EXHIBIT 10.3
EXECUTION COPY
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IESI CORPORATION
A DELAWARE CORPORATION
STOCK PURCHASE AGREEMENT
Dated as of December 24, 2001
Series D Convertible Preferred Stock
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TABLE OF CONTENTS
PAGE
ARTICLE I PURCHASE AND SALE OF THE STOCK.......................................................1
1.1 Purchase and Sale.......................................................................1
1.2 Purchase Price..........................................................................1
1.3 Closing Fee.............................................................................1
1.4 Time and Place of Transaction...........................................................2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................2
2.1 Due Organization and Qualification; Subsidiaries; Due Authorization.....................2
2.2 No Conflicts or Defaults................................................................3
2.3 Capitalization..........................................................................4
2.4 Subsidiaries; Investments...............................................................4
2.5 Financial Statements....................................................................5
2.6 Further Financial Matters...............................................................5
2.7 Taxes...................................................................................6
2.8 Indebtedness; Contracts; No Defaults....................................................6
2.9 Personal Property.......................................................................8
2.10 Real Property...........................................................................8
2.11 Compliance with Law....................................................................10
2.12 Permits and Licenses...................................................................10
2.13 Environmental, Health, and Safety Matters..............................................10
2.14 No Adverse Changes.....................................................................11
2.15 Litigation.............................................................................11
2.16 Insurance..............................................................................12
2.17 Authorizations.........................................................................12
2.18 Certificate of Incorporation and By-laws; Minute Books.................................12
2.19 Employee Benefit Plans.................................................................13
2.20 Intellectual Property..................................................................14
2.21 Transactions with Affiliates...........................................................14
2.22 Brokers................................................................................14
2.23 Securities Matters.....................................................................15
2.24 Miscellaneous..........................................................................15
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TABLE OF CONTENTS
(CONTINUED)
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.....................................15
3.1 Due Authorization; Valid Obligation....................................................15
3.2 No Conflicts...........................................................................16
3.3 Authorizations.........................................................................16
3.4 Purchase for Investment................................................................16
3.5 Investment Experience..................................................................16
3.6 Information; Projections...............................................................17
3.7 Restricted Securities..................................................................17
3.8 Miscellaneous..........................................................................17
ARTICLE IV ADDITIONAL AGREEMENTS...............................................................17
4.1 Further Investigation..................................................................17
4.2 Confidentiality........................................................................18
4.4 Preserve Accuracy of Representations and Warranties of the Company.....................18
4.5 Consents and Waivers...................................................................19
ARTICLE V CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER......................................19
5.1 Due Performance........................................................................19
5.2 Accuracy of Representations and Warranties.............................................19
5.3 Stockholders' Agreement................................................................19
5.4 Registration Rights Agreement..........................................................19
5.5 Amended Charter........................................................................20
5.6 Securities Law Compliance..............................................................20
5.7 Closing Documents......................................................................20
5.8 No Claims..............................................................................20
5.9 Approvals, Consents and Waivers........................................................21
5.10 No New Law or Regulation...............................................................21
5.11 Compliance with Applicable Laws........................................................21
5.12 No Material Adverse Change.............................................................21
5.13 Opinion................................................................................21
5.14 Warrant Holder Waivers.................................................................21
5.15 Employee Agreement Waivers.............................................................22
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TABLE OF CONTENTS
(CONTINUED)
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5.16 Satisfaction of Counsel................................................................22
ARTICLE VI CONDITIONS TO THE OBLIGATIONS OF THE COMPANY........................................22
6.1 Due Performance........................................................................22
6.2 Accuracy of Representations and Warranties.............................................22
6.3 [Intentionally Left Blank].............................................................22
6.4 Certificate............................................................................22
6.5 No Claims..............................................................................23
6.6 Approvals, Consents and Waivers........................................................23
6.7 Certain Agreements.....................................................................23
6.8 No New Law or Regulation...............................................................23
6.9 Satisfaction of Counsel................................................................23
ARTICLE VII INDEMNIFICATION.....................................................................24
7.1 Indemnity of the Purchaser.............................................................24
7.2 Indemnification Procedure..............................................................24
ARTICLE VIII AFFIRMATIVE COVENANTS OF THE COMPANY................................................25
8.1 Financial Statements and Other Information.............................................25
8.2 Rights of Inspection...................................................................26
8.3 Reservation of Common Stock............................................................26
8.4 Use of Proceeds........................................................................26
8.5 Observation Rights; Registration Rights................................................27
ARTICLE IX TERMINATION.........................................................................27
9.1 Termination............................................................................27
9.2 Procedure and Effect of Termination....................................................28
ARTICLE X MISCELLANEOUS.......................................................................28
10.1 Survival of Representations, Warranties and Agreements.................................28
10.2 Expenses...............................................................................28
10.4 Notice.................................................................................29
10.5 Entire Agreement.......................................................................30
10.6 Successors and Assigns.................................................................30
10.7 Governing Law; Submission to Jurisdiction..............................................30
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TABLE OF CONTENTS
(CONTINUED)
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10.8 Counterparts...........................................................................30
10.9 Knowledge..............................................................................31
10.10 Construction...........................................................................31
10.11 Severability...........................................................................31
ARTICLE XI DEFINITIONS.........................................................................31
11.1 Defined Terms..........................................................................31
EXHIBITS
Exhibit A Stockholders' Agreement
Exhibit B Registration Rights Agreement
Exhibit C Subordinate Registration Rights Agreement
SCHEDULES
Schedule 2.1 Subsidiaries
Schedule 2.2 Conflicts
Schedule 2.3 Capitalization and Stockholder List
Schedule 2.4 Subsidiaries; Investments
Schedule 2.5 Financial Statements
Schedule 2.6 Projections and Certain Liabilities
Schedule 2.7 Taxes
Schedule 2.8 Operating Agreements
Schedule 2.9 Personal Property
Schedule 2.10 Real Property
Schedule 2.11 Compliance with Law
Schedule 2.12 Permits and Licenses
Schedule 2.13 Environmental, Health and Safety Matters
Schedule 2.15 Litigation
Schedule 2.16 Insurance
Schedule 2.19 Employee Benefit Plans
Schedule 2.20 Intellectual Property
Schedule 2.21 Affiliate Transactions
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of December 24, 2001, by and
among IESI Corporation, a Delaware corporation (the "Company") and Indosuez
Capital Partners 2001, L.P. (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Purchaser desires to acquire from the Company, and the
Company desires to sell to the Purchaser, that number of shares of the Company's
Series D Preferred Stock set forth on the Purchaser's signature page annexed
hereto, on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and agreements set forth herein, the parties hereto
agree as follows:
ARTICLE I
PURCHASE AND SALE OF THE STOCK
1.1 PURCHASE AND SALE
Subject to the terms and conditions of this Agreement, on the
Closing Date, the Company shall issue and deliver to the Purchaser, and the
Purchaser agrees to purchase from the Company on the Closing Date, that number
of authorized but unissued shares of the Series D Preferred Stock set forth on
the Purchaser's signature page annexed hereto (all such shares of Series D
Preferred Stock, the "Shares").
1.2 PURCHASE PRICE
The purchase price for each Share is $1,000 and the aggregate
purchase price for all the Shares is Six Million Five Hundred Thousand Dollars
($6,500,000), payable on the Closing Date by wire transfer of immediately
available funds to the Company against the issuance and delivery to the
Purchaser of a certificate evidencing the Shares being purchased by the
Purchaser on the Closing Date.
1.3 CLOSING FEE
The Company shall pay to the Purchaser, or such Person as the
Purchaser shall designate in writing to the Company not less than three (3) days
prior to the Closing Date, on the Closing Date relating to the purchase and sale
of the Shares being purchased by the Purchaser as additional consideration for
the purchase of such Shares hereunder, a fee (the "Closing Fee") equal to 3% of
the aggregate purchase price for the Shares purchased by the Purchaser on the
Closing Date payable by wire transfer of immediately available funds.
1.4 TIME AND PLACE OF TRANSACTION
The consummation of the purchase and sale of the Shares by the
Purchaser (the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇▇, Will &
▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on a date and time as the
Company and the Purchaser may mutually agree, but the Closing shall not occur
later than December 28, 2001 (the "Closing Date").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to the Purchaser to enter into this
Agreement and purchase the Shares, the Company represents and warrants to the
Purchaser that:
2.1 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES; DUE AUTHORIZATION
(a) Except as set forth in Item 2.1 of the Disclosure Schedule,
the Company and each Subsidiary are corporations duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of formation,
with full corporate power and authority to own, lease and operate their
respective businesses and properties and to carry on their respective businesses
in the places and in the manner as presently conducted and as presently proposed
to be conducted. The Company and each Subsidiary are in good standing as foreign
corporations in each jurisdiction in which the properties owned, leased or
operated, or the businesses conducted, by them requires such qualification
except for any such failure, which when taken together with all other failures,
does not have and is not likely to have a material adverse effect on the results
of operations, financial condition, assets or business of the Company and its
Subsidiaries taken as a whole (a "Material Adverse Effect").
(b) The Company does not own, directly or indirectly, any capital
stock, equity or interest in any corporation, firm, partnership, joint venture
or other entity, other than those (each, a "Subsidiary" and together, the
"Subsidiaries") set forth in Item 2.1 of the Disclosure Schedule of even date
herewith, which accompanies this Agreement and is incorporated herein by
reference (the "Disclosure Schedule"). Except as set forth in Item 2.1 of the
Disclosure Schedule, each Subsidiary is wholly owned by the Company, all the
outstanding shares of capital stock of each Subsidiary are owned free and clear
of all Liens, there is no contract, agreement, arrangement, option, warrant,
call, commitment or other right of any character obligating any Subsidiary to
issue, sell, redeem or repurchase any of its securities, and there is no
outstanding security of any kind convertible into or exchangeable for securities
of any Subsidiary.
(c) The Company has all requisite corporate power and authority
to execute and deliver this Agreement, the Amended and Restated Stockholders'
Agreement attached hereto as EXHIBIT A (the "Stockholders' Agreement"), the
Amended and Restated Registration Rights Agreement attached hereto as EXHIBIT B
(the "Registration Rights Agreement") and the Subordinate Registration Rights
Agreement attached hereto as EXHIBIT C (the "Subordinate Registration Rights
Agreement"), and to consummate the transactions and actions, including the
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adoption of the Amended Charter, contemplated hereby and thereby. The Company
has taken all corporate action necessary for the execution and delivery of this
Agreement, the Stockholders' Agreement, the Registration Rights Agreement and
the Subordinate Registration Rights Agreement, and the consummation of the
transactions contemplated hereby and thereby. This Agreement constitutes, and,
when executed and delivered by the Company, each of the Additional Agreements
will constitute, the valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except as may be
affected by bankruptcy, insolvency, moratoria or other similar laws affecting
the enforcement of creditors' rights generally and subject to the qualification
that the availability of equitable remedies is subject to the discretion of the
court before which any proceeding therefor may be brought.
