Exhibit 10.1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into this 6th day of
December, 2005, by and among Middleby Marshall, Inc. (the "Buyer"), ALKAR
HOLDINGS, INC., a Wisconsin corporation (the "Holding Company"), FACILITATOR
CAPITAL FUND, LIMITED PARTNERSHIP ("FCF"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"),
▇▇▇▇▇▇ Holdings, LLC ("▇▇▇▇▇▇") (hereinafter, FCF, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ are
referred to as "Investors"), J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ("Hinderaker), ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇▇▇") (hereinafter, Hinderaker, Jurkowski, Hanson, Smith,
and ▇▇▇▇▇▇▇▇▇▇▇ shall be referred to as the "Managers," and the Managers and
Investors shall hereinafter be referred to collectively as the "Sellers"), the
Bank of Sun Prairie, as custodian for the J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇
("▇▇▇▇▇▇▇▇▇▇ ▇▇▇ Custodian"), the ▇▇▇▇ ▇▇▇▇▇▇▇▇▇-▇▇▇ ("▇▇▇▇▇▇▇▇▇ ▇▇▇
Custodian"), the ▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇ ("▇▇▇▇▇▇ ▇▇▇ Custodian"), the ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇-▇▇▇ ("▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ Custodian"), and the ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇ ("▇▇▇▇▇
▇▇▇ Custodian") (hereinafter, the ▇▇▇▇▇▇▇▇▇▇ ▇▇▇ Custodian, ▇▇▇▇▇▇▇▇▇ ▇▇▇
Custodian, ▇▇▇▇▇▇ ▇▇▇ Custodian, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ Custodian and ▇▇▇▇▇ ▇▇▇
Custodian shall be referred to as the "Custodians"), and G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, the Sellers own, either individually or beneficially
pursuant to individual retirement accounts, all of the issued and outstanding
stock of the Holding Company (the "Holding Company Stock"); and
WHEREAS, the Holding Company owns all of the issued and
outstanding stock of Alkar-RapidPak, Inc., a Wisconsin corporation (the
"Operating Company"); and
WHEREAS, the Operating Company owns all of the issued and
outstanding membership interests of Alkar-RapidPak Brasil LLC, a Wisconsin
limited liability company ("Alkar Brasil") (the Holding Company, the Operating
Company, and Alkar Brasil are referred to herein as the "Companies"); and
WHEREAS, the Sellers desire to sell all of the outstanding
stock of the Holding Company, and the Buyer desires to purchase all of the
outstanding stock of the Holding Company, all on the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the foregoing recitals and
the mutual covenants, representations, warranties, conditions and agreements
hereinafter expressed, the Parties agree as follows:
ARTICLE I
DEFINITIONS
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Without limiting the effect of any other terms defined in the
text of this Agreement, the following words shall have the meaning given them
in this Article I:
1.1 "Acquisition Date" means December 31, 2001.
1.2 "Adjustment Amount" means, subject to Section 2.5(b)(ii), the
amount by which the Final Net Working Capital is greater than Seven Hundred
Fifty Thousand Dollars ($750,000) or less than Two Hundred Fifty Thousand
Dollars ($250,000). (For the avoidance of doubt, by way of example, if Final
Net Working Capital is determined to be negative $250,000, the Adjustment
Amount shall be $500,000 in favor of Buyer.)
1.3 "Affiliate" means, with respect to any person, any person or
entity which is controlling, controlled by, or under common control with,
directly or indirectly through any person or entity, the person referred to,
and, if the person referred to is a natural person, any of such person's
parents, brothers, sisters, spouse or children. The term "control" (including,
with correlative meaning, the terms "controlled by" and "under common control
with") as used with respect to any person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities, by
contract or otherwise, including each person that serves as a director,
officer, partner, executor or trustee of such specified person. Without
limiting the foregoing, with respect to the Companies, each of the Sellers and
any Affiliate of the Sellers shall be deemed an Affiliate of the Companies. For
the avoidance of doubt, Affiliates will not include limited partners of FCF who
are not Sellers or managers, officers, directors or employees of FCF.
1.4 "Agreement" means this Agreement as executed on the date hereof
and as amended or supplemented in accordance with the terms hereof, including
all Schedules and Exhibits hereto.
1.5 "Arbiter" means one of the four major accounting firms reasonably
acceptable to the Parties.
1.6 "Base Purchase Price" means $26,695,182.58.
1.7 "Basket Amount" has the meaning set forth in Section 9.6(a).
1.8 "Benchmark Balance Sheet" means the unaudited consolidated balance
sheet of the Companies as of September 30, 2005. A copy of such balance sheet
is attached hereto as Schedule 1.8.
1.9 "Benefit Plan(s)" are all employee benefit plans and programs
maintained or contributed to by the Companies or with respect to which any of
the Companies has or may have in the future any liability, or otherwise
applicable to Employees as of the date hereof, including plans and programs
providing for pension, retirement, profit sharing, savings, bonus, deferred or
incentive compensation, hospitalization, medical, life or disability insurance,
vacation and paid holiday, termination or severance pay, change in control or
retention pay, restricted interest, interest option or unit appreciation rights
benefits.
1.10 "Business" means the Companies' business of engineering,
manufacturing, distributing, promoting and selling packaging equipment and meat
cooking and chilling equipment, as such business is currently being conducted,
taken as a whole.
1.11 "Business Day" means any day which is not a Saturday, Sunday or a
legal holiday in the State of Wisconsin, United States of America.
1.12 "Buyer" has the meaning set forth in the preamble.
1.13 "Buyer Indemnified Parties" has the meaning set forth in Section
9.1(a).
1.14 "Cause" means the occurrence of any of the following events, as
determined in the reasonable judgment of the Buyer:
(a) the material failure of the Restricted Manager to perform
such Restricted Manager's duties as an employee of the Companies or to comply
with reasonable and lawful directions of the Companies (other than as a result
of physical or mental illness or injury) where such Restricted Manager does not
cure such failure within ten (10) days of receiving notice thereof;
(b) commission by the Restricted Manager of (i) a felony relating
to such Restricted Manager's conduct at work or restricting such Restricted
Manager from performing his duties, (ii) a material act or omission
constituting dishonesty, disloyalty, moral turpitude or professional misconduct
with respect to the Companies or their affiliates, or (iii) an act or omission
constituting fraud against the Companies or their affiliates;
(c) commission by the Restricted Manager of an act or omission
that (i) adversely affects, or could reasonably be expected to adversely
affect, the Companies' business or reputation, (ii) indicates alcohol abuse
which interferes with such Restricted Manager's ability to perform his duties
or illegal drug use by such Restricted Manager, or (iii) indicates a violation
of any law, regulation or ordinance applicable to the Companies or their
business; or
(d) the Restricted Manager's material violation of the Companies'
employee policies and/or code of conduct.
1.15 "Closing" means the consummation of the transactions contemplated
by this Agreement, as provided for in Section 2.3.
1.16 "Closing Balance Sheet" means the consolidated balance sheet of
the Companies, as of the Closing, prepared consistently with the Benchmark
Balance Sheet.
1.17 "Closing Date" means December 6, 2005
1.18 "Closing Payment" means $26,695,182.58, plus One Million Five
Hundred Thousand Dollars ($1,500,000) (the "Estimated Working Capital
Payment"), less the Escrow Amount.
1.19 "COBRA" means the provisions of Section 4980B of the Code and
Part 6 of Subtitle B of Title 1 of ERISA.
1.20 "Code" means the United States Internal Revenue Code of 1986, as
amended.
1.21 "Companies" has the meaning set forth in the Recitals to this
Agreement.
1.22 "Competing Business" means a business which is competitive with
the Business as now being conducted, including without limitation any business
which (1) involves production or sale of machinery, equipment or parts utilized
for cooking and/or chilling, (2) involves the production or sale of rollstock
packaging machinery, equipment or parts, (3) involves the production or sale of
flash pasteurization machinery, equipment or parts or (4) involves the
installation or servicing of the foregoing. "Competing Business" does not
include any business which manufactures equipment and products which relate to
substantially different processes than those processes addressed by equipment
and products manufactured by the Business as set forth in the preceding
sentence, including without limitation washers, grinders and slicers.
1.23 "Confidential Information" means any information relating to the
business or affairs of the Business or Buyer, including, without limitation, to
information relating to financial statements, client or customer identities,
potential clients or customers, employees, suppliers, servicing methods,
equipment, programs, strategies and information, analyses, profit margins or
other proprietary information; provided, however, that Confidential Information
shall not include any information which is in the public domain or becomes
generally known in the public domain, in each case through no wrongful act on
the part of any Seller or its Affiliates.
1.24 "Contract" means any contract, agreement, lease, indenture,
collective bargaining agreement, mortgage, purchase and sales order,
undertaking, arrangement, evidence of indebtedness, binding commitment or
instrument (whether written or oral) to which any of the Companies are a party
or by which any of them are bound or to which any of their properties may be
subject.
1.25 "Defect" means a defect or impurity of any kind, whether in
design, manufacture, processing, or otherwise, including any dangerous
propensity associated with any reasonably foreseeable use of a Product, or the
failure to warn of the existence of any defect, impurity, or dangerous
propensity.
1.26 "Employees" means individuals who as of the Closing are employees
of the Operating Company (including active and inactive employees).
1.27 "Encumbrances" means any mortgages, liens, charges, claims,
security interests, pledges, assessments, charges, easements or other
encumbrances of any kind, or any conditional sale Contract, title retention
Contract or other Contract to give any of the foregoing.
1.28 "Environmental Claim" means any claim, action, cause of action,
investigation or notice (written or oral) by any person or entity alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (a) the presence, Environmental Release or
threatened Environmental Release of any Hazardous Materials at any location,
whether or not owned or operated by the Seller, or (b) circumstances forming
the basis of any violation, or alleged violation, of any Environmental Law.
1.29 "Environmental Laws" means all common law, federal, state, local
and foreign laws and regulations relating to pollution or protection of human
health or the environment, including without limitation, laws relating to
Environmental Releases or threatened Environmental Releases of Hazardous
Materials or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, Environmental Release, transport or handling of
Hazardous Materials and all laws and regulations with regard to recordkeeping,
notification, disclosure and reporting requirements respecting Hazardous
Materials; provided, however, that Environmental Laws do not include laws which
regulate or govern product or food safety.
1.30 "Environmental Release" means any release, spill, emission,
discharge, leaking, pumping, injection, deposit, disposal, dispersal, leaching
or migration into the indoor or outdoor environment (including, without
limitation, ambient air, surface water, groundwater and surface or subsurface
strata) or into or out of any property, including the movement of Hazardous
Materials through or in the air, soil, surface water, groundwater or property.
1.31 "ERISA" means the U.S. Employee Retirement Income Security Act of
1974, as amended from time to time.
1.32 "Escrow Agent" means LaSalle Bank N.A.
1.33 "Escrow Amount" means $4,200,000, subject to the reductions set
forth in the Transaction Escrow Agreement.
1.34 "Final Net Working Capital" has the meaning set forth in Section
2.4.
1.35 "Financial Statements" means (i) the 2004, 2003 and 2002 audited
consolidated balance sheets of the Companies as of December 31, and the related
consolidated statements of earnings, shareholders' equity and cash flows for
the years then ended and (ii) the Benchmark Balance Sheet and the related
consolidated statements of earnings, shareholders' equity and cash flows for
the nine (9) months then ended.
1.36 "GAAP" means U.S. generally accepted accounting principles
consistently applied.
1.37 "Governmental Authority" means any nation or government, any
state, regional, local or other political subdivision thereof, and any entity
or official exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
1.38 "Governmental Permits"means all permits and licenses constituting
a material entitlement or otherwise material to the operation of the Business
and the use of the Owned Real Property or Leased Real Property.
1.39 "Hazardous Materials" means all substances defined as Hazardous
Substances, Oils, Pollutants or Contaminants in the National Oil and Hazardous
Substances Pollution Contingency Plan, 40 C.F.R. ss. 300.5, toxic mold, or
defined as such by, or regulated as such under, any Environmental Law.
1.40 "HIPAA" means the provisions of the Health Insurance Portability
and Accountability Act of 1996.
1.41 "Holding Company" has the meaning set forth in the preamble.
1.42 "Holding Company Stock" has the meaning set forth in the Recitals
to this Agreement.'
1.43 "Indebtedness" of the Companies means all obligations of the
Companies (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or
similar instruments, (iii) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the ordinary course of
business), (iv) under capital leases, (v) all liabilities secured by any
Encumbrance on any property, (vi) in the nature of guarantees of the
obligations described in clauses (i) through (v) above of any other person and
(vii) liabilities for income Taxes relating to periods prior to the Closing.
1.44 "Indemnification Pro Rata Portion" means the percentage set forth
for each Seller on Schedule 1.44.
1.45 "Indemnifying Party" means the party liable for indemnification
under Section 9.3.
1.46 "Injured Party" means the party entitled to indemnification under
Section 9.3.
1.47 "Intellectual Property" means patents and industrial designs
(including any continuations, divisionals, continuations-in-part, renewals and
reissues), patent applications and proprietary rights in inventions;
trademarks, trade names, service marks, designs, logos, slogans, Internet
domain names, together with the goodwill of the Business symbolized by any of
the foregoing and any registrations and applications for registration therefor;
trade secrets, schematics, technology, know-how, Confidential Information and
proprietary processes, formulae, algorithms, methodologies, databases, customer
lists and supplier lists; copyrights, authors' rights, droit moral, moral
rights and any registrations and applications for registration therefor;
computer software programs or applications; and rights to ▇▇▇ for past
infringement for all of the foregoing.
1.48 "IRS" means the United States Internal Revenue Service.
1.49 "Labor Laws" means any federal, state or local laws regulating
employment and/or labor relations.
1.50 "Law" means all statutes, laws, ordinances, decrees, orders,
injunctions, rules, directives, and regulations of any Governmental Authority
applicable in the countries where the Business is conducted or has previously
been conducted including where the Companies' products and services are sold by
the Companies.
1.51 "Leased Personal Property" is the personal property used by the
Companies in its operations, owned by others, and subject to a lease agreement.
1.52 "Leased Real Property" is the real property leased by the
Operating Company described more fully in Schedule 3.12(b).
1.53 "Loss" or "Losses" means each and all of the following items to
the extent actually paid or incurred: losses, liabilities, damages, judgments,
fines, costs, penalties, amounts paid in settlement and reasonable
out-of-pocket costs and expenses incurred in connection therewith (including,
without limitation, costs and expenses of suits and proceedings, and reasonable
fees and disbursements of counsel), but net of any insurance proceeds actually
received by the Injured Party with respect to such Losses.
