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Exhibit 2.1
STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 18, 1997
by and among
GREENWICH IV LLC,
GSD ACQUISITION CORP.
and
THE STOCKHOLDERS OF
DAY INTERNATIONAL GROUP, INC. PARTIES HERETO
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS.................................................................1
ARTICLE II
SALE OF STOCK; CONVERSION OF OPTIONS........................................6
2.1. Sale of Shares.....................................................6
2.2. Options............................................................7
ARTICLE III
PAYMENT; PURCHASE PRICE.....................................................7
3.1. Closing Payments...................................................7
3.2. Adjustment of Purchase Price.......................................7
3.3. Additional Adjustment to Purchase Price............................8
ARTICLE IV
CLOSING.....................................................................9
4.1. The Closing........................................................9
4.2. Actions and Deliveries at the Closing..............................9
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLERS..............................11
5.1. Capitalization; Ownership of Shares...............................11
5.2. Subsidiaries......................................................11
5.3. Organization......................................................12
5.4. Corporate Power and Authority; No Violations......................12
5.5. SEC Reports.......................................................13
5.6. Absence of Certain Changes or Events..............................13
5.7. Title to Assets...................................................14
5.8. Intellectual Property.............................................14
5.9. Contracts.........................................................14
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5.10. Litigation........................................................15
5.11. Compliance With Laws..............................................16
5.12. Environmental Matters.............................................16
5.13. Employee Benefit Plans............................................17
5.14. Labor Matters.....................................................18
5.15. Consents..........................................................18
5.16. Taxes.............................................................18
5.17. Real Property.....................................................19
5.18. Affiliate Transactions............................................20
5.19. Broker's Fees.....................................................20
5.20. Disclaimer........................................................20
5.21. Restricted Payments Basket........................................20
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BUYER................................21
6.1. Organization......................................................21
6.2. Corporate Power and Authority; No Violations......................21
6.3. Brokers' Fees.....................................................21
6.4. Litigation........................................................22
6.5. Consents..........................................................22
6.6. Purchase for Investment...........................................22
6.7. Adequate Funds. ..................................................22
ARTICLE VII
COVENANTS OF THE PARTIES...................................................22
7.1. Efforts...........................................................22
7.2. Conduct of Business...............................................23
7.3. Certain Other Conduct.............................................25
7.4. Access............................................................25
7.5. No Solicitation...................................................25
7.6. Books and Records; Personnel.....................................25
7.7. Liabilities and Indemnification...................................26
7.8. Insurance.........................................................26
7.9. Subsequent Disclosures by Company.................................27
7.10. Litigation Support................................................27
7.11. Employee Matters..................................................27
7.12. Breakage Costs....................................................28
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7.13. Use of Business Name, Proprietary Information.....................28
7.14. Financing.........................................................28
ARTICLE VIII
CONDITIONS TO THE BUYER'S OBLIGATIONS......................................28
8.1. Representations, Warranties and Covenants of the Company..........29
8.2. Certain Stockholder Approvals.....................................29
8.3. Corporate and Other Proceedings...................................29
8.5. Financing.........................................................29
8.6. No Prohibition....................................................30
8.7. Governmental Consents.............................................30
8.8. Document Deliveries...............................................30
ARTICLE IX
CONDITIONS TO THE SELLERS' OBLIGATIONS.....................................30
9.1. Representations, Warranties and Covenants of the Buyer............30
9.2. No Prohibition....................................................30
9.3. Governmental Consents.............................................30
9.4. Document Deliveries...............................................30
ARTICLE X
TERMINATION PRIOR TO CLOSING...............................................31
10.1. Termination.......................................................31
10.2. Effect of Termination.............................................31
ARTICLE XI
MISCELLANEOUS..............................................................32
11.1. Non-Survival of Representations and Warranties....................32
11.2. Entire Agreement..................................................32
11.3. Successors and Assigns; Third Party Beneficiaries.................32
11.4. Headings..........................................................32
11.5. Modification and Waiver...........................................32
11.6. Expenses..........................................................32
11.7. Notices...........................................................32
11.8. Governing Law; Forum..............................................33
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11.9. Public Announcements..............................................34
11.10. Counterparts......................................................34
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SCHEDULES:
Schedule 1 -- Permitted Liens
Schedule 5.1 -- Ownership of Shares
Schedule 5.2 -- Subsidiaries
Schedule 5.3 -- Organization
Schedule 5.4 -- Corporate Power and Authority; No Violations
Schedule 5.6 -- Absence of Certain Changes or Events
Schedule 5.8 -- Intellectual Property
Schedule 5.9(a) -- Contracts
Schedule 5.9(b) -- Change in Control
Schedule 5.10 -- Litigation
Schedule 5.12 -- Environmental Matters
Schedule 5.13 -- Employee Benefit Plans
Schedule 5.14 -- Labor Matters
Schedule 5.15 -- Consents
Schedule 5.16 -- Taxes
Schedule 5.17(a) -- Owned Property
Schedule 5.17(b) -- Leased Property
Schedule 5.18 -- Affiliate Transactions
Schedule 5.19 -- Broker's Fees
Schedule 6.2 -- Buyer Contravention
Schedule 6.5 -- Buyer Consents
Schedule 7.2 -- Conduct of Business
Schedule 7.11 -- Former Employees
Schedule 8.2 -- Section 280G
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of
December 18, 1997, is made by and among the shareholders and optionholders named
on the signature pages attached hereto (each, a "Seller" and collectively, the
"Sellers") of Day International Group, Inc., a Delaware corporation (the
"Company"), Greenwich IV, a Delaware limited liability company (the "Parent")
and GSD Acquisition Company, a Delaware corporation and a wholly-owned
subsidiary of the Parent (the "Buyer"). All capitalized words and terms
contained in this Agreement shall have the meanings set forth in Article I
hereof.
RECITALS
WHEREAS, the Buyer wishes to purchase from the Sellers all of
the issued and outstanding shares of Common Stock, par value $.01 per share, of
the Company (the "Shares") and all of the outstanding Options to acquire such
Shares; and
WHEREAS, AIP is the beneficial and record owner of 96.79% of
the issued and outstanding Shares and wishes to sell to the Buyer all of such
Shares held by it; and
WHEREAS, AIP has the right under the Stockholders Agreement to
cause the beneficial and record owners of the remaining 3.21% of the issued and
outstanding Shares and all of the holders of the Options to sell such Shares and
Options to the Buyer; and
NOW, THEREFORE, in consideration of the mutual
representations, warranties, covenants and conditions contained herein, the
parties hereby agree as follows:
ARTICLE I
DEFINITIONS
"Affiliate" means as to any person, any other person directly
or indirectly controlling, controlled by or under common control with that
person.
"Agreement" has the meaning set forth in the preface hereof.
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"AIP" means collectively, American Industrial Partners Capital
Fund, L.P. and American Industrial Partners Capital Fund II, L.P.
"Balance Sheet" means the unaudited consolidated balance sheet
of the Company and its Subsidiaries at September 30, 1997.
"Bank Commitments" has the meaning set forth in Section 6.7
hereof.
"Benefit Plan" has the meaning set forth in Section 5.13(a)
hereof.
"Business" means the businesses and activities currently
conducted by the Company and the Subsidiaries that are described in the Offering
Memorandum prepared by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and such businesses and activities
of the Company and its Subsidiaries as are conducted at any time thereafter to
and including the Closing Date.
"Buyer" has the meaning set forth in the preface hereof.
"Closing" has the meaning set forth in Section 4.1 hereof.
"Closing Date" has the meaning set forth in Section 4.1
hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" has the meaning set forth in the preface
hereof.
"Company" has the meaning set forth in the preface hereof.
"Company Intellectual Property" has the meaning set forth in
Section 5.8 hereof.
"Company Material Adverse Effect" has the meaning set forth in
Section 5.3 hereof.
"Company Released Parties" has the meaning set forth in
Section 5.20 hereof.
"Confidentiality Agreement" has the meaning set forth in
Section 7.4 hereof.
"Contracts" has the meaning set forth in Section 5.9(a)(viii)
hereof.
"Debt" has the meaning set forth in Section 3.2(a) hereof.
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"Defaulting Party" has the meaning set forth in Section 10.2
hereof.
"Disclosure Schedule" has the meaning set forth in Section 5.1
hereof.
"Environmental Claim" means any notice, violation, demand,
allegation, action, suit, or claim (whether administrative, judicial, or private
in nature) arising pursuant to any Environmental Law.
"Environmental Laws" mean all foreign, federal, state and
local statutes, regulations, ordinances, and similar provisions having the force
and effect of law concerning the pollution or protection of the environment,
including without limitation the federal Clean Air Act, the Clean Water Act, the
Solid Waste Disposal Act, the Comprehensive Environmental Response,
Compensation, and Liability Act, the Emergency Planning and Community
Right-To-Know Act.
"Environmental Lien" means a Lien, either recorded or
unrecorded, in favor of any Governmental Entity, arising under Environmental
Laws.
"ERISA" means Employee Retirement Income Security Act of 1974,
as amended.
"Financing" has the meaning set forth in Section 6.7 hereof.
"Former Employees has the meaning set forth in Section 7.11
hereof.
"GAAP" means United States generally accepted accounting
principles or United Kingdom generally accepted accounting principles, as
applicable, as in effect for the period for which it is referred to herein.
"Governmental Entity" means any governmental or political
subdivision thereof, whether federal, state, local, national or foreign, or any
agency or instrumentality of any such government or political subdivision, or
any judicial, quasi-judicial, administrative or regulatory body, commission or
tribunal.
"GSCP Group" has the meaning set forth in Section 6.7 hereof.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"Hazardous Materials" means any substance, chemical, product
or material that is classified or regulated as "hazardous" or "toxic" pursuant
to any Environmental Law.
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"Indebtedness" of any person at any date means without
duplication (a) all indebtedness of such person for borrowed money or for the
deferred purchase price of property or services which, in accordance with GAAP,
would be required to be shown as a liability on the face of a balance sheet of
such person on such date (other than trade liabilities and accrued expenses and
liabilities, in each case to the extent incurred in the ordinary course of
business and payable in accordance with customary practices), (b) any other
indebtedness of such person which is evidenced by a note, bond, debenture or
similar instrument, and (c) all obligations of such person under capitalized
lease obligations.
"Indemnified Party" has the meaning set forth in Section
7.7(b) hereof.
"Indenture" means the agreement, dated June 6, 1995, among the
Company, as Issuer, Day International, Inc., as Guarantor, and American Bank
National Association, as Trustee, relating to $100,000,000 aggregate principal
amount of 11-1/8% Senior Subordinated Notes due June 1, 2005.
