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EXHIBIT 10.33
STOCK PURCHASE AGREEMENT
by and among
THE STOCKHOLDERS OF
STEADI-SYSTEMS, LTD.,
DAISYTEK, INCORPORATED
and
DAISYTEK INTERNATIONAL CORPORATION
January 5, 1998
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STOCK PURCHASE AGREEMENT dated as of January 5, 1998 among ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ (each, a "Seller" and
collectively, the "Sellers"), DAISYTEK, INCORPORATED, a Delaware corporation
(the "Purchaser") and DAISYTEK INTERNATIONAL CORPORATION, a Delaware corporation
("Parent").
WHEREAS, the Sellers are the record and beneficial owner of all of the
issued and outstanding shares of Common Stock, no par value (the "Shares"), of
Steadi-Systems, Ltd., a California corporation (the "Company"); and
WHEREAS, the Company is a distributor of media products and video
hardware to the filmed entertainment and multimedia industries (the "Business");
and
WHEREAS, the Sellers desire to sell to the Purchaser, and the Purchaser
desires to purchase from the Sellers, all of the Shares, subject to and in
accordance with the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, Parent, the Purchaser and the
Sellers hereby agree as follows:
ARTICLE I
DEFINITIONS
1. CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings:
"▇▇▇▇▇▇ Agreement" means the agreement between the Company and ▇▇▇▇▇
▇▇▇▇▇▇ dated the date hereof pursuant to which the Company has agreed, subject
to the conditions set forth therein, to pay to ▇▇▇▇▇ ▇▇▇▇▇▇ the principal amount
of $223,000, of which $163,000 is payable on the Closing Date and $60,000 is
payable on May 15, 1998.
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"Action" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation, in each case, by or before any Governmental
Authority.
"Additional Agreements" means the Employment Agreements and the
Options.
"Affiliate" means, with respect to any specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
"Audited Financial Statements" has the meaning set forth in Section
4.7.
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"Bank Debt" means the Indebtedness owing by the Company to Congress
Financial Corporation.
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in The City of
New York.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, and the rules and regulations promulgated
thereunder.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System.
"Closing" and "Closing Date" have the meanings specified in Section
2.3.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Stock" means the shares of Common Stock, no par value, of the
Company.
"Control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the affairs or management of a
Person, whether through the ownership of voting securities, as trustee or
executor or by contract, including, without limitation, the ownership, directly
or indirectly, of securities having the power to elect a majority of the board
of directors or similar body governing the affairs of such Person.
"Cost of Sales" means, for any fiscal year, the sum of (a) the
aggregate of the Steadi Group's equipment purchases, film stock purchases, video
tape purchases, audio tape purchases, data media purchases, repair purchases,
digital tech purchases and miscellaneous purchases and freight cost less
purchase returns and allowances, rebates and discounts plus or minus net
Inventory adjustments and giving effect to the establishment of appropriate
reserves in respect of Inventory obsolescence, in each case, determined in a
manner consistent with the Audited Financial Statements and (b) the aggregate
cost of sales incurred by Parent or any Affiliate thereof in respect of New
Business for such fiscal year, determined in a manner consistent with Parent's
financial statements.
"D&T" means Deloitte & Touche, L.L.P.
"Employment Agreements" means the Employment Agreements to be executed
by the Company and each of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, as of
the Closing Date, substantially in the form of Exhibit A hereto.
"Encumbrance" means any security interest, pledge, mortgage, lien
(including, without limitation, environmental and tax liens), charge,
encumbrance, adverse claim, preferential
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arrangement, or restriction of any kind, including, without limitation, any
restriction on the use, voting, transfer, receipt of income or other exercise of
any attributes of ownership.
"Environment" means surface waters, groundwaters, soil, subsurface
strata and ambient air.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demand letters, claims, liens, notices of noncompliance
or violation, investigations, proceedings, consent orders or consent agreements
relating in any way to any Environmental Law or any Environmental Permit
(hereinafter "Claims"), including without limitation (a) any and all Claims by
Governmental Authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any applicable Environmental Law and (b)
any and all Claims by any Person seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment.
"Environmental Laws" means any federal, state or local law or any
foreign law, including any statute, rule, regulation, ordinance, code or rule of
common law, now or hereafter in effect and in each case as amended, including
any judicial or administrative order, consent decree or judgment, relating to
the environment, health, safety or Hazardous Materials, including, without
limitation, the CERCLA; the Resource Conservation and Recovery Act, 42 U.S.C.
▇▇.▇▇. 6901 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
▇▇.▇▇. 6901 et seq.; the Clean Water Act, 33 U.S.C. ▇▇.▇▇. 1251 et seq.; the
Toxic Substances Control Act, 15 U.S.C. ▇▇.▇▇. 2601 et seq.; the Clean Air Act,
42 U.S.C. ▇▇.▇▇. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. ▇▇.▇▇.
300f et seq.; the Atomic Energy Act, 42 U.S.C. ▇▇.▇▇. 2011 et seq.; and the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. ▇▇.▇▇. 136 et seq.
"Environmental Permits" means all permits, written approvals, U.S.
Environmental Protection Agency or state generator numbers, licenses and other
authorizations from applicable Governmental Authorities required under any
applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"GAAP" means generally accepted accounting principles and practices in
effect from time to time applied consistently throughout the periods involved.
"Governmental Authority" means any United States federal, state, local,
possession or foreign governmental, regulatory or administrative authority,
agency or commission, or any political subdivision thereof, or any court,
tribunal or arbitral body.
"Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.
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"Gross Profit" means, for any fiscal year, Net Sales minus Cost of
Sales for such fiscal year, as determined in a manner consistent with the
Audited Financial Statements and, with respect to New Business, Parent's
financial statements.
"Hazardous Materials" means (a) petroleum and petroleum fuels,
lubricants and cleaning agents, radioactive materials, friable asbestos material
as defined under 40 C.F.R. 61.141, urea formaldehyde foam insulation,
transformers or other equipment that contain polychlorinated biphenyls in
concentrations of 50 ppm, and radon gas; (b) any other chemicals, materials or
substances defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials" or "extremely hazardous wastes"; and
(c) any other chemical, material or substance exposure to which is regulated
pursuant to any applicable Environmental Law.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
"Immediate Family" means any spouse, brother, sister, parent or child
of any specified individual.
"Indebtedness" means, with respect to any Person, (a) all indebtedness
of such Person, whether or not contingent, for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services, (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations of such Person as
lessee under leases that have been or should be, in accordance with GAAP,
recorded as capital leases, (f) all obligations, contingent or otherwise, of
such Person under acceptance, letter of credit or similar facilities, (g) all
Indebtedness of others referred to in clauses (a) through (f) above guaranteed
directly or indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (i) to pay or
purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (ii) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the holder
of such Indebtedness against loss, (iii) to supply funds to or in any other
manner invest in the debtor (including any agreement to pay for property or
services irrespective of whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss, and (h) all
Indebtedness referred to in clauses (a) through (f) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Encumbrance on property (including, without
limitation, accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness.
"Intellectual Property" means all trademarks, patents, copyrights,
tradenames, service marks, logos and all registrations and applications for
registration thereof and all renewals or reissues thereof.
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"Inventories" and "Inventory" mean all inventory, merchandise, goods,
raw materials, finished goods, packaging and supplies, maintained, held
(including, without limitation, on consignment) or stored by or for any member
of the Steadi Group, and held or offered for sale in the ordinary course of the
Business, and any prepaid deposits for any of the same, but excluding any fixed
assets (as such term is used in the Audited Financial Statements) held or
offered for lease or rent.
"Knowledge" (including the terms "to the knowledge of" or "to the best
knowledge of") means, with respect to the Sellers, the actual personal knowledge
of one or more of the Sellers at the time when the applicable statement is made
as evidenced by one or more written statements or other documentary evidence.
"Leased Real Property" means the real property leased by any member of
the Steadi Group, as tenant, together with, to the extent leased by such member,
all buildings and other structures, facilities or improvements currently or
hereafter located thereon, all fixtures attached or appurtenant thereto, and all
easements, licenses, rights and appurtenances relating to the foregoing.
"Liabilities" means any and all debts, liabilities and obligations,
whether accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable, including, without limitation, those arising under
any law (including, without limitation, any Environmental Law), rule,
regulation, Action or Governmental Order and those arising under any contract,
agreement, arrangement, commitment or undertaking, including all indemnification
obligations under any charter document, any indemnity agreement or as permitted
under applicable law.
"Material Adverse Effect" means any circumstance, change in, or effect
on, the Business that, individually or in the aggregate with any other
circumstances, changes in, or effects on, the Business, taken as a whole: (a)
is, or would be, materially adverse to the operations, assets or liabilities
(including, without limitation, contingent liabilities), employee relationships,
customer or supplier relationships, prospects, results of operations or the
condition (financial or otherwise) of the Business or (b) would materially
adversely affect the ability of the Purchaser to operate or conduct the Business
in the manner in which it is currently operated or conducted by the Steadi
Group.
"Material Contracts" has the meaning specified in Section 4.8.
"Multiplier" means, for the 12 month period ending December 31, 1998
(the "1998 Multiplier") or the 12 month period ending December 31, 1999 (the
"1999 Multiplier"), the percentage (not to exceed 100%) set forth in the
intersecting cell of the applicable Net Revenue column and Gross Profit column
for such fiscal year as set forth on Exhibit B attached hereto.
"New Business" means the sale of goods or services by Parent or any
Affiliate thereof to any third party and which meets the following tests: (i)
such third party was introduced to Parent or any Affiliate thereof by a Seller,
(ii) such sale of goods or services would not have occurred but
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for the actions or steps taken by a Seller, (iii) the Seller shall have
designated such sale as "New Business" hereunder prior to such introduction and
prior to any such sale and (iv) "New Business" shall not include the wholesale
sale or distribution of consumable computer and office supplies and shall not
include sales of goods or services which are sold as part of the Business,
regardless of whether such sales are by the Steadi Group or by Parent or an
Affiliate of Parent (which shall be deemed sales of the Steadi Group).
"Net Sales" means, for any fiscal year, the sum of (a) the aggregate of
equipment sales, film stock sales, video tape sales, audio sales, data media
sales, repair income, equipment rental fees, digital tech sales, equipment
service fees, management and administration fees, processing fees, services
charges, freight revenue and miscellaneous income received by the Steadi Group
for such fiscal year, in each case, determined in a manner consistent with the
Audited Financial Statements, plus (b) the aggregate net revenue received by
Parent or any Affiliate thereof in respect of New Business for such fiscal year,
determined in a manner consistent with Parent's financial statements.
"Options" means options (which are designated as "incentive stock
options" under the Code) to purchase 15,000 and 12,500 shares of Parent Common
Stock, respectively, to be issued by Parent under and in accordance with the
terms of the Daisytek International Corporation 1997 Stock Option Plan, to each
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, respectively, on the Closing Date.
"Parent Common Stock" means the shares of Common Stock, $.01 par value,
of Parent.
"Permits" has the meaning specified in Section 4.17.
"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a person under Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended.
"Plan" has the meaning specified in Section 4.24.
"Purchase Price" has the meaning specified in Section 2.2.
"Regulations" means the Treasury Regulations (including Temporary
Regulations) promulgated by the United States Department of Treasury with
respect to the Code or other federal tax statutes.