2.2 NO CONFLICTS OR DEFAULTS
Except as set forth in Item 2.2 of the Disclosure Schedule, the
execution and delivery of this Agreement and the Additional Agreements by the
Company and the consummation of the transactions contemplated hereby and thereby
do not and will not (i) contravene the Amended Charter or by-laws of the Company
or (ii) with or without the giving of notice or the passage of time and subject
to the consents set forth in Item 2.2 of the Disclosure Schedule (A) violate,
conflict with, or result in a breach of, or a default or loss of rights under,
any covenant, agreement, mortgage, indenture, lease, instrument, permit or
license to which the Company or any of the Subsidiaries is a party or by which
the Company or any of the Subsidiaries or any of their respective assets are
bound, or any judgment, order or decree, or any law, rule or regulation to which
the Company or any of the Subsidiaries or any of their respective assets are
subject, (B) result in the creation of, or give any party the right to create,
any lien, charge, security interest, encumbrance or any other right or adverse
interest ("Liens") upon any of the capital stock or assets of the Company or any
of the Subsidiaries, (C) terminate or give any party the right to terminate,
amend, abandon or refuse to perform, any agreement, arrangement or commitment to
which the Company or any of the Subsidiaries is a party or by which the Company
or any of the Subsidiaries or any of their respective assets are bound, (D)
accelerate or modify, or give any party the right to accelerate or modify, the
time within which, or the terms under which, the Company or any of the
Subsidiaries is to perform any duties or obligations or receive any rights or
benefits hereunder, or (E) result in a violation of, or require any
authorization, consent, approval, exemption or other action by or notice or
declaration to, or filing with, any court or administrative or governmental body
or agency pursuant to, the certificate of incorporation or by-laws of the
Company or any Subsidiary, or any law, statute, rule or regulation to which the
Company or any Subsidiary is subject, or any agreement, instrument, order,
judgment or decree to which the Company or any Subsidiary is subject, except in
each case, for such violations, conflicts, breaches, defaults, terminations or
other events that would not, singly or in the aggregate, result in a Material
Adverse Effect. Except as set forth on Item 2.2 of the Disclosure Schedule, none
of the Subsidiaries is subject to any restrictions upon making loans or advances
or paying dividends to, transferring property to, or repaying any Indebtedness
owed to, the Company or another Subsidiary.
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2.3 CAPITALIZATION
As of the date hereof, the authorized capital stock of the Company
consists of 3,600,000 shares of Class A Stock, of which 142,000 shares are
issued and outstanding, 450,000 shares of Class B Stock, of which 112,980.18
shares are issued and outstanding, 32,000 shares of the Series A Convertible
Preferred Stock (the "Series A Preferred Stock"), of which 32,000 shares are
issued and outstanding, 20,100 shares of Series B Convertible Preferred Stock
(the "Series B Preferred Stock"), of which 20,100 shares are issued and
outstanding, 55,000 shares of Series C Convertible Preferred Stock (the "Series
C Preferred Stock") of which 55,000 shares are issued and outstanding and
145,000 shares of Series D Convertible Preferred Stock (the "Series D Stock" and
together with the Series A Preferred Stock, the Series B Preferred Stock and the
Series C Preferred Stock, the "Preferred Stock") of which 48,500 shares are
issued and outstanding. Set forth in Item 2.3 of the Disclosure Schedule is a
list that accurately sets forth all of the stockholders of the Company, their
names, addresses and the number of shares of each class and series of the
Company's capital stock owned by each such stockholder. All of the outstanding
shares of Common Stock and Preferred Stock are, and the Shares when issued in
accordance with the terms hereof, will be, duly authorized, validly issued,
fully paid and nonassessable, and have not been or, with respect to the Shares,
will not be, issued in violation of any preemptive right of any stockholder of
the Company. Except as set forth in Item 2.3 of the Disclosure Schedule, none of
the Common Stock or the Preferred Stock is, and none of the Shares will be,
subject to any preemptive or subscription right, any voting trust agreement or
other contract, agreement, arrangement, option, warrant, call, commitment or
other right of any character obligating or entitling the Company to issue, sell,
redeem or repurchase any of its securities, and there is no outstanding security
of any kind convertible into or exercisable or exchangeable for Common Stock.
The offer, issuance and sale of all of the outstanding shares of Common Stock
and Preferred Stock issued prior to the date hereof were exempt from
registration under the Securities Act and applicable state securities laws. The
offer, sale and issuance of the Shares pursuant to Section 1.1 of this
Agreement, and the Common Stock upon conversion of the Shares, do not and will
not, as the case may be, require registration under the Securities Act or any
applicable state securities laws.
2.4 SUBSIDIARIES; INVESTMENTS
Item 2.1 of the Disclosure Schedule accurately sets forth the name
of each Subsidiary, the jurisdiction of its incorporation and the Persons owning
the outstanding capital stock of such Subsidiary. Except as set forth in Item
2.1 of the Disclosure Schedule, each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, possesses all requisite corporate power and authority and all
material licenses, permits and authorizations necessary to own its properties
and to carry on its businesses as now being conducted and as presently proposed
to be conducted and is qualified to do business in every jurisdiction in which
its ownership of property or the conduct of its business requires it to qualify,
except when the failure to be so qualified would not, singly or in the
aggregate, have a Material Adverse Effect. All of the outstanding shares of
capital stock of each Subsidiary are validly issued, fully paid and
nonassessable, and except as set forth in Item 2.1 of the Disclosure Schedule,
all such shares are owned by the Company or another Subsidiary free and clear of
any Lien and not subject to any option or right to purchase any such shares.
Except as set forth on Item 2.4 of the Disclosure Schedule, neither the Company
nor any Subsidiary
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owns, or holds the right or has an obligation to acquire, any shares of stock or
any other Investment in any other Persons.
2.5 FINANCIAL STATEMENTS
Item 2.5 to the Disclosure Schedule contains copies of the
consolidated balance sheets of the Company at December 31, 2000, March 31, 2001,
June 30, 2001, September 30, 2001, and October 31, 2001 and the related
statements of operations, stockholders' equity and cash flows for the respective
fiscal year, three, six, nine, and ten months periods then ended, including with
respect to the Financial Statements for the 2000 fiscal year, the notes thereto,
as audited by Ernst & Young LLP, certified public accountants ("E&Y") (all such
statements being the "Financial Statements"). Except as set forth in Item 2.5 to
the Disclosure Schedule or the notes to the Financial Statements, the Financial
Statements, together with the notes to the Financial Statements for the 2000
fiscal year, have been prepared in accordance with U.S. generally accepted
accounting principles applied on a basis consistent throughout all periods
presented. Such statements present and will present fairly the financial
position of the Company as of the dates and for the periods indicated. The books
of account and other financial records of the Company have been maintained in
accordance with good business practices.
2.6 FURTHER FINANCIAL MATTERS
(a) Except as set forth in Item 2.6(a) of the Disclosure
Schedule, neither the Company nor any of the Subsidiaries has any material
liabilities or obligations, whether secured or unsecured, accrued, determined,
absolute or contingent, asserted or unasserted or otherwise, which are required
to be reflected or reserved in a balance sheet or the notes thereto under
generally accepted accounting principles, but which are not reflected in the
Financial Statements. As of the date hereof, the Company has no dividends
declared but not paid or in arrears.
(b) The forecasted balance sheet, operations statements and cash
flow statements for the years 2001 - 2005 dated July 17, 2001 of the Company
(the "Projections"), true and complete copies of which have been delivered to
the Purchaser and which are listed in Item 2.6(b) of the Disclosure Schedule and
attached as Exhibit 2 to the Disclosure Schedule, were prepared in good faith on
the assumptions stated therein, which assumptions were believed and presently
are believed to be fair and reasonable in light of conditions existing at the
time of delivery of such forecasts and those presently existing, and
represented, at the time of delivery, and continue to represent the Company's
reasonable estimate of its future financial performance, it being recognized
that such forecasts do not constitute a warranty as to the future performance of
the Company and that actual results may vary from forecasted results.
(c) Except as set forth in Item 2.6(c) of the Disclosure
Schedule, since December 31, 2000, each of the Company and the Subsidiaries have
conducted their respective businesses, maintained their respective real property
and equipment and kept their respective books of account, records and files,
substantially in the same manner as previously conducted, maintained or kept and
solely in the ordinary course.
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2.7 TAXES
Except as indicated in Item 2.7 of the Disclosure Schedule, each of
the Company and each Subsidiary has timely filed all Tax Returns required to be
filed by it, and has paid all Taxes which have become due and payable, or, with
respect to Taxes which have accrued and are not yet due and payable, the same
have been properly reflected as a liability on the books and records of the
Company and adequate reserves therefor have been established. All such Tax
Returns have been properly prepared and are true, correct (and to the extent
such Tax Returns reflect judgments made by the Company or a Subsidiary, as the
case may be, such judgments were reasonable under the circumstances) and
complete in all material respects. Except as indicated in Item 2.7 of the
Disclosure Schedule, no extension for the filing of any Tax Return is currently
in effect. Except as indicated in Item 2.7 of the Disclosure Schedule, no Tax
Return or Tax Return liability of the Company or any Subsidiary has been audited
or is presently under audit or to the knowledge of the Company and its
Subsidiaries is proposed to be audited. All Taxes and any penalties, fines and
interest which have been asserted to be payable as a result of any audits have
been paid. Except as indicated in Item 2.7 of the Disclosure Schedule, neither
the Company nor any Subsidiary has given or been requested to give waivers of
any statute of limitations relating to the assessment of any Taxes (or any
related penalties, fines and interest). There are no claims, actions, suits or
taxing authority proceedings, or audits pending or, to the knowledge of the
Company, threatened, against the Company or any Subsidiary for Taxes. Except as
indicated in Item 2.7 of the Disclosure Schedule, all payments for withholding
Taxes, unemployment insurance and other amounts required to be paid for any Tax
periods (or portions thereof) ending on or prior to the Closing Date to any
governmental authority in respect of employment obligations of the Company and
each Subsidiary, including, without limitation, amounts payable pursuant to the
Federal Insurance Contributions Act, have been paid or shall be paid prior to
the Closing Date and have been duly provided for on the books and records of the
Company and in the Financial Statements. Except as indicated in Item 2.7 of the
Disclosure Schedule, no claim has ever been made by a Taxing authority in a
jurisdiction where the Company or any Subsidiary does not file Tax Returns that
the Company or Subsidiary is or may be subject to Taxes assessed by such
jurisdiction. Neither the Company nor any Subsidiary has been a member of an
Affiliated Group other than one consisting solely of two or more of the Company
and any of the Subsidiaries, or filed or been included in a combined,
consolidated or unitary income Tax Return, other than one filed by a group
consisting solely of two or more of the Company and any of the Subsidiaries.