"Initial Purchase Price" means $362,500,000 (Three Hundred
Sixty Two Million Five Hundred Thousand Dollars).
"Intellectual Property" means all trademarks, service marks,
trade names, trade dress, Internet domain names, copyrights, and similar rights,
including registrations and applications to register or renew the registration
of any of the foregoing, patents (including design patents, industrial designs
and utility models) and patent applications (including reissues, revisions,
supplementary protection certificates, divisions, continuations,
continuations-in-part, extensions and re-examinations) and improvements thereto,
and inventions (whether patentable or unpatentable and whether or not reduced in
practice), and improvements thereto, processes, designs, formulae, trade
secrets, know-how, ideas, research and development, manufacturing and production
processes and techniques, technical data, copyrighted works, engineering
notebooks, confidential information, software, documentation, firmware, and all
similar intellectual property rights, and licenses of any of the foregoing.
"IRS" means the United States Internal Revenue Service.
"Knowledge" means with respect to the Company or any
Subsidiary, the actual knowledge of any officer or management level employee of
the Company or any such Subsidiary, and with respect to the Buyer, the actual
knowledge of any officer or management level employee of the Buyer.
"Leased Property" has the meaning set forth in Section 5.17(b)
hereof.
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"Liabilities" means any liability or obligation of or arising
out of or relating to the Company or any of the Subsidiaries, or the operation
or ownership of the Company or any of the Subsidiaries (including as to
environmental matters), of whatever kind or nature.
"Liens" means liens, mortgages, security interests, pledges,
charges or other encumbrances.
"Litigation" has the meaning set forth in Section 5.10 hereof.
"Losses" has the meaning set forth in Section 7.7(a) hereof.
"Management Shareholder" means the holders of Shares that are
currently employed by the Company or any Subsidiary.
"Optionholders" has the meaning set forth in Section 2.2
hereof.
"Options" has the meaning set forth in Section 2.2 hereof.
"Owned Property" has the meaning set forth in Section 5.17(a)
hereof.
"Parent" has the meaning set forth in the prefaces hereof.
"Permits" has the meaning set forth in Section 5.11 hereof.
"Permitted Liens" means (i) Liens for Taxes or other
governmental charges or levies which are not delinquent or are being contested
in good faith and by appropriate proceedings and for which adequate reserves
have been established in accordance with GAAP, (ii) those Liens listed on
Section 1 of the Disclosure Schedule and (iii) mechanic's, worker's,
materialmen's and other like Liens and installments of special assessments not
yet delinquent, recorded easements, covenants, and other restrictions, and
utility easements, building restrictions, encroachments, zoning restrictions and
other encumbrances and restrictions existing generally with respect to
properties of a similar character which, in each case, do not affect materially
and adversely the conduct of the business of the Company and its Subsidiaries.
"Per Share Purchase Price" means the Purchase Price divided by
the sum of (i) the number of shares of Common Stock outstanding as of at the
Closing Date and (ii) the number of shares issuable upon exercise of the Options
not exercised on or prior to the Closing Date.
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"person" means any individual, firm, corporation, association,
unincorporated organization, joint stock company, general, limited or limited
liability partnership, limited liability company, trust, joint venture,
Governmental Entity or other entity.
"Purchase Price" has the meaning set forth in Section 3.2
hereof.
"Real Property" has the meaning set forth in Section 5.17(b)
hereof.
"Related Person" has the meaning set forth in Section 5.13(b)
hereof.
"Release" means any spilling, leaking, pumping, emitting,
discharging, injecting, escaping, leaching, dumping or disposing into the
environment.
"Returns" has the meaning set forth in Section 5.16(a) hereof.
"Sales Commission Agreements" means (i) each of the Memorandum
of Agreement for Sales Commission, dated as of October 15, 1997, between Day
International, Inc. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, respectively
and (ii) the sales commission arrangements under the Employment Agreements
between Day International, Inc. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇,
respectively, entered into pursuant to item 7 of Section 5.6 of the Disclosure
Schedule.
"Sales Commissions" has the meaning set forth in Section
3.2(a)(iii) hereof.
"SEC Reports" has the meaning set forth in Section 5.5 hereof.
"Senior Subordinated Notes" means the Company's $100,000,000
111/8% Series B Senior Subordinated Notes due 2005.
"Stockholder Agreement" means the agreement dated June 6,
1995, by and among Day International Group, Inc. and its Stockholders.
"Subsidiary" means any corporation with respect to which the
Company, directly or indirectly through another Subsidiary, owns a majority of
the common stock or has the power to vote or direct the voting of sufficient
securities to elect a majority of the directors.
"Taxes" means any and all taxes, charges, fees, levies or
other assessments, including, without limitation, income, excise, real or
personal property, sales, use, service, value added, license, net worth,
transfer and recording taxes, gross
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receipts, fees and charges, imposed by the IRS or any other taxing authority or
any Governmental Entity, whether computed on a separate, consolidated, unitary,
combined or any other basis; and such term shall include any interest, penalties
or additional amounts attributable to, or imposed upon, or with respect to, any
such taxes, charges, fees, levies or other assessments.
"Transaction Expenses" has the meaning set forth in Section
3.2(a)(ii) hereof.
"U.K. Credit Agreement" means the agreement, dated January 31,
1996, between Day International (UK) Holdings and the Bank of Scotland, and the
Credit Facility, dated January 31, 1996, between Day International (UK) Limited
and the Bank of Scotland.
"U.S. Credit Agreement" means the agreement, dated June 6,
1995, among the Company, certain Subsidiaries of the Company as Guarantors, the
several lenders from time to time party thereto, and NationsBank of Texas, N.A.
ARTICLE II
SALE OF STOCK; CONVERSION OF OPTIONS
2.1. Sale of Shares. (a) At the Closing, subject to the terms
and conditions set forth in this Agreement, (i) the Buyer agrees to purchase
from each of the Sellers, and each of the Sellers agrees to sell, assign,
transfer and deliver to the Buyer, all of his or its Shares, free and clear of
all Liens, other than the restrictions imposed by federal and state securities
laws and (ii) the Buyer agrees to make all payments to the Optionholders due in
respect of the Options.
(b) Representations and Warranties of Sellers. Each
of the Sellers represents and warrants to the Buyer that (i) such Seller has
full power and authority (including, if such Seller is a corporation, full
corporate power and authority) to execute and deliver this Agreement and to
perform its obligations hereunder, (ii) this Agreement constitutes the valid and
legally binding obligation of such Stockholder, enforceable in accordance with
its terms and conditions, (iii) such Seller holds of record or owns
beneficially, and as of the Closing Date shall hold of record or own
beneficially, the number of Shares and Options set forth next to such Seller's
name in Section 5.1 of the Disclosure Schedule, free and clear of all Liens,
other than the restrictions imposed by federal and state securities laws, (iv)
such Seller is not a party to any option, warrant, purchase right, or other
contract or commitment that could require such Seller to sell, transfer, or
otherwise dispose of any Shares held by such Seller (other than this
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Agreement), and (v) such Seller is not a party to any voting trust, proxy, or
other agreement or understanding with respect to the voting of any capital stock
of the Company, except for this Agreement and the Stockholder Agreement.
2.2. Options. Notwithstanding any provision to the contrary
contained in the Company's Stock Option Plan, as amended, in consideration of
the transactions contemplated by this Agreement, immediately prior to the
Closing Date, each option for Company Common Stock granted thereunder (the
"Options") shall become fully vested and immediately exercisable, without any
further action on the part of the Company or the holder thereof (each, an
"Optionholder"). In this regard, at or prior to the Closing Date, the Board of
Directors of the Company shall adopt such resolutions or take such other actions
as may be necessary to cause each Option outstanding immediately prior to the
Closing Date to become vested and exercisable as a consequence of the
transactions contemplated by this Agreement and to cause any plan, program or
arrangement providing for the issuance or grant of any interest in respect of
the capital stock of the Company or any of its Subsidiaries to be terminated as
of the Closing Date. If requested by the Buyer, AIP shall cause the Company to
amend the Company's Stock Option Plan to provide for cashless exercise of the
Options in connection with the consummation of the transactions contemplated by
this Agreement. After the Closing Date, no Option shall be deemed to be
outstanding or to have any rights other than those set forth in this Section 2.2
and Section 3.1.
ARTICLE III
PAYMENT; PURCHASE PRICE
3.1. Closing Payments. At the Closing, Buyer shall pay (a)
each Seller an amount of cash equal to the product of (i) the number of Shares
held by such Seller and (ii) the Per Share Purchase Price, (b) each Optionholder
in respect of Options not exercised on or prior to the Closing Date an amount in
cash equal to the product of (i) the number of shares of Common Stock issuable
upon exercise of such Option (after giving effect to Section 2.2) and (ii) the
Per Share Purchase Price less the per share exercise price for each such Option,
(c) the Transaction Expenses and (d) the Sales Commissions. All payments
pursuant to this Section 3.1 shall be paid by wire transfer of immediately
available funds to such bank account or accounts as per written instructions of
the persons receiving such payment, given to the Buyer at least two business
days prior to the Closing Date. Each of the Optionholders and the recipients of
the Commissions hereby agrees that payments to such persons shall be net of all
withholding Taxes applicable to payments made pursuant to clauses (b) and (d),
respectively.
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3.2. Adjustment of Purchase Price. (a) The Initial Purchase
Price shall be adjusted by
(i) deducting therefrom the amount of all
Debt (as defined below) outstanding on the Closing Date (not
including Debt incurred as part of the Financing); and
(ii) deducting therefrom all costs, fees
and expenses paid or incurred by the Company or its
Subsidiaries in connection with the process relating to the
proposed sale of the Company, including, without limitation,
all costs, fees and expenses paid or payable to ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Co. and ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ and all costs, fees and expenses
incurred by the Company and its Subsidiaries in connection
with the preparation for, negotiation of and closing of the
transactions contemplated by this Agreement, including,
without limitation, all legal, accounting and other
professional fees but excluding any fees, costs and expenses
incurred by the Buyer in connection with the process relating
to the proposed sale of the Company which become obligations
of the Company as a result of the transactions contemplated by
this Agreement (all such costs, fees and expenses of the
Company and its Subsidiaries are, collectively, the
"Transaction Expenses"); and
(iii) deducting therefrom all amounts paid
or payable to each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇ pursuant to the Sales
Commission Agreements and any other similar payments due to
any other employees of the Company or any Subsidiary (the
"Sales Commissions"); and
(iv) adding thereto the aggregate exercise
price of the Options.
(as so adjusted, the "Purchase Price").