1.54 "Material Adverse Effect" means a material adverse effect on the
business, properties, assets, liabilities, rights, obligations, operations,
prospects, condition (financial or otherwise) or results of operations of the
Companies taken as a whole, but shall not be deemed to include any changes
resulting from general economic, regulatory or political conditions; changes in
foreign currency exchange rates; or circumstances that affect the industries as
a whole in which the Companies operate generally.
1.55 "Material Contracts"shall mean written or oral, (a) loan
agreements, indentures, mortgages, pledges, hypothecations, deeds of trust,
conditional sale or title retention agreements, security agreements, equipment
financing obligations or guaranties, or other sources of contingent liability
in respect of any indebtedness or obligations to any other person, or letters
of intent or commitment letters with respect to same; (b) contracts obligating
the Companies to provide or obtain products or services for a period of one
year or more, excluding standard warranty contracts entered into in the
Ordinary Course without material modification from the preprinted forms used by
the Companies in the Ordinary Course, copies of which forms have been made
available to Buyer; (c) leases of real property; (d) leases of personal
property (other than those which individually provide for annual payments of
less than $25,000 and which do not in the aggregate provide for payments in
excess of $100,000); (e) distribution, sales agency or franchise or similar
agreements, or agreements providing for an independent contractor's services,
or letters of intent with respect to same (other than those which individually
provide for annual payments of less than $25,000 and which do not in the
aggregate provide for payments in excess of $100,000); (f) employment
agreements, management service agreements, consulting agreements,
confidentiality agreements, non-competition agreements and any other agreements
relating to any employee, officer or director of the Companies; (g) any
Intellectual Property license agreement to which any of the Companies is a
party, whether as licensee or licensor thereunder (other than non-exclusive
licenses for the use of commercially-available software which was acquired for
a cost of less than $5,000) and any "consent to use," "non-assertion", or other
agreement restricting any of the Companies' ownership of rights to use
Intellectual Property; (h) contracts relating to pending capital expenditures
by the Companies; (i) contracts obligating the Companies to purchase parts,
accessories, supplies, equipment, (other than those which individually provide
for annual payments of less than $25,000 and which do not in the aggregate
provide for payments in excess of $100,000); (j) any contracts obligating the
Companies to make or receive payments in excess of $25,000, in the aggregate,
over the remaining term of such contract; (k) any contracts, agreements or
arrangements that entitle the Companies to rebates, discounts or incentives for
the purchase of parts, accessories, supplies, equipment or other goods and
services; and (l) all other Contracts which are material to the Companies or
their businesses, assets or properties.
1.56 "Net Working Capital" as of a given date shall mean the amount
calculated by subtracting the current liabilities of the Companies as of that
date from the current assets of the Companies as of that date, determined in
accordance with the accounting principles and methodology set forth in Schedule
2.5(a) to this Agreement.
1.57 "Notice of Claim" means the written notice given by the Injured
Party to the Indemnifying Party under Section 9.3 of Losses which the Injured
Party has determined have given or could give rise to a claim under Section 9.1
or 9.2.
1.58 "Notice of Dispute" means a written notice by the Sellers'
Representative to the Buyer delivered pursuant to Section 2.5, specifying in
reasonable detail all points of disagreement with the Buyer's calculation of
the Final Net Working Capital.
1.59 "Operating Company" has the meaning set forth in the recitals to
this Agreement.
1.60 "Ordinary Course" means, with respect to the Business, the
ordinary course of commercial operations customarily engaged in by the
Business.
1.61 "Ownership Schedule" is the schedule attached hereto as Schedule
1.61, which sets forth the direct and indirect ownership interests in the
Holding Company and the Pro Rata Portion owned by each Seller.
1.62 "Owned Real Property" is the real property owned by the Operating
Company described more fully in Schedule 3.12(a).
1.63 "Party" means any Seller, the Holding Company, or the Buyer, and
"Parties" means the Holding Company, all of the Sellers and the Buyer.
1.64 "Permitted Encumbrances" means, collectively, (a) encumbrances
that are disclosed in Schedule 1.64, (b) liens for Taxes, fees, levies, duties
or other governmental charges of any kind which are not yet delinquent or are
being contested in good faith by appropriate proceedings, (c) liens for
mechanics, materialmen, laborers, employees, suppliers or similar liens arising
by operation of law and (d) in the case of real property, any matters,
restrictions, covenants, conditions, limitations, rights, rights of way,
encumbrances, encroachments, reservations, easements, agreements and other
matters of record, such state of facts of which an accurate survey or
inspection of the property would reveal.
1.65 "Pre-closing Periods" means all taxable periods of the Companies
ending on or before the Closing Date.
1.66 "Pro Rata Portion" is the direct or indirect percentage interest
in Holding Company owned by each Seller as set forth on the Ownership Schedule.
1.67 "Product" means any product designed, manufactured, shipped,
sold, marketed, distributed and/or otherwise introduced into the stream of
commerce by or on behalf of the Companies, including any product sold by the
Companies as the distributor, agent, or pursuant to any other contractual
relationship.
1.68 "Purchase Price" means $26,695,182.58 plus or minus the
Adjustment Amount.
1.69 "Qualified Plans" are Benefit Plans intended to meet the
requirements of Section 401(a) of the Code.
1.70 "Records" means all accounting and Tax records and all files,
instruments, papers, books, records and documents of the Companies, including,
without limitation, all customer lists, personnel records, supplier lists,
price lists, telephone numbers and listings, advertising materials, business
files, ledgers, journals, budgets, contracts, computer files and programs,
operating data and plans, financial data, sales invoices, purchase and payment
receipts, payroll and transaction details, engineering drawings, operating
manuals, environmental studies and plans, notes, memoranda, test records and
any other electronic or written data pertaining or relating to the Business
prior to the Closing.
1.71 "Releases" means the documents delivered to Buyer at Closing by
the Sellers in the form of Exhibit A hereto.
1.72 "Resignations" means the resignations delivered to Buyer at
Closing by the Sellers in the form of Exhibit B hereto.
1.73 "Restricted Managers" has the meaning given to it in Section
6.8(a).
1.74 "Restricted Manager Non-Competition Period" has the meaning given
to it in Section 6.8(a).
1.75 "Satisfied Debts and Liabilities" has the meaning given to it in
Section 6.5.
1.76 "Sellers" has the meaning set forth in the preamble.
1.77 "Sellers' Representative" is FCF.
1.78 "Straddle Period Taxes" has the meaning given to it in Section
6.7(a).
1.79 "Straddle Periods" has the meaning given to it in Section 6.7(a).
1.80 "Tax" or "Taxes" means all taxes, charges, fees, levies, duties
or other like governmental assessments including, without limitation, all
federal, possession, state, city, county and foreign (or governmental unit,
agency, or political subdivision of any of the foregoing) income, profits,
employment (including Social Security, unemployment insurance and employee
income tax withholding), franchise, gross receipts, sales, use, transfer,
stamp, occupation, property, capital, severance, premium, windfall profits,
customs, duties, ad valorem, escheat, value-added and excise taxes; Pension
Benefit Guaranty Corporation premiums and any other governmental charges of the
same or similar nature (whether payable directly or by withholding); all
penalties, additions to tax and interest relating to any such taxes, premiums
or charges and any liability for any such amounts as a result either of being a
member of a combined, consolidated, unitary, affiliated or other similar group
or of a contractual obligation to indemnify an Person, regardless of whether
disputed. Any one of the foregoing Taxes shall be referred to sometimes as a
"Tax."
1.81 "Taxing Authority"means any governmental entity responsible for
the imposition or collection of any Taxes.
1.82 "Tax Return"means any report, return, document, declaration or
other information or filing (including any amendment thereto or related or
supporting information) supplied or required to be supplied to any Taxing
Authority or jurisdiction (foreign or domestic) with respect to Taxes.
1.83 "Transaction Escrow Agreement" means the agreement among the
Sellers, the Buyer and the Escrow Agent in substantially the form of Exhibit C
hereto.
ARTICLE II
PURCHASE AND SALE OF THE HOLDING COMPANY STOCK
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2.1 Transfer of Stock. Upon the terms and subject to the conditions of
this Agreement, at the Closing, each of the respective Sellers and Custodians
shall sell, assign, transfer and convey the number of shares of Holding Company
Stock set forth opposite such Seller's and Custodian's name on the Ownership
Schedule free and clear of all Encumbrances, other than restrictions imposed by
federal and state securities laws to the Buyer and the Buyer shall purchase,
acquire and accept the Holding Company Stock from each of the respective
Sellers and Custodians.
2.2 Consideration. Upon the terms and subject to the conditions of
this Agreement, in consideration of the aforesaid sale, conveyance, assignment
and transfer to Buyer at the Closing of all of the issued and outstanding
Holding Company Stock, the Buyer shall pay the Purchase Price for all of the
issued and outstanding Holding Company Stock.
2.3 Closing. The Closing shall take place at the close of business. on
the Closing Date at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, in Madison, Wisconsin,
or on such other date and at such other place as the Parties may agree to in
writing. At the Closing, (i) the Holding Company shall deliver or cause to be
delivered to the Buyer the documents identified in Section 7.1, and (ii) each
Seller shall deliver or cause to be delivered to the Buyer the documents
identified in Section 7.2. At the Closing, the Buyer shall deliver (x) to the
Sellers, the documents identified in Section 8.1, (y) to the Escrow Agent, the
Escrow Amount, to be held and delivered by the Escrow Agent pursuant to Section
9.9 hereof and the Transaction Escrow Agreement, and (z) to each Seller and
Custodian, such Seller's and Custodian's Pro Rata Portion of the Closing
Payment, by wire transfer of immediately available funds to the account
designated by such Seller to the Buyer prior to the Closing Date.
2.4 Closing Balance Sheet. As soon as reasonably practicable following
the Closing Date, and in any event no later than one-hundred-twenty (120) days
thereafter, the Buyer shall prepare and deliver to the Sellers the Closing
Balance Sheet and during such period Sellers shall cooperate fully with any
reasonable requests by Buyer for information concerning Net Working Capital or
the components thereof. Such Closing Balance Sheet shall be accompanied by a
statement calculating the final Net Working Capital reflected on the Closing
Balance Sheet (the "Final Net Working Capital"). The Final Net Working Capital
shall be calculated in accordance with GAAP consistently applied, in all
material respects, with prior periods. The Buyer shall permit the Sellers and
their representatives to review promptly upon request all records of the
Business reasonably necessary for the preparation or review of such Closing
Balance Sheet and, subject to the confidentiality provisions set forth in
Section 6.2, computation of Final Net Working Capital and to take copies of the
same; provided, however, that such copies shall be returned to Buyer within
five (5) days of the later to occur of the resolution of the Final Net Working
Capital or any dispute arising under Section 2.5.
2.5 Post-Closing Adjustment.
(a) The Sellers' Representative may dispute the Final Net Working
Capital as calculated by the Buyer at any time within thirty (30) days after
the date the Sellers receive the calculation thereof, by delivery to the Buyer
of a Notice of Dispute. Upon receipt of any Notice of Dispute by the Buyer, the
Sellers' Representative and the Buyer shall promptly consult with each other
with respect to the specified points of disagreement in an effort to resolve
the dispute. If any such dispute cannot be resolved by the Sellers'
Representative and the Buyer within thirty (30) calendar days after the receipt
of the Notice of Dispute, the Sellers' Representative and the Buyer shall
jointly refer the dispute to the Arbiter, as an arbitrator to finally resolve,
as soon as practicable, and in any event within thirty (30) calendar days after
such reference, all points of disagreement with respect to the Final Net
Working Capital reflected on the Closing Balance Sheet. For purposes of such
arbitration the Sellers' Representative and the Buyer shall each submit a
proposed calculation of the Final Net Working Capital. The Arbiter shall apply
the terms of Section 2.4 of this Agreement, the accounting principles and
methodology set forth in Schedule 2.5(a) to this Agreement, and the other
provisions of this Agreement relating to the Closing Balance Sheet, and shall
otherwise conduct the arbitration under such procedures as the Parties may
agree or, failing such agreement, under the then prevailing Commercial Rules of
the American Arbitration Association. Each of the Parties shall bear its own
expenses in connection with the arbitration, unless the Arbiter otherwise
directs. The fees and expenses of the Arbiter incurred in connection with the
arbitration of the Final Net Working Capital shall be allocated between the
Sellers and the Buyer by the Arbiter in proportion to the extent either of such
Parties did not prevail on items in dispute with respect to the Final Net
Working Capital reflected on the Closing Balance Sheet; provided, that such
fees and expenses shall not include, so long as a Party complies with the
procedures of this Section, the other Party's outside counsel or accounting
fees. All determinations by the Arbiter shall be final, conclusive and binding
on the Buyer and the Sellers with respect to the Final Net Working Capital and
the allocation of arbitration fees and expenses, in the absence of fraud or
manifest error.
(b) The Purchase Price shall be finally paid, or overpayment
refunded, as follows, based on the Final Net Working Capital determined
pursuant to Sections 2.4 and 2.5:
(i) The Escrow Agent shall pay to the Buyer the amount by
which the Estimated Working Capital Payment exceeds the Adjustment Amount (for
the avoidance of doubt, by way of example, if Final Net Working Capital is
determined to be negative $250,000 resulting in an Adjustment Amount of
$500,000 in favor of Buyer, then the Escrow Agent shall pay to the Buyer the
Amount of $2,000,000); provided, however, that if such amount exceeds the
Escrow Amount, then Sellers shall promptly pay to Buyer any such excess over
the Escrow Amount, or
(ii) the Buyer shall pay to each of the Sellers and
Custodians such Seller's and Custodian's Pro Rata Portion of the amount by
which the Adjustment Amount exceeds the Estimated Working Capital Payment
(provided, however, that in no event shall the aggregate of the Adjustment
Amount and the Estimated Working Capital Payment exceed Three Million Dollars
($3,000,000)).
Any payment so required to be made by either the Sellers or
the Buyer shall be by wire transfer of immediately available funds, not more
than seven (7) Business Days after final determination thereof, to an account
to be designated by the payee at least two (2) Business Days prior to the due
date.
2.6 Taxes. All transfer, documentary, sales, use, value-added, gross
receipts, stamp, registration or other similar transfer Taxes incurred in
connection with the transfer and sale of the Holding Company Stock as
contemplated by the terms of this Agreement, including all recording or filing
fees, notarial fees and other similar costs of Closing, that may be imposed,
payable, collectible or incurred shall be borne by the Sellers.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANIES AND SELLERS
----------------------------
A. Each of Sellers and the Companies severally and not jointly make
each of the representations and warranties contained in Sections 3.1 through
and including Section 3.30 to the Buyer, each of which is true and correct on
the date hereof and shall survive the Closing and the transactions contemplated
hereby to the extent set forth herein.
3.1 Existence and Power.
(a) Organization and Existence.