"Remedial Action" means all action reasonably necessary and required
under any applicable Environmental Law or Environmental Permit and all action
required by a Governmental Authority to (i) clean up, remove, treat or handle in
any other way Hazardous Materials in the Environment; (ii) prevent the Release
of Hazardous Materials so that they do not migrate, endanger or threaten to
endanger public health or the Environment; or (iii) perform remedial
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investigations, feasibility studies, corrective actions, closures, and
postremedial or postclosure studies, investigations, operations, maintenance and
monitoring on, about or in any Real Property.
"Sands Note" means the Buyout Note dated November 2, 1995 executed and
delivered by the Company to ▇▇▇▇▇▇▇ ▇▇▇▇▇ in the original principal amount of
$3,000,000.
"Sellers' Representative" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, or, in the event
of his death or incapacity, such other person as may have been designated by
him.
"Shareholder Note" means the promissory note dated December 31, 1996
payable by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ to the Company in the original principal amount of
$442,121.
"Shares" means the shares of Company Stock owned of record and
beneficially by the Sellers.
"Steadi Group" and the "members of the Steadi Group" mean the Company
and the Subsidiaries, jointly and severally.
"Subsidiaries" means the subsidiaries of the Company set forth on
Schedule 4.2, each of which is referred to as a "Subsidiary".
"Tax" or "Taxes" means any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any government or taxing authority, including,
without limitation: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers' compensation,
unemployment compensation, or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes;
license, registration and documentation fees; and customs' duties, tariffs, and
similar charges.
ARTICLE II
SALE AND PURCHASE OF SHARES
2.1 SALE AND PURCHASE OF SHARES. Upon the terms and subject to the
conditions contained in this Agreement, at the Closing, each Seller shall sell,
transfer and convey to the Purchaser all the Shares owned by such Seller, and
Parent shall cause the Purchaser to purchase and acquire, and the Purchaser
shall purchase and acquire from each Seller all the Shares owned by such Seller.
2.2. PURCHASE PRICE. The aggregate purchase price ("Purchase Price")
for the Shares shall be $7,638,000. The Purchase Price shall be allocated among
the Sellers in accordance with Schedule 2.2.
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2.4. CLOSING. Subject to the terms and conditions of this Agreement,
the purchase and sale of the Shares shall take place at a closing (the
"Closing") to be held at the offices of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ P.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m., local time, on the date hereof (the
"Closing Date").
ARTICLE III
PAYMENT OF PURCHASE PRICE
3.1 PAYMENT OF PURCHASE PRICE. Subject to the terms set forth herein,
the Purchase Price shall be payable in two installments. The first portion (the
"Closing Payment") shall be equal to $5,698,000 and the second portion (the
"Contingent Payment") shall be equal to $1,940,000.
3.2 CLOSING PAYMENT. The Closing Payment shall be payable at the
Closing by wire transfer to an account designated by the Sellers' Representative
and set forth on Exhibit C hereto.
3.3 ADDITIONAL PAYMENT. In the event that, pursuant to the terms of the
▇▇▇▇▇▇ Agreement, the conditions precedent to the payment by the Company
thereunder of $60,000 on May 15, 1998 are not satisfied, the Purchaser shall pay
such amount to the Sellers in accordance with the allocation and payment and
delivery instructions set forth in Schedule 2.2 and Exhibit C.
3.4 CONTINGENT PAYMENT. The Contingent Payment shall be determined and
payable in accordance with the following:
(a) Not later than March 1, 1999, the Purchaser shall deliver to
the Sellers' Representative a detailed statement (the "Contingent Payment
Statement") of the Purchaser's chief financial officer setting forth (i) Net
Sales, Cost of Sales and Gross Profit in respect of the 12 month period ending
December 31, 1998 (including a detailed statement setting forth the items
included therein) and (ii) the amount (the "Purchaser's Contingent Payment
Amount") determined by multiplying the Contingent Payment by the 1998 Multiplier
determined by the Purchaser. The Sellers' Representative and his representatives
and agents shall have the right to review and inspect, and shall be afforded the
opportunity to examine and make copies of, all work papers and supporting
documentation reasonably requested in order to verify the accuracy of the
Contingent Payment Statement. The Purchaser and the Sellers' Representative
shall meet on a quarterly basis to review preliminary non-binding determinations
of Net Sales, Cost of Sales and Gross Profit (and each of the items included
therein) during the 1998 calendar year.
(b) The Sellers' Representative shall have the right to dispute
any amount set forth in the Contingent Payment Statement and the Purchaser's
Contingent Payment Amount, provided, however, the Sellers' Representative shall
notify (the "Sellers' Representative's Notice") the Purchaser in writing of the
nature and basis of such dispute within 60 days of the Purchaser's delivery of
the Contingent Payment Statement; provided, further, however, that such 60-day
period shall be reasonably extended in the event there is any delay by the
Purchaser in providing to the Sellers' Representative any of the information
(including all necessary details) reasonably requested by the Sellers'
Representative in connection with his review of the Contingent Payment Statement
and supporting documentation. The Purchaser and the Sellers' Representative
shall
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attempt to resolve all disputes set forth in the Sellers' Representative's
Notice. In the event the difference between the Purchaser's Contingent Payment
Amount and the amount determined by the Sellers' Representative as the
Contingent Payment Amount does not exceed $100,000, then the Purchaser's
Contingent Payment Amount shall be increased by one-half of such difference (but
not to exceed $50,000) and such dispute shall be deemed conclusively determined
and binding upon the parties. If the difference between the Purchaser's
Contingent Payment Amount and the Sellers' Representative's Contingent Payment
Amount exceeds $100,000 and the Purchaser and the Sellers' Representative are
unable to resolve such dispute within 20 Business Days of the Purchaser's
receipt of the Sellers' Representative's Notice, such dispute shall be submitted
to D&T (or if such firm is unwilling or unable to serve, such other independent
nationally recognized accounting firm mutually acceptable to the Purchaser and
the Sellers' Representative) who shall, within 30 Business Days after such
submission, resolve such disputed items in accordance with the terms of this
Agreement, which resolution shall (absent manifest error) be final, binding and
conclusive on the parties hereto. All fees and expenses of D&T (or other
accounting firm as aforesaid) arising in connection with the resolution of
disputes hereunder shall be divided equally between the Sellers and the
Purchaser.
(c) Concurrently with the delivery of the Contingent Payment
Statement, the Purchaser shall deliver to the Sellers (in accordance with the
allocation and payment and delivery instructions set forth in Schedule 2.2 and
Exhibit C) the Purchaser's Contingent Payment Amount reflected therein.
(d) Upon the final resolution of all disputes as provided in the
preceding paragraph, the Purchaser shall deliver to the Sellers (in accordance
with the allocation and payment and delivery instructions set forth in Schedule
2.2 and Exhibit C) the excess, if any, of (i) the amount determined by
multiplying the Contingent Payment by the 1998 Multiplier, over (ii) the
Purchaser's Contingent Payment Amount previously paid.
(e) Notwithstanding the foregoing, the Contingent Payment shall
be immediately payable in full to all Sellers (in accordance with the allocation
and payment and delivery instructions set forth in Schedule 2.2 and Exhibit C)
in the event that either or both of the Employment Agreements shall be
terminated prior to the expiration of the Initial Term (as defined therein),
except that the foregoing shall not apply to any voluntary termination by
▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ thereunder.
3.5 CARRYOVER AMOUNT. If the First Contingent Payment Amount is less
than the Contingent Payment, such shortfall (the "Carryover Amount") shall be
determined and payable in accordance with the following:
(a) Not later than March 1, 2000, the Purchaser shall deliver to
the Sellers' Representative a detailed statement (the "Carryover Statement") of
the Purchaser's chief financial officer setting forth (i) Net Sales, Cost of
Sales and Gross Profit in respect of the 12 month period ending December 31,
1999 (including a detailed statement setting forth the items included therein)
and (ii) the amount determined by multiplying the Carryover Amount by the 1999
Multiplier. The Sellers' Representative and its representatives and agents shall
have the right to review and inspect, and shall be afforded the opportunity to
examine and make copies of all work papers and
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supporting documentation reasonably requested in order to verify the accuracy of
the Carryover Statement. The Purchaser and the Sellers' Representative shall
meet on a quarterly basis to review preliminary non-binding determinations of
Net Sales, Cost of Sales and Gross Profit (and each of the items included
therein) during the 1999 calendar year.
(b) All of the terms and provisions of Sections 3.4(b), (c), (d)
and (e) above regarding payments, disputes, notices thereof, the resolution
process thereof and the costs and expenses associated therewith shall apply to
the Carryover Statement and the matters set forth therein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Sellers hereby, jointly and severally, make the following
representations and warranties to the Purchaser and Parent (except that no
Seller shall be deemed to make any representation or warranty regarding any
other Seller):
4.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
California with full corporate power and authority to own its properties and to
carry on the Business as now conducted. Schedule 4.1 sets forth the state of
incorporation of each Subsidiary, and each Subsidiary is a corporation, duly
organized, validly existing and in good standing under the laws of its state of
incorporation with full corporate power and authority to own its properties and
to carry on the Business as now conducted. The Company and each Subsidiary is
duly qualified or licensed and has all permits necessary to transact business,
and is in good standing as a foreign corporation, in each of the jurisdictions
set forth in Schedule 4.1, which are the only jurisdictions wherein the nature
of the business conducted by it or its ownership or lease of real property
requires it to be so qualified or licensed or to hold such permits.
4.2 CAPITALIZATION. The Sellers own all of the Shares which are the
only shares of Company Stock which are issued and outstanding. The Company is
not authorized to issue, and has not issued, any shares of capital stock or
equity interests (whether common or preferred) other than the Shares. The total
authorized and issued capital stock of each of the Subsidiaries is set forth on
Schedule 4.2 (the "Subsidiaries Stock"). The Company is the lawful record and
beneficial owner of all of the issued and outstanding shares of the Subsidiaries
Stock and has good and marketable title thereto, free and clear of all
Encumbrances. All of the issued and outstanding shares of Company Stock and
Subsidiaries Stock have been duly authorized and validly issued in full
compliance with all applicable federal, state and other securities and other
laws, and without any violation of any pre-emptive rights and are fully paid and
non-assessable. There are no other shares or other securities of the Company or
any Subsidiary which are authorized, issued and/or outstanding other than the
Shares and the Subsidiaries Stock owned by the Company. Except as set forth on
Schedule 4.2, there are no outstanding subscriptions, options, warrants, rights,
calls, contracts, commitments, understandings or agreements to purchase, redeem,
retire, defease or otherwise acquire or relating to the issuance of any shares
of Company Stock or other securities of the Company or any Subsidiary,
including, without limitation, any options, rights, warrants or
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other rights of conversion or exchange under any outstanding securities or other
instruments, other than this Agreement. Except as set forth in Schedule 4.2, the
Company does not own any capital shares or other proprietary interests, directly
or indirectly, in any Person, other than the Subsidiaries, and the Subsidiaries
do not, jointly or severally, own any capital shares or other proprietary
interests, directly or indirectly, in any Person.
4.3 CHARTER DOCUMENTS. The copies of the certificates of incorporation
and by-laws of each of the Company and the Subsidiaries, certified by the
respective secretaries or assistant secretaries thereof, which have been
delivered to Purchaser are complete and correct in all respects. Except as set
forth in Schedule 4.3, there are no voting trusts, stockholder agreements,
proxies or other agreements or understandings currently in effect with respect
to the voting or transfer of any of the shares of Company Stock or Subsidiaries
Stock.