For purposes of this Section 3.2, "Debt" means any liability (including without
limitation accrued but unpaid interest) in respect of (A) borrowed money, (B)
capitalized lease obligations, (C) the deferred purchase price of property or
services (other than trade payables in the ordinary course of business and
consistent with past practice), (D) obligations under interest rate agreements
and currency agreements and (E) guarantees of any of the foregoing (without
double counting).
(b) Determination of Purchase Price. Two business
days prior to the Closing Date, the Company shall deliver to the Buyer a
statement setting forth the
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Company's good faith calculation of the Purchase Price as of immediately prior
to the Closing Date, together with reasonable supporting documentation with
respect to such calculation including, without limitation, the Transaction
Expenses; it being understood and agreed that the amount of all Debt for
purposes of determining the Purchase Price shall be calculated on the same basis
on which the Company has historically calculated its Debt for purposes of its
financial statements included in the SEC Reports and shall be evidenced by debt
payoff letters from the lenders under the U.S. Credit Agreement and the U.K.
Credit Agreement, respectively. The Company shall update such calculation as of
the close of business on the business day immediately prior to the Closing Date.
3.3. Additional Adjustment to Purchase Price. Buyer agrees to
deduct the Sales Commissions as an ordinary expense for U.S. federal, state and
local income tax purposes to the full extent permitted by applicable law. To the
extent any deduction attributable to the Sales Commissions is reflected, from
time to time, on any U.S. federal, state or local income tax return of the
Company or any of its Subsidiaries, the Buyer shall promptly pay each Seller, as
an adjustment to the Purchase Price, such Seller's pro rata share of any amount
equal to 50% of the excess, if any, of (i) the amount of taxes that would have
been shown as due and payable on such tax return if such deduction had not been
reflected on such tax return over (ii) the amount of taxes actually shown as due
and payable on such tax return. Promptly after filing its U.S. federal income
tax return for a taxable year, the Company shall deliver a certificate prepared
by the Company's accountants, setting forth the computation described in the
previous sentence in reasonable detail, regardless of whether a payment is then
due pursuant to this Section 3.3 for such taxable year. For purposes of clauses
(i) and (ii) above, net operating loss carryforwards shall not be taken into
account in determining the amount of taxes due and payable, except for
carryforwards of deductions for the Sales Commissions, which shall be taken into
account, to the full extent permitted by applicable law, for purposes of clause
(ii) only. Each Seller's pro rata share of any amount payable pursuant to this
Section 3.3 shall be determined based on the relative amounts of Shares
(treating Options as exercised) held by each Seller immediately prior to the
Closing. Notwithstanding anything to the contrary in this Section 3.3, in no
event shall the Buyer, the Company or any of the Subsidiaries be required to
submit any of its tax returns or any part thereof to any of the Sellers or any
other Person.
ARTICLE IV
CLOSING
4.1. The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇, Citicorp Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, commencing at
10:00 a.m. local
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time within three business days following the date on which all of the
conditions to each party's obligations hereunder have been satisfied or waived,
other than those to be satisfied at Closing, or at such other date, place or
time as the parties may agree (the "Closing Date").
4.2. Actions and Deliveries at the Closing. At the Closing:
(a) The Sellers shall deliver or cause to be
delivered to the Buyer:
(i) certificates evidencing the Shares, which
certificates shall be properly endorsed for transfer or accompanied by
duly executed stock powers, in either case executed in blank or in
favor of the Buyer and otherwise in a form acceptable for transfer on
the books of the Company;
(ii) a copy of resolutions of the board of
directors of the Company and the shareholders of the Company,
authorizing the execution, delivery and performance of this Agreement
and all related documents and agreements, certified by the Secretary of
the Company, as being true and correct copies of the originals thereof
subject to no modifications or amendments;
(iii) a certificate of the Secretary of the
Company certifying as to the incumbency of the officers of the Company
and as to the signatures of such officers who have executed documents
delivered at the Closing on behalf of the Company;
(iv) certificates, dated within five days of
the Closing, of the Secretary of State of Delaware (or equivalent
Governmental Entity) establishing that the Company and each of the
domestic Subsidiaries is in existence and otherwise is in good standing
to transact business;
(v) a certificate of the Chief Financial
Officer of the Company certifying as to the fulfillment of the
conditions set forth in Section 8.1 hereof;
(vi) a statement issued by the Company pursuant
to Treasury Regulations section 1.897-2(h) as contemplated under
Treasury Regulations section 1.1445-2(c)(3)(i), certifying that the
interest being acquired in the Company is not a United States real
property interest, within the meaning of the Code and the Treasury
Regulations or such other evidence reasonably acceptable to the Buyer
to enable the Buyer to determine the amount to be
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withheld, if any, pursuant to Section 1445 of the Code in respect of
any payment under Article III; and
(vii) the resignations of each of the directors
of the Company and each Subsidiary as of immediately prior to the
Closing Date.
(b) The Buyer will deliver or cause to be delivered
to the Sellers:
(i) a copy of resolutions of the board of
directors of the Buyer authorizing the execution, delivery and
performance of this Agreement and all related documents and agreements,
each certified by the Secretary of the Buyer as being true and correct
copies of the originals thereof subject to no modifications or
amendments;
(ii) a certificate of the Secretary of the
Buyer certifying as to the incumbency of the officers of the Buyer and
as to the signatures of such officers who have executed documents
delivered at the Closing on behalf of the Buyer;
(iii) a certificate, dated within five days of
the Closing, of the Secretary of State of Delaware establishing that
the Buyer is in existence and otherwise is in good standing to transact
business; and
(iv) a certificate of the Chief Financial
Officer of the Buyer certifying as to the fulfillment of the conditions
set forth in Section 9.1 hereof.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers hereby represent and warrant to the Buyer as
follows:
5.1. Capitalization; Ownership of Shares. The authorized
capital stock of the Company consists of (i) 100,000 shares of Common Stock, of
which 51,655.50 shares are issued and outstanding and (ii) 10,000 shares of
Preferred Stock, none of which shares are issued and outstanding. All of the
shares of capital stock of the Company outstanding as of the date of this
Agreement are owned of record by the Sellers as set forth in Section 5.1 of the
disclosure schedule delivered by the Company to the Buyer in connection herewith
(the "Disclosure Schedule"). All of such shares are validly
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issued, fully paid and non-assessable. Section 5.1 of the Disclosure Schedule
sets forth a list, complete and correct as of the date hereof, of the holders of
all outstanding Options, the number of shares of Company Common Stock issuable
upon the exercise of each such Option and the exercise prices thereof. Except as
set forth in Section 5.1 of the Disclosure Schedule, there are no securities
presently outstanding, and at the Closing Date there will not be any outstanding
securities which are convertible into, exchangeable for, or carrying the right
to acquire, equity securities of the Company, or subscriptions, warrants,
options, calls, convertible securities, registration or other rights or other
arrangements or commitments obligating the Company to issue, transfer or dispose
of any of its equity securities or any ownership interest therein, and no
authorization therefor has been given. Except for the Stockholders Agreement,
there is no voting trust or other agreement or understanding to which the
Company or any of the Sellers is bound with respect to the voting of the capital
stock of the Company. Under the Stockholders Agreement, upon the execution of
this Agreement by AIP, all of the Sellers shall be obligated to execute this
Agreement and to consummate the transactions contemplated hereby.
5.2. Subsidiaries. Except for the Subsidiaries and as set
forth in Section 5.2 of the Disclosure Schedule, the Company does not own,
directly or indirectly, any capital stock or any other equity interest in any
person. The name, jurisdiction of incorporation, capitalization and ownership of
each Subsidiary is set forth in Section 5.2 of the Disclosure Schedule. Except
as set forth on Section 5.2 of the Disclosure Schedule, the Company owns all of
the issued and outstanding shares of capital stock of the Subsidiaries which
they purport to own, free and clear of any Liens, except for Permitted Liens,
and all of such shares are validly issued, fully paid and non-assessable. Except
as set forth on Section 5.2 of the Disclosure Schedule, there are not now, and
at the Closing there will be no, outstanding securities convertible into,
exchangeable for, or carrying the right to acquire, equity securities of any of
the Subsidiaries, or subscriptions, warrants, options, calls, convertible
securities, registration or other rights or other arrangements or commitments
obligating any Subsidiary to issue, transfer or dispose of any of its equity
securities or any ownership interest therein or voting trusts or other
agreements or understandings to which the Company or any of the Subsidiaries is
bound with respect to the voting of the capital stock of any of the
Subsidiaries, and no authorization therefor has been given.
5.3. Organization. The Company and each of the Subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation with all requisite corporate power
and authority to own, lease and operate its properties and assets and to carry
on its business as it is now being conducted. Except as set forth in Section 5.3
of the Disclosure Schedule, the Company and each of the Subsidiaries is duly
qualified to do business and in good standing as a foreign corporation in the
jurisdictions set forth in Section 5.3 of the Disclosure
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Schedule, which are all of the jurisdictions where the nature of the property
owned or leased by it, or the nature of the business conducted by it, makes such
qualification necessary and the absence of such qualification would have a
material adverse effect on the assets, business, operations or financial
condition of the Company and the Subsidiaries taken as a whole other than such
effects attributable to general economic conditions or to other changes
generally affecting companies in the same business as the Company (a "Company
Material Adverse Effect"). True and complete copies of the certificate of
incorporation and bylaws (or substantially equivalent documents) of the Company
and each of the Subsidiaries have been delivered or made available to the Buyer.
5.4. Corporate Power and Authority; No Violations. The Company
has full power and authority to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby. The execution, delivery and
per formance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Company, including due and valid
authorization by the board of directors and the stockholders of the Company and
no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by the Company
and constitutes the valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent that such
enforceability (i) may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally, and
(ii) is subject to general principles of equity. Except as set forth in Section
5.4 of the Disclosure Schedule, neither the execution, delivery and performance
by the Company of this Agreement nor the consummation by the Company of the
transactions contemplated hereby will, with or without the giving of notice or
the passage of time, or both, (x) violate any provision of law, rule,
regulation, order, judgment, writ, injunction or decree applicable to the
Company or any of the Subsidiaries, or any of their properties or assets, (y)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any note, bond, mortgage, indenture,
license, contract or agreement to which the Company or any of the Subsidiaries
is a party or by which the Company or any of the Subsidiaries or any of their
assets is bound or result in the imposition of any Lien (other than Permitted
Liens) upon any of the assets of the Company or any of the Subsidiaries; or (z)
conflict with or violate any provision of the certificate of incorporation or
bylaws (or substantially equivalent documents) of the Company or any of the
Subsidiaries, except, in the case of clauses (x) or (y), for violations,
conflicts, breaches, defaults, accelerations, terminations, modifications,
cancellations or failures to give notice or Liens which, individually or in the
aggregate, would not reasonably be expected to have a Company Material Adverse
Effect.
