AGREEMENT FOR PURCHASE AND SALE OF STOCK
of
SUPERGRAPHICS HOLDING COMPANY, INC.
TABLE OF CONTENTS
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ARTICLE I
PURCHASE AND SALE; PRICE...........................1
1.1 Purchase and Sale of the Shares...................................1
1.2 Purchase Price....................................................1
1.3 Deferred Purchase Price Payment...................................2
(a) Amount of Deferred Purchase Price Payment...............2
(b) Settlement of Deferred Purchase Price Payment............3
1.4 Financial Requirement Regarding Net Working Capital...............5
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANIES AND XXXXXXX.........6
2.1 Corporate Organization, etc.......................................6
2.2 Capital Stock; Options............................................6
2.3 Subsidiaries and Affiliates.......................................7
2.4 Authorization, etc................................................7
2.5 No Violation......................................................7
2.6 Governmental Authorities..........................................7
2.7 Financial Statements..............................................7
2.8 No Undisclosed Liabilities, Claims, etc...........................8
2.9 Absence of Certain Changes........................................8
2.10 Contracts........................................................9
2.11 True and Complete Copies.........................................9
2.12 Title and Related Matters........................................9
(a) Real Property............................................9
(b) Personal Property.......................................10
(c) No Disposition of Assets................................10
2.13 Litigation......................................................10
2.14 Tax Matters.....................................................11
2.15 Government Contracts............................................13
2.16 Compliance with Law.............................................13
2.17 Absence of Certain Business Practices...........................14
2.18 ERISA and Related Employee Benefit Matters......................14
(a) Welfare Benefit Plans...................................14
(b) Pension Benefit Plans...................................14
(c) Compliance with Applicable Law..........................15
(d) Administration of Plans.................................15
(e) Title IV Plans..........................................15
(f) Other Employee Benefit Plans and Agreements.............16
(g) Copies of Plans.........................................16
(h) Continuation Coverage Requirements for Health Plans.....16
(i) Valid Obligations.......................................17
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2.19 Intellectual Property...........................................17
2.20 Warranties......................................................17
2.21 Labor Relations.................................................17
2.22 Insurance.......................................................18
2.23 Liability for Services..........................................18
2.24 Environmental...................................................18
2.25 Capital Expenditures............................................20
2.26 Suppliers.......................................................20
2.27 Dealings with Affiliates........................................20
2.28 Bank Accounts...................................................21
2.29 Compensation....................................................21
2.30 Credit Facility.................................................21
2.31 Accounts Receivable.............................................21
2.32 Customers.......................................................21
2.33 Powers of Attorney..............................................21
2.34 Complete Disclosure.............................................21
2.35 Year 2000 Compliance............................................22
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER..................22
3.1 Corporate Organization, etc......................................22
3.2 Authorization, etc...............................................22
3.3 No Violation.....................................................22
3.4 Governmental Authorities.........................................22
3.5 Capitalization...................................................22
3.6 SEC Reports and Financial Statements.............................23
ARTICLE IV
COVENANTS OF THE SELLERS..........................23
4.1 Regular Course of Business.......................................23
4.2 Amendments.......................................................24
4.3 Capital Changes..................................................24
4.4 Capital and Other Expenditures...................................24
4.5 Borrowing........................................................24
4.6 Other Commitments................................................24
4.7 Interim Financial Information....................................24
4.8 Full Access and Disclosure.......................................25
4.9 Consents.........................................................25
4.10 Breach of Agreement.............................................25
4.11 Further Assurances..............................................25
4.12 Fulfillment of Conditions.......................................25
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ARTICLE V
CONVENANTS OF BUYER............................25
5.1 Post-Closing Course of Business..................................25
5.2 Books and Records................................................26
5.3 Further Assurances...............................................26
5.4 Fulfillment of Conditions........................................26
ARTICLE VI
OTHER AGREEMENTS..............................26
6.1 Agreement to Defend..............................................26
6.2 Consultants, Brokers and Finders.................................26
6.3 Noncompetition Agreement.........................................26
6.4 Taxes............................................................26
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF BUYER...................28
7.1 Representations and Warranties; Performance......................28
7.2 Consents and Approvals...........................................28
7.3 Opinion of the Sellers' Counsel..................................28
7.4 No Proceeding or Litigation......................................28
7.5 Credit Facility..................................................28
7.6 Other Agreements.................................................28
7.7 Escrow Agreement.................................................29
7.9 Prior Owner Earn-Out.............................................29
7.10 Credit Facility Balance.........................................29
7.11 Options.........................................................29
7.12 Financial Statements............................................29
