EXHIBIT 10.17
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STOCK PURCHASE AGREEMENT
between
▇▇▇▇▇▇ CO.
and
PEN-TAB HOLDINGS, INC.
Dated as of June 24, 1998
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TABLE OF CONTENTS
Page
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ARTICLE I PURCHASE AND SALE OF STOCK .................................... 1
1.1 Stock Purchase ........................................ 1
1.2 Purchase Price ............................................ 1
1.3 Adjustment to Purchase Price .............................. 1
(a) Purchase Price Adjustment ........................ 1
(b) Closing Statement of Net Working Capital ......... 2
(c) Buyer's Review of Preliminary Closing Statement .. 2
(d) Seller's Response to Buyer's Letter .............. 2
(e) Meeting to Resolve Proposed Adjustments .......... 3
(f) Arbitration of Disputed Purchase Price Adjustments 3
(g) Notices Relating to the Closing Statement ........ 4
(h) Payment and Interest ............................. 4
1.4 Intercompany Obligations .................................. 4
ARTICLE 11 CLOSING ................................................... 5
2.1 Time and Place ............................................ 5
2.2 Deliveries by Seller ...................................... 5
2.3 Deliveries by Buyer ....................................... 5
ARTICLE III REPRESENTATIONS AND WARRANTIES ............................ 5
3.1 Representations and Warranties of Seller .................. 5
(a) Due Organization of ▇▇▇▇▇▇ ▇▇▇▇ .................. 6
(b) Due Organization and Power of Seller ............. 6
(c) Authorization and Validity of Agreements ......... 6
(d) Subsidiaries ..................................... 6
(e) Capitalization of ▇▇▇▇▇▇ ▇▇▇▇ .................... 6
(f) No Conflict ...................................... 7
(g) Financial Statements ............................. 7
(h) Tax Matters ...................................... 7
(i) Title to Personal Properties; Liens and Encumbrances;
No Other Interests ............................... 9
(j) Business Contracts ............................... 10
(k) Legal Proceedings ................................ 10
(1) Government Licenses, Permits and Related Approvals 10
(m) Conduct of Business in Compliance with Regulatory
Requirements ..................................... 10
(n) Labor Matters .................................... 10
(o) Intellectual Property ............................ 11
(p) Employee Benefit Plans ........................... 11
(q) Undisclosed Liabilities .......................... 12
(r) Environmental Matters ............................ 12
(s) Absence of Changes ............................... 14
(t) Leased Real Property ............................. 14
(u) Insurance ........................................ 15
(v) Company Transactions ............................. 15
(w) Sufficiency of Assets ............................ 15
(x) Transactions with Affiliates ..................... 15
(y) No Other Representations or Warranties ........... 15
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3.2 Representations and Warranties of Buyer ................... 15
(a) Due Organization and Power ....................... 15
(b) Authorization and Validity of Agreements ......... 15
(c) No Conflict ...................................... 16
(d) Brokers, Finders. etc ............................ 16
(e) Commitment Letters ............................... 16
3.3 Supplements to Schedules .................................. 16
ARTICLE IV PRE-CLOSING COVENANTS ..................................... 16
4.1 Access to Information Concerning Properties and Records;
Confidentiality.......................................... . 16
4.2 Conduct of the Business Prior to the Closing Date ......... 17
(a) Ordinary Course .................................. 17
(b) Changes in Compensation .......................... 17
(c) Assets ........................................... 17
(d) Capital Stock .................................... 17
(e) Dividends ........................................ 17
(f) Capital Expenditures ............................. 17
(g) Liens ............................................ 18
(h) Accounting Practices ............................. 18
(i) Constituent Documents ............................ 18
(j) Taxes ............................................ 18
(k) Other ............................................ 18
4.3 Preservation of Business .................................. 18
4.4 Authorizations ............................................ 18
4.5 Cash Management ........................................... 18
4.6 Intercompany Services and Products ........................ 18
4.7 Further Actions ........................................... 19
4.8 Exclusivity ............................................... 19
4.9 Buyer's Financing ......................................... 19
4.10 Customer Confirmation ..................................... 20
4.11 Release From Lease ........................................ 20
4.12 Commitment Letters ........................................ 20
4.13 Miscellaneous ............................................. 20
ARTICLE V CONDITIONS PRECEDENT ...................................... 21
5.1 Conditions Precedent to Obligations of Parties ............ 21
(a) Antitrust Laws .................................... 21
(b) No Injunction ..................................... 21
(c) Governmental Authority Consents ................... 21
(d) Third Party Consents .............................. 21
(e) Financing ......................................... 21
5.2 Conditions Precedent to Obligation of Buyer ............... 22
(a) Accuracy of Representations and Warranties ........ 22
(b) Performance of Agreements ......................... 22
(c) Certificates ...................................... 22
(d) Ancillary Agreements .............................. 22
(e) Release of Liens .................................. 22
(f) Proceedings ....................................... 22
(g) Transactions with Affiliates ...................... 23
(h) Additional Matters ................................ 23
(I) Material Adverse Change ........................... 23
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5.3 Conditions Precedent to the Obligation of Seller .......... 23
(a) Accuracy of Representations and Warranties ........ 23
(b) Performance of Agreements ......................... 23
(c) Certificates ...................................... 23
(d) Payment of 33% of Stay Bonuses .................... 23
ARTICLE VI PROVISIONS AS TO TAX MATTERS .............................. 24
6.1 Certain Tax Matters ....................................... 24
(a) Preparation and Filing of Tax Returns ............. 24
(b) Payment of Taxes .................................. 24
(c) Carryforwards and Carrybacks ...................... 24
(d) Refunds ........................................... 24
6.2 Tax Indemnification ....................................... 25
(a) Seller Indemnification ............................ 25
(b) Buyer Indemnification ............................. 25
(c) Determining Liability for Taxes ................... 25
(d) Indemnification for Post-Closing Transactions ..... 25
6.3 Contest Provisions ........................................ 25
6.4 Section 338 Elections and Forms ........................... 25
6.5 Audits .................................................... 26
6.6 Cooperation ............................................... 26
ARTICLE VII LABOR MATTERS, EMPLOYEE RELATIONS AND BENEFITS ............ 26
7.1 Offers of Employment ...................................... 26
7.2 Participating in Buyer's Retirement Plans ................. 27
7.3 Health and Welfare Plans .................................. 27
7.4 No Rights or Remedies ..................................... 27
7.5 Indemnification ........................................... 27
ARTICLE VIII SURVIVAL AND INDEMNIFICATION .............................. 27
8.1 Survival .................................................. 27
8.2 Indemnification Provisions for the Benefit of Buyer ....... 28
8.3 Indemnification Provisions for the Benefit of Seller ...... 28
8.4 Matters Involving Third Parties ........................... 28
8.5 Adjustments ............................................... 29
8.6 Exclusive Remedy .......................................... 29
8.7 Payment and Interest ...................................... 29
ARTICLE IX OTHER POST-CLOSING COVENANTS .............................. 30
9.1 Post-Closing Accounting Cooperation ....................... 30
9.2 Transfer Taxes ............................................ 30
9.3 Further Actions ........................................... 30
9.4 Subsequent Access ......................................... 30
9.5 Payment of Remainder of Stay Bonuses ...................... 30
9.6 Confidentiality ........................................... 30
(a) By Seller ........................................ 30
(b) By Buyer ......................................... 30
(c) Exceptions ....................................... 30
9.7 Buyer's Financing ......................................... 31
9.8 Nonsolicitation ........................................... 31
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ARTICLE X MISCELLANEOUS ................................................ 31
10.1 Termination .................................................. 31
(a) General ............................................... 31
(b) Procedure Upon Termination ............................ 32
(c) Survival of Certain Provisions ........................ 32
10.2 Fees and Expenses ............................................ 32
10.3 Notices ...................................................... 32
10.4 Entire Agreement ............................................. 33
10.5 Binding Effect; Benefit ...................................... 33
10.6 Assignability ................................................ 33
10.7 Amendment and Modification; Waiver ........................... 34
10.8 Public Announcements ......................................... 34
10.9 Interpretation ............................................... 34
10.10 Counterparts ................................................. 35
10.11 Applicable Law ............................................... 35
10.12 Severability of Provisions ................................... 35
10.13 Time is of the Essence ....................................... 35
10.11 Applicable Law ............................................... 35
10.12 Severability of Provisions ................................... 35
10.13 Time is of the Essence ....................................... 35
SCHEDULES
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Schedule 1.3(a)(i)(A) Excluded Liabilities
Schedule 1.3(a)(i)(B) Exceptions to GAAP
Schedule 1.3(a)(ii) Peg Statement
Schedule 3.1(e)(i) Capitalization of ▇▇▇▇▇▇ ▇▇▇▇
Schedule 3.1(e)(ii) Stock Options
Schedule 3.1(f)(i) Seller's Knowledge
Schedule 3.1(f)(ii) No Conflict (Seller)
Schedule 3.1(f)(iv) Consents
Schedule 3.1(g)(i) Financial Statements
Schedule 3.1(g)(i)(ii) 1998 Monthly Unaudited Financial Statements
Schedule 3.1(g)(iii) Financial Matters
Schedule 3.1(h)(v) Tax Matters; Filing Extensions
Schedule 3.1(h)(vi) Tax Matters; Waivers or Extensions to Statute
of Limitations
Schedule 3.1(h)(vii) Tax Matters; Deficiency or Claim
Schedule 3.1(h)(viii) Tax Matters; Audits
Schedule 3.1(i) Permitted Liens
Schedule 3.1(j)(i) Contracts
Schedule 3.1(j)(ii) Contracts - Exceptions
Schedule 3.1(k) Legal Proceedings
Schedule 3.1(1) Government Licenses
Schedule 3.1(n) Labor Matters
Schedule 3.1(o)(i) Intellectual Property
Schedule 3.1(o)(ii) Intellectual Property - Exceptions
Schedule 3.1(p) Employee Benefits Matters
Schedule 3.1(r)(i) Environmental Matters; Required Environmental
Permits
Schedule 3.1(r)(ii) Environmental Matters; Laws
Schedule 3.1(s)(i) Absence of Changes
Schedule 3.1(s)(ii) Hiring of Key Employees
Schedule 3.1(t)(ii)(A) Leases
Schedule 3.1(t)(ii)(B) Landlord Consents
Schedule 3.1(t)(iii) Subleases
Schedule 3.1(y) Transactions with Affiliates
Schedule 3.2(c) No Conflict (Buyer)
Schedule 3.2(c)(i) Buyer's Knowledge
Schedule 3.2(e) Commitment Letters
Schedule 4.2 Conduct of the Business Prior to Closing
Schedule 4.13(c) Indebtedness
Schedule 5.1(d) Third Party Consents
Schedule 5.2(d) Canadian Assets and Liabilities
Schedule 5.2(e) Release of Liens
Schedule 5.2(f) Proceedings
Schedule 5.2(g) Termination of Transactions with Affiliates
Schedule 5.3(d) Stay Bonuses
EXHIBITS
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Exhibit A Transition Services Agreement
Exhibit B Canadian Asset Agreement
Exhibit C Terms of Comfort Letter of Seller's Accountants for
Rule 144A Offering
Exhibit D KC Lease Assignment
STOCK PURCHASE AGREEMENT
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This STOCK PURCHASE AGREEMENT (this "Agreement "), dated as of June
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24, 1998, is between Pen-Tab Holdings, Inc., a corporation organized and
existing under the laws of the Commonwealth of Virginia ("Buyer"), and
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▇▇▇▇▇▇ CO., a corporation organized and existing under the laws of the State
of Delaware ("Seller").
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Seller, through its wholly-owned subsidiary ▇▇▇▇▇▇ ▇▇▇▇ COMPANY,
INC., a Missouri corporation ("▇▇▇▇▇▇ ▇▇▇▇"), is engaged in the design,
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manufacture, marketing and sale of stationery products, consisting of
wireless and wirebound notebooks/notepads, softside organizers and planners,
two pocket portfolios, pencil pouches, letterhead stationery, envelopes and
fine stationery (the "Business").
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Buyer desires to purchase, and Seller desires to sell, 100% of the
outstanding shares of stock of ▇▇▇▇▇▇ ▇▇▇▇, upon the terms and subject to
the conditions set forth herein.
The parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF STOCK
1.1 Stock Purchase. Upon the terms and subject to the conditions of
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this Agreement, at the Closing (as defined in Section 2.1), Seller shall
sell, and Buyer shall purchase, all of the capital stock (the "Stock") of
▇▇▇▇▇▇ ▇▇▇▇.
1.2 Purchase Price. In consideration for the sale and transfer of
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the Stock, on the Closing Date (as defined in Section 2.1) Buyer shall pay
to Seller by wire transfer in immediately available funds an aggregate
amount equal to $107,000,000 (the "Stock Purchase Price").
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1.3 Adjustment to Purchase Price.
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(a) Purchase Price Adjustment. Any amounts payable under this
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Section 1.3(a) will be paid within five Business Days following the date on
which the Final Closing Statement is finalized. The "Adjusted Purchase
Price" means the Stock Purchase Price minus the amount, if any, by which the
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Net Working Capital of ▇▇▇▇▇▇ ▇▇▇▇ on the Peg Statement of Net Working
Capital (the "Peg Statement") at December 31, 1997 ("Peg Net Working
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Capital") exceeds the Net Working Capital of ▇▇▇▇▇▇ ▇▇▇▇ as of the close of
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business on the Closing Date as shown on the Final Closing Statement (the
"Closing Net Working Capital") or plus the amount, if any, by which the
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Closing Net Working Capital exceeds the Peg Net Working Capital. If the
Stock Purchase Price is greater than the Adjusted Purchase Price, Seller
will pay the difference to Buyer. If the Adjusted Purchase Price is greater
than the Stock Purchase Price, Buyer will pay the difference to Seller. For
purposes of this Agreement, "Net Working Capital" means the excess of the
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current assets (other than cash and cash equivalents) of ▇▇▇▇▇▇ ▇▇▇▇ as of
the close of business on the date of determination over the current
liabilities (other than the liabilities set forth on Schedule 1.3(a)(i)(A))
of ▇▇▇▇▇▇ ▇▇▇▇ as of the close of business on the date
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of determination. Closing Net Working Capital shall be prepared using the
same principles, practices, procedures, policies, computational methods and
assumptions including GAAP (subject to the exceptions described in Schedule
1.3(a)(i)(B)) as those used in determining Peg Net Working Capital. Closing
Net Working Capital shall include the same categories of current assets and
current liabilities as the Peg Net Working Capital. The Peg Statement is
attached hereto as Schedule 1.3(a)(ii).