4.4 TITLE TO STOCK. Except as set forth in Schedule 4.4, each Seller
represents he is the lawful record and beneficial owner of the number of Shares
set forth opposite his name on Schedule 4.4 and each Seller represents he has
good and marketable title thereto, free and clear of all Encumbrances,
including, without limitation, any agreements, subscriptions, options, warrants,
calls, commitments or rights of any character granting to any Person any
interest or right to acquire from such Seller at any time, or upon the happening
of any stated event, any of the Shares. Upon the delivery by each Seller to the
Purchaser of the Shares owned by such Seller and set forth opposite his name on
Schedule 4.4, the Purchaser shall acquire the legal, valid and indefeasible
title to such Shares, free and clear of all Encumbrances and shall become the
lawful record and beneficial owner thereof. Except for the Shares set forth
opposite his name on Schedule 4.4, each Seller represents that he does not own
any shares or any other Shares of capital stock, securities or equity interests
of the Company.
4.5 AUTHORITY; BINDING OBLIGATION. Each Seller represents that he has
all requisite power and authority to execute, deliver and perform his respective
obligations under this Agreement and the Additional Agreements to which each may
be a party and consummate the transactions contemplated herein and therein. Each
Seller represents that this Agreement and the Additional Agreements have been
duly executed and delivered by such Seller (to the extent a party thereto) and
constitute the legal, valid and binding obligation of such Seller enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditor's rights'
generally and to general equitable principles.
4.6 NO VIOLATIONS. Except as set forth in Schedule 4.6, the execution,
delivery and performance of this Agreement and the Additional Agreements and the
consummation of the transactions contemplated herein and therein by the Sellers
parties thereto do not and will not, with or without the giving of notice or
passage of time or both (a) violate, conflict with or result in the breach of
any term or provision of, or require any notice, filing or consent under (i) the
certificate of incorporation, by-laws or other charter documents of any member
of the Steadi Group, (ii) any statutes, laws, rules, regulations, ordinances or
Permits of any Governmental Authority applicable to Sellers or any member of the
Steadi Group or (iii) any Governmental Order binding upon any Seller or any
member of the Steadi Group or any of their respective properties or assets; (b)
conflict with or result in the breach of any term or provision of, require any
notice or consent under, give rise to a right
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of termination of, constitute a default under, result in the acceleration of, or
give rise to a right to accelerate any obligation under, (i) any of the Material
Contracts or (ii) any loan agreement, mortgage, indenture, financing agreement,
lease or any other agreement or instrument to which (A) any Seller is a party or
by which any of their respective properties or assets are bound or (B) the
Company or any member of the Steadi Group is a party or by which any of their
respective properties or assets are bound and which will cause a Material
Adverse Effect; or (c) result in any Encumbrance on any of the properties or
assets of any of the Sellers or any member of the Steadi Group.
4.7 FINANCIAL STATEMENTS. The Sellers have furnished to the Purchaser
the audited consolidated balance sheet of the Company as at September 30, 1997
and the related audited consolidated statements of operations and retained
earnings and cash flows for the twelve months then ended, including the notes
thereto, certified by D&T (the "Audited Financial Statements"), copies of which
are attached hereto as Schedule 4.7. The Audited Financial Statements (i) were
prepared in all material respects in accordance with the books of account and
other financial records of the Company and its Subsidiaries, (ii) fairly present
the consolidated financial condition, results of operations, changes in retained
earnings and, cash flows for Company and the Subsidiaries as of the dates and
for the periods covered thereby and (iii) have been prepared in accordance with
GAAP applied on a basis consistent with past practice.
4.8 BOOKS OF ACCOUNTS. To the best of the Sellers' knowledge, the books
of account and other financial records of each member of the Steadi Group (i)
reflect all material items of income and expense and all material assets and
material liabilities required to be reflected therein in accordance with GAAP
consistently applied and (ii) are in all material respects complete and correct
and do not contain or reflect any material inaccuracies or discrepancies.
4.9 ABSENCE OF UNDISCLOSED LIABILITIES. No member of the Steadi Group
has any Liabilities, except: (a) Liabilities that were reflected, disclosed or
reserved against in the Audited Financial Statements and not heretofore paid or
discharged; (b) Liabilities specifically disclosed in Schedule 4.9; (c)
Liabilities incurred in, or as a result of, the ordinary course of the Business
consistent with past practice since September 30, 1997 which do not exceed
$25,000 for any one transaction or $50,000 in the aggregate; and (d) Liabilities
in respect of open purchase orders of Inventory which are cancelable without
penalty.
4.10 ACCOUNTS RECEIVABLE. To the Sellers' knowledge, Schedule 4.10 sets
forth an aged list of trade accounts receivable arising in the ordinary course
of the Business as of September 30, 1997 showing separately those accounts
receivable that, as of such date, had been outstanding (i) for 30 days or less,
(ii) 31 to 60 days, (iii) 61 to 90 days and (iv) more than 90 days, and a list
of all other accounts receivable outstanding as of such date. Except for any
allowance for doubtful accounts (considered in the aggregate) set forth therein,
all accounts receivable reflected on the Audited Financial Statements (a) have
arisen in the ordinary course of the Business consistent with past practice, (b)
to the Sellers' knowledge, are not subject to any valid defenses, set-offs or
counterclaims and (c) to the Sellers' knowledge, are good and collectible in
full in the ordinary course of business and no member of the Steadi Group has
received any written notice that any account debtor thereof intends to contest
payment. Except as set forth in Schedule 4.10, each member of the Steadi Group
has good and marketable title to all of its accounts receivable, free and clear
of any Encumbrances.
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4.11 INVENTORY.
Except as set forth in Schedule 4.11, all Inventories are in the
physical possession of the Company or its Subsidiaries at the facilities located
on the Leased Real Property. The value at which all Inventories are carried in
the Audited Financial Statements reflect the historical inventory valuation
policy of the Company. Except as set forth in Schedule 4.11, each member of the
Steadi Group has good and marketable title to all of its Inventories, free and
clear of all Encumbrances. Except as set forth in Schedule 4.11, the Inventory
does not include any items held on consignment for others, and no member of the
Steadi Group is under any obligation or liability with respect to accepting
returns of Inventory or merchandise in the possession of its customers other
than in the ordinary course of the Business consistent with past practice. As of
the date hereof, the Sellers have no present knowledge that the Inventory
reflected in the Audited Financial Statements is over-valued in any material
respect or that any Inventory reserve is insufficient or inadequate in any
material respect.
4.12 [Deleted]
4.13 [Deleted]
4.14 CONDUCT IN THE ORDINARY COURSE; ABSENCE OF CERTAIN CHANGES.
(a) Since September 30, 1997, except as disclosed in Schedule
4.14, there has not been any change in the condition (financial or otherwise) of
the Business or the Liabilities, assets, customer or supplier relations,
operations, results of operations, prospects or condition (financial or
otherwise) of the Steadi Group, taken as a whole, including, without limitation,
any damage or destruction of property by fire or other casualty, which change
would have a Material Adverse Effect.
(b) Since September 30, 1997, except as disclosed in Schedule
4.14, the Business has been conducted in all material respects in the ordinary
course and consistent with past practice. For the avoidance of doubt and as
amplification and not limitation of the foregoing, except as disclosed in
Schedule 4.14, since September 30, 1997, no member of the Steadi Group has:
(i) permitted or allowed any of its assets or properties
(whether tangible or intangible) to be subjected to any Encumbrance, other than
Encumbrances reflected in the Audited Financial Statements;
(ii) amended, terminated, canceled or compromised any material
claims or waived any other rights of value in excess of $25,000;
(iii) sold, transferred, leased, subleased, licensed or
otherwise disposed of any properties or assets, real, personal or mixed
(including, without limitation, leasehold interests and intangible property), of
or relating to the Business in excess of $25,000, other than in the ordinary
course of the Business consistent with past practice;
(iv) [deleted];
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(v) (A) granted or proposed any increase, or announced any
increase, in the wages, salaries, compensation, bonuses, incentives, pension or
other benefits payable by it to any of its employees, other than aggregate
annual increases which do not exceed $250,000, or (B) established or increased
or promised or proposed to increase any benefits under any Plan, in either case
except as required by law and except for ordinary increases consistent with the
past practice of the Business;
(vi) made any material change in any method of accounting or
accounting practice or policy, other than such changes required by GAAP;
(vii) made or changed any express or deemed election or
settled or compromised any liability with respect to Taxes or prepaid any Taxes,
except in the ordinary course of the Business consistent with past practice, or
as may be required by any applicable law, rule or regulation;
(viii) [deleted];
(ix) incurred any Indebtedness for borrowed money described
in clauses (a), (c) and (f) of the definition of Indebtedness in excess of
$10,000, in the aggregate and currently outstanding, except as reflected in the
Audited Financial Statements or arising in the ordinary course of the Business
consistent with past practice;
(x) [deleted];
(xi) redeemed any of its capital stock or, declared, made or
paid any dividends or distributions (whether in cash, securities or other
property), other than dividends, distributions and redemptions declared, made or
paid by any Subsidiary solely to the Company;
(xii) issued or sold any capital stock, notes, bonds or
other securities, or any option or warrant to purchase the same (other than the
issuance by any Subsidiary solely to the Company);
(xiii) amended or restated its charter or by-laws;
(xiv) made any capital expenditure or commitment for any
capital expenditure in excess of $100,000 individually or $250,000 in the
aggregate;
(xv) merged with, entered into a consolidation with or
acquired (by purchase, merger, consolidation, stock acquisition or otherwise) a
substantial portion of the assets or business of any other Person or any
division or line of business thereof, or, except as permitted by clause (xiv),
acquired any material assets other than in the ordinary course of the Business
consistent with past practice;
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(xvi) entered into any agreement with any of its directors,
officers or shareholders (or any Immediate Family member thereof);
(xvii) made any loan to, guaranteed any Indebtedness of or
otherwise incurred any Indebtedness on behalf of, any Person in excess of
$10,000 which remains outstanding, other than Indebtedness solely among or
between the members of the Steadi Group;
(xviii) materially amended, modified or consented to the
termination of any Material Contract or any of its rights therein, except in the
ordinary course of Business and as would not reasonably be expected to have a
Material Adverse Effect;
(xix) allowed any Permit or Environmental Permit that was
issued to it and is required to operate the Business in the ordinary course and
consistent with past practice to lapse or terminate (unless the same has been
reinstated);
(xx) failed in the aggregate to maintain its plant,
property and equipment in its general operating condition, ordinary wear and
tear excepted;
(xxi) to the best of Sellers' knowledge, violated any law,
rule or regulation of any Governmental Authority or any Governmental Order which
can reasonably be expected to have a Material Adverse Effect;
(xxii) made any charitable contribution which would cause the
aggregate amount of charitable contributions of all the members of the Steadi
Group made since September 30, 1996 to exceed the aggregate amount of charitable
contributions made by the Steadi Group during the fiscal year ended September
30, 1996;
(xxiii) suffered any casualty loss or damage with respect to
any of its assets, plant, property or equipment which, when aggregated with the
casualty losses or damages of the other members of the Steadi Group suffered
since September 30, 1997, would have a replacement cost of more than $250,000,
whether or not such losses or damage shall have been covered by insurance; or
(xxiv) agreed, whether in writing or otherwise, to take any
of the actions specified in this Section or granted any options to purchase,
rights of first refusal, rights of first offer or any other similar rights with
respect to any of the actions specified in this Section, except as expressly
contemplated by this Agreement.
