EXHIBIT 99.1
PURCHASE AGREEMENT
BY AND AMONG
RAYOVAC CORPORATION,
REMINGTON PRODUCTS COMPANY, L.L.C.,
VESTAR EQUITY PARTNERS, L.P.,
INVESTORS/RP, L.L.C.
AND
RPI CORP.
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS; INTERPRETATION.............................................................................1
Section 1.1 Definitions............................................................................1
Section 1.2 Interpretation.........................................................................7
ARTICLE II PURCHASE AND SALE; CLOSING.............................................................................7
Section 2.1 Purchase and Sale......................................................................7
Section 2.2 Purchase Price.........................................................................7
Section 2.3 The Closing............................................................................7
Section 2.4 Payment of the Purchase Price; Closing Deliverables....................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS........................................................10
Section 3.1 Organization, Corporate Power and Authorization.......................................10
Section 3.2 Binding Effect; Noncontravention......................................................10
Section 3.3 Ownership of Securities...............................................................10
Section 3.4 ▇▇▇▇▇▇ and Razor Capitalization; Subsidiaries.........................................11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................................12
Section 4.1 Organization, Qualification, and Corporate Power......................................12
Section 4.2 Approvals and Consents................................................................12
Section 4.3 Capitalization; Subsidiaries..........................................................12
Section 4.4 Financial Statements..................................................................13
Section 4.5 Events Subsequent to the Most Recent Balance Sheet....................................14
Section 4.6 Absence of Undisclosed Liabilities....................................................14
Section 4.7 Title to Assets; Adequacy.............................................................14
Section 4.8 Compliance With Laws..................................................................14
Section 4.9 Tax Matters...........................................................................14
Section 4.10 Environmental Matters.................................................................15
Section 4.11 Intellectual Property.................................................................16
Section 4.12 Real Estate...........................................................................16
Section 4.13 Litigation............................................................................16
Section 4.14 Employee Benefits.....................................................................16
Section 4.15 Contracts.............................................................................17
Section 4.16 Defective Products....................................................................18
Section 4.17 Major Customers.......................................................................18
Section 4.18 Major Suppliers.......................................................................18
Section 4.19 Labor Relations.......................................................................18
Section 4.20 Affiliate Transactions................................................................19
Section 4.21 Insurance.............................................................................19
Section 4.22 Corporate Records.....................................................................19
Section 4.23 Brokerage.............................................................................19
Section 4.24 NO ADDITIONAL REPRESENTATIONS.........................................................19
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER........................................................20
Section 5.1 Organization, Corporate Power and Authorization.......................................20
Section 5.2 Binding Effect and Noncontravention...................................................20
Section 5.3 Brokerage.............................................................................21
Section 5.4 Financial Ability.....................................................................21
Section 5.5 No Litigation.........................................................................21
Section 5.6 Investment............................................................................21
Section 5.7 Acknowledgement by the Purchaser......................................................21
ARTICLE VI COVENANTS.............................................................................................22
Section 6.1 Reasonable Best Efforts...............................................................22
Section 6.2 Conduct of Business...................................................................23
Section 6.3 Access................................................................................24
Section 6.4 No Solicitation.......................................................................25
Section 6.5 Books and Records.....................................................................25
Section 6.6 Director and Officer Liabilities and Indemnification..................................25
Section 6.7 No Transfers..........................................................................26
Section 6.8 Trademark and Trade Name Release......................................................26
Section 6.9 Releases..............................................................................26
Section 6.10 Payment of Intercompany Transactions..................................................27
Section 6.11 No Interference; Nondisclosure........................................................27
Section 6.12 Employee Matters......................................................................28
Section 6.13 Public Announcements..................................................................29
Section 6.14 Litigation Support....................................................................29
Section 6.15 Tax Procedures........................................................................30
Section 6.16 Phantom Equity Disbursement Account...................................................31
Section 6.17 Financial Statements..................................................................31
Section 6.18 Commitment............................................................................31
ARTICLE VII CONDITIONS TO THE CLOSING............................................................................32
Section 7.1 Conditions of the Purchaser's Obligation..............................................32
Section 7.2 Conditions of the Sellers' Obligation.................................................33
ARTICLE VIII TERMINATION.........................................................................................33
Section 8.1 Termination...........................................................................33
Section 8.2 Effect of Termination.................................................................34
ARTICLE IX MISCELLANEOUS.........................................................................................34
Section 9.1 Non-Survival of Representations, Warranties, Covenants and Agreement..................34
Section 9.2 Remedies..............................................................................34
Section 9.3 Confidentiality.......................................................................35
Section 9.4 Consent to Amendments.................................................................35
Section 9.5 Entire Agreement......................................................................35
Section 9.6 Successors and Assigns................................................................35
Section 9.7 Governing Law; Consent to Jurisdiction; Venue; Waiver of Jury Trial...................35
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Section 9.8 Notices...............................................................................36
Section 9.9 Exhibits..............................................................................38
Section 9.10 Counterparts..........................................................................38
Section 9.11 Time is of the Essence................................................................38
Section 9.12 No Third-Party Beneficiaries..........................................................38
Section 9.13 Headings..............................................................................38
Section 9.14 Transaction Expenses; Transfer Taxes..................................................38
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PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "Agreement") is made as of August 21,
2003, by and among Rayovac Corporation, a Wisconsin corporation (the
"Purchaser"), Remington Products Company, L.L.C., a Delaware limited liability
company (the "Company"), Vestar Equity Partners, L.P., a Delaware limited
partnership ("Vestar"), Investors/RP, L.L.C., a Delaware limited liability
company ("IRP") and RPI Corp., a Delaware corporation ("RPI"), and together with
Vestar and IRP, the "Sellers") and solely for the purposes of Section 6.9 and
Section 6.10 hereof, Vestar ▇▇▇▇▇▇ Corp. ("▇▇▇▇▇▇") and Vestar Razor Corp.
("Razor"). The Purchaser, the Sellers and the Company are each sometimes
referred to herein as a "Party" and, collectively, as the "Parties". Capitalized
terms which are used but not otherwise defined herein are defined in Section 1.1
below.
WHEREAS, as of the date hereof, RPI, ▇▇▇▇▇▇ and Razor collectively own
100% of the issued and outstanding Membership Interests of the Company (the
"Company Interests");
WHEREAS, as of the date hereof, Vestar owns 100% of the issued and
outstanding capital stock of each of ▇▇▇▇▇▇ and Razor (collectively, the
"Shares");
WHEREAS, as of the date hereof, IRP owns 10.26% of ▇▇▇▇▇▇'▇ and Razor's
Economic Interests in the Company;
WHEREAS, the Parties desire to enter into this Agreement pursuant to
which RPI, Vestar and IRP each agrees to sell to the Purchaser and the Purchaser
agrees to purchase: all of the RPI Company Interests (as defined below) from
RPI, all of the Shares from Vestar and all of the IRP Economic Interests from
IRP;
NOW, THEREFORE, in consideration of the premises and the mutual
promises made herein, and in consideration of the representations, warranties,
and covenants herein contained, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
SECTION 1.1 DEFINITIONS. For the purposes of this Agreement, the
following terms have the meanings set forth below:
"Affiliate" means, with respect to any Person, any other Person who
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
"controlled" and "controlling" have meanings correlative thereto.
"Aggregate Phantom Equity Payment" means the amount necessary to
satisfy the obligations pursuant to all agreements under the Phantom Equity
Program other than the SP Agreements.
"Assignment Agreement" means the Instrument of Assignment and Transfer,
dated as of May 23, 1996, by and among the Company, ▇▇▇▇▇▇, Razor and IRP.
"Business" means the business of the Company and its Subsidiaries, as
conducted on the date of this Agreement.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York, or is a day on
which banking institutions located in such state or in the city of New York are
authorized or required by law or other governmental action to close.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Units" has the meaning set forth in the LLC Agreement.
"Company Contracts" has the meaning set forth in Section 4.15.
"Contract" shall mean any written agreement, contract, obligation,
promise, or undertaking.
"Confidentiality Agreement" has the meaning set forth in Section 6.3.
"Credit Agreement" mean the Credit and Guarantee Agreement, dated
August 21, 2001, among the Company, certain of its Subsidiaries, various lending
institutions, Fleet Capital Corporation, as Administrative Agent, and Congress
Financial Corporation, as Co-arranger, as amended, restated or modified from
time to time.
"Defaulting Party" has the meaning set forth in Section 8.2.
"Disclosure Letter" means the letter delivered by the Sellers to the
Purchaser on the date of this Agreement which sets forth (i) the exceptions to
the Sellers' representations and warranties in Articles III and IV hereof and
(ii) other information required by this Agreement.
"Disposal" has the meaning set forth in the Solid Waste Disposal Act.
"Economic Interest" shall have the meaning set forth in the LLC
Agreement.
"Employee Benefit Plan" means each "employee benefit plan" (as such
term is defined in ERISA Section 3(3)) and each other material employee benefit
plan, program or arrangement maintained by the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries contributes or
under which they have any material liability.
"Environmental Laws" means all federal, state, and local statutes,
regulations, ordinances and judicial or administrative orders concerning the
pollution or protection of the environment, including without limitation the
Clean Air Act, the Clean Water Act, the Solid Waste Disposal Act, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, the Federal Insecticide, Fungicide and
Rodenticide
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Act, the Occupational Safety and Health Act, and the Emergency Planning and
Community Right-to-Know Act of 1986.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time.
"Government Entity" means any federal, state, local or foreign
government or any court, administrative agency or commission or other
governmental authority or agency, domestic or foreign.
"Hazardous Substance" means any waste, pollutant, contaminant,
hazardous or toxic substance, petroleum, petroleum-based or petroleum-derived
substance or waste or asbestos-containing material with respect to which
liability or standards of conduct are imposed, or which are regulated, pursuant
to any Environmental Laws.
"High-Yield Debt" means the Company's 11% Senior Subordinated Notes due
2006.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the regulations promulgated thereunder.
"Indebtedness" of any Person at any date means without duplication (a)
all indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services which, in accordance with GAAP, would be required
to be shown as a liability on the face of a balance sheet of such Person on such
date (other than trade liabilities and accrued expenses and liabilities, in each
case to the extent incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of such Person
which is evidenced by a note, bond, debenture or similar instrument, (c) all
obligations of such Person under capitalized lease obligations, and (d) any
obligation of the type described in clauses (a) - (c) above of another Person
for which such Person has or many become liable pursuant to a guarantee of
payment or performance.
"Intellectual Property" has the meaning set forth in Section 4.11.
"IRP Economic Interests" means the Economic Interests owned by IRP
pursuant to the Assignment Agreement.
"IRS" means the United States Internal Revenue Service.
"Knowledge" means, (i) with respect to the Company, the actual
knowledge of ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (ii) with respect
to any Seller, the actual knowledge of any executive officer (or similar
position) of such Seller, and (ii) with respect to the Purchaser, the actual
knowledge of any executive officer of the Purchaser.
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"Laws" means all laws, ordinances, final rules and regulations, or
orders of all Government Entities.
"Leases" has the meaning set forth in Section 4.12(b).
"Legal Requirement" means any requirement arising under any action,
law, treaty, rule or regulation, determination or direction of an arbitrator or
Government Entity, including any Environmental Law.
"Liability" or "Liabilities" means any and all debts, liabilities and
obligations of any nature whatsoever, whether accrued or fixed, absolute or
contingent, mature or unmatured or determined or indeterminable.
"Liens" shall mean, with respect to any asset or security, any
mortgage, pledge, option, lien, security interest, proxy, voting trust or
agreement, charge, claim, encroachment, defects of title, right of first
refusal, easements, encumbrance or restriction of any kind or nature, including
any restriction on use or transfer.
"Litigation" has the meaning set forth in Section 4.13.
"LLC Agreement" means the Amended and Restated Limited Liability
Company Agreement of the Company dated as of May 16, 1996, as amended.
"Losses" means, with respect to any Person, any liabilities, costs,
damages, deficiencies, penalties, fines or other losses or expenses, including
attorney's fees and expenses, whether or not arising out of a third party claim,
against or affecting such Person, other than lost profits or consequential
damages.
"Material Adverse Effect" means a material adverse effect on the
Business, properties, assets, liabilities, results of operations or financial
condition of the Company and its Subsidiaries, taken as a whole, but excluding
any effect resulting from or relating to (i) general economic conditions or
general effects on the industry in which the Business is primarily engaged
(including as a result of (a) an outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war, or (b) the occurrence of any other calamity or crisis or any
change in financial, political or economic conditions in the United States or
elsewhere), (ii) resulting from the public announcement of the transactions
contemplated by this Agreement or (iii) relating to or resulting from action
taken by Purchaser or any of its Affiliates or representatives.
"Membership Interests" has the meaning set forth in the LLC Agreement
and includes, without limitation, Common Units and Preferred Capital.