(b) Closing Statement of Net Working Capital. On or immediately
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prior to the Closing Date, Seller and its Accountants will conduct an audit
(including a physical inventory that Buyer and its Accountants may observe)
of ▇▇▇▇▇▇ ▇▇▇▇ using the same principles, practices, procedures, policies,
computational methods and assumptions including GAAP as those used in
determining the Peg Net Working Capital. Within 90 days following the
Closing Date, Seller will prepare and deliver to Buyer a statement of Net
Working Capital as of the close of business on the Closing Date (the
"Preliminary Closing Statement"). The Preliminary Closing Statement, as it
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may be modified pursuant to Sections 1.3(c) - (g) to become the final
statement of Net Working Capital as of the close of business on the Closing
Date (the "Final Closing Statement"), will set forth a calculation of
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Closing Net Working Capital. Any dispute, controversy or claim arising out
of or relating to the Preliminary Closing Statement and the Final Closing
Statement (each, a "Dispute") will be resolved in accordance with Sections
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1.3(c) - (g). In connection with preparing the Preliminary Closing Statement
and the Final Closing Statement, Buyer will, and will cause its Accountants
to, give Seller and its representatives access to the books, records and
accounts of ▇▇▇▇▇▇ ▇▇▇▇ that have been transferred to Buyer. For purposes of
this Section 1.3, "Accountants" means, in the case of Buyer, Deloitte &
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Touche LLP, and means, in the case of Seller, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP.
(c) Buyers Review of Preliminary Closing Statement. Buyer will have
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25 days following receipt to review and respond to the Preliminary Closing
Statement, during which period Seller will grant Buyer and its Accountants
reasonable access during normal business hours to the accounting work papers
of Seller's Accountants relating to the preparation of the Financial
Statements, including any accounting working papers or schedules prepared by
Seller or its Accountants with respect to the Preliminary Closing Statement.
Buyer and its Accountants will sign a customary accountants' letter required
by Seller's Accountants prior to a review of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ work papers.
If, within such 25-day period, Buyer has not delivered to Seller a written
letter ("Buyer's Letter") setting forth in reasonable detail any proposed
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adjustment to the Preliminary Closing Statement and the basis for such
adjustment (including a specific dollar amount and accompanied by a
reasonably detailed explanation), the Preliminary Closing Statement will be
the Final Closing Statement. Any amount set forth in the Preliminary Closing
Statement as to which Buyer has not objected and proposed an adjustment (in
a specific dollar amount and accompanied by a reasonably detailed
explanation) in Buyer's Letter will be deemed to be accepted and will become
part of the Final Closing Statement.
(d) Seller's Response to Buyers Letter. Seller will have 25 days
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following receipt to review and respond to Buyer's Letter. If, within such
25-day period, Seller has not delivered to Buyer a written letter ("Seller's
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Letter") setting forth in reasonable detail its objection to any proposed
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adjustment in Buyer's Letter and the basis for such objection, the proposed
adjustment will be deemed to be accepted, and any amount set forth in
Buyer's Letter as to which Seller has not objected and proposed an
adjustment (in a specific dollar amount and accompanied by a reasonably
detailed explanation) in Seller's Letter will be deemed to be accepted and
will become part of the Final Closing Statement.
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(e) Meeting to Resolve Proposed Adjustment . As soon as reasonably
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practicable following the periods provided in Sections 1.3(c) and (d), but
in any event no later than 15 days after Sellers delivery of Seller's
Letter, the parties will meet and endeavor to resolve the unaccepted
adjustments in Buyer's Letter. If the parties reach agreement on such
adjustments, the Final Closing Statement will be the Preliminary Closing
Statement, modified to reflect the adjustments accepted pursuant to Section
1.3(c) and those otherwise mutually resolved by the parties.
(f) Arbitration of Disputed Purchase Price Adjustments.
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(i) If the parties do not resolve to their mutual
satisfaction all disputed adjustments relating to the Preliminary
Closing Statement described in Buyer's Letter and Seller's Letter
within 25 days following the periods provided in Sections 1.3(c) and
(d), any remaining disputed adjustments will be settled by
arbitration by a three-member arbitration panel (the "Panel") in
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accordance with the Center for Public Resources ("CPR") Rules for
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Non-Administered Arbitration of Business Disputes, as modified by
the provisions set forth in clauses (ii) - (vii) below. The parties
will each separately appoint to the Panel an arbitrator selected
from a panel of CPR neutrals in Chicago, Illinois with relevant
experience in mergers and acquisitions and such arbitrators shall
jointly appoint a third arbitrator from a nationally recognized
accounting firm other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, Deloitte & Touche
LLP or Ernst & Young LLP, located in Chicago, Illinois.
(ii) The parties will furnish the Panel with a copy of this
Agreement, the Peg Statement, the Preliminary Closing Statement,
Buyer's Letter, Seller's Letter and any other relevant
correspondence between them. Each party will also give the Panel
access to the Books and Records of ▇▇▇▇▇▇ ▇▇▇▇, as well as any
accounting work papers or other schedules relating to the
preparation of the Preliminary Closing Statement, Buyer's Letter and
Seller's Letter. There will be no other discovery during the
arbitration.
(iii) Within 25 days of submitting the disputed adjustments
to the Panel pursuant to Section 1.3(f)(i), Buyer and Seller will
provide to the Panel and to each other a copy of a written
submission setting forth its position with respect to each item in
dispute that is described in Buyer's Letter and Seller's Letter.
Within 25 days thereafter, each party may provide to the Panel and
to each other a written rebuttal, which will be limited to
addressing the points raised in the opposing party's initial written
submission. No additional written submission will be made to the
Panel unless specifically requested by the Panel. No party will be
required to disclose any information protected by the attorney-
client privilege, attorney work product doctrine or other applicable
privilege.
(iv) After receiving the written submissions, rebuttal
responses, if any, and any other written information pursuant to
Section 1.3(f)(iii), the Panel will promptly schedule a date to
interview persons designated by each party to present that party's
position. Such interviews will take place in Chicago, Illinois. The
interviews will be held on at least seven days' notice to each
party, and each party, its counsel and other advisors may be present
and participate in any questioning at such interviews. The
interviewing process will last no more than five days in the
aggregate. The scope of the interviews shall be limited to any
issues raised by Buyer's Letter or Seller's Letter.
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(v) The arbitration will be limited to (A) reviewing the
amounts properly placed in dispute by Buyer's Letter and Seller's
Letter pursuant to Sections 1.3(c) and (d); (B) reviewing the
parties' written submissions described in Section 1.3(f)(iii); (C)
considering the interviews described in Section 1.3(f)(iv), (D)
applying GAAP on a basis consistent with the Peg Statement to
determine the proper amount for each disputed adjustment, provided
that such amount must fall within the range set by Seller's
proposed amount in the Preliminary Closing Statement and Buyer's
proposed adjustment in Buyer's Letter; (E) preparing the Final
Closing Statement showing the Net Working Capital, which will
include those amounts in the Preliminary Closing Statement accepted
by Buyer pursuant to Section 1.3(c), Buyer's proposed adjustments
accepted by Seller pursuant to Section 1.3(d) or otherwise mutually
resolved by the parties, and those amounts determined by the Panel
pursuant to subparagraph (D) hereof; and (F) calculating the
Adjusted Purchase Price. The Panel will be instructed to resolve
issues in a manner consistent with the provisions of this
Agreement.
(vi) The Panel will complete its preparation of the Final
Closing Statement and calculation of the Adjusted Purchase Price
within 25 days of the final interview conducted pursuant to Section
1.3(f)(iv) and will deliver a copy of the Final Closing Statement
and the Adjusted Purchase Price to Seller and Buyer, together with
a report setting forth each disputed adjustment, the Panel's
determination with respect thereto, and a statement of the Panel's
reasons for such determination. The Panel's determinations will be
conclusive and binding upon the parties.
(vii) The Panel's decision will be entered and enforced in
any court of competent jurisdiction. Each party will pay 50% of the
fees, costs and expenses of the arbitration.
(g) Notices Relating to the Closing Statement. Each party will
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deliver all notices and other communications under this Section 1.3 in
accordance with Section 10.3.
(h) Payment and Interest. Any payment required to be made by Seller
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or Buyer pursuant to Section 1.3(a) shall be (i) made by wire transfer of
immediately available funds pursuant to written instructions provided by the
party that is to receive payment pursuant to Section 1.3(a) and (ii) bear
interest from the Closing Date through the date of payment on the basis of
the average daily rate of interest publicly announced by The Northern Trust
in Chicago, Illinois from time to time as its base rate from the Closing
Date to the date of such payment.
1.4 Intercompany Obligations.
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(a) Seller maintains, and until the Closing Date will maintain,
certain intercompany payables and intercompany receivables (the
"Intercompany Accounts") reflecting indebtedness or other liabilities to or
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from ▇▇▇▇▇▇ ▇▇▇▇, on the one hand, and Seller or any of its other
affiliates, as defined in Rule 405 promulgated under the Securities Act of
1933, as amended (each, an "Affiliate") on the other.
(b) If, as of the Closing Date, the Net Intercompany Debt (as
defined below) in the Intercompany Accounts consists of a net indebtedness
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of ▇▇▇▇▇▇ ▇▇▇▇ to Seller or its Affiliates, Seller shall, prior to or
simultaneously with the Closing, contribute or cause to be contributed such
Net Intercompany Debt in the Intercompany Accounts to ▇▇▇▇▇▇ ▇▇▇▇, or, if
not contributed
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will, prior to or simultaneously with the Closing, cause such Net
Intercompany Debt in the Intercompany Accounts to be settled or to be
eliminated in some other manner. If, as of the Closing Date, the Net
Intercompany Debt in the Intercompany Accounts consists of a net
indebtedness of Seller or its Affiliates to ▇▇▇▇▇▇ ▇▇▇▇, Seller shall, prior
to or simultaneously with the Closing, cause ▇▇▇▇▇▇ ▇▇▇▇ to cancel or
dividend an amount equal to such indebtedness to Seller or its Affiliates.
As used herein, the term "Net Intercompany Debt" shall mean the difference
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between (i) all intercompany liabilities of ▇▇▇▇▇▇ ▇▇▇▇ to Seller or its
Affiliates in the Intercompany Accounts and (ii) the sum of all intercompany
receivables due to ▇▇▇▇▇▇ ▇▇▇▇ from Seller or its Affiliates in the
Intercompany Accounts.
ARTICLE 11
CLOSING
2.1 Time and Place. Unless this Agreement shall have been terminated
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or the transactions herein contemplated shall have been abandoned, each
pursuant to Section 10.1, the closing with respect to the purchase and sale
of the Stock (the "Closing") shall take place, subject to the provisions of
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Article V, at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m. on August 24, 1998, in accordance
with Section 10.1 (a)(ii), or such other place, time and date as the
parties may agree. The actual date of the Closing is herein referred to as
the "Closing Date."
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2.2 Deliveries by Seller. At the Closing, upon the terms and subject
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to the conditions of this Agreement, Seller shall deliver to Buyer:
(a) certificates representing 100% of the outstanding capital stock
of ▇▇▇▇▇▇ ▇▇▇▇, duly endorsed, or accompanied by stock powers duly executed
with all necessary stock transfer stamps attached thereto and canceled;
(b) a duly executed copy of each of the Ancillary Agreements (as
defined in Section 5.2(d)); and
(c) the other documents to be delivered pursuant to Sections
5.1(d), 5.1(f) and 5.2.
2.3 Deliveries by Buyer. At the Closing, upon the terms and subject
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to the conditions of this Agreement, Buyer shall deliver to Seller:
(a) the Stock Purchase Price, in immediately available funds by wire
transfer to an account designated by Seller prior to the Closing;
(b) a duly executed copy of each of the Ancillary Agreements; and
(c) the certificates and other documents to be delivered pursuant to
Section 5.3 hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Seller. Seller represents and
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warrants to Buyer as follows:
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(a) Due Organization of ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇ is a corporation
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duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. ▇▇▇▇▇▇ ▇▇▇▇ (i) has the requisite power
and authority to own, lease and operate its properties and assets and to
conduct its business as it is now being conducted and (ii) to the extent
that the concept of good standing exists in the relevant jurisdiction, is in
good standing and is duly qualified to transact business in each
jurisdiction in which the nature of property owned, leased or operated by it
or the conduct of its business requires it to be so qualified, except, in
each case, where the failure to be so qualified or to be in good standing
would not have a Material Adverse Effect. For purposes of this Agreement,
the phrase "Material Adverse Effect" means, with respect to the Seller or
-----------------------
the Business, a material adverse effect on (x) the business, assets,
liabilities or financial condition of the Business taken as a whole or (y)
the ability of Seller to perform its obligations hereunder or under the
Ancillary Agreements and, with respect to the Buyer, to perform its
obligations hereunder or under the Ancillary Agreements. Complete and
correct copies of the respective constituent documents of ▇▇▇▇▇▇ ▇▇▇▇, as
amended and in effect as of the date hereof, have been made available to
Buyer.
(b) Due Organization and Power of Seller. Seller is a corporation
------------------------------------
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite corporate power and
authority to enter into this Agreement and the Ancillary Agreements (as
defined in Section 5.2(d) and together with this Agreement, the "Transaction
-----------
Agreements") to which it is a party and to consummate the transactions
----------
contemplated hereby and thereby and perform its obligations hereunder and
thereunder.
(c) Authorization and Validity of Agreements. The execution,
----------------------------------------
delivery and performance, as applicable, by Seller of the Transaction
Agreements and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate
action, and no other corporate action on its part is necessary for the
execution, delivery and performance by it of the Transaction Agreements and
the consummation by it of the transactions contemplated hereby and thereby.
This Agreement has been, and at the Closing each of the Ancillary Agreements
will be, duly executed and delivered by Seller. This Agreement is, and at
the Closing each of the Ancillary Agreements will be, the legal, valid and
binding obligation of Seller, enforceable against Seller in accordance with
its terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting
creditors' rights generally and by general equity principle.
(d) Subsidiaries. ▇▇▇▇▇▇ ▇▇▇▇ has no subsidiaries.
------------
(e) Capitalization of ▇▇▇▇▇▇ ▇▇▇▇. Schedule 3.1(e)(i) sets forth
-----------------------------
for ▇▇▇▇▇▇ ▇▇▇▇ the authorized capital stock and the number of shares of
outstanding capital stock. All of the outstanding shares of capital stock of
▇▇▇▇▇▇ ▇▇▇▇ have been validly issued, are fully paid and nonassessable, and
are owned by Seller free and clear of all Liens other than Permitted Stock
Liens. Except as set forth on Schedule 3.1(e)(ii), there are no outstanding
or authorized options, warrants, calls, rights, stock appreciation rights or
other rights, commitments, interests of any character relating to the sale
or issuance of any shares of capital stock of ▇▇▇▇▇▇ ▇▇▇▇. There are no
voting trusts, proxies, or other agreements or understandings with respect
to the voting of capital stock of ▇▇▇▇▇▇ ▇▇▇▇.