4.15 LITIGATION. Except as set forth in Schedule 4.15 (which sets forth
a summary of each Action disclosed therein containing the following information:
parties, nature of the proceeding, date commenced, description of claim and
amount of damages or other relief sought and, if applicable, paid or granted),
to the knowledge of the Sellers, there are no Actions, pending or threatened,
against any member of the Steadi Group. Except as set forth in Schedule 4.15, to
the knowledge of the Sellers, no member of the Steadi Group nor any of their
respective assets or properties, is subject to any Governmental Order (nor, to
the knowledge of the Sellers, are there
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any such Governmental Orders threatened to be imposed by any Governmental
Authority) which has had or would have a Material Adverse Effect.
4.16 COMPLIANCE WITH LAWS. Except as set forth in Schedule 4.16, to
the knowledge of the Sellers, each member of the Steadi Group has each conducted
and continues to conduct the Business substantially in accordance with all
applicable laws, ordinances, statutes, rules, regulations and Governmental
Orders applicable to it or any of its properties or assets or the Business
(except where any such failure would not have a Material Adverse Effect), and,
to the knowledge of the Sellers, no member of the Steadi Group is in material
violation of any such law, ordinance, statute, rule, regulation or Governmental
Order (except where any such violation would not have a Material Adverse
Effect). No member of the Steadi Group nor any officer, director, employee,
agent or representative of any member of the Steadi Group has violated or is
currently in violation of the Foreign Corrupt Practices Act of 1977, as amended.
4.17 ENVIRONMENTAL AND OTHER PERMITS AND LICENSES; RELATED MATTERS.
(a) Except as disclosed in Schedule 4.17, to the knowledge of
the Sellers, each member of the Steadi Group currently holds all health and
safety and other permits, licenses, authorizations, certificates, exemptions and
approvals of Governmental Authorities (collectively, "Permits"), including,
without limitation, Environmental Permits, necessary or proper for the current
use, occupancy or operation of any of its assets or properties or the conduct of
the Business (except where the failure to hold any such Permit or Environmental
Permit will not have a Material Adverse Effect), and all such Permits and
Environmental Permits are in full force and effect. To the knowledge of Sellers,
Schedule 4.17 contains a true, correct and complete list of all Permits held by
each member of the Steadi Group (setting forth the issuer thereof and any
expiration or terminate date). Except as disclosed in Schedule 4.17, to the
knowledge of the Sellers, there is no existing practice, action or activity of
any member of the Steadi Group and no existing condition of the properties or
assets of any member of the Steadi Group, or the Business, which will give rise
to any civil or criminal Liability under, or violate or prevent compliance with,
any health or occupational safety Environmental Law or other applicable statute,
regulation, ordinance or decree (except where the same will not have a Material
Adverse Effect). No member of the Steadi Group has received any notice from any
Governmental Authority revoking, canceling, rescinding, materially modifying or
refusing to renew any Permit or Environmental Permit or providing written notice
of violations under any Environmental Law. Except as disclosed in Schedule 4.17,
to the knowledge of the Sellers each member of the Steadi Group is in all
material respects substantially in compliance with all applicable Permits, all
applicable Environmental Laws and the requirements of all applicable
Environmental Permits (except where the failure to be in compliance will not
have a Material Adverse Effect).
(b) Except as disclosed in Schedule 4.17, to the knowledge of
the Sellers (i) Hazardous Materials have not been generated, used, treated,
handled or stored on, or transported to or from, or released (as "release" is
defined under any applicable Environmental Law) by any member of the Steadi
Group on any Leased Real Property or any property adjoining any Leased Real
Property; (ii) the members of the Steadi Group have disposed of all wastes,
including those containing Hazardous Materials, in compliance with all
applicable Environmental Laws and Environmental Permits; (iii) there are no
past, pending or threatened Environmental Claims, nor
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any basis for asserting the same, against any member of the Steadi Group, or any
Leased Real Property; and (iv) no Leased Real Property or any property adjoining
any Leased Real Property, is listed or proposed for listing on the National
Priorities List under CERCLA or on the CERCLIS or any analogous state list of
sites requiring investigation or cleanup.
4.18 MATERIAL CONTRACTS.
(a) Schedule 4.18 lists each of the following contracts and
agreements to which any member of the Steadi Group is a party (such contracts
and agreements being collectively referred to herein as the "Material
Contracts"):
(i) any contract, agreement, invoice, purchase order or
other arrangement, whether oral or written which imposes upon any member of the
Steadi Group the current or future obligation (whether primary or secondary,
direct or contingent) to make any payment (or series of payments) of $100,000 or
more and which is not terminable by any member of the Steadi Group without
penalty or further payment at any time upon not more than 30 calendar days'
notice;
(ii) [deleted];
(iii) [deleted];
(iv) any indebtedness for borrowed money (including
without limitation, all promissory notes, bonds, debentures, credit agreements,
letters of credit, acceptances and other similar items) as to which any member
of the Steadi Group has any Liability, whether as borrower or guarantor;
(v) any contract or agreement with any Governmental
Authority other than purchase orders in the ordinary course of the Business;
(vi) [deleted];
(vii) any contract or agreements that limits the ability
of any member of the Steadi Group to compete in any line of business or with any
Person or entity or in any geographic area or during any period of time;
(viii) any contract or agreement (including without
limitation those relating to employment) between or among any member of the
Steadi Group and any Seller (or any member of any Seller's Immediate Family);
(ix) any collective bargaining agreement, employment
contract, severance agreement and any contract, agreement for providing benefits
under any Plan, except, in each case, any agreement or contract which is
terminable by any member of the Steadi Group without penalty or further payment
at any time upon not more than 30 calendar days' notice; and
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(x) any other contract or agreement, except those made in
the ordinary course of the Business, which if terminated by the other party
thereto (with or without notice and with or without cause) would cause a
Material Adverse Effect.
(b) Except as expressly set forth in Schedule 4.18 (which shall
identify each such Material Contract), each Material Contract: (i) is valid and
binding on the member of the Steadi Group that is a party to such Material
Contract and, to the knowledge of the Sellers, on the other parties thereto and
is in full force and effect, (ii) upon consummation of the transactions
contemplated by this Agreement shall continue in full force and effect without
penalty or other adverse consequence and unaffected by such transactions. No
member of the Steadi Group is in material breach or default under the terms of
any Material Contract.
(c) Except as expressly set forth in Schedule 4.18 (which shall
identify each such Material Contract), to the knowledge of the Sellers, no other
party to any Material Contract is in material breach or default thereunder.
(d) Except as expressly set forth in Schedule 4.18, there is no
contract, agreement or other arrangement granting any Person any right of first
refusal or similar preferential right to purchase any of the properties or
assets of any member of the Steadi Group.
(e) To their knowledge, the Sellers have delivered to the
Purchaser true, correct and complete copies of each written Material Contract.
(f) The Sellers have delivered to the Purchaser a true, correct
and complete copy of the ▇▇▇▇▇▇ Agreement.
4.19 INTELLECTUAL PROPERTY. Except for the application filed for
"Steadi-Systems Firm Video Multimedia Sales Service Rentals" in Class 042, no
member of the Steadi Group owns (or has any rights as licensee in) any
Intellectual Property. To the best of the Sellers' knowledge, no member of the
Steadi Group has infringed upon, or used without authorization, any Intellectual
Property of any other Person.
4.20 REAL PROPERTY.
(a) Except as set forth in Schedule 4.20, no member of the
Steadi Group currently owns or has ever owned any real property and no member of
the Steadi Group is currently the lessor or sublessor of any real property.
(b) Schedule 4.20 contains true and complete copies of all
leases for each Leased Real Property and all amendments, modifications and
supplements thereto and all material ancillary documents pertaining thereto.
(c) Except as described in Schedule 4.20, no Seller has received
any written notice of any material violation of any law, regulation or ordinance
relating to any of the Leased Real Property.
(d) With respect to each of the leases contained in Schedule
4.20:
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(i) such lease is legal, valid, binding, enforceable
and in full force and effect with respect to the member of the Steadi Group that
is a party thereto, and, to the knowledge of the Sellers, with respect to all
other parties thereto and is the entire agreement between the parties thereto
with respect to such property;
(ii) [deleted];
(iii) except as otherwise disclosed in Schedule 4.20,
with respect to each such lease: (A) no Seller nor any member of the Steadi
Group has received any notice of cancellation or termination under such lease
and, to the knowledge of the Sellers, no lessor has any right of termination or
cancellation under such lease except in connection with the default of a member
of the Steadi Group thereunder, and (B) no Seller nor any member of the Steadi
Group has received any notice of a breach or default by any member of the Steadi
Group under such lease, which breach or default has not been cured; and
(iv) no member of the Steadi Group is presently in
arrears with respect to any rental payments or other sums due under any such
lease (other than payments due in respect of the current month) and, to the
knowledge of the Sellers, no member of the Steadi Group nor any other party to
such lease is in breach or default in any material respect, and, to the
knowledge of the Sellers, no event has occurred that, with notice or lapse of
time, would constitute such a material breach or default or permit termination,
modification or acceleration under such lease.
(e) To the knowledge of the Sellers, no member of the Steadi
Group has, within the past 12 months, wrongfully terminated any lease or
sublease for any real property or abandoned any real property held by it under
lease or sublease.
4.21 TANGIBLE PERSONAL PROPERTY.
(a) Schedule 4.21 contains true and complete copies of all
leases (whether capital leases or operating leases) for tangible personal
property to which any member of the Steadi Group is a party, as lessee, and
which has remaining annual rental payments in excess of $35,000 and any and all
material ancillary documents pertaining thereto (including, but not limited to,
any amendments, consents and evidence of commencement dates and expiration
dates). With respect to each of these leases:
(i) such lease is legal, valid, binding, enforceable
and in full force and effect in all material respects with respect to the member
of the Steadi Group that is a party thereto and, to the knowledge of the
Sellers, with respect to all other parties thereto and is the entire agreement
between the parties thereto with respect to such property;
(ii) [deleted]:
(iii) except as otherwise disclosed in Schedule 4.21,
with respect to each such lease: (A) no Seller nor any member of the Steadi
Group has received any notice of cancellation or termination under such lease
and, to the knowledge of the Sellers, no lessor has any right of termination or
cancellation under such lease except in connection with the default of a member
of the Steadi Group thereunder, and (B) no Seller nor any member of the Steadi
Group has received
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any notice of a breach or default under such lease, which breach or default has
not been cured; and
(iv) member of the Steadi Group is presently in arrears
with respect to any rental payments or other sums due under any such lease
(other than payments due in respect of the current month) and, to the knowledge
of the Sellers, no member of the Steadi Group, nor any other party to such
lease, is in breach or default thereunder in any material respect, and, to the
knowledge of the Sellers, no event has occurred that, with notice or lapse of
time would, constitute such a material breach or default or permit termination,
modification or acceleration under such lease.
4.22 CUSTOMERS. Listed in Schedule 4.22 are the names and addresses
of the top ten customers of the Company and the members of the Steadi Group (on
a consolidated basis), ranked by revenue, for the fiscal year ending September
30, 1997 and the respective revenue amounts for each such customer. Except as
disclosed in Schedule 4.22, no Seller nor any member of the Steadi Group has
received any written notice that any customer listed in Schedule 4.22 has
ceased, or will cease, to use the products, equipment, goods or services of the
Steadi Group, or has substantially reduced, or will substantially reduce, the
use of such products, equipment, goods or services following the Closing Date.