"Most Recent Balance Sheet" means the unaudited consolidated balance
sheet of the Company and its Subsidiaries as of July 26, 2003 set forth in
Section 4.4 of the Disclosure Letter.
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"Net Purchase Price" means the Purchase Price minus the Aggregate
Phantom Equity Payment.
"Owned Real Property" has the meaning set forth in Section 4.12(a).
"Permitted Liens" means (i) liens for taxes or assessments and similar
charges, which either (a) are not delinquent or (b) are being contested in good
faith and by appropriate proceedings, and for which adequate reserves (as
determined in accordance with GAAP, consistently applied) have been established
on the Company's or its Subsidiaries' books with respect thereto, (ii)
mechanics', materialmen's or contractors' liens or encumbrances or any similar
statutory lien or restriction for amounts not yet due or payable or for which
adequate reserves (as determined in accordance with GAAP, consistently applied)
have been established on the Company or its Subsidiaries books with respect
thereto, (iii) zoning, entitlement, building and other land use regulations
imposed by governmental agencies having jurisdiction over the real property
which are not violated by the current use and operation of the real property,
(iv) covenants, conditions, restrictions, easements and other similar matters of
record affecting title to the real property which do not materially impair the
occupancy or use, value or marketability of the owned real property which they
encumber for the purposes for which it is currently used in connection with the
Business, and (v) Liens outstanding under the Credit Agreement that will be
extinguished at such time as the Purchaser refinances the Credit Agreement.
"Person" means an individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization or a Government Entity.
"Phantom Equity Disbursement Account" means an account to be created
and maintained by the Company to disburse the Aggregate Phantom Equity Payment
to each Phantom Equity Participant (such account shall be specified in writing
to the Purchaser not less than three (3) Business Days prior to the Closing
Date).
"Phantom Equity Participant" means any Person entitled to any payment
under the Phantom Equity Program as of the Closing Date.
"Phantom Equity Program" means, collectively, all Time Based Phantom
Equity Agreements, Performance Based Phantom Equity Agreements and Super
Performance Based Phantom Equity Agreements in effect from time to time between
the Company and its or its Subsidiaries' employees and certain of their
respective directors including all Offer to Compromise, Settlement and Release
Agreements in which payments under these programs have been deferred.
"Preferred Capital" has the meaning set forth in the LLC Agreement.
"Purchase Price" has the meaning set forth in Section 2.2.
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"Purchaser Disclosure Letter" means the letter delivered by the
Purchaser to the Seller on the date of this Agreement setting forth the
exceptions to the Purchaser's representations and warranties in Article V
hereof.
"Purchaser Material Adverse Effect" means a material adverse effect on
the business, properties, liabilities, results of operations or financial
condition of the Purchaser and its Subsidiaries, taken as a whole.
"Returns" has the meaning set forth in Section 4.9(a).
"RPI Company Interests" means all Company Interests owned by RPI, as
set forth in Section 2.4 of the Disclosure Letter.
"RPI Services Agreement" means the Consulting and Transitional Services
Agreement, dated as of May 23, 1996 between RPI and the Company.
"Sale" means the purchase by the Purchaser from the Sellers of the
Securities in accordance with the terms and conditions set forth in this
Agreement.
"SEC" means the United States Securities and Exchange Commission.
"Securities" means the Shares, the IRP Economic Interests, and the RPI
Company Interests, collectively.
"Securities Act" means the Securities Act of 1933, as amended.
"SP Agreement" has the meaning given thereto in Section 6.2.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a limited liability company (with voting securities)
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a limited liability company (without
voting securities), partnership, association or other business entity, a
majority of the partnership or other similar ownership interest thereof is at
the time owned or controlled, directly or indirectly, by any Person or one or
more Subsidiaries of that Person or a combination thereof. For purposes hereof,
a Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or control any managing director or general partner of such limited
liability company, partnership, association or other business entity.
"Tax Distribution" means a distribution made pursuant to Section 5.5 of
the LLC Agreement to any current or former holder of a Membership Interest with
respect to income of the Company that has been or will be allocated to such
Person prior to or subsequent to the
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Closing and is accrued consistent with past practice on the Financial Statements
for the period from January 1, 2003 through the Closing Date.
"Taxes" means any and all taxes, charges, fees, levies or other
assessments, including, without limitation, income, excise, real or personal
property, sales, use, service, customs, duties and charges value added, license,
net worth, transfer and recording taxes, gross receipts, fees and charges,
imposed by the IRS or any other taxing authority or any Government Entity; and
such term shall include any interest, penalties or additional amounts
attributable to, or imposed upon, or with respect to, any such taxes, charges,
fees, levies or other assessments.
"Vestar Management Agreement" means the Management Agreement, dated May
23, 1996 between Vestar Capital Partners and the Company.
SECTION 1.2 INTERPRETATION. Unless otherwise indicated to the contrary
herein by the context or use thereof (i) the words, "herein," "hereto," "hereof"
and words of similar import refer to this Agreement as a whole and not to any
particular Section or paragraph hereof, (ii) the word "including" means
"including, but not limited to", (iii) words importing the singular will also
include the plural, and vice versa, and (iv) any reference to any federal,
state, local, or foreign statute or law will be deemed also to refer to all
rules and regulations promulgated thereunder. References to $ will be references
to United States Dollars, and with respect to any contract, obligation,
liability, claim or document that is contemplated by this Agreement but
denominated in currency other than United States Dollars, the amounts described
in such contract, obligation, liability, claim or document will be deemed to be
converted into United States Dollars for purposes of this Agreement as of the
applicable date of determination. Any numeric reference or dollar threshold
contained in this Agreement for disclosure or other purposes shall not be deemed
to be an indicia of materiality with respect to such matter or any other matter
for purposes of this Agreement.
ARTICLE II
PURCHASE AND SALE; CLOSING
SECTION 2.1 PURCHASE AND SALE. At the Closing, subject to the terms and
conditions set forth in Article VII below, the Purchaser shall purchase from the
Sellers, and each Seller shall, severally and not jointly, sell, convey, assign,
transfer, and deliver to the Purchaser, all of the Securities owned by it to the
Purchaser hereunder, free and clear of any Liens, other than restrictions on
transfer arising under the Securities Act and state or foreign securities laws.
SECTION 2.2 PURCHASE PRICE. The aggregate cash purchase price (the
"Purchase Price") to be paid by the Purchaser for the Securities shall equal
$165,000,000, payable as described in Section 2.4 below.
SECTION 2.3 THE CLOSING. Subject to Section 8.1 below, the closing of
the Sale and the transactions relating thereto (collectively, the "Closing")
shall take place at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ (or at such other location as the Parties may agree), commencing
at 10:00 a.m. local time on September 30, 2003; or, if later, the second (2nd)
Business Day following the satisfaction or waiver of all conditions (specified
in
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Section 7.1 and Section 7.2 hereof) to the obligations of the Parties to
consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective Parties shall take at the Closing itself). The
date and time of the Closing are referred to as the "Closing Date."
SECTION 2.4 PAYMENT OF THE PURCHASE PRICE; CLOSING DELIVERABLES. At the
Closing, subject to the satisfaction or waiver of each of the conditions
specified in Section 7.1 and Section 7.2, as applicable:
(a) The Purchaser shall deliver or cause to be delivered
to the Sellers:
(i) the Net Purchase Price (in the respective
amounts to each Seller as set forth on Section 2.4(a)(i) of the
Disclosure Letter), by wire transfer of immediately available funds, to
accounts designated by the Sellers and delivered to the Purchaser not
less than three (3) Business Days prior to the Closing Date;
(ii) a copy of resolutions of the board of
directors of the Purchaser authorizing the execution, delivery and
performance of this Agreement and all related documents and agreements,
each certified by the Secretary of the Purchaser as being true and
correct copies of the originals which have not been modified or amended
and which are in effect at the Closing;
(iii) a certificate of the Secretary of the
Purchaser certifying as of the Closing as to the incumbency of the
officers of the Purchaser and as to the signatures of such officers who
have executed documents delivered at the Closing on behalf of the
Purchaser;
(iv) a certificate, dated within five days of the
Closing, of the Secretary of State of Wisconsin establishing that the
Purchaser is in existence and otherwise is in good standing to transact
business;
(v) a certificate of an authorized officer of
the Purchaser certifying as of the Closing as to the fulfillment of the
conditions set forth in Section 7.2(a) hereof;
(vi) such other documents and instruments
necessary to transfer the Securities as contemplated hereby as the
Sellers may reasonably request.
(b) The Purchaser shall deposit to the Phantom Equity
Disbursement Account (for the exclusive and ratable benefit of each Phantom
Equity Participant) the Aggregate Phantom Equity Payment (the Company will
notify the Purchaser of the exact amount of the Aggregate Phantom Equity Payment
not less than three (3) Business Days prior to the Closing) by wire transfer of
immediately available funds.
(c) Vestar shall deliver to the Purchaser (i) all of the
stock certificates representing the Shares, endorsed in blank or accompanied by
duly executed assignment documents; provided, however, that if any stock
certificate representing Shares has been lost, stolen, or destroyed, in lieu of
delivering such stock certificate, Vestar may deliver an affidavit of
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that fact in form and substance reasonably acceptable to the Purchaser, and (ii)
evidence reasonably satisfactory to the Purchaser that the Assignment Agreement
has been terminated and any and all obligations of ▇▇▇▇▇▇ and Razor thereunder
have been satisfied or waived.
(d) RPI shall deliver to Purchaser all right, title and
interest in and to the RPI Company Interests, as evidenced by the Assignment and
Assumption of Limited Liability Company Interest in the form of Exhibit A
hereto.
(e) The Company will deliver or cause to be delivered to
the Purchaser:
(i) a copy of resolutions of the management
committee of the Company, authorizing the execution, delivery and
performance of this Agreement and all related documents and agreements,
certified by the Secretary of the Company, as being true and correct
copies of the originals which have not been modified or amended and
which are in effect at the Closing;
(ii) a certificate of the Secretary of the
Company certifying as of the Closing as to the incumbency of the
officers of the Company and as to the signatures of such officers who
have executed documents delivered at the Closing on behalf of the
Company;
(iii) certificates, dated within five days of the
Closing, of the Secretary of State of Delaware establishing that the
Company is in existence and otherwise is in good standing to transact
business;
(iv) resignations, to be effective as of the
Closing, of the directors of Razor and ▇▇▇▇▇▇ and each of the Company's
Subsidiaries which are corporations and resignations of each of the
members of the Management Committee of the Company and the managers of
each of the Company's Subsidiaries which are limited liability
companies;
(v) a certificate of an authorized officer of
the Company certifying as of the Closing as to the fulfillment of the
conditions set forth in Section 7.1(a) hereof;
(vi) evidence reasonably satisfactory to the
Purchaser that each agreement set forth in Section 2.4(e)(vi) of the
Disclosure Letter (which includes all agreements under the Phantom
Equity Program in existence on the date hereof other than the SP
Agreements) has been terminated and any and all obligations of the
Company and any of its Subsidiaries thereunder have been satisfied or
waived (or in the case of any obligations of the Company under the
Phantom Equity Program (other than obligations under any SP Agreement)
will be satisfied upon receipt by each Phantom Equity Participant of
his or her respective share of the Aggregate Phantom Equity Payment);
and
(vii) such other documents and instruments
necessary to transfer the Securities as contemplated hereby as the
Purchaser may reasonably request.
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(f) IRP shall deliver to Purchaser all right,
title and interest in and to the IRP Economic Interests, as evidenced
by the Instrument of Assignment and Transfer in the form of Exhibit B
attached hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
As a material inducement to the Purchaser to enter into this Agreement
and to purchase the Securities, each Seller hereby severally, and not jointly,
represents and warrants as of the date of this Agreement as follows:
SECTION 3.1 ORGANIZATION, CORPORATE POWER AND AUTHORIZATION. Such
Seller is validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, as applicable, and has the
requisite power and authority necessary to enter into, deliver and perform its
obligations pursuant to this Agreement. Such Seller's execution, delivery and
performance of this Agreement has been duly authorized by such Seller.
SECTION 3.2 BINDING EFFECT; NONCONTRAVENTION.
(a) This Agreement has been duly executed and delivered
by such Seller. This Agreement constitutes a valid and binding obligation of
such Seller which is enforceable against such Seller in accordance with its
terms, except as such enforceability may be limited by (i) applicable
insolvency, bankruptcy, reorganization, moratorium or other similar laws
affecting creditors' rights generally, and (ii) applicable equitable principles
(whether considered in a proceeding at law or in equity).