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5.5. SEC Reports. The Company has filed all forms, reports,
statements and schedules with the Securities and Exchange Commission (the
"Commission") required to be filed pursuant to the Exchange Act of 1934, as
amended (the "Exchange Act"), or other federal securities laws, and the rules
and regulations promulgated thereunder, since October 25, 1995 (the "SEC
Reports"). The SEC Reports complied in all materials respects with all
applicable requirements of the Exchange Act and such other federal securities
laws, and the rules and regulations promulgated thereunder, and did not (as of
their respective filing dates) contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The audited and unaudited consolidated
financial statements of the Company included (or incorporated by reference) in
the SEC Reports comply as to the form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP applied on a
consistent basis (except as stated in the financial statements, including the
related notes, and except that the quarterly financial statements do not contain
all of the footnote disclosures required by generally accepted accounting
principles) and fairly present the financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the results of their
operations and changes in financial position for the periods then ended,
subject, in the case of the unaudited financial statements, to normal year-end
adjustments and any other adjustments described therein. Except as disclosed in
the SEC Reports filed prior to the date hereof or as disclosed in Section 5.1 of
the Disclosure Schedule, neither the Company nor any of its Subsidiaries has
incurred any liabilities or obligations (absolute, accrued, contingent or
otherwise) which would be required to be reflected on a balance sheet or in the
notes thereto prepared in accordance with GAAP applied on a consistent basis,
other than liabilities or obligations which would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
5.6. Absence of Certain Changes or Events. Except as permitted
or contemplated by this Agreement and except as and to the extent disclosed in
the SEC Reports or as set forth on Sections 5.6, 5.9, 5.10 or 5.11 of the
Disclosure Schedule, since the date of the Balance Sheet, neither the Company
nor any of the Subsidiaries has (a) suffered any Company Material Adverse Effect
(excluding normal shifts in working capital occurring in the ordinary course of
business), (b) granted (i) to any officer or other key employee of the Company,
or any of the Subsidiaries, any increase in compensation, except for normal
increases in the ordinary course of business consistent with past practices or
as required under employment agreements set forth in Section 5.6 of the
Disclosure Schedule or (ii) to any officer or other key employee any increase in
severance or termination pay, except as was required under any employment,
severance or termination agreements set forth in Section 5.6 of the Disclosure
Schedule, (c) declared, set aside, or paid any dividend or other distribution
(whether in cash, stock or
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property or any combination thereof) in respect of its capital stock, (d) split,
combined or reclassified any of its capital stock or issued or authorized or
proposed the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, (e) made any changes in accounting
methods, principles or practices materially affecting its assets, liabilities or
business of the Company or any of the Subsidiaries (except as may have been
required by a change in GAAP or as disclosed in the SEC Reports) or (f) failed
to operate its business only in the ordinary course consistent with past
practice.
5.7. Title to Assets. Each of the Company and the Subsidiaries
has good (and, in the case of Owned Property, marketable) title (or leasehold
interest with respect to capital leases) to all of the assets and properties
which are material to the conduct of the businesses of the Company and the
Subsidiaries taken as a whole (including those assets and properties reflected
on the Balance Sheet), free and clear of all Liens except for the Permitted
Liens, except for assets and properties sold, consumed or otherwise disposed of
in the ordinary course of business, consistent with past practices, since the
date of the Balance Sheet.
5.8. Intellectual Property. Section 5.8 of the Disclosure
Schedule sets forth an accurate and complete list of all of the material
patents, patent applications, trademark registrations and trademark applications
and copyright registrations and copyright applications used in the conduct of
the Business. Except as set forth in Section 5.8 of the Disclosure Schedule, the
Company and its Subsidiaries, as the case may be, own and possess all right,
title and interest in and to, or possess the legal and valid right to use, all
material Intellectual Property used or held for use in connection with their
respective businesses ("Company Intellectual Property") free and clear of any
Liens, except for Permitted Liens and other than Liens which would not
reasonably be expected to, individually or in the aggregate, have a Company
Material Adverse Effect. The Company Intellectual Property constitutes all of
the Intellectual Property used in or necessary for the conduct of the Business.
To the Knowledge of the Company, the conduct of the Business does not infringe
or conflict with the Intellectual Property rights of any other person. To the
Knowledge of the Company, none of the Company Intellectual Property is being
infringed or otherwise used or available for use by any person without a license
or permission from the Company or its Subsidiaries. In each case to the extent
material to the Business, the Company Intellectual Property owned by the Company
and its Subsidiaries has been duly registered with, filed in or issued by, as
the case may be, the United States Patent and Trademark Office, the United
States Copyright Office or other filing offices, domestic or foreign, to the
extent necessary or desirable to ensure full protection under applicable laws,
and such registrations, filings, issuances and other actions remain in full
force and effect. In each case to the extent material to the Business, the
Company and its Subsidiaries have taken all reasonable actions to maintain the
secrecy of all confidential Intellectual Property.
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5.9. Contracts.
(a) Section 5.9(a) of the Disclosure Schedule sets forth
an accurate and complete list of each material written and an accurate and
complete description of any material oral contract, license or agreement
(including any and all amendments thereto) to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the Subsidiaries is
bound which (i) relates to the borrowing of money or the guaranty of any
obligation to borrow money; (ii) involves revenues or expenditures in excess of
$200,000 (excluding purchase and sale orders entered into in the ordinary course
consistent with past practice); (iii) is a collective bargaining agreement or
similar agreement with any labor union or organization within or outside of the
United States; (iv) obligates the Company or any Subsidiary not to compete with
any business or which otherwise restrains or prevents the Company or any of the
Subsidiaries from carrying on any lawful business (excluding customary
restrictive covenants contained in agreements identified pursuant to clause (i)
above); (v) relates to employment, compensation, severance, termination,
retention, change of control, stock option or other equity-based compensation,
consulting or indemnification between the Company or any Subsidiary and any of
their respective current or former officers, directors, employees or consultants
who are entitled to compensation thereunder in excess of $25,000 per annum; (vi)
transfers or grants any rights or licenses under, or limits the use of Company
Intellectual Property; (vii) imposes any restriction on the declaration or
payment of dividends or similar distributions by the Company or any of the
Subsidiaries; or (viii) is material to the assets, business, operations or
financial condition of the Company and the Subsidiaries taken as a whole
(collectively, the "Contracts"). The Company previously has furnished or made
available to the Buyer true and correct copies of all Contracts. To the
Company's Knowledge, all of the Contracts are enforceable by the Company or the
Subsidiary which is a party thereto in accordance with their terms except to the
extent that such enforceability (a) may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to creditors' rights
generally, and (b) is subject to general principles of equity and public policy.
Except as set forth in Section 5.9(a) of the Disclosure Schedule, neither the
Company nor any of the Subsidiaries is in breach or default under (and no event
has occurred which with notice or the passage of time or both would constitute a
breach or default under) any agreements listed or required to be listed in
Section 5.9(a) of the Disclosure Schedule nor, to the Knowledge of the Company,
is any other party to any of the agreements listed or required to be listed in
Section 5.9(a) of the Disclosure Schedule in default thereunder (and no event
has occurred which with notice or the passage of time or both would constitute a
breach or default thereunder); excluding, however, in each instance, breaches or
defaults which, individually or in the aggregate, would not be expected to have
a Company Material Adverse Effect.
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(b) Assuming that the shareholder approval contemplated
by Section 8.2 is obtained, no payment or benefit which has been, will or may be
made by the Company or any Subsidiary in connection with the transactions
contemplated hereby has failed or will fail to be deductible by such entity
pursuant to Section 280G of the Code or has resulted or will result in the
imposition of any excise tax pursuant to Section 280G or 4999 of the Code.
Except as set forth in Section 5.9(b) of the Disclosure Schedule, neither the
Company nor any Subsidiary is a party to any contract, plan, program or other
agreement which contains a "change in control," "potential change in control" or
similar provision or which could result in a potential "parachute payment"
within the meaning of Section 280G of the Code. Except as set forth in Section
5.9(b) of the Disclosure Schedule, the consummation of the transactions
contemplated hereby will not (either alone or upon the passage of time and/or
occurrence of any additional acts or events) result in any payment (severance
pay or otherwise) becoming due from the Company or any Subsidiary to any person
or accelerate the time of payment or vesting, or increase the amount of
compensation due, any person; excluding, however, any such payments,
accelerations or increases which could have occurred upon the passage of time
and/or occurrence of any additional acts or events even if the "change of
control" or "potential change of control" occurring upon the execution and
delivery of this Agreement and the consummation of the transactions contemplated
herein did not occur.
5.10. Litigation. Except as set forth on Section 5.10 of the
Disclosure Schedule, as of the date hereof, there is no claim, action, suit,
arbitration, inquiry, proceeding, or investigation of any nature by or before
any Governmental Entity ("Litigation") pending or, to the Company's Knowledge,
threatened, involving the Company or any of the Subsidiaries which individually
or in the aggregate would reasonably be expected to have a Company Material
Adverse Effect or which would have a material adverse effect on the ability of
the Company to perform its obligations hereunder, or which seeks to enjoin or
obtain damages in respect of the consummation of the transactions contemplated
hereby. Neither the Company nor any of the Subsidiaries is subject to any
outstanding orders, rulings, judgments or decrees that would have a Company
Material Adverse Effect. Section 5.10 of the Disclosure Schedule also sets forth
a list of each outstanding order, ruling, judgment, injunctions or decree to
which the Company or any Subsidiary or any of its or their assets, properties or
rights is bound or subject.
5.11. Compliance With Laws. The Company and the Subsidiaries
are in compliance with all applicable laws, rules, regulations, ordinances,
decrees or orders of any Governmental Entity currently in effect, except where
the failure to comply therewith would not reasonably be expected to,
individually or in the aggregate, have a Company Material Adverse Effect. The
Company and the Subsidiaries have all governmental permits, licenses and
authorizations necessary for the conduct of their businesses as presently
conducted ("Permits") and are in compliance with the terms of
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the Permits (including environmental Permits), except for any non-compliance
which would not reasonably be expected to, individually or in the aggregate,
have a Company Material Adverse Effect.