7.13 Financing.......................................................29
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE SELLERS................29
8.1 Representations and Warranties; Performance......................29
8.2 No Proceeding or Litigation......................................29
8.3 Opinion of Counsel...............................................30
8.4 Payment..........................................................30
8.5 Other Documents..................................................30
8.6 Other Agreements.................................................30
8.7 Employment Agreement.............................................30
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ARTICLE IX
CLOSING..................................30
9.1 Closing..........................................................30
9.2 Deliveries at Closing............................................30
9.3 Specific Performance.............................................31
ARTICLE X
TERMINATION AND ABANDONMENT........................31
10.1 Methods of Termination..........................................31
10.2 Procedure Upon Termination......................................31
ARTICLE XI
INDEMNIFICATION...............................31
11.1 Indemnification by the Sellers..................................31
11.2 Tender of Defense for Damages...................................32
ARTILCE XII
MISCELLANEOUS PROVISIONS..........................33
12.1 Amendment and Modification......................................33
12.2 Waiver of Compliance; Consents..................................33
12.3 Expenses........................................................33
12.4 Investigations; Survival of Warranties..........................33
12.5 Notices.........................................................33
12.6 Assignment......................................................34
12.7 Governing Law; Dispute Resolution...............................34
12.8 Counterparts....................................................35
12.9 Neutral Interpretation..........................................35
12.10 Headings.......................................................35
12.11 Entire Agreement...............................................35
12.12 Waiver; Alteration.............................................36
(a) Waiver..................................................36
(b) Alteration..............................................36
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SCHEDULE OF EXHIBITS TO
AGREEMENT FOR PURCHASE AND SALE OF STOCK
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Exhibits Title
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Exhibit 1.2(a) Stockholders
Exhibit 1.2(b) Warrant Agreement
Exhibit 1.3(c) EBITDA Calculation
Exhibit 1.4 Calculation of Net Working Capital
Exhibit 2.1.1 Foreign Qualifications
Exhibit 2.2 Schedule of Authorized, Issued and Outstanding
Capital Stock
Exhibit 2.3 Schedule of Subsidiaries
Exhibit 2.5 Restrictions on Ability to Perform
Exhibit 2.8 Undisclosed Liabilities
Exhibit 2.9 Certain Changes
Exhibit 2.10 Schedule of Contracts
Exhibit 2.12 Title and Related Matters
Exhibit 2.13 Litigation
Exhibit 2.14.1 Tax Matters
Exhibit 2.18.1 Welfare Benefit Plans; Retiree Health Benefits
Exhibit 2.18.2 Pension Benefit Plans
Exhibit 2.18.3 Other Benefit Plans; Accrued Vacations
Exhibit 2.18.5 Consents and Agreements
Exhibit 2.19 Schedule of Intellectual Property Rights
Exhibit 2.20 Warranties and Claims Under Warranties
Exhibit 2.21 Labor Relations
Exhibit 2.22 Schedule of Insurance
Exhibit 2.24 Environmental Matters
Exhibit 2.25 Schedule of Capital Expenditures
Exhibit 2.27 Schedule of Contracts with Affiliates
Exhibit 2.28 Bank Accounts
Exhibit 2.29 Compensation Schedule
Exhibit 2.30 Credit Facility
Exhibit 3.5 Schedule of Authorized, Issued and Outstanding
Capital Stock
Exhibit 6.3 Noncompetition Agreement
Exhibit 7.1 Certificate of Fulfillment of Conditions by
Sellers
Exhibit 7.3 Opinion of the Sellers' Counsel
Exhibit 8.1 Certificate of Fulfillment of Conditions of
Buyer
Exhibit 8.3 Opinion of Buyer's Counsel
Exhibit 11.1 Indemnity Percentages
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AGREEMENT FOR PURCHASE AND SALE OF STOCK
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THIS AGREEMENT (this "Agreement"), dated as of the 16th day of November
1998, is made among SUPERGRAPHICS HOLDING COMPANY, INC., a Delaware corporation
("Holding", and together with Supergraphics Corporation, a California
corporation and wholly-owned subsidiary of Holding (the "Subsidiary"),
collectively the "Companies"), the Subsidiary, all the stockholders of Holding
identified in Exhibit 1.2(a) (each a "Seller" and collectively, the "Sellers")
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and Unidigital Inc., a Delaware corporation ("Buyer").
ARTICLE I
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PURCHASE AND SALE; PRICE
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1.1 Purchase and Sale of the Shares. At the Closing (as defined herein) and
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in the manner herein provided, the Sellers shall sell and deliver all of the
shares of capital stock of Holding (collectively, the "Shares") to Buyer, and
Buyer shall purchase the Shares from the Sellers on the terms and conditions set
forth herein.
1.2 Purchase Price. Subject to the terms and conditions of this Agreement
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and in reliance on the representations and warranties of the Sellers contained
herein, and in consideration of the sale, conveyance, transfer and delivery of
the Shares provided for in this Agreement, Buyer agrees to pay an aggregate
purchase price (the "Purchase Price") of
(a) in respect of the preferred stock of Holding included in the
Shares (the "Preferred Stock"), an aggregate amount equal to the aggregate
redemption price of the preferred stock plus the aggregate of all dividends
accrued and unpaid on the preferred stock to the Closing Date (the
"Preferred Stock Payment"), to be paid at the Closing by Buyer's delivery
to each Seller of a certified or cashier's check or funds by wire transfer
in the respective amount for such Seller determined as provided in Exhibit
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1.2(a),
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(b) on behalf of Holding, the aggregate of all amounts outstanding on
the Closing Date under those certain Promissory Notes (the "Junior Notes")
dated as of January 3, 1997 from Holding to the Sellers (the "Junior Notes
Payment"), to be paid at the Closing by Buyer's delivery to each Seller of
a certified or cashier's check or funds by wire transfer in the respective
amount for such Seller determined as provided in Exhibit 1.2(a),
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(c) on behalf of Holding, an aggregate of $1,076,999 (the aggregate
amount of the earn-out payments Holding is required to make pursuant to
Section 2.13 of the Agreement and Plan of Reorganization dated as of