(i) The Holding Company is duly organized, validly existing
and in active status under the laws of the State of Wisconsin. Schedule 3.1(a)
contains correct and complete copies of the Articles of Incorporation and
Bylaws of the Holding Company, as most recently amended or adopted.
(ii) The Operating Company is duly organized, validly existing
and in active status under the laws of the State of Wisconsin. Schedule 3.1(a)
contains correct and complete copies of the Articles of Incorporation and
Bylaws of the Operating Company, as most recently amended or adopted.
(iii) Alkar Brasil is duly organized, validly existing and in
active status under the laws of the State of Wisconsin. Schedule 3.1(a)
contains correct and complete copies of the Articles of Organization and
Operating Agreement of Alkar Brasil, as most recently amended or adopted.
(b) Each of the Companies has all power and authority necessary to
execute and deliver this Agreement, to perform its respective obligations
hereunder, and to consummate the transactions contemplated hereby. Each of the
Companies has taken all action necessary to authorize the execution and
delivery of this Agreement, the performance of its respective obligations
hereunder, and the consummation of the transactions contemplated hereby.
(c) The Holding Company, the Operating Company and Alkar Brasil
each has the power and authority to own, lease and use its assets and to
transact the business in which it is engaged, and each Company holds all
material authorizations, franchises, licenses and Governmental Permits required
therefor. The Holding Company, the Operating Company, and Alkar Brasil are each
duly licensed or qualified to do business and is in good standing in each
jurisdiction where such license or qualification is required, except those
jurisdictions where the failure to be so licensed or qualified does not have a
Material Adverse Effect. Schedule 3.1(c) sets forth each jurisdiction in which
each Company has qualified to do business together with any state or other
similar identification. There is no pending or threatened proceeding for the
dissolution, liquidation, insolvency or rehabilitation of any of the Companies.
3.2 No Violation. Except as set forth on Schedule 3.2, the execution
and delivery of this Agreement by the Companies, the performance by such
parties of their respective obligations hereunder and the consummation by them
of the transactions contemplated by this Agreement will not (i) contravene any
provision of the Articles of Incorporation, Bylaws or other organizational or
governing document of any such parties, (ii) violate or conflict with any Law
of any Governmental Authority or of any arbitration award which is either
applicable to, binding upon or enforceable against any such parties, (iii)
conflict with, result in any breach of, or constitute a default (or an event
which would, with the passage of time or the giving of notice or both,
constitute a default) under, or give rise to a right of payment under or the
right to terminate, amend, modify, abandon or accelerate, any Material Contract
which is applicable to, binding upon or enforceable against any such parties,
(iv) result in or require the creation or imposition of any Encumbrance upon or
with respect to any of the properties or assets of any such parties, (v) give
to any individual or entity a right or claim against any such parties or (vi)
require the consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, any court or tribunal or any other
person.
3.3 Valid and Enforceable Agreement. This Agreement has been duly
executed and delivered by each of the Companies and constitutes a legal, valid
and binding obligation of each of them, enforceable against them in accordance
with its terms, except that such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally, and (ii) general
principles of equity.
3.4 Capitalization and Ownership.
(a) The Ownership Schedule sets forth with respect to each of the
Companies the number of authorized shares of each class of its capital stock
and the number of issued and outstanding shares of each class of its capital
stock and the number of shares held and owned by each of its stockholders. No
preemptive rights or rights of first refusal or similar rights exist with
respect to any shares of capital stock of the Companies and no such rights
arise by virtue of or in connection with the transactions contemplated hereby;
there are no outstanding or authorized rights, options, warrants, convertible
securities, subscription rights, conversion rights, exchange rights or other
agreements or commitments of any kind that could require any of the Companies
to issue or sell any shares of its capital stock (or securities convertible
into or exchangeable for shares of its capital stock); there are no outstanding
stock appreciation, phantom stock, profit participation or other similar rights
with respect to the Companies; there are no proxies, voting rights or other
agreements or understandings with respect to the voting or transfer of the
capital stock of the Companies; and none of the Companies is obligated to
redeem or otherwise acquire any of its outstanding shares of capital stock.
(b) The Sellers own 100% of the issued and outstanding capital
stock of the Holding Company, and no other person or entity has an equity
interest or other interest in Holding Company. The Holding Company Stock
constitutes all equity interests of the Holding Company issued and outstanding
as of the Closing. The Ownership Schedule sets forth this information in
tabular form, except for the loans payable by certain Sellers to the Companies
which shall be satisfied at Closing. All of the shares of the Holding Company
Stock have been validly issued, and are fully paid and non-assessable, except
to the extent provided by Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law, and were issued in compliance with all applicable state and
federal securities laws and were not issued in violation of any preemptive
rights or rights of first refusal or similar rights.
(c) The Holding Company owns 100% of the issued and outstanding
capital stock of the Operating Company, and no other person or entity has an
equity interest or other interest in Operating Company. All of the shares of
the Operating Company stock have been validly issued, and are fully paid and
non-assessable, except to the extent provided by Section 180.0622(2)(b) of the
Wisconsin Business Corporation Law, and were issued in compliance with all
applicable state and federal securities laws and were not issued in violation
of any preemptive rights or rights of first refusal or similar rights. As of
the date of this Agreement, the Holding Company does not, directly or
indirectly, own capital stock or other securities of, or any proprietary
interest in, or control any other entity or person other than the ownership of
all of the issued and outstanding stock of Operating Company and Alkar Brasil.
(d) The Operating Company owns 100% of the issued and outstanding
membership units of Alkar Brasil, and no other person or entity has an equity
interest or other interest in Alkar Brasil. All of the units of Alkar Brasil
have been validly issued, and are fully paid and non-assessable, and were
issued in compliance with all applicable state and federal securities laws and
were not issued in violation of any preemptive rights or rights of first
refusal or similar rights. As of the date of this Agreement, the Operating
Company does not, directly or indirectly, own capital stock or other securities
of, or any proprietary interest in, or control any other entity or person other
than the ownership of all of the issued and outstanding units of Alkar Brasil.
(e) As of the date of this Agreement, Alkar Brasil does not,
directly or indirectly, own capital stock or other securities of, or any
proprietary interest in, or control any entity or person.
(f) All of the shares and the units of Alkar Brasil referred to in
this Section 3.4 are owned by the applicable stockholders or members, as the
case may be, free and clear of all Encumbrances.
(g) Simultaneously with the Closing, Sellers and the Companies
have satisfied in full any and all obligations of the Companies under any and
all Stock Appreciation Rights Plans, including, without limitation, the plan
set forth on Schedule 3.4(g).
3.5 Good Title Conveyed. The stock certificates, stock powers,
endorsements, assignments and other instruments to be executed and delivered by
the Sellers and Custodians to Buyer at the Closing will effectively vest in
Buyer good, valid and marketable title to all of the issued and outstanding
Holding Company Stock pursuant to and as contemplated by this Agreement free
and clear of all Encumbrances.
3.6 Records. The documents and agreements of each of the Companies
that were provided to Buyer are true, accurate, and complete in all material
respects and reflect all amendments made through the date of this Agreement.
All accounts, books, ledgers and official and other records of each of the
Companies are accurate and complete in all material respects, and to the
knowledge of the Sellers and the Companies there are no inaccuracies or
discrepancies of any kind contained therein. The capital stock ledgers of each
of the Companies, as previously made available to Buyer, contain accurate and
complete records of all issuances, transfers and cancellations of capital stock
of each of the Companies. 3.7 Financial Statements.
(a) Attached as Schedule 3.7(a) are the true and complete
Financial Statements. The audited Financial Statements (a) were derived from
the books and records of the Companies and (b) present fairly in all material
respects the financial position and results of operations of the Companies at
the dates and for the periods indicated, and were prepared in accordance with
GAAP consistently applied. The unaudited Financial Statements (a) were derived
from the books and records of the Companies and (b) present fairly in all
material respects the financial position and results of operations of the
Companies at the dates and for the periods indicated, and were prepared in
accordance with GAAP consistently applied. Upon payment of the Purchase Price
in accordance with the wire transfer instructions provided by Sellers pursuant
to Section 2.3, there will be no Indebtedness of the Companies. Sellers and the
Companies agree and acknowledge that irrespective of the foregoing, the Closing
Balance Sheet prepared in accordance with Sections 2.4 and 2.5 shall be free of
any Indebtedness of the Companies.
(b) The Estimated Working Capital Payment set forth in Section
1.18 has been calculated in a manner consistent with the methodology set forth
in Sections 2.4 and 2.5 and represents Sellers' and the Companies' good faith
estimate of the Adjustment Amount. Schedule 3.7(b) sets forth the true and
correct calculation of the Estimated Working Capital Payment.
3.8 Absence of Certain Developments. Since the date of the Benchmark
Balance Sheet, except as is disclosed on Schedule 3.8, none of the Companies
has:
(a) issued, sold, pledged, disposed of, encumbered, or authorized
the issuance, sale, pledge, disposition, grant or encumbrance of, any shares of
its capital stock of any class, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of such capital
stock or any other ownership interest;
(b) declared, set aside, made, or paid any dividend or other
distribution payable in cash, stock, property or otherwise, on or with respect
to its capital stock or other securities or reclassified, combined, split,
subdivided or redeemed, purchased or otherwise acquired, directly or
indirectly, any of its capital stock or other securities;
(c) sold, leased, licensed or transferred any of its properties or
assets other than in the Ordinary Course;
(d) abandoned or failed to maintain any rights in Intellectual
Property owned by or licensed to it;
(e) (i) acquired (including, without limitation, for cash or
shares of capital stock, by merger, consolidation or acquisition of stock or
assets) any interest in any corporation, partnership or other business
organization or division thereof or any assets, or made any investment either
by purchase of stock or securities, contributions of capital or property
transfer or, except in the Ordinary Course, purchased any property or assets of
any other person, (ii) made or obligated itself to make capital expenditures
out of the Ordinary Course, (iii) other than in the Ordinary Course, incurred
any obligations or liabilities including, without limitation, Indebtedness,
(iv) issued any debt securities or assumed, guaranteed or endorsed or otherwise
as an accommodation become responsible for, the obligations of any person, or
made any loans or advances, (v) modified, terminated or entered into any
Contract other than in the Ordinary Course, or (vi) imposed any security
interest or other Encumbrance on any of its assets other than in the Ordinary
Course;
(f) suffered any theft, damage, destruction or casualty loss,
whether or not covered by insurance, in excess of $50,000 in the aggregate;
(g) suffered any Material Adverse Effect in the working capital,
consolidated financial condition, businesses, results of operations or
prospects of the Companies;
(h) waived, canceled, compromised or released any rights other
than in the Ordinary Course;
(i) increased the compensation payable or to become payable to its
employees, officers or directors or granted any bonus, severance or termination
pay to, or entered into any bonus, employment, change of control or severance
agreement with, any of its managers, officers, or employees, or established,
adopted, entered into or amended or taken any action to accelerate any rights
or benefits with respect to any collective bargaining, bonus, profit sharing
trust, compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any managers,
officers or employees;
(j) made any loans to any of its officers, directors, employees,
affiliates, agents or consultants or made any change in its existing borrowing
or lending arrangements for or on behalf of any of such persons, whether
pursuant to a Benefit Plan or otherwise;
(k) conducted any operations or adopted any policies other than in
the Ordinary Course;
(l) taken any action with respect to accounting policies or
procedures or made any adjustment to its books and records other than in the
Ordinary Course;
(m) paid, discharged or satisfied any existing claims, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the Ordinary
Course of due and payable liabilities reflected or reserved against in its
financial statements, as appropriate;
(n) delayed paying any account payable beyond the date on which it
is due and payable except to the extent being contested in good faith;
(o) entered into any transaction with any Seller or any of the
Sellers' Affiliates; or
(p) agreed, in writing or otherwise, to do or authorized any of
the foregoing.
3.9 Liabilities.
(a) None of the Companies has any liabilities or obligations,
whether accrued, absolute, contingent or otherwise, except:
(i) to the extent reflected on the Benchmark Balance Sheet and
not heretofore paid or discharged;
(ii) liabilities incurred in the Ordinary Course since the
date of the Benchmark Balance Sheet which, individually and in the aggregate,
are not material and are of the same character and nature as the obligations,
duties and liabilities set forth on the Benchmark Balance Sheet; and
(iii) liabilities incurred in the Ordinary Course prior to the
date of the Benchmark Balance Sheet which, in accordance with GAAP consistently
applied, were not required to be recorded thereon and which, in the aggregate,
are not material.
3.10 Taxes.
(a) Except as set forth on Schedule 3.10(a), all Tax Returns in
respect of Pre-Closing Periods required to be filed with respect to the
Companies, and any current or former subsidiary thereof, have been, or will be,
filed in a timely manner (taking into account all extensions of due dates) and
all Taxes for the respective Pre-Closing Periods of the Companies, and any
current or former subsidiary thereof (other than Taxes that are reflected on
the Closing Balance Sheet or are being contested in good faith), whether or not
shown on such Tax Returns, have been, or will be, paid. All such Tax Returns
are true, correct and complete in all material respects.
(b) Except as set forth on Schedule 3.10(b), no deficiencies for
any Taxes in respect of the Companies, and any current or former subsidiary
thereof, have been asserted or assessed in writing, which remain unpaid.
(c) With respect to each of the Companies, and any current or
former subsidiary thereof, (i) there is no action, suit, proceeding, audit,
written claim, lien (other than Permitted Encumbrances), or assessment pending,
proposed or threatened in writing, with respect to Taxes or with respect to any
Tax Return, (ii) all amounts required to be collected or withheld with respect
to Taxes have been duly collected or withheld and any such amounts that are
required to be remitted to any Taxing Authority have been duly and timely
remitted, (iii) no extension of time within which to file any Tax Return has
been requested which Tax Return has not since been filed, (iv) there are no
waivers or extensions of any applicable statute of limitations for the
assessment or collection of Taxes with respect to any Tax Return that remain in
effect, (v) there are no tax rulings, requests for rulings, applications for
change in accounting methods or closing agreements that could reasonably be
expected to affect liabilities for Taxes for any period after the Closing Date,
and (vi) none of the Companies, or any current or former subsidiary thereof,
has agreed to, or is required to include in income, any adjustment pursuant to
Section 481(a) or 482 of the Code (or similar provisions of other law) nor has
any Taxing Authority proposed in writing any such adjustment or change of
accounting method.
(d) None of the Companies, or any current or former subsidiary
thereof, (i) is or has been a member of an affiliated group as defined under
Section 1504 of the Code and (ii) has any liability for Taxes of any Person (a)
under Treas. Reg. Section 1.1502-6 (or any similar provision of state, local or
foreign law) or (b) as a transferee or successor, by contract or otherwise.