Also listed in Schedule 4.22 are the names and addresses of each Person holding
goods or merchandise on consignment from any member of the Steadi Group and the
cost to such member of the Steadi Group of the goods or merchandise shipped to
such Person.
4.23 SUPPLIERS. Listed in Schedule 4.23 are the names and addresses
of the top ten suppliers of the Company and the members of the Steadi Group (on
a consolidated basis), ranked by purchases, for the fiscal year ending September
30, 1997 and the approximate respective purchase amounts for each such supplier.
Except as disclosed in Schedule 4.23, no Seller nor any member of the Steadi
Group has received any written notice that any supplier listed in Schedule 4.23
will not sell materials, supplies, merchandise and other goods to the Steadi
Group at any time after the Closing Date on terms and conditions similar to
those imposed on current sales, except for general and customary price
increases. Schedule 4.23 also contains a true, correct and complete copy of the
written distributor agreement or similar agreement between any supplier listed
therein and any member of the Steadi Group (other than ordinary purchase orders
and correspondence arising in the ordinary course of the Business), and, to the
knowledge of the Sellers, no member of the Steadi Group is in breach or default
thereunder in any material respect.
4.24 EMPLOYEE BENEFIT MATTERS.
(a) Plans and Material Documents. Schedule 4.24 lists (i) all
employee benefit plans (as defined in Section 3(3) of ERISA) and all bonus,
stock option, stock purchase, restricted stock, incentive, deferred
compensation, retiree medical or life insurance, supplemental retirement,
severance or other benefit plans, programs or arrangements to which any member
of the Steadi Group is a party, with respect to which any member of the Steadi
Group has any obligation or which are maintained, contributed to or sponsored by
any member of the Steadi Group for the benefit of any current or former
employee, officer or director of such member and (ii) each employee benefit plan
for which any member of the Steadi Group could incur liability
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under Section 4069 of ERISA in the event such plan has been or were to be
terminated (collectively, the "Plans"). Except as set forth in Schedule 4.24,
each Plan is in writing and the Sellers have furnished the Purchaser with a
complete and accurate copy of each written Plan and a complete and accurate copy
of each material document prepared in connection with each such Plan, including,
where applicable, without limitation, (i) each current trust or other funding
arrangement, (ii) each current summary plan description and summary of material
modifications, (iii) the most recently filed Internal Revenue Service ("IRS")
Form 5500, (iv) the most recently received IRS determination letter for each
such Plan, and (v) the most recently prepared actuarial report and financial
statement in connection with each such Plan. Except as disclosed on Schedule
4.24, there are no other employee benefit plans, programs, arrangements or
agreements, whether formal or informal, whether in writing or not, to which any
member of the Steadi Group is a party, with respect to which any member of the
Steadi Group has any obligation or which are maintained, contributed to or
sponsored by any member of the Steadi Group for the benefit of any current or
former employee, officer or director of such member.
(b) [deleted].
(c) Compliance with Applicable Law. To the Sellers' knowledge,
each Plan offered by any member of the Steadi Group is operated in all material
respects in accordance with the requirements of all applicable law, including,
without limitation, ERISA and the Code, and, to the knowledge of the Sellers,
all persons who participate in the operation of such Plans and all Plan
"fiduciaries" (within the meaning of Section 3(21) of ERISA) have acted in all
material respects in accordance with the provisions of all applicable law,
including, without limitation, ERISA and the Code. To the Sellers' knowledge,
each member of the Steadi Group has performed all material obligations required
to be performed by it under, is not in any material respect in default under or
in violation of, and has no knowledge of any default or violation by any party
to any Plan.
(d) Qualification of Certain Plans. To the knowledge of the
Sellers, no fact or event has occurred since the date of any Plan's
determination letter from the IRS to adversely affect the qualified status of
any such Plan or the exempt status of any such trust established in connection
therewith.
(e) Absence of Certain Liabilities and Events. To the knowledge
of the Sellers, there has been no prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan. To
the knowledge of the Sellers, no member of the Steadi Group has incurred any
liability for any excise tax arising under Section 4971, 4972, 4980 or 4980B of
the Code and, to the knowledge of the Sellers, no fact or event exists which
could give rise to any such liability. To the knowledge of the Sellers, no
member of the Steadi Group has incurred any material liability under, arising
out of or by operation of Title IV of ERISA (other than liability for premiums
to the Pension Benefit Guaranty Corporation arising in the ordinary course);
and, to the knowledge of the Sellers, no fact or event exists which could give
rise to any such liability. To the knowledge of the Sellers, no complete or
partial termination has occurred within the five years preceding the date hereof
with respect to any Plan subject to
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Title IV of ERISA. To the knowledge of the Sellers, no reportable event (within
the meaning of Section 4043 of ERISA) has occurred or is expected to occur with
respect to any Plan subject to Title IV of ERISA. To the knowledge of the
Sellers, no Plan had an accumulated funding deficiency (within the meaning of
Section 302 of ERISA or Section 412 of the Code), whether or not waived, as of
the most recently ended plan year of such Plan. None of the assets of any member
of the Steadi Group is the subject of any lien arising under Section 302(f) of
ERISA or Section 412(n) of the Code; no member of the Steadi Group has been
required to post any security under Section 307 of ERISA or Section 401(a)(29)
of the Code; and, to the knowledge of the Sellers, no fact or event exists which
could give rise to any such lien or requirement to post any such security.
(f) Plan Contributions and Funding. To the Sellers' knowledge,
all employer and employee contributions, premiums or payments required to be
made with respect to any Plan have been made on or before their due dates. To
the Sellers' knowledge, as of the date hereof, no Plan which is subject to Title
IV of ERISA has an "unfunded benefit liability" (within the meaning of Section
4001(a)(18) of ERISA).
4.25 LABOR MATTERS. Except as set forth in Schedule 4.25, (a) no member
of the Steadi Group is a party to any collective bargaining agreement or other
labor union contract applicable to persons employed by any member of the Steadi
Group and currently there are no organizational campaigns, petitions or other
unionization activities seeking recognition of a collective bargaining unit
which could affect any member of the Steadi Group; (b) there are no strikes,
slowdowns or work stoppages pending or, to the best knowledge of the Sellers,
threatened between any member of the Steadi Group and any of their respective
employees, and no member of the Steadi Group has experienced any such strike,
slowdown or work stoppage within the past three years; (c) to the Sellers'
knowledge, each member of the Steadi Group is currently in material compliance
with all applicable laws, rules and regulations relating to the employment of
labor, including those related to wages, hours, collective bargaining and the
payment and withholding of taxes and other sums as required by the appropriate
Governmental Authority and has withheld and paid to the appropriate Governmental
Authority or is holding for payment not yet due to such Governmental Authority
all amounts required to be withheld from such employees of such member of the
Steadi Group and is not liable for any arrears of wages, taxes, penalties or
other sums for failure to comply with any of the foregoing (except as otherwise
reflected in the Audited Financial Statements); (d) there is no material claim
with respect to payment of wages, salary or overtime pay that has been asserted
or is now pending or, to the knowledge of the Sellers, threatened before any
Governmental Authority with respect to any persons currently or formerly
employed by any member of the Steadi Group; (e) no member of the Steadi Group is
a party to, or otherwise bound by, any consent decree with, or citation by, any
Governmental Authority relating to employees or employment practices; (f) to the
Sellers' knowledge, there is no material charge or proceeding with respect to a
violation of any occupational safety or health standards that has been asserted
in the past 12 months or is now pending or threatened with respect to any member
of the Steadi Group; (g) to the Sellers knowledge, there is no charge of
discrimination in employment or employment practices, for any reason, including,
without limitation, age, gender, race, religion or other legally protected
category, which has been asserted in the past 12 months or is now pending or,
threatened in writing before the United States Equal Employment Opportunity
Commission, or any other Governmental Authority in any jurisdiction in which any
member of the Steadi Group has employed employees; (h) no member of the Steadi
Group has violated or otherwise failed to comply with the requirements of the
Workers Adjustment and
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Retraining Notification Act; and (i) no member of the Steadi Group is party to
any written employment agreement.
4.26 KEY EMPLOYEES. Schedule 4.26 lists the name, place of
employment, the current annual salary rates, bonuses, deferred or contingent
compensation (other than compensation under a 401(k) plan), "golden parachute"
and other like benefits paid or payable (in cash or otherwise), the date of
employment and job title of each current salaried employee, officer, director,
consultant or agent of any member of the Steadi Group whose annual compensation
exceeds $100,000 for the fiscal year ending September 30, 1997.
4.27 CERTAIN INTERESTS.
(a) Except as disclosed in Schedule 4.27, no Seller or Immediate
Family member thereof:
(i) has any direct or indirect financial interest in any
competitor, supplier or customer of any member of the Steadi Group, provided,
however, that the ownership of securities representing no more than two percent
of the outstanding voting power of any competitor, supplier or customer, and
which are also listed on any national securities exchange or traded actively in
the national over-the-counter market, shall not be deemed to be a "financial
interest" so long as the Person owning such securities has no other connection
or relationship with such competitor, supplier or customer;
(ii) owns, directly or indirectly, in whole or in part, or
has any other interest in any material tangible or intangible property which any
member of the Steadi Group uses or proposes to use in the conduct of the
Business; or
(iii) has outstanding any Indebtedness in excess of $5,000
to any member of the Steadi
Group.
4.28 TAXES. Except as set forth in Schedule 4.28, (i) all returns and
reports in respect of Taxes required to be filed with respect to each member of
the Steadi Group or the Business have been timely filed; (ii) all Taxes required
to be shown on such returns and reports or otherwise due have been timely paid;
(iii) all such returns and reports are true, correct and complete in all
material respects; (iv) no adjustment relating to such returns has been proposed
formally or informally by any Governmental Authority and, to the knowledge of
the Sellers, no basis exists for any such adjustment; (v) there are no pending
or, to the knowledge of the Sellers, threatened actions or proceedings for the
assessment or collection of Taxes against any member of the Steadi Group or any
corporation that was included in the filing of a return with any member of the
Steadi Group on a consolidated or combined basis; (vi) no consent under Section
341(f) of the Code has been filed with respect to any member of the Steadi
Group; (vii) there are no Tax liens on any assets of any member of the Steadi
Group or of the Business; (viii) there are no outstanding waivers or agreements
extending the statute of limitations for any period with respect to any Tax to
which any member of the Steadi Group may be subject; (ix) there are no requests
for information currently outstanding that could affect the Taxes of any member
of the Steadi Group; (x) there are no proposed reassessments of any property
owned by any member of the Steadi
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Group; and (xi) no power of attorney that is currently in force has been granted
with respect to any matter relating to Taxes.
4.29 INSURANCE.
(a) Schedule 4.29 sets forth true, correct and complete
copies of all insurance policies (including policies providing property,
casualty, liability, workers' compensation, and bond and surety arrangements)
under which any member of the Steadi Group is presently an insured, a named
insured or otherwise the principal beneficiary of coverage thereunder.
(b) With respect to each such insurance policy: (i) the policy
is legal, valid, binding and enforceable in accordance with its terms with
respect to the member of the Steadi Group that is a party thereto and, to the
knowledge of the Sellers, with respect to the other parties thereto and, to the
Sellers' knowledge, is in full force and effect; (ii) to the Sellers' knowledge,
no member of the Steadi Group is in breach or default (including any breach or
default with respect to the payment of premiums or the giving of notice), and no
event has occurred which, with notice or the lapse of time, would constitute
such a material breach or default or which would permit termination or
modification, under the policy; and (iii) no party to the policy has repudiated,
or given notice of an intent to repudiate, any provision thereof.