November 26, 1996 by and among Holding, Subsidiary, SG Acquisition (DE)
Corporation and certain formershareholders of Subsidiary) (the "Earn-Out
Payment"), to be paid at the
Closing by Buyer's delivery to a representative of the former shareholders
of Subsidiary of a certified or cashier's check or funds by wire transfer
in the aggregate amount of the Earn-Out Payment,
(d) on behalf of Holding, the aggregate of all amounts outstanding on
the Closing Date under the Credit Facility (as defined herein) (the "Credit
Facility Payment"), to be paid at the Closing by Buyer's delivery to First
Source Financial LLP of funds by wire transfer in the amount of the Credit
Facility Payment,
(e) on behalf of Holding, an amount equal to certain fees and expenses
of Holding (the "Expense Payment"), to be paid at the Closing by Buyer's
delivery to the payees thereof as identified to Buyer at or before the
Closing of certified or cashier's checks or funds by wire transfer in the
aggregate amount of the Expense Payment,
(f) on behalf of Holding, an aggregate of $240,000 (the "Employee
Payment"), to be paid at the Closing by Buyer's delivery to employees
identified to Buyer at or before the Closing of certified or cashier's
checks or funds by wire transfer in the aggregate amount of the Employee
Payment, and
(g) in respect of the common stock of Holding included in the Shares:
(i) an aggregate of (x) $16,500,000 less (y) the sum of the Preferred Stock
Payment, Junior Notes Payment, Earn-Out Payment, Credit Facility Payment,
Expense Payment and Employee Payment (the "Common Stock Payment"), to be
paid at the Closing by Buyer's delivery to each Seller and to each option
holder identified on Exhibit 1.2(a) (each an "Option Holder") of a
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certified or cashier's check or funds by wire transfer in the respective
amount for such Seller or Option Holder determined as provided in Exhibit
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1.2(a); (ii) the Deferred Purchase Price Payment (as defined below), which
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shall be paid in accordance with Section 1.3 hereof by delivery to each
Seller and Option Holder of a certified or cashier's check or funds by wire
transfer in the respective amount for such Seller or Option Holder
determined as provided in Exhibit 1.2(a); and (iii) warrants (the
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"Warrants") to purchase an aggregate of 225,000 shares of Buyer Common
Stock (as defined herein), which Warrants shall be exercisable beginning on
the Closing Date and for a period of five years thereafter and shall have
an exercise price equal to 125% of the average closing bid and ask prices
of Buyer Common Stock during the 20 trading days ending two days prior to
the Closing and which shall be issued pursuant to the terms of a Warrant
Agreement substantially in the form of Exhibit 1.2(b) attached hereto,
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which Warrants shall be delivered at the Closing to each Seller and Option
Holder in the respective amount set forth opposite such Seller's or Option
Holder's name on Exhibit 1.2(a).
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1.3 Deferred Purchase Price. (a) Amount of Deferred Purchase Price Payment.
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The Sellers and Option Holders will receive an additional Purchase Price payment
(the
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"Deferred Purchase Price Payment") equal to the difference between (i) EBITDA
(as defined herein) multiplied by 6 less (ii) $16,500,000.
(b) Settlement of Deferred Purchase Price Payment.
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(i) Buyer, at no cost to the Sellers, will issue, and cause either BDO
Xxxxxxx LLP or Ernst & Young ("Buyer's Accountants") to conduct an audit
of, the consolidated balance sheet and the related consolidated statements
of income, retained earnings and cash flows of the Companies for the year
ended December 31, 1998 on a basis consistent with past practice (the "Y/E
Financials and Computations"). Sellers shall cause their accountants (to
the extent different from Buyer's Accountants) to cooperate fully with
Buyer and Buyer's Accountants, including providing access to their work
papers as necessary.
(ii) The Y/E Financials and Computations shall be delivered to the
Sellers for review, together with the Deferred Purchase Price Payment which
is earned pursuant to the Y/E Financials and Computations and this
Agreement, no later than March 15, 1999. If the Sellers within fifteen (15)
calendar days of receipt of the Y/E Financials and Computations (the
"Notice Period") do not object thereto in writing, the calculation of
EBITDA for the twelve months ending December 31, 1998 shall become final
and binding on the parties.
(iii) If Sellers do not agree with the Y/E Financials and Computations
or the amount of the Deferred Purchase Price Payment, Sellers shall, during
the Notice Period, deliver to Buyer a written statement (the "Dispute
Notice") of the matters with respect to which there is disagreement
specifying the particulars of the disagreement, including, but not limited
to, the disputed amount of the calculated Deferred Purchase Price Payment.
(iv) If the parties fail to resolve the disagreements outlined in the
dispute Notice within fifteen (15) calendar days following receipt of the
Dispute Notice, Sellers (at Seller's expense, if Buyer's Accountants are
BDO Xxxxxxx LLP or at Buyer's expense if Buyer's Accountants are Ernst &
Young) shall cause their independent certified public accountants
("Sellers' Accountants") to conduct an examination of the portion of the
Y/E Financials and Computations in dispute, which examination shall be
completed within 45 days of the date of the Dispute Notice. Buyer shall
cause Buyer's Accountants to cooperate fully with Sellers' Accountants,
including providing access to their work papers as necessary.
(v) If Buyer's Accountants and Sellers' Accountants are in
disagreement with respect to the Y/E Financials and Computations and
resulting Deferred Purchase Price Payment, Buyer shall cause Buyer's
Accountants and Sellers' shall cause Sellers' Accountants to mutually
select a firm of independent certified public accountants of recognized
standing for its determination with
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respect to such items of disagreement. The parties will use their best
efforts to cause such firm to resolve all items of disagreement within
thirty (30) calendar days after submission and such firm's determination
("Final Determination") will be final and binding on the parties, notice of
such Final Determination to be delivered to the parties within five (5)
days of such Final Determination. The cost of such determination shall be
borne by the party who proposed the Deferred Purchase Price Payment
furthest from the Deferred Purchase Price Payment due as a result of the
Final Determination of the independent certified public accounts chosen
hereunder.