(b) Except as set forth in Section 3.2(b) of the
Disclosure Letter, neither the execution and the delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will (i) conflict with
or result in a breach of the terms, conditions or provisions of, (ii) constitute
a default under or result in a violation of, (iii) result in the creation of any
Lien upon any assets (including any Securities owned by), properties or rights
of such Seller pursuant to, (iv) give any Person the right to modify, terminate
or accelerate any Liability of, or charge any fee, penalty or similar payment to
such Seller, or (v) require any authorization, consent, approval, exemption or
other action by or declaration or notice to any Person or Government Entity
(except for the applicable requirements of the HSR Act and any applicable
foreign antitrust laws or regulations) pursuant to (A) any Contract to which
such Seller is a party, by which it is bound, or to which any of its assets are
subject, (B) the certificate of organization, bylaws or similar governing
documents of such Seller, or (C) any laws to which such Seller or any of its
assets are subject, except, in the case of clauses (A) and (C), where such
conflict, default, creation, modification, termination or acceleration or
authorization could not reasonably be expected to have a Material Adverse
Effect.
SECTION 3.3 OWNERSHIP OF SECURITIES. Such Seller holds of record, owns
beneficially and has good and marketable title to all of such Seller's
Securities (as identified on Section 2.4(a)(i)) of the Disclosure Letter, free
and clear of any Liens (other than Permitted Liens, the terms of the Assignment
Agreement and restrictions on transfer arising under the Securities Act
10
and state or foreign securities laws). Such Seller is not a party to any voting
trust, proxy, or other agreement or understanding with respect to the voting or
transfer of any Securities which will survive the Closing Date.
SECTION 3.4 ▇▇▇▇▇▇ AND RAZOR CAPITALIZATION; SUBSIDIARIES. Vestar
represents and warrants that as of the date of this Agreement:
(a) The entire authorized capital stock of ▇▇▇▇▇▇
consists of: 1,000 shares of common stock, par value $.01 per share, of which
1,000 shares are issued and outstanding. All of the issued and outstanding
shares of ▇▇▇▇▇▇ have been duly authorized, are validly issued, fully paid and
nonassessable, and are held of record and beneficially by Vestar. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require ▇▇▇▇▇▇ to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation or similar rights with
respect to ▇▇▇▇▇▇. ▇▇▇▇▇▇ is not a party to, and there are no, voting trusts,
proxies, or other agreements or understandings with respect to the voting or
transfer of any shares of ▇▇▇▇▇▇ which will survive the Closing Date.
(b) The entire authorized capital stock of Razor consists
of: 1,000 shares of common stock, par value $.01 per share, of which 1,000
shares are issued and outstanding. All of the issued and outstanding shares of
Razor have been duly authorized, are validly issued, fully paid and
nonassessable, and are held of record and beneficially by Vestar. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require Razor to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding or authorized
stock appreciation, phantom stock, profit participation or similar rights with
respect to Razor. Razor is not a party to, and there are no, voting trusts,
proxies, or other agreements or understandings with respect to the voting or
transfer of any shares of Razor which will survive the Closing Date.
(c) Neither ▇▇▇▇▇▇ nor Razor has any Subsidiaries other
than the Company.
(d) From their respective dates of formation, neither
▇▇▇▇▇▇ nor Razor has conducted any business other than to hold the Company
Interests and to engage in transactions related to the acquisition, holding and
divestiture of such interests. Other than for taxes related to income that has
been or may be allocated to them by the Company with respect to periods
following December 31, 2002 (or for prior periods) and liabilities that are
payable to certain Affiliates which shall be extinguished prior to or at Closing
with assets available to Razor or ▇▇▇▇▇▇, as applicable, or otherwise in a
manner that will not result in any cost to the Purchaser, neither Razor nor
▇▇▇▇▇▇ has any material liabilities beyond those disclosed in the respective
balance sheets of Razor and ▇▇▇▇▇▇ as of and for the year ended December 31,
2002 that were previously provided to the Purchaser.
(e) The Razor and ▇▇▇▇▇▇ corporate record books
(including the ownership and share records of Razor and ▇▇▇▇▇▇) are complete,
accurate and up to date in all material respects with all necessary signatures
and set forth all meetings and actions
11
taken by the stockholders and directors of Razor and ▇▇▇▇▇▇ and all transactions
involving shares of Razor and ▇▇▇▇▇▇ (and contain all canceled certificates).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to the Purchaser to enter into this Agreement
and to purchase the Securities hereunder, the Company hereby represents and
warrants as of the date of this Agreement as follows:
SECTION 4.1 ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. The
Company is a limited liability company duly formed, validly existing and in good
standing under the laws of the State of Delaware. Each of the Company's
Subsidiaries is a corporation or a limited liability company validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
formation. Each of the Company and its Subsidiaries is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required, except where the lack of such
qualification could not reasonably be expected to have a Material Adverse
Effect. Each of the Company and its Subsidiaries has full corporate power and
authority to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it.
SECTION 4.2 APPROVALS AND CONSENTS. Except as set forth in Section 4.2
of the Disclosure Letter, the execution, delivery, and performance of this
Agreement by the Company will not (i) conflict with or result in a breach of the
terms, conditions or provisions of, (ii) constitute a default under or result in
a violation of, (iii) result in the creation of any Lien upon any assets,
properties or rights of the Company or its Subsidiaries pursuant to, (iv) give
any Person the right to modify, terminate or accelerate any Liability of, or
charge any fee, penalty or similar payment to, the Company or its Subsidiaries,
or (v) require any authorization, consent, approval, exemption or other action
by or declaration or notice to any Person or Government Entity (except for the
applicable requirements of the HSR Act and any applicable foreign antitrust laws
or regulations) pursuant to (A) any Contract to which the Company or its
Subsidiary is a party, by which it is bound, or to which any of its assets are
subject, (B) the certificate of formation of the Company or the LLC Agreement,
or (C) any laws to which the Company or its Subsidiaries or any of their
respective assets are subject, except, in the case of clauses (A) and (C), where
such conflict, default, creation, modification, termination or acceleration or
authorization could not reasonably be expected to have a Material Adverse
Effect.
SECTION 4.3 CAPITALIZATION; SUBSIDIARIES.
(a) The Company has outstanding $62,000,000 of Preferred
Capital and 68,800 Common Units, all of which are owned of record by RPI, ▇▇▇▇▇▇
and Razor as set forth in Section 4.3(a) of the Disclosure Letter, free of any
Liens, except Permitted Liens and the interest arising under the Assignment
Agreement. The designations, powers, preferences, rights, qualifications,
limitations and restrictions in respect of the Company Interests are as set
forth in the certificate of formation of the Company and the LLC Agreement, in
each case, as amended to
12
the date hereof, and all such designations, powers, preferences, rights,
qualifications, limitations and restrictions are valid, binding and enforceable
in accordance with all applicable laws, except as the enforceability thereof may
be limited by (i) applicable bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or similar laws in effect which affect the enforcement of
creditors' rights generally or (ii) general principles of equity, whether
considered in a proceeding at law or in equity. All of the Company Interests
have been duly authorized and validly issued, were not issued in violation of
any preemptive rights and represent 100% of the outstanding capital of the
Company. Except as set forth in Section 4.3(a) of the Disclosure Letter, there
are no outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts or
commitments that could require the Company to issue, sell, or otherwise cause to
become outstanding any of its Membership Interests. Except as set forth in
Section 4.3(a) of the Disclosure Letter, there are no outstanding or authorized
stock appreciation, phantom stock, profit participation or similar rights with
respect to the Company. The Company is not a party to any, and to the Company's
Knowledge there are no, voting trusts, proxies, or other agreements or
understandings with respect to the voting or transfer of any Membership
Interests which will survive the Closing Date.
(b) Section 4.3(b) of the Disclosure Letter sets forth
for each Subsidiary of the Company (i) its name and jurisdiction of
incorporation, (ii) the number of shares or units of authorized capital stock or
other equity interests of each class of its capital stock or equity interests,
(iii) the number of issued and outstanding shares or units of each class of its
capital stock or equity interests, the names of the holders thereof, and the
number of shares or units held by each such holder, and (iv) the number of
shares of its capital stock or other equity interests held in treasury. All of
the issued and outstanding shares or units of capital stock or other equity
interests of each Subsidiary of the Company have been duly authorized and are
validly issued, fully paid and nonassessable. Subject to any Permitted Liens,
each of the Company and its Subsidiaries holds of record, owns beneficially and
has good and marketable title to all of the outstanding equity interests of each
Subsidiary of the Company. Except as set forth in Section 4.3(b) of the
Disclosure Letter, such equity interests shall be free and clear of any Liens
(other than restrictions on transfer arising under the Securities Act and state
or foreign securities laws) other than Permitted Liens . There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require any of the Subsidiaries of the Company to issue, sell or
otherwise cause to become outstanding and owned by a Person who is not the
Company or one of its Subsidiaries any of such Subsidiary's own capital stock or
other equity interests. There are no outstanding or authorized stock
appreciation, phantom stock, profit participation or similar rights with respect
to any Subsidiary of the Company. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of any capital stock or
other equity interests of any of the Company's Subsidiaries.
SECTION 4.4 FINANCIAL STATEMENTS. The following financial statements
for the Company, together with the financial statements to be provided pursuant
to Section 6.17, are referred to hereafter, collectively, as the "Financial
Statements": (i) the Company's audited consolidated balance sheets and related
statements of income for the years ending December 31, 2002 and December 31,
2001 as filed with the SEC in the Company's Annual Report for the years ended
December 31, 2002 and December 31, 2001, respectively; and (ii) the Company's
13
unaudited consolidated balance sheet as of, and related statement of income as
prepared by management year-to-date, July 26, 2003 as set forth in Section 4.4
of the Disclosure Letter. Each Financial Statement (including the notes thereto)
has been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby and fairly presents in all material
respects the financial condition of the Company and its Subsidiaries as of such
dates and the results of the Company's and its Subsidiaries', operations for the
periods specified; provided, however, that the Financial Statements described in
clause (ii) above lack footnotes and other presentation items and are subject to
normal year-end adjustments.
SECTION 4.5 EVENTS SUBSEQUENT TO THE MOST RECENT BALANCE SHEET. Since
the date of the Most Recent Balance Sheet, (i) there has been no change in the
financial condition or operating results of the Business which has had or is
likely to have a Material Adverse Effect, (ii) the Company and its Subsidiaries
have operated the Business in the ordinary course consistent with past practice
and (iii) the Company has not made any distributions with respect to, or
repurchased or otherwise acquired any of, its Membership Interests other than
Tax Distributions.
SECTION 4.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in
Section 4.6 of the Disclosure Letter or in the Most Recent Balance Sheet, the
Company and each of its Subsidiaries: (a) as of July 26, 2003, did not have any
material Liabilities required by GAAP to be disclosed in the Most Recent Balance
Sheet; (b) since July 26, 2003 have not incurred any Liabilities (other than
liabilities or obligations incurred in the ordinary and usual course of business
after July 26, 2003), except as could not reasonably be expected to have a
Material Adverse Effect; and (c) since July 26, 2003, have not conducted their
business otherwise than in the ordinary and usual course in all material
respects.
SECTION 4.7 TITLE TO ASSETS; ADEQUACY. Each of the Company and its
Subsidiaries has good (and, in the case of real property, marketable) title (or
leasehold interest with respect to capital leases) to all of the assets and
properties which are material to the conduct of the Business (including those
reflected on the Most Recent Balance Sheet), free and clear of all Liens except
for Permitted Liens, except for assets and properties sold, consumed or
otherwise disposed of in the ordinary course of business since the date of the
Most Recent Balance Sheet. The buildings, structures and improvements owned or
leased by the Company and each of its Subsidiaries conform in all material
respects to all applicable material Laws, including zoning regulations, none of
which would upon consummation of the transactions contemplated hereby materially
adversely interfere with the use of such properties, buildings, structures or
improvements for the purposes for which they are now utilized. Except as
disclosed in Section 4.7 of the Disclosure Letter, the properties and assets
owned or leased by the Company and each of its Subsidiaries are adequate in all
material respects for the conduct of its business as presently conducted, are
adequately insured, and are in reasonably good repair and operating condition,
normal wear and tear excepted.
SECTION 4.8 COMPLIANCE WITH LAWS. Except as set forth in Section 4.8 of
the Disclosure Letter (and other than tax matters addressed in Section 4.9,
environmental matters addressed in Section 4.10 and employee benefits matters
addressed in Section 4.14 and employee matters addressed by Section 4.19), since
July 26, 1998 each of the Company and its Subsidiaries has complied in all
material respects with all material Legal Requirements relating to the
14
operation of the Business. To the Company's Knowledge, none of the Company and
its Subsidiaries has received written notice alleging any violations of material
Legal Requirements within the last 12 months, except as set forth in Section 4.8
of the Disclosure Letter.