6
(f) No Conflict. The execution, delivery and performance by Seller
-----------
of the Transaction Agreements and the consummation by Seller of the
transactions contemplated hereby and thereby, do not and will not, (i) to
the actual knowledge of the officers of Seller set forth on Schedule 3.1
(f)(i) ("Seller's Knowledge"), violate any provision of Federal, state,
------------------
local or foreign law, rule, regulation, order, injunction, judgment or
decree (each, a "Law") applicable to ▇▇▇▇▇▇ ▇▇▇▇ or to which the Business is
---
subject; (ii) except as set forth on Schedule 3.1(f)(ii), require any
consent or approval of, or filing with or notice to, any governmental
authority whether foreign, federal, state, local or other political
subdivision or agency of any of the foregoing ("Governmental Authority")
----------------------
under any material provision of Law applicable to ▇▇▇▇▇▇ ▇▇▇▇; (iii) violate
any provision of the charter or by-laws of ▇▇▇▇▇▇ ▇▇▇▇; or (iv) except as
set forth on Schedule 3.1(f)(iv), require any consent, approval or notice
under, or result in the breach, lapse, cancellation or termination of, or
constitute a default under, or result in the acceleration of any right or
obligation of or the performance by ▇▇▇▇▇▇ ▇▇▇▇ under any material
indenture, lease, license, agreement, or other instrument to which ▇▇▇▇▇▇
▇▇▇▇ is a party or by which ▇▇▇▇▇▇ ▇▇▇▇, or any of its assets, is bound or
encumbered.
(g) Financial Statements. Seller has previously delivered to Buyer
--------------------
the audited financial statements for ▇▇▇▇▇▇ ▇▇▇▇ at and for the fiscal years
ended December 31, 1995, December 31, 1996 and December 31, 1997, which such
financial statements include for each such year the balance sheets,
statements of income, changes in shareholders' equity and cash flow (the
"Financial Statement"), a copy of which is included in Schedule 3.1(g)(i),
-------------------
the unaudited balance sheets, statements of assets and statements of income
of ▇▇▇▇▇▇ ▇▇▇▇ at and for the months ended January 31, 1998, February 28,
1998, March 31, 1998, April 30, 1998 and May 31, 1998, respectively, and the
statements of income of ▇▇▇▇▇▇ ▇▇▇▇ for the periods beginning on January 1,
1998 and ending on January 31, 1998, February 28, 1998, March 31, 1998,
April 30, 1998 and May 31, 1998, respectively (the balance sheet of ▇▇▇▇▇▇
▇▇▇▇ at May 31, 1998 being hereinafter referenced as the "1998 Balance
------------
Sheet"), copies of which are included in Schedule 3.1(g)(ii). Except as
-----
described in Schedule 3.1 (g)(i), the Financial Statements were prepared on
a basis consistent with United States Generally Accepted Accounting
Principles ("GAAP") and are complete and correct in all material respects.
Except as set forth in Schedule 3.1(g)(iii), the books, records and
accounts of Seller relating to the Business and ▇▇▇▇▇▇ ▇▇▇▇ (the "Books and
---------
Records") accurately and fairly reflect, in reasonable detail, all material
-------
transactions and all material items of income and expense, assets and
liabilities and accruals relating to the Business.
(h) Tax Matters.
-----------
(i) To Sellers Knowledge, Seller, ▇▇▇▇▇▇ ▇▇▇▇, and any
affiliated group (within the meaning of Section 1504 of the
Internal Revenue Code of 1986, as amended (the "Code") or similar
----
group under state, local or other applicable law of which ▇▇▇▇▇▇
▇▇▇▇ is or has been a member ("Affiliated Group") have filed, or
----------------
caused to be filed, in a timely manner all Tax Returns (as defined
below) required to be filed by Seller, ▇▇▇▇▇▇ ▇▇▇▇ or any such
Affiliated Group, and all such Tax Returns are complete and correct
in all respects.
(ii) To Seller's Knowledge, all Taxes (as defined below)
due and payable (whether or not shown on any Tax Return) from
▇▇▇▇▇▇ ▇▇▇▇ or any Affiliated Group have been timely paid in full
or are not yet delinquent.
7
(iii) To Seller's Knowledge, ▇▇▇▇▇▇ ▇▇▇▇ and any Affiliated Group
have complied with all applicable laws relating to the withholding of Taxes
(including, without limitation, withholding of Taxes pursuant to Section
1441 and 1442 of the Code or similar provisions under any foreign laws), and
have, within the time and in the manner prescribed by such laws, withheld
and paid over to the proper Governmental Authorities all amounts required to
be so withheld and paid over under all such applicable laws and has, within
the time and within the manner prescribed by such laws, filed all Tax
Returns with respect to such withholding.
(iv) To Seller's Knowledge, except for ad valorem Taxes and real
and personal property Taxes not yet delinquent, there are no Liens for Taxes
upon any assets of ▇▇▇▇▇▇ ▇▇▇▇.
(v) Except as set forth on Schedule 3.1(h)(v), neither ▇▇▇▇▇▇ ▇▇▇▇
nor any Affiliated Group have requested, nor has any person requested on
behalf of either of them, any extension of time within which to file any Tax
Return in respect of any taxable year which has not since been filed.
(vi) Except as set forth on Schedule 3.1(h)(vi), there are no
outstanding waivers or extensions of time regarding the application of the
statute of limitations with respect to any Taxes of ▇▇▇▇▇▇ ▇▇▇▇ or any
Affiliated Group or Tax Returns required to be filed by ▇▇▇▇▇▇ ▇▇▇▇ or any
Affiliated Group.
(vii) Except as set forth on Schedule 3.1(h)(vii), no deficiency
or claim has been formally asserted, assessed or threatened with regard to
any Taxes of ▇▇▇▇▇▇ ▇▇▇▇ or any Affiliated Group which has not been received
and paid in full.
(viii) Except as set forth on Schedule 3.1(h)(viii), no audits or
other administrative proceedings or court proceedings are pending and no
written notification of such proceedings has been received by ▇▇▇▇▇▇ ▇▇▇▇ or
any Affiliated Group with regard to any Taxes of ▇▇▇▇▇▇ ▇▇▇▇ or such
Affiliated Group or Tax Returns required to be filed by ▇▇▇▇▇▇ ▇▇▇▇ or any
Affiliated Group.
(ix) Except for leases of personal property by or to ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ is not a party to, is not bound by, and has no obligation under,
any contract providing for the allocation or sharing of Taxes.
(x) No power of attorney has been granted with respect to any
matter relating to Taxes of ▇▇▇▇▇▇ ▇▇▇▇ or any Affiliated Group which is
currently in force.
(xi) ▇▇▇▇▇▇ ▇▇▇▇ is not a party to any contract that could result,
separately or in the aggregate, in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code and has not made
any such payments since July 8, 1992.
(xii) ▇▇▇▇▇▇ ▇▇▇▇ has been a member of the Affiliated Group (within
the meaning of Section 1504 of the Code) of which Seller is the common
parent since July 8, 1992.
8
(xiii) No property of ▇▇▇▇▇▇ ▇▇▇▇ is property that ▇▇▇▇▇▇
▇▇▇▇ or any party is or will be required to treat as being owned by
another person pursuant to the provisions of Section 168(f)(8) of
the Code (as in effect before amendment by the Tax Reform Act of
1986) or is "tax-exempt use property" within the meaning of Section
168(f) of the Code.
(xiv) Neither ▇▇▇▇▇▇ ▇▇▇▇ nor any Affiliated Group has
agreed to make, or is required to make, any adjustment under Section
481(a) of the Code.
(xv) Neither ▇▇▇▇▇▇ ▇▇▇▇ nor any Affiliated Group has
participated in or cooperated with an international boycott within
the meaning of Section 999 of the Code.
(xvi) Seller has provided or made available to Buyer or its
representatives (i) complete and correct copies of the relevant
portions of the consolidated federal income Tax Returns relating to
▇▇▇▇▇▇ ▇▇▇▇ and filed by or including Seller for the taxable periods
ended December 31, 1996, and will provide such for the taxable
periods ended on December 31, 1997 as soon as practicable after such
are completed, (ii) complete and correct copies of relevant portions
of the state, local and foreign income Tax Returns relating to
▇▇▇▇▇▇ ▇▇▇▇ for the taxable periods ended December 31, 1996, and
will provide such for the taxable periods ended on December 31, 1997
as soon as practicable after such are completed, and (iii) all
examination reports, closing agreements and statements of
deficiencies, if any, relating to the audit of such Tax Returns or
relevant portions thereof by the IRS or the relevant state, local or
foreign taxing authorities. Seller has indicated on Schedule 3.1
(h)(viii) those Tax Returns which have been audited and those which
are currently the subject of audit.
(xvii) For purposes of this Agreement, "Taxes" shall mean
-----
and include all taxes, charges, fees, duties, levies, penalties or
other assessments imposed by any federal state, local or foreign
authority, including, but not limited to, income, gross receipts,
excise, property, sales, gains, use, license, capital stock,
transfer, franchise, payroll, withholding, social security or other
taxes, including any interest, penalties or additions attributable
thereto (whether or not disputed); and "Tax Returns" shall mean and
-----------
include all federal, state, local and foreign tax returns,
declarations, statements, reports, schedules, forms or information
returns or claims for refunds relating to Taxes or other written
information required to be supplied to any taxing Governmental
Authority in connection with Taxes (including any amended Tax
Returns).
(i) Title to Personal Properties; Liens and Encumbrances; No Other
--------------------------------------------------------------
Interests. Other than with respect to real property which is addressed in
---------
Section 3.1(t), to Seller's Knowledge, ▇▇▇▇▇▇ ▇▇▇▇ or an Affiliate thereof
has good and marketable title to all of the material properties and assets,
tangible or intangible, reflected in the 1998 Balance Sheet, free and clear
of all Liens, except (i) as set forth on Schedule 3.1(i), (ii) Liens that
do not affect the use thereof in any material respect, (iii) statutory Liens
securing payments not yet due and payable, due but not yet delinquent, or
being tested in good faith by appropriate proceedings, for which there are
reserves, (iv) mechanics', carriers', workmen's, repairmen's or other like
Liens arising or incurred in the ordinary course of business, and (v)
original purchase price conditional sales contracts and equipment leases
with third parties entered into in the ordinary course of business
("Permitted Liens"). Each tangible asset that constitutes material
----------------
operating
equipment is in satisfactory operating condition and repair (subject to
normal wear and tear), and is suitable for the purposes for which it
presently is used.
9
(j) Business Contracts. Schedule 3.1(j)(i) sets forth, as of the
------------------
date hereof, each contract, maintenance and service agreement, purchase
order, and purchase commitment for raw materials, goods and other services,
advertising and promotional agreement, lease, license, shipping agreement,
agreement with a finished goods supplier, and collective bargaining
agreement (i) that relate to the Business, and (ii) to which ▇▇▇▇▇▇ ▇▇▇▇ or
an Affiliate thereof is a party or by which the assets of the Business are
bound, which (A) require any party thereto to pay an amount (whether in a
lump sum or in a series of installments) in excess of $250,000 annually, (B)
provides for a surety, cosigner, endorser, guaranty or indemnity by ▇▇▇▇▇▇
▇▇▇▇ of any obligation or liability in excess of $250,000, contingent or
otherwise, or (C) has a stated term in excess of one year, requires any
party thereto to pay an amount (whether in a lump sum or in a series of
installments) in excess of $250,000 annually, except for purchase orders and
commitments, sales contracts, and similar agreements in the ordinary course
of business (each, a "Business Contract"). Except as set forth on Schedule
-----------------
3.1(j)(ii), each Business Contract is in full force and effect and is a
legal and valid contract or agreement, binding on ▇▇▇▇▇▇ ▇▇▇▇ and, to
Seller's Knowledge, each other party thereto. There is no material breach or
default by ▇▇▇▇▇▇ ▇▇▇▇ (or, to Seller's Knowledge, any event which, with
notice or lapse of time or both, could constitute a material breach or
default) by ▇▇▇▇▇▇ ▇▇▇▇ or, to Seller's Knowledge, by any other party in the
timely performance of any obligation to be performed or paid under any
provision of any Business Contract. To Seller's Knowledge, no party to any
Business Contract has given written notice or asserted in writing to ▇▇▇▇▇▇
▇▇▇▇ that ▇▇▇▇▇▇ ▇▇▇▇ is in default under any such Business Contract and, to
Seller's Knowledge, no other party is in material breach or default under
any Business Contract.
(k) Legal Proceedings. As of the date of this Agreement, except as
-----------------
set forth in Schedule 3.1(k), there are no actions, suits or proceedings
instituted or pending, or to Seller's Knowledge, threatened, against ▇▇▇▇▇▇
▇▇▇▇. Except as set forth on Schedule 3.1(k), ▇▇▇▇▇▇ ▇▇▇▇ is not subject to
any material judgment, order, writ, injunction or decree.
(l) Government Licenses, Permits and Related Approval. Schedule 3.1
-------------------------------------------------
(l) lists each material license, permit, consent, approval, authorization,
qualification and order of any Governmental Authority required to permit
▇▇▇▇▇▇ ▇▇▇▇ to conduct the Business as presently conducted. Each such
license, permit, consent, approval, authorization, qualification and order
(i) is valid and in full force and effect in all material respects and (ii)
to Seller's Knowledge, has not been violated.
(m) Conduct of Business in Compliance with Regulatory Requirements.
---------------------------------------------------------------
To Seller's Knowledge, ▇▇▇▇▇▇ ▇▇▇▇ is in compliance in all material respects
with each Law, applicable to the operation or conduct of, or ownership of
the property relating to, the Business.
(n) Labor Matters. Except as set forth in Schedule 3.1 (n), Stuart
-------------
Hall is not a party to any collective bargaining agreement or other contract
or agreement with any labor organization or other representative of any of
the employees of the Business, and there is no labor strike, slowdown, work
stoppage or lockout in effect or otherwise affecting ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇
▇▇▇▇ has complied with, and continues to comply with, the terms of the
collective bargaining agreements set forth in Schedule 3.1(n) (each, a
"Collective Bargaining Agreement") in all material respects.