(vi) To the extent the Final Determination of the Deferred Purchase
Price Payment exceeds the Deferred Purchase Price Payment paid by Buyer to
Sellers pursuant to Section 1.3(b)(ii), such excess of the Deferred
Purchase Price Payment shall be paid by Buyer to Sellers within three days
of the submission of the Final Determination.
(vii) Any portion of the Final Determination of the Deferred Purchase
Price Payment not paid pursuant to Section 1.3(ii) (including any excess
payment to be paid pursuant to Section 1.3(b)(vi)) shall accrue interest
equal to fifteen percent (15%) per annum (increasing by one percent (1%)
during each subsequent 30 day period up to a maximum of 18%) on such unpaid
portion for the time period beginning on March 15, 1999 and ending on the
date of payment of such amounts.
(c) For the purposes of this Agreement, EBITDA shall mean consolidated net
income or net deficit, calculated on a basis consistent with Exhibit 1.3(c), as
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reflected in audited consolidated financial statements with the following
adjustments:
(i) less interest income;
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(ii) plus interest (including deferred financing fees and expense) and
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other expense in respect of indebtedness charged or accrued against such
net income;
(iii) plus expenses for income taxes (whether paid, accrued or
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deferred) charged or accrued against such net income;
(iv) plus expenses for depreciation and amortization charged or
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accrued against such net income;
(v) plus expenses incurred in connection with the transactions
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contemplated by this Agreement charged or accrued against such net income;
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(vi) plus non-recurring expenses (including without limitation,
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non-recurring accounting expenses, expenses related to the property tax
audit and management fees paid to Regent Capital Management Corp., each as
listed on Exhibit 1.3(c)) charged or accrued against such net income;
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(vii) plus bonus payments made in lieu of options on or prior to
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Closing.
EBITDA shall be determined by the Board of Directors of Buyer from the
consolidated financial statements of Holding for the year ended December 31,
1998, which shall be prepared in accordance with GAAP on an historically
consistent basis.
1.4 Financial Requirement Regarding Net Working Capital.
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(a) Net Working Capital. Notwithstanding anything herein to the
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contrary, Net Working Capital (as hereinafter defined) of the Companies at
Closing shall be $975,000.
(b) Closing Date Balance Sheet. Buyer, at no cost to Sellers, will
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prepare a consolidated balance sheet of Holdings as of the Closing Date,
together with a calculation of net working capital (the "Closing
Computations"). The Closing Computations shall be completed within 60
calendar days after the Closing Date and shall be delivered to Sellers for
review. If the Sellers, within 15 calendar days of receipt of the Closing
Computations, do not object thereto in writing, the calculation of Net
Working Capital shall become final and binding upon the parties. If Sellers
do not agree with the Closing Computations, the Sellers shall, prior to the
expiration of such 15 calendar day period, deliver to the Buyer a written
statement of the matters with respect to which there is disagreement
specifying the particulars of the disagreement. If the parties fail to
resolve the disagreements within 15 calendar days thereafter, Buyer and
Sellers shall mutually choose a firm of nationally recognized independent
certified accountants (other than BDO Xxxxxxx LLP or Ernst & Young) to
resolve all items of disagreement within 30 days of submission thereto and
the determination of such firm will be final and binding on the parties.
The cost of such referral and determination shall be borne 50% by Sellers
and 50% by Buyer.
(c) For purposes of this Section 1.4, Net Working Capital shall mean the
excess of current assets (excluding cash) of the Companies over the
current liabilities of the Companies, in each case as determined in
accordance with generally accepted accounting principles and
consistent with Exhibit 1.4 attached hereto.
(d) In the event that Net Working Capital, as determined in accordance
with Section 1.4(b) hereof, is less than $975,000 (the amount of such
deficit hereinafter referred to as the "Net Working Capital Deficit"),
then the
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Deferred Purchase Price Payment shall be reduced on a
dollar-for-dollar basis by the amount that Net Working Capital is less
than $975,000, provided, however, that if the Deferred Purchase Price
Payment has already been made pursuant to Section 1.3 hereof, then the
Sellers shall, on a pro rata basis, pay to Buyer the Net Working
Capital Deficit.
(e) At Closing, all liabilities of the Companies, including without
limitation taxes, accounts payable and other regular and usual
liabilities and obligations of the Companies incurred in the ordinary
course of business, other than any amounts due and owing under the
Credit Facility (as defined in Section 2.30) or any other funded debt
(including but not limited to any capital lease obligation), which
shall be repaid at or prior to Closing by the Companies or Sellers,
shall be the obligation of Buyer.