2.8 INDEBTEDNESS; CONTRACTS; NO DEFAULTS
(a) Item 2.8 of the Disclosure Schedule sets forth a true,
complete and correct list of all material instruments, agreements, indentures,
mortgages, guarantees, notes, commitments, accommodations, letters of credit or
other arrangements or understandings, whether written or oral, to which the
Company or any Subsidiary is a party (collectively, the "Operating Agreements").
An agreement shall not be considered material for the purposes of this Section
2.8 or the definition of Operating Agreements if the agreement has a term of
less than one year, and if it (together with all related agreements) provides
for expenditures or receipts of less than $200,000 and has been entered into by
the Company or a Subsidiary in the ordinary course of business. In addition, set
forth in Item 2.8 of the Disclosure Schedule is an
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indication whether any contract with any governmental body contains a
renegotiation provision. To the Company's knowledge, it is not party to any oral
Operating Agreements.
Notwithstanding the foregoing, Item 2.8 of the Disclosure Schedule and Items
2.10 and 2.19 of the Disclosure Schedule name or describe, and the term
"Operating Agreement" shall include, each of the following to which the Company
or a Subsidiary is a party:
(i) each pension, profit sharing, stock option, employee stock
purchase or other plan or arrangement providing for deferred
or other compensation to employees or any other employee
benefit plan or arrangement, or any collective bargaining
agreement or any other contract with any labor union, or
severance agreements, programs, policies or arrangements;
(ii) each contract for the employment of any officer, individual
employee or other Person on a full-time, part-time,
consulting or other basis providing annual compensation in
excess of $100,000 or providing for any severance or other
payment on or after termination, or any contract relating to
loans to officers, directors or Affiliates ("Employment
Agreements");
(iii) each contract under which the Company or a Subsidiary has
advanced or loaned any other Person amounts in the aggregate
exceeding $200,000;
(iv) each agreement or indenture relating to borrowed money or
other Indebtedness or the mortgaging, pledging or otherwise
placing a Lien on any material asset or material group of
assets of the Company or a Subsidiary;
(v) each guarantee of any obligation in excess of $200,000 (other
than by the Company of a Wholly-Owned Subsidiary's debts or a
guarantee by a Subsidiary of the Company's debts or another
Subsidiary's debts);
(vi) each lease or agreement under which the Company or any
Subsidiary is lessor of, or permits any third party to hold
or operate, any property, real or personal, owned or
controlled by the Company or any Subsidiary providing for
annual rental payments in excess of $200,000;
(vii) each agreement under which it has granted any Person any
registration rights (including, without limitation, demand
and piggyback registration rights); and
(viii) each contract or agreement prohibiting it from freely
engaging in any business or competing anywhere in the world.
The Operating Agreements constitute all of the material contracts, agreements,
understandings and arrangements required for the operation of the business of
the Company and the Subsidiaries or which have a material effect thereon. True
and complete copies of all written Operating Agreements without schedules and
exhibits have previously been delivered or otherwise made
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available to the Purchaser. Such schedules and exhibits contain no information
which is material to the provisions of the Operating Agreements.
(b) Except as disclosed in Item 2.8 of the Disclosure Schedule,
neither the Company, any Subsidiary, nor, to the Company's knowledge, any other
Person or entity is in breach in any material respect of, or in default in any
material respect under, any Operating Agreement and no event or action has
occurred, is pending or is threatened, which, after the giving of notice,
passage of time or otherwise, would constitute or result in such a material
breach or material default by the Company or any Subsidiary or, to the knowledge
of the Company, any other Person or entity except for such breaches as would not
have a Material Adverse Effect. Neither the Company nor any Subsidiary has
received any notice of default under any Operating Agreement to which it is a
party, which default has not been cured to the satisfaction of, or duly waived
by, the party claiming such default on or before the date hereof. All of the
Operating Agreements on Item 2.8 of the Disclosure Schedule are in all material
respects, valid, binding and enforceable in accordance with their respective
terms. Neither the Company nor any Subsidiary has any present expectation or
intention of not fully performing its obligations under any Operating Agreement;
and, neither the Company nor any Subsidiary has knowledge of any anticipated
breach by the other parties to any Operating Agreement except for such breaches
or anticipated breaches as would not, singly or in the aggregate, have a
Material Adverse Effect.
2.9 PERSONAL PROPERTY
Except as set forth in Item 2.9 of the Disclosure Schedule, each of
the Company and the Subsidiaries has good and marketable title to all of its
tangible personal property and assets, including, without limitation, all of the
assets reflected in the Financial Statements (except for assets that have been
disposed of in the ordinary course of business since December 31, 2000), free
and clear of all Liens or mortgages, except for (a) any Lien for current taxes
not yet due and payable, (b) restrictions, if any, on the disposition of
securities as may be imposed by federal or applicable state securities laws and
(c) failures of title or Liens as do not materially affect the value,
marketability, operation or the Company's and the Subsidiaries' use of such
assets or as would not, singly or in the aggregate, have a Material Adverse
Effect.
2.10 REAL PROPERTY
(a) Item 2.10(a) of the Disclosure Schedule sets forth a true and
complete list of all real property owned by the Company or any Subsidiary (the
"Owned Real Property"). Either the Company or a Subsidiary is the owner of good
and marketable title to such Owned Real Property and to all of the structures
located thereon, free and clear of all Liens, mortgages, encroachments,
restrictions on the use thereof, or other defects in title (collectively,
"Encumbrances"), except matters of record which do not reduce the value or
marketability, or interfere in any material way with use or occupancy of the
Owned Real Property or as would not, singly or in the aggregate, have a Material
Adverse Effect.
(b) Item 2.10(b)(i) of the Disclosure Schedule sets forth a true,
correct and complete list of all leases, subleases, licenses and other
agreements (collectively, the "Real Property Leases") under which the Company or
any Subsidiary uses or occupies, has the right to
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use or occupy, or leases the right to use or occupy, now or in the future, any
real property where the annual rental obligation exceeds $200,000 (the land,
buildings, and other improvements covered by the Real Property Leases being
herein called the "Leased Real Property" and together with the Owned Real
Property, the "Real Property"). Except as set forth in Items 2.10(b)(i) and (ii)
of the Disclosure Schedule, (i) the Company or a Subsidiary has a valid
leasehold interest in the Leased Real Property and (ii) each Real Property Lease
is valid, binding and in full force and effect with respect to the Company or a
Subsidiary, as the case may be, and, to the knowledge of the Company, to all
other parties thereto; no notice of default or termination under any Real
Property Lease is outstanding; no termination event or condition or uncured
default on the part of the Company or a Subsidiary, as the case may be, exists
under any Real Property Lease, and no event has occurred and no condition exists
which, with the giving of notice or the lapse of time or both, would constitute
such a default or termination event or condition with respect to the Company or
a Subsidiary, as the case may be, or, to the knowledge of the Company or any
Subsidiary, any other party thereto, in each case except for such defaults,
terminations, events or conditions as would not, singly or in the aggregate,
have a Material Adverse Effect. The Company and the Subsidiaries hold their
respective leasehold estate under, and any other interest in each applicable
Real Property Lease, free and clear of all Encumbrances except as set forth in
Item 2.10(b)(ii) of the Disclosure Schedule. The Company has previously
delivered or otherwise made available to the Purchaser true and complete copies
of all the Real Property Leases involving annual rental payments in excess of
$200,000. Except as described in Item 2.10(b)(iii) of the Disclosure Schedule,
no consent, waiver, approval or authorization is required from the landlord
under any Real Property Lease as a result of the execution of this Agreement or
the consummation of the transactions contemplated hereby.
(c) The Real Property constitutes all of the real property owned,
leased, occupied or otherwise utilized in connection with the business of the
Company and the Subsidiaries. Except as set forth in Item 2.10(c) of the
Disclosure Schedule, other than the Company and the Subsidiaries, there are no
parties in possession or parties having any current or future right to occupy
any of the Real Property. Except as set forth in Item 2.10(c) of the Disclosure
Schedule, the Real Property is, in all material respects, in good condition and
repair and is sufficient and appropriate for the conduct of the business of the
Company and its Subsidiaries as currently conducted or as currently contemplated
to be conducted. Except as set forth in Item 2.10(c) of the Disclosure Schedule,
to the knowledge of the Company and its Subsidiaries, the Real Property and,
with respect to the Owned Real Property, all plants, buildings and improvements
located thereon conform in all material respects to all applicable building,
zoning and other laws, ordinances, rules and regulations. There exists no
material violation of any covenant, condition, restriction, easement, agreement
or order affecting any portion of the Real Property. Except as set forth in Item
2.10(c) of the Disclosure Schedule, all improvements located on the Real
Property have direct access to a public road adjoining such Real Property. No
such improvements or accessways encroach on land not included in the Real
Property and no such improvement is dependent for its access, operation or
utility on any land, building or other improvement not included in the Real
Property. There is no pending or, to the knowledge of the Company or any
Subsidiary, threatened condemnation proceeding affecting any portion of the Real
Property.
(d) There are no outstanding options or rights of first refusal
with respect to the purchase or use of any of the Real Property, any portion
thereof or interest therein, except as
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set forth in Item 2.10(d) of the Disclosure Schedule. Neither the Company nor
any Subsidiary is obligated to purchase or lease any real property, except as
set forth in Item 2.10(d) of the Disclosure Schedule.
2.11 COMPLIANCE WITH LAW
Except as set forth in Item 2.11 of the Disclosure Schedule, neither
the Company nor any Subsidiary has been or is conducting its respective business
or affairs in material violation of any applicable federal, state or local law,
ordinance, rule, regulation, court or administrative order, decree or process.
Neither the Company nor any Subsidiary has received any notice of material
violation or claimed material violation of any such law, ordinance, rule,
regulation, order, decree, process or requirement.
2.12 PERMITS AND LICENSES
Except as set forth in Item 2.12 of the Disclosure Schedule, each of
the Company and the Subsidiaries have all certificates of occupancy, rights,
permits, certificates, licenses, franchises, approvals and other authorizations
as are reasonably necessary to conduct their respective businesses and to own,
lease, use, operate and occupy their respective assets (including without
limitation the Real Property), at the places and in the manner now conducted and
operated, except those the absence of which would not have a Material Adverse
Effect and all of the foregoing are in full force and effect and have not been
violated. Except as set forth in Item 2.12 of the Disclosure Schedule, as of the
date hereof, neither the Company nor any Subsidiary has received any written or
oral notice or claim pertaining to the failure to obtain, or the violation of,
any material permit, certificate, license, approval or other authorization
required by any federal, state or local agency or other regulatory body, the
failure of which to obtain would have a Material Adverse Effect.