-------------------------------
10
(o) Intellectual Property
---------------------
(i) Schedule 3.1(o)(i) lists, as of the date of this Agreement, all
(1) United States and foreign patents and patent applications, (2) United
States and foreign trademark and service ▇▇▇▇ registrations or applications
therefor, (3) United States and foreign copyright registrations and
applications therefor, (4) foreign design registrations, (5) material
utility models, in which ▇▇▇▇▇▇ ▇▇▇▇ has an interest and that relate to the
Business and the nature of such interest, (6) material trade and corporate
names used by ▇▇▇▇▇▇ ▇▇▇▇, (7) material unregistered trademarks, service
marks and copyrights owned or used by ▇▇▇▇▇▇ ▇▇▇▇ and that relate to the
Business, and (8) material computer software owned Or used by ▇▇▇▇▇▇ ▇▇▇▇,
other than mass-marketed software with an annual license fee of less than
$10,000 (collectively, the "Intellectual Property")
---------------------
(ii) (1) Except as set forth on Schedule 3.1(o)(ii), ▇▇▇▇▇▇ ▇▇▇▇
owns and possesses all right, title and interest in and to, or has a valid
and enforceable license to use, all intellectual property necessary for the
operation of the Business as currently conducted, free and clear of all
Liens; (2) to Seller's Knowledge, no claim by any third party contesting the
validity, enforceability, use or ownership of any of the Intellectual
Property is currently outstanding or is threatened (including, without
limitation, any demand or request that ▇▇▇▇▇▇ ▇▇▇▇ license any intellectual
property from a third party), and to ▇▇▇▇▇▇ ▇▇▇▇'▇ Knowledge, there are no
grounds for the same; (3) to Seller's Knowledge, ▇▇▇▇▇▇ ▇▇▇▇ has not
received any notices of, and is not aware of, any facts which indicate a
likelihood of any infringement or misappropriation by any third party of any
Intellectual Property; (4) to Seller's Knowledge, ▇▇▇▇▇▇ ▇▇▇▇ has not
infringed, misappropriated or otherwise conflicted with any intellectual
property of any third parties, and ▇▇▇▇▇▇ ▇▇▇▇ is not aware of any
infringement, misappropriation or conflict which will occur as a result of
the continued operation of the Business as currently conducted; (5) except
as set forth on Schedule 3.1(o)(ii), all Intellectual Property owned or
used by ▇▇▇▇▇▇ ▇▇▇▇ immediately prior to the Closing will be owned or
available for use by ▇▇▇▇▇▇ ▇▇▇▇ on identical terms and conditions
immediately subsequent to the Closing; and (6) to Seller's Knowledge, the
owners of any Intellectual Property licensed to ▇▇▇▇▇▇ ▇▇▇▇ have taken all
necessary and desirable action to maintain and protect the Intellectual
Property subject to such licenses.
(p) Employee Benefit Plans.
----------------------
(i) ▇▇▇▇▇▇ ▇▇▇▇ does not maintain any employee benefit plan as
defined in Section 3(3) of ERISA or any bonus, incentive or other
nonqualified plan of deferred pay or change of control plan or program or
any material fringe benefit plan or program.
(ii) ▇▇▇▇▇▇ ▇▇▇▇ does not contribute to or have any actual or
potential liability with respect to any multiemployer plan as defined in
Section 3(37) of ERISA other than such plan maintained by the United
Paperworker's International Union AFL-CIO Local 765.
(iii) To Seller's Knowledge, ▇▇▇▇▇▇ ▇▇▇▇ does not have any actual
or potential liability to the Pension Benefit Guaranty Corporation, the
Internal Revenue Service or the Department of Labor or with respect to any
employee pension benefit plan currently maintained by members of the
controlled group of companies (as defined in Section 414
11
of the Code) that includes ▇▇▇▇▇▇ ▇▇▇▇ that has not been satisfied
in full, and no condition exists that presents a material risk to
▇▇▇▇▇▇ ▇▇▇▇ of incurring such a liability.
(iv) ▇▇▇▇▇▇ ▇▇▇▇ has not incurred any liability on account
of a "partial withdrawal" or a "complete withdrawal" (within the
meaning of Sections 4205 and 4203, respectively, of ERISA) from the
multiemployer plan maintained by United Paperworker's International
Union AFL-CIO Local 765, no such liability has been asserted, and
nor to Seller's Knowledge are there any events or circumstances
which could result in any such partial or complete withdrawal. To
Seller's Knowledge, the multiemployer plan maintained by United
Paperworker's International Union AFL-CIO Local 765 complies in form
and has been administered in accordance with the requirements of
ERISA and, where applicable, the Code and such multiemployer plan is
qualified under Section 401 (a) of the Code as amended to the date
hereof and is not in reorganization.
(v) To Seller's Knowledge, Schedule 3.1(p) contains a list
of all employees at ▇▇▇▇▇▇ ▇▇▇▇ who are on short-term disability,
long-term disability, or leave of absence.
(q) Undisclosed Liabilities. To Seller's Knowledge, ▇▇▇▇▇▇ ▇▇▇▇ has
-----------------------
no material liability, except for (i) liabilities set forth on the face of
the Financial Statements for the period ended December 31, 1997 (rather than
in any notes thereto), and (ii) liabilities which have arisen after the
Financial Statements in the ordinary course of business.
(r) Environmental Matters.
---------------------
(i) To Seller's Knowledge, Schedule 3.1(r)(i) contains a
list of all Required Environmental Permits (defined below)
(including the expiration date of each, if applicable), all of which
are presently valid and effective. To Seller's Knowledge, except as
set forth in Schedule 3.1(r)(i),
(A) ▇▇▇▇▇▇ ▇▇▇▇ has obtained all Environmental
Permits that are required for the ongoing operation of the
Business ("Required Environmental Permits"); and
------------------------------
(B) ▇▇▇▇▇▇ ▇▇▇▇ has not received any written
notice alleging a violation of any such Environmental
Permit, and no proceeding is pending to modify or revoke
any such Environmental Permit.
(ii) To Seller's Knowledge, except as set forth on Schedule
3.1(r)(ii),
(A) ▇▇▇▇▇▇ ▇▇▇▇ is in compliance in all material
respects with all relevant and applicable Environmental
Laws (as defined below) in connection with the operation of
the Business;
(B) ▇▇▇▇▇▇ ▇▇▇▇ has not received notice from any
Governmental Authority alleging a material failure of
▇▇▇▇▇▇ ▇▇▇▇ to comply with any applicable Environmental Law
in connection with the operation of the Business and no
proceeding alleging such a failure is pending;
12
(C) there have been no material Releases of Hazardous
Substances (as defined below) on or from the real property owned or
used by ▇▇▇▇▇▇ ▇▇▇▇ or generated in connection with the Business,
except as in substantial compliance with applicable Environmental
Laws;
(D) Hazardous Substances have not at any time been
generated, used, treated, recycled or stored on the real property
owned or used by ▇▇▇▇▇▇ ▇▇▇▇ and used in connection with the
operation of the Business, except in substantial compliance in all
material respects with applicable Environmental Laws;
(E) there are no underground storage tanks located on the
real property owned or used by ▇▇▇▇▇▇ ▇▇▇▇;
(F) ▇▇▇▇▇▇ ▇▇▇▇ has not received any notice, written or
oral, alleging that ▇▇▇▇▇▇ ▇▇▇▇ is or may be obligated to
investigate or remediate Hazardous Substances at any site; and
(G) no material Lien in favor of any Governmental
Authority for any damages or other liability under applicable
Environmental Law or for costs incurred in response to a Release of
Hazardous Substances has been filed or attached to the real
property owned or used by ▇▇▇▇▇▇ ▇▇▇▇.
(iii) Seller has or has caused to be given to Buyer access to all
material records and files in its possession, including, without limitation,
all reports, studies, analyses, tests or monitoring results, pertaining to
the existence of Hazardous Substances or any other material concerns related
to the real property owned by ▇▇▇▇▇▇ ▇▇▇▇ or concerning compliance by
▇▇▇▇▇▇ ▇▇▇▇ with Environmental Law.
(iv) For purposes of this Agreement, "Environmental Statutes" means
----------------------
Federal, state, local and foreign statutes and ordinances, and regulations
promulgated thereunder, in effect prior to Closing and intended to provide
protection for public health or the environment, including, without
limitation, the Clean Air Act, the Federal Water Pollution Control Act, the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), the Emergency Planning and Community Right to Know Act, the
------
Solid Waste Disposal Act (including the Resource Conservation and Recovery
Act), the Toxic Substances Control Act, the Safe Drinking Water Act and
other substantially similar state statutes and regulations, as amended from
time to time; "Environmental Law" means Environmental Statutes and any
-----------------
common law (A) creating a cause of action for damage to person or property
due to exposure to Hazardous Substances or (B) governing the contamination,
pollution or protection of public health or the environment or allocating
liabilities in respect thereof; "Hazardous Substance" means any hazardous
-------------------
material, hazardous substance, toxic substance or words of similar import
under any Environmental Statute; "Environmental Permits" means Federal,
state and local permits, licenses, and authorizations issued to ▇▇▇▇▇▇ ▇▇▇▇
under Environmental Law in connection with the operation of the Business;
and "Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, dumping or disposing of a
Hazardous Substance into the environment.
13
(s) Absence of Changes. Except as set forth in Schedule 3.1 (s)(i),
------------------
since December 31, 1997, there has not been any event or circumstance that,
individually or in the aggregate, has had or would have a Material Adverse
Effect. Additionally, except as set forth on Schedule 3.1(s)(i); since
December 31, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ has not taken or permitted to be taken any of
the actions in Section 4.2 of this Agreement. Except as set forth on
Schedule 3.1(s)(ii), since December 31, 1997, no key employee of ▇▇▇▇▇▇
▇▇▇▇ has left employment at ▇▇▇▇▇▇ ▇▇▇▇ to assume a position of employment
with another operating division of ▇▇▇▇▇▇ Co.
(t) Leased Real Property.
--------------------
(i) ▇▇▇▇▇▇ ▇▇▇▇ owns no real property.
(ii) Attached as Schedule 3.1 (t)(ii)(A) is a list of all
leases, subleases and other occupancy agreements, including all
amendments, extensions and other modifications (the "Leases") for
------
real property (the "Leased Property") to which ▇▇▇▇▇▇ ▇▇▇▇ is (or
---------------
shall be as of the Closing Date) the "tenant", "subtenant" or other
lessee party. ▇▇▇▇▇▇ ▇▇▇▇ has a good and valid leasehold interest in
and to all of the Leased Property, subject to no Liens,
encroachments, encumbrances or other defects in title (collectively,
"Encumbrances") except as described in such Schedule and except as
------------
would not materially adversely affect the use, possession or
marketability of such Leased Property. To Seller's Knowledge, each
Lease is in full force and effect and is enforceable in accordance
with its terms. To Seller's Knowledge, there exists no default or
condition which, with the giving of notice, the passage of time or
both, could become a default under any Lease. Seller has previously
delivered to Buyer true and complete copies of all the Leases.
Except as described on Schedule 3.1(t)(ii)(B), no consent, waiver,
approval or authorization is required from the landlord under any
Lease as a result of the execution of this Agreement or the
consummation of the transactions contemplated hereby.
(iii) The Leased Property constitutes all of the real
property owned, leased or otherwise occupied in connection with the
Business. Other than ▇▇▇▇▇▇ ▇▇▇▇, except as set forth in Schedule
3.1(t)(iii) (the "Subleases"), there are no parties in possession
---------
or parties having any current or future right to occupy any of the
Leased Property. Each Sublease is in full force and effect and is
enforceable in accordance with its terms. To Sellers Knowledge,
there exists no default or condition which, with the giving of
notice, the passage of time or both, could become a default under
any Sublease. Seller has previously delivered to Buyer true and
complete copies of all the Subleases. No consent, waiver, approval
or authorization is required from the subtenant under any Sublease
as a result of the execution of this Agreement or the consummation
of the transactions contemplated hereby. The Leased Property is in
good condition and repair and is sufficient and appropriate for the
conduct of the Business. All improvements located on the Leased
Property have direct access to a public road adjoining such Leased
Property. No such improvements or accessways encroach on land not
included in the Leased Property and no such improvement is dependent
for its access, operation or utility on any land, building or other
improvement not included in the Leased Property. There is no pending
or, to Seller's Knowledge, any threatened condemnation proceeding
affecting any portion of the Leased Property.
14
(iv) To Sellers' Knowledge, there are no outstanding
options or rights of first refusal with respect to the purchase or
use of any of the Leased Property, any portion thereof or interest
therein. To Seller's Knowledge, ▇▇▇▇▇▇ ▇▇▇▇ is not obligated to
purchase or lease any real property.
(u) Insurance. Seller has casualty, general liability and other
---------
insurance policies for the assets and properties of ▇▇▇▇▇▇ ▇▇▇▇ that is
customary and adequate for corporations of similar size engaged in similar
lines of business.
(v) Company Transactions. Neither the Seller nor ▇▇▇▇▇▇ ▇▇▇▇ is
--------------------
party to or bound by any agreement with respect to a Company Transaction
other than this Agreement and the Seller has terminated all discussions with
third parties (other than Buyer) regarding Company Transactions.
(w) Sufficiency of Assets. ▇▇▇▇▇▇ ▇▇▇▇ owns, leases, possesses a
---------------------
valid license or otherwise has the legal right to use all buildings,
machinery, equipment, and other assets used in the conduct of the Business
as presently conducted and as conducted on December 31, 1997, except as
could not reasonably be expected to have a Material Adverse Effect.
(x) Transactions with Affiliates. Except as set forth on Schedule
----------------------------
3.1 (y), none of Seller or its Affiliates owns any material asset, tangible
or intangible, which is used in the Business.
(y) No Other Representations or Warranties. Except for the
--------------------------------------
representations and warranties contained in this Section 3.1 and in the
Ancillary Agreements, Seller makes no other express or implied warranty or
representation in the Transaction Agreements.
3.2 Representations and Warranties of Buyer. Buyer represents and
---------------------------------------
warrants on behalf of itself and, as applicable, its Affiliates, to Seller
as follows:
(a) Due Organization and Power. Each of Buyer and its Affiliates
--------------------------
that is a party to an Ancillary Agreement is a corporation duly organized,
validly existing and in good standing to the extent that the concept of good
standing exists in the relevant jurisdiction, under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to enter into the Transaction Agreements to which it is a party
and perform its obligations thereunder.
(b) Authorization and Validity of Agreements. The execution,
----------------------------------------
delivery and performance by each of Buyer and any Affiliate of Buyer of the
Transaction Agreements to which it is a party, and the consummation by Buyer
or its Affiliates, as applicable, of the applicable transactions
contemplated hereby and thereby, have been duly authorized by all necessary
corporate and shareholder action, and no other corporate action on its part
is necessary for the execution, delivery and performance by it of the
Transaction Agreements to which it is a party and the consummation by it of
the applicable transactions contemplated hereby and thereby. This Agreement
has been, and at the Closing the Ancillary Agreements Will be, duly executed
and delivered by Buyer. This Agreement is, and at the Closing the Ancillary
Agreements will be, the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with their respective terms, except
as the same may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights
generally and by general equity principles.
15
(c) No Conflict. Except as set forth in Schedule 3.2(c), the
-----------
execution, delivery and performance by each of Buyer and any Affiliate of
Buyer of the Transaction Agreements to which it is a party and the
consummation by Buyer or its Affiliates, as applicable, of the transactions
contemplated thereby does not, and will not (i) to the actual knowledge of
the officers of Buyer set forth in Schedule 3.2(c)(i), violate any provision
of Law applicable to Buyer or any of its Affiliates or to which their
respective properties are subject; (ii) except as set forth on Schedule
3.2(c), require any consent or approval of, or filing with or notice to, any
Governmental Authority under any provision of Federal, state, local and
foreign law applicable to Buyer or any of its Affiliates; (iii) violate any
provision of the charter or by-laws or other constituent documents of Buyer
or any of its Affiliates; or (iv) require any consent, approval or notice
under, or result in the breach, lapse, cancellation or termination of, or
constitute a default under, or result in the acceleration of, any right or
obligation of or the performance by Buyer or any of its Affiliates under any
material indenture, lease, franchise, agreement, or other instrument to
which Buyer or any of its Affiliates is a party or by which any of them or
their assets are bound or encumbered.