ARTICLE II
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REPRESENTATIONS AND WARRANTIES OF THE COMPANIES AND XXXXXXX
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The Companies and Xxxxx Xxxxxxx hereby represent and warrant to Buyer as
follows:
2.1 Corporate Organization, etc. Each of Holding and the Subsidiary are
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corporations duly organized, validly existing and in good standing under the
laws of the state of Delaware, with respect to the Holding, and California, with
respect to the Subsidiary, with all requisite corporate power and authority to
carry on its business as it is now being conducted and to own, operate and lease
its properties and assets. Exhibit 2.1.1 lists each of the states where the
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Companies, respectively, are qualified as a foreign corporation. The conduct of
its business and its ownership or use of property do not require the Companies,
respectively, to be qualified or licensed to do business as a foreign
corporation in any state except those listed in Exhibit 2.1.1, or except where
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the failure to be so qualified or licensed would not cause a material adverse
change in the Companies' business operations (as now conducted), assets,
properties or rights, prospects or condition (financial or otherwise), or
combination thereof which reasonably could be expected to result in any such
material adverse change (a "Material Adverse Effect"). Complete and correct
copies have been delivered to representatives of Buyer of each of the Companies'
(i) articles or certificate of incorporation, (ii) bylaws, (iii) good standing
certificates from the secretary of state of (A) the states of Delaware and
California, as applicable, and (B) each of the states listed on Exhibit 2.1.1,
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as applicable, and (iv) certificates of authority for the states listed in
Exhibit 2.1.1, each as amended to date. The Companies have all federal, state,
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local and foreign licenses, permits or other approvals required for the
operation of their businesses as now being conducted except for such licenses,
permits or other approvals which would not cause a Material Adverse Effect.
2.2 Capital Stock; Options. The authorized capital stock of the Companies
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and the shares of capital stock of the Companies issued and outstanding, of all
classes, and the related ownership thereof, are as set forth in Exhibit 2.2. The
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Shares represent 100% of the issued and outstanding capital stock of Holding and
neither of the Companies has any treasury stock. All
6
of the issued and outstanding capital stock of the Subsidiary (the "Subsidiary
Shares") is owned by Holding. All of the Shares and the Subsidiary Shares are
validly issued, fully paid and nonassessable and, are owned by the Sellers and
Holding, respectively, free and clear of all encumbrances or claims. Except as
set forth in Exhibit 2.2, there are no issued and outstanding options, warrants,
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rights, securities, contracts, commitments, understandings or arrangements by
which the Companies are bound to issue any additional shares of their capital
stock or options to purchase shares of their capital stock.
2.3 Subsidiaries and Affiliates. Except as set forth in Exhibit 2.3, the
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Companies have no subsidiaries, Affiliates (defined herein) or investments in
any other entity or business operation. The term "Affiliates" includes any
corporation, partnership or other entity in which the Companies, any of the
Sellers, any family member of any of the Sellers or director or officer of the
Companies has any financial interest or is a controlling person, as that term is
used in connection with the federal securities laws, if such person or entity
has, or in the past had, a contractual relationship with or is transacting, or
has in the past transacted, business with the Companies.
2.4 Authorization, etc. The Sellers have full power and authority to enter
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into this Agreement and to carry out the transactions contemplated hereby. This
Agreement and all other related agreements constitute legal, valid and binding
obligations of each of the Sellers, enforceable against each Seller in
accordance with their respective terms.
2.5 No Violation. Except as set forth in Exhibit 2.5, neither of the
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Companies is subject to or obligated under any article or certificate of
incorporation, bylaw, Law or any agreement or instrument, or any license,
franchise or permit, which would be breached or violated by the Sellers'
execution, delivery and performance of this Agreement. As used herein, "Law"
shall mean all laws, rules, regulations, orders, decrees and injunctions
applicable to or binding upon the Companies. The Sellers will comply with all
applicable Laws in connection with their execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby. The
execution of this Agreement and the consummation of the transactions
contemplated hereby will not cause the creation of any liens, claims or
encumbrances upon any of the assets of the Companies.
2.6 Governmental Authorities. Assuming that the ultimate parent entity (as
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such term is defined in Rule 801.1(a), 16 C.F.R. ss. 801.1(a)(3)) ("Ultimate
Parent Entity") of Buyer has less than $100 million of annual net sales or total
assets (as determined in accordance with Rule 801.11, 16 C.F.R. ss. 801.11) as
stated on its last regularly prepared income statement and balance sheet ("HSR
Assets and Revenues"), the Sellers are not required to submit any notice, report
or other filing with, and no consent, approval or authorization is required, by
any governmental or regulatory authority or third party in connection with the
execution, delivery, consummation or performance of this Agreement or the
transactions contemplated hereby.
2.7 Financial Statements. Copies have been provided to representatives of
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Buyer of (i) unaudited monthly adjusted consolidated statements of income of the
Companies for the nine
7
months ended September 30, 1998 and 1997, and (ii) audited consolidated
statements of financial position as of December 31 for each of the years 1995
through 1997 and audited consolidated statements of income and retained earnings
of the Companies for the fiscal years then ended (the "Audited Statements"),
each such audited statement being audited by BDO Xxxxxxx LLP. All such
statements of financial position and the notes thereto fairly present the
financial position of the Companies as of the respective dates thereof, and such
statements of income and retained earnings and the notes thereto fairly present
the results of operations for the periods therein referred to, in accordance
with generally accepted accounting principles consistently applied throughout
the periods indicated (except as stated therein or in the notes thereto). The
consolidated statement of financial position as of December 31, 1997 and the
notes thereto are referred to as the "Balance Sheet." December 31, 1997 is
referred to as the "Financial Statement Date."