(c) No member of the Steadi Group is self-insured or covered
under any risk retention program. The terms "self-insured" and "risk retention
program" as used in this Section shall not refer to the mere absence of
insurance, but, in the case of self-insurance, to a formal program of
self-insurance that includes the actuarial projections of losses, the
maintenance of reserves and the adherence to formal claim procedures and, in the
case of a risk retention program, to means other than insurance by which the
availability of funds to pay losses arising out of defined risks is assured
before the losses occur (including, without limitation, retention group).
(d) All material properties and risks of the Business and of
each member of the Steadi Group are, and for the past five years have been,
covered by valid and, except for policies that have expired under their terms in
the ordinary course, currently effective insurance policies or binders of
insurance (including, without limitation, general liability insurance, property
insurance and workers' compensation insurance) issued in favor of such member of
the Steadi Group or the member of the Steadi Group bearing such risk of the
Business.
(e) At no time during the past three years has any member of the
Steadi Group (i) been denied any insurance or indemnity bond coverage which it
has requested, (ii) made any material reduction in the scope or amount of its
insurance coverage, or received notice from any of its insurance carriers that
any insurance premiums will be subject to increase in an amount materially
disproportionate to the amount of the increases with respect thereto (or with
respect to similar insurance) in prior years or that any insurance coverage will
not be available in the future substantially on the same terms as are now in
effect, except for increases in premiums occurring in the ordinary course of the
Business or (iii) suffered any extraordinary increase in premium for renewed
coverage, except increases applicable to all insureds under similar policies.
During the past three years, no insurance carrier has canceled, failed to renew
or materially reduced any
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insurance coverage for any member of the Steadi Group or given any notice or
other indication of its intention to cancel, not renew or reduce any such
coverage.
4.30 ACCOUNTS; LOCKBOXES; SAFE DEPOSIT BOXES; POWERS OF ATTORNEY.
Schedule 4.30 is a true and complete list of (i) the names of each bank, savings
and loan association, or other financial institution in which any member of the
Steadi Group has an account, and the names of all persons authorized to draw
thereon or have access thereto, (ii) the location of all lockboxes and safe
deposit boxes of each member of the Steadi Group and the names of all Persons
authorized to draw thereon or have access thereto and (iii) the names of all
Persons, if any, holding powers of attorney from any member of the Steadi Group
relating to the Business. On the Closing Date, no member of the Steadi Group
shall have any such account, lockbox or safe deposit box other than those listed
in Schedule 4.31, nor shall any additional Person have been authorized, from the
date of this Agreement, to draw thereon or have access thereto or to hold any
such power of attorney, without prior written notice to the Purchaser. Except as
disclosed in Schedule 4.31, no member of the Steadi Group has commingled monies
or accounts of any member of the Steadi Group with other monies or accounts of
the Sellers.
4.31 BROKERS. Except for Barrington Associates, whose fees and other
compensation shall be paid by the Sellers, no broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Sellers or any member of the Steadi
Group.
4.32 FULL DISCLOSURE. No Seller has knowledge of any facts pertaining
to the Sellers, any member of the Steadi Group or the Business which, in such
Seller's reasonable opinion, could have a Material Adverse Effect and which have
not been disclosed in this Agreement or any of the Schedules hereto.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE PURCHASER
Parent and the Purchaser, jointly and severally, represent and warrant
to the Sellers as follows:
5.1 ORGANIZATION AND QUALIFICATION. Each of Parent and the Purchaser is
a corporation duly organized validly existing and in good standing under the
laws of its state of incorporation with full corporate power and authority to
own its properties and to carry on its business as now conducted. Each of Parent
and the Purchaser is duly qualified or licensed and has all permits necessary to
transact business, and is in good standing as a foreign corporation, in each of
the jurisdictions wherein the nature of the business conducted by it or its
ownership or lease of real property requires it to be so qualified or licensed
or to hold such permits. The Purchaser is a wholly-owned subsidiary of Parent.
5.2 AUTHORITY; BINDING OBLIGATION. Parent and the Purchaser have all
requisite power and authority to execute, deliver and perform their respective
obligations under this Agreement and the Additional Agreements to which each may
be a party and consummate the transactions
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contemplated herein and therein. The Purchaser's and Parent's execution,
delivery and performance of this Agreement and the Additional Agreements to
which each may be a party and the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action and this Agreement
and the Additional Agreements have been duly executed and delivered by the
Purchaser and Parent (to the extent parties thereto) and constitute the legal,
valid and binding obligation of the Purchaser and Parent (to the extent parties
thereto) enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
creditor's rights' generally and to general equitable principles.
5.3 NO VIOLATIONS. The execution and delivery of this Agreement and the
Additional Agreements and the consummation of the transactions contemplated
herein and therein by the Purchaser and Parent (to the extent parties thereto)
do not and will not, with or without the giving of notice or passage of time or
both (a) violate, conflict with or result in the breach of any term or provision
of, or require any notice, filing or consent under (i) the certificate of
incorporation, by-laws or other charter documents of the Purchaser or Parent,
(ii) any statutes, laws, rules, regulations, ordinances or Permits of any
Governmental Authority applicable to Purchaser or Parent or (iii) any
Governmental Order binding upon the Purchaser or Parent or any of their
respective properties or assets; (b) conflict with or result in the breach of
any term or provision of, require any notice or consent under, give rise to a
right of termination of, constitute a default under, result in the acceleration
of, or give rise to a right to accelerate any obligation under, any material
contract or any loan agreement, mortgage, indenture, financing agreement, lease
or any other agreement or instrument to which the Purchaser or Parent is a party
or by which any of their respective properties or assets are bound; or (c)
result in any Encumbrance on any of the properties or assets of the Purchaser or
Parent.
5.4 SEC DOCUMENTS. Parent has filed all required reports, schedules,
forms, statements and other documents with the Securities and Exchange
Commission the ("SEC Documents"). Parent has made available to the Sellers true,
correct and complete copies of all Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and final Proxy Statements
included within the SEC Documents. All of the SEC Documents (other than
preliminary material or material which was subsequently amended), as of their
respective filing dates, complied in all material respects with all applicable
requirements of the Act, and the Securities Exchange Act of 1934, as amended,
(the "Exchange Act"). None of the SEC Documents, as of their respective dates,
contained any untrue statements of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except to the extent such statements have been amended, modified
or superseded by later SEC Documents. Parent's consolidated financial statements
included in the SEC Documents were prepared in accordance with GAAP (except, in
the case of unaudited statements, as permitted by Form 10-Q) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly presented, in accordance with the applicable
requirements of GAAP, the consolidated financial position thereof and the
consolidated results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end adjustments).
5.5 FINANCIAL ABILITY. The Purchaser and Parent have the financial
resources to pay the Purchase Price and consummate the transactions described
herein.
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5.6 BROKERS AND FINDERS. Neither the Purchaser nor Parent has employed
any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
hereby.
5.7 FULL DISCLOSURE. No representation or warranty of Parent or the
Purchaser in this Agreement, or any Schedule hereto, or any certificate
furnished or to be furnished to the Sellers pursuant to this Agreement, contains
or will contain any untrue statements of a material fact, or omits or will omit
to state a material fact necessary to make the statements contained herein or
therein not misleading.
ARTICLE VI
POST-CLOSING COVENANTS
6.1 PERSONAL GUARANTIES. Schedule 6.1 sets forth a true, correct and
complete copy of personal guarantees (the "Personal Guarantees") executed and
delivered by certain Sellers with respect to obligations (the "Guaranteed
Obligations") of the Company or members of the Steadi Group, together with true,
correct and complete copies of all instruments, agreements and documents
evidencing the Guaranteed Obligations. Following the Closing, Parent agrees to
indemnify and hold the Sellers harmless from and against and in respect of any
claim or demand made or asserted under the Personal Guarantees with respect to
the Guaranteed Obligations.
6.2 CREDIT SUPPORT. Following the Closing, Parent agrees to provide the
Company with the necessary credit support (whether by means of inter-company
loans, advances, guarantees or other method, and upon such terms and conditions,
reasonably deemed appropriate by Parent), but not to exceed the principal amount
of $4,500,000 (excluding the repayment of the Sands Note), to continue to
operate the Business in the ordinary course and the reasonably projected growth
thereof.
6.3 NO THIRD PARTY BENEFIT. Except for the parties hereto and their
permitted successors and assigns, nothing contained in this Article VI shall
confer upon any Person any rights, remedies or benefits, nor shall any such
Person be deemed a third party beneficiary thereof.
ARTICLE VII
CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS
The obligation of the Sellers to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction, or waiver
by the Sellers' Representative, prior to or at the Closing, of each of the
following conditions precedent:
7.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Parent and the Purchaser contained in this Agreement shall be true,
correct and complete in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties were made or given
on and as of such date (other than such representations and warranties as are
made as of another specified date, which shall be true and correct as of such
other specified date).
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7.2 PERFORMANCE OF OBLIGATIONS. Parent and the Purchaser shall have
performed and complied with all of the covenants, agreements and conditions
required by this Agreement to be performed and complied with by them prior to or
on the Closing Date.
7.3 COMPLIANCE CERTIFICATE. Parent and the Purchaser shall each have
delivered to Sellers' Representative on the Closing Date a certificate signed by
an authorized officer thereof and dated as of the Closing Date to the effect
that each of the representations and warranties of Parent and the Purchaser,
respectively, contained in this Agreement is true, correct and complete in all
material respects as of the Closing Date (other than such representations and
warranties as are made as of another specified date, which shall be true and
correct as of such other specified date), and each of Parent and the Purchaser,
respectively, has complied with, fulfilled and performed each of the covenants,
terms and conditions to be complied with, fulfilled or performed by it under
this Agreement on or prior to the Closing Date
7.4 ABSENCE OF LITIGATION. No Action shall be threatened or pending on
the Closing Date in which it is sought to restrain or prohibit or to obtain
damages or other relief in connection with this Agreement or the consummation of
the transactions contemplated hereby, and no investigation that might result in
any such Action shall be pending or threatened.
7.5 REQUIRED CONSENTS AND APPROVALS; HSR. Each Governmental Authority
and all other Persons whose approval, consent or waiver may be necessary or
required with respect to the transactions contemplated herein shall have given
or granted such approval, consent or waiver. Specifically, but without limiting
the foregoing, any waiting period (and any extension thereof) under the HSR Act
shall have expired or shall have been terminated.
7.6 RESOLUTIONS. The Sellers' Representative shall have received a true
and complete copy, certified by the Secretary or Assistant Secretary of each of
Parent and the Purchaser, of the resolutions duly adopted by the Board of
Directors of each of Parent and the Purchaser evidencing its authorization of
the execution and delivery of this Agreement and the Additional Agreements to
which it is a party and the consummation of the transactions contemplated hereby
and thereby.
7.7 INCUMBENCY CERTIFICATE. The Sellers' Representative shall have
received a certificate of the Secretary or Assistant Secretary of each of Parent
and the Purchaser certifying the names and signatures of the officers of Parent
and the Purchaser authorized to sign this Agreement and the Additional
Agreements to which is a party.
7.8 LEGAL OPINION. The Sellers' Representative shall have received a
legal opinion, dated as of the Closing Date, of ▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., as to the
matters set forth in Sections 5.1, 5.2 and 5.3, substantially in the form of
Exhibit D.