(d) Brokers, Finders. etc. None of Buyer or its Affiliates have
---------------------
entered into any contract, arrangement or understanding with any person or
firm that may result in the obligation of any of them to pay any finders
fees, brokerage or agent's commissions or other like payments in connection
with the transactions contemplated hereby or by the Ancillary Agreements.
(e) Commitment Letters. Attached hereto as Schedule 3.2(e) are
------------------
true, complete and correct copies of the following: (i) Letter Agreement,
dated June 10, 1998, between Bank of American National Trust and Savings
Association and Pen-Tab Industries, Inc., (ii) Letter Agreement, dated June
24, 1998, between Citicorp Mezzanine Partners, L.P. and Citicorp Venture
Capital, Ltd., and (iii) Letter, dated June 24, 1998, ▇.▇. ▇▇▇▇▇▇
Securities, Inc. to Pen Tab Holdings, Inc. (collectively, the "Commitment
----------
Letters").
-------
3.3 Supplements to Schedules. From time to time prior to the
------------------------
Closing, Seller will promptly supplement or amend the Schedules with respect
to any matter hereafter arising which, if existing or occurring at the date
of this Agreement, would have been required to be set forth or described in
the Schedules; provided, however, that any such supplement or amendment, if
material, will not be deemed to be part of the applicable Schedule until
Buyer consents to such supplement in writing (which consent shall not be
unreasonably withheld).
ARTICLE IV
PRE-CLOSING COVENANTS
4.1 Access to Information Concerning Properties and Records;
Confidentiality
-------------------------------------------------------
During the period commencing on the date hereof and ending on the
Closing Date, Seller shall cause ▇▇▇▇▇▇ ▇▇▇▇ to, upon reasonable notice,
afford to Buyer, its counsel, accountants, lenders and other authorized
representatives such access, during normal business hours, to the
facilities, properties, books, records, Tax Returns, documents, personnel
and auditors of the Business, as Buyer shall reasonably request. Buyer
agrees that its inspections shall be undertaken in a manner to cause minimal
and limited interference with the operations of ▇▇▇▇▇▇ ▇▇▇▇ and Seller.
Seller shall cause ▇▇▇▇▇▇ ▇▇▇▇ and its respective officers, employees,
accountants and other agents to furnish to Buyer such additional financial
and
16
operating data and information relating to the Business as Buyer may from
time to time reasonably request. If this Agreement is terminated pursuant to
Section 10.1 prior to the Closing Date, Buyer shall return to Seller or
certify to Seller as to the destruction of all copies held by Buyer or its
representatives of such books, records, Tax Returns and documents and
results of such inspections, assessments, audits and tests. Buyer agrees
that it will continue to treat all information so obtained from Seller as
"Information" under the Confidentiality Agreement, dated as of January 20,
1998, between Seller and Buyer (the "Confidentiality Agreement"), and will
-------------------------
continue to honor its obligations thereunder, until the Closing Date on
which date Section 9.6 will govern the confidentiality obligations of the
parties to this Agreement.
4.2 Conduct of the Business Prior to the Closing Date. Seller
-------------------------------------------------
agrees that, except as provided in this Agreement or consented to or
approved in writing by Buyer (which consent shall not be unreasonably
withheld) or set forth on Schedule 4.2, during the period commencing on the
date hereof and ending at the Closing Date, ▇▇▇▇▇▇ ▇▇▇▇ shall not take any
of the following actions with respect to the Business or its employees:
(a) Ordinary Course. Conduct the Business other than in the
---------------
ordinary course of business;
(b) Changes in Compensation. Grant any general increase in
-----------------------
compensation or benefits to its employees or to its officers, except in the
ordinary course of business or as required by law; pay any bonus
compensation except in the ordinary course of business or in accordance with
the provisions of any applicable program or plan adopted by the Board of
Directors of Seller or ▇▇▇▇▇▇ ▇▇▇▇ prior to the date hereof; enter into or
amend the terms of any severance agreements with its officers; or effect any
change in retirement benefits for any Transferred Employees (as defined
herein) or officers (unless such change is required by applicable law);
provided, however, that nothing in this subsection (b) shall prevent the
payment or other performance of any award or grant made prior to the date
hereof and disclosed in the Schedules or pursuant to this Agreement;
(c) Assets. Sell, lease, license, abandon or otherwise dispose of
------
any of its assets, tangible or intangible (including but not limited to
Intellectual Property), other than inventory, or acquire any business or
assets, except in the ordinary course of business and in any event not to
exceed $500,000 in the aggregate;
(d) Capital Stock. Issue (i) any additional shares of capital stock
-------------
of any class or series, (ii) any securities convertible into or exchangeable
for shares of capital stock, or (iii) any options, warrants or other rights
to acquire any shares of capital stock, of ▇▇▇▇▇▇ ▇▇▇▇;
(e) Dividends. ▇▇▇▇▇▇ ▇▇▇▇ will not declare or pay any dividend,
---------
other than to repay intercompany obligations as provided in Section 1.4;
(f) Capital Expenditures. Authorize or commit to, or make new
--------------------
capital expenditures, except in the ordinary course of business and in any
event not to exceed $500,000 in the aggregate;
17
(g) Liens. Mortgage or otherwise encumber or subject to any Lien any
-----
material assets used in the Business (including the Leases) and owned by
▇▇▇▇▇▇ ▇▇▇▇, except for Permitted Liens;
(h) Accounting Practice. Make any material change to the accounting
-------------------
(including Tax accounting) methods, principles or practices of the Business,
except as may be required by GAAP;
(i) Constituent Documents. Make any material amendment to its
---------------------
charter or by-laws;
(j) Taxes. Incur any Taxes other than in the ordinary course of
-----
business or make any Tax election or give any ruling request without the
written consent of Buyer, which shall not be unreasonably withheld; or
(k) Other. Agree in writing to do any of the foregoing.
-----
4.3 Preservation of Business. Seller will use its, and will cause
------------------------
▇▇▇▇▇▇ ▇▇▇▇ to use its reasonable efforts to preserve intact the business
organization of the Business, to keep available the services of their
present officers and key employees, and to preserve the good will of those
having business relationships with the Business.
4.4 Authorizations. Subject to the terms and conditions herein
--------------
provided, Seller and Buyer shall (a) promptly make their respective filings
and thereafter make any other required submissions under the ▇▇▇▇-▇▇▇▇▇-
▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR Act"); (b)
-------
use their reasonable best efforts to cooperate with each other in (I)
determining which filings are required to be made prior to the Closing Date
with, and which consents, approvals, permits or authorizations are required
to be obtained prior to the Closing Date from any Governmental Authority in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, and (ii) timely making
all such filings and timely seeking all such consents, approvals, permits or
authorizations; and (c) use their reasonable best efforts to, or cause to be
taken, all other action and do, or cause to be done, all other things
necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement. If, at any time after the
Closing Date, any further action is necessary or desirable to carry out the
purposes of this Agreement, the officers and directors of the parties shall
take all such necessary action.
4.5 Cash Management.
---------------
(a) Between the date of this Agreement and the Closing Date. ▇▇▇▇▇▇
▇▇▇▇ shall continue to participate in the central cash management system of
Seller in accordance with prior practice.
(b) In the event that Seller receives any payments after the Closing
Date that are intended for ▇▇▇▇▇▇ ▇▇▇▇, Seller shall promptly remit such
payments to Buyer.
4.6 Intercompany Services and Products. Any intercompany services
----------------------------------
provided by Seller or its Affiliates to ▇▇▇▇▇▇ ▇▇▇▇ shall terminate as of
the Closing Date, except as set forth in this Agreement, and all amounts
(but without duplication of amounts included in accrued
18
expenses) owing by ▇▇▇▇▇▇ ▇▇▇▇ with respect to such services as of the close
of business on the day preceding the Closing Date with respect to such
services shall be paid prior to Closing or simultaneously therewith.
Notwithstanding the foregoing, Seller or its Affiliates shall provide
transition services pursuant to the Transition Services Agreement (as
defined in Section 5.2(d)) to ▇▇▇▇▇▇ ▇▇▇▇ on such terms and conditions and
for such prices and duration as described in such agreements.
4.7 Further Actions
---------------
(a) Subject to the terms and conditions of this Agreement, each of
the parties hereto will use their reasonable best efforts to take, or cause
to be taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this
Agreement and shall use its best efforts to satisfy the conditions to the
transactions contemplated hereby and to obtain all waivers, permits,
consents and approvals and to effect all registrations, filings and notices
with or to third parties or any Governmental Authority that are necessary or
desirable in connection with the transactions contemplated by this
Agreement.
(b) Seller agrees to promptly notify Buyer in writing of any
material change to Seller's or ▇▇▇▇▇▇ ▇▇▇▇'▇ representations or Disclosure
Schedules in this Agreement.
4.8 Exclusivity. None of the Seller, ▇▇▇▇▇▇ ▇▇▇▇ or any of their
-----------
respective Affiliates, representatives, officers, employees, directors or
agents shall, directly or indirectly, (a) submit, solicit, initiate,
encourage, entertain, negotiate, accept or discuss, directly or indirectly,
any proposal or offer from any person or enter into any agreement or accept
any offer relating to any (i) reorganization, liquidation, dissolution or
recapitalization of ▇▇▇▇▇▇ ▇▇▇▇, (ii) merger or consolidation involving
▇▇▇▇▇▇ ▇▇▇▇, (iii) purchase or sale of any assets or capital stock (other
than a purchase or sale of inventory in the ordinary course of business
consistent with past custom and practice) of ▇▇▇▇▇▇ ▇▇▇▇, or (iv) similar
transaction or business combination involving ▇▇▇▇▇▇ ▇▇▇▇, the Business or
the assets of ▇▇▇▇▇▇ ▇▇▇▇ (each of the foregoing actions described in
clauses (i) through (iv), a "Company Transaction"), (b) furnish any
-------------------
information with respect to, assist or participate in or facilitate in any
other manner any effort or attempt by any person to do or seek to do any of
the foregoing or (c) enter into any agreement, arrangement or understanding
requiring the Seller or ▇▇▇▇▇▇ ▇▇▇▇ to abandon, terminate or fail to
consummate any of the transactions contemplated hereby. The Seller and
▇▇▇▇▇▇ ▇▇▇▇ agree to notify Buyer immediately if any person makes any
proposal, offer, inquiry or contact with respect to a Company Transaction.
4.9 Buyer's Financing
-----------------
(a) Seller has provided Buyer with confidential evaluation material
for the sole purpose of assisting Buyer in deciding whether to proceed with
a further investigation of ▇▇▇▇▇▇ ▇▇▇▇ and the Business. Buyer has conducted
its own due diligence investigation of ▇▇▇▇▇▇ ▇▇▇▇ and the Business and
hereby acknowledges that the only representations or warranties of Seller
with respect to ▇▇▇▇▇▇ ▇▇▇▇ and the Business are contained in Section 3.1 of
this Agreement.
(b) Notwithstanding the provisions of the last sentence of Section
4.1 of this Agreement relating to confidentiality obligations prior to the
Closing Date, Seller will permit
19
Buyer to utilize such confidential information as may be legally required to
complete and issue an Offering Memorandum as part of a private placement of
securities pursuant to Rule 144A under the Securities Act of 1933, as
amended (the "Rule 144A Offering"), provided that (i) Buyer shall give
------------------
Seller a reasonable period of time to review such Offering Memorandum and
will not include any information or statement about ▇▇▇▇▇▇ ▇▇▇▇, its
Affiliates or the Business to which Seller reasonably objects, and (ii) such
Offering Memorandum shall include a legend stating that neither ▇▇▇▇▇▇ ▇▇▇▇
nor any of its Affiliates is making any representations or warranties with
respect to any information included in such Offering Memorandum.
(c) Seller will use its reasonable best efforts to cause its
accountants, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, to issue a comfort letter to Buyer in
connection with the Rule 144A Offering in accordance with the memorandum,
dated June 18, 1998, from ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ attached hereto as Exhibit
C.
4.10 Customer Confirmation. Prior to the Closing Date, Buyer is
---------------------
permitted to place one telephone call to not more than three key customers
of ▇▇▇▇▇▇ ▇▇▇▇, subject to the prior consent and participation of Seller,
which consent shall not be unreasonably withheld.
4.11 Release From Lease. Subject to the terms and conditions of this
------------------
Agreement, Buyer shall use its reasonable best efforts to assist Seller, as
Seller requests, in obtaining a release from its obligations accruing from
and after the Closing Date relating to the Standard Commercial Lease, dated
April 2, 1993, identified on Schedule 3.1(t)(ii)(A) as amended, among Mid-
West Terminal Warehouse Company, ▇▇▇▇▇▇ ▇▇▇▇ and Seller (the "Kansas City
-----------
Lease").
-----
4.12 Commitment Letters. Buyer and its Affiliates will comply in a
------------------
timely fashion with all of their obligations (including, conditions,
covenants) set forth in the Commitment Letters.
4.13 Miscellaneous. Prior to the Closing Date, Seller will take all
-------------
action necessary to ensure that on the Closing Date:
(a) ▇▇▇▇▇▇ ▇▇▇▇ and the Business will have no contract, arrangement
or understanding with any person or firm that may result in the obligation
of either of them to pay any finder's fee, brokerage or agent's commission
or other like payments in connection with the transactions contemplated
hereby or by the Ancillary Agreements;
(b) ▇▇▇▇▇▇ ▇▇▇▇ and the Business will have no involvement in any
material business arrangement or relationship with Seller or any of its
Affiliates (except as provided in the Transition Services Agreement
described in Section 5.2(d) and the arrangement between Seller and Buyer
relating to the Kansas City Lease described in Section 5.1(f));
(c) except as set forth on Schedule 4.13(c), ▇▇▇▇▇▇ ▇▇▇▇ and the
Business will have no indebtedness constituting (i) obligations for borrowed
money or evidenced by bonds, debentures, notes, letters of credit or other
similar instruments, (ii) obligations as lessee under capital leases and
(iii) material guarantees of debts of third parties, including such
guarantees supported by ▇▇▇▇▇▇ ▇▇▇▇ or secured by a Lien on any of the
assets of ▇▇▇▇▇▇ ▇▇▇▇ or the Business;
(d) there will be no liens, charges, security interests,
restrictions or other legal or equitable encumbrances ("Liens") on the
-----
Stock.