2.8 No Undisclosed Liabilities, Claims, etc. Other than as set forth on
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Exhibit 2.8, except for (a) liabilities fully reflected or reserved against in
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the Balance Sheet and (b) regular and usual liabilities and obligations incurred
in the ordinary course of business consistent with past practices after the
Financial Statement Date, the Companies do not have any liabilities, obligations
or claims (absolute, accrued, fixed or contingent, matured or unmatured, or
otherwise), including liabilities, obligations or claims which may become known
or which arise only after the Closing and which result from actions, omissions
or occurrences of the Sellers prior to the Closing.
2.9 Absence of Certain Changes. Since the Financial Statement Date, except
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for Permitted Distributions (as defined in Section 4.1) or as set forth in
Exhibit 2.9 there has not been: (a) any material adverse change in the business,
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prospects, financial condition, earnings or operations of the Companies; (b) any
damage, destruction or loss, whether covered by insurance or not, materially
adversely affecting the Companies' properties and business; (c) any declaration,
setting aside or payment of any dividend whether in cash, stock or property with
respect to the Shares, or any redemption or other acquisition of such Shares;
(d) any increase in the compensation payable or to become payable by the
Companies to their respective directors, officers, key employees, Affiliates or
any of the Sellers or any adoption of or increase in any bonus, insurance,
pension or other employee benefit plan, payment or arrangement made to, for or
with any such party; (e) any entry by the Companies into any commitment or
transaction, including without limitation, any borrowing or capital expenditure
other than in accordance with the schedule of capital expenditures (Exhibit
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2.25); (f) any change by the Companies in accounting methods, practices or
----
principles; (g) any adoption of any statute, rule, regulation or order which
adversely affects the Companies; (h) any termination or waiver of any rights of
value to the business of the Companies; (i) any other transaction or event
affecting the Companies other than in the ordinary course of business of the
Companies, respectively; (j) any transaction or conduct inconsistent with past
business practices; (k) any adoption or amendment of any collective bargaining,
bonus profit sharing, compensation, stock option, pension, retirement, deferred
compensation, or other plan, agreement, trust, fund or arrangement for the
benefit of employees; or (l) any agreement or understanding made or entered into
to do any of the foregoing.
8
2.10 Contracts. Exhibit 2.10 contains a schedule of all Contracts (defined
--------- ------------
herein) to which the Companies are a party, copies of which having been provided
to representatives of Buyer. The term "Contracts" shall include, but shall not
be limited to, all oral (which shall be summarized in Exhibit 2.10) and written
------------
contracts, agreements, agency agreements, loan agreements, mortgages,
indentures, deeds of trust, guarantees, commitments, joint venture agreements,
purchase and/or sale agreements, collective bargaining, union, consulting and/or
employment contracts, leases of real or personal property, easements,
distribution or dealer agreements, service agreements, license agreements, and
advertising agreements (except there shall not be included agreements which do
not exceed, in the case of any one agreement, an obligation of $10,000 and in
the case of a series of related agreements, an aggregate obligation of $20,000,
so long as such agreements are not material to the business of the Companies).
Neither of the Companies is in default or alleged to be in default under any
Contract nor is Xxxxx Xxxxxxx or to the knowledge of the Companies and Xxxxx
Xxxxxxx, any of the other Sellers, aware of any default by any other party to
any Contract, and there exists no event, condition or occurrence which, after
notice or lapse of time, or both, would constitute a default under any Contract.
All of the Contracts are in full force and effect and constitute legal, valid
and binding obligations of the parties thereto in accordance with their terms,
and will remain in full force and effect after the Closing without any notice to
or consent by any other party.
2.11 True and Complete Copies. Copies of all agreements, contracts and
-------------------------
documents delivered and to be delivered hereunder by the Sellers or the
Companies, are, and will be, true and complete copies of such agreements,
contracts and documents. All written summaries of oral agreements will be true
and complete.
2.12 Title and Related Matters. Except as set forth in Exhibit 2.12, the
-------------------------- ------------
Companies have good and marketable title to all of the properties and assets
reflected in the Balance Sheet or acquired after the date thereof (except
properties sold or otherwise disposed of since the date thereof in the ordinary
course of business and consistent with past practices), including, without
limitation, the specific assets referred to in paragraphs (a), (b) and (c)
below, free and clear of all mortgages, security interests, liens, pledges,
claims, escrows, options, rights of first refusal, indentures, easements,
licenses, security agreements or other agreements, arrangements, contracts,
commitments, understandings, obligations, charges or encumbrances of any kind or
character, except as reflected on the Balance Sheet. The Companies own or lease,
directly or indirectly, all of the assets and properties, and are a party to all
licenses and other agreements, presently used or necessary to carry on the
business or operations of such company as presently conducted.
(a) Real Property.
-------------
(i) Neither of the Companies has an ownership interest in any
real property.
(ii) Neither of the Companies is a tenant under any lease(s) of
real property used by such company except as described on Exhibit
-------
2.10. With respect to the leased real property described on Exhibit
---- -------
2.10 and except as set forth on
----
9
Exhibit 2.12; (A) all such leases are
------------
in full force and effect and constitute valid and binding obligations
of the respective parties thereto; (B) there have not been and there
currently are not any defaults thereunder by any party thereto; (C) no
event has occurred which (whether with or without notice, lapse of
time or the happening or occurrence of any other event) would
constitute a default thereunder entitling the lessor to terminate the
lease; and (D) the continuation, validity and effectiveness of all
such leases under the current rentals and other current terms thereof
will in no way be affected by the transactions contemplated by this
Agreement or, if any would be affected, the Sellers shall use all
necessary means at its disposal to cause an appropriate consent to
such transactions to be delivered to Buyer prior to the Closing Date
at no cost or other adverse consequences to the Companies ((B) through
(D) are hereinafter collectively referred to as "Lease Restrictions").