2.13 ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS
Except as set forth in Item 2.13 of the Disclosure Schedule:
(a) Without limiting the generality of Section 2.11, the Company
and the Subsidiaries have complied in all material respects and are in
compliance in all material respects with all Environmental, Health, and Safety
Requirements.
(b) Without limiting the generality of Section 2.11, the Company
and the Subsidiaries have obtained and complied in all material respects with,
and are in compliance in all material respects, with, all material permits,
licenses and other authorizations that are required pursuant to Environmental,
Health, and Safety Requirements for the occupation of their facilities and the
operation of their business; and a list of all such material permits, licenses
and other authorizations is set forth in Item 2.13 of the Disclosure Schedule.
(c) Neither the Company nor any Subsidiary has received any
written or oral notice, report or other information regarding any actual or
alleged material violation of Environmental, Health, and Safety Requirements, or
any material liabilities or potential liabilities (whether accrued, absolute,
contingent, unliquidated or otherwise), including any investigatory,
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remedial or corrective obligations, relating to any of them or its facilities
arising under Environmental, Health, and Safety Requirements.
(d) Neither the Company nor any Subsidiary has treated, stored,
disposed of, arranged for or permitted the disposal of, transported, handled, or
released any substance, including without limitation any hazardous substance, or
owned or operated any property or facility in a manner that has given or would
give rise to material liabilities under Environmental, Health and Safety
Requirements, including any liability for response costs, corrective action
costs, personal injury, property damage, natural resources damages or attorney
fees.
(e) Neither the execution nor the delivery of this Agreement will
result in any obligations for site investigation or cleanup, or notification to
or consent of government agencies or third parties, pursuant to any of the
so-called "transaction-triggered" or "responsible property transfer"
Environmental, Health, and Safety Requirements.
(f) Except as set forth in Item 2.13(f) of the Disclosure
Schedule, neither the Company nor any Subsidiary has expressly assumed or
undertaken any liability, including without limitation, any obligation for
material corrective or remedial action, of any other Person relating to
Environmental, Health, and Safety Requirements.
(g) No facts, events or conditions relating to the present
facilities, properties or operations of the Company or the Subsidiaries will
prevent, hinder or limit continued compliance with Environmental, Health, and
Safety Requirements, give rise to any investigatory, remedial or corrective
obligations pursuant to Environmental, Health, and Safety Requirements, or give
rise to any other material liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise) pursuant to Environmental, Health, and Safety
Requirements, including without limitation, any relating to onsite or offsite
releases or threatened releases of hazardous materials, substances or wastes,
personal injury, property damage or natural resources damage except as would
not, singly or in the aggregate, have a Material Adverse Effect.
2.14 NO ADVERSE CHANGES
Since December 31, 2000, there has not been (a) any material adverse
change in the business, prospects, the financial or other condition, or the
respective assets or liabilities of the Company and the Subsidiaries as
reflected in the Financial Statements, (b) any material loss sustained by the
Company or any Subsidiary, including, but not limited to any loss on account of
theft, fire, flood, explosion, accident or other calamity, whether or not
insured, which has materially and adversely interfered, or may materially and
adversely interfere, with the operation of the Company's or any Subsidiary's
business, or (c) to the best knowledge of the Company, any event, condition or
state of facts, including, without limitation, the enactment, adoption or
promulgation of any law, rule or regulation, the occurrence of which would have
a Material Adverse Effect.
2.15 LITIGATION
(a) Except as set forth in Item 2.15 of the Disclosure Schedule,
there is no claim, dispute, action, suit, proceeding or investigation pending
or, to the knowledge of the Company, threatened, against or affecting the
business of the Company or any Subsidiary, or challenging
-11-
the validity or propriety of the transactions contemplated by this Agreement and
the Additional Agreements, at law or in equity or before any federal, state,
local, foreign or other governmental authority, board, agency, commission or
instrumentality, nor to the knowledge of the Company, has any such claim,
dispute, action, suit, proceeding or investigation been pending or threatened,
during the 24-month period preceding the date hereof; (b) there is no
outstanding judgment, order, writ, ruling, injunction, stipulation or decree of
any court, arbitrator or federal, state, local, foreign or other governmental
authority, board, agency, commission or instrumentality, against or materially
affecting the business of the Company or any Subsidiary; (c) neither the Company
nor any Subsidiary is subject to any arbitration proceedings under collective
bargaining agreements or otherwise or, to the best of the Company's knowledge,
and except for inquiries and investigations by the New York City Trade Waste
Commission, any governmental investigations or inquiries (including, without
limitation, inquiries as to the qualification to hold or receive any license or
permit) and, to the best of the Company's knowledge, there is no basis for any
of the foregoing; (d) neither the Company nor any Subsidiary has received any
written or verbal inquiry from any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality concerning
the possible violation of any law, rule or regulation or any matter disclosed in
respect of its business.
2.16 INSURANCE
Neither the Company nor any Subsidiary is in default with respect to
its obligations under any insurance policy maintained by it, and neither the
Company nor any Subsidiary has within the past twelve months been denied
insurance coverage. The insurance coverage of the Company and its Subsidiaries
is customary for companies of similar size engaged in similar lines of business.
Except as set forth in Item 2.16 of the Disclosure Schedule, the Company and the
Subsidiaries do not have any self-insurance or co-insurance programs, and the
reserves set forth on the latest balance sheet are adequate to cover all
anticipated liabilities with respect to any such self-insurance or co-insurance
programs.
2.17 AUTHORIZATIONS
Any authorization, approval, order, license, permit, franchise or
consent of, declaration to, or filing or registration with, any court,
governmental authority or any other Person or entity which is not a party to
this Agreement or any Additional Agreement which is required in connection with
the execution, delivery and performance by the Company of this Agreement and the
Additional Agreements has been obtained or shall be obtained as of the Closing
Date. There is no pending or threatened claim, action, suit, investigation or
proceeding against the Company before any court, arbitrator or governmental
authority which, if determined adversely to the Company, would have a Material
Adverse Effect on the ability of the Company to perform its obligations under
this Agreement or the Additional Agreements.
2.18 CERTIFICATE OF INCORPORATION AND BY-LAWS; MINUTE BOOKS
The copies of the certificate of incorporation and by-laws (or
similar governing documents) of the Company and each Subsidiary, and all
amendments to each, access to which has been provided to counsel for the
Purchaser are true, correct and complete as of the date hereof. The minute books
of the Company and each Subsidiary contain true and complete
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records of all meetings and consents in lieu of meetings of their respective
board of directors (and any committees thereof), or similar governing bodies,
since the time of their respective organization. The stock books of the Company
and each Subsidiary are true, correct and complete.
2.19 EMPLOYEE BENEFIT PLANS
(a) Except as set forth in Item 2.19 of the Disclosure Schedule,
neither the Company nor any Subsidiary maintains or contributes or is required
to contribute to any employee benefit plan (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")), or any
plans, programs, policies, practices, arrangements or contracts (whether group
or individual) providing for payments, benefits or reimbursements to employees
or former employees (or their beneficiaries and dependents) of the Company or
any Subsidiary. Each item listed on Item 2.19 of the Disclosure Schedule is a
"Benefit Plan."
(b) Each Benefit Plan that is intended to be qualified within the
meaning of Section 401(a) of the Code has received a determination from the
Internal Revenue Service (the "IRS") that such Benefit Plan is qualified under
Section 401(a) of the Code, and to the knowledge of the Company, nothing has
occurred since the date of such determination that could adversely affect the
qualification of such Benefit Plan.
(c) Except as set forth in Item 2.19 of the Disclosure Schedule,
neither the Company nor any Subsidiary has liability that exceeds $500,000 with
respect to any "employee pension benefit plan" (as such term is defined in
Section 3(2) of ERISA) that is subject to Section 302 of ERISA or Section 412 of
the Code or any "multiemployer plan" (as such term is defined in Section 3(37)
of ERISA).
(d) None of the Benefit Plans obligates the Company or any
Subsidiary to pay any separation, severance, termination or similar benefit
solely as a result of any transaction contemplated by this Agreement or solely
as a result of a change in control or ownership within the meaning of Section
280G of the Code.
(e) Except as set forth in Item 2.19 of the Disclosure Schedule,
each Benefit Plan and any related trust, insurance contract or fund has been
maintained, funded and administered in substantial compliance with its
respective terms and the terms of any applicable collective bargaining
agreements and in substantial compliance with all applicable laws and
regulations, including, but not limited to, ERISA and the Code. No asset of the
Company or any Subsidiary is subject to any lien under ERISA or the Code, and
neither the Company nor any Subsidiary has incurred any liability under Title IV
of ERISA or to the Pension Benefit Guaranty Corporation. There are no pending or
threatened actions, suits, investigations or claims with respect to any Benefit
Plan.
(f) The Company and each Subsidiary has complied with the health
care continuation requirements of Part 6 of Subtitle B of Title I of ERISA; and
neither the Company nor any Subsidiary has any obligation under any Benefit Plan
or otherwise to provide health or life insurance benefits to former employees of
the Company or Subsidiary or any other person, except as specifically required
by Part 6 of Subtitle B of Title I of ERISA.
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(g) To the knowledge of the Company, neither the Company nor any
Subsidiary nor any other "disqualified person" (within the meaning of Section
4975 of the Code) or "party in interest" (within the meaning of Section 3(14) of
ERISA) has taken any action with respect to any of the Benefit Plans which could
subject any such Benefit Plan (or its related trust) or the Company or any
Subsidiary or any officer, director or employee of any of the foregoing to any
penalty or tax under Section 502(i) of ERISA or Section 4975 of the Code.
(h) Neither the Company nor any Subsidiary has any liability with
respect to any "employee benefit plan" (as defined in Section 3(3) of ERISA)
solely by reason of being treated as a single employer under Section 414 of the
Code with any trade, business or entity other than the Company and the
Subsidiaries.
(i) With respect to each Benefit Plan, the Company has provided
the Purchaser with true, complete and correct copies of (to the extent
applicable) (i) all documents pursuant to which the Benefit Plan is maintained,
funded and administered, (ii) the most recent annual report (Form 5500 series)
filed with the IRS (with applicable attachments), (iii) the most recent
financial statement, (iv) the most recent summary plan description provided to
participants, and (v) the most recent determination letter received from the
IRS.
2.20 INTELLECTUAL PROPERTY
Item 2.20 of the Disclosure Schedule sets forth a true and complete
list of all Intellectual Property owned by the Company and each of the
Subsidiaries. Each of the Company and the Subsidiaries owns or possesses
sufficient legal rights to use all patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights, trade secrets,
licenses, information, proprietary rights and processes ("Intellectual
Property") listed in Item 2.20 of the Disclosure Schedule, and all Intellectual
Property necessary for each of the Company's and each of the Subsidiaries'
business as now conducted without any conflict with or infringement of the
Intellectual Property rights of any other Person or entity. There are no
outstanding options, licenses or agreements of any kind relating to the
Intellectual Property, and neither the Company nor any Subsidiary is bound by,
or a party to, any options, licenses or agreements of any kind with respect to
the Intellectual Property of any other Person or entity.