SECTION 4.9 TAX MATTERS. Except as set forth in Section 4.9 of the
Disclosure Letter:
(a) Each of Razor, ▇▇▇▇▇▇, the Company and its
Subsidiaries have: (i) timely filed and in all material respects correctly
prepared all returns, declarations, reports, estimates, information returns and
statements ("Returns") required to be filed or sent by or with respect to it in
respect of any Taxes; (ii) properly paid all Taxes due and payable by Razor,
▇▇▇▇▇▇, the Company and its Subsidiaries; (iii) established on its books and
records and in the Financial Statements reserves in accordance with GAAP for the
payment of all Taxes not yet due and payable; and (iv) complied in all material
respects with all applicable material laws, rules and regulations relating to
the payment and withholding of Taxes from employees and other persons.
(b) There are no Liens for Taxes upon the assets of
Razor, ▇▇▇▇▇▇, the Company or any of its Subsidiaries, except Permitted Liens
set forth in clause (i) of the definition thereof.
(c) No written claim or deficiency for any Taxes has been
asserted against Razor, ▇▇▇▇▇▇, the Company or any of its Subsidiaries which has
not been resolved and paid in full.
(d) There are no outstanding waivers or comparable
consents given by Razor, ▇▇▇▇▇▇, the Company or any of its Subsidiaries
regarding the application of the statute of limitations with respect to any
Taxes or Returns.
(e) No audits or proceedings before any Government Entity
are presently pending with regard to any Taxes or Returns and Razor, ▇▇▇▇▇▇, the
Company and its Subsidiaries have not received any written notices of any such
audits or proceedings.
SECTION 4.10 ENVIRONMENTAL MATTERS. Except as described in Schedule
4.10 of the Disclosure Letter:
(a) Since July 26, 1998, each of the Company and its
Subsidiaries has at all times been in compliance in all material respects with
all applicable material Environmental Laws.
(b) Since July 26, 1998, each of the Company and its
Subsidiaries has at all times been in compliance in all material respects with
all material permits, licenses and other authorizations that may be required
pursuant to all applicable material Environmental Laws for the occupation of the
facilities and the operation of the Business.
(c) Since July 26, 1998, none of the Company and its
Subsidiaries has received any written notice of any violations or liabilities,
including any investigatory, remedial or corrective obligations, arising under
material Environmental Laws and relating to the operation of the Business.
15
(d) None of the real property leased by the Company or
its Subsidiaries has, since July 26, 1998, due to the activity of the Company
and/or its Subsidiaries, been contaminated in any material respect with any
hazardous wastes, hazardous substances or other hazardous or toxic materials, as
defined in the Environmental Laws, so as to constitute a material violation of
any material Environmental Laws or so as to trigger any material corrective or
remedial action under the material Environmental Laws.
(e) This Section 4.10 contains the sole and exclusive
representation and warranty with regard to environmental matters, including
without limitation any arising under Environmental Laws.
SECTION 4.11 INTELLECTUAL PROPERTY. Section 4.11 of the Disclosure
Letter sets forth an accurate and complete list of all of the material patents,
patent applications, trademark registrations and applications therefor and
copyright registrations and applications therefor used in the conduct of the
Business (collectively, "Intellectual Property"). Except as set forth in Section
4.11 of the Disclosure Letter, the Company or its Subsidiaries, as the case may
be, own and possess all right, title and interest in and to, or possess the
valid right to use, the Intellectual Property. Except as set forth in Section
4.11 of the Disclosure Letter, neither the Company nor any of its Subsidiaries
has received any written notices of material infringement or misappropriation
from any third party with respect to the Intellectual Property, and, to the
Knowledge of the Company, neither the Company nor its Subsidiaries is currently
infringing on the intellectual property of any other person.
SECTION 4.12 REAL ESTATE.
(a) Section 4.12 of the Disclosure Letter lists all of
the real property owned by the Company or any of its Subsidiaries and material
to the conduct of the Business (the "Owned Real Property"). The Company or one
or more of its Subsidiaries, as applicable, has good and marketable title to all
of the Owned Real Property.
(b) Section 4.12 of the Disclosure Letter lists all of
the leases (the "Leases") for real property to which the Company or any of its
Subsidiaries is a party that are material to the conduct of the Business. Each
Lease is in full force and effect. The Company has previously made available to
the Purchaser true and complete copies of all of the Leases.
SECTION 4.13 LITIGATION. Except as set forth in Section 4.13 of the
Disclosure Letter, as of the date hereof, there is no claim, action, suit,
arbitration, inquiry, proceeding, or investigation by or before any Government
Entity ("Litigation") pending or, to the Knowledge of the Company, threatened
involving the Company or any of its Subsidiaries which is reasonably likely to
result in damages in excess of $250,000, or which seeks to enjoin or obtain
damages in respect of the consummation of the transactions contemplated hereby.
Neither the Company nor any of its Subsidiaries is subject to any outstanding
orders, rulings, judgments or decrees that would have a Material Adverse Effect.
Section 4.13 of the Disclosure Letter also sets forth a list of each material
outstanding order, ruling, judgment or decree to which the Company or any of its
Subsidiaries or any of its or their assets is bound or subject.
16
SECTION 4.14 EMPLOYEE BENEFITS. Section 4.14 of the Disclosure Letter
lists each Employee Benefit Plan. Except as set forth in Section 4.14 of the
Disclosure Letter:
(a) Each Employee Benefit Plan complies in form and in
operation in all material respects with the applicable material requirements of
ERISA and the Code or other applicable Laws.
(b) With respect to each Employee Benefit Plan, all
required payments, premiums, contributions, distributions, or reimbursements for
all periods ending prior to or as of the date of this Agreement have been made
or properly accrued under applicable Laws and the terms of such Employee Benefit
Plan.
(c) Each Employee Benefit Plan which is intended to be
qualified under ss.401(a) of the Code has received a determination letter from
the Internal Revenue Service to the effect that it meets the requirements of
ss.401(a) of the Code. The Company has no Liability under Title IV of ERISA with
respect to any Employee Benefit Plan.
(d) With respect to each Employee Benefit Plan, the
Company has delivered or made available to the Purchaser, to the extent
applicable, correct and complete copies of the plan and trust documents and
summary plan descriptions, the most recent determination letter received from
the Internal Revenue Service, and the most recent Form 5500 Annual Report.
(e) Except as set forth in Section 4.14 of the Disclosure
Letter, the Company does not maintain, contribute to or sponsor any employee
benefit plan, agreement or arrangement applicable to employees outside the
United States (the "Foreign Plans"). Each Foreign Plan is in compliance in all
material respects with all material laws applicable thereto and the respective
requirements of such Foreign Plan's governing documents and is funded to at
least the minimum level required by applicable law.
SECTION 4.15 CONTRACTS. Section 4.15 of the Disclosure Letter sets
forth an accurate and complete list of each material Contract (including any and
all amendments thereto) to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound which (i)
relates to the borrowing of money or the guaranty of any obligation to borrow
money; (ii) involves revenues or expenditures in excess of $500,000 (excluding
purchase and sale orders entered into in the ordinary course of business
consistent with past practice); (iii) is a collective bargaining agreement; (iv)
obligates the Company or any of its Subsidiaries not to compete with any
business or which otherwise restrains or prevents the Company or any of the
Subsidiaries from carrying on any lawful business (excluding customary
restrictive covenants contained in agreements identified pursuant to clause (ii)
above); (v) relates to employment, compensation, severance, consulting or
indemnification between the Company or any of its Subsidiaries and any of their
respective officers, directors, employees or consultants who are entitled to
compensation thereunder in excess of $500,000 per annum or that will become
payable as a result of the consummation of the Sale; (vi) is a license of
intellectual property requiring payments in excess of $100,000 per annum or
$500,000 in the aggregate; or (vii) is otherwise material to the assets,
business, operations or financial condition of the Company and its Subsidiaries
taken as a whole (collectively, the "Company Contracts"). To the Knowledge of
the Company, all of the Company Contracts are enforceable by the Company or
17
the Subsidiary which is a party thereto in accordance with their terms except to
the extent that such enforceability (a) may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditors' rights generally, and (b) is subject to general principles of equity.
Except as set forth in Section 4.15 of the Disclosure Letter, neither the
Company nor any of its Subsidiaries is in breach or default under (and no event
has occurred which with notice or the passage of time or both would constitute a
breach or default under) any Contract listed in Section 4.15 of the Disclosure
Letter nor, to the Knowledge of the Company, is any other party to any of the
agreements listed in Section 4.15 of the Disclosure Letter in default thereunder
(and to the Knowledge of the Company, no event has occurred which with notice or
the passage of time or both would constitute a breach or default thereunder).
SECTION 4.16 DEFECTIVE PRODUCTS. The Company and its Subsidiaries have
not manufactured, sold or supplied any product or service which is or was in any
material respect, defective or dangerous or which does not substantially comply
with any warranties expressly or impliedly made by the Company and its
Subsidiaries or with all Legal Requirements in circumstances where the liability
of the Company with respect thereto and its Subsidiaries would have a Material
Adverse Effect.
SECTION 4.17 MAJOR CUSTOMERS. Section 4.17 of the Disclosure Letter
sets forth (i) the name of each customer of the Company and its Subsidiaries
which was among the twenty customers which generated the greatest amount of
revenue during the year ended December 31, 2002, (ii) the name of each customer
which was among the twenty customers which generated the greatest amount of
revenue during the seven months ended July 26, 2003, and (iii) the name of each
customer listed pursuant to (i) or (ii) above as to which the Company or one of
its Subsidiaries has received a written notice that such customer will, or the
Company otherwise has Knowledge that such customer has notified the Company
verbally that it intends to, terminate its relationship with the Company and its
Subsidiaries or materially reduce its future purchases from the Company and its
Subsidiaries on or before December 31, 2003.
SECTION 4.18 MAJOR SUPPLIERS. Section 4.18 of the Disclosure Letter.
sets forth (i) the name of each supplier of the Company and its Subsidiaries
which was among the ten suppliers which generated the greatest amount of expense
during the year ended December 31, 2002, (ii) the name of each supplier which
was among the ten suppliers which generated the greatest amount of expense
during the seven months ended July 26, 2003, and (iii) the name of each supplier
listed pursuant to (i) and (ii) above and as to which the Company or one of its
Subsidiaries has received a written notice that such supplier will, or the
Company otherwise has Knowledge that such supplier has notified the Company
verbally that it intends to, terminate its relationship with the Company and its
Subsidiaries or materially reduce its future sales to the Company and its
Subsidiaries on or before December 31, 2003.
SECTION 4.19 LABOR RELATIONS. Except as set forth in Section 4.19 of
the Disclosure Letter, the Company and each of its Subsidiaries is, in all
material respects, in compliance with all applicable material Laws respecting
employment and employment practices, terms and conditions of employment, wages
and hours. There is no unlawful employment practice or discrimination charge
pending involving the Company or any of its Subsidiaries before the Equal
Employment Opportunity Commission ("EEOC") or any EEOC recognized state
"referral
18
agency." There is no unfair labor practice charge or complaint against the
Company or any of its Subsidiaries pending before the National Labor Relations
Board ("NLRB") or any foreign equivalent. There is no labor strike, dispute,
slowdown or stoppage actually pending or, to the Knowledge of Company,
threatened against or involving or affecting the Company or any of its
Subsidiaries and no NLRB representation questions exists respecting any of the
Company or any of its Subsidiaries' employees. No grievance or arbitration
proceeding is pending and no written claim therefor exists involving the Company
or any of its Subsidiaries. There is no collective bargaining agreement that is
binding on the Company or any of its Subsidiaries. Except for any Contract
disclosed pursuant to Section 4.19, neither the Company nor any of its
Subsidiaries is a party to or is bound by any agreement, arrangement or
understanding with any employee or consultant that involves payments in excess
of $100,000 per annum that cannot be terminated on notice of ninety (90) or
fewer days or that entitles employee to consultant to receive any salary
continuation or severance payment or retain any specified position with the
Company or any of its Subsidiaries.
SECTION 4.20 AFFILIATE TRANSACTIONS. Except as set forth in Section
4.20 of the Disclosure Letter, there are no business arrangements or contractual
relationships between the Company and/or any of its Subsidiaries, on the one
hand, and any of the Sellers or any of the Sellers' respective Affiliates, on
the other hand that will continue after the Closing Date (other than the
ordinary course purchase and sale of products or provision of services to or by
Affiliates of the Sellers).
SECTION 4.21 INSURANCE. The Company and each of its Subsidiaries
maintains the amount and scope of all insurance policies or contract providing
coverage as summarized and set forth in Section 4.21 of the Disclosure Letter.
All such policies or contracts of insurance are of a scope and, in the opinion
of management, in an amount usual and customary for businesses of similar size
and scope engaged in the Business in similar geographic areas and are sufficient
for compliance in all material respects with all material Laws and of all
agreements to which the Company or any of its Subsidiaries is a party. All
insurance policies pursuant to which any such insurance is provided are in full
force and effect and no effective written notice of cancellation or termination
of any such insurance policies has been given to the Company or any of its
Subsidiaries by the carrier of any such policy. All premiums required to be paid
in connection therewith have been paid in full.