(e) None of the Companies, or any current or former subsidiary
thereof, is or has been a party to any tax sharing or similar agreement.
(f) None of the Companies, or any current or former subsidiary
thereof, has received written notice of a claim from a Taxing Authority in a
jurisdiction in which such entity does not file Tax Returns that it is or may
be subject to taxation by that jurisdiction.
(g) No power of attorney that would be in force after the Closing
Date has been granted by any of the Companies, or any current or former
subsidiary thereof, with respect to Taxes.
(h) None of the Companies, or any current or former subsidiary
thereof, is, and during the five-year period ending on the Closing Date, none
of the Companies, or any current or former subsidiary thereof, has been, a
"United States Real Property Holding Corporation," as such term is defined in
Section 897(c) of the Code and the regulations promulgated thereunder.
(i) There is no contract, plan or arrangement (written or
otherwise) covering any current or former employee or independent contractor of
any of the Companies, or any current or former subsidiary thereof, that,
individually or in the aggregate, could give rise to the payment of any amount
that will not be deductible by such entity under Section 280G of the Code.
(j) None of the Companies, or any current or former subsidiary
thereof, has filed with respect to any item a disclosure statement pursuant to
Section 6662 of the Code or any comparable disclosure with respect to state,
local and/or foreign Tax statutes.
(k) None of the Companies, or any current or former subsidiary
thereof, has participated in a reportable transaction or filed with respect to
any item a disclosure statement pursuant to Treas. Reg. Section 1.6011-4 of the
Code or any comparable disclosure with respect to state, local and/or foreign
Tax statutes.
(l) Alkar Brasil has been treated as a disregarded entity within
the meaning of Treas. Reg. Section 301.7701-3(b)(1) for all U.S. federal and
state income tax purposes since its formation.
(m) None of the Companies has been a distributing or controlled
corporation in any transaction described in Section 355 of the Code that would
be treated as part of a "plan (or series of related transactions)" (within the
meaning of Section 355(e) of the Code) that includes the transactions
contemplated by this Agreement.
3.11 Litigation. Except as set forth on Schedule 3.11(a), there are no
actions, suits or other legal or administrative proceedings or other
governmental investigations pending or, to the knowledge of the Companies and
the Sellers, threatened against or by the Holding Company, Operating Company or
Alkar Brasil or their properties or assets, and there is no basis for any of
the foregoing. Except as set forth on Schedule 3.11(b), neither the Holding
Company, the Operating Company nor Alkar Brasil is subject to any order,
judgment, writ, injunction or decree of any Governmental Authority to which any
of the Companies is or was a party which have not been complied with in full or
which continue to impose any obligations on the Company.
3.12 Title to Properties.
(a) The Operating Company does not own any real property other
than the Owned Real Property described on Schedule 3.12(a). The Holding Company
and Alkar Brasil do not own any real property.
(b) Schedule 3.12(b) sets forth a list of all Leased Real Property
and the applicable lease agreements for such Leased Real Property, true and
complete copies of which have been made available to Buyer. The Operating
Company conducts its business and operations entirely at and from the Owned
Real Property and the Leased Real Property. The Holding Company and Alkar
Brasil are not parties to any real property leases.
(c) Schedule 3.12(c) sets forth a list of Leased Personal Property
used by the Operating Company and the associated leases. The Holding Company
and Alkar Brasil are not parties to any personal property leases.
(d) As of the date hereof, each of the leases set forth on
Schedule 3.12(b) and Schedule 3.12(c) is legal, valid and binding on the
Operating Company and, to the knowledge of the Companies and the Sellers, the
other party or parties thereto. As of the Closing Date, each of the leases set
forth on Schedule 3.12(b) and Schedule 3.12(c) will be legal, valid and binding
on the Operating Company, and, to the Holding Company's knowledge, the other
party or parties thereto.
(e) Except as set forth on Schedule 3.12(e) or except to the
extent the same constitutes a Permitted Encumbrance hereunder, there are no
leases, subleases, tenancy agreements, easements, written covenants, or written
restrictions to which the Operating Company is a party as of the date hereof
which create or confer on any person other than the Operating Company a right
to use, occupy or possess all or any of the Owned Real Property or the Leased
Real Property or interest therein.
(f) All bank, saving, checking, investment accounts, safe deposit
boxes, and lockboxes of the Holding Company, the Operating Company and the
Alkar Brasil and the names of all persons authorized to withdraw funds from
each such account are identified on Schedule 3.12(f) hereto.
3.13 Condition of Real and Personal Property.
(a) Except as listed on Schedule 3.13, all of the buildings,
offices and other structures located on the Owned Real Property and Leased Real
Property which, taken as a whole, are material to the conduct of the Business
are structurally sound with no known defects, are in good operating condition
and repair, are adequate for the use to which they are presently being put,
and, with respect to the Leased Real Property, are maintained in the manner and
to the standard required under the applicable lease.
(b) Except as set forth in Schedule 3.13, all tangible personal
property which, taken as a whole, is material to the conduct of the Business
has been maintained in reasonable operating condition and repair.
3.14 Title. Each of the Companies has good and marketable title to all
of its assets reflected as owned on the Benchmark Balance Sheet, free and clear
of all Encumbrances other than Permitted Encumbrances.
3.15 Contracts.
(a) Schedule 3.15(a) sets forth a list of all Material Contracts
to which any of the Companies or any Seller (in the case of Material Contracts
to which a Seller is a party, those Contracts that relate solely to the
business of the Companies), true, correct and complete copies of which have
been provided to Buyer. Schedule 3.15(a) identifies those Material Contracts
that require the consents of third parties to the transactions contemplated
hereby. The copy of each Material Contract furnished to Buyer is a true and
complete copy of the document it purports to represent and reflects all
amendments thereto made through the date of this Agreement. Each of the
Material Contracts constitutes the legal, valid and binding obligation of the
respective Company that is a party to such Material Contract, each in
accordance with its terms and, to the knowledge of the Companies and Sellers,
the other party or parties thereto. The Companies are not subject to any
Contract, decree or injunction that restricts the continued operation of any
business or the expansion thereof to other geographical areas, customers and
suppliers or lines of business.
(b) The terms of all Material Contracts have been complied with
in all material respects by the Holding Company, the Operating Company, Alkar
Brasil or Sellers (as applicable) and, to the knowledge of the Companies and
Sellers, by the other parties to such Material Contracts and no claims have
been made or issued for breach or indemnification or notice of default or
termination under any Material Contract.
(c) All rebates provided for in the Material Contracts have been
provided by the Companies in the Ordinary Course, and except as set forth on
Schedule 3.15(c), at present there are no fines, assessments, holdbacks outside
of the ordinary course of business, rebates or offsets under any such
Contracts. Schedule 3.15(c) sets forth a description of all rebate programs of
the Companies to which customers of the Companies participate on the date
hereof, and an estimate of the obligations of the Companies under such rebate
programs as of the date hereof. The Benchmark Balance Sheet properly accrues or
reserves for all such rebate programs as of the date of such balance sheet in
accordance with GAAP consistently applied.
(d) To the knowledge of the Companies and the Sellers, none of
the Companies is a party to a Contract with a governmental entity which
requires any of Companies to have an affirmative action plan.
3.16 Licenses and Permits. Except as set forth on Schedule 3.16(a),
the Companies have all Governmental Permits, licenses and authorizations
necessary for the conduct of the Business as presently conducted in the
Ordinary Course, and all such Governmental Permits, licenses and authorizations
are in full force and effect, and, except as set forth on Schedule 3.16(a), to
the knowledge of the Companies and the Sellers, all of such Governmental
Permits, licenses and authorizations will continue to be in full force and
effect immediately following the consummation of the transactions contemplated
herein. Schedule 3.16(b) sets forth a full and complete list of, and Sellers
and the Companies have delivered to Buyer copies of all Governmental Permits
owned, issued to or held by the Companies as of the date of this Agreement. No
violations are or have been recorded in respect of any Governmental Permit. No
proceeding is pending or threatened to revoke or limit any Governmental Permit.
3.17 Compliance with Laws. Except as set forth in Schedule 3.17, the
Companies have complied in a timely manner in all material respects with all
applicable Laws and no Company has received any notice that any violation is
being alleged.
3.18 Environmental Matters.
(a) Except as set forth on Schedule 3.18(a) hereof, the Companies
are and have been for the applicable statute of limitations period in material
compliance with all applicable Environmental Laws applicable to the Owned Real
Property and Leased Real Property and operations thereon. Neither the Sellers
nor the Companies have received any communication (written or oral), whether
from a Governmental Authority, citizens group, employee or otherwise, alleging
that the Companies are not in such compliance, and there are no past or present
(or to the knowledge of the Sellers and the Companies, future) actions,
activities, circumstances conditions, events or incidents that may prevent or
interfere with such compliance in the future. Except as set forth on Schedule
3.18(a) hereof, there is no Environmental Claim pending or, to the knowledge of
the Companies and Sellers, threatened against the Companies or, to the
knowledge of the Sellers and Companies, against any person or entity whose
liability for any Environmental Claim the Companies have or may have retained
or assumed either contractually or by operation of law.
(b) Except as set forth on Schedule 3.18(b) hereof, there are no
present or past actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the Environmental Release, threatened
Environmental Release or presence of any Hazardous Material which could form
the basis of any Environmental Claim against the Companies, or to the knowledge
of the Sellers and Companies, against any person or entity whose liability for
any Environmental Claim the Companies has or may have retained or assumed
either contractually or by operation of law.
(c) The Operating Company has been and is in compliance with all
Governmental Permits necessary for its activities and operations at the Owned
Real Property and the Leased Real Property.
(d) Except as set forth on Schedule 3.18(d), the Companies, and
any other person or entity for whose conduct they may be held responsible, have
not (i) entered into or been subject to any consent decree, compliance order,
or administrative order with respect to the Leased Real Property or Owned Real
Property or operations thereon; (ii) received notice under the citizen suit
provision of any Environmental Law in connection with the Leased Real Property
or Owned Real Property or any operations thereon; (iii) received any request
for information, notice, demand letter, administrative inquiry, or formal or
informal inquiry, or formal or informal complaint or claim with respect to any
violation of an Environmental Law relating to the Leased Real Property or Owned
Real Property or any operations thereon; or (iv) been subject to or threatened
with any governmental or citizen enforcement action with respect to the Leased
Real Property or Owned Real Property or any operations thereon; and the
Companies, and any other person or entity for whose conduct they may be held
responsible, and Sellers and the Companies have no knowledge that any of the
above will be forthcoming.
(e) The Sellers have delivered or otherwise made available for
inspection to the Buyer true, complete and correct copies and results of any
material reports, studies, analyses, tests or monitoring possessed or initiated
by the Sellers or the Companies pertaining to Hazardous Materials in, on,
beneath or adjacent to any property currently or formerly owned, operated or
leased by the Companies, or regarding the Companies' compliance with applicable
Environmental Laws. For purposes of this subsection, material reports shall not
include material safety data sheets.
3.19 Intellectual Property.
(a) Schedule 3.19 sets forth a complete and accurate list of all
United States and foreign Intellectual Property owned by the Companies,
including a list of all the Companies' patent applications currently pending.
Each applicable Company owns good title to the items listed on Schedule 3.19,
free and clear of all Encumbrances. Schedule 3.19 sets forth a complete and
accurate list of all license agreements for Intellectual Property to which any
of the Companies is a party as either a licensee or licensor and any other
agreements under which any of the Companies grants or receives any rights to
Intellectual Property, except for non-exclusive license agreements for
commercially-available software that were acquired by a Company for a cost of
less than $5,000. The Intellectual Property owned and used by the Companies, as
set forth on Schedule 3.19, is sufficient for the continued conduct of the
Business after the Closing in the same manner as it is currently being
conducted.
(b) Except as set forth on Schedule 3.19:
(i) the conduct of the Business as presently conducted does
not infringe or misappropriate any third party's rights in Intellectual
Property and no such claims, suits or actions have been brought or threatened
in writing by a third party, nor, to the knowledge of the Companies and the
Sellers, is any Intellectual Property owned by the Companies being infringed or
misappropriated and no such claims, suits or actions have been brought or
threatened against any third party by the Companies;
(ii) the Intellectual Property owned by the Companies and, to
the knowledge of the Companies and the Sellers, any Intellectual Property used
by the Companies that is material to the conduct of the Business, is valid and
enforceable, subsisting, in full force and effect, and has not been cancelled,
expired or abandoned;
(iii) the Companies have taken reasonable measures to protect
the confidentiality of their trade secrets, including requiring their employees
and persons having access thereto to execute written non-disclosure agreements;
and
(iv) the transactions contemplated hereby will not result in
the loss or impairment of the Companies' right to own or use any Intellectual
Property used in the conduct of the Business as it is currently conducted nor
will it require the consent of any Governmental Authority or third party with
respect to any such Intellectual Property.
3.20 Insurance Policies. Schedule 3.20 contains a complete and correct
list and description of all policies or binders of fire, liability, product
liability, workmen's compensation, vehicular, group life, health, accident and
other insurance held by the Companies with respect to the Business, the Owned
Real Property and the Leased Real Property. Such policies are in full force and
effect and, to the knowledge of the Companies and Sellers, insure adequately
against risks to which the Companies, the Business, the Owned Real Property or
the Leased Real Property are normally exposed in the operation of Business.
There are no material outstanding unpaid claims under any such policy or binder
pertaining to the Business, the Owned Real Property or the Leased Real Property
and no notice of cancellation, expiration or non-renewal of any such policy has
been received by the Companies or the Sellers and no cause for such termination
exists. A copy of each insurance policy has been provided to Buyer or otherwise
made available pursuant to Buyer's due diligence investigation of the
Companies.
3.21 Related Party Transactions. Except as disclosed in Schedule 3.21,
no Seller, nor any person controlling, controlled by or under common control
with any Seller and no officer or director of any Seller has any interest,
financial or otherwise, in any business, corporate or otherwise, is a party to,
or has an interest in any property which is the subject of, business
relationships or arrangements of any kind with the Companies in connection with
the Business, including, without limitation, any customer, supplier,
competitor, or potential competitor or lessor.
3.22 Labor Matters.
(a) Except as set forth on Schedule 3.22(a), (i) there is no
controversy existing, pending or, to the knowledge of the Companies and
Sellers, threatened with any association or union or collective bargaining
representative of the Employees and (ii) except to the extent the
non-satisfaction of which would not have a Material Adverse Effect, the
Companies have fully satisfied any and all obligations they may have under
Labor Laws.
(b) Except as set forth on Schedule 3.22(b), there is no charge
or complaint relating to an unfair labor practice pending against the
Companies, nor is there any labor strike, work stoppage, material grievance or
other labor dispute pending or, to the knowledge of the Companies and Sellers,
threatened against the Companies.