2.21 TRANSACTIONS WITH AFFILIATES
Except as set forth in Item 2.21 of the Disclosure Schedule and
except for Employment Agreements which are set forth in Item 2.8 of the
Disclosure Schedule, no officer, director, employee, stockholder or Affiliate of
the Company or any Subsidiary or any individual related by blood, marriage or
adoption to any such individual or any entity in which any such Person or
individual owns any beneficial interest, is a party to any agreement, contract,
commitment or transaction with the Company or any Subsidiary or has any material
interest in any material property used by the Company or any Subsidiary.
2.22 BROKERS
All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried out by the Company directly with the
Purchaser without the intervention of any Person on behalf of the Company in
such a manner as to give rise to any
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valid claim by any Person against any Purchaser for a finder's fee, brokerage
commission or similar payment (other than the Closing Fees payable pursuant to
Section 1.4 hereof). The Company shall pay, and hold the Purchaser harmless
against, any liability, loss or expense (including, without limitation,
reasonable attorneys' fees and out-of-pocket expenses) arising in connection
with any such claim.
2.23 SECURITIES MATTERS
The Company is not a "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" of a "holding company," as such terms are
defined in the Public Utility Holding Company Act of 1935, and the Company is
not a "registered investment company" or "an affiliated Person" or a "principal
underwriter" of a "registered investment company," as such terms are defined in
the Investment Company Act of 1940, as amended.
2.24 MISCELLANEOUS
(a) The representations and warranties made by the Company in
this Agreement and the Additional Agreements and the statements made by or on
behalf of the Company in any certificate, document or exhibit furnished in
connection with the transactions contemplated hereby or thereby, when taken
together, do not and will not as of the Closing contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make
such representations or warranties or other such statements, in light of the
circumstances under, and at the time at, which they were made, not false or
misleading.
(b) Disclosure of any fact or item in any Item of the Disclosure
Schedule referenced by a particular paragraph or Section in this Agreement
shall, should the existence of the fact or item or its contents be reasonably
responsive to any other Item of the Disclosure Schedule or paragraph or Section
of this Agreement, be deemed to be disclosed with respect to that other Item or
Section if an explicit cross-reference appears.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company that:
3.1 DUE AUTHORIZATION; VALID OBLIGATION
The Purchaser has taken all corporate or other action necessary to
authorize it to execute and deliver this Agreement and each Additional Agreement
to which it is a party, and to consummate the transactions contemplated hereby
and thereby, and this Agreement and each Additional Agreement to which it is a
party, constitute the valid and binding obligations of the Purchaser,
enforceable in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and subject to the qualification that
the availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefor may be brought.
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3.2 NO CONFLICTS
The execution and delivery by the Purchaser of this Agreement and
each Additional Agreement to which it is a party and the consummation of the
transactions contemplated hereby and thereby do not and shall not (a) contravene
the certificate of incorporation or by-laws (or similar governing instruments),
or (b) with or without the giving of notice or the passage of time, violate,
conflict with, or result in a breach of, or a default or loss of rights under,
any covenant, agreement, mortgage, indenture, lease or instrument to which the
Purchaser is a party or by which the Purchaser or any of its assets is bound or
any judgment, order, decree, law, rule or regulation to which the Purchaser or
any of its assets are subject.
3.3 AUTHORIZATIONS
Any authorization, approval, order, license, permit, franchise or
consent of, declaration to, or filing or registration with, any court,
governmental authority or any other Person or entity which is not a party to
this Agreement or the Additional Agreements which is required in connection with
the execution, delivery and performance of this Agreement and the applicable
Additional Agreements by the Purchaser has been obtained or shall be obtained as
of the Closing Date. There is no pending or threatened claim, action, suit,
investigation or proceeding against the Purchaser before any court, arbitrator
or governmental authority which, if determined adversely to the Purchaser, would
have a Material Adverse Effect on the Purchaser or on the ability of the
Purchaser to perform its obligations under this Agreement or the applicable
Additional Agreements.
3.4 PURCHASE FOR INVESTMENT
(a) The Purchaser is acquiring the Shares being purchased by the
Purchaser for investment for the Purchaser's own account and not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and the Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same. The Purchaser further
represents that it does not have any contract, undertaking, agreement or
arrangement with any Person to sell, transfer or grant a participation to such
Person or to any third Person, with respect to any of the Shares.
(b) The Purchaser understands that the Shares are not registered
under the Securities Act on the ground that the sale and the issuance of
securities hereunder is exempt from registration under the Securities Act
pursuant to Section 4(2) thereof, and that the Company's reliance on such
exemption is predicated on the Purchaser's representations set forth herein. The
Purchaser is an "accredited investor" as that term is defined in Rule 501(a) of
Regulation D under the Securities Act.
3.5 INVESTMENT EXPERIENCE
The Purchaser acknowledges that it can bear the economic risk of its
Investment in the Shares, and has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the
Investment in the Shares.
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3.6 INFORMATION; PROJECTIONS
The Purchaser has been furnished and has carefully reviewed the
Projections, and such other information as the Purchaser deemed necessary to
evaluate an investment in the Shares. To the full satisfaction of the Purchaser,
it has been furnished all materials that it has requested relating to the
Company and the offering of the Shares, and the Purchaser has been afforded the
opportunity to ask questions of representatives of the Company concerning the
terms and conditions of the offering to verify the information in the
Projections provided to it and to obtain any additional information necessary to
verify the accuracy of any representations or information made or given to the
Purchaser. Notwithstanding the foregoing, nothing herein shall derogate from or
otherwise modify the representations and warranties of the Company set forth in
this Agreement, on which the Purchaser has relied in making an investment in the
Shares.
3.7 RESTRICTED SECURITIES
The Purchaser understands that the Shares may not be sold,
transferred, or otherwise disposed of without registration under the Securities
Act or an exemption therefrom, and that in the absence of an effective
registration statement covering the Shares or any available exemption from
registration under the Securities Act, the Shares must be held indefinitely. The
Purchaser is aware that the Shares may not be sold pursuant to Rule 144
promulgated under the Securities Act unless all of the conditions of that Rule
are met. Among the conditions for use of Rule 144 may be the availability of
current information to the public about the Company. Such information is not now
available, and the Company has no present plans to make such information
available. The Purchaser is aware that the Shares are subject to the terms and
conditions of the Stockholders' Agreement and that the certificates evidencing
the Shares will bear the legend contemplated by the Stockholders' Agreement.
3.8 MISCELLANEOUS
The representations and warranties made by the Purchaser in this
Agreement and the applicable Additional Agreements and the statements made by or
on behalf of the Purchaser in any certificate, document or exhibit furnished in
connection with the transactions contemplated hereby and thereby do not and will
not as of the Closing contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make such representations or
warranties or other such statement, in light of the circumstances under which
they were made, not false or misleading.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 FURTHER INVESTIGATION
The Company shall give to the Purchaser and its representatives
between the date of this Agreement and the Closing Date, full access during
normal business hours to all of the premises, files, books and records of the
Company and the Subsidiaries and cause the officers of the Company to furnish
such financial and operating data and other information with respect to
-17-
the Company and the Subsidiaries as each the Purchaser shall from time to time
reasonably request; provided, however, that any such investigation (a) shall be
conducted in such manner as not to interfere unreasonably with the operation of
the business of the Company and the Subsidiaries, and (b) shall not affect any
of the representations and warranties hereunder. During such investigation, each
the Purchaser and its representatives shall have the right to make copies of, or
excerpts from, such files, books and records, as they may deem advisable. If
this Agreement is not consummated, the Purchaser shall return to the Company all
such copies of materials belonging to the Company made by or furnished to any
Purchaser except for such materials as the Purchaser is entitled to hereunder or
under the Stockholders' Agreement.
4.2 CONFIDENTIALITY
At all times prior to the Closing or, if the transactions
contemplated by this Agreement are not consummated and this Agreement shall be
terminated, the Purchaser shall, and shall cause its Affiliates, officers,
directors, employees, agents and representatives to, keep secret and not divulge
to any third party or otherwise use for the Purchaser's benefit (other than in
connection with the transactions contemplated by this Agreement) any
confidential or proprietary information of the Company to which the Purchaser
obtains access pursuant to Section 4.1; provided, however, that such obligation
shall not apply to any information to the extent that (a) it is or becomes part
of public or industry knowledge or literature as a result of causes other than
the acts or omissions of the Purchaser or its Affiliates, officers, directors,
employees, agents or representatives, (b) can be demonstrated to have been known
to the Purchaser prior to its receipt from the Company, (c) is received by the
Purchaser in good faith from a third party or (d) disclosure shall be required
by applicable law, regulation or court order provided that prior to such
disclosure, the Purchaser shall promptly notify the Company with respect to such
requirement in recognition of the fact that the Company may elect to obtain
relief from such disclosure requirement.
4.3 PRESERVE BUSINESS
Between the date of this Agreement and, with respect to the
Purchaser, the Closing Date relating to the purchase of Shares by the Purchaser,
the Company shall use commercially reasonable efforts to preserve substantially
intact its and each Subsidiary's business organization, keep available the
services of the present officers and employees of the Company and each
Subsidiary, preserve the present relationships with Persons having significant
business relationships therewith and conduct its and each Subsidiary's business
only in the ordinary course, except as otherwise contemplated hereby or set
forth in the Disclosure Schedule.
4.4 PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Between the date of this Agreement and the Closing Date, the Company
shall, and shall cause each Subsidiary to, refrain from taking any action which
would render any of the representations or warranties set forth in Article II
hereof materially inaccurate as of the Closing Date. The Company shall notify
the Purchaser promptly of the occurrence of any matter, event or change in
circumstances after the date hereof and prior to the Closing that would have
been
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required to be disclosed in the Disclosure Schedule if it had occurred prior to
the date hereof, but such notification shall not affect any of the Purchaser's
rights under this Agreement.
4.5 CONSENTS AND WAIVERS
The parties hereto shall cooperate with each other and use their
reasonable best efforts to (i) obtain all consents and waivers to the
transactions contemplated hereby required under all agreements, mortgages,
indentures, contracts, licenses, franchises, permits, leases or other
instruments, the withholding of which consents or waivers could have a Material
Adverse Affect and (ii) satisfy the conditions to closing required to be
satisfied by them, including, with respect to the Company, the submission of the
Charter Amendment to its stockholders.