SECTION 4.22 CORPORATE RECORDS. The limited liability and corporate
record books (including the ownership and share records) of the Company and each
of its Subsidiaries are complete, accurate and up to date in all material
respects with all necessary signatures and set forth all meetings and actions
taken by the stockholders and directors (or members and managers, as applicable)
of the Company and each of its Subsidiaries and all transactions involving
shares or other equity units of the Company and each of its Subsidiaries (and
contain all canceled certificates).
SECTION 4.23 BROKERAGE. Except for amounts payable to the Bear ▇▇▇▇▇▇▇
Companies Inc. or any of its Affiliates for advisory services rendered in
connection with the transactions contemplated hereby (the amount and terms and
conditions for the payment of which have previously been disclosed to the
Purchaser), none of the Sellers, the Company or its Subsidiaries
19
has any liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this Agreement
for which the Purchaser or the Company could become liable or obligated.
SECTION 4.24 NO ADDITIONAL REPRESENTATIONS. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN ARTICLE IV OF THIS AGREEMENT OR IN THE CERTIFICATE BEING
DELIVERED PURSUANT TO SECTION 2.4(e)(v), EXCEPT AS EXPRESSLY SET FORTH IN
ARTICLE IV, THE COMPANY EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF
ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY OF
THE BUSINESS OR THE ASSETS OF THE BUSINESS, AND THE COMPANY SPECIFICALLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, SUITABILITY
OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE ASSETS OF THE
BUSINESS, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE
OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT, IT BEING UNDERSTOOD THAT,
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN ARTICLE IV OF THIS AGREEMENT OR IN
THE CERTIFICATE BEING DELIVERED PURSUANT TO SECTION 2.4(e)(v), SUCH SUBJECT
ASSETS ARE BEING ACQUIRED "AS IS, WHERE IS" ON THE CLOSING DATE, AND IN THEIR
PRESENT CONDITION, AND THE PURCHASER SHALL RELY ON ITS OWN EXAMINATION AND
INVESTIGATION THEREOF.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As a material inducement to the Sellers to enter into this Agreement
and to sell the Securities, the Purchaser hereby represents and warrants as
follows:
SECTION 5.1 ORGANIZATION, CORPORATE POWER AND AUTHORIZATION. The
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Wisconsin. The Purchaser has the requisite
corporate power and authority and all material licenses, permits and
authorizations necessary to enter into, deliver and carry out its obligations
pursuant to this Agreement. The Purchaser's execution, delivery and performance
of each of this Agreement and each other Contract executed in connection
herewith to which it is a party has been duly authorized by the Purchaser.
SECTION 5.2 BINDING EFFECT AND NONCONTRAVENTION.
(a) This Agreement constitutes a valid and binding
obligation of the Purchaser which is enforceable against the Purchaser in
accordance with its terms, except as such enforceability may be limited by (i)
applicable insolvency, bankruptcy, reorganization, moratorium or other similar
laws affecting creditors' rights generally, and (ii) applicable equitable
principles (whether considered in a proceeding at law or in equity).
(b) The execution, delivery and performance by the
Purchaser of this Agreement do not and shall not: (i) conflict with or result in
a breach of the terms, conditions or
20
provisions of, (ii) constitute a default under or result in a violation of,
(iii) result in the creation of any Lien upon the assets, properties or rights
of such Person pursuant to, (iv) give any Person the right to modify, terminate
or accelerate any Liability of, or charge any fee, penalty or similar payment to
such Person, or (v) require any authorization, consent, approval, exemption or
other action by or declaration or notice to any Person or Government Entity
(except for the applicable requirements of the HSR Act and any applicable
foreign antitrust laws or regulations) pursuant to (A) any Contract to which the
Purchaser is a party, by which it is bound, or to which any of its assets are
subject, (B) the certificate of organization, bylaws or similar governing
documents of the Purchaser, or (C) any laws to which the Purchaser or any of its
assets are subject, except, in the case of clauses (A) and (C), where such
conflict, default, creation, modification, termination or acceleration or
authorization could not reasonably be expected to have a Purchaser Material
Adverse Effect.
SECTION 5.3 BROKERAGE. The Purchaser has no liability or obligation to
pay any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Sellers or the Company
could become liable or obligated.
SECTION 5.4 FINANCIAL ABILITY. The Purchaser has received a written
commitment letter (the "Commitment Letter") to obtain the funds necessary for
the consummation of the transactions contemplated hereby (a true, correct and
complete copy of the Commitment Letter is attached as Section 5.4 of the
Purchaser Disclosure Letter). The Purchaser has paid all commitment fees
required to be paid and taken all other actions required to cause such
Commitment Letter to be effective and to constitute the valid commitment of the
issuer of such letter. There is no breach of any representation, warranty or
covenant under the Commitment Letter and the Commitment Letter is a valid and
binding commitment of the Purchaser and, to the Purchaser's Knowledge, the
issuer thereof to the extent set forth on the face thereof. There is no fact,
occurrence or condition that makes any of the assumptions or statements therein
inaccurate in any material respect or that would cause the commitments provided
in the Commitment Letter to be terminated or ineffective or any of the
conditions contained therein not to be met.
SECTION 5.5 NO LITIGATION. There is no lawsuit, claim, action,
proceeding or investigation pending or, to the Knowledge of the Purchaser,
threatened against the Purchaser, its properties or businesses, which could
reasonably be expected to have a Purchaser Material Adverse Effect or restrict
the ability of the Purchaser to consummate the transactions contemplated hereby
or otherwise perform hereunder.
SECTION 5.6 INVESTMENT. The Purchaser is acquiring the Securities for
its own account, for investment only, and not with a view to any resale or
public distribution thereof. The Purchaser shall not offer to sell or otherwise
dispose of the Securities in violation of any Legal Requirement applicable to
any such offer, sale or other disposition. The Purchaser acknowledges that (i)
the Securities have not been registered under the Securities Act or any state
securities laws, (ii) there is no public market for the Securities and there can
be no assurance that a public market shall develop, and (iii) it must bear the
economic risk of its investment in the Securities for an indefinite period of
time. The Purchaser is an "accredited
21
investor" within the meaning of Rule 501 of Regulation D under the Securities
Act, as presently in effect.
SECTION 5.7 ACKNOWLEDGEMENT BY THE PURCHASER. The Purchaser
acknowledges and agrees that it has conducted its own independent review and
analysis of the business, assets, condition, operations and prospects of the
Company and its Subsidiaries. In entering into this Agreement, the Purchaser has
relied solely upon its own investigation and analysis, and the representations
and warranties, covenants and agreements of the Sellers and the Company
contained in this Agreement, and the Purchaser:
(a) acknowledges that, other than as set forth in this
Agreement, none of the Sellers, the Company, nor any of their respective
directors, officers, employees, Affiliates, agents or representatives makes or
has made any representation or warranty, either express or implied, as to the
accuracy or completeness of any of the information provided or made available to
the Purchaser or its agents or representatives prior to the execution of this
Agreement;
(b) agrees, to the fullest extent permitted by law
(except with respect to claims of fraud), that none of the Sellers, the Company,
nor any of their respective Affiliates, directors, officers, employees,
stockholders, agents or representatives shall have any liability or
responsibility whatsoever to the Purchasers on any basis (including in contract,
tort or otherwise) based upon any information provided or made available, or
statements made, to the Purchaser prior to the execution of this Agreement; and
(c) acknowledges that it is not aware of any
representation or warranty of the Sellers or the Company set forth in Article
III or IV of this Agreement being untrue or inaccurate.
ARTICLE VI
COVENANTS
The Parties hereby agree as follows:
SECTION 6.1 REASONABLE BEST EFFORTS. Upon the terms and subject to the
conditions of this Agreement, each of the Parties hereto shall use its
reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate the transactions contemplated by this
Agreement and to cause each of the conditions to Closing set forth in Article
VII below to be satisfied, in each case, as soon as practicable following the
date of this Agreement (including seeking early termination of the waiting
period under the HSR Act), provided that such efforts shall not include any
requirement to expend a material amount of money, commence any litigation or
offer or grant any accommodation (financial or otherwise) to any third party for
any extraordinary purpose or in response to any extraordinary demand. Without
limiting the generality of the foregoing, the Sellers and the Purchaser hereby
agree to provide promptly to Governmental Entities with regulatory jurisdiction
over enforcement of any applicable antitrust laws all information and documents
requested by any such Governmental Entity or necessary, proper or advisable to
permit consummation of the transactions contemplated hereby, and to file
22
any Notification and Report Form and related material required under the HSR Act
as soon as practicable after the date hereof, and in any event no later than
August 29, 2003. The Purchaser and the Sellers shall each thereafter use its
reasonable best efforts to complete as soon as practicable its substantial
compliance with any requests for additional information or documentary material
that may be made under the HSR Act. Furthermore, prior to the Closing, the
Sellers and the Company shall use their reasonable commercial efforts to assist
the Purchaser in any undertaking to retire the Company's outstanding High-Yield
Debt (which such retirement, whether pursuant to a tender offer made by the
Purchaser or otherwise, would occur following, and be contingent upon, the
Closing); provided however, that under no circumstances shall the Company be
required to call any outstanding High-Yield Debt for redemption, or shall the
Company or any Seller be required to expend a material amount of money, unless
the Purchaser has agreed in writing to reimburse the Company and/or the Sellers
for such amounts.
SECTION 6.2 CONDUCT OF BUSINESS.
(a) Except as may be otherwise contemplated by this
Agreement or required by law or any Contracts disclosed in Section 4.15 of the
Disclosure Letter or as the Purchaser may otherwise consent to in writing (which
consent shall not be unreasonably withheld or delayed), from the date hereof and
prior to the Closing, the Company will, and will cause each of its Subsidiaries,
to operate its business in all material respects in the ordinary course
consistent with past practice.
(b) Without limiting the generality of the foregoing,
except as may be otherwise contemplated by this Agreement or required by Law or
any Contracts disclosed, or not required to be disclosed, in Section 4.15 of the
Disclosure Letter or as the Purchaser may otherwise consent to in writing (which
consent shall not be unreasonably withheld or delayed), from the date hereof and
prior to the Closing, neither Razor, ▇▇▇▇▇▇, the Company nor any of its
Subsidiaries will:
(i) other than any Tax Distribution, (A)
declare, set aside or pay any dividend or other distribution (whether
in cash, stock or property or any combination thereof) in respect of
any of its capital stock or other equity interests (for the avoidance
of doubt, payments made pursuant to the terms of the Vestar Management
Agreement and/or the RPI Services Agreement shall not be considered a
distribution for purposes of this Agreement); (B) split, combine or
reclassify any of its capital stock or other equity interests or issue
or authorize or propose the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock or
other equity interests or (C) amend the terms of, repurchase, redeem or
otherwise acquire, or permit any of its Subsidiaries to repurchase,
redeem or otherwise acquire, any of its securities or any securities of
its Subsidiaries, or propose to do any of the foregoing;
(ii) authorize for issuance, issue, sell, deliver
or agree or commit to issue, sell or deliver (whether through the
issuance or granting of options, warrants, commitments, subscriptions,
rights to purchase or otherwise) any stock of any class or any other
securities (including Indebtedness having the right to vote) or equity
equivalents (including, without limitation, stock appreciation rights),
or amend in any respect any of the terms of any such securities or
equity equivalents outstanding on the
23
date hereof; provided, that notwithstanding the foregoing, the Company
may issue, reissue, amend the terms of or cancel any rights under the
Company's Phantom Equity Program or any other stock appreciation rights
so long as any amounts payable pursuant to such rights are satisfied at
the Closing from the Purchase Price and provided further, that the
Company may amend the Super Performance Based Phantom Equity Agreements
(the "SP Agreements") set forth on Section 6.12(iv) of the Disclosure
Letter in the manner contemplated by and consistent with the terms of
the Form of Letter Agreement attached as Exhibit C hereto. Such
amendments shall not, however, cause the aggregate payments under all
SP Agreements to exceed $2,763,750. The SP Agreements will not be
amended in any manner inconsistent with Exhibit C hereto without the
prior written consent of the Purchaser;
(iii) amend or propose to amend its certificate of
incorporation, bylaws certificate of formation, limited liability
company agreement or equivalent documents;
(iv) acquire, sell, lease, encumber, transfer or
dispose of any assets (except that the Company and its Subsidiaries may
sell inventory in the ordinary course of business consistent with past
practice) or make any capital expenditures aggregating over $500,000
(except for capital expenditures made in accordance with the Company's
existing capital expenditure budget); modify or amend any Contracts
(including any relating to Indebtedness) outside of the ordinary course
of business; enter into any Contract that would be required to be
disclosed in Section 4.15 of the Disclosure Letter hereto if it were in
effect on the date of this Agreement;
(v) except for revolving credit loans (and
letters of credit obtained in the ordinary course of business) and
intercompany loans and advances among the Company and/or one or more of
its wholly owned Subsidiaries, incur or assume any Indebtedness or
issue or sell any debt securities or warrants or rights to acquire any
debt securities of the Company or any of its Subsidiaries or guarantee
(or become liable for) any Indebtedness of others or mortgage, pledge
or otherwise encumber any assets or consensually create any Lien
thereupon other than Permitted Liens;
(vi) make any loans, advances or capital
contributions outside of the ordinary course of business, except to
wholly-owned Subsidiaries;
(vii) except as may otherwise be required by the
SEC, the Public Company Accounting Oversight Board, GAAP or the
Financial Accounting Standards Board, change any of the accounting
principles or practices used by it;
(viii) make any Tax election except in the ordinary
course of business or settle or compromise any income tax liability
material to the Company and its Subsidiaries taken as a whole;
(ix) (1) enter into, adopt, amend or terminate
any Employee Benefit Plan or any agreement, arrangement, plan or policy
between itself and one or more of its directors or executive officers
or (2) increase in any manner the compensation or fringe benefits of
any director, officer or employee or pay any benefit not required by
any plan
24
or arrangement as in effect as of the date hereof, except in the case
of officers and employees for normal increases in compensation and
normal year-end bonuses in the ordinary course of business and
consistent with past practice; or enter into any Contract, agreement,
commitment or arrangement to do any of the foregoing;
(x) agree to take any of the foregoing actions,
except where the effectiveness of such agreement is subject to the
approval of the Purchaser.