20
ARTICLE V
CONDITIONS PRECEDENT
5.1 Conditions Precedent to Obligations of Parties. The respective
----------------------------------------------
obligations of Buyer and Seller hereunder are subject to the satisfaction or
waiver, at or prior to the Closing Date of each of the following conditions:
(a) Antitrust Laws. The waiting period applicable to the
--------------
consummation of the transactions contemplated hereby under the HSR Act shall
have expired or been terminated.
(b) No Injunction. None of the parties hereto shall be subject to
-------------
any order or injunction of a court of competent jurisdiction that prohibits
the consummation of the transactions contemplated by this Agreement. In the
event any such order or injunction shall have been issued, each party agrees
to use its reasonable best efforts to have any such order overturned or
injunction lifted.
(c) Governmental Authority Consents. All material consents,
-------------------------------
authorizations, orders and approvals of (or filings or registrations with)
any Governmental Authority required in connection with the execution,
delivery and performance of this Agreement (including the transfer of the
Stock to Buyer) shall have been obtained or made.
(d) Third Party Consents. The consents of third parties required in
--------------------
connection with the execution, delivery and performance of this Agreement
and listed on Schedule 5.1(d) shall have been obtained by Seller with such
assistance from Buyer as Seller shall reasonably request.
(e) Financing. Buyer shall have received cash proceeds sufficient
---------
to pay the Stock Purchase Price, pay all fees and expenses incurred in
connection with the transactions contemplated hereby and provide ▇▇▇▇▇▇ ▇▇▇▇
with their working capital, all on terms and conditions satisfactory to
Buyer.
(f) Kansas City Lease. Seller shall have assigned to ▇▇▇▇▇▇ ▇▇▇▇
-----------------
all of Seller's rights as a tenant under the Kansas City Lease effective as
of the Closing, and ▇▇▇▇▇▇ ▇▇▇▇ shall have assumed from Seller all of
Seller's obligations as a tenant under the Kansas City Lease which accrue
from and after the Closing pursuant to an assignment instrument
substantially in the form attached hereto as Exhibit D (the "KC Lease
--------
Assignment"); provided, however, if after having used commercially
----------
reasonable efforts, Seller is unable to obtain the consent of the KC
Landlord to the KC Lease Assignment and a release of Seller thereunder (as
contemplated in Section 4.11 of this Agreement), then the condition set
forth in this Section 5.1(f) shall be deemed satisfied if either of the
following occurs in the following order of priority: first, Seller shall use
commercially reasonable efforts so that Seller shall have assigned to ▇▇▇▇▇▇
▇▇▇▇ all of Seller's rights as a tenant under the Kansas City Lease
effective as of the Closing, and ▇▇▇▇▇▇ ▇▇▇▇ shall have assumed from Seller
all of Seller's obligations as a tenant under the Kansas City Lease which
accrue from and after the Closing pursuant to the KC Lease Assignment, with
the consent of the KC Landlord, whether or not Seller remains liable to the
KC Landlord, or second, if Seller is unable to obtain the consent as set
forth above, then Seller shall use commercially reasonable efforts to create
some other arrangement, which is mutually satisfactory to Seller and Buyer
between Seller and ▇▇▇▇▇▇ ▇▇▇▇, which is consented to by the KC Landlord, as
required, whereby ▇▇▇▇▇▇ ▇▇▇▇ shall be the sole tenant or subtenant under
the Kansas City
21
Lease and Seller is indemnified or otherwise protected to its reasonable
satisfaction against obligations accruing under the KC Lease from and after
the Closing.
5.2 Conditions Precedent to Obligation of Buyer. The obligation of
-------------------------------------------
Buyer to consummate the transactions contemplated by this Agreement is
subject to the satisfaction or waiver by Buyer at or prior to the Closing
Date of each of the following additional conditions:
(a) Accuracy of Representations and Warranties. (i) Each of the
------------------------------------------
representations and warranties of Seller contained herein that are not
subject to a materiality or Material Adverse Effect qualifier shall be true
and correct in all material respects as of the date of this Agreement and as
of the Closing Date, with the same force and effect as though made at and as
of the Closing Date, except for changes permitted or contemplated by this
Agreement and except that to the extent any such representations or
warranties were made as of a specified date, which need be true only as of
such date, and (ii) each of the representations and warranties of Seller
made herein that is subject to a materiality or Material Adverse Effect
qualifier is true and correct in all respects as of the date of this
Agreement and on and as of the Closing Date, with the same force and effect
as though made at and as of the Closing Date, except for changes permitted
or contemplated by this Agreement and except that to the extent any such
representations or warranties were made as of a specified date, which need
be true only as of such date.
(b) Performance of Agreements. Each of the agreements and contracts
-------------------------
of Seller to be performed and complied with by Seller under this Agreement
prior to or at the Closing Date shall have been performed and complied with
in all material respects.
(c) Certificates. Buyer shall have received (i) a certificate of
------------
Seller, dated the Closing Date, executed on behalf of Seller by its
president or any of its vice presidents, to the effect that the conditions
specified in paragraphs (a) and (b) above have been fulfilled; (ii) a
certificate of the Secretary of Seller, dated the Closing Date, with true
and complete copies of ▇▇▇▇▇▇ ▇▇▇▇'▇ charter, by-laws and resolutions
relating to this transaction attached, and (iii) a Certificate of Good
Standing from the Secretary of State of the State of Missouri, dated as of a
recent date.
(d) Ancillary Agreements. Seller shall have executed and delivered
--------------------
a Transition Services Agreement substantially in the form attached hereto as
Exhibit A. Seller's Affiliate, ▇▇▇▇▇▇ Industries Canada, Inc., and Buyer
shall have entered into a Canadian Asset Transfer Agreement pursuant to
which the assets and liabilities listed on Schedule 5.2(d) will be
transferred to Buyer, substantially in the form reasonably satisfactory to
Buyer and Seller attached hereto as Exhibit B (together with the Transition
Services Agreement, the "Ancillary Agreements").
--------------------
(e) Release of Liens. Except as set forth on Schedule 5.2(e), the
----------------
Seller shall have obtained releases of all Liens (other than any Permitted
Liens) relating to the assets and properties of ▇▇▇▇▇▇ ▇▇▇▇.
(f) Proceedings. Except a set forth on Schedule 5.2(f), all
-----------
corporate and other proceedings taken or required to be taken by Seller or
▇▇▇▇▇▇ ▇▇▇▇ at or prior to the Closing in connection with the transactions
contemplated hereby shall have been taken and all documents incident thereto
shall be reasonably satisfactory in form and substance to Buyer.
22
(g) Transactions with Affiliates. Except as set forth on Schedule
----------------------------
5.2(g), all transactions, agreements or other arrangements between ▇▇▇▇▇▇
▇▇▇▇ and the Seller or any of its Affiliates, other than the Transition
Services Agreement and this Agreement, shall have been terminated.
(h) Additional Matters. All corporate and other proceedings and all
------------------
documents, instruments and other legal matters in connection with the
transactions contemplated by the Transaction Agreements shall be reasonably
satisfactory to Buyer and Buyer shall have received such other documents as
it shall reasonably request.
(i) Material Adverse Change. Since December 31, 1997, there shall
-----------------------
have been no fact, event or circumstance which could reasonably be expected
to have a Material Adverse Effect.
(j) No Conflict with Applicable Laws. The consummation by Seller of
--------------------------------
this Agreement, the Ancillary Agreements, and the transactions contemplated
hereby and thereby shall not violate any material provision of applicable
Law, and ▇▇▇▇▇▇ ▇▇▇▇ shall be in compliance in all material respects with
each applicable Law.
5.3 Conditions Precedent to the Obligation of Seller. The
------------------------------------------------
obligation of Seller to consummate the transactions contemplated by this
Agreement is subject to the satisfaction or waiver by Seller at or prior to
the Closing Date of each of the following additional conditions:
(a) Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties of Buyer contained herein shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing
Date, with the same force and effect as though made at and as of the Closing
Date, except for changes permitted or contemplated by this Agreement and
except that to the extent any representations or warranties is made as of a
specified date, which need be true only as of such date.
(b) Performance of Agreements. Each of the agreements and covenants
-------------------------
of Buyer to be performed prior to or at the Closing Date shall have been
performed and complied with in all material respects.
(c) Certificates. Seller shall have received (i) a certificate of
------------
Buyer, dated the Closing Date, executed on behalf of Buyer by its president
or any of its vice presidents, to the effect that the conditions specified
in paragraphs (a) and (b) above have been fulfilled; (ii) a certificate of
the Secretary of Buyer, dated the Closing Date, with true and complete
copies of Buyer's charter, by-laws and resolutions relating to this
transaction attached; and (iii) a Certificate of Good Standing from the
Secretary of State of the Commonwealth of Virginia, dated as of a recent
date.
(d) Payment of 33% of Stay Bonuses. Buyer shall have paid to each
------------------------------
"Eligible Participant" 33% of his or her "Stay Bonus" as described in
-------------------- ----------
Schedule 5.3(d).
23
ARTICLE VI
PROVISIONS AS TO TAX MATTERS
6.1 Certain Tax Matters.
-------------------
(a) Preparation and Filing of Tax Returns. Seller shall prepare and timely
-------------------------------------
file (or shall cause to be prepared and timely filed) all Tax Returns in respect
of ▇▇▇▇▇▇ ▇▇▇▇ and its assets and activities that (i) are required to be filed
on or before the Closing Date or (ii) are required to be filed after the Closing
Date and (A) are paid on a consolidated, unitary, combined or similar basis with
respect to Tax Returns ("Consolidated Tax Returns") or (B) are with respect to
------------------------
Taxes based upon, measured by, or calculated with respect to gross or net
income, receipts or profits ("Income Taxes") and are required to be filed on a
------------
separate return basis for any Tax period ending on or before the Closing Date.
To the extent reasonably requested by Seller, Buyer shall cause ▇▇▇▇▇▇ ▇▇▇▇ to
assist Seller in the preparation and timely filing of the Tax Returns specified
in the preceding sentence. Buyer shall prepare or cause to be prepared all other
Tax Returns required of ▇▇▇▇▇▇ ▇▇▇▇, its assets or activities. To the extent
reasonably requested by Buyer, Seller shall assist Buyer in the preparation and
timely filing of the Tax Returns specified in the preceding sentence.
(b) Payment of Taxes. Seller shall timely pay or cause to be paid, but only
----------------
to the extent not reflected on the Final Closing Statement, all Taxes due with
respect to Tax Returns that Seller is obligated to prepare and file or cause to
be prepared and filed pursuant to Section 6.1(a) and all Taxes due on or before
the Closing Date for which no Tax Return is required to be filed. Except as
provided in Section 6.1(e) below, Buyer shall pay or cause to be paid all Taxes
due with respect to periods ending after the Closing Date and Taxes shown on the
Final Closing Statement.
(c) Carryforwards and Carrybacks. Buyer shall cause ▇▇▇▇▇▇ ▇▇▇▇ to elect,
----------------------------
where permitted by law, to carry forward any net operating loss, charitable
contribution or other item arising after the Closing Date that could, in the
absence of such an election, be carried back to a taxable period of ▇▇▇▇▇▇ ▇▇▇▇
ending on or before the Closing Date in which ▇▇▇▇▇▇ ▇▇▇▇ was included in a
Consolidated Tax Return.
(d) Refunds. Seller shall be entitled to retain (or receive within 10 days
-------
of receipt by Buyer) payment from Buyer or any of its subsidiaries or Affiliates
(including ▇▇▇▇▇▇ ▇▇▇▇) equal to any refund or credit for Taxes with respect to
any Tax period ending on or before the Closing Date relating to ▇▇▇▇▇▇ ▇▇▇▇
("Seller's Refunds") (other than any refund or credit resulting from a carry
----------------
back permitted under Section 6.1(c)).
(e) Straddle Periods. Any Taxes of ▇▇▇▇▇▇ ▇▇▇▇ attributable to a Tax period
----------------
which begins before and ends after the Closing Date (a "Straddle Period") shall
---------------
be apportioned between Seller and Buyer based on the actual operations and
transactions of ▇▇▇▇▇▇ ▇▇▇▇ during the portion of such period ending on the
Closing Date, and the portion of such beginning on the day following the Closing
Date, respectively, calculated as though the taxable year of ▇▇▇▇▇▇ ▇▇▇▇
terminated at the close of business on the Closing Date, except that any tax
based on capital or the value of any asset shall be apportioned between Buyer
and Seller based on the ratio of (i) the number of days in the relevant taxable
period up to and including the Closing Date to (ii) the number of days in the
relevant taxable period following the Closing Date.
24
6.2 Tax Indemnification.
-------------------
(a) Seller Indemnification. Seller hereby agrees to indemnify Buyer and
----------------------
hold it harmless from all liability for Taxes imposed on ▇▇▇▇▇▇ ▇▇▇▇ (including
without limitation liability under Treas. Reg. ss. 1. 1502-6 or any comparable
provision of state law) for any taxable year or period ending on or before the
Closing Date and Seller's portion of the Straddle Period Taxes.
(b) Buyer Indemnification. Buyer hereby agrees to indemnify Seller and the
---------------------
Affiliates and hold them harmless from all liability for Taxes imposed on ▇▇▇▇▇▇
▇▇▇▇ for any taxable year or period beginning, after the Closing Date and
Buyer's portion of the Straddle Period Taxes.
(c) Determining Liability for Taxes. Whenever it is necessary to determine
-------------------------------
liability for Straddle Period Taxes, the determination shall be made assuming
that there was a closing of the books at 11:59 p.m. (local time) on the Closing
Date, except that any tax based on capital or the value of any asset shall be
apportioned between Buyer and Seller based on the ratio of (i) the number of
days in the relevant taxable period up to and including the Closing Date to (ii)
the number of days in the relevant taxable period following the Closing Date.
(d) Indemnification for Post-Closing Transaction. Buyer hereby agrees to
--------------------------------------------
indemnify Seller for any additional Tax owed by Seller (including Tax owed by
Seller due to this indemnification payment) resulting from any transaction or
action not in the ordinary course of business occurring on the Closing Date
after Buyer's purchase of the Stock and effected or procured by Buyer.
6.3 Contest Provisions. Buyer shall promptly notify Seller in writing upon
------------------
receipt by Buyer or any of its Affiliates of notice of any pending or threatened
audits or assessments that may materially affect the Tax liabilities of ▇▇▇▇▇▇
▇▇▇▇ for which Seller would be required to indemnify Buyer pursuant to Section
6.2(a). Seller shall have the sole right to represent ▇▇▇▇▇▇ ▇▇▇▇'▇ interests in
any Tax audit or administrative or court proceeding relating to taxable periods
ending on or before the Closing Date, and to settle any such proceeding as it
sees fit so long as Seller indemnifies Buyer against the effects of any such
settlement as if it had taken place prior to the Closing Date. Seller shall be
entitled to participate at its expense in the defense of any claim for Taxes for
a year or period ending after the Closing Date which may be the subject of
indemnification by Seller pursuant to Section 6.2(a) and, with the written
consent of Buyer, may assume the entire defense of any such claim. Neither Buyer
nor ▇▇▇▇▇▇ ▇▇▇▇ may agree to settle any Tax claim for the portion of the year or
period ending on the Closing Date which may be the subject of indemnification by
Seller under Section 6.2(a) without the prior written consent of Seller which
shall not be unreasonably withheld.