ARTICLE V
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser under this Agreement are subject to
the satisfaction, on or prior to the Closing Date, of the following conditions,
any of which may be waived in whole or in part by the Purchaser:
5.1 DUE PERFORMANCE
The Company and each other Purchaser shall have performed and
complied in all material respects with all agreements and conditions required by
this Agreement to be performed or complied with by the Company and each other
Purchaser on or prior to the Closing Date.
5.2 ACCURACY OF REPRESENTATIONS AND WARRANTIES
All representations and warranties of the Company set forth in this
Agreement shall be true and correct in all material respects on and as of the
date hereof and on and as of the Closing Date, as though made on and as of the
Closing Date.
5.3 STOCKHOLDERS' AGREEMENT
The Company and each Existing Stockholder shall have entered into
the Stockholders' Agreement in the form and substance set forth in EXHIBIT A
attached hereto.
5.4 REGISTRATION RIGHTS AGREEMENT
The Company and the Purchaser shall have executed the Registration
Rights Agreement in the form and substance set forth as EXHIBIT B attached
hereto. The Company and certain purchaser parties to the
Stock Purchase
Agreement, dated September 10, 2001 among the Company and the other parties
named therein (the "Prior Series D Purchase Agreement") shall have entered into
the Subordinate Registration Rights Agreement in the form and substance set
forth as EXHIBIT C attached hereto.
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5.5 AMENDED CHARTER
The Amended Charter shall be in full force and effect as of the
Closing Date under the laws of the state of Delaware and shall not have been
amended or modified.
5.6 SECURITIES LAW COMPLIANCE
The Company shall have made all filings under all applicable federal
and state securities laws necessary to consummate the issuance of the Series D
Preferred Stock pursuant to this Agreement in compliance with such laws.
5.7 CLOSING DOCUMENTS
On the Closing Date, the Company shall have delivered to the
Purchaser all of the following documents:
(a) an Officer's Certificate, dated the date of the Closing
executed by the President of the Company, to the effect that the conditions set
forth in Sections 5.1, 5.2, 5.9 and 5.12 hereto (in the case of Sections 5.1 and
5.2 hereof insofar as they relate to the representations and warranties set
forth in Article II hereof and the due performance and satisfaction of the
obligations and conditions hereunder to be performed and satisfied by the
Company) have been satisfied in all respects;
(b) certified copies of the resolutions duly adopted by the
Company's board of directors (the "Board") authorizing the execution, delivery
and performance of this Agreement, the Stockholders' Agreement, the Registration
Rights Agreement, and each of the other agreements contemplated hereby, the
filing of the Amended Charter, the issuance and sale of Series D Preferred Stock
and the consummation of all the other transactions contemplated by this
Agreement;
(c) copies of the Amended Charter and the Company's by-laws, each
as in effect at the Closing Date certified by the Secretary of the Company and a
certificate as to the good standing of the Company and each Subsidiary in the
states of their formation and each state where the Company and each Subsidiary
is required to be qualified as a foreign corporation; and
(d) such other documents relating, to the transactions
contemplated by this Agreement as the Purchaser or its counsel may reasonably
request.
5.8 NO CLAIMS
No claim, action, suit, investigation or proceeding shall be pending
or threatened by any Person against any of the parties hereto or any of their
respective affiliates which, if adversely determined, could (a) prevent, hinder
or enjoin consummation of the transactions contemplated by this Agreement or the
Additional Agreements or (b) have a Material Adverse Effect. No party to this
Agreement shall have received written notice from any court or governmental
authority, board, agency, commission or instrumentality of its intention to (i)
institute any action or proceeding to restrain, enjoin, nullify or render
ineffective this Agreement, any Additional Agreement or the transactions
contemplated hereby or thereby, if consummated,
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or (ii) commence any investigation (other than a routine letter of inquiry,
including a routine Civil Investigation Demand) into this Agreement, any
Additional Agreement or the transactions contemplated hereby or thereby, which,
in the reasonable opinion of the Purchaser, would make it inadvisable to
consummate such transactions.
5.9 APPROVALS, CONSENTS AND WAIVERS
The Company shall have received all approvals, consents and waivers
to the transactions contemplated hereby required under all agreements,
mortgages, indentures, contracts, licenses, franchises, permits, leases or other
instruments, laws, rules or regulations applicable to the Company or any
Subsidiary, which are necessary to consummate the transactions contemplated
hereby and to preserve the business of the Company or any Subsidiary.
5.10 NO NEW LAW OR REGULATION
There shall not have been enacted between the date hereof and the
Closing Date any law or regulation which would have a Material Adverse Effect or
prevent or hinder the consummation of the transactions contemplated by this
Agreement or the Additional Agreements.
5.11 COMPLIANCE WITH APPLICABLE LAWS
The purchase of Series D Preferred Stock by the Purchaser hereunder
shall not be prohibited by any applicable law or governmental rule or regulation
and shall not subject the Purchaser to any penalty or liability, and the
purchase of the Series D Preferred Stock by the Purchaser hereunder shall be
permitted by laws, rules and regulations of the jurisdictions and governmental
authorities and agencies to which the Purchaser is subject.
5.12 NO MATERIAL ADVERSE CHANGE
There shall not have occurred a material adverse change in the
business or business prospects of the Company and its Subsidiaries taken as a
whole between December 31, 2000 and the Closing Date.
5.13 OPINION
The Purchaser shall have received an opinion of counsel for the
Company, dated the Closing Date, reasonably satisfactory in form and substance
to counsel to the Purchaser.
5.14 WARRANT HOLDER WAIVERS
The Company shall deliver (a) resolutions of the Board, certified by
its secretary or assistant secretary as being in full force and effect, that the
issuance of the Series D Preferred Stock is for Fair Market Value (as such term
is defined in the warrant issued to the holders thereof (each a "Warrant
Holder") listed in Item 2.3 of the Disclosure Schedule), together with (b) a
written consent, executed by such Warrant Holder (whose consent is required), to
the effect that such Warrant Holder does not dispute, and waives any right to
dispute, the determination of the Board that the issuance of the Series D
Preferred Stock is for Fair Market Value.
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5.15 EMPLOYEE AGREEMENT WAIVERS
The Company shall deliver waivers, executed by each of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, to the effect that neither the transactions
contemplated by this Agreement and the Prior Series D Purchase Agreement nor the
conversion of the Series D Preferred Stock in accordance with the terms of the
Amended Charter shall constitute a "Change of Control" as such term is used in
Section 5(e)(ii)(4) of the Employment Agreement with each such individual.
5.16 SATISFACTION OF COUNSEL
All actions, proceedings, instruments, documents and other relevant
legal matters in connection with the transactions contemplated by this Agreement
shall be reasonably satisfactory in all respects to counsel for the Purchaser.
ARTICLE VI
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
The obligations of the Company under this Agreement to issue and
deliver Shares to the Purchaser are subject to the satisfaction, on or prior to
the Closing Date, of the following conditions, any of which may be waived in
whole or in part by the Company:
6.1 DUE PERFORMANCE
The Purchaser shall have fully performed and complied with all
agreements and conditions required by this Agreement to be performed or complied
with by it on or prior to the Closing Date.
6.2 ACCURACY OF REPRESENTATIONS AND WARRANTIES
All representations and warranties of the Purchaser set forth in
this Agreement shall be true and correct on and as of the Closing Date in all
material respects, as though made on and as of the date hereof and on and as of
the Closing Date.
6.3 [INTENTIONALLY LEFT BLANK]
6.4 CERTIFICATE
The Company shall have received a certificate executed by the
Purchaser, in the case of a Purchaser who is a natural person, or an authorized
officer of the Purchaser, in the case of a Purchaser which is not a natural
person, to the effect that the conditions set forth in Sections 6.1 and 6.2
hereof have been satisfied in all respects.
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6.5 NO CLAIMS
No claim, action, suit, investigation or proceeding shall be pending
or threatened by any Person against any of the parties hereto or any of their
respective Affiliates which, if adversely determined, would (a) prevent or
hinder consummation of the transactions contemplated by this Agreement or the
Additional Agreements, or (b) result in the payment by the Company or a
Subsidiary of substantial damages as a result of the transactions contemplated
hereby which would have a Material Adverse Effect. No party to this Agreement
shall have received written notice from any court or governmental authority,
commission or instrumentality of its intention to (i) institute any action or
proceeding to restrain, enjoin, nullify or render ineffective this Agreement,
any Additional Agreement or the transactions contemplated hereby or thereby, if
consummated, or (ii) commence any investigation (other than a routine letter of
inquiry, including a routine Civil Investigation Demand) into this Agreement,
any Additional Agreement or the transactions contemplated hereby or thereby,
which, in the reasonable opinion of the Company, would make it inadvisable to
consummate such transactions.
6.6 APPROVALS, CONSENTS AND WAIVERS
The Company shall have received all approvals, consents and waivers
to the transactions contemplated hereby required under all agreements,
mortgages, indentures, contracts, licenses, franchises, permits, leases or other
instruments, laws, rules or regulations applicable to the Company or any
Subsidiary, which are necessary to consummate the transactions contemplated
hereby and to preserve the business of the Company or any Subsidiary.
6.7 CERTAIN AGREEMENTS
The Purchaser shall have entered into a joinder to the Stockholders'
Agreement and shall have executed and delivered the Stockholders' Agreement and
the Registration Rights Agreement. The Purchaser, if named as a party thereto,
shall have entered into and shall have executed and delivered the Subordinate
Registration Rights Agreement.
6.8 NO NEW LAW OR REGULATION
There shall not have been enacted between the date hereof and the
Closing Date any law or regulation which would have a Material Adverse Effect or
prevent or hinder the consummation of the transactions contemplated by this
Agreement or the Additional Agreements.
6.9 SATISFACTION OF COUNSEL
All actions, proceedings, instruments, documents and other relevant
legal matters in connection with the transactions contemplated by this Agreement
and the Additional Agreements, shall be reasonably satisfactory in all respects
to counsel for the Company.
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ARTICLE VII
INDEMNIFICATION
7.1 INDEMNITY OF THE PURCHASER
The Company agrees to defend, indemnify and hold harmless the
Purchaser from and against, and to reimburse the Purchaser with respect to, all
liabilities, losses, costs and expenses, including, without limitation,
reasonable attorneys' fees and disbursements, asserted against or incurred by
the Purchaser by reason of, arising out of, or in connection with:
(a) any material breach of any representation or warranty
(PROVIDED, HOWEVER, that if any such representation and warranty is already
qualified in any respect by materiality or as to Material Adverse Effect, for
purposes of this Section 7.1(a), such materiality or Material Adverse Effect
qualification will be in all respects ignored and such representation shall be
true and correct in all material respects without regard to such qualification)
contained in this Agreement and made by the Company or in any document or
certificate delivered by the Company pursuant to the provisions of this
Agreement or in connection with the transactions contemplated thereby;
(b) any material failure by the Company to perform any agreement
required by this Agreement to be performed thereby; or
(c) any claim, demand, action, suit, proceeding or investigation
involving the Company or any Subsidiary arising at any time and not disclosed in
the Disclosure Schedule (including the exhibits thereto) and required to be so
disclosed relating to a state of facts, action or omission to act arising on or
prior to the Closing Date or the allegation by any third party of the existence
of any state of facts which, if existing, would constitute a material breach of
any representation or warranty referred to in clause (a) of this Section 7.1.