5.12. Environmental Matters. Except as set forth on Section
5.12 of the Disclosure Schedule, or except as would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect:
(a) the Company and the Subsidiaries are in compliance
and since June 6, 1995 have been in compliance with all Environmental Laws;
(b) neither the Company nor any of the Subsidiaries has
received written notice from a Governmental Entity or anyone else (i) alleging
that the Company or any Subsidiary is not in compliance with Environmental Laws
or (ii) investigating the Release or threatened Release of any Hazardous
Material by the Company or its Subsidiaries;
(c) no Environmental Lien has attached to any property
that is currently owned or operated by the Company or any Subsidiary;
(d) the Company and the Subsidiaries have not caused any
Release or threatened Release at any Real Property or any property currently or
formerly owned, leased or used by the Company;
(e) there are no conditions or occurrences that could
reasonably be expected to form the basis for an Environmental Claim against the
Company or the Subsidiaries; and
(f) the Company and the Subsidiaries have made available
to Buyer all written environmental compliance audits, site assessments, and air
emission and waste water discharge sampling data that are in their possession.
5.13. Employee Benefit Plans.
(a) Section 5.13 of the Disclosure Schedule sets forth
an accurate and complete list of each employee benefit plan (as such term is
defined in Section 3(3) of ERISA), and any other bonus, deferred compensation,
incentive compensation, stock, severance or other plan or arrangement, other
than a non-material fringe benefit plan (each of the foregoing, a "Benefit
Plan"), currently maintained or contributed to by the Company or any Subsidiary
or with respect to which the Company or any Subsidiary has or may have any
material liability. With respect to each Benefit Plan, the Company previously
has furnished to the Buyer a true and correct copy of,
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where applicable, (a) the most recent annual report (Form 5500) filed with the
IRS, (b) the plan document if written, or a description of such plan if not
written, (c) each trust agreement, group annuity contract or other funding
arrangement, if any, relating to such Benefit Plan, (d) the most recent
actuarial report or valuation relating to such Benefit Plan (in the event such
Benefit Plan is subject to Title IV of ERISA, is a non-U.S. pension plan, or
provides any post-employment health, medical or life insurance benefits), (v)
the most recent summary plan description and (vi) the most recent determination
letter issued by the IRS.
(b) Neither the Company nor any Subsidiary has an
obligation to contribute to any multiemployer plan (as defined in Section 3(37)
of ERISA) and, no Benefit Plan is or was a multiemployer plan (as defined in
Section 3(37) of ERISA) or a plan subject to Title IV of ERISA. The amount of
any and all liabilities relating to any Benefit Plan are adequately accrued and
reflected in the SEC Reports and on the Balance Sheet or have been incurred and
relate to services rendered after September 30, 1997 in the ordinary course of
business consistent with past practice and in accordance with the terms of this
Agreement, including, without limitation, any material liabilities with respect
to foreign compensation or benefit arrangements. Except as set forth in Section
5.13 of the Disclosure Schedule with respect to the Benefit Plans, all required
contributions to date by the Company or any Subsidiary under the terms of any
Benefit Plan or applicable law have been made within the time prescribed by any
such Plan or applicable law or properly accrued on the appropriate balance
sheet. All contributions, premiums and expenses payable to or in respect of any
Benefit Plan or the operation or administration thereof relating to any period
on or prior to the date hereof have been paid or properly accrued on the
appropriate balance sheet. No liability has been or is expected to be incurred
by the Company or any Subsidiary or any trade or business, whether or not
incorporated, which is or would have been at any date of determination occurring
within the preceding six years treated as a single employer under Section 414 of
the Code together with the Company or the Subsidiaries (each such person, a
"Related Person") (either directly or indirectly, including as a result of an
indemnification obligation or any joint and several liability obligations) under
or pursuant to Title I or IV of ERISA or the penalty, excise tax or joint and
several liability provisions of the Code relating to employee benefit plans, and
no event, transaction or condition has occurred or exists that could result in
any such liability to the Buyer, the Company, any Subsidiary or any Related
Person or any employee benefit plan of the Company, any Subsidiary or any
Related Person.
(c) Each of the Benefit Plans has been administered in
accordance with its terms in all material respects and is in compliance in all
material respects with applicable laws and regulations.
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(d) Each of the Benefit Plans which is intended to be a
qualified plan within the meaning of Section 401(a) of the Code and the trust
forming a part thereof has received a favorable determination letter from the
IRS to be so qualified and to the extent that each such trust is exempt from
taxation under section 501(a) of the Code, and to the Knowledge of the Company
nothing has occurred since the date of such determination that could adversely
affect such qualification or tax-exempt status.
(e) Except as set forth in Section 5.13 of the
Disclosure Schedule, no Benefit Plan provides health, medical or life insurance
benefits with respect to current or former employees of the Company or any
Subsidiary beyond their retirement or other termination of service other than
(a) coverage mandated by applicable law, or (b) benefits the full cost of which
are borne by the current or former employee (or his or her beneficiary).
5.14. Labor Matters. Except as set forth on Section 5.14 of
the Disclosure Schedule, there are no labor unions or other organizations
representing, purporting to represent or, to the Knowledge of the Company,
attempting to represent any employee of the Company or any Subsidiary. Neither
the Company nor any Subsidiary is the subject of any suit, action or proceeding
which is pending or, to the Knowledge of the Company, threatened, asserting that
the Company or any Subsidiary has committed an unfair labor practice (within the
meaning of the National Labor Relations Act or applicable state statutes) or
seeking to compel the Company or any Subsidiary to bargain with any labor
organization as to wages and conditions of employment, in any such case, that is
reasonably likely to result in a material liability of the Company and its
Subsidiaries. No strike or other labor dispute involving the Company or any of
its Subsidiaries is pending or, to the Knowledge of the Company, threatened,
and, to the Knowledge of the Company, there is no activity involving any
employees of the Company or any of its Subsidiaries seeking to certify a
collective bargaining unit or engaging in any other organizational activity.
5.15. Consents. Except as set forth in Section 5.15 of the
Disclosure Schedule, no consent, approval or authorization of, notification to,
or exemption by, or filing with, any Governmental Entity (other than pursuant to
the HSR Act) is required in connection with the Company's execution, delivery
and performance by the Company of this Agreement or the taking of any other
action contemplated hereby, excluding, however, consents, approvals,
authorizations, exemptions and filings, which, if not obtained, would not
reasonably be expected to, individually or in the aggregate, have a Company
Material Adverse Effect.
5.16. Taxes. Except in each case as set forth in Section 5.16
of the Disclosure Schedule:
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(a) Each of the Company, the Subsidiaries, and any
affiliated, combined or unitary group for Tax purposes of which either the
Company or any Subsidiary is a member has: (i) timely filed and in all material
respects correctly prepared all returns, declarations, reports, estimates,
information returns and statements ("Returns") required to be filed or sent by
or with respect to it in respect of any Taxes; (ii) properly paid all Taxes that
are shown due and payable on such Returns; (iii) established on its books and
records and in the financial statements included in the SEC Reports adequate
reserves in accordance with GAAP for the payment of all liabilities for Taxes
for the periods covered by the financial statements included in such SEC
Reports; and (iv) complied in all respects with all applicable laws, rules and
regulations relating to the payment and withholding of Taxes from employees and
other persons except where such failure to comply would not reasonably be
expected to, individually or in the aggregate, have a Company Material Adverse
Effect.
(b) There are no Liens for Taxes upon the assets of the
Company or any of the Subsidiaries, except Permitted Liens.
(c) No written claim or deficiency for any Taxes has
been asserted against the Company or any of the Subsidiaries which has not been
resolved and paid in full.
(d) There are no outstanding waivers or comparable
consents given by the Company or any of the Subsidiaries regarding the
application of the statute of limitations with respect to any Taxes or Returns.
(e) No audits or proceedings before any Governmental
Entity are presently pending with regard to any Taxes or Returns and the Company
and the Subsidiaries have not received any written notices of any such audits or
proceedings.
(f) None of the Company or any Subsidiary is a party to
or has any obligation under any Tax sharing, indemnification or similar
agreement.
(g) Except for any consolidated, affiliated or unitary
group of which Company is the common parent, none of the Company or any
Subsidiary is or has been a member of a affiliated, combined or unitary group
for Tax purposes at any time after June 6, 1995.
5.17. Real Property.
(a) Section 5.17(a) of the Disclosure Schedule lists all
of the real property and all interests in real property owned in fee by the
Company or any Subsidiary and material to the conduct of the Business ("Owned
Property"). The
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Company or a Subsidiary, as applicable, has good and marketable title to all of
the Owned Property.
(b) Section 5.17(b) of the Disclosure Schedule lists all
real property and all interests in real property leased by the Company or any
Subsidiary and material to the conduct of the Business (individually, a "Leased
Property"; together with the Owned Property, the "Real Property"). The Company
and the Subsidiaries have good and valid leasehold interests in all Leased
Property, and each leasehold interest is free and clear of all Liens except for
Permitted Liens. The Company has previously delivered to the Buyer true and
complete copies of each lease relating to the Leased Property.
(c) The current use and operation of the Real Property
does not violate in any material respect any instrument of record affecting the
Real Property, except for such violations which, individually or in the
aggregate, would not have a Company Material Adverse Effect. The Owned Property
is in material compliance with all real estate laws, and the Company has
Knowledge of no written notice of violation or claimed violation of any real
estate law, in either case except where such violation or lack of compliance
would not, individually or in the aggregate, materially restrict the ability of
the Company or any Subsidiary to conduct its business as presently conducted.
This Section 5.17 does not relate to environmental matters, which are the
subject of Section 5.12.
5.18. Affiliate Transactions. (a) Section 5.18(a) of the
Disclosure Schedule contains a complete and correct list of all material
agreements, contracts, arrangements, understandings, transfers of assets or
liabilities or other commitments or transactions, whether or not entered into in
the ordinary course of business, to or by which the Company or any Subsidiary,
on the one hand, and any Affiliate, on the other hand, are or have been a party
or otherwise bound or affected, and that are currently pending or in effect
(other than any of the foregoing entered into by and between the Company and any
the Subsidiaries).
(b) To the Company's Knowledge, except as set forth in
Section 5.18(b) of the Disclosure Schedule, no stockholder, officer, director or
employee of the Company or any Subsidiary, or any family member, relative or
Affiliate of any such stockholder, officer, director or employee, (i) owns,
directly or indirectly, and whether on an individual, joint or other basis, any
interest in (x) any property or asset, real or personal, tangible or intangible,
used in or held for use in connection with or pertaining to the Business, or (y)
any person, that is a supplier, customer or competitor of the Company or any
Subsidiary (except for a deminimus interest in any company whose securities are
publicly traded), (ii) serves as an officer, director or employee of any person
that is a supplier, customer or competitor of the Company or any Subsidiary or
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(iii) has received any loans from or is otherwise a debtor of, or made any loans
to or is otherwise a creditor of, the Company or any Subsidiary.