(iii) Neither of the Companies currently has, nor to the
knowledge of the Companies and Xxxxx Xxxxxxx in the past has had, any
interest (as owner, tenant or otherwise) in any real property except
as disclosed on Exhibit 2.12.
------------
(b) Personal Property. The Companies respectively have good and
------------------
marketable title to all the personal property and assets, tangible or
intangible, shown on the Balance Sheet, except to the extent sold or
disposed of in transactions entered into in the ordinary course of business
consistent with past practices since the Financial Statement Date. The
personal property in the aggregate is in good condition and working order.
None of such assets are subject to any (i) contracts of sale or lease,
except contracts for the sale of inventory in the ordinary and regular
course of business or (ii) security interests, encumbrances, liens or
charges of any kind or character, except as set forth in Exhibit 2.12.
-------------
Except as set forth in Exhibit 2.12, there are no Lease Restrictions with
------------
respect to the personal property leased by the Companies.
(c) No Disposition of Assets. Except for Permitted Distributions,
--------------------------
there has not been since the Financial Statement Date any sale, lease or
any other disposition or distribution by the Companies of any of their
assets or properties and any other assets now or hereafter owned by them
except transactions in the ordinary and regular course of business
consistent with past practices or as otherwise consented to by Buyer.
2.13 Litigation. Except as set forth in Exhibit 2.13, there is no suit,
---------- -------------
action, investigation or proceeding pending or, to the knowledge of the
Companies and Xxxxx Xxxxxxx, threatened against the Companies or any of the
Sellers which, if adversely determined, would cause a Material Adverse Effect,
nor is there any judgment, decree, injunction, rule or order of any court,
governmental department, commission, agency, instrumentality or arbitrator
outstanding against the Companies or which the Companies are in violation of
having, or which, insofar as can be reasonably foreseen, in the future may have,
any such effect.
10
2.14 Tax Matters. The term "Taxes" means all net income, capital gains,
-----------
gross income, gross receipts, sales, use, transfer, ad valorem, franchise,
profits, license, capital, withholding, payroll, employment, excise, goods and
services, severance, stamp, occupation, premium, property, windfall profits,
customs, duties or other taxes, fees or assessments, or other governmental
charges of any kind whatsoever, together with any interest, fines and any
penalties, additions to tax or additional amounts incurred or accrued under
applicable Law or assessed, charged or imposed by any governmental authority,
domestic or foreign, provided that any interest, penalties, additions to tax or
additional amounts that relate to Taxes for any taxable period (including any
portion of any taxable period ending on or before the Closing Date) shall be
deemed to be Taxes for such period, regardless of when such items are incurred,
accrued, assessed or imposed. For the purposes of this Section 2.14 and Section
6.5, the Companies shall be deemed to include any predecessor of the Companies,
respectively, or any person or entity from which the Companies, respectively,
incur a liability for Taxes as a result of any transferee liability. Except as
stated in Exhibit 2.14.1:
--------------
(a) The Companies have duly and timely filed (and prior to the Closing
Date will duly and timely file) true, correct and complete tax returns in
all material respects, reports or estimates, all prepared in accordance
with applicable Laws, for all years and periods (and portions thereof) and
for all jurisdictions (whether federal, state, local or foreign) in which
any such returns, reports or estimates were due. All Taxes shown as due and
payable on such returns, reports and estimates have been paid, and there is
no current liability for any Taxes due and payable in connection with any
such returns. All material Taxes not yet due and payable have been fully
accrued on the books of the Companies and adequate reserves have been
established therefor; the charges, accruals and reserves for Taxes provided
for on the consolidated financial statements delivered or to be delivered
pursuant to Section 2.7 and Section 4.7 are adequate in all material
respects; and there are no unpaid assessments for additional Taxes for any
period nor is there any basis therefor. Copies of all federal, state and
foreign tax returns filed by the Companies for the past three years have
been provided to representatives of Buyer.
(b) Neither of the Companies, respectively, has been a member of any
consolidated, combined or unitary group for federal, state, local or
foreign tax purposes. Neither of the Companies, respectively, have been
party to any joint venture, partnership or other arrangement that could be
treated as a partnership for federal income tax purposes.
(c) Each of the Companies has (i) withheld all required amounts from
its employees, agents, contractors and nonresidents and remitted such
amounts to the proper agencies; (ii) paid all employer contributions and
premiums; and (iii) filed all federal, state, local and foreign returns and
reports with respect to employee income tax withholding, and social
security and unemployment taxes and premiums, all in compliance with the
withholding tax provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), as in effect for the applicable year or any prior provision
thereof and other applicable Laws.
11
(d) The federal income tax returns of the Companies have been examined
by the Internal Revenue Service (the "IRS"), or have been closed by the
applicable statute of limitations, for all periods through December 31,
1997, the state tax returns of the Companies have been examined by the
relevant state agencies or such returns have been closed by the applicable
statute of limitations for all periods through December 31, 1997, no
deficiencies or reassessments for any Taxes have been proposed, asserted or
assessed against the Companies by any federal, state, local or foreign
taxing authority. Exhibit 2.14.1 describes the status of any federal,
---------------
state, local or foreign tax audits or other administrative proceedings,
discussions or court proceedings that are presently pending with regard to
any Taxes or tax returns of the Companies (including a description of all
issues raised by the taxing authorities in connection with any such audits
or proceedings), and to the knowledge of the Companies and Xxxxx Xxxxxxx,
no additional issues are being asserted against the Companies in connection
with any existing audits or proceedings.