6.4 Section 338 Elections and Forms.
-------------------------------
(a) With respect to Buyer's acquisition of the Stock hereunder, at the
written request of Buyer, Seller will agree to join in making an election under
Section 338(h)(10) of the Code, and the Treasury Regulations promulgated
thereunder and all similar elections under applicable state and local law (the
"Section 338(h)(10) Election") within 180 days after the Closing Date. Buyer
---------------------------
shall be responsible for preparation and timely filing of Form 8023-A (or any
successor form) in connection with the Section 338(h)(10) Election, and Seller
shall use reasonable efforts
25
to cooperate with Buyer, to prepare and file such form and to complete the
Section 338(h)(10) Election.
(b) The Purchase Price and the liabilities of ▇▇▇▇▇▇ ▇▇▇▇ and other
relevant items shall be allocated to the assets of ▇▇▇▇▇▇ ▇▇▇▇ in accordance
with the rules of Section 338(h)(10) of the Code and the Treasury Regulations
promulgated thereunder. Such allocation shall be set forth on a schedule which
shall be prepared by Buyer and provided to Seller no later than 90 days
following the Closing Date for Seller's review and approval, which approval
shall not be unreasonably withheld. All allocations contained in such schedule
shall be used by each party in preparing Form 8023-A (or any successor form) and
all relevant Tax Returns, subject to adjustment to reflect (i) Seller's selling
expenses as a reduction of sales proceeds, and (ii) Buyer's acquisition expenses
as an addition to purchase price. Any appraisal costs incurred in connection
with the Section 338(h)(10) Election shall be paid by Buyer. If the Section
338(h)(10) Election is disputed by a Governmental Authority, the party receiving
notice of such dispute shall promptly notify the other party concerning such
dispute.
(c) Buyer agrees that it shall not make a filing under Section 338(g) of
the Code in connection with Buyer's acquisition of the Stock hereunder.
6.5 Audits. Buyer shall promptly notify Seller in writing upon receipt by
------
Buyer or any Affiliate of Buyer of notice of any pending or threatened Tax
audits or assessments which may affect the Tax liabilities or indemnification
obligations of, or otherwise relate to, Seller for Tax periods ending on or
prior to the Closing Date. Seller shall have the sole right, at its expense, to
represent all interests in any such Tax matter, including any Tax audit or
administrative or court proceedings ("Tax Matters"), and to employ counsel of
-----------
its choice. Buyer agrees that it will cooperate fully with Seller and its
counsel in the defense against, or compromise of, any claim in any said
proceeding. Buyer shall have the sole right, at its expense, to represent all
interests in any Tax Matter for Tax periods ending after the Closing Date, and
to employ counsel of its choice; provided, however, that with respect to
Straddle Periods, Buyer shall obtain Seller's consent, which shall not be
unreasonably withheld.
6.6 Cooperation. After the Closing, Buyer and Seller shall promptly make
-----------
available or cause to be made available to the other, as reasonably requested,
and to any taxing authority, all information, records or documents relating to
Tax liabilities, potential Tax liabilities, or refunds of or relating to ▇▇▇▇▇▇
▇▇▇▇ and the Business for all periods prior to or including the Closing Date and
shall preserve all such information, records and documents until the expiration
of any applicable statute of limitations or extensions thereof. Buyer and Seller
shall otherwise cooperate with respect to any Tax Matter or other claim for
Seller's Refunds, including by provision of appropriate powers of attorney.
Buyer shall prepare and provide to Seller any Federal, state, local and foreign
Tax information packages requested by Seller for Seller's use in preparing
▇▇▇▇▇▇ ▇▇▇▇'▇ Tax Returns. Such Tax information packages shall be completed by
Buyer and provided to Seller within 45 days after Seller's request therefor.
Each party shall bear its own expense in complying with the foregoing
provisions.
ARTICLE VII
LABOR MATTERS, EMPLOYEE RELATIONS AND BENEFITS
7.1 Offers of Employment. As of the Closing Date, Buyer shall continue to
--------------------
employ any and all individuals who are employed by ▇▇▇▇▇▇ ▇▇▇▇ as of such
Closing Date, including such
26
individuals on short-term disability, long-term disability or other leave
of absence (each such individual being referred to as an "Employee"); provided,
--------
however, that this Section shall not require Buyer to continue the employment of
any Employee for a specified period of time after the Closing Date. Buyer shall
assume all liability for wages and payroll deductions with respect to Employees
for the period ending on the day preceding the Closing Date.
7.2 Participating an Buyers Retirement Plans. As of the Closing Date, Buyer
----------------------------------------
shall offer Employees not covered by a Collective Bargaining Agreement the right
to participate in the qualified retirement plans sponsored by or contributed to
by Buyer. Buyer's retirement plans shall credit such Employees with all service
credited to the Employees under Seller's retirement plans for purposes of
determining the Employees' eligibility to participate in and vesting under
Buyer's retirement plans.
7.3 Health and Welfare Plans. As of the Closing Date, Buyer shall provide
------------------------
Employees with coverage under Buyer's health and welfare plans on terms
substantially similar to those applicable to Buyer's employees. Buyers health
and welfare plans shall credit Employees with all service credited to the
Employees under Seller's health and welfare plans for purposes of determining
eligibility to participate in Buyer's health and welfare plans. Buyer shall
waive any waiting periods, pre-existing condition exclusions and
actively-at-work requirements and provide that any expenses incurred on or
before the Closing Date by an Employee or an Employee's covered dependents shall
be taken into account for purposes of satisfying applicable deductible,
coinsurance and maximum out-of-pocket provisions of Buyer's health and welfare
plans.
7.4 No Rights or Remedies. Nothing in this Article shall confer upon any
---------------------
Employees or legal representative thereof any rights or remedies, including any
right to employment, or continued employment for any specified period, of any
nature or kind whatsoever under or by reason of this Agreement.
7.5 Indemnification. Buyer shall indemnify Seller and its Affiliates and
---------------
hold each of them harmless and against any liabilities which may be incurred or
suffered by any of them in connection with any claim made by any Employee by
reason of Buyer's failure to comply with any provision of this Article.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
8.1 Survival. All of the representations and warranties contained in
Sections 3.1 and 3.2 will survive the Closing and continue in full force and
effect until six months after the Closing Date; except that the representations
and warranties contained in Section 3.1(h) (Tax Matters) will survive the
Closing and continue in full force and effect until the applicable statutes of
limitation (after giving effect to any extensions or waivers thereof); the
representations and warranties in Section 3.1(r) (Environmental Matters) will
survive the Closing and continue in full force and effect until two years after
the Closing Date; and the representations and warranties in Section 3.1(g)
(Financial Statements) and Section 3.1(q) (Undisclosed Liabilities) will
survive the Closing and continue in full force and effect until April 15, 1999.
All of the covenants contained in this Agreement will survive the Closing and
continue in full force and effect in accordance with their terms.
27
8.2 Indemnification Provisions for the Benefit of Buyer. In the event (a)
---------------------------------------------------
Seller breaches any of its representations or warranties contained in this
Agreement and provided that Buyer makes a written claim for indemnification
against Seller within the applicable survival period, (b) Seller breaches any of
its covenants contained in this Agreement (including all of the covenants in
Article IV to be performed by Seller and other than Tax matters, which are
addressed in Article VI), provided that Buyer makes a written claim against
Seller promptly, but in no event later than ten Business Days, after becoming
aware of such breach, provided that no delay on the part of Buyer in notifying
Seller will relieve Seller from its obligations under this clause (b) unless
Seller is actually prejudiced thereby, or (c) Buyer sustains Damages as a direct
result of any of the liabilities retained by Seller, as set forth in Schedule
1.3(a)(i)(A), then Seller agrees to indemnify, defend and hold harmless Buyer
and ▇▇▇▇▇▇ ▇▇▇▇ from and against all losses, liabilities, damages and expenses
(including reasonable attorneys' fees and expenses) (collectively, "Damages")
-------
Buyer or ▇▇▇▇▇▇ ▇▇▇▇ suffers caused by such event; provided, however, that
Seller will not have any obligation to indemnify Buyer and ▇▇▇▇▇▇ ▇▇▇▇ from and
against such Damages in connection with matters described in clause (a) above
(i) until Buyer and ▇▇▇▇▇▇ ▇▇▇▇ have suffered aggregate Damages, by reason of
all such breaches, in excess of $3,000,000 (after which point Seller will be
obligated only to indemnify Buyer and ▇▇▇▇▇▇ ▇▇▇▇ from and against aggregate
Damages in excess of $3,000,000) and (ii) to the extent the aggregate Damages
Buyer and ▇▇▇▇▇▇ ▇▇▇▇ have suffered by reason of all of such breaches exceeds
$15,000,000; provided, however, that this Cap on indemnification for Damages
shall not apply to any claim for common law fraud brought by Buyer against
Seller that is based on any intentional misrepresentation or omission of facts
within Seller's Knowledge on or prior to the Closing Date; and further provided
that, in the event Seller prevails against any such common law fraud claim,
Buyer shall indemnify Seller for its attorney's fees, costs and other expenses
incurred in connection with defending against such claim. Notwithstanding the
foregoing, if the amount of any claim or series of related claims for Damages
suffered by Buyer and ▇▇▇▇▇▇ ▇▇▇▇ in connection with the matters described in
clause (a) above does not exceed $10,000, then the amount of such claim or
series of claims will be excluded from the calculation of the aggregate amount
of Damages for purposes of this Section 8.2; provided that this sentence shall
not apply to claims resulting directly from a breach of a representation or
warranty that is subject to a materiality qualifier.
8.3 Indemnification Provisions for the Benefit of Seller. In the event (a)
----------------------------------------------------
Buyer breaches any of its representations, warranties, covenants or agreements
contained in this Agreement or (b) after the Closing, ▇▇▇▇▇▇ ▇▇▇▇ breaches any
of its covenants or agreements contained in the Kansas City Lease Assignment, or
any other arrangement agreed to under Section 5.1(f), then Buyer agrees to
indemnify, defend and hold harmless Seller from and against any Damages Seller
suffers caused by such breach; provided that Seller makes a written claim
against Buyer promptly, but in no event later than ten Business Days, after
becoming aware of such breach, provided further that no delay on the part of
Seller in notifying Buyer will relieve Seller from its obligations under this
Section 8.3 unless Seller is actually prejudiced thereby.
8.4 Matters Involving Third Parties. If any third party notifies any party
-------------------------------
hereto (the "Indemnified Party") with respect to any matter which may give rise
-----------------
to a claim for indemnification against the other party hereto (the "Indemnifying
------------
Party") under this Article VIII, then the Indemnified Party will notify the
-----
Indemnifying Party thereof promptly, but in no event later than ten Business
Days, after receiving such notice; provided that no delay on the part of the
Indemnified Party in notifying the Indemnifying Party will relieve the
Indemnifying Party from
28
any obligation hereunder unless the Indemnifying Party is actually
prejudiced thereby. Once the Indemnified Party has given notice of the matter to
the Indemnifying Party, the Indemnifying Party may defend against the matter in
any manner it reasonably may deem appropriate; provided that (a) the Indemnified
Party may retain separate counsel at its sole cost and expense to participate in
such defense (provided that such participation does not unreasonably interfere
with the Indemnifying Party's ability to defend against the matter), and (b) the
Indemnifying Party shall not be entitled to assume control of such defense and
shall pay the reasonable fees and expenses of counsel retained by the
Indemnified Party and reasonably acceptable to the Indemnifying Party if (1)
such matter relates to or arises in connection with any criminal proceeding,
action, indictment, allegation or investigation, (2) a material conflict of
interest exists between the Indemnifying Party and the Indemnified Party (the
parties agreeing that a dispute over legal fees will not constitute such a
conflict of interest); or (3) the Indemnifying Party fails to defend such a
claim. The Indemnified Party will provide any assistance reasonably requested by
the Indemnifying Party; provided that the Indemnifying Party will reimburse the
Indemnified Party for all expenses (including, without limitation, fees and
expenses of counsel selected by the Indemnifying Party) as they are accrued in
connection with providing such assistance. The Indemnifying Party will not
consent to the entry of a judgment or enter into any settlement agreement with
respect to such matter without the written consent of the Indemnified Party
(which consent will not be unreasonably withheld), unless such judgment or
settlement involves only money Damages for which the Indemnifying Party will be
liable or otherwise releases the Indemnified Party from all liability with
respect to such matter. If the Indemnifying Party does not notify the
Indemnified Party within 30 days after the Indemnified Party has given notice of
the matter that the Indemnifying Party is assuming all responsibility therefor,
the Indemnified Party may defend against, consent to the entry of any judgment
or enter into any settlement with respect to the matter in any manner the
Indemnified Party reasonably deems appropriate without waiving any right to
indemnity therefor by the Indemnifying Party; provided that the Indemnified
Party will not consent to the entry of a judgment or enter into any settlement
with respect to such matter without the written consent of the Indemnifying
Party (which consent will not be withheld unreasonably).
8.5 Adjustments. Any Damages recovered pursuant to this Article VIII shall
-----------
be reduced by any Tax benefits and/or insurance coverage proceeds relating
thereto actually realized or received by the Indemnified Party. Seller and Buyer
agree to make reasonable best efforts to receive or collect such benefits or
proceeds promptly. All indemnification payments made pursuant to this Article
VIII shall be deemed to be adjustments to the Stock Purchase Price.
8.6 Exclusive Remedy. Except as provided in this Agreement, indemnification
----------------
under this Article VIII shall constitute the exclusive remedy for disputes
arising under this Agreement for which Damages are available. Indemnification
under this Articles VIII shall not preclude any available equitable remedies
(including, without limitation, specific performance).
8.7 Payment and Interest. Any payment required to be made by Seller or
--------------------
Buyer pursuant to this Article VIII shall be (i) made by wire transfer of
immediately available funds pursuant to written instructions provided by the
party that is to receive payment pursuant to this Article VIII and (ii) bear
interest from the Closing Date through the date of payment on the basis of the
average daily rate of interest publicly announced by The Northern Trust in
Chicago, Illinois from time to time as its base rate from the Closing Date to
the date of such payment.
29
ARTICLE IX
OTHER POST-CLOSING COVENANTS
9.1 Post-Closing Accounting Cooperation. Until the later of five years
-----------------------------------
following the Closing Date or the expiration of the applicable statute of
limitations for any Tax filings by Seller, Seller and Buyer agree that Seller
and/or its independent auditors shall have reasonable access during normal
business hours, provided such access shall not interfere with the normal
operations of the Business, to the Books and Records applicable to the period
the Business was directly or indirectly owned by Seller and have the reasonable
assistance and cooperation of the appropriate personnel of Buyer in the review
of such Books and Records consistent with assistance and cooperation furnished
during the period the Business was directly or indirectly owned by Seller.