7.2 INDEMNIFICATION PROCEDURE
The Purchaser shall give prompt notice to the Company of any claim
for indemnification arising under Section 7.1. The Company shall have the right
to assume and to control the defense of any such claim with counsel reasonably
acceptable to the Purchaser, at the Company's own cost and expense, including
the cost and expense of reasonable attorneys' fees and disbursements in
connection with such defense, in which event the Company shall not be obligated
to pay the fees and disbursements of separate counsel for the Purchaser in such
action. In the event, however, that the Purchaser's legal counsel shall
determine that defenses may be available to the Purchaser that are different
from or in addition to those available to the Company, in that there could
reasonably be expected to be a conflict of interest if the Purchaser and the
Company have common counsel in any such proceeding, or if the Company has not
assumed the defense of the action or proceedings, then the Purchaser may employ
separate counsel to represent or defend the Purchaser, and the Company shall pay
the reasonable fees and disbursements of such counsel. No settlement of any such
claim or payment in connection with any such settlement shall be made without
the prior consent of the Company which consent shall not be unreasonably
withheld.
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ARTICLE VIII
AFFIRMATIVE COVENANTS OF THE COMPANY
The Company covenants and agrees that until the date on which the
Company shall be obligated to file periodic reports under the Securities
Exchange Act of 1934 by reason of its registration of Common Stock thereunder if
any Shares are outstanding:
8.1 FINANCIAL STATEMENTS AND OTHER INFORMATION
The Company shall deliver to the Purchaser:
(a) as soon as available but in any event within 30 days after
the end of each monthly accounting period in each fiscal year, unaudited
consolidated statements of income and cash flows of the Company and the
Subsidiaries for such monthly period and for the period from the beginning of
the fiscal year to the end of such month, and unaudited consolidated balance
sheets of the Company and the Subsidiaries as of the end of such monthly period,
setting forth in each case comparisons to the Company's annual budget and to the
corresponding period in the preceding fiscal year, and all such statements shall
be prepared in accordance with generally accepted accounting principles,
consistently applied and shall be certified by the Company's chief financial
officer;
(b) within 120 days after the end of each fiscal year,
consolidating and consolidated statements of income and cash flows of the
Company and the Subsidiaries for such fiscal year, and consolidating and
consolidated balance sheets of the Company and the Subsidiaries as of the end of
such fiscal year, setting forth in each case comparisons to the Company's annual
budget and to the preceding fiscal year, all prepared in accordance with
generally accepted accounting principles, consistently applied, and accompanied
by (i) with respect to the consolidated portions of such statements, an opinion
of an independent accounting firm of recognized national standing acceptable to
the holders of a majority of the outstanding Series D Preferred Stock, (ii) a
certificate from such accounting firm, addressed to the Board, stating that in
the course of its examination nothing came to its attention that caused it to
believe that there was any default by the Company or any Subsidiary in the
fulfillment of or compliance with any of the terms, covenants, provisions or
conditions of any material agreement to which the Company or any Subsidiary is a
party or, if such accountants have reason to believe any such default by the
Company or any Subsidiary exists, a certificate specifying the nature and period
of existence thereof, and (iii) a copy of such firm's annual management letter
to the board of directors;
(c) promptly upon receipt thereof, any additional reports,
management letters or other detailed information concerning significant aspects
of the Company's operations or financial affairs given to the Company by its
independent accountants (and not otherwise contained in other materials provided
hereunder);
(d) at least 30 days, but not more than 90 days, prior to the
beginning of each fiscal year, an annual budget prepared on a monthly basis for
the Company and the Subsidiaries for such fiscal year (displaying anticipated
statements of income and cash flows and balance
-25-
sheets), and promptly upon preparation thereof any other significant budgets
prepared by the Company or any Subsidiary and any revisions of such annual or
other budgets;
(e) with reasonable promptness, such other information and
financial data concerning the Company and the Subsidiaries as any Person
entitled to receive information under this Section 8.1 may reasonably request.
Each of the financial statements referred to in Section 8.1(a) and
8.1(b) hereof shall present fairly the financial position of the Company and the
Subsidiaries in all material respects as of the dates and for the periods stated
therein, subject in the case of the unaudited financial statements to changes
resulting from year-end adjustments.
8.2 RIGHTS OF INSPECTION
The Company will permit any representatives designated by the
Purchaser to visit and inspect the property of the Company and the Subsidiaries
and to make copies and extracts therefrom and to discuss the affairs, finances
and accounts of the Company and the Subsidiaries with their respective officers,
all during reasonable business hours, upon reasonable notice and as often as the
Purchaser may reasonably request, subject, in the case of any proprietary or
confidential material, to appropriate measures to ensure the confidentiality
thereof, provided, however, that any such investigation shall be conducted in
such manner as not to interfere unreasonably with (a) the operation of the
business of the Company and the Subsidiaries or (b) the performance by the
officers of the Company and the Subsidiaries of their respective duties to the
Company and the Subsidiary. The presentation of an executed copy of this
Agreement by the Purchaser to the Company's independent accountants shall
constitute the Company's permission to its independent accountants to
participate in discussions with such Persons.
8.3 RESERVATION OF COMMON STOCK
The Company shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
issuance upon the conversion of the Series D Preferred Stock, such number of
shares of Common Stock issuable upon the conversion of all outstanding Series D
Preferred Stock. All shares of Common Stock which are so issuable shall, when
issued, be duly and validly issued, fully paid and nonassessable and free from
all taxes, liens and charges. The Company shall take all such actions as may be
necessary to assure that all such shares of Common Stock may be so issued
without violation of any applicable law or governmental regulation or any
requirements of any domestic securities exchange upon which shares of Common
Stock may be listed (except for official notice of issuance which shall be
immediately transmitted by the Company upon issuance).
8.4 USE OF PROCEEDS
The Company shall use the net proceeds (after payment of the Closing
Fee and other expenses related to the offering and sale of the Shares) from the
sale of the Shares to reduce its borrowings under the Credit Agreement and for
working capital and general corporate purposes.
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8.5 OBSERVATION RIGHTS; REGISTRATION RIGHTS
The Purchaser shall have the right to (a) designate a representative
to attend and observe meetings of the Company's Board of Directors and any
committee thereof and (b) receive all information and consents distributed to
directors. Such representative shall be entitled to reimbursement of, and the
Company shall reimburse such representative for, all of its reasonable
out-of-pocket expenses incurred in connection with attending regular and special
meetings of the Board of Directors and any meeting of any committee of the Board
of Directors. Notwithstanding the foregoing, upon the request of the underwriter
in connection with an initial Public Offering (as defined in the Stockholders'
Agreement), the Purchaser will discuss the termination of the rights provided in
this Section 8.5.
The Company shall use its best efforts to obtain the signatures of
all parties to the Registration Rights Agreement. If by the 30th day after the
date hereof, the Company has not obtained the signatures of all parties to the
Registration Rights Agreement, then the Company shall execute, and shall cause
those parties holding in the aggregate at least 95% of the Paid-In Shares (as
defined in the Stockholders' Agreement) to execute the Side Letter attached to
the Subordinate Registration Rights Agreement as Exhibit B thereto, dated the
45th day after the date hereof (the "Side Letter"). Without the prior written
consent of the Purchaser, the Company agrees not to amend or waive any provision
of the Side Letter so as to disproportionately and adversely affect the
Purchaser relative to the other addressees of the Side Letter.
ARTICLE IX
TERMINATION
9.1 TERMINATION
This Agreement may be terminated and the transactions contemplated
hereby abandoned at any time prior to the Closing:
(a) By mutual written consent of the Purchaser and the Company;
(b) By the Company if any condition specified in Article VI
hereof has not been met or waived by the Company at such time as such conditions
can no longer be satisfied;
(c) By the Purchaser if any condition specified in Article V
hereof has not been met or waived by the Purchaser at such time as such
condition can no longer be satisfied; or
(d) By either the Purchaser or the Company if (i) a court of
competent jurisdiction or other governmental authority shall have issued a
final, non-appealable order, decree or ruling or taken any other action (which
order, decree or ruling the parties hereto shall use their best efforts to
lift), in each case permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated hereby or (ii) the transactions contemplated
hereby shall not have occurred on or before December 28, 2001 if the party
seeking termination is not at such time in material breach of this Agreement.
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9.2 PROCEDURE AND EFFECT OF TERMINATION
In the event of termination of this Agreement pursuant to Section
9.1 hereof, written notice thereof shall forthwith be given by the terminating
party or parties to the other party or parties hereto, and this Agreement shall
thereupon terminate and become void and have no effect and the transactions
contemplated hereby shall be abandoned without further action by the parties
hereto, except that the provisions of Sections 4.2 and 10.7 hereof shall survive
such termination; provided, however, that such termination shall not relieve any
party hereto of any liability for any breach of this Agreement.
ARTICLE X
MISCELLANEOUS
10.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS
All representations and warranties and statements made in this
Agreement or in any document or certificate delivered pursuant hereto shall
survive the Closing Date for one year from the Closing or, with respect to the
Company, if later, until 120 days after delivery to the Purchaser of the
Company's 2001 fiscal year audited financial statements, regardless of any
investigation made by any party or on its behalf; provided, however, that the
representations and warranties and statements made by the Company in Section 2.7
of this Agreement entitled "Taxes" shall survive until the end of the applicable
statute of limitations period (giving effect to any extensions or waivers
thereof), plus six months. The representations and warranties set forth in
Section 2.3 entitled "Capitalization" shall survive the Closing Date without any
time limitation.
10.2 EXPENSES
(a) The Company agrees that if the transactions contemplated by
this Agreement are consummated, it shall pay all reasonable fees of, and
out-of-pocket expenses incurred by, the Purchaser, including, without
limitation, the fees and expenses of Ropes & ▇▇▇▇, counsel to the Purchaser, in
connection with such transactions, including, without limitation, the cost and
expenses of preparing and negotiating this Agreement and the Additional
Agreements and consummating the transactions contemplated hereby.
(b) The costs and expenses (including reasonable attorney's fees)
associated with any filings with any governmental body and any approvals of any
governmental authority (including with respect to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended) required under the Amended
Charter in connection with the conversion or redemption of any capital stock of
the Company shall be paid by the Company.