5.19. Broker's Fees. Section 5.19 of the Disclosure Schedule
lists all liabilities on the part of the Company, any Subsidiary or any
Affiliate or representative of the Company or any Subsidiary, to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement for which the Buyer could become liable or
obligated.
5.20. Disclaimer. Except as set forth in this Agreement, none
of the Company, any Subsidiary or any officer, director, employee, agent,
stockholder, or Affiliate of the Company or any Subsidiary (such officers,
directors, employees, agents, stockholders and Affiliates being collectively
referred to herein as the "Company Released Parties") makes any representation
or warranty, express or implied, at law or in equity, in respect of the Company,
the Subsidiaries or any of their respective assets, Liabilities or operations,
including, without limitation, with respect to merchantability or fitness for
any particular purpose, and any such other representations or warranties are
hereby expressly disclaimed.
5.21. Restricted Payments Basket. The Company has at least
$7,000,000 of availability under the basket for restricted payments set forth in
Section 4.09 of the Indenture.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Parent and the Buyer hereby represent and warrant to the
Company as follows:
6.1. Organization. The Parent is a limited liability company
duly organized and in good standing under the laws of the State of Delaware and
has the power and authority to carry on its business as presently conducted. The
Buyer is a corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its incorporation. True and complete
copies of the certificate of incorporation and bylaws of the Parent and the
Buyer have been delivered or made available to the Company.
6.2. Corporate Power and Authority; No Violations. The Buyer
has full power and authority to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby. The execution, delivery and
per-
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formance by the Buyer of this Agreement and the consummation by the Buyer of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Buyer, including due and valid authorization
by the board of directors and the stockholders of the Buyer and no other
corporate proceedings on the part of the Buyer are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
has been duly and validly executed and delivered by the Buyer and constitutes
the valid and binding obligation of the Company, enforceable against the Buyer
in accordance with its terms, except to the extent that such enforceability (i)
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to creditors' rights generally, and (ii) is subject to
general principles of equity. Except as set forth in Section 6.2 of the
Disclosure Schedule, neither the execution, delivery and performance by the
Buyer of this Agreement nor the consummation by the Buyer of the transactions
contemplated hereby will, with or without the giving of notice or the passage of
time, or both, (x) violate any provision of law, rule, regulation, order,
judgment, writ, injunction or decree applicable to the Buyer, (y) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any note, bond, mortgage, indenture, license,
contract or agreement to which the Buyer is a party or by which the Buyer or any
of its assets is bound; or (z) conflict with or violate any provision of the
certificate of incorporation or bylaws (or substantially equivalent documents)
of the Buyer.
6.3. Brokers' Fees. Neither the Buyer nor any Affiliate or
representative of the Buyer has any Liability to pay any fees or commissions to
any broker, finder or agent with respect to the transactions contemplated by
this Agreement for which the Company or any of the Sellers could become liable
or obligated.
6.4. Litigation. No Litigation is pending or, to the Knowledge
of the Buyer, is threatened which seeks to delay, prevent, adversely affect or
restrict the consummation of the transactions contemplated hereby.
6.5. Consents. Except as set forth in Section 6.5 of the
Disclosure Schedule, no consent, approval or authorization of, or exemption by,
or filing with, any Governmental Entity (other than pursuant to the HSR Act) is
required in connection with the execution, delivery and performance by the Buyer
of this Agreement or the taking of any other action contemplated hereby,
excluding, however, consents, approvals, authorizations, exemptions and filings,
if any, which the Company or any Subsidiary is required to obtain or make and
consents or authorizations which, if not obtained, would not prevent or
materially delay, hinder or impair the consummation of the transactions
contemplated hereby.
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6.6. Purchase for Investment. The Buyer is acquiring the
Company for investment and not with a view to any public resale or other
distribution thereof in violation of the Securities Act of 1933, as amended, or
any applicable state securities laws.
6.7. Adequate Funds. Prior to the date hereof, the Parent has
delivered to the Company written commitments from Greenwich Street Capital
Partners, L.P., Greenwich Street Capital Offshore Fund, LTD and TRV Employees
Fund, L.P. (collectively, "GSCP Group") and SG Capital Partners, LLC ("SG")
which contains the terms and conditions upon which each member of the GSCP Group
and SG has severally agreed to provide equity capital funds to the Parent to
enable it to fund a portion of the Purchase Price and to perform its other
obligations set forth in this Agreement. The aggregate amount of such
commitments from the GSCP Group and SG is $92.5 million. Prior to the date
hereof, the Parent has delivered to the Company written commitments (the "Bank
Commitments") from one or more banks or other financial institutions which
contain the general terms and conditions upon which such banks or financial
institutions have agreed to make loans to the Parent, the Buyer and/or the
Company, the proceeds of which loans, together with the Parent's net equity
capital funds immediately prior to the Closing Date, will be sufficient to
enable the Parent to consummate the transactions contemplated in this Agreement.
The Funds to be loaned to the Buyer are hereinafter referred to as the
"Financing".
ARTICLE VII
COVENANTS OF THE PARTIES
7.1. Efforts. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its commercially reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable to consummate and effect the
transactions contemplated by this Agreement on the earlier of January 15, 1998
or the date that is two business days after the expiration or termination of the
applicable waiting period (and any extensions thereof) under the HSR Act,
including, without limitation, obtaining all required consents and approvals,
making all required filings and applications and, complying with or responding
to any requests by Governmental Entities. The Buyer shall use commercially
reasonable efforts to make all filings required under the HSR Act no later than
December 24, 1997. AIP and the Management Shareholders shall cause the Company
to use commercially reasonable efforts to assist the Parent in obtaining the
Financing required to consummate the transactions contemplated by this
Agreement, including but not limited to, causing the Company (i) to take, or
cause to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable to cause all of the indebtedness of the Company
and
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the Subsidiaries under the U.S. Credit Agreement and the U.K. Credit Agreement
to be repaid in full (using funds supplied or made available by the Parent) and
all of the agreements and instruments relating to such indebtedness, including
all security agreements, filings and related instruments, to be terminated to
the reasonable satisfaction of the Buyer and (ii) to enter into the Senior
Capital Facility provided for under the Bank Commitments. AIP shall use
commercially reasonable efforts to cause each of the other Sellers to execute
this Agreement as soon as practical after the date hereof. The Buyer and the
Sellers agree that no filings with any foreign Governmental Entities are
required to be made prior to the consummation of the transactions contemplated
by this Agreement and that no filings shall be made with any Governmental
Entities other than the filing required under the HSR Act.
7.2. Conduct of Business.
(a) Except as may be otherwise contemplated by this
Agreement or Section 7.2 of the Disclosure Schedule or required by law or any
Contracts or other agreements or arrangements disclosed in the Disclosure
Schedule or as the Buyer may otherwise consent to in writing (which consent
shall not be unreasonably withheld), from the date hereof and prior to the
Closing, AIP and the Management Shareholders will cause the Company and each of
the Subsidiaries to operate their businesses only in the ordinary course
consistent with past practice.
(b) Without limiting the generality of the foregoing,
except as may be otherwise contemplated by this Agreement or Section 7.2 of the
Disclosure Schedule or required by law or any Contracts or other agreements or
arrangements disclosed in the Disclosure Schedule or as the Buyer may otherwise
consent to in writing (which consent shall not be unreasonably withheld), from
the date hereof and prior to the Closing, AIP and the Management Shareholders
shall cause the Company and the Subsidiaries not to:
(i) (A) declare, set aside or pay any dividend or
other distribution (whether in cash, stock or property or any
combination thereof) in respect of any of its capital stock; (B) split,
combine or reclassify any of its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock or (C) amend the
terms of, repurchase, redeem or otherwise acquire, or permit any
Subsidiary to repurchase, redeem or otherwise acquire, any of its
securities or any securities of the Subsidiaries, or propose to do any
of the foregoing;
(ii) authorize for issuance, issue, sell, deliver or
agree or commit to issue, sell or deliver (whether through the issuance
or granting of options, warrants, commitments, subscriptions, rights to
purchase or otherwise)
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any stock of any class or any other securities (including Indebtedness
having the right to vote) or equity equivalents (including, without
limitation, stock appreciation rights), or amend in any respect any of
the terms of any such securities or equity equivalents outstanding on
the date hereof;
(iii) amend or propose to amend its certificate of
incorporation or bylaws or equivalent documents;
(iv) acquire, sell, lease, encumber, transfer or
dispose of any assets (except that the Company and the Subsidiaries may
sell inventory in the ordinary course of business consistent with past
practice) in an aggregate amount not in excess of $500,000, unless the
same shall be replaced with assets of equal or greater value and
utility, or make any capital expenditures in excess of $250,000 each or
aggregating over $500,000, except in each case pursuant to Contracts in
effect on the date hereof or pursuant to the Company's Capital
Expenditure Budget; modify or amend any Contracts (including any
relating to Indebtedness) outside of the ordinary course of business
consistent with past practices; enter into any material contract,
commitment or transaction outside the ordinary course of business
consistent with past practices;
(v) except for revolving credit loans (and letters
of credit obtained in the ordinary course of business consistent with
past practices), incur or assume any Indebtedness or issue or sell any
debt securities or warrants or rights to acquire any debt securities of
the Company or any of the Subsidiaries or guarantee (or become Liable
for) any Indebtedness of others or mortgage, pledge or otherwise
encumber any assets or consensually create any Lien thereupon other
than Permitted Liens;
(vi) make any loans, advances or capital
contributions outside of the ordinary course of business consistent
with past practices, except to wholly-owned Subsidiaries;
(vii) except as may otherwise be required by GAAP or
the United States or United Kingdom Financial Accounting Standards
Boards, change any of the accounting principles or practices used by
it;
(viii) make any Tax election except in the ordinary
course of business and consistent with past practice, amend any
Returns, or settle or compromise any Tax liability material to the
Company and its Subsidiaries taken as a whole;
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(ix) (1) enter into, adopt, amend or terminate any
Benefit Plan or any agreement, arrangement, plan or policy between
itself or any Subsidiary and any of their respective current or former
officers, directors, employees or consultants or (2) increase in any
manner the compensation or fringe benefits of any current or former
director, officer, employee or consultant or pay any benefit not
required by any plan or arrangement as in effect as of the date hereof,
except in the case of officers and employees for normal increases in
compensation and normal year-end bonuses, in each case, in the ordinary
course of business and consistent with past practice; or enter into any
contract, agreement, commitment or arrangement to do any of the
foregoing; or
(x) transfer or grant any rights or licenses under,
or enter into any settlement regarding the infringement of, Company
Intellectual Property or enter into any licensing or similar agreements
or arrangements relating to Intellectual Property outside of the
ordinary course of business; and
(xi) agree to take any of the foregoing actions.