SECTION 6.3 ACCESS. From the date hereof and prior to the Closing, the
Company shall provide the Purchaser with such information as the Purchaser may
from time to time reasonably request with respect to the Company and its
Subsidiaries and their assets and properties and the transactions contemplated
by this Agreement, and shall provide the Purchaser and its representatives
reasonable access during regular business hours and upon reasonable notice to
the personnel, representatives, properties, books and records of the Company and
its Subsidiaries as the Purchaser may from time to time reasonably request. Any
disclosure whatsoever during such investigation by the Purchaser shall not
constitute any enlargement or additional representations or warranties of the
Company or any Seller or any of their respective Affiliates beyond those
specifically set forth in this Agreement. All such information and access shall
be subject to the terms and conditions of the Confidentiality Agreement, dated
February 14, 2003, executed by the Purchaser (the "Confidentiality Agreement").
SECTION 6.4 No Solicitation. Neither the Company nor any of its
Subsidiaries, Affiliates, officers, directors, employees, representatives or
agents, shall, directly or indirectly, encourage, solicit, participate in,
initiate or continue discussions or negotiations with, or provide any
information to, any person (other than the Purchaser and its Affiliates and
representatives) concerning any merger, sale of assets, sale of shares of
capital stock or similar transactions involving the Company or any of its
Subsidiaries or a division of the Company and any existing discussions or
negotiations with third persons relating thereto shall be terminated
immediately.
SECTION 6.5 BOOKS AND RECORDS. For a period of seven (7) years from the
Closing, the Purchaser shall, and shall cause the Company and its Subsidiaries
to, provide to any Seller for any purpose relating to such Seller's ownership of
any securities of the Company, access to the books and records of the Company
related to periods prior to the Closing Date upon reasonable advance written
notice during regular business hours for the sole purpose of obtaining
information for use as aforesaid and will permit such Seller to make such
extracts and copies thereof as may be necessary. Such Seller shall reimburse the
Company or its Subsidiaries for the reasonable out-of-pocket expenses incurred
by any of them in performing the covenants contained in this Section 6.5.
SECTION 6.6 DIRECTOR AND OFFICER LIABILITIES AND INDEMNIFICATION.
(a) The Company and each of its Subsidiaries hereby
exculpate (to the fullest extent permitted by applicable law), contingent upon
but automatically effective upon the Closing and the Company, each of its
Subsidiaries and their respective successors shall jointly and severally
indemnify, defend and hold harmless, the present and former officers, employees
and directors of the Company or any of its Subsidiaries (each an "Indemnified
Party") against all Losses, arising out of actions or omissions in their
capacities as such occurring at or prior to the
25
Closing to the fullest extent permitted under applicable law, the Company's or
any of its Subsidiaries' certificate of incorporation or bylaws (or
substantially equivalent documents), and any agreement between an Indemnified
Party and the Company or any of its Subsidiaries in effect at the date of this
Agreement set forth in Section 6.6(a) of the Disclosure Letter, including,
without limitation, advancing expenses incurred in the defense of any action or
suit, provided that (i) the Company shall pay for only one counsel for all
Indemnified Parties unless the use of one counsel for such Indemnified Parties
would present such counsel with a conflict of interest and (ii) such advancement
of expenses shall be subject to such Indemnified Party's agreement to return any
advanced funds if a court of competent jurisdiction, after all time for appeals
having been exhausted, shall have determined that the Indemnified Party is not
entitled to indemnity against such expenses under applicable law or the
Company's certificate of formation or the LLC Agreement.
(b) If (but only if) for any reason the indemnity
provided for in Section 6.6(a) is unavailable to any Indemnified Party, as the
case may be, or is insufficient to hold each such Indemnified Party, as the case
may be, harmless from all such Losses, then the Company and its Subsidiaries and
their respective successors shall each contribute to the amount paid or payable
by such Indemnified Party in such proportion as is appropriate to reflect not
only the relative benefits received by the Company and its Subsidiaries on the
one hand and such Indemnified Party, as the case may be, on the other but also
the relative fault of such persons as well as any relevant equitable
considerations.
(c) Prior to the Closing, if available, the Company may
purchase a directors' and officers' liability insurance policy (the terms of
which will be acceptable to the Sellers) providing coverage for the Company's
pre-closing officers and directors for a period of up to six years following the
Closing (the "Tail"). The premium and other expenses related to the acquisition
of such policy will be paid by the Company and shall not be considered fees and
expenses of the transaction for purposes of Section 9.14 hereof, provided that,
if the purchase price and other expenses related to the acquisition of the Tail
exceeds $600,000, any amounts in excess of $600,000 shall be paid by the
Sellers. The Company shall not cancel, limit, modify or amend the Tail while it
is in effect.
(d) The obligations of the Company under this Section 6.6
shall not be terminated or modified in such a manner as to adversely affect any
Indemnified Party to whom this Section 6.6 applies (it being expressly agreed
that the Indemnified Parties to whom this Section 6.6 applies are hereby made
express and intended third party beneficiaries of this Section 6.6).
SECTION 6.7 NO TRANSFERS. After the date of this Agreement, none of the
Sellers shall sell, pledge, encumber or otherwise transfer any or all of the
Securities or any interest therein.
SECTION 6.8 TRADEMARK AND TRADE NAME RELEASE. Except as set forth in
Section 6.8 of the Disclosure Letter, effective only as of the Closing Date,
each of the Sellers does hereby unconditionally and irrevocably forever waive
and release all rights to use any of the trade names and any trademarks set
forth in Section 4.11 of the Disclosure Letter (or any trademarks likely to be
confused therewith). The Sellers shall have thirty (30) days following the
Closing Date to remove such trade names and trademarks from any of Sellers'
materials (but notwithstanding the
26
foregoing, shall have a limited license to use such trade names and trademarks
in connection with disclosing their prior ownership of the Company in marketing
and similar materials.
SECTION 6.9 Releases.
(a) Release of Company. Effective as of the Closing Date,
except for those matters set forth in Section 6.9(a) of the Disclosure Letter,
each of the Sellers does hereby unconditionally and irrevocably forever release
and discharge Razor, ▇▇▇▇▇▇, the Company and its Subsidiaries from all
obligations and liabilities to the Sellers, all agreements and understandings
involving the Sellers other than this Agreement and the instruments and
documents delivered by the Purchaser or the Sellers pursuant to this Agreement,
and all claims and causes of action (whether at law or in equity) of the Sellers
against Razor, ▇▇▇▇▇▇, the Company and its Subsidiaries, arising prior to the
Closing Date.
(b) Release of the Sellers. Effective as of the Closing
Date, except for those matters set forth in Section 6.9(b) of the Disclosure
Letter, each of Razor, ▇▇▇▇▇▇, the Company and its Subsidiaries does hereby
unconditionally and irrevocably forever release and discharge each of the
Sellers from all obligations and liabilities to each of Razor, ▇▇▇▇▇▇, the
Company and its Subsidiaries, all agreements and understandings involving Razor,
▇▇▇▇▇▇ or the Company or its Subsidiaries other than this Agreement and the
instruments and documents delivered by the Purchaser or the Sellers pursuant to
this Agreement, and all claims and causes of action (whether at law or in
equity) of Razor, ▇▇▇▇▇▇ or the Company or its Subsidiaries against the Sellers
arising prior to the Closing Date.
SECTION 6.10 PAYMENT OF INTERCOMPANY TRANSACTIONS. Prior to or on the
Closing Date, Razor, ▇▇▇▇▇▇, the Company and its Subsidiaries, on the one hand,
and the Sellers, on the other hand, shall pay any amounts due and owing the
other. Vestar shall cause Razor and ▇▇▇▇▇▇ to extinguish on or prior to Closing
those liabilities that are payable to certain Affiliates referenced in Section
3.4(d).
SECTION 6.11 NO INTERFERENCE; NONDISCLOSURE.
(a) No Interference with Customers. During the period
commencing on the Closing Date and continuing for a period of two years
thereafter (the "Non-Interference Period", each of the Sellers agrees that
neither it nor any of its Affiliates which it controls shall induce a Customer
to withdraw, curtail or cancel such Customer's business with the Purchaser or
its Affiliates. As used in this Section 6.11, "Customer" means any actual
customer of the Purchaser or its Affiliates, or any potential customer of the
Purchaser or its Affiliates, served or actually solicited by the Purchaser or
the Company or its Subsidiaries within the twelve-month period prior to the
Closing Date.
(b) No Interference with Employees. Each Seller agrees
that, during the Non-Interference Period, neither it nor any of its Affiliates
which it controls will directly or indirectly request or induce any employee to
terminate his employment with the Purchaser or its Affiliates and accept
employment with another business entity engaged in the Business in North
America, Europe, Australia or New Zealand (the "Territory") except as set forth
in Section 6.11(b) of the Disclosure Letter, or hire during the Non-Interference
Period, any employee within
27
twelve (12) months after termination of such employee's employment with the
Purchaser or any of its Affiliates. This Section 6.11(b) shall not be construed
to prohibit each Seller or its Affiliates from placing general advertisements
for employees in newspapers, periodicals or other media of general circulation
or hiring any such employees as a result thereof, other than the employees who
are parties to the agreements listed as items 21, 23-33 and 34(b) in Section
4.15 of the Disclosure Letter.
(c) Trade Secrets; Confidential Information.
(i) Each of the Sellers recognizes and
acknowledges that it has had access to certain highly sensitive,
special, unique information of the Company and its Subsidiaries that is
confidential or proprietary. Each of the Sellers hereby covenants and
agrees that it and its Affiliates which it controls will not (A) as to
Trade Secrets for a period of seven years and (B) as to Confidential
Information, during the Non-Interference Period, use or disclose any
Trade Secrets or Confidential Information, except for disclosures to
authorized representatives of the Purchaser; provided, however, that
the foregoing restrictions shall not apply to (1) items that have
entered the public domain other than by an unauthorized disclosure by
the Sellers or any of their Affiliates, (2) any items required to be
disclosed by a Governmental Entity or under applicable Laws, or (3)
Confidential Information received subsequently from third parties not
known by the Sellers to be subject to confidentiality restrictions.
(ii) For purposes of this Agreement, (A) "Trade
Secret" means any currently existing information, including, but not
limited to, technical or non-technical data, a formula, a pattern, a
compilation, a program, a device, a method, a technique, a set of
guidelines, a procedure, a drawing, a process, financial data,
financial plans, product plans, or a list of actual or potential
customers or suppliers of the Company or its Subsidiaries, that derives
economic value, actual or potential, from not being generally known to
and not being readily ascertainable by proper means by other persons
who can obtain economic value from its disclosure or use and is the
subject of efforts that are reasonable under the circumstances to
maintain its secrecy or otherwise constitutes a trade secret under
applicable Law; and (B) "Confidential Information" is any currently
existing data or information of the Company or its Subsidiaries other
than Trade Secrets, which is competitively sensitive and not generally
known to the public.
SECTION 6.12 EMPLOYEE MATTERS.