7.9 ADDITIONAL AGREEMENTS. The Company shall have executed and
delivered the Employment Agreements and Parent shall have executed and delivered
the Options.
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7.10 PAYMENT OF BANK DEBT. Parent shall provide the Company with the
necessary funds to repay the Bank Debt in full and the Company shall cause the
Bank Debt to be paid in full and all collateral securing the same shall be
released.
7.11 SANDS NOTE. Parent shall provide the Company with the necessary
funds to pay the Sands Note in full and the Company shall cause the Sands Note
to be paid in full and all collateral securing the same shall be released.
7.12 ▇▇▇▇▇▇ AGREEMENT. Parent shall provide the Company with the
necessary funds to pay the Closing payment due under the ▇▇▇▇▇▇ Agreement and
the Company shall pay such amount to ▇▇▇▇▇ ▇▇▇▇▇▇.
7.13 CLOSING PAYMENT. The Purchaser shall have made the payment set
forth in Section 3.2 in accordance with the allocation and payment instructions
set forth in Schedule 2.2 and Exhibit C.
ARTICLE VIII
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
The obligation of the Purchaser and Parent to consummate the
transactions contemplated by this Agreement shall be subject to the
satisfaction, or waiver by the Purchaser, prior to or at the Closing, of each of
the following conditions precedent:
8.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Sellers contained in this Agreement shall be true, correct and complete
in all material respects on and as of the Closing Date with the same effect as
though such representations and warranties were made or given on and as of such
date (other than such representations and warranties as are made of another
specified date, which shall be true and correct as of such other specified
date).
8.2 PERFORMANCE OF OBLIGATIONS. Sellers shall have performed and
complied with all of the covenants, agreements and conditions required by this
Agreement to be performed and complied with by them prior to or on the Closing
Date.
8.3 COMPLIANCE CERTIFICATE. Sellers shall have delivered to Purchaser
on the Closing Date a certificate signed by or on behalf of Sellers and dated as
of the Closing Date to the effect that each of the representations and
warranties of Sellers contained in this Agreement is true, correct and complete
in all material respects as of the Closing Date (other than such representations
and warranties as are made of another specified date, which shall be true and
correct as of such other specified date), and Sellers have complied with,
fulfilled and performed each of the covenants, terms and conditions to be
complied with, fulfilled or performed by Sellers under this Agreement on or
prior to the Closing Date.
8.4 ABSENCE OF LITIGATION. No Action shall be threatened or pending on
the Closing Date in which it is sought to restrain or prohibit or to obtain
damages or other relief in connection with this Agreement or the consummation of
the transactions contemplated hereby, and no investigation that might result in
any such Action shall be pending or threatened.
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8.5 REQUIRED CONSENTS AND APPROVALS; HSR. Each Governmental Authority
and all other Persons whose approval, consent or waiver may be necessary or
required with respect to the transactions contemplated herein shall have given
or granted such approval, consent or waiver. Specifically, but without limiting
the foregoing, any waiting period (and any extension thereof) under the HSR Act
shall have expired or shall have been terminated.
8.6 ORGANIZATIONAL DOCUMENTS; MINUTE BOOKS. The Purchaser shall have
received for each member of the Steadi Group (i) its certificate of
incorporation, as amended, certified by the Secretary of State (or other similar
official) of its state of incorporation, (ii) a long form good standing
certificate from the Secretary of State (or other similar official) of its state
of incorporation and each other jurisdiction set forth in Schedule 4.1 hereof,
(iii) a copy of its By-laws, certified by the Secretary of such member, (iv) the
original minute book and stock ledger or register, certified by the Secretary of
such member and (v) the resignation of each member of its Board of Directors.
8.7 LEGAL OPINION. The Purchaser shall have received a legal opinion,
dated as of the Closing Date, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, as to the matters set forth
in Sections 4.1, 4.2, 4.4, 4.5, 4.6 and 4.15, substantially in the form of
Exhibit E. In rendering such opinion, such counsel may rely as to factual
matters upon certificates or other documents furnished by the Sellers and
officers of the Company and government officials and upon such other documents
as such counsel deems appropriate as the basis for such opinion.
8.8 ADDITIONAL AGREEMENTS. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
shall have executed and delivered the Employment Agreements.
8.9 ▇▇▇▇▇▇ AGREEMENT. Provided Parent shall have delivered the
necessary funds therefor, the Company shall pay the Closing Payment due under
the ▇▇▇▇▇▇ Agreement to ▇▇▇▇▇ ▇▇▇▇▇▇.
8.10 SHAREHOLDER NOTE. The Shareholder Note shall have been discharged
or paid in full as of the Closing Date and the Purchaser shall have received a
copy thereof marked canceled.
8.11 BANK DEBT. Provided Parent shall have delivered the necessary
funds therefor, the Company shall have caused the Bank Debt to be paid in full
and all collateral securing the same shall be released.
8.12 SANDS NOTE. Provided Parent shall have delivered the necessary
funds therefor, the Company shall have caused the Sands Note to be paid in full
and all collateral securing the same shall be released.
8.13 STOCK CERTIFICATES. The Purchaser shall have received original
stock certificates evidencing the Shares, duly endorsed in blank, or accompanied
by stock powers duly executed in blank, in form reasonably satisfactory to the
Purchaser, with all required stock transfer tax stamps affixed
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8.14 BARRINGTON RELEASE. Barrington Associates shall have delivered to
the Company a full and unconditional release of any obligation or liability to
pay any fee, commission or other amount (including any reimbursement of
expenses) in connection with the transactions described herein or any other
matter.
8.15 MAXIMUM DEBT. As of the Closing Date, the outstanding principal
balance of (i) the Sands Note shall not exceed $2,045,000 and (ii) the Bank Debt
shall not exceed $2,900,000.
ARTICLE IX
OTHER MATTERS
9.2 FEES AND EXPENSES. Except for the fees and expenses of D&T in
connection with the Audited Financial Statements (which shall be apportioned
between the Company and the Purchaser in accordance with a separate engagement
letter of D&T), all legal, accounting, investment banking and other costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses. Without
limiting the foregoing, the Sellers shall be responsible for and pay and
discharge all fees and expenses payable to Barrington Associates and ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ in connection with the negotiation, preparation and consummation of this
Agreement and the transactions contemplated hereby.
9.3 TAXES. Each party and their respective Affiliates shall be liable
for all federal, state and local taxes on capital gains, transfer, documentary,
stamp and other similar taxes which may be due or payable by it in connection
with the consummation of the transactions contemplated hereunder.
ARTICLE X
INDEMNIFICATION
10.1 INDEMNIFICATION BY SELLERS. From and after the Closing, the
Sellers shall, jointly and severally, but subject to the limitations of Section
10.3 hereof, reimburse, indemnify and hold harmless the Purchaser, Parent and
their respective officers, directors, employees, agents, representatives and
successors and assigns (collectively, "Purchaser Indemnitees") from and against
and in respect of each of the following (collectively, the "Purchaser's
Indemnification Events"):
(a) any and all actual damages, losses, deficiencies,
liabilities, claims, demands, charges, costs and expenses of every nature and
character whatsoever, including, without limitation, reasonable attorneys' fees
and costs, excluding punitive or consequential damages of any kind
(collectively, the "Losses") that result from or arise out of any
misrepresentation or breach of warranty of the Sellers in this Agreement or any
of the Schedules provided hereunder or any agreement, document, statement, list,
certificate or instrument furnished by or on behalf of the Sellers or any of
them in connection with the performance of this Agreement and the transactions
contemplated herein; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses incident to any of the foregoing or to the successful enforcement of
this Section.
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10.2 INDEMNIFICATION OF SELLERS. From and after the Closing, the
Purchaser and Parent shall, jointly and severally, but subject to the
limitations of Section 10.3 hereof, reimburse, indemnify and hold harmless
Sellers and each of their respective heirs, estate, successors and assigns
(collectively, "Seller Indemnitees") from and against and in respect of each of
the following (collectively, the "Sellers' Indemnification Events"):
(a) any and all Losses that result from or arise out of any
misrepresentation or breach of warranty of the Purchaser or Parent in this
Agreement or any of the Schedules provided hereunder or any agreement, document,
statement, list, certificate or instrument furnished by or on behalf of the
Purchaser or Parent in connection with the performance of this Agreement and the
transactions contemplated herein; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses incident to any of the foregoing or to the successful enforcement of
this Section.
10.3 LIMITATIONS ON LOSSES
(a) In case any event shall occur that would otherwise entitle any
party to assert a claim for indemnification hereunder, no Losses shall be deemed
to have been sustained by such party to the extent of (i) any actual tax savings
realized by such party with respect thereto or (ii) any proceeds (net of
deductibles, taxes and collection costs) received by such party from any
insurance policies maintained by or on behalf of such party with respect to
losses to such party's property. The parties agree to submit a claim under such
insurance policies prior to or promptly following making a request for
indemnification hereunder.
(b) No Seller shall be liable under Section 10.1 for any
misrepresentation or breach of warranty solely made by any other Seller.
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ shall only be liable for
20% and 10%, respectively, of all Losses, except for a misrepresentation or
breach of warranty made by them individually as set forth in Sections 4.2, 4.4
or 4.5 hereof.
(d) The maximum liability of each Seller under Section 10.1 shall
not exceed an amount equal to such Seller's proportionate share (as set forth in
Schedule 2.2) of the Purchase Price (each Seller's "Maximum Liability"),
provided, however, that to the extent any Seller has not received his full
allocable share of the Purchase Price, then (i) such Seller shall not be
required to pay any amount in excess of the portion of the Purchase Price
received by him and (ii) the Purchaser may offset any shortfall against any
portion of the Purchase Price thereafter payable to such Seller up to the amount
of his Maximum Liability.
(e) The sum of all Losses incurred by the Purchaser and Parent in
the aggregate, or the sum of all Losses incurred by all Sellers in the
aggregate, must exceed $250,000 before such parties shall be entitled to
indemnification hereunder; provided, however, once such Losses exceed $250,000,
such parties shall be entitled to indemnification for all Losses to the extent
such Losses exceed $100,000 (it being agreed that such parties shall only be
liable for such excess amounts).
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(f) No party shall have any liability hereunder in respect of
claims asserted against any Indemnified Party on or after March 1, 2000;
provided, however, (i) the representations and warranties of the Sellers
relating to (A) title to the Shares shall survive indefinitely and (B) Taxes and
Environmental matters shall survive until the applicable statute of limitations
has expired and (ii) except as to claims asserted on or prior to May 15, 1998,
the maximum aggregate liability of the Sellers shall not exceed the unpaid
Contingent Payment. The limitation set forth in this paragraph shall not apply
to any claim asserted on or before May 15, 1998 or March 1, 2000, as the case
may be.
(g) Purchasers' Indemnification Events shall not include any
misrepresentation or breach of warranty set forth in Section 4.7, to the extent
the same relates to accounts receivable or Inventory and does not constitute a
misrepresentation or breach of warranty set forth in Sections 4.10 or 4.11,
respectively.
(h) Purchaser's Indemnification Events shall not include any
misrepresentation or breach of warranty of which Parent or Purchaser has actual
knowledge (as evidenced by the Schedules hereto or a written statement or other
documentary evidence addressed and delivered to Parent or Purchaser) prior to or
as of the Closing.
(i) None of the limitations set forth in this Section 10.3, or the
provisions of Section 10.5, shall apply to any party who is found to have
fraudulently made any misrepresentation hereunder.