9.2 Transfer Taxes. Buyer shall pay any and all transfer, documentary,
---------------
stamp, excise or similar Taxes (including, without limitation, any real estate
transfer or value-added Taxes) incurred in connection with the transactions
contemplated by this Agreement, whether such Taxes are imposed on Buyer, Buyer's
Affiliates, Seller, or Seller's Affiliates.
9.3 Further Actions. Subject to the terms and conditions of this Agreement,
---------------
from and after the Closing, each of the parties hereto will use their reasonable
best efforts to take, or cause to be taken, all action, and to do, or cause to
be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement.
9.4 Subsequent Access. Following the Closing, Buyer shall provide Seller
-----------------
and its representatives and accountants reasonable access to personnel and
records of Buyer relating to the Business to the extent Seller reasonably
requests such access, provided such access shall not unreasonably interfere with
the normal operations of the Business.
9.5 Payment of Remainder of Stay Bonuses. Within 90 days following the
------------------------------------
Closing, Buyer shall pay to each Eligible Participant the remaining 67% of his
or her Stay Bonus described in Schedule 5.3(d).
9.6 Confidentiality. After the Closing Date, the following provisions of
---------------
this Section 9.6 will govern the confidentiality obligations between the
parties.
(a) By Seller. Seller and its Affiliates will not disclose any information
---------
which is confidential, proprietary or otherwise not publicly available
("Confidential Information") about (i) the Business, or (ii) Buyer and its
------------------------
Affiliates obtained while in the performance of this Agreement for a period of
three (3) years following the Closing Date.
(b) By Buyer. Buyer and its Affiliates will not disclose any Confidential
--------
Information about Seller and its Affiliates obtained in the performance of the
Agreement (other than with respect to the Business) for a period of three (3)
years following the Closing Date.
(c) Exceptions. The obligations provided for in this Section 9.6 will not
-----------
apply to information which: (i) can be reasonably shown to have been in the
possession of the party receiving the information as of the date of receipt;
(ii) is disclosed to the receiving party by a third party which has a legal
right to make such disclosure; (iii) was in the public domain or
30
generally available as of the date of disclosure through no fault of the
receiving party or; (iv) which is required by law to be disclosed; or (v) with
respect to Seller, relates to ▇▇▇▇▇▇ ▇▇▇▇ or the Business and is legally
required to be disclosed in the Form S-3 (or amendments thereto).
9.7 Buyer's Financing.
-----------------
(a) Seller will use its reasonable best efforts to cause its accountants,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, to issue its consent to be filed as an exhibit to the
resale registration statement on the applicable form to be filed with the
Securities and Exchange Commission relating to the securities offered pursuant
to the Rule 144A Offering (the "SEC Form").
--------
(b) Seller will provide Buyer and its representatives and accountants
reasonable access to the personnel and records of Seller for information about
▇▇▇▇▇▇ ▇▇▇▇ and the Business legally required to be disclosed in the SEC Form
(or amendments thereto).
9.8 Nonsolicitation. Between the Closing Date and the date 18 months from
---------------
the date of the Closing Date, Seller shall not without the prior consent of
Buyer (a) induce or attempt to induce any employee of the Business on the date
hereof to leave the employ of the Business or (b) hire any person who was an
employee of the Business on the date hereof, unless such person's employment was
terminated by ▇▇▇▇▇▇ ▇▇▇▇ or the Buyer for any reason after the Closing Date.
The foregoing provisions do not apply to the ability of a ▇▇▇▇▇▇ Co. division
(other than ▇▇▇▇▇▇ ▇▇▇▇) to employ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
9.9 Nonsolicitation. Between the Closing Date and the date 18 months from
---------------
the date of the Closing Date, Seller shall not without the prior consent of
Buyer (a) induce or attempt to induce any employee of the Business on the date
hereof to leave the employ of the Business or (b) hire any person who was an
employee of the Business on the date hereof, unless such person's employment was
terminated by ▇▇▇▇▇▇ ▇▇▇▇ or the Buyer for any reason after the Closing Date.
The foregoing provisions do not apply to the ability of a ▇▇▇▇▇▇ Co. division
(other than ▇▇▇▇▇▇ ▇▇▇▇) to employ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
ARTICLE X
MISCELLANEOUS
10.1 Termination.
-----------
(a) General. This Agreement may be terminated and the transactions
-------
contemplated hereby may be abandoned at any time, but not later than the Closing
Date:
(i) by mutual written consent of Buyer and Seller;
(ii) subject to Section 10.1 (a)(iii), by Seller on or
after the date 61 days (but no later than 89 days) after the date
of this Agreement, if on such date (1) the conditions precedent to
the obligations of Buyer set forth in Sections 5.1 and 5.2 (other
than the condition precedent set forth in Section 5.1 (e))
("Buyer's Condition") shall have been satisfied, and (2) Buyer is
-----------------
unable to pay the Purchase Price; provided that Seller has given
Buyer 14 days' written notice that Buyer's Conditions have been
satisfied or will be satisfied by the date 14 days from the date of
such notice.
(iii) by Seller or Buyer the date that is 90 days after the
date of this Agreement, through no fault of the party seeking to
terminate, the Closing shall not have occurred; or
(iv) by Seller or Buyer, upon written notice to the other
party, if any Governmental Authority of competent jurisdiction
shall have issued an injunction, order or decree enjoining or
otherwise prohibiting the consummation of the transactions
contemplated by this Agreement, and such injunction, order or
decree shall have
31
become final and non-appealable; provided, however, that the party
seeking to terminate this Agreement pursuant to this clause (iv)
has used its reasonable best efforts to remove such injunction,
order or decree.
(b) Procedure Upon Termination. In the event of the termination and
--------------------------
abandonment of this Agreement, written notice thereof shall promptly be given to
the other party hereto and this Agreement shall terminate (subject to Section
10.1(c)) and the transactions contemplated hereby shall be abandoned without
further action by any of the parties hereto.
(c) Survival of Certain Provision. The respective obligations of the
-----------------------------
parties hereto pursuant to Sections 9.6, 10.2, 10.3 and 10. 11 shall survive any
termination of this Agreement.
10.2 Fees and Expenses.
-----------------
(a) Whether or not the transactions contemplated hereby are consummated,
each of the parties hereto shall pay its own fees and expenses incident to the
negotiation, preparation and execution of this Agreement, including attorneys',
accountants' and other advisors' fees; provided, however, that Buyer shall be
responsible for the audit fees of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP incurred in connection
with this transaction (including, without limitation, any fees charged by ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP in connection with the audit performed in contemplation of the Rule
144A Offering, the comfort letter to be issued pursuant to Section 4.9(c) of
this Agreement and the audit to be performed pursuant to Section 1.3(b)).
(b) Notwithstanding the generality of Section 10.2(a), in the event Seller
terminates this Agreement in accordance with Section 10.1(a)(ii), Buyer will
pay Seller, at the open of business on the day immediately after termination, a
termination fee of $6,000,000 by wire transfer in immediately available funds
pursuant to written instructions provided by Seller. Buyer and Seller agree that
such payment will constitute complete, reasonable and adequate payment of
liquidated damages and will not constitute a penalty or forfeiture, because at
the time of execution of this Agreement, the determination of the actual damages
to Seller resulting from the actions requiring the payment of such liquidated
damages would be impracticable or extremely difficult to ascertain.
10.3 Notices. All notices, requests, demands, waivers and other
-------
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered personally
or by overnight courier with delivery charges prepaid, or sent by telecopy, as
follows:
(a) if to Seller
▇▇▇▇▇▇ Co.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
32
with copies to:
▇▇▇▇▇▇ Co.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Home
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Buyer
Pen-Tab Holdings, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Citicorp Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person or address as either party shall specify by notice
in writing to the other party. All such notices, requests, demands, waivers and
communications shall be deemed to have been received on the date of delivery.
10.4 Entire Agreement. This Agreement (including the Exhibits and
----------------
Schedules, which are hereby fully incorporated into this Agreement), together
with the Ancillary Agreements and the Confidentiality Agreement, constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings, oral and written,
between the parties hereto with respect to the subject matter hereof.
10.5 Binding Effect; Benefit. This Agreement shall inure to the benefit of
-----------------------
and be binding upon the parties hereto and their respective successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
confer on any person other than the parties hereto or their respective
successors and assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.
33
10.6 Assignability. This Agreement shall be binding upon and inure to the
-------------
benefit of the parties hereto and their respective successors and assigns and
shall not be assigned by either of the parties hereto without the prior written
consent of the other party, except under the following conditions: (i) Seller
may, at its election, assign this Agreement and its rights, interests and
obligations hereunder to one or more of its Affiliates without the prior written
approval of Buyer, in which case Seller will continue to be liable for the
performance of its obligations under this Agreement; and (ii) Buyer may, at its
election, assign this Agreement and its rights, interests and obligations
hereunder to (A) one or more of its Affiliates, (B) to a subsequent purchaser of
the Business, or (C) to Buyer's lenders for collateral purposes without the
prior written approval of Seller, in which case Buyer will continue to be liable
for the performance of its obligations under this Agreement.
10.7 Amendment and Modification; Waiver. Subject to applicable law, this
----------------------------------
Agreement and any Schedule or Exhibit attached hereto may be amended, modified
and supplemented by a written instrument expressly identified as an amendment
hereto authorized and executed on behalf of Buyer and Seller at any time prior
to the Closing Date with respect to any of the terms contained herein. No waiver
by any party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and executed by the party so waiving. The waiver
by any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any other or subsequent breach. No
failure on the part of either party hereto to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof. The remedies
herein are cumulative and not exclusive of any remedies provided by law.
10.8 Public Announcements. Unless otherwise required by law, prior to the
--------------------
Closing Date, no news release or other public announcement pertaining to the
transactions contemplated by this Agreement will be made by or on behalf, of any
party without the prior approval of the other party.
10.9 Interpretation.
(a) Any reference to any Federal, state or local statute or law will be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise. When a reference is made in this Agreement to an
Article, Section, Schedule or Exhibit, such reference is to an Article, Section,
Schedule or Exhibit of this Agreement, unless otherwise indicated. The table of
contents contained in this Agreement is for reference purposes only and will not
affect in any way the meaning or interpretation of this Agreement. Whenever the
words "include," "includes" or "including" are used in this Agreement, they will
be understood be followed by the words "without limitation." Words (including
defined terms) in the singular will be held to include the plural and vice versa
words of one gender will be held to include the other genders as the context
requires.
(b) Any disclosure which should, based on the description included in a
particular Schedule, be applicable to another Schedule to this Agreement shall
be deemed to be made with respect to such other Schedule regardless of whether
or not a specific cross reference is made thereto. Certain information set forth
in the Schedules is included solely for informational purposes and may not be
required to be disclosed pursuant to this Agreement. The disclosure of any
information in the Schedules shall not be deemed to constitute an acknowledgment
that such information is required to be disclosed in connection with the
representations and
34
warranties made by Seller in this Agreement or that it is material, nor
shall such information be deemed to establish a standard of materiality.
10.10 Counterparts. This Agreement may be executed in any number of
------------
Counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
10.11 Applicable Law. This Agreement and the legal relations between the
--------------
parties hereto shall be governed by and construed in accordance with the laws of
the State of Illinois without regard to conflict of laws principles thereof,
except that the Federal Arbitration Act, 9 U.S.C. Sections 1-16 will govern all
questions relating to the arbitrability of any claim or dispute in connection
with Section 1.3, and to the enforcement of the arbitration provisions contained
in Section 1.3. All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined in any Illinois state or Federal court
sifting in the Northern District of Illinois, and the parties hereby consent to
the jurisdiction of such courts in any such action or proceeding.
10.12 Severability of Provisions. Any provision of this Agreement that is
--------------------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent and only for the duration of such prohibition or
enforceability without invalidating the remaining provisions hereof or affecting
the validity or enforceability of such provisions in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
10.13. Time is of the Essence. Each of the parties agrees that time is of
----------------------
the essence with respect to every date, every action and every delivery set
forth herein.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
35
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
▇▇▇▇▇▇ CO.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
PEN-TAB HOLDINGS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: CEO
36
Defined Terms List
------------------
1998 Balance Sheet ......................................... 7
Accountants ................................................ 2
Adjusted Purchase Price .................................... 1
Affiliate .................................................. 4
Affiliated Group ........................................... 7
Agreement .................................................. 1
Ancillary Agreements ....................................... 22
Books and Records .......................................... 7
Business ................................................... 1
Business Contract .......................................... 10
Buyer ...................................................... 1
Buyer's Condition .......................................... 31
Buyer's Letter ............................................. 2
CERCLA ..................................................... 13
Closing .................................................... 5
Closing Date ............................................... 5
Closing Net Working Capital ................................ 1
Code ....................................................... 7
Collective Bargaining Agreement ............................ 10
Commitment Letters ......................................... 16
Company Transaction ........................................ 19
Confidential Information ................................... 30
Confidentiality Agreement .................................. 17
Consolidated Tax Returns ................................... 24
CPR ........................................................ 3
Damages .................................................... 28
Dispute .................................................... 2
Eligible Participant ....................................... 23
Employee ................................................... 27
Encumbrances ............................................... 14
Environmental Law .......................................... 13
Environmental Permits ...................................... 13
Environmental Statutes ..................................... 13
Final Closing Statement .................................... 2
Financial Statements ....................................... 7
GAAP ....................................................... 7
Governmental Authority ..................................... 7
Hazardous Substance ........................................ 13
HSR Act .................................................... 18
Income Taxes ............................................... 24
Indemnified Party .......................................... 28
Indemnifying Party ......................................... 28
Intellectual Property ...................................... 11
Intercompany Accounts....................................... 4
Kansas City Lease .......................................... 20
37
Law ........................................................ 7
Leased Property ............................................ 14
Leases ..................................................... 14
Liens ...................................................... 20
Material Adverse Effect .................................... 6
Net Intercompany Debt ...................................... 5
Net Working Capital ........................................ 1
Panel ...................................................... 3
Peg Net Working Capital .................................... 1
Peg Statement .............................................. 1
Permitted Liens ............................................ 9
Preliminary Closing Statement .............................. 2
Release .................................................... 13
Required Environmental Permits ............................. 12
Rule 144A Offering ......................................... 20
SEC Form ................................................... 31
Section 338(h)(10) Election ................................ 25
Seller ..................................................... 1
Seller's Knowledge ......................................... 7
Seller's Letter ............................................ 2
Seller's Refunds ........................................... 24
Stay Bonus ................................................. 23
Stock ...................................................... 1
Stock Purchase Price ....................................... 1
Straddle Period ............................................ ▇▇
▇▇▇▇▇▇ ▇▇▇▇ ................................................ 1
Subleases .................................................. 14
Tax Matters ................................................ 26
Tax Returns ................................................ 9
Taxes ...................................................... 9
Transaction Agreements ..................................... 6
38