(e) The Companies have not executed or filed any agreement or other
document extending the period for assessment, reassessment or collection of
any Taxes, and no power of attorney granted by the Companies with respect
to any Taxes is currently in force.
(f) The Companies have not entered into any closing or other agreement
with any taxing authority which affects any taxable year of the Companies
ending after the Closing Date. The Companies are not a party to any tax
sharing agreement or similar arrangement for the sharing of tax liabilities
or benefits.
(g) The Companies have not agreed to nor are they required to make any
adjustment by reason of a change in accounting methods that affects any
taxable year ending after the Closing Date. The IRS has not proposed to the
Companies any such adjustment or change in accounting methods that affects
any taxable year ending after the Closing Date. The Companies do not have
an application pending with any taxing authority requesting permission for
any changes in accounting methods that relate to its business or operations
and that affects any taxable year ending after the Closing Date.
(h) The Companies have not consented to the application of Code
Section 341(f).
(i) There is no contract, agreement, plan or arrangement covering any
employee or former employee of the Companies that, individually or
collectively, could give rise to the payment by the Companies of any amount
that would not be deductible by reason of Code Section 280G.
(j) No asset of the Companies is tax exempt use property under Code
Section 168(h). No portion of the cost of any asset of the Companies has
been financed directly
12
or indirectly from the proceeds of any tax exempt state or local government
obligation described in Code Section 103(a).
(k) The Companies do not have nor have they had a permanent
establishment in any foreign country and do not engage, nor have they
engaged, in a trade or business in any foreign country. None of the Sellers
nor the Companies is a foreign person or entity within the meaning of Code
Section 1445.
(l) To the knowledge of the Companies and Xxxxx Xxxxxxx, none of the
Buyer nor the Companies will be liable for any federal, state, local,
foreign and other sales, use, documentary, recording, stamp, transfer or
similar Taxes applicable to, imposed upon or arising out of the transfer of
the Shares to Buyer and the transactions contemplated by this Agreement.
2.15 Government Contracts. No Contract or other aspect of the business of
---------------------
the Companies is subject to the Armed Services Procurement Regulations or other
regulations of any governmental agency. Neither of the Companies has bid on or
been awarded any "small business set aside contract", any other "set aside
contract" or other order or contract requiring small business or other special
status at any time during the last three years. Neither of the Companies' sales
or orders will be lost, nor the Companies' customer relations damaged, as a
result of such Company continuing its operations as an entity that does not
qualify as a small business.
2.16 Compliance with Law.
-------------------
(a) Neither of the Companies has previously failed, and is currently
failing, to comply with any applicable Laws relating to its business or the
operation of its assets where such failure or failures would individually
or in the aggregate have a Material Adverse Effect. In particular, but
without limiting the generality of the foregoing, the Companies are in
material compliance with all applicable Laws relating to (i)
anti-competitive practices, (ii) price fixing, (iii) health and safety, and
(iv) the environment. There are no proceedings of record and no proceedings
are pending or threatened, nor have the Companies or any of the Sellers
received any written notice regarding any violation of any Law, including,
without limitation, any requirement of the United States Federal Trade
Commission, any state or foreign franchise agency or regulatory authority,
OSHA or any pollution or environmental control agency (including air and
water).
(b) Copies have been provided to representatives of Buyer of all
reports which are known to the Companies of inspections by representatives
of any federal, state or local governmental entity or agency of the
business and properties of the Companies from January 1, 1994 through the
date hereof under OSHA and under all other applicable health and safety
Laws. The deficiencies, if any, noted on such reports or any deficiencies
noted by such inspections through the Closing Date shall be corrected by
the Closing Date. Neither of the Companies, nor, to the knowledge of the
Companies and Xxxxx Xxxxxxx, any of the Sellers, know, of any other
registration, safety, health,
13
environmental, anti-competitive or discrimination problems relating to the
financial condition, business, assets, operations, prospects, earnings or
employment practices of the Companies.
2.17 Absence of Certain Business Practices. None of the Sellers, any person
-------------------------------------
or entity related to or affiliated with any of the Sellers, any officer,
employee or agent of the Companies or any of the Sellers, any other person or
entity acting on behalf of or associated with the Companies or any of the
Sellers, nor any other entity directly or indirectly owned or controlled by any
of the Sellers or the Companies, acting alone or together, has (a) received,
directly or indirectly, any rebates, payments, commissions, promotional
allowances or any other economic benefit, regardless of its nature or type, from
any customer, supplier, trading company, shipping company, governmental employee
or other entity or individual with whom the Companies have done business
directly or indirectly or (b) directly or indirectly, given or agreed to give
any gift or similar benefit to any customer, supplier, trading company, shipping
company, governmental employee or other person or entity who is or may be in a
position to help or hinder the business of the Companies (or assist the
Companies in connection with any actual or proposed transaction) which (i) would
be reasonably likely to subject the Companies to any damage or penalty in any
civil, criminal or governmental litigation or proceeding, (ii) if not given in
the past, might have a Material Adverse Effect or (iii), if not continued in the
future, might have had a Material Adverse Effect or which might subject the
Companies to suit or penalty in any private or governmental litigation or
proceeding.
2.18 ERISA and Related Employee Benefit Matters.
------------------------------------------
(a) Welfare Benefit Plans. Exhibit 2.18