(c) Except as set forth on Schedule 3.22(c), there is no
collective bargaining or similar agreement between any of the Companies and any
labor organization, and none of the Companies are part of any multi-employer
group, unit or association for the purpose of collective bargaining. None of
the Companies has delegated any bargaining authority and/or authorized any
association or group of any kind to represent it in collective bargaining with
any labor organization.
(d) Except as set forth on Schedule 3.22(d), all Employees are
employees at will, and without any employment agreement with any of the
Companies.
(e) Attached as Schedule 3.22(e) is a copy of the Operating
Company's current employee manual. Except as set forth on Schedule 3.22(e),
there are no material employment policies for any Company other than as set
forth in such manual.
(f) Except as set forth on Schedule 3.22(f), and further except
for compensation and benefits for work performed in the Ordinary Course or for
which insurance is available to the Companies, to the knowledge of the Holding
Company, no Employee has any monetary claim against the Companies.
(g) The employees of the Operating Company as of the date five
(5) Business Days prior to the date hereof are identified by name, position and
status (e.g. active, short-term disability, long-term disability, unpaid leave,
etc.) on Schedule 3.22(g). The Holding Company and Alkar Brasil do not have any
employees.
3.23 Employee Benefit Matters.
(a) Schedule 3.23(a) sets forth a complete and accurate list of
all Benefit Plans. Except as contemplated by this Agreement or set forth on
Schedule 3.23(a), no Benefit Plan has been amended, other than as required by
Law, since the Acquisition Date. With respect to each Benefit Plan, each of the
following items has been made available to Buyer: the plan document or a
summary thereof and, if applicable, the most recent copies of the following:
summary plan description, Form 5500 with all attachments for the years ended
December 31, 2003 and 2004, audited financial statements for the Benefit Plans
for the last two years, trust agreements, and most recent determination or
qualification letter from the IRS.
(b) Each Benefit Plan has been maintained and administered in all
material respects in compliance with their respective terms and applicable
Laws, including any relevant reporting and disclosure requirements to employees
and to governmental agencies under ERISA, the Code or other applicable Laws,
except for those terms that are inconsistent with statutes, regulations, and
rulings requiring changes in the administration of the Benefit Plan in
operation but for which amendments to such terms of the Benefit Plan are not
yet required to be made, in which case the Benefit Plan has been administered
in all material respects in accordance with the provision of applicable
statutes, regulations and rulings.
(c) Schedule 3.23(c) identifies each of the Qualified Plans, and
each such Qualified Plan is so qualified. With respect to each Qualified Plan,
the IRS determination letter, if any, remains in effect and has not been
revoked. No issue concerning qualification of any Qualified Plan is pending
before or, to the knowledge of the Companies and Sellers, threatened by, any
governmental agency, except for routine requests for determination of
qualification. Schedule 3.23(c) identifies each Qualified Plan for which the
Companies have not submitted a determination letter request to the IRS as of
the date hereof.
(d) No Qualified Plan has suffered any "accumulated funding
deficiency," within the meaning of ERISA Section 302 and Section 412 of the
Code, whether or not waived. All contributions required to be made with respect
to any Benefit Plan on or prior to the Closing Date have been timely made.
(e) Except as set forth on Schedule 3.23(e): (i) none of the
Companies maintains or contributes to, or is obligated to contribute to, and
(ii) none of the Companies has, since the Acquisition Date, maintained or
contributed to, or has been obligated to contribute to, a "multiemployer plan,"
as defined in Section 3(37) of ERISA.
(f) Since the Acquisition Date, none of the Companies nor any
ERISA Affiliate, as defined below, has a material liability to the Pension
Benefit Guaranty Corporation with respect to any Benefit Plan. There has been
no "reportable event," as defined in Section 4043(b) or (c) of ERISA, with any
respect to any Benefit Plan, for which notice has not been waived.
(g) None of the Companies has made or is obligated to make any
nondeductible contributions to any Qualified Plan.
(h) No Benefit Plan is subject to Title IV of ERISA and no
liability under Title IV of ERISA has been incurred by any of the Companies or
any trade or business that, together with the Companies, would be deemed to be
a "single employer" within the meaning of Section 4001(b) of ERISA (an "ERISA
Affiliate").
(i) None of the Companies has engaged in any "prohibited
transaction," as defined in Section 4975 of the Code or ERISA Section 406 and
not exempted under Section 4975 of the Code or ERISA Section 408, respectively,
with respect to the Benefit Plans, and, to the knowledge of the Companies and
Sellers, all "fiduciaries," as defined in Section 3(21) of ERISA, with respect
to the Benefit Plans, have complied with the requirements of Section 404 of
ERISA.
(j) Other than routine claims for benefits, there are no material
actions, audits, investigations, suits, or claims pending or, to the knowledge
of the Companies and Sellers, threatened against any of the Benefit Plans or
any fiduciary thereof or against the assets of any of the Benefit Plans, and
there are no issues outstanding with reference to any Benefit Plan pending
before any governmental entity.
(k) Except as set forth in Schedule 3.23(k), neither the
execution and delivery of this Agreement, nor the transaction contemplated
hereby will (i) result in any payment or increased or accelerated payment or
benefit to an Employee, including severance, unemployment compensation, golden
parachute (as defined in Section 280G of the Code) or otherwise, (ii) increase
any benefits otherwise payable under any Benefit Plan or (iii) result in any
payments under any Benefit Plan which would not be deductible under Section
280G of the Code.
(l) Except as set forth on Schedule 3.23(l), no Benefit Plan
provides benefits to current or former Employees beyond their retirement or
other termination of service (other than benefits under any Qualified Plan or
coverage mandated by COBRA or similar state law, the cost of which is fully
paid by the current or former Employee or his or her dependents) and none of
the Companies has a current or contingent liability with respect to any such
current or former Benefit Plan.
(m) The Companies have at all times in the past three (3) years
properly classified each of their respective employees as employees and each of
their independent contractors as independent contractors, as applicable, except
for any failure which could not reasonably be expected to be material. There is
no action, suit or investigation pending, or to the knowledge of the Companies
and Sellers, threatened, against the Companies by any individual or
governmental entity challenging or questioning the classification by the
Companies of any individual as a independent contractor, including any claim
for unpaid benefits, for or on behalf of, any such individuals.
3.24 Product Liability. Except as set forth on Schedule 3.24, there
are not presently pending, or, to the knowledge of the Companies and Sellers,
threatened, and, to the knowledge of the Companies and Sellers, no incidents
have occurred which would constitute a valid basis for, any civil, criminal or
administrative actions, suits, demands, claims, hearings, notices of violation,
investigations, proceedings or demand letters relating to any alleged hazard or
alleged Defect in design, manufacture, materials or workmanship, including any
failure to warn or alleged breach of express or implied warranty or
representation, relating to any Product manufactured, distributed or sold by or
on behalf of the Companies prior to the Closing Date.
3.25 Accounts Receivable; Progress ▇▇▇▇▇▇▇▇; and Customer Advances.
(a) Except to the extent accounted for as progress ▇▇▇▇▇▇▇▇
pursuant to subsection (b) below, all accounts receivable of the Companies,
whether reflected in the Financial Statements or otherwise, represent sales
actually made in the ordinary course of business and are current and
collectible net of any reserves shown in the Financial Statements. Subject to
such reserve, to the knowledge of the Companies and Sellers, each such account
receivable either has been collected in full or will be collected in full,
without any set-off, within 90 days after the day on which it became due and
payable in accordance with the Companies' past practice.
(b) All progress ▇▇▇▇▇▇▇▇ of the Companies represent amounts due
from customers in connection with the terms of validly existing contractual
commitments and are recorded in conjunction with work performed in accordance
with GAAP consistently applied. Subject to reserves shown in the Financial
Statements, to the knowledge of the Companies and Sellers, each progress
billing will be collected in full, without any set-off, in accordance with the
contractual relationship pursuant to which it arises.
(c) Schedule 3.25(c) sets forth a true and complete list of each
customer advance of the kind that would be required to be set forth in the
"customer advance" line item in the Financial Statements.
3.26 Disputed Accounts Payable. Except as set forth in Schedule 3.26,
there are no unpaid invoices or bills representing amounts alleged to be owed
by any of the Companies, or other alleged obligations of any of the Companies,
which the respective Company has disputed or determined to dispute or refuse to
pay.
3.27 Inventory. All of the inventories of the Companies, whether
reflected in the Financial Statements or otherwise, consist of a quality and
quantity usable and salable in the ordinary and usual course of business,
except for items of obsolete materials and materials of below-standard quality,
all of which items have been written off or written down in the Financial
Statements to fair market value or for which adequate reserves have been
provided therein. All inventories not written off have been priced at the lower
of cost or market. The quantities of each type of inventory (whether raw
materials, work-in-process, or finished goods) are not excessive, but are
reasonable and warranted in the present circumstances of the Companies. All
work in process and finished goods inventory held by the Companies is free of
any Defect or other deficiency.
3.28 Suppliers, Distributors and Customers. Schedule 3.28 lists, by
dollar volume paid for the twelve months ended on September 30, 2005, (i) the
ten largest suppliers to the Business, and (ii) the ten largest customers of
the Business. Except as set forth on Schedule 3.28, neither the Sellers nor any
of the Companies has received (i) any written communication from any
representative of a supplier or customer listed on Schedule 3.28 of any
intention to terminate all purchases from the Companies with respect to the
Business or (ii) any written communication from any representative of such
customers of any intention to materially reduce the price of such purchases
from the Companies with respect to the Business or to materially and adversely
change the terms (including credit terms) of the sales agreements or similar
arrangements with such customers; provided, however, that Buyer acknowledges
that such terms are negotiated on a proposal by proposal basis. Except as set
forth on Schedule 3.28, since June 1, 2005, neither the Sellers nor the
Companies has either (x) received any written complaint from any customer
concerning the products of the Companies in respect of the Business or (y) had
any such products returned by any such customer, except, in the case of both
clauses (x) and (y), for complaints and returns (or replacements) made in the
ordinary course of business. Neither the Sellers nor the Companies have any
notice that any supplier or customer intends to cancel its relationship with
the Companies as a result of the transactions contemplated by this Agreement.
3.29 Brokers, Finders. Other than Lincoln Partners, L.L.C., no finder,
broker, agent, or other intermediary acting on behalf of the Companies or the
Sellers is entitled to a commission, fee, or other compensation from the
Companies in connection with the negotiation or consummation of this Agreement
or any of the transactions contemplated hereby.
3.30 Full Disclosure. Except as set forth on Schedule 3.30, to the
current, actual knowledge of the Sellers, the Companies and Sellers have not
omitted any material disclosures necessary in order to make the representations
and warranties made in this Agreement, in light of the circumstances under
which they were made, not misleading.
B. Each Seller and Custodian as to himself or itself only makes each
of the representations and warranties contained in Section 3.31 to the Buyer,
each of which is true and correct on the date hereof and shall survive the
Closing and the transactions contemplated hereby to the extent set forth
herein.
3.31 Seller and Custodian Representations and Warranties.
(a) Each Seller and Custodian has the power and authority to
execute and deliver this Agreement, to perform its obligations hereunder, and
to consummate the transactions contemplated hereby.
(b) Except as set forth on Schedule 3.31(b), the execution and
delivery of this Agreement by such Seller and Custodian, the performance by
such Seller or Custodian of its obligations hereunder and the consummation by
it of the transactions contemplated by this Agreement will not (i) if
applicable, contravene any provision of the Articles of Incorporation, Bylaws
or other organizational or governing document of such Seller or Custodian, (ii)
violate or conflict with any Law of any Governmental Authority or of any
arbitration award which is either applicable to, binding upon or enforceable
against such Seller or Custodian, (iii) conflict with, result in any breach of,
or constitute a default (or an event which would, with the passage of time or
the giving of notice or both, constitute a default) under, or give rise to a
right of payment under or the right to terminate, amend, modify, abandon or
accelerate, any contract which is applicable to, binding upon or enforceable
against such Seller or Custodian, (iv) give to any individual or entity a right
or claim against such Seller or Custodian or (v) require the consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, any court or tribunal or any other person.
(c) Each of this Agreement, the stock certificates, stock powers,
endorsements, assignments and other instruments has been duly executed and
delivered by such Seller and Custodian and constitutes a legal, valid and
binding obligation of such Seller or Custodian, enforceable against such Seller
or Custodian in accordance with its terms, except that such enforcement may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to enforcement of creditors' rights
generally, and (ii) general principles of equity.
(d) As of the Closing, such Seller owns beneficially and of
record the shares of Holding Company Stock as are set forth on the Ownership
Schedule, free and clear of all Encumbrances.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
-------------------------------------------
The Buyer hereby makes the following representations and
warranties to the Sellers, each of which is true and correct on the date hereof
and shall survive the Closing and the transactions contemplated hereby to the
extent set forth herein.
4.1 Existence and Power.
(a) The Buyer has the corporate power and authority to enter into
this Agreement, to perform its obligations hereunder, and to consummate the
transactions contemplated hereby.
(b) The Buyer is duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(c) No permit, consent, waiver, approval or authorization of, or
declaration to or filing or registration with, any governmental or regulatory
authority or third party is required in connection with the execution, delivery
or performance of this Agreement by the Buyer.
4.2 Valid and Enforceable Agreement; Authorization. This Agreement
constitutes a legal, valid and binding obligation of the Buyer, enforceable
against it in accordance with its terms, except that such enforcement may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting or relating to enforcement of creditors' rights
generally and (ii) general principles of equity. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized, approved and ratified by all necessary action on the
part of the Buyer.
4.3 Brokers, Finders. Except as set forth on Schedule 4.3, no finder,
broker, agent, or other intermediary acting on behalf of the Buyer is entitled
to a commission, fee, or other compensation in connection with the negotiation
or consummation of this Agreement or any of the transactions contemplated
hereby.
4.4 Compliance with Securities Laws. The Buyer is acquiring the
Holding Company Stock for investment and not with a view to distribution
thereof, and will not sell, offer for sale, pledge, transfer or otherwise
dispose of the Holding Company Stock or any interest therein except in
compliance with the Securities Act of 1933, as amended, and any other
applicable federal, state or foreign securities laws.
4.5 Litigation. There are no actions, suits or proceedings pending or,
to Buyer's knowledge, threatened against the Buyer or any of the Buyer's
Affiliates, at law or in equity, which if adversely determined would have a
Material Adverse Effect on the Buyer's performance under this Agreement or the
consummation of the transactions contemplated hereby. There are no orders,
writs, injunctions, decrees or unsatisfied judgments outstanding against or
related to the Buyer which could interfere with the Buyer's ability to
consummate the transactions contemplated by this Agreement.