7.3. Certain Other Conduct. Neither AIP nor the Management
Shareholders shall knowingly take any action that would cause any of the
representations and warranties not to be true and correct on the Closing Date in
the manner required by Section 8.1(b) hereof.
7.4. Access. From the date hereof and prior to the Closing,
AIP and the Management Shareholders shall cause the Company to provide the
Parent with such information as the Parent may from time to time reasonably
request with respect to the Company and the Subsidiaries and their assets and
properties and the transactions contemplated by this Agreement, and shall cause
AIP and the Management Shareholders to provide the Parent and its
representatives reasonable access during regular business hours and upon
reasonable notice to the personnel, representatives, properties, books and
records of the Company and the Subsidiaries as the Parent may from time to time
reasonably request. Any disclosure whatsoever during such investigation by the
Buyer shall not constitute any enlargement or additional representations or
warranties of the Company or any of its Affiliates beyond those specifically set
forth in this Agreement. All such information and access shall be subject to the
terms and conditions of the Confidentiality Agreement, dated September 30, 1997,
executed by the Buyer (the "Confidentiality Agreement").
7.5. No Solicitation. Neither the Sellers nor their
Affiliates, officers, directors, employees, representatives or agents, shall,
and AIP and the Management Shareholders shall cause the Company and the
Subsidiaries not to, directly or indirectly,
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encourage, solicit, participate in, initiate or continue discussions or
negotiations with, or provide any information to, any person (other than the
Buyer and its Affiliates and representatives) concerning any merger, sale of
assets, sale of shares of capital stock or similar transactions involving the
Company or any Subsidiary or division of the Company and any existing
discussions or negotiations with third persons relating thereto shall be
terminated immediately.
7.6. Books and Records; Personnel. For a period of seven (7)
years from the Closing, the Parent shall, and shall cause the Company and the
Subsidiaries to, provide to any Seller for any purpose relating to such Seller's
ownership of any securities of the Company, access to the books and records of
the Company upon reasonable advance written notice during regular business hours
for the sole purpose of obtaining information for use as aforesaid and will
permit such Seller to make such extracts and copies thereof as may be necessary.
Such Seller shall reimburse the Company or the Subsidiary for the reasonable
out-of-pocket expenses incurred by any of them in performing the covenants
contained in this Section 9.5.
7.7. Liabilities and Indemnification.
(a) The Buyer understands and agrees that, from and after
the Closing, neither the Sellers nor any of their respective Affiliates shall
have any Liability or responsibility for any Liability of or arising out of or
relating to the Company or any of the Subsidiaries, or their operation or
ownership of the Company or any of the Subsidiaries (including as to
environmental matters), of whatever kind or nature, whether contingent or
absolute, whether arising prior to or on or after, and whether determined or
indeterminable on, the Closing, and whether or not specifically referred to in
this Agreement. Accordingly, the Buyer agrees that, effective upon the Closing,
the Buyer shall be responsible for and indemnify the Sellers and their
respective Affiliates and hold each of them harmless against any Liability,
loss, damage, claim, cost or expense (including, without limitation, reasonable
attorneys' fees and disbursements) (collectively, "Losses") incurred or suffered
by any of them arising out of any of the Liabilities.
(b) After the Closing, the Company and each Subsidiary
shall exculpate (to the greatest extent permitted by applicable law) and the
Buyer shall indemnify, defend and hold harmless the Sellers (each an
"Indemnified Party") against all Losses, arising out of actions or omissions in
their capacities as such occurring at or prior to the Closing to the fullest
extent permitted under applicable law or the Company's or any Subsidiary's
certificate of incorporation or bylaws (or substantially equivalent documents)
in effect at the date of this Agreement, including, without limitation,
provisions relating to advances of expenses incurred in the defense of any
action or suit, provided that the Company shall pay for only one counsel for all
Indemnified Parties
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unless the use of one counsel for such Indemnified Parties would present such
counsel with a conflict of interest; subject to such Indemnified Party's
agreement to return any advanced funds if a court of competent jurisdiction,
after all time for appeals having been exhausted, shall have determined that
such Indemnified Party is not entitled to such amounts under applicable law or
the Company's certificate of incorporation or bylaws (or substantially
equivalent documents).
(c) If (but only if) for any reason the indemnity
provided for in Sections 9.6(a) or (b) is unavailable to any Indemnified Party
or is insufficient to hold each such Indemnified Party harmless from all such
Losses, then the Buyer, the Company and the Subsidiaries shall each contribute
to the amount paid or payable by such Indemnified Party in such proportion as is
appropriate to reflect not only the relative benefits received by the Company
and the Subsidiaries on the one hand and such Indemnified Party on the other but
also the relative fault of such persons as well as any relevant equitable
considerations.
(d) Notwithstanding anything in this Agreement to the
contrary, after the Closing Date, no Seller shall have any liability for the
breach of any of the representations, warranties or covenants set forth in this
Agreement; provided, however that each Seller shall be severally liable for any
breach by such Seller of the representations and warranties made by such Seller
pursuant to Section 2.1(b) hereof.
7.8. Insurance. The Company and the Subsidiaries shall
maintain, and the Parent shall cause the Company and the Subsidiaries to
maintain, the Company's and the Subsidiaries' existing officers' and directors'
liability insurance, if available, for a period of not less than six years after
the Closing; provided that the Parent may substitute therefor policies of
insurers with at least equal rating with at least the same coverage containing
terms and conditions which are no less advantageous to the beneficiaries;
provided, however, that the Parent shall not in any event be required to cause
such insurance to be maintained by the Company if the annual premium therefor
would be in excess of 200% of the last annual premium paid prior to the date of
this Agreement (which was $25,000); provided, further, that if the same coverage
cannot be obtained by the Company without paying an annual premium in excess of
such limit, the Parent shall cause to be maintained as much coverage as can be
obtained by paying an annual premium equal to such limit.
7.9. Subsequent Disclosures by Company. To the extent that AIP
hereafter informs the Buyer that any representation or warranty of the Sellers
was untrue when made, and such untruth is sufficiently material to prevent the
satisfaction on or prior to February 8, 1998, of the condition set forth in
Section 8.1(b) hereof, then unless the Buyer terminates this Agreement pursuant
to Section 10.1(c) hereof within five (5) business days after the Buyer is
informed of such untruth and the Sellers have provided
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the Buyer with all information, if any, in the possession of the Sellers or the
Company in respect of such untruth, (i) the Buyer shall have no rights hereunder
by reason of such untruth, and (ii) any such representation or warranty by the
Company shall be deemed to be amended (effective as of the date of this
Agreement) to the extent necessary to render it consistent with such Knowledge
of the Buyer; provided that nothing in this Section 7.9 shall in any way limit
the Buyer's rights under Section 8.5 hereof.
7.10. Litigation Support. In the event and for so long as any
party actively is contesting or defending against any Litigation in connection
with (a) any transaction contemplated under this Agreement, or (b) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act or transaction on or prior
to the Closing Date involving any of the Company and the Subsidiaries, each of
the other parties shall cooperate with the defending or contesting party and its
counsel in the defense or contest, all at the sole cost and expense of the
defending or contesting party (unless the defending or contesting party is
otherwise entitled to indemnification from the other party).
7.11. Employee Matters.
(a) From and after the Closing Date, the Buyer shall
cause the Company and the Subsidiaries to continue for persons formerly employed
by the Company, or any Subsidiary and identified on Section 7.11 of the
Disclosure Schedule (collectively, "Former Employees"), the Benefit Plans set
forth on Section 7.11 of the Disclosure Schedule , or to adopt other such plans,
programs, policies, arrangements or agreements that will provide such Former
Employees with benefits that are in the aggregate substantially comparable to
the benefits provided to such Former Employees under the Benefit Plans set forth
on Section 7.11 of the Disclosure Schedule on the date hereof, and shall cause
the Company to continue such Benefit Plans for at least two years following the
Closing Date; provided that, the Buyer retains the right to change the terms of
the coverage provided by the Benefit Plans set forth on Section 7.11 of the
Disclosure Schedule or substantially comparable benefit plans if such changes
are required by applicable law; and, provided, further, that neither the Buyer
nor the Company shall have any responsibility or obligation to provide benefits
for Former Employees whose last employment was with the Company's predecessor
Dayco Corporation at its Waynesville, North Carolina plant.
(b) From and after the Closing Date, the Buyer shall
cause the Company and the Subsidiaries to continue for current employees the
Benefit Plans, or to adopt other such plans, programs, policies, arrangements or
agreements that will provide such employees with benefits that are in the
aggregate substantially comparable to the benefits provided to such employees
under the Benefit Plans on the date hereof (other than stock-based or other
equity plans), and shall cause the Company to continue such
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Benefit Plans in effect for at least two years following the Closing Date;
provided that, the Buyer retains the right to terminate such employees and to
change the terms of the coverage provided by the Benefit Plans or substantially
comparable benefit plans in accordance with any change in an employee's status
or if such changes are required by applicable law.
7.12. Breakage Costs. AIP and the Management Shareholders
shall cause the Company to cooperate with the Buyer to manage the Company's and
its Subsidiaries' indebtedness under the U.S. Credit Agreement and the U.K.
Credit Agreement so as to avoid any payment of any "breakage" or similar charges
upon any repayment of such indebtedness pursuant to the provisions of Section
10.5 hereof.
7.13. Use of Business Name, Proprietary Information. From and
after the Closing Date, no Seller shall, directly or indirectly, use or do
business under, or allow any Affiliate to use or do business under, or assist
any third party in using or doing business under, or grant or attempt to grant
any person any rights to use or do business under the names and marks included
in the Intellectual Property owned by the Company (or any other name or ▇▇▇▇
confusingly similar to such names and marks). From and after the Closing Date,
no Seller shall have any interest in, or claim to any of the Intellectual
Property owned by the Company.
7.14. Financing. The Buyer agrees to use its commercially
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable to consummate and
effect the Financing on terms set forth in the Bank Commitments.
ARTICLE VIII
CONDITIONS TO THE BUYER'S OBLIGATIONS
The obligation of the Buyer to consummate the transactions
contemplated hereby shall be subject to the satisfaction (or waiver) at or prior
to the Closing of all of the following conditions:
8.1. Representations, Warranties and Covenants of the Company.
(a) The Company shall have performed and complied in all
material respects with their respective agreements and covenants contained
herein on, prior to or as of the Closing Date.