(a) From and after the Closing Date, the Purchaser shall
cause the Company and its Subsidiaries to (i) continue in effect for at least
one year following the Closing Date for current and former employees of the
Company and its Subsidiaries the Employee Benefit Plans, or to provide other
plans, programs, policies, arrangements or agreements that will provide such
employees and former employees with benefits as are in the aggregate comparable
to the benefits provided to such employees and former employees under the
Employee Benefit Plans as in effect on the date hereof, (ii) adopt a severance
plan for certain employees having the terms described in Section 6.12(ii) of the
Disclosure Letter, pursuant to which any such employee who is terminated by the
Company or its successor without cause on or prior to the first anniversary of
the Closing will be entitled to a payment equal to the greater of (x) the amount
determined
28
in accordance with the provisions of the plan described in Section 6.12(ii) of
the Disclosure Letter or (y) any amounts to which such employee is entitled
pursuant to any agreement between such employee and the Company, (iii) make the
severance payments described in the agreements set forth in Section 6.12 (iii)
of the Disclosure Letter in the event that any such payments become due and
payable and (iv) in the event that the "Performance Criteria" as defined in
those certain SP Agreements listed on Section 6.12(iv) of the Disclosure Letter,
as each such agreement has been modified prior to the date hereof and as any
such agreement may be amended and/or modified following the date hereof solely
in the form of the Letter Agreement attached hereto as Exhibit C, (which result
in aggregate payments under all SP Agreements of not more than $2,763,750), have
been met, make payment under the outstanding SP Agreements in accordance with
the terms thereof. Nothing in this Section 6.12 shall be deemed to require the
Purchaser to cause to be continued any employee's employment, responsibilities
or title for any period or to change the terms of any existing employee benefit
program.
(b) For purposes of determining whether the Performance
Criteria referenced in Section 6.12(a)(iv) above has been met, the terms
"EBITDA" and "RVM" (as applied by the Company with respect to the SP Agreements)
shall be determined and calculated in a manner strictly consistent with the
accounting principles and methods applied by the Company in the preparation of
the Financial Statements and measurements that it has used historically to
determine these amounts (including, without limitation, for the Company's 2002
fiscal year). For the avoidance of doubt, in determining whether the EBITDA/RVM
targets have been met with respect to the SP Agreements, the Company shall make
such determination without giving effect to any cost, expense, charge or other
item arising from, related to or resulting from the transactions contemplated by
this Agreement (including the purchase of the Tail pursuant to Section 6.6(c))
nor any purchase accounting or other adjustments to the Company's accounting or
tax basis in its assets and/or liabilities arising from, related to or resulting
from the transactions contemplated by this Agreement (including the Purchaser's
financing or any retirement or repayment of the Company's indebtedness,
including any related fees and expenses). In the event that, following the
Closing, the Company engages in any transaction involving the acquisition or
disposition of, or a fundamental change in, the Company's business, material
assets or business units, whether by means of asset purchase or sale, stock
purchase or sale, merger, combination, recapitalization or otherwise, and such
transaction or change is reasonably expected to affect the Company's "EBITDA"
and/or "RVM," whether in the period during which such transaction or change
occurs or any subsequent period for which "EBITDA" and/or "RVM" will be measured
for the purpose of determining whether the Performance Criteria have been met,
then the Board of Directors of the Company shall determine in good faith, in
consultation with ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the amount, if any, of the adjustments
that should be made to the Performance Criteria.
SECTION 6.13 PUBLIC ANNOUNCEMENTS. Neither the Company, the Sellers,
the Purchaser nor any of their respective Affiliates shall issue or cause the
publication of any press release or other public announcement with respect to
this Agreement or the transactions contemplated hereby without the prior
consultation with the other Parties, except as may be required by law or by any
listing agreement with, or the policies of, a national securities exchange.
Notwithstanding the foregoing, the Purchaser and the Sellers shall cooperate to
prepare a joint press release to be
29
issued on the Closing Date and, upon the request of any of the parties hereto,
at the time of the signing of this Agreement.
SECTION 6.14 LITIGATION SUPPORT. In the event and for so long as any
Party actively is contesting or defending against any third party action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand in
connection with (i) any transaction contemplated under this Agreement, or (ii)
any fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Sellers or the Company, the Purchaser agrees
to (a) cooperate with the contesting or defending party and its counsel, (b)
make available the employees of the Business then employed by the Purchaser, the
Company or any of its Subsidiaries to provide testimony, to be deposed, to act
as witnesses and to assist counsel, and (c) provide reasonable access to its and
the Company's or any Subsidiary's books and records as shall be necessary in
connection with the defense or contest; provided that, the contesting or
defending party shall pay the out-of-pocket expenses reasonably incurred by the
party so cooperating (unless the contesting or defending party is entitled to
indemnification therefor under this Article VI).
SECTION 6.15 TAX PROCEDURES.
(a) Notwithstanding anything regarding the time of
distributions to the contrary in Section 5.5 of the LLC Agreement, the Company
shall, as promptly as practicable following its determination of the members'
distributive shares of taxable income for the period preceding Closing, make a
Tax Distribution to the members in respect of income allocated for such short
taxable period which the members shall apply to the taxes related thereto;
provided, however, that the Company shall not make any Tax Distribution to the
members prior to Closing to the extent any member has a "Shortfall Amount" (as
defined in the LLC Agreement) with respect to previous taxable years.
(b) Sellers shall prepare or cause to be prepared and
file or cause to be filed (in each case in a manner consistent with past
practice) all federal, state and local Tax Returns of Razor, ▇▇▇▇▇▇, the Company
and its Subsidiaries required to be filed (taking into account any extensions)
for taxable periods ending on or before the Closing Date, and shall provide the
Purchaser with the opportunity to review and comment upon such filings prior to
the time they are filed and the Sellers shall not file such filings without the
Purchaser's consent, which consent shall not be unreasonably withheld. If the
Sellers have requested such consent and have not received within fifteen (15)
days of making such request either the Purchaser's consent or a written notice
from the Purchaser that describes in reasonable detail any dispute that the
Purchaser has with any information contained in the subject Tax Return (a
"Dispute Notice"), then the Purchaser shall automatically be deemed to have
given such consent. In the event that the Purchaser has delivered a Dispute
Notice, such dispute(s) shall be subject to good faith negotiation among the
Sellers, the Purchaser and their respective tax advisors for a period of ten
(10) days, and if there has been no resolution of all such dispute(s) within
such ten (10) day period, then unless otherwise agreed, any remaining disputes
shall then be submitted to an independent "Big Four" accounting firm (or, if all
"Big Four" accounting firms shall have a conflict of interest, any other
nationally recognized accounting firm), that has not performed material services
for the Company, the Sellers or the Purchaser or any of their respective
30
controlled Affiliates for a period of at least one (1) year, selected by the
respective tax advisors of the Sellers and the Purchaser (the "Tax Return
Arbitrator"), which shall act as an arbitrator and shall issue its report
resolving all such disputes within ten (10) days after such dispute is referred
to and accepted by it. The Tax Return Arbitrator shall use its best judgment to
resolve the disputed matters in a manner that most consistently reflects the
Company's or other affected entity's past custom and practices so long as such
past custom and practices are consistent with applicable law. The subject Tax
Return, as so modified, may be filed by the Sellers with the appropriate
government authorities without the consent of the Purchaser. The fees and
expenses of the Arbitrator shall be paid one-half by the Purchaser and one-half
by the Sellers. The Purchaser shall be liable for all Taxes payable with respect
to the operations of Razor, ▇▇▇▇▇▇, the Company and its Subsidiaries after the
Closing, and shall be responsible for filing the necessary Tax Returns and
reports with respect to the operations of Razor, ▇▇▇▇▇▇, the Company and its
Subsidiaries for all taxable periods ending after the Closing.
(c) Each party shall provide to each other party such
information as may reasonably be requested by the other party in connection with
the preparation of any Tax Return, any audit or other examination by any taxing
authority, or any judicial or administrative proceeding relating to liability
for Taxes with respect to Razor, ▇▇▇▇▇▇, the Company and its Subsidiaries. Each
Party shall retain, for a reasonable period of time, and provide the other
Parties upon request and reasonable notice with, any records or information
which they in fact have and which may be relevant to such return, audit or
examination, proceeding or determination. The Party responsible for filing a Tax
Return pursuant to subsection (a) above shall control any audits, disputes,
administrative, judicial or other proceedings relating to such Tax Returns;
provided that no Party may agree to settle any Tax liability or compromise any
claim with respect to Taxes if such settlement or compromise may affect the
liability for Taxes of the other Party, without such other Party's consent
(which consent shall not be unreasonably withheld or delayed).
(d) Sellers shall promptly notify Purchaser, and
Purchaser shall promptly notify Sellers, in writing, of any notice of a tax
deficiency, assessment or audit relating to Razor, ▇▇▇▇▇▇, the Company or any of
its Subsidiaries.
SECTION 6.16 PHANTOM EQUITY DISBURSEMENT ACCOUNT. The Company will
establish the Phantom Equity Disbursement Account, no later than three days
prior to the Closing, with a commercial banking institution selected by the
Company. The Company will provide instructions to such banking institution for
the payment to each Phantom Equity Participant of his or her respective share of
the Aggregate Phantom Equity Payment, less all payroll tax withholdings. Such
payments will be made by wire transfer of immediately available funds or
cashiers or certified check. Prior to the Closing, the Company will instruct
such banking institution to make such payments promptly upon receipt of the
Aggregate Phantom Equity Payment from Purchaser.
SECTION 6.17 FINANCIAL STATEMENTS. As soon as reasonably practicable
after the end of every month (but in no event later than the twentieth day of
the following month) beginning with the month in which this Agreement is signed,
the Company shall deliver to the Purchaser an unaudited consolidated balance
sheet of the Company and its Subsidiaries as of the applicable
31
scheduled end of such month, and a related consolidated statement of operations
for such month, which meet the standard for Financial Statements set forth in
Section 4.4(ii).
SECTION 6.18 COMMITMENT. The Purchaser hereby covenants and agrees to
use and to cause its Subsidiaries to use their respective commercial best
efforts and to do all other things to obtain for itself and/or the Company the
financing necessary for consummation of the transactions contemplated by this
Agreement (whether from the issuer of the Commitment Letter or from other
sources) in accordance with the Commitment Letter. The Purchaser hereby
represents that there are no conditions to the closing of the financing as
contemplated by the Commitment Letter other than those set forth in the
Commitment Letter and the payment of fees related thereto. The Purchaser further
covenants and agrees that (i) it will not terminate, modify, amend or in any
manner alter the obligations of the issuer of the Commitment Letter in any
manner that is adverse to the Purchaser's ability to obtain financing for the
transactions contemplated by this Agreement at any time prior to the termination
of this Agreement and (ii) it will enforce its rights to obtain the financing
contemplated by the Commitment Letter to the fullest extent permitted by law.
The Purchaser will promptly use its commercial best efforts to enable the
Purchaser to consummate the "Bridge Loans" under the Commitment Letter if the
Senior Subordinated Notes have not been sold by October 1, 2003.
ARTICLE VII
CONDITIONS TO THE CLOSING
SECTION 7.1 CONDITIONS OF THE PURCHASER'S OBLIGATION. The Purchaser's
obligation to effect the Sale at the Closing is subject to the satisfaction (or
waiver by Purchaser) at or prior to Closing of the following conditions
precedent:
(a) Representations, Warranties and Covenants of the
Company.
(i) The Company and the Sellers shall have
performed and complied in all material respects with their respective
agreements and covenants contained herein on, prior to or as of the
Closing Date.
(ii) The representations and warranties of the
Company and the Sellers contained herein shall have been true and
correct at and as of the date of this Agreement and shall also be true
and correct on the Closing Date, except for representations and
warranties that are made as of a specific date or time other than the
date of this Agreement, which shall be true and correct as of such date
or time. This condition shall be deemed satisfied unless the failure of
the representations and warranties of the Company and the Sellers to be
true and correct as contemplated above, considered collectively, would
have a Material Adverse Effect, provided that in determining whether
such failure would have a Material Adverse Effect, all "material,"
"Material Adverse Effect," "in all material respects" and similar
qualifiers in Article IV (other than qualifications specifically
referring to a certain dollar amount), shall be ignored for purposes of
this Section 7.1(a)(ii).
32
(b) No Prohibition. No order, judgment, ruling, charge,
decree or injunction of any Government Entity shall be in effect which is final
and non-appealable and which prohibits the consummation of the transactions
contemplated hereby.
(c) Governmental Consents. The applicable waiting period
(and any extensions thereof) under the HSR Act shall have expired or been
terminated and the consents, approvals, authorizations, exemptions and waivers
from Government Entities, which consents shall be required in order to (i)
enable the Purchaser to consummate the transactions contemplated hereby (except
for such consents, approvals, authorizations, exemptions and waivers, the
absence of which would not prohibit consummation of such transactions or render
such consummation illegal) and (ii) enable the Company and its Subsidiaries to
conduct their businesses after the Closing on the same basis as conducted prior
to the date hereof shall have been obtained (excluding, however, the failure to
obtain any consents, approvals, authorizations, exemptions and waivers the
failure of which to obtain would not reasonably be expected to result in a
Material Adverse Effect).