4.6 Funds. The Buyer has sufficient funds on hand or available
pursuant to unconditional commitments to pay the Purchase Price.
ARTICLE V
[RESERVED]
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ARTICLE VI
ADDITIONAL AGREEMENTS OF THE PARTIES
------------------------------------
6.1 Books and Records. For a period of seven (7) years after the
Closing, the Buyer shall provide the Sellers and their representatives with
reasonable access to all books and records of the Companies as may be
reasonably required in connection with (a) preparing Tax Returns, (b) defending
any claim in respect of which a Notice of Claim has been served on a Seller or
(c) reviewing the Closing Balance Sheet as referred to in Section 2.4, during
normal business hours, including, but not limited to the Records; provided,
however, that such access and assistance does not unreasonably disrupt the
normal operations of Buyer. Unless otherwise consented to in writing by the
Sellers' Representative, the Buyer shall not, for a period of seven (7) years
following the date hereof or such longer period as retention thereof is
required by applicable Law, destroy, alter or otherwise dispose of (or allow
the destruction, alteration or disposal of) any of the Records without first
offering to surrender to the Sellers such Records.
6.2 Announcements. Except as may be required by law or applicable
listing agreement with a national securities exchange, none of Buyer, the
Companies, Sellers or any of their respective Affiliates, shall issue any press
release or make any public statement with respect to the transactions
contemplated by this Agreement without the prior approval of the other parties.
Each party will use commercially reasonable efforts to consult with the other
parties (and consider in good faith the comments of the other parties) in
connection with any such press release or public statement.
6.3 Cooperation. On or after the Closing Date, the Parties shall, on
request, cooperate with one another by furnishing any additional information,
executing and delivering any additional documents and instruments, including
contract assignments, and doing any and all such other things as may be
reasonably required by the Parties or their counsel to consummate or otherwise
implement the transactions contemplated by this Agreement.
6.4 Resignation of Directors. At or immediately following the Closing,
the Sellers will cause each of the officers and directors of the Companies to
resign as an officer and/or director of each of the Companies (as applicable)
effective as of the Closing.
6.5 Discharge of Liabilities. Upon payment of the Purchase Price in
accordance with the wire transfer instructions provided by Sellers pursuant to
Section 2.3, the Sellers will have, or will have caused the Companies to have,
paid those debts and liabilities of the Companies listed on the attached
Schedule 6.5 (the "Satisfied Debts and Liabilities"). The Parties agree and
acknowledge that irrespective of the foregoing sentence, the Closing Balance
Sheet prepared in accordance with Sections 2.4 and 2.5 shall be free of such
Satisfied Debts and Liabilities.
6.6 Guarantees. If one or more of the Sellers or any of their
Affiliates remain a party to any guarantee, indemnity or bond in respect of the
Business or the Companies as of Closing, then the Buyer shall use its, and
shall cause the Companies to use commercially reasonably efforts to obtain a
release of any such Sellers or their Affiliates from such guarantee, indemnity
or bond. To the Companies' and Sellers' knowledge, all such guarantees,
indemnities and bonds are listed on Schedule 6.6 hereto.
6.7 Tax Matters.
(a) The Sellers shall prepare or cause to be prepared and/or cause
to be filed all Tax Returns for the Companies for all Pre-closing Periods which
are due after the Closing Date. Such Tax Returns shall be prepared in a manner
consistent with the Companies' prior practice. At least thirty (30) days prior
to the filing of each such Tax Return, the Sellers shall provide the Tax Return
to the Buyer for its review and comment and the Sellers shall consider in good
faith Buyer's comments to such Tax Returns. Sellers shall be responsible for
payment of any Taxes for any Pre-closing Periods, and shall be entitled to any
refunds or credits (including any applicable interest) shown on such Tax
Returns necessary to conform the Tax Return with the preceding sentence or to
be consistent with applicable Law and shall provide the Tax Return, as revised,
to the Buyer for filing. The Buyer shall prepare or cause to be prepared and
the Buyer shall timely file or cause to be filed any Tax Returns of the
Companies for Tax periods which begin before the Closing Date and end after the
Closing Date (the "Straddle Periods"). Such Tax Returns shall be prepared in a
manner consistent with the Companies' prior practice to the extent consistent
with applicable Laws. At least thirty (30) days prior to the filing of each
such Tax Return with respect to Straddle Periods, the Buyer shall provide
copies of such Tax Return to the Sellers for the Sellers' review and comment
and the Buyer shall consider in good ▇▇▇▇▇ ▇▇▇▇▇▇▇' comments to such Tax
Returns. For Tax Returns relating to the Straddle Periods, the Sellers shall
pay to the Buyer within fifteen (15) days before the date on which such Taxes
are to be paid the portion of such Taxes which relates to the portion of such
Taxable period ending on the Closing Date in excess of any amount accrued as a
liability for Taxes in the calculation of Final Net Working Capital (such
excess "Straddle Period Taxes"). Such Straddle Period Taxes shall be calculated
as though the taxable year of the Companies terminated as of the end of the day
on the Closing Date; provided, however, that in the case of a Tax not based on
income, receipts, proceeds, profits or similar items, such Straddle Period
Taxes shall be equal to the amount of Tax for the taxable period multiplied by
a fraction, the numerator of which shall be the number of days from the
beginning of the taxable period through the Closing Date and the denominator of
which shall be the number of days in the taxable period.
(b) The Buyer and the Sellers shall cooperate fully with each
other and with each party's accounting firms and legal counsel, as and to the
extent reasonably requested by the other party, in connection with the filing
of Tax Returns pursuant to this Section 6.7 and any audit, litigation or other
proceeding with respect to Taxes or pertaining to the transactions contemplated
by this Agreement. Such cooperation shall include the retention and (upon the
other party's request) the provision of records and information which are
reasonably relevant to any such filing, audit, litigation or other proceeding
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. The
Sellers agree (i) to retain all books and records with respect to Tax matters
pertinent to each of the Companies relating to any taxable period beginning
before the Closing Date until the expiration of the statute of limitations
(and, to the extent notified by the Buyer or the Sellers, any extensions
thereof) of the respective taxable periods, and to abide by all record
retention agreements entered into with any Taxing Authority, and (ii) to give
the Buyer reasonable written notice prior to transferring, destroying or
discarding any such books and records and, if the Buyer so requests the Sellers
shall allow the Buyer to take possession of such books and records prior to
such transfer, destruction or discarding.
(c) The Buyer and the Sellers further agree, upon request, to use
their reasonable best efforts to obtain any certificate or other document from
any Taxing Authority or any other person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including, but not limited
to, with respect to the transactions contemplated hereby).
(d) On the Closing Date, any tax sharing agreement or other
similar arrangement to which any of the Companies is a party shall be
terminated and have no further effect for any taxable year or period (whether a
past, present or future year or period), and no additional payments shall be
made thereunder on or after the Closing Date in respect of redetermination of
Tax liabilities or otherwise.
(e) The Sellers shall severally and not jointly be liable for, and
shall indemnify and hold the Buyer and the Companies and the Buyer's Affiliates
harmless against, their respective Indemnification Pro Rata Portion of all
Losses and Taxes suffered by the Buyer, the Companies and the Buyer's
Affiliates arising out of, incident to, or as a result of: (i) subject to the
limitations set forth in Article IX of this Agreement, the inaccuracy of any
representation or warranty made by the Companies in Section 3.10, (ii) any
breach of any covenant of the Sellers contained in this Section 6.7; (iii)
Taxes of or attributable to any of the Companies for any Pre-closing Periods,
but only to the extent that the amount of such Taxes exceeds the amount accrued
as a liability for Taxes in the calculation of Final Net Working Capital; (iv)
Straddle Period Taxes, but only to the extent that the amount of such Taxes
exceeds the amount accrued as a liability for Taxes in the calculation of Final
Net Working Capital; (v) Taxes payable by the Companies with respect to any
Pre-closing Period or pre-closing portion of any Straddle Period by reason of
the Companies being severally liable for the Tax of any Person pursuant to
Treas. Reg. Section 1.1502-6 or any analogous state or local Tax law; (vi) any
amount required to be paid by the Companies under an indemnification agreement
(other than this Agreement) or on a transferee liability theory, in respect of
any Taxes of any Person, which indemnification agreement or application of
transferee liability theory relates to an acquisition, disposition or similar
transaction occurring on or prior to the Closing Date; and (vii) all Taxes
described in Section 2.6. Any claims hereunder shall be resolved in accordance
with the procedures set forth in Sections 9.3 and 9.4.
(f) The Buyer shall be liable for, and shall indemnify and hold
the Sellers harmless against, all Losses and Taxes suffered by the Sellers and
arising out of, incident to, or as a result of: (i) Taxes for any taxable year
or taxable period commencing after the Closing Date attributable to the
Companies and (ii) Taxes attributable to the Companies with respect to the
post-closing portion of any Straddle Period.
(g) Amended Tax Returns. Except to the extent required under
applicable Law, Buyer shall not amend any Tax Return for any Pre-Closing
Periods with respect to the Companies that affects the Tax liability of the
Sellers without the prior consent of Sellers, which consent shall not be
unreasonably withheld or delayed.
6.8 Non-Competition; Non-Solicitation; Confidentiality.
(a) Non-Competition.
(i) Each Investor agrees and acknowledges that in order to
assure Buyer that the Business will retain its value as a going concern, it is
necessary that such Investor undertakes not to utilize its special confidential
knowledge of the Business and its relationship with clients or customers to
compete with Buyer and the Companies. Each Investor further agrees and
acknowledges that the Business could be irreparably damaged if such Investor
were to engage in any Competing Business. Therefore, as a significant
inducement to Buyer to enter into and perform its obligations under this
Agreement and to acquire the Holding Company Stock, each Investor hereby agrees
that for a period of five (5) years after the Closing Date (the
"Non-Competition Period"), no such Investor nor any of its successors, assigns
or Affiliates shall, anywhere in the world, directly or indirectly, either for
themselves or any other person, engage in, own, operate, manage, control,
invest in or participate in any manner or permit their names to be used by, act
as a consultant or advisor to, render services for (alone or in association
with any person), or otherwise assist in any manner any person that engages in
or owns, operates, manages, controls, invests in or participates in, any
Competing Business.
(ii) Each of Jurkowski, Hanson, ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ (the
"Restricted Managers") agrees and acknowledges that in order to assure Buyer
that the Business will retain its value as a going concern, it is necessary
that such Restricted Manager undertakes not to utilize his special confidential
knowledge of the Business and his relationship with clients or customers to
compete with Buyer and the Companies. Each Restricted Manager further agrees
and acknowledges that the Business could be irreparably damaged if such
Restricted Manager were to engage in a Competing Business. Therefore, as a
significant inducement to Buyer to enter into and perform its obligations under
this Agreement and to acquire the Holding Company Stock, each Restricted
Manager hereby agrees that for a period of three (3) years after the Closing
Date (the "Restricted Manager Non-Competition Period"); provided, however, that
with respect to each Restricted Manager, if such Restricted Manager's
employment is terminated by the Companies without Cause after the Closing Date,
the Restricted Manager Non-Competition Period shall, if shorter, continue only
through the period of time such Restricted Manager receives severance equal to
the then current base salary of such Restricted Manager (provided such base
salary has not been materially reduced immediately prior to termination of
employment); provided, further, that with respect to each Restricted Manager,
if such Restricted Manager's employment is terminated by the Companies with
Cause after the Closing Date, the Restricted Manager Non-Competition Period
shall, if shorter, continue for a period of one (1) year after the termination
of such Restricted Manager), no such Restricted Manager nor any of his
Affiliates shall, anywhere in the world, directly or indirectly, either for
himself or any other person, engage in, own, operate, manage, control, invest
in or participate in any manner or permit their names to be used by, act as a
consultant or adviser to, render services for (alone or in association with any
person), or otherwise assist in any manner any person that engages in or owns,
operates, manages, controls, invest in or participates in, any Competing
Business.
(iii) Notwithstanding the foregoing, each Seller shall be
permitted to invest in stock, bonds, or other securities of any public
corporation, regardless of whether such public corporation is a Competing
Business so long as such Seller is not involved in the business of such
corporation and provided (i) such stock, bonds, or other securities are listed
on any national or required exchange or have been registered under Section
12(g) of the Securities Act of 1934; and (ii) its investment does not exceed,
in the case of any class of capital stock of any issuer, five (5%) percent of
the issued and outstanding shares, or in the case of bonds or other securities,
five (5%) percent of the aggregate principal amount thereof issued and
outstanding.
(b) Non-Solicitation of Employees.
(i) Each Seller agrees that, for a period of three (3) years
after the Closing Date (the "Non-Solicitation Period"), neither it nor any of
its successors, assigns or Affiliates will directly or indirectly engage,
recruit, solicit for employment or engagement, offer employment to or hire, or
otherwise seek to influence or alter any relationship with, without the prior
written consent of Buyer, any person who is (or was within one hundred eighty
(180) days of the Closing Date) an employee of the Companies on the Closing
Date unless such employee is terminated by the Companies or, with respect to
all employees other than the Restricted Managers, more than one hundred eighty
(180) days shall have passed since employee's voluntary termination of his or
her employment by the Companies.
(ii) Without limiting the generality of the provisions of
Section 6.8(b), each Seller hereby agrees that during the Non-Solicitation
Period, neither it nor any of its successors, assigns or Affiliates shall,
directly or indirectly, without the prior written consent of Buyer (i) induce
any person which is a customer of the Business or Buyer to patronize any
Competing Business; (ii) canvass, solicit or accept from any person who is a
customer of the Business or Buyer, any such competitive business; or (iii)
request or advise any person who is a customer or vendor of the Business or
Buyer or their successors to withdraw, curtail or cancel any such customer's or
vendor's business with any such entity.
(c) Confidential Information. During the Non-Competition Period,
each Seller and its Affiliates shall keep secret and retain in strictest
confidence, and shall not, without the prior written consent of Buyer, furnish,
make available or disclose to any third party or use for the benefit of himself
or any third party, any Confidential Information. Each Seller acknowledges that
the Confidential Information is vital, sensitive, confidential and proprietary
to the Companies, the Business and Buyer.
(d) Blue Pencil. Each Seller recognizes that the territorial, time
and scope limitations set forth in this Section 6.8 are reasonable and are
properly required for the protection of the Business' and Buyer's legitimate
interests in client relationships, goodwill and trade secrets, and in the event
that any such territorial, time or scope limitation is deemed to be
unreasonable by a court of competent jurisdiction, Buyer and each Seller agree,
and each Seller submits, to the reduction of any or all of said territorial,
time or scope limitations to such an area, period or scope as said court shall
deem reasonable under the circumstances, and in its reduced form, such
provision shall then be enforceable and shall be enforced.