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(b) (i) The representations and warranties of the Company
contained herein that are qualified by reference to Company Material Adverse
Effect, as subsequently modified in accordance with the provisions of Section
7.9 hereof, shall be true and correct and (ii) all other representations and
warranties of the Company contained herein, as subsequently modified in
accordance with the provisions of Section 7.9 hereof, shall be true and correct
at and as of the Closing Date, except for representations and warranties that
speak as of a specific date or time other than the Closing Date, which shall be
true as of such date or time; provided, that this clause (ii) shall be deemed
satisfied unless the failure of the representations and warranties of the
Company to be true and correct, in the aggregate, is material to the business of
the Company and its Subsidiaries taken as a whole.
8.2. Certain Stockholder Approvals. The Company shall have
provided evidence reasonably satisfactory to Buyer that the Company has
obtained, where necessary to avoid the imposition of an excise tax under Section
280G or Section 4999 of the Code or the denial of a deduction under Section 280G
of the Code, proper written consent in accordance with the shareholder approval
requirements of Section 280G(b)(5) of the Code with respect to all Benefit
Plans, Contracts and any other contract, plan, policy, arrangement, or
agreement, which alone or in conjunction with any other arrangement or payment,
provides or may provide payment which without such consent would or could
constitute "parachute payments" (within the meaning of Section 280G of the
Code), including without limitation the Benefit Plans, Contracts and other
contracts, plans, policies, arrangements or agreements set forth in Section 8.2
of the Disclosure Schedule.
8.3. Corporate and Other Proceedings. All corporate
proceedings of the Company in connection with the transactions contemplated by
this Agreement, and all documents and instruments incident hereto, shall be
reasonably satisfactory in substance to the Buyer and its counsel, and the Buyer
and its counsel shall have received all such documents and instruments, or
copies thereof, certified if requested, as may be reasonably requested.
8.4. Repayment of Indebtedness. All of the indebtedness of the
Company and the Subsidiaries under the U.S. Credit Agreement and the U.K. Credit
Agreement shall be repaid in full (using funds supplied or made available by the
Parent) and all of the agreements and instruments relating to such indebtedness,
including all security agreements, filings and related instruments, shall be
terminated to the reasonable satisfaction of the Buyer.
8.5. Financing. All of the conditions to the banks'
obligations to fund under the Bank Commitments shall be satisfied or waived.
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8.6. No Prohibition. No order, judgement, ruling, charge,
decree, law or injunction of any Governmental Entity shall be in effect which
prohibits the consummation of the transactions contemplated hereby.
8.7. Governmental Consents. The applicable waiting period (and
any extensions thereof) under the HSR Act shall have expired or been terminated.
8.8. Document Deliveries. The Buyer shall have received from
the Company the documents listed in Section 4.2(a) hereof.
ARTICLE IX
CONDITIONS TO THE SELLERS' OBLIGATIONS
The obligations of the Sellers to consummate the transactions
contemplated hereby shall be subject to the satisfaction (or waiver) at or prior
to the Closing of all of the following conditions:
9.1. Representations, Warranties and Covenants of the Buyer.
(a) The Buyer shall have performed and complied in all
material respects with its agreements and covenants contained herein on, prior
to or as of the Closing Date.
(b) The representations and warranties of the Buyer
contained herein shall be true and correct as of the Closing Date, except for
representations and warranties that speak as of a specific date or time other
than the Closing Date, which shall be true as of such date or time.
9.2. No Prohibition. No order, judgment, ruling, charge,
decree, law or injunction of any Governmental Entity shall be in effect which
prohibits the consummation of the transactions contemplated hereby.
9.3. Governmental Consents. The applicable waiting period (and
any extensions thereof) under the HSR Act shall have expired or been terminated.
9.4. Document Deliveries. The Sellers shall have received from
Buyer the documents listed in Section 4.2(b) hereof.
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ARTICLE X
TERMINATION PRIOR TO CLOSING
10.1. Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) By the mutual written consent of AIP, the Parent and
the Buyer;
(b) By AIP in writing, without liability to the Sellers
on account of such termination, if the Closing shall not have occurred on or
before January 15, 1998; provided that notwithstanding the foregoing, (i) if the
parties receive early termination under the HSR Act before January 15, 1998, AIP
shall not be entitled to exercise its right to terminate this Agreement pursuant
to this Section 10.1(b) until the third business day following the date upon
which such notice was received by the parties, and (ii) if the parties do not
receive early termination under the HSR Act on or before January 15, 1998, AIP
shall not be entitled to exercise its right to terminate this Agreement pursuant
to this Section 10.1(b) until the third business day following expiration or
termination of the applicable waiting period (and any extensions thereof) under
the HSR Act; or
(c) By either AIP or the Buyer if the conditions to such
party's obligations shall have become impossible to satisfy on or before
February 8, 1998, (after giving effect to any potential actions the
non-terminating party may propose to take to cure such failure of condition
after reasonable notice from the party proposing to terminate this Agreement),
provided that no party shall be entitled to terminate this Agreement pursuant to
this clause (c) if the reason for such impossibility is due to a breach by the
party proposing to terminate this Agreement.
10.2. Effect of Termination. Termination of this Agreement
pursuant to this Article 10 shall terminate all obligations of the parties
hereunder, except for the obligations under Sections 11.6, 11.8 and 11.9 hereof
and the Confidentiality Agreement, provided, however, that nothing in this
Section 10.2 shall relieve or limit the Liability hereunder of any party (the
"Defaulting Party") to the other party or parties on account of (i) a wilful
breach of a representation or warranty, or (ii) a breach of a covenant contained
herein by the Defaulting Party. In the case of such a breach, in addition to any
damages for which the Defaulting Party may be liable, the Defaulting Party shall
reimburse the other party or parties for any expenses incurred by such party or
parties in order to enforce its or their rights under this Agreement (including
reasonable attorney's fees and expenses); provided, that the obligations of the
Sellers pursuant to this Section 10.2 shall be several and not joint and no
Seller shall be liable for damages in excess of
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such Seller's ownership interest in the Company based on such Seller's
respective holding of Shares.
ARTICLE XI
MISCELLANEOUS
11.1. Non-Survival of Representations and Warranties. Except
as set forth in Section 7.7(d), none of the covenants, representations and
warranties in this Agreement or any certificate delivered pursuant to this
Agreement shall survive the Closing except for covenants which, by their terms,
are to be performed after the Closing.
11.2. Entire Agreement. This Agreement (including the
Disclosure Schedule and all Exhibits hereto) and the Confidentiality Agreement
constitute the sole understanding of the parties with respect to the subject
matter hereof. Matters disclosed in the Disclosure Schedule pursuant to any
section of this Agreement shall be deemed to be disclosed with respect to all
sections of this Agreement.
11.3. Successors and Assigns; Third Party Beneficiaries. The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties hereto;
provided, however, that this Agreement may not be assigned by any party without
the prior written consent of the other parties and any such attempted
assignments shall be null and void, except that the Buyer may assign this
Agreement to any of its Affiliates, but no such assignment shall release the
Buyer from any Liability hereunder. From and after the Closing, the Company
Released Parties and their respective Affiliates shall be third party
beneficiaries of this Agreement.
11.4. Headings. The headings of the articles, sections and
paragraphs of this Agreement are inserted for convenience only and shall not be
deemed to constitute part of this Agreement or to affect the construction
hereof.
11.5. Modification and Waiver. No amendment, modification or
alteration of the terms or provisions of this Agreement shall be binding unless
the same shall be in writing and duly executed by the parties hereto, except
that any of the terms or provisions of this Agreement may be waived in writing
at any time by the party which is entitled to the benefits of such waived terms
or provisions. No waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof (whether or
not similar). No delay on the part of any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof.
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11.6. Expenses. Except as otherwise provided herein, the
Sellers on the one hand and the Buyer on the other hand shall each pay all costs
and expenses incurred by it or on its behalf in connection with this Agreement
and the transactions contemplated hereby including, without limiting the
generality of the foregoing, fees and expenses of its own financial consultants,
accountants and counsel.
11.7. Notices. Any notice, request, instruction or other
document to be given hereunder by any party hereto to any other party shall be
in writing and shall be given (and will be deemed to have been duly given upon
receipt) by delivery in person, by electronic facsimile transmission, by
overnight courier or by registered or certified mail, postage prepaid,
if to the Company, to:
Day International Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: 937/226-0052
with a copy to:
American Industrial Partners
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: 415/788-5302
and a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: 202/879-5200
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if to the Buyer, to:
▇/▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Capital Partners, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Telecopy: 212/816-0166
with a copy to:
Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy: 212/909-6836
11.8. Governing Law; Forum. This Agreement shall be construed
in accordance with and governed by the laws of the State of New York applicable
to agreements made and to be performed wholly within such jurisdiction. Except
as explicitly provided otherwise herein, each of the parties hereto hereby
irrevocably and unconditionally waives any objection to the laying of venue of
any litigation arising out of this Agreement or the transactions contemplated
hereby in the courts of the State of New York or the United States of America,
in each case located in County of New York, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such litigation brought in any such court has been brought in an
inconvenient forum.
11.9. Public Announcements. None of the parties shall make any
public statements, including, without limitation, any press releases, with
respect to this Agreement and the transactions contemplated hereby without the
prior written consent of the other parties except as such party in good faith
believes may be required by applicable law or pursuant to any Contract (in which
case the disclosing party will use its reasonable best efforts to consult with
the other party in advance as to the contents and timing thereof).
11.10. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original and all of which shall constitute the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the date first above written.
GREENWICH IV LLC
By:
Name:
Title:
GSD ACQUISITION CORP.
By:
Name:
Title:
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SELLERS
AMERICAN INDUSTRIAL PARTNERS
CAPITAL FUND, L.P.
By: AMERICAN INDUSTRIAL
PARTNERS, L.P., its General Partner
By: AIP MANAGEMENT CO.,
its Managing General Partner
By:______________________________________
W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
AMERICAN INDUSTRIAL PARTNERS
CAPITAL FUND II, L.P.
By: AMERICAN INDUSTRIAL
PARTNERS II, L.P., its General Partner
By: AMERICAN INDUSTRIAL
PARTNERS CORPORATION, its
General Partner
By:______________________________________
W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
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_________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
_________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_________________________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇ ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ 1990 Revocable
Trust
By:____________________________________
R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee
▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ 1987 Irrevocable
Children's Trust
By:____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇ ▇. ▇▇▇▇
_________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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_________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇ Boret
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
_________________________________________
Medford ▇. ▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________________
▇▇▇▇▇▇ ▇▇▇▇▇
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