(d) The Purchaser shall have obtained financing in the
amount specified in the Commitment Letter.
(e) Document Deliveries. The Purchaser shall have
received from the Company the documents listed in Section 2.4(e) hereof, from
the Sellers, the documents required pursuant to Section 2.4(d) hereof, and from
IRP, the documents required pursuant to Section 2.4(f).
SECTION 7.2 CONDITIONS OF THE SELLERS' OBLIGATION. The Sellers'
obligation to effect the Sale at the Closing is subject to the satisfaction (or
waiver by Vestar) at or prior to the Closing of the following conditions
precedent:
(a) Representations, Warranties and Covenants.
(i) The Purchaser shall have performed and
complied in all material respects with its agreements and covenants
contained herein on, prior to or as of the Closing Date.
(ii) The representations and warranties of the
Purchaser contained herein shall have been true and correct as of the
date of this Agreement and shall also be true and correct in all
material respects on the Closing Date, except for representations and
warranties that are made as of a specific date or time other than the
date of this Agreement, which shall be true as of such date or time.
This condition shall be deemed satisfied unless the failure of the
representations and warranties of the Purchaser to be true and correct
as contemplated above, in the aggregate, would have a Purchaser
Material Adverse Effect.
(b) No Prohibition. No order, judgment, ruling, charge,
decree or injunction of any Government Entity shall be in effect which is final
and non-appealable and which prohibits the consummation of the transactions
contemplated hereby.
33
(c) Governmental Consents. The applicable waiting period
(and any extensions thereof) under the HSR Act shall have expired or been
terminated and the consents, approvals, authorizations, exemptions and waivers
from Government Entities listed on Section 7.2(c) of the Purchaser Disclosure
Letter, which consents shall be required in order to enable the Company to
consummate the transactions contemplated hereby (except for such consents,
approvals, authorizations, exemptions and waivers, the absence of which would
not prohibit consummation of such transactions or render such consummation
illegal).
(d) Document Deliveries. Each Seller shall have received
from Purchaser the documents listed in Section 2.4(a)(ii)-(vi) hereof and the
Purchase Price.
ARTICLE VIII
TERMINATION
SECTION 8.1 TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
(a) By the mutual written consent of Vestar on behalf of
the Sellers, and the Purchaser;
(b) By either Vestar on behalf of the Sellers or the
Purchaser in writing, without liability to the terminating party on account of
such termination (except as otherwise provided in Section 8.2), if the Closing
shall not have occurred on or before October 15, 2003 provided, that the right
to terminate this Agreement under this Section 8.1(b) shall not be available to
the Sellers,on the one hand, or the Purchaser, on the other hand, if their or
its failure to fulfill any obligations under this Agreement has been the cause
of or resulted in the failure of the Closing to occur on or before such date; or
(c) By either Vestar on behalf of the Sellers or the
Purchaser, if there shall be any statute, law, rule or regulation that makes
consummation of the transactions contemplated hereby illegal or prohibited or if
any court or other Government Entity of competent jurisdiction shall have issued
an order, judgment, decree or ruling, or taken any other action restraining,
enjoining or otherwise prohibiting the transactions contemplated hereby and such
order, judgment, decree, ruling or other action shall have become final and
non-appealable.
SECTION 8.2 EFFECT OF TERMINATION. Termination of this Agreement
pursuant to this Article VIII shall terminate all obligations of the parties
hereunder, except for the obligations under the last sentence of Section 6.3,
Sections 6.13, 8.2, 9.2, 9.7, 9.8, 9.10, 9.12, 9.13 and 9.14 hereof and the
Confidentiality Agreement, provided, however, that nothing in this Section 8.2
(including the final sentence hereof) shall relieve or limit the Liability
hereunder of any party (the "Defaulting Party") to the other party or parties on
account of a willful breach of (i) a representation or warranty, or (ii) a
covenant contained herein by the Defaulting Party. In the case of such a breach,
in addition to any damages for which the Defaulting Party may be liable, the
Defaulting Party shall reimburse the other party or parties for any expenses
incurred by such party or parties in order to enforce its or their rights under
this Agreement (including reasonable attorney's fees and expenses).
34
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENT. Except for Sections 6.5, 6.6, 6.8, 6.9, 6.10, 6.11, 6.12, 6.13, 6.14,
6.15 and 6.16 and Article IX, none of the representations, warranties, covenants
and agreements contained in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Closing, and thereafter there shall
be no liability on the part of either the Sellers, the Purchaser or the Company
or any of their respective officers, directors, stockholders or Affiliates in
respect thereof.
SECTION 9.2 REMEDIES. No failure to exercise, and no delay in
exercising, any right, remedy, power or privilege under this Agreement by any
party shall operate as a waiver of such right, remedy, power or privilege, nor
shall any single or partial exercise of any right, remedy, power or privilege
under this Agreement preclude any other or further exercise of such right,
remedy, power or privilege or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges provided pursuant to this
Agreement are cumulative and not exhaustive of any other rights, remedies,
powers and privileges which may be provided by law, including, without
limitation, the remedy of specific performance
SECTION 9.3 CONFIDENTIALITY. The Purchaser agrees to maintain all
nonpublic information regarding the Company (with respect to the period prior to
the Closing Date) and the Sellers and their respective Affiliates confidential
in a manner consistent with the obligations of the Purchaser pursuant to the
Confidentiality Agreement. Notwithstanding anything herein to the contrary, the
Purchaser and the Sellers (and each Affiliate and Person acting on behalf of any
such Person) agree that each party (and representative of such party) may
disclose to any and all Persons, without limitation of any kind, the Tax
treatment and Tax structure of the purchase and sale of the Securities and all
materials of any kind (including opinions or other Tax analyses) that are
provided to such party or such person relating to such Tax treatment and Tax
structure, except to the extent necessary to comply with any applicable federal
or state securities laws. This authorization is not intended to permit
disclosure of any other information including (without limitation) (i) any
portion of any materials to the extent not related to the Tax treatment or Tax
structure of the purchase and sale of the Securities; (ii) the identities of
participants or potential participants in such purchase and sale; (iii) the
existence or status of any negotiations; (iv) any pricing or financial
information (except to the extent such pricing or financial information is
related to the Tax treatment or Tax structure of the transactions contemplated
by this Agreement; or (v) any other term or detail not relevant to the Tax
treatment or the Tax structure of the purchase and sale of the Securities
contemplated herein.
SECTION 9.4 CONSENT TO AMENDMENTS. This Agreement may be amended or
modified, and any provisions of this Agreement may be waived, in each case upon
the approval, in writing, executed by each of the Company, each of the Sellers
and the Purchaser. No other course of dealing between or among any of the
parties or any delay in exercising any rights pursuant to this Agreement shall
operate as a waiver of any rights of any party.
35
SECTION 9.5 ENTIRE AGREEMENT. This Agreement, including the Schedules
and Exhibits attached hereto, and the other agreements referred to herein
constitute the entire agreement among the parties with respect to the matters
covered hereby and supersedes all previous written, oral or implied
understandings among them with respect to such matters.
SECTION 9.6 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided in this Agreement, all covenants and agreements set forth in this
Agreement by or on behalf of the parties shall bind and inure to the benefit of
the respective successors and permitted assigns of the parties, whether so
expressed or not, except that neither this Agreement nor any of the rights,
interests or obligations hereunder may be assigned by the Purchaser (on the one
hand), or the Sellers (on the other hand) without the prior written consent of
the other party. The Purchaser may (i) (at any time prior to the Closing) at its
sole discretion, in whole or in part assign its rights pursuant to this
Agreement, including the right to purchase the Securities, to one or more of its
direct or indirect wholly owned Affiliates, and (ii) designate one or more of
its Affiliates to perform its obligations hereunder (in any or all of which
cases the Purchaser nonetheless shall remain responsible for the performance of
all of its obligations hereunder), or (iii) assign all its rights and
obligations under this Agreement to a purchaser of substantially all its
business or assets, whether by sale of stock, sale of assets, merger or
otherwise.
SECTION 9.7 GOVERNING LAW; CONSENT TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE DOMESTIC LAWS OF THE STATE OF NEW YORK FOR CONTRACTS ENTERED INTO AND TO BE
PERFORMED IN SUCH STATE WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW
PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES
OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT
AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.8 NOTICES. All demands, notices, communications and reports
provided for in this Agreement shall be in writing and shall be either sent by
facsimile with confirmation to the number specified below or personally
delivered or sent by reputable overnight courier service (delivery charges
prepaid) to any party at the address specified below, or at such address, to the
36
attention of such other Person, and with such other copy, as the recipient party
has specified by prior written notice to the sending party pursuant to the
provisions of this Section 9.8:
If to the Company, to:
---------------------
Remington Products Company, L.L.C.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Executive Officer
General Counsel
with a copy, which shall not constitute notice to the Company, to:
-----------------------------------------------------------------
Vestar Capital Partners
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
If to RPI, to:
-------------
RPI Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: President
with a copy, which shall not constitute notice to RPI, to:
---------------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
If to Vestar or IRP, to:
-----------------------
Vestar Equity Partners, L.P.
c/o Vestar Capital Partners
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
37
with a copy, which shall not constitute notice to Vestar or IRP, to:
-------------------------------------------------------------------
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
Citigroup Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
If to the Purchaser:
-------------------
Rayovac Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
with a copy, which shall not constitute notice to the Purchaser, to:
-------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Any such demand, notice, communication or report shall be deemed to have been
given pursuant to this Agreement when delivered personally, when confirmed if by
facsimile or on the business day after deposit with a reputable overnight
courier service, as the case may be.
SECTION 9.9 EXHIBITS. The Exhibits to this Agreement constitute a part
of this Agreement and are incorporated into this Agreement for all purposes as
if fully set forth herein. Any disclosure made in any Schedule to this Agreement
which is 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 if the relevance of such disclosure to such
other schedule is reasonably apparent on its face.
SECTION 9.10 COUNTERPARTS. The parties may execute this Agreement in
two or more counterparts (no one of which need contain the signatures of all
parties), each of which shall be an original and all of which together shall
constitute one and the same instrument.
SECTION 9.11 TIME IS OF THE ESSENCE. The Purchaser and the Sellers
hereby expressly acknowledge and agree that time is of the essence for each and
every provision of this Agreement.
SECTION 9.12 NO THIRD-PARTY BENEFICIARIES. Except as otherwise
expressly provided in this Agreement, no Person which is not a party shall have
any right or obligation pursuant to this Agreement.
38
SECTION 9.13 HEADINGS. The headings used in this Agreement are for the
purpose of reference only and shall not affect the meaning or interpretation of
any provision of this Agreement.
SECTION 9.14 TRANSACTION EXPENSES; TRANSFER TAXES. In the event that
the transactions contemplated hereby are not consummated, each of the Purchaser,
the Company, and the Sellers shall bear their own costs and expenses (including
legal fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby; provided, however, any expense incurred by the
Company in connection with the Purchaser's efforts to finance the transactions
contemplated hereby shall be paid by the Purchaser. Contemporaneous with the
Closing of the transactions contemplated hereby, the Company shall pay all of
its own fees, costs and expenses (including, without limitation, all legal fees
and disbursements of counsel and the fees and expenses of the Bear ▇▇▇▇▇▇▇
Companies, Inc. referenced in Section 4.23 hereof) incurred in connection with
the process leading to the transactions contemplated hereby, and the
negotiation, execution and closing of the transactions contemplated hereby up to
an aggregate of $4,000,000. The Purchaser will pay any and all transfer taxes,
stamp and recording taxes, sales and use taxes and other miscellaneous closing
fees or costs associated therewith, if any.
* * *
39
IN WITNESS WHEREOF, the parties have executed this Purchase Agreement
as of the date first written above.
RAYOVAC CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name:
Title:
REMINGTON PRODUCTS COMPANY, L.L.C.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman, President and CEO
VESTAR EQUITY PARTNERS, L.P.
By: Vestar Associates, L.P.,
its General Partner
By: Vestar Associates Corporation,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name:
Title:
RPI CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ III
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇ III
Title: President
INVESTORS/RP, L.L.C
By: Vestar Equity Partners, L.P.
its Manager
By: Vestar Associates, L.P.,
its General Partner
By: Vestar Associates Corporation,
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Name:
Title:
VESTAR ▇▇▇▇▇▇ CORP.
(solely for the purposes of Section 6.9 and
Section 6.10)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
VESTAR RAZOR CORP.
(solely for the purposes of Section 6.9 and
Section 6.10)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President