10.3 CONSENT TO AMENDMENTS
Except as otherwise expressly provided herein, the provisions of
this Agreement may be amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company has obtained the written consent of the holders of a
majority of the Common Stock issued upon conversion of the Series
-28-
D Preferred Stock (determined as if all then outstanding Series D Preferred
Stock were converted in accordance with its terms). No other course of dealing
between the Company and the holder of any Preferred Stock or Common Stock or any
delay in exercising any rights hereunder or under the Amended Charter shall
operate as a waiver of any rights of any such holders.
10.4 NOTICE
All communications, notices, requests, consents or demands given or
required under this Agreement shall be in writing and shall be deemed to have
been duly given when delivered to, or received by prepaid registered or
certified mail or recognized overnight courier addressed to, or upon receipt of
a facsimile sent to, the party for whom intended, as follows, or to such other
address or facsimile number as may be furnished by such party by notice in the
manner provided herein:
If to the Company:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
in each case with a copy (which shall not constitute notice) to:
IESI Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel.:(▇▇▇) ▇▇▇-▇▇▇▇
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Tel.:(▇▇▇) ▇▇▇-▇▇▇▇
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
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If to the Purchaser, to the Purchaser's address set forth on the
Purchaser's signature page hereto,
in each case with a copy (which shall not constitute notice) to:
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
10.5 ENTIRE AGREEMENT
This Agreement, the Disclosure Schedule and the exhibits thereto,
the Additional Agreements and the instruments and agreements to be executed
pursuant hereto or thereto, set forth the entire understanding of the parties
hereto with respect to the transactions contemplated hereby and thereby, merges
and supersedes all prior and contemporaneous understandings with respect to such
subject matter and may not be waived or modified, in whole or in part, except by
a writing signed by each of the parties hereto. No waiver of any provision of
this Agreement in any instance shall be deemed to be a waiver of the same or any
other provision in any other instance. Failure of any party to enforce any
provision of this Agreement shall not be construed as a waiver of its rights
under such provision.
10.6 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon, enforceable against and inure
to the benefit of, the parties hereto and their respective heirs,
administrators, executors, personal representatives, successors and assigns, and
nothing herein is intended to confer any right, remedy or benefit upon any other
Person. This Agreement shall be assignable to any successor or assign of a
holder of Series D Preferred Stock.
10.7 GOVERNING LAW; SUBMISSION TO JURISDICTION
This Agreement shall in all respects be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and fully to be performed in such state, without giving effect to conflicts of
law rules or provisions (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. The parties hereto agree to submit to the
jurisdiction of the State and Federal courts in the State of New York with
respect to any claim or matter arising under this Agreement, and hereby consent
that service of process with respect to all courts in and of the State of New
York may be made by registered mail to such Person at the address of such Person
set forth herein.
10.8 COUNTERPARTS
This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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10.9 KNOWLEDGE
As used in Article II hereof, the term "knowledge" shall mean and
include the actual knowledge or awareness, after inquiry, of the Company or the
Subsidiaries (which shall include the actual knowledge or awareness of the
officers, directors and key employees of the Company or the Subsidiaries and the
general managers of each facility of the Company and the Subsidiaries), and
without limiting the foregoing, the knowledge or awareness, after inquiry, of
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ shall be imputed to the
Company.
10.10 CONSTRUCTION
Headings contained in this Agreement are for convenience only and
shall not be used in the interpretation of this Agreement. References herein to
Articles, Sections and Exhibits are to the articles, sections and exhibits,
respectively, of this Agreement, unless specifically noted otherwise. The
Disclosure Schedule is hereby incorporated herein by reference and made a part
of this Agreement. As used herein, the singular includes the plural, and the
masculine, feminine and neuter gender each includes the others where the context
so indicates.
10.11 SEVERABILITY
If any provision of this Agreement is held to be invalid or
unenforceable by a court of competent jurisdiction, this Agreement shall be
interpreted and enforceable as if such provision were severed or limited, but
only to the extent necessary to render such provision and this Agreement
enforceable.
ARTICLE XI
DEFINITIONS
11.1 DEFINED TERMS
As used in this Agreement, and unless the context requires a
different meaning, the following terms have the meanings indicated:
"Additional Agreements" shall mean the Amended Charter, the
Stockholders' Agreement, the Registration Rights Agreement and the Subordinate
Registration Rights Agreement.
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through the ownership of
voting securities, contract or otherwise; provided that TC Carting, L.L.C., TC
Carting II, L.L.C. and ▇▇▇▇▇▇ Equity Investors IV, L.P. and their affiliates
shall not be deemed "Affiliates" of the Company.
"Affiliated Group" means an affiliated group as defined in Section
1504 of the Code (or any analogous combined, consolidated or unitary group
defined under state, local or foreign income Tax law) of which the Company or
any Subsidiary is or has been a member.
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"Agreement" shall mean this
Stock Purchase Agreement, as the same
may be amended, supplemented or modified from time to time in accordance with
the terms hereof.
"Amended Charter" shall mean the Fourth Amended and Restated
Certificate of Incorporation of the Company.
"Benefit Plan" is defined in Section 2.19(a).
"Board" is defined in Section 5.7(b).
"Class A Stock" shall mean the Class A Voting Common Stock of the
Company, par value $.01 per share.
"Class B Stock" shall mean the Class B Nonvoting Common Stock of the
Company, par value $.01 per share.
"Closing" is defined in Section 1.4.
"Closing Date" is defined in Section 1.4.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean the Class A Stock and the Class B Stock.
"Company" is defined in the preamble.
"Credit Agreement" is defined in Section 5.17.
"Disclosure Schedule" is defined in Section 2.1(b).
"E&Y" is defined in Section 2.5.
"Employment Agreements" is defined in Section 2.8(a)(ii).
"Encumbrances" is defined in Section 2.10(a).
"Environmental, Health and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
concerning public health and safety, worker health and safety, and pollution or
protection of the environment, including without limitation all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances or wastes, chemical substances or mixtures, pesticides,
pollutants, contaminants, toxic chemicals, petroleum products or byproducts,
asbestos, polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.
"ERISA" is defined in Section 2.19(a).
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"Existing Stockholders" shall mean the stockholders of the Company
on the Closing Date immediately prior to the Closing.
"Financial Statements" is defined in Section 2.5.
"Indebtedness" means at a particular time, without duplication, (A)
any indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money, (B) any indebtedness evidenced by any note,
bond, debenture or other debt security, (C) any indebtedness for the deferred
purchase price of property or services with respect to which a Person is liable,
contingently or otherwise, as obligor or otherwise (other than trade payables
and other current liabilities incurred in the ordinary course of business which
are not more than six months past due), (D) any commitment by which a Person
assures a creditor against loss (including, without limitation, contingent
reimbursement obligations with respect to letters of credit), (E) any
indebtedness guaranteed in any manner by a Person (including, without
limitation, guarantees in the form of an agreement to repurchase or reimburse),
(F) any obligations under capitalized leases with respect to which a Person is
liable, contingently or otherwise, as obligor, guarantor or otherwise, or with
respect to which obligations a Person assures a creditor against loss, (G) any
indebtedness secured by a Lien on a Person's assets and (H) any unsatisfied
obligation for "withdrawal liability" to a "multiemployer plan" as such terms
are defined under ERISA.
"Intellectual Property" is defined in Section 2.20.
"Investment" as applied to any Person means (A) any direct or
indirect purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or ownership interest (including partnership
interests and joint venture interests) of any other Person and (B) any capital
contribution by such Person to any other Person.
"IRS" is defined in Section 2.19(b).
"Leased Real Property" is defined in Section 2.10(b).
"Liens" is defined in Section 2.2.
"Material Adverse Affect" is defined in Section 2.1(a).
"Operating Agreements" is defined in Section 2.8(a).
"Owned Real Property" is defined in Section 2.10(a).
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Preferred Stock" is defined in Section 2.3.
"Prior Series D Purchase Agreement" is defined in Section 5.4.
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"Projections" is defined in Section 2.6(b).
"Purchaser" is defined in the preamble.
"Real Property" is defined in Section 2.10(b).
"Real Property Leases" is defined in Section 2.10(b).
"Registration Rights Agreement" is defined in Section 2.1(c).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series A Preferred Stock" is defined in Section 2.3.
"Series B Preferred Stock" is defined in Section 2.3.
"Series C Preferred Stock" is defined in Section 2.3.
"Series D Preferred Stock" shall mean the Series D Convertible
Preferred Stock of the Company, par value $1.00 per share, to be issued by the
Company pursuant to this Agreement.
"Shares" is defined in Section 1.1.
"Side Letter" is defined in Section 8.5.
"Stockholders' Agreement" is defined in Section 2.1(c).
"Subordinate Registration Rights Agreement" is defined in Section
2.1(c).
"Subsidiary" is defined in Section 2.1(b).
"Tax" or "Taxes" means any (A) federal, state, local or foreign
income, gross receipts, franchise, estimated, alternative minimum, add-on
minimum, sales, use, transfer, registration, value added, excise, natural
resources, severance, stamp, occupation, premium, windfall profit,
environmental, disability, payroll, license, employee or other withholding, or
other tax, of any kind whatsoever, including any interest, penalties or
additions to tax or additional amounts in respect of the foregoing; (B)
liability of the Company or any Subsidiary for the payment of any amounts of the
type described in clause (A) arising as a result of being (or ceasing to be) a
member of any Affiliated Group (or being included (or required to be included)
in any Tax Return relating thereto); and (C) liability of the Company or any
Subsidiary for the payment of any amounts of the type described in clause (A) as
a result of any express or implied obligation to indemnify or otherwise assume
or succeed to the liability of any other person.
"Tax Returns" means returns, declarations, reports, claims for
refund, information returns or other documents (including any related or
supporting schedules, statements or information) filed or required to be filed
in connection with the determination, assessment or collection of Taxes of any
party or the administration of any laws, regulations or administrative
requirements relating to any Taxes.
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"Warrant Holders" is defined in Section 5.14.
"Wholly-Owned Subsidiary" means, with respect to any Person, a
Subsidiary of which all of the outstanding capital stock or other ownership
interests are owned by such Person or another Wholly-Owned Subsidiary of such
Person.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first set forth above.
COMPANY:
IESI CORPORATION
a Delaware corporation
By:
-------------------------------------
Name:
Title:
PURCHASER:
INDOSUEZ CAPITAL PARTNERS 2001, L.P.
By: Indosuez ▇▇ ▇▇, Inc., its
managing general partner
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
Address:
-------------------------------------
-------------------------------------
-------------------------------------
Number of Shares being purchased:
6,500
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EXHIBIT A
STOCKHOLDERS' AGREEMENT
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
EXHIBIT C
SUBORDINATE REGISTRATION RIGHTS AGREEMENT