(e) Equitable Remedies. Each Seller acknowledges and agrees that
the covenants set forth in this Section 6.8 are reasonable and necessary for
the protection of the Business and Buyer's business interests, its failure to
comply with any of the provisions of this Section 6.8 will cause irreparable
harm to Buyer and the Companies and that in the event of Seller's or its
Affiliates actual or threatened breach of any of the provisions contained in
this Section 6.8, Buyer will have no adequate remedy at law. As a result, each
Seller agrees that in the event of any actual or threatened breach of any of
the covenants set forth in this Section 6.8, Buyer and the Companies may seek
equitable relief against such Seller and its Affiliates, including, but not
limited to, restraining orders and injunctions, without having to show actual
monetary damages or posting a bond, as may be deemed necessary or appropriate
by a court of competent jurisdiction. Nothing contained herein shall be
construed as prohibiting Buyer and the Companies from pursuing any other
remedies available to it for such breach or threatened breach, including,
without limitation, the right to monetary damages.
6.9 [Reserved].
6.10 G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Guarantee. G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ hereby
irrevocably, absolutely and unconditionally guarantees, as primary obligor and
not merely as surety, and as a guaranty of payment when due and not of
collectibility, to the Buyer and its successors and assigns the prompt and
punctual payment and satisfaction in full of all obligations, liabilities and
indebtedness of any kind, nature and description, if any, of ▇▇▇▇▇▇ under this
Agreement and the Release delivered by ▇▇▇▇▇▇ pursuant to this Agreement,
whether direct or indirect, absolute or contingent, joint or several, due or
not due, primary or secondary, liquidated or unliquidated, secured or
unsecured, together with all claims for damages arising from the failure to pay
such amounts or perform such obligations, and all costs and expenses
(including, without limitation, attorneys' fees and legal expenses) incurred in
connection with the collection, enforcement and defense of any of ▇▇▇▇▇▇
obligations, liabilities and indebtedness as aforesaid. G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
hereby (a) further agrees that if ▇▇▇▇▇▇ shall fail to pay, or otherwise
satisfy, in full any of such amounts when they become due, he shall promptly
pay, or otherwise satisfy the same and (b) waives, for the benefit of Buyer and
its successors and assigns, (i) any right to require Buyer to proceed against
▇▇▇▇▇▇, (ii) any right to set-offs, recoupments and counterclaims, (iii)
notices, demands, presentments, protests, notices of protest and notices of
action or inaction under this Agreement and the Release delivered by ▇▇▇▇▇▇
pursuant to this Agreement; (iv) any right of subrogation, reimbursement,
indemnification or contribution that he may have against ▇▇▇▇▇▇ and (v) to the
fullest extent permitted by law, any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate him or
sureties, or which may conflict with the terms of this Section 6.10. The
obligations of G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ pursuant to this Section 6.10 (i) shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of all or any portion of any indemnification obligation of ▇▇▇▇▇▇
is rescinded as a preference, fraudulent transfer or conveyance or must
otherwise be returned by Buyer on the insolvency, bankruptcy or reorganization
of ▇▇▇▇▇▇, all as though the payment had not been made and (ii) shall be
subject to any defenses, counter-claims, rights of offset and the like which
are or would otherwise be available to ▇▇▇▇▇▇.
ARTICLE VII
CLOSING DELIVERIES OF THE HOLDING COMPANY AND SELLERS
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7.1 Deliveries of the Holding Company. The Holding Company shall make
or tender, or cause to be made or tendered, delivery to the Buyer of the
following:
(a) a certificate of the Holding Company (signed by an officer of
the Holding Company) certifying that the Companies have performed or complied
with all of their obligations under this Agreement, which certificate, for all
purposes herein, shall be deemed to constitute a representation and warranty of
the Companies pursuant to Article III hereof;
(b) all of the Records; and
(c) such other customary documents, instruments or certificates as
shall be reasonably requested by the Buyer and as shall be consistent with the
terms of this Agreement.
7.2 Deliveries of the Sellers. Each Seller shall make or tender, or cause to be
made or tendered, delivery to the Buyer of the following:
(a) stock certificates evidencing the Holding Company Stock owned
by such Seller, which certificates shall be either duly endorsed in blank or
accompanied by stock powers or other instruments of transfer duly executed and
in proper form for transfer to the Buyer under applicable law;
(b) a certificate of such Seller certifying that such Seller has
performed or complied with all of its obligations under this Agreement;
(c) the Transaction Escrow Agreement, duly executed by such
Seller;
(d) the Releases and Resignations, each duly executed by the
signatories thereto;
(e) a certificate from each Seller (in form and substance
reasonably acceptable to Buyer) certifying such Seller's non-foreign status in
accordance with Code Section 1445 and the regulations promulgated thereunder;
and
(f) such other customary documents, instruments or certificates as
shall be reasonably requested by the Buyer and as shall be consistent with the
terms of this Agreement.
ARTICLE VIII
CLOSING DELIVERIES OF BUYER
---------------------------
8.1 Deliveries. The Buyer shall make or tender, or cause to be made or
tendered, delivery to the Escrow Agent of the Escrow Amount in accordance with
Section 2.3 and delivery to the Sellers of the Closing Payment in accordance
with Section 2.3 and the following:
(a) the certificate required by an officer of the Buyer certifying
that Buyer has performed or complied with all of its obligations under this
Agreement, which certificate, for all purposes herein, shall be deemed to
constitute a representation and warranty of the Buyer pursuant to Article IV
hereof;
(b) the Transaction Escrow Agreement, duly executed by the Buyer;
and
(c) such other customary documents, instruments or certificates as
shall be reasonably requested by Sellers and as shall be consistent with the
terms of this Agreement.
ARTICLE IX
INDEMNIFICATION/ESCROW
9.1 Indemnification by Sellers.
(a) Subject to the terms and limitations set forth in this Article
IX, each Seller shall severally, in accordance with his/its Indemnification Pro
Rata Portion, indemnify and hold harmless the Buyer and the Companies (as
wholly-owned subsidiaries of Buyer) and their stockholders, directors,
officers, employees, attorneys, agents and Affiliates (collectively, the "Buyer
Indemnified Parties") from and against and in respect of any and all Losses
arising out of, relating to, or resulting from any (i) breach of any of the
representations and warranties made by the Sellers and the Companies in Article
III (excluding, in any event, those representations and warranties made by the
Sellers, and not the Companies, contained in Section 3.31), (ii) any breach of
the covenants or agreements made by the Companies in or pursuant to this
Agreement (for the avoidance of doubt, in this Section the terms "covenants"
and "agreements" specifically exclude any representation or warranty under
Article III), or (iii) any inaccuracy in any certificate, instrument or other
document delivered by the Companies as required by this Agreement.
(b) Subject to the terms and limitations set forth in this Article
IX, each Seller shall severally, in accordance with his/its Indemnification Pro
Rata Portion, indemnify and hold harmless the Buyer Indemnified Parties from
and against and in respect of any and all Losses arising out of, relating to or
resulting from (i) any breach of any of the representations and warranties made
by such Seller in Section 3.31 hereof, (ii) any breach or violation by such
Seller of the covenants or agreements made in this Agreement by such Seller, or
(iii) any inaccuracy in any certificate, instrument or other document delivered
by such Seller as required by this Agreement.
9.2 Indemnification by the Buyer. The Buyer shall indemnify and hold
harmless the Sellers against and in respect of any and all Losses arising out
of, relating to, or resulting from:
(a) any breach or violation of the covenants made in this
Agreement by the Buyer;
(b) any breach of any of the representations or warranties made in
Article IV by the Buyer; or
(c) any inaccuracy in any certificate, instrument or other
document delivered by the Buyer as required by this Agreement.
9.3 Notice and Payment of Losses. Upon obtaining knowledge of any
Loss, the Injured Party shall promptly provide the Indemnifying Party or
Indemnifying Parties with a Notice of Claim; provided, however, that failure of
an Injured Party timely to give a Notice of Claim to the Indemnifying Party or
Indemnifying Parties shall not release an Indemnifying Party from its indemnity
obligations set forth in this Article IX except to the extent that such failure
materially prejudices the ability of such Indemnifying Party to defend such
claim. A Notice of Claim shall specify in reasonable detail, to the extent
known by the Injured Party, the nature and, to the extent reasonably
calculable, estimated amount of any such claim giving rise to a right of
indemnification. Each Indemnifying Party shall satisfy its obligations under
Section 9.1 or 9.2, as the case may be, within forty-five (45) days of its
receipt of a Notice of Claim; provided, however, that for so long as an
Indemnifying Party is disputing its liability or defending a third-party claim
in good faith pursuant to Section 9.4, its obligations to indemnify the Injured
Party with respect thereto shall be suspended until such claim is settled or a
final unappealable judgment of a court of competent jurisdiction is given in
relation to such claim. Each Indemnifying Party shall have fifteen (15) days
(or such shorter period of time that the Injured Party may be required to
respond to any suit or governmental action) after receipt of a Notice of Claim
to notify the Injured Party (a) whether or not it disputes its liability to the
Injured Party with respect to such Notice of Claim and (b) whether it or the
Indemnifying Parties collectively elect to defend a third-party claim pursuant
to Section 9.4.
9.4 Defense of Third-Party Claims. With respect to any action or any
claim set forth in a Notice of Claim relating to a third-party claim, the
Indemnifying Party or Indemnifying Parties, as the case may be, may defend, in
good faith by appropriate actions diligently pursued and at its or their own
expense, any such claim or demand, and the Injured Party, at its expense, shall
have the right, but not the obligation, to participate in (but not control) at
its expense in the defense of any such third-party claim; provided, however,
that the Injured Party shall be entitled, at the Indemnifying Party's cost,
risk and expense, to retain one firm of separate counsel of its own choosing
(along with any required local counsel) if (i) the Indemnifying Party and the
Injured Party so mutually agree; (ii) the Indemnifying Party fails within a
reasonable time to retain counsel reasonably satisfactory to the Injured Party;
(iii) the Injured Party shall have reasonably concluded that there may be legal
defense available to it that are different from or in addition to those
available to the Indemnifying Party; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Party and the Injured Party and representation of both sets of parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. If the Indemnifying Party fails to assume the defense
of such third party claim in accordance with this Section 9.4 within ten (10)
days after delivery of the notice in accordance with Section 9.3 or fails to
diligently pursue the defense thereof, the Injured Party against which such
third party claim has been asserted shall (upon delivering notice to such
effect to the Indemnifying Party) have the right to undertake the defense,
compromise and settlement of such third party claim, and the Indemnifying Party
shall be liable for any resulting settlement of such third party claim and for
any final judgment with respect thereto (subject to any right of appeal), if
any, but only to the full extent otherwise provided in this Agreement. In the
event the Indemnifying Party assumes the defense of the claim, the Indemnifying
Party shall keep the Injured Party reasonably informed of the progress of any
such defense, compromise or settlement, and in the event the Injured Party
assumes the defense of the claim in good faith, the Injured Party shall keep
the Indemnifying Party reasonably informed of the progress of any such defense,
compromise or settlement. So long as an Indemnifying Party or the Indemnifying
Parties are defending any such third-party claim, the Injured Party shall not
settle or compromise such third-party claim without the consent of the
Indemnifying Party or Indemnifying Parties, as the case may be. The
Indemnifying Party or Indemnifying Parties, as the case may be, may not settle
or compromise such third-party claim without the consent of the Injured Party,
which consent shall not be unreasonably withheld. The Injured Party shall make
available to the Indemnifying Party or the Indemnifying Parties, as the case
may be, or its or their representatives all records and other materials
reasonably required for use in contesting any third-party claim. The Injured
Party shall cooperate fully with the Indemnifying Party or Indemnifying Parties
in the defense of all such claims.
9.5 Survival of Representations and Warranties and Certain Covenants.
Except for the representations and warranties contained in Section 3.10
(Taxes), 3.18 (Environmental Matters), 3.23 (Employee Benefit Matters) and 3.24
(Product Liability), which shall survive until ninety (90) days after the
expiration of the applicable statute of limitations and except for the
representations and warranties contained in Sections 3.1 and 4.1 (Existence and
Power), 3.2 (No Violation), 3.3 and 4.2 (Valid and Enforceable Agreement), 3.4
(Capitalization and Ownership), 3.5 (Good Title Conveyed), and 3.31 (Seller and
Custodian Representations and Warranties), which shall survive the Closing Date
indefinitely, all of the representations and warranties made by any Party in
Articles III and IV shall survive for a period of eighteen (18) months
following the Closing and thereafter to the extent a Notice of Claim is made
within such period with respect to any breach of such representation or
warranty occurring within such period and set out in such Notice of Claim. No
party shall be entitled to indemnification for breach of any representation and
warranty set forth in Articles III and IV unless a Notice of Claim of such
breach has been given to the Indemnifying Party within the period of survival
of such representation and warranty as set forth herein.
9.6 Limitation on Indemnification.
(a) Sellers shall not be required to indemnify and hold the Buyer
Indemnified Parties harmless under Section 9.1(a)(i) or (iii) until the
aggregate amount of Losses exceeds $325,000 (the "Basket Amount"), at which
point Sellers shall be required to indemnify and hold the Buyer Indemnified
Parties harmless for all Losses in excess of the Basket Amount, up to, but not
in excess of, the limitations set forth in Subsection (b) herein; provided,
however, where the aggregate amount of Losses arising out of a single claim or
series of related claims derived from the same or related facts, events or
circumstances for which any Buyer Indemnified Party could otherwise seek
indemnification under Section 9.1(a)(i) or (iii) does not exceed $10,000, such
claim or series of related claims shall not count towards the Basket Amount as
Losses for purposes of this Agreement; provided, further, that the limitations
set forth in this Section 9.6 shall not apply to Losses under Section
9.1(a)(ii) or Section 9.1(b). Notwithstanding anything to the contrary
contained herein, in no event shall any of the Companies be required to
indemnify or hold the Buyer Indemnified Parties harmless under Section 9.1
after the Closing. Such obligations shall be solely the several obligations of
Sellers.
(b) Notwithstanding anything contained herein to the contrary, in
no event shall any Seller be liable under Section 9.1(a)(i) or (iii) in an
amount in excess of such Seller's Indemnification Pro Rata Portion of the
following percentages of the Base Purchase Price:
(i) with respect to a breach of a representation or warranty
set forth in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.14, or 3.31: one hundred
percent (100%) of the Base Purchase Price;
(ii) with respect to a breach of a representation or warranty
set forth in Sections 3.10 and 3.19: fifty percent (50%) of the Base Purchase
Price;
(iii) with respect to a breach of a representation or warranty
set forth in Sections 3.18 and 3.24: thirty percent (30%) of the Base Purchase
Price; provided, however, that with respect to any claims relating to a breach
of the warranties and representations as to products liability under Section
3.24: such percentage cap shall only apply to product liability claims with
respect to products sold prior to Closing and all other breaches of the
representations and warranties in Section 3.24 shall be such to the percentage
cap set forth in subsection (iv); and
(iv) with respect to a breach of any other representation or
warranty set forth in Article III: thirty percent (30%) of such Seller's
Indemnification Pro Rata Portion of the Base Purchase Price for indemnification
claims made within six (6) months after the Closing Date and fifteen percent
(15%) of the Base Purchase Price for indemnification claims made thereafter.