10.4 NOTICE.
(a) Promptly after receipt by an Indemnified Party of notice of
the assertion of any claim by a Person not a party to this Agreement (a "Third
Party Claim") with respect to which such Indemnified Party expects to make a
request for indemnification hereunder, such Indemnified Party shall give the
Indemnifying Party written notice describing such claim in reasonable detail.
The Indemnifying Party shall, upon receipt of such notice, be entitled to
participate in or, at the Indemnifying Party's option, assume the defense,
appeal or settlement of, such claim with respect to which such indemnity has
been invoked with counsel selected by it and approved by the Indemnified Party
(such approval not to be unreasonably withheld), and the Indemnified Party will
fully cooperate with the Indemnifying Party in connection therewith; provided,
that the Indemnified Party shall be entitled to employ separate counsel (at the
expense of the Indemnifying Party) to represent such Indemnified Party if
counsel selected by the Indemnifying Party cannot, by reason of any actual or
deemed conflict of interest, adequately represent the interests of the
Indemnified Party. In the event that the Indemnifying Party fails to assume the
defense, appeal or settlement of such claim within 20 days after receipt of
notice thereof from the Indemnified Party, and the Indemnified Party is, or
reasonably may be, prejudiced thereby, the Indemnified Party shall have the
right to undertake the defense or appeal of, or settle or compromise, such claim
on behalf of and for the account and risk of the Indemnifying Party; provided,
however, no settlement shall be for an amount in excess of such claim. The
Indemnifying Party shall not settle or compromise any such claim without the
Indemnified Party's prior written consent, unless the terms of such settlement
or compromise release the Indemnified Party from any and all liabilities with
respect to such Third Party Claim.
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(b) Any indemnifiable claim that is not a Third Party Claim shall
be asserted by written notice to the Indemnifying Party. If the Indemnifying
Party does not respond to such notice within 30 days, it shall have no further
right to contest the validity of such claim.
10.5 EXCLUSIVE REMEDY. Except as set forth in Section 10.7 below, the
indemnification rights of the parties hereto under this Agreement shall be
subject to, and deemed effective as of, the Closing of the transactions
contemplated hereunder and, except as set forth in Section 10.3(i), are the
exclusive rights and remedies of the parties hereto, including, without
limitation, for any misrepresentation or breach of warranty.
10.6 REPRESENTATIONS OF THE PARTIES. Except for the representations and
warranties expressly set forth herein and the Schedules hereto, no party hereto
makes any representation or warranty of any kind or nature regarding the
Business or any other matter, fact or circumstance, and Parent and the Purchaser
acknowledge that they (and their authorized agents and representatives,
including ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP) have conducted their own investigation and due
diligence review of the Company and have reviewed the operations, facilities,
books and records of the Company and the Steadi Group and have met with and
interviewed such employees, suppliers and customers as they deemed appropriate.
10.7 CERTAIN ADDITIONAL MATTERS.
(a) Notwithstanding anything contained herein, the Sellers shall
pay, satisfy and discharge, and indemnify and hold the Purchaser Indemnitees
harmless from and against (i) any and all Taxes of the Steadi Group for all
taxable periods, or portions thereof, prior to the Closing Date, (ii) all claims
and causes of action now or hereafter asserted by any third party against any
member of the Steadi Group in connection with the matters set forth in Numbers 3
and 4 of Schedule 4.15 hereto and (iii) all claims and causes of action now or
hereafter inserted by ▇▇▇▇▇▇▇ ▇▇▇▇▇ against any member of the Steadi Group in
connection with any event, occurrence or cause of action arising prior to the
Closing Date.
(b) The liability of the Sellers under the preceding paragraph (a)
shall be joint and several, except that ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ shall
only be liable for 20% and 10%, respectively, of such amounts.
(c) The obligation of the Sellers to pay the Taxes of the Steadi
Group as set forth in paragraph (a)(i) above shall (i) not apply to federal,
state and city income taxes for the fiscal year ending September 30, 1997 and
all taxable periods thereafter, (ii) not apply to any state sales or use tax
arising in connection with sales or rentals occurring after November 30, 1997,
provided, and only to the extent that, the Company has collected the proper
amount of tax in respect of each such transaction or event and (iii) only apply
to the extent the aggregate amount of such Taxes for which the Sellers have the
obligation to pay exceeds $145,000, in which event the aforesaid obligation of
the Sellers shall be to pay such excess.
(d) The matters described in this Section 10.7 shall not be
deemed "Purchaser's Indemnification Events" under Section 10.1 above, and the
indemnification
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contained in Section 10.1 shall not include all Losses arising from the matters
described in this Section 10.7.
ARTICLE XI
MISCELLANEOUS
11.1 COVENANT OF FURTHER ASSURANCES. The parties hereto covenant and
agree to execute and deliver any and all additional writings, instruments and
other documents and take such further actions as shall be reasonably required or
requested to effectuate the terms and conditions of this Agreement.
11.2 ENTIRE AGREEMENT. This Agreement and the Additional Agreements
represent the entire agreements between the parties hereto and thereto with
respect to the subject matter hereof and thereof, and supersede all prior
agreements and communications with respect thereto and all prior agreements and
understandings, whether oral or written, are merged into this Agreement.
11.3 ASSIGNMENT AND BINDING EFFECT. Neither this Agreement nor any
rights or obligations hereunder may be assigned by any party hereto without the
express written consent of the others and any attempted assignment in violation
thereof shall be null and void; provided, however, that the rights of the
Purchaser may be assigned to any Affiliate of Parent. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer on any Person other than the parties hereto or their
respective successors or permitted assigns or the Indemnified Parties (who shall
be deemed third party beneficiaries hereof) any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
11.4 AMENDMENT OR MODIFICATION. This Agreement may not be waived,
amended, modified or supplemented by the parties hereto in any manner, except by
an instrument in writing signed by the Purchaser and the Sellers'
Representative.
11.5 SEVERABILITY. If any provision of this Agreement shall be
determined by a court of competent jurisdiction to be invalid or unenforceable,
such determination shall not affect the remaining provisions of this Agreement,
all of which shall remain in full force and effect, nor shall it affect their
validity or enforceability in any other jurisdiction. To the extent permitted by
law, each party hereto waives any provision of law which renders any provision
hereof unenforceable in any respect.
11.6 NOTICES. All notices, requests, demands or other communications
under or with respect to this Agreement shall be in writing and shall be given
by hand, by telecopy with request for acknowledgment or confirmation of receipt,
by Federal Express or other nationally recognized overnight delivery service
providing for receipt against delivery (delivery charges prepaid) or by
certified or registered U.S. Mail, postage prepaid, return receipt requested,
and shall be deemed to have been duly given and effective upon the earlier of
(i) its actual receipt (or acknowledgment or confirmation of receipt), (ii) the
next business day after having been sent by Federal Express or similar
nationally recognized overnight delivery service providing for receipt against
delivery, delivery charges prepaid, or (iii) three days after having been sent
by certified or registered U.S. mail, return receipt requested, postage prepaid,
addressed as follows:
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If to Sellers: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Steadi-Systems, Ltd.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
- with a copy to -
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: M. ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇., Esq.
Telecopier: 212-838-7472
If to Purchaser: Daisytek, Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
- with a copy to -
▇▇▇▇▇ & Samson, P.A.
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Any such Person by written notice to each of the others listed in this Section
in accordance herewith may change the address to which notices may be directed,
but such notice shall be deemed duly given and effective only upon actual
receipt thereof.
12.7 WAIVERS AND EXTENSIONS. Any waiver by any party hereto of any
provision or condition of this Agreement or breach thereof or any extension of
time granted by any party under this Agreement shall not be construed or deemed
to be a waiver of any other provision or condition of this Agreement or breach
thereof or extension of time with respect thereto or a waiver of a subsequent
breach of or subsequent extension of time with respect to same provision or
condition.
12.8 GOVERNING LAW; PERSONAL JURISDICTION. This Agreement shall be
governed by, and be construed in accordance with, the laws of the State of New
York without regard to the conflicts of laws principles thereof. Each party
hereto hereby agrees that any legal action or proceeding (other than any action
seeking injunctive relief, specific performance or other equitable relief) shall
be brought in the courts of the State of New York, New York County, or of the
United States for the Southern District of New York, and each party hereto
hereby accepts for itself and in respect of its property the jurisdiction of
said courts in any such suit or proceeding, and each party consents that process
therein
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may be served by registered or certified mail addressed to such party at the
address designated for notice pursuant hereto.
12.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original of this Agreement but
all of which taken together shall constitute one and the same instrument.
12.10 CAPTIONS AND HEADINGS. The captions, section and other headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
12.11 EXHIBITS AND SCHEDULES. All Exhibits annexed hereto, and all
Schedules referred to herein, are hereby incorporated in and made a part of this
Agreement as if set forth herein.
12.12 CONSTRUCTION. The parties hereto hereby acknowledge and agree
that they and their respective counsel have independently reviewed and made
amendments to this Agreement and that the normal rule of construction, whereby
ambiguities are to be resolved against the drafting party, shall be inapplicable
to this Agreement.
12.13 PUBLICITY. Except as otherwise required by applicable laws or
regulations, neither Sellers, the Purchaser, Parent, nor any Affiliate of the
foregoing, shall issue any press release or make any other public statement
prior to the Closing relating to or connected with or arising out of this
Agreement or the matters contained herein, without obtaining the prior approval
of the other parties hereto to the contents and the manner of presentation and
publication thereof, such consent not to be unreasonably delayed or withheld.
12.14 SELLERS' REPRESENTATIVE. Each Seller hereby appoints the Sellers'
Representative as his agent and representative to give and receive all notices
and services of process and to take any action, give any consents and waivers or
take any other action in connection with the transactions contemplated by this
Agreement; provided, however, each Seller shall have the right at any time, upon
prior written notice to Parent, to revoke such appointment.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SELLERS:
---------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
PURCHASER:
DAISYTEK, INCORPORATED
By:
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President & CEO
PARENT:
DAISYTEK INTERNATIONAL
CORPORATION
By:
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President & CEO
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SCHEDULES AND EXHIBITS
TO
STOCK PURCHASE AGREEMENT
Exhibit A - Form of Employment Agreements
Exhibit B - Multiplier Table
Exhibit C - Wire transfer instructions
Exhibit D - Form of Legal Opinion
Exhibit E - Form of Legal Opinion
Schedule 2.2 - Seller Allocation of Purchase Price and Shares
Schedule 4.1 - Organization and Qualification
Schedule 4.2 - Capitalization
Schedule 4.3 - Voting Trusts, etc.
Schedule 4.4 - Title to Stock
Schedule 4.6 - No Violations
Schedule 4.7 - Audited Financial Statements
Schedule 4.9 - Undisclosed Liabilities
Schedule 4.10 - Accounts Receivable
Schedule 4.11 - Inventory
Schedule 4.14 - Absence of Changes
Schedule 4.15 - Litigation
Schedule 4.16 - Compliance with Laws
Schedule 4.17 - Environmental and Other Permits
Schedule 4.18 - Material Contracts
Schedule 4.20 - Real Property
Schedule 4.21 - Tangible Personal Property
Schedule 4.22 - Customers
Schedule 4.23 - Suppliers
Schedule 4.24 - Employee Benefit Matters
Schedule 4.25 - Labor Matters
Schedule 4.26 - Key Employees
Schedule 4.27 - Certain Interests
Schedule 4.28 - Taxes
Schedule 4.29 - Insurance
Schedule 4.30 - Accounts, Lockboxes
Schedule 6.1 - Personal Guaranties
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