(c) In no event shall any Seller be liable in the aggregate under
Section 9.1(a)(i) and (iii) and 9.1(b)(i) and (iii) in an amount in excess of
such Seller's Indemnification Pro Rata Portion of one hundred percent (100%) of
the Base Purchase Price; provided further that in no event shall ▇▇▇▇▇▇▇▇▇ be
liable under Section 9.1(a) and 9.1(b) in an amount in excess of such
individual's Indemnification Pro Rata Portion of one hundred percent (100%) of
the Base Purchase Price.
(d) All indemnification obligations shall be paid in U.S. Dollars
in the United States.
9.7 Characterization of Indemnity Payments. Any indemnification
payments made pursuant to this Agreement shall be considered, to the extent
permissible under Law, as adjustments to the Purchase Price for all Tax
purposes.
9.8 Exclusive Remedy. In the absence of fraud, except as set forth in
Section 6.8, the indemnification provisions set forth in this Article IX shall
provide the exclusive remedy for breach of any covenant, agreement,
representation or warranty set forth in this Agreement; provided however, such
limitation shall not impair the rights of any of the Parties to seek
non-monetary equitable relief, including (without limitation) specific
performance or injunctive relief to redress any default or breach of this
Agreement. In connection with the seeking of any non-monetary equitable relief,
each of the Parties acknowledges and agrees that the other Parties hereto would
be damaged irreparably in the event any of the provisions of this Agreement are
not performed in accordance with their specific terms or otherwise are
breached.
9.9 Transaction Escrow Agreement. The Sellers shall deliver the Escrow
Amount to the Escrow Agent at Closing to be held and disbursed by the Escrow
Agent pursuant to the Transaction Escrow Agreement and this Agreement. The
Escrow Amount shall be applied to satisfy indemnification obligations of the
Sellers in accordance with the terms thereof. The Buyer agrees that until the
termination of the Transaction Escrow Agreement it shall satisfy all of its
claims for indemnification hereunder by first making a claim pursuant to and in
accordance with the terms of the Transaction Escrow Agreement.
ARTICLE X
APPOINTMENT OF SELLERS' REPRESENTATIVE
10.1 Appointment. Each Seller hereby irrevocably constitutes and
appoints FCF through any one of its officers as Sellers' Representative for the
purpose of representing such Seller in connection with the following matters:
(a) consenting to, compromising, paying and resolving all matters
with respect to the determination of the Closing Balance Sheet, the Final Net
Working Capital and the related matters thereto pursuant to Sections 2.4 and
2.5 herein,
(b) consenting to, compromising, paying and resolving all
indemnification obligations arising under Article IX,
(c) accepting on behalf of each Seller service of process and any
notices required to be served on Sellers,
(d) exercising all rights, and discharging all duties and
obligations, of the Sellers under the Transaction Escrow Agreement, and
(e) the appointment of FCF as the Sellers' Representative is
coupled with an interest and all authority hereby conferred shall be
irrevocable and shall not be terminated by any or all of the Sellers without
the consent of the Buyer, which consent may be withheld for any reason. Such
appointment shall be binding upon the heirs, executors, administrators,
estates, personal representatives, successors and assigns of each Seller.
For the avoidance of doubt, any compromise or settlement of
any matter by Sellers' Representative shall be binding on and fully enforceable
against, all Sellers.
10.2 Reliance. Each Seller hereby agrees that: (i) in all matters in
which action by Sellers' Representative is required or permitted, Sellers'
Representative is authorized to act on behalf of each Seller, notwithstanding
any dispute or disagreement among any Seller, and any Buyer Indemnified Party
shall be entitled to rely on any and all action taken by Sellers'
Representative under this Agreement without any liability to, or obligation to
inquire of, any Seller, notwithstanding any knowledge on the part of any Buyer
Indemnified Party of any such dispute or disagreement; (ii) notice to Sellers'
Representative, delivered in the manner provided in Section 11.1, shall be
deemed to be notice to each Seller for the purposes of this Agreement; (iii)
the power and authority of Sellers' Representative, as described in this
Agreement, shall continue in full force until all rights and obligations of
each Seller under this Agreement shall have terminated, expired or been fully
performed.
10.3 Authority. In furtherance and not in limitation of the authority
granted to the Sellers' Representative above, each of the Sellers, for
themselves and their respective heirs, executors, administrators, successors
and assigns, hereby authorizes the Sellers' Representative without notice to
such Seller hereunder to:
(a) Waive any provision of this Agreement (except the limitations
contained in Section 9.6);
(b) Make and receive notices and other communications pursuant to
this Agreement (and provide copies of the same to the Managers' counsel as
provided in Section 11.1), including any service of process in any legal action
or other proceeding arising out of or related to this Agreement or any of the
transactions hereunder;
(c) Settle any dispute, claim, action, suit or proceeding arising
out of or related to this Agreement on behalf of all or any of the Sellers,
including, without limitation, by consenting to the entry of any confession of
judgment in connection therewith, as further provided in Section 10.4, below;
(d) Appoint or provide for successor agents, with the consent of
the Buyer, such consent not to be unreasonably withheld; and
(e) Pay reasonable expenses incurred or which may be incurred by
or on behalf of the Sellers in connection with this Agreement.
In the event of the failure or refusal of the Sellers' Representative to
continue to act as the Sellers' Representative, the Investors shall, by
majority vote of the Investors, promptly appoint one of the remaining Sellers
as their agent for purposes of this Article X, and failing such appointment
within fifteen (15) days following such failure or refusal, the Buyer may, by
written notice to the Sellers at the last address of the Sellers designated
under this Agreement, designate one of the remaining Sellers as such agent.
10.4 Claims. Any claim, action, suit or other proceeding, whether in
law or equity, to enforce any right, benefit or remedy granted to the Sellers
under this Agreement relating to a matter within the scope of the Sellers'
Representative authority specified in Section 10.1 may be asserted, brought,
prosecuted or maintained only by the Sellers' Representative, and the Sellers
hereby irrevocably waive any right to enforce such rights in their own name.
The Sellers consent and agree that any claim, action, suit or other proceeding,
whether in law or equity, to enforce any right, benefit or remedy granted to
Buyer under this Agreement relating to a matter within the scope of the
Sellers' Representative's authority specified in Section 10.1 may be asserted,
brought, prosecuted or maintained by Buyer against the Sellers by service of
process on the Sellers' Representative and without the necessity of serving
process on, or otherwise joining or naming as a defendant in such claim,
action, suit or other proceeding, any Sellers. For this purpose, each Seller
hereby irrevocably stipulates and agrees that the Sellers' Representative is a
proper party defendant to represent its interests in any such proceeding and to
appear on its behalf for all purposes therein, and that service of process upon
the Sellers' Representative shall be effective to bind such Seller for all
purposes of any such proceeding. Each Seller hereby irrevocably waives any and
all rights it may have to object to jurisdiction or venue in any proceeding in
which service of process is served upon the Sellers' Representative on such
Seller's behalf. With respect to any matter within the scope of authority
granted to the Sellers' Representative under this Article X, the Sellers shall
be bound by any determination in favor of or against the Sellers'
Representative or the terms of any settlement or release to which the Sellers'
Representative shall become a party, including, without limitation, any
confession of judgment or other stipulation or settlement granted or entered
into by the Sellers' Representative on their behalf.
10.5 Reimbursement. All reasonable out-of-pocket expenses incurred by
the Sellers' Representative in the performance of his duties hereunder
(including, without limitation, attorneys' and accountants' fees) shall be
borne by the Sellers in the Pro Rata Portion, and neither the Companies nor the
Buyer shall have any liability with respect thereto.
ARTICLE XI
MISCELLANEOUS PROVISIONS
------------------------
11.1 Notice. All notices, requests, demands, and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given and made upon being delivered by courier
delivery or by facsimile to the Party for whom it is intended, or five (5)
Business Days after having been deposited in the mail, certified or registered
(with receipt requested) and postage prepaid, addressed at the address shown in
this Section 11.1 for, or such other address as may be designated in writing
hereafter by, such Party:
If to the Buyer: With copies to:
Middleby Marshall, Inc. Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Holding Company: With copies to:
Alkar Holdings, Inc. ▇▇▇▇▇ & Lardner LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: President Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: _____________ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Sellers' Representative: With copies to:
Facilitator Capital Fund, Limited ▇▇▇▇▇▇▇ & ▇▇▇▇ S.C.
Partnership ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Madison, Wisconsin 53718-8300 Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
AND
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, LLP
▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
AND
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, S.C.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
11.2 Entire Agreement. This Agreement and the Exhibits and Schedules
hereto and thereto embody the entire agreement and understanding of the Parties
hereto with respect to the subject matter hereof, and supersede all prior
agreements and understandings relating to such subject matter, and the Parties
are not relying on any written or oral representations or statements, whether
express or implied, not expressly set forth in this Agreement.
11.3 Severability. If any provision hereof shall be held invalid or
unenforceable by any court of competent jurisdiction or as a result of future
legislative action, such holding or action shall be strictly construed and
shall not affect the validity or effect of any other provision hereof, as long
as the remaining provisions, taken together, are sufficient to carry out the
overall intentions of the Parties as evidenced hereby.
11.4 Assignment; Binding Agreement. This Agreement and the rights and
obligations arising hereunder shall inure to the benefit of and be binding upon
the Parties hereto and their successors and permitted assigns. Neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
transferred, delegated, or assigned by the Parties hereto without the prior
written consent of the other Parties; provided that upon written notice Buyer
may assign, in its sole discretion and without prior written consent, any or
all of its rights under this Agreement to one or more of its lenders as
security for obligations to such lenders in respect of its financing agreements
and related arrangements, provided that the foregoing shall not release Buyer
from its obligations hereunder. The Parties agree that the execution of this
Agreement shall constitute the written notice required pursuant to this Section
11.4.
11.5 Counterparts. This Agreement may be executed simultaneously in
multiple counterparts, and in separate counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and
the same instrument.
11.6 Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with the consummation of the transactions
contemplated hereby by Buyer shall be borne by Buyer, all costs and expenses
incurred in connection with the consummation of the transactions contemplated
hereby by the Companies shall be borne by the Sellers, and all costs and
expenses incurred in connection with the consummation of the transactions
contemplated hereby by Sellers shall be borne by Sellers.
11.7 Headings; Interpretation. The article and section headings
contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement. Each
reference in this Agreement to an Article, Section, Schedule or Exhibit, unless
otherwise indicated, shall mean an Article or a Section of this Agreement or a
Schedule or Exhibit attached to this Agreement, respectively. References herein
to "days", unless otherwise indicated, are to consecutive calendar days. All
Parties have participated substantially in the negotiation and drafting of this
Agreement and agree that no ambiguity herein should be construed against the
draftsman. References to a "person" shall be construed so as to include any
individual, firm, company, government, joint venture, partnership or other
legal entity. References to a "corporation" or "company" shall be construed so
as to include any corporation, company or other body corporate, wherever and
however incorporated or established.
11.8 Governing Law. This Agreement shall be governed by, and construed
in accordance with, the law of the State of Delaware applicable to contracts to
be carried out wholly within such State.
11.9 Submission to Jurisdiction. Each of the Parties hereto
irrevocably submits to the exclusive jurisdiction of (a) the circuit court
located in ▇▇▇▇ County, Illinois and (b) the United States District Court for
the Northern District of Illinois, for the purposes of any suit, action or
other proceeding arising out of this Agreement or any transaction contemplated
hereby. Each of the Parties agrees to commence any action, suit or proceeding
relating hereto in the United States District Court for the Northern District
of Illinois, or if such suit, action or other proceeding may not be brought in
such court for jurisdictional reasons, in the circuit court located in ▇▇▇▇
County, Illinois. Each of the Parties further agrees that service of any
process, summons, notice or document by U.S. registered mail to such Party's
respective address set forth above shall be effective service of process for
any action, suit or proceeding in Illinois with respect to any matters to which
it has submitted to jurisdiction in this Section 11.9. Each of the Parties
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in (i) the circuit court located in ▇▇▇▇
County, Illinois or (ii) the United States District Court for the Northern
District of Illinois, and hereby further irrevocably and unconditionally agrees
not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum
or to raise any similar defense or objection.
11.10 WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES (TO THE FULLEST
EXTENT PERMITTED BY LAW) ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. THE PARTIES
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO THIS
AGREEMENT. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY.
IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO
A TRIAL BY THE COURT.
11.11 No Third Party Beneficiaries. No agreement between the parties
hereto nor any action by the Companies, the Sellers, the Buyer or their
Affiliates shall be deemed to create any third party beneficiary rights in any
employees of the Companies, the Buyer, or any Affiliate of any of them, and no
person other than the parties to this Agreement shall have any rights to
enforce any provision hereof.
11.12 Knowledge. Whenever "to the knowledge of the Companies," "known
to the Companies" or a similar phrase is used to qualify a representation or
warranty, the "knowledge" so referred to with respect to the Companies shall be
the knowledge of the officers and senior and mid-level managers of the
Companies.
SECTION 2.5 OF THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH
MAY BE ENFORCED BY THE PARTIES.
[Signature Page to Follow]
IN WITNESS WHEREOF, each of the Parties hereto has caused
this Agreement to be executed as of the date first above written.
MIDDLEBY MARSHALL, INC. ("Buyer")
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
ALKAR HOLDINGS, INC.
("Holding Company")
By: /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
FACILITATOR CAPITAL FUND,LIMITED
PARTNERSHIP
By: ZW Capital Partners, Inc. its
General Partner
By: /s/ ▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇
Title: Senior Managing Director
▇▇▇▇▇▇ HOLDINGS, LLC
By: /s/ G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman and CEO
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ -
▇▇▇ By: Bank of Sun
Prairie, Custodian
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title:_____________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ - ▇▇▇
By: Bank of Sun Prairie, Custodian
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title:_____________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇
By: Bank of Sun Prairie, Custodian
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title:_____________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇
By: Bank of Sun Prairie, Custodian
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title:_____________________________
AND SOLELY WITH RESPECT TO
SECTIONS 6.8 AND 6.10 HEREOF:
/s/ G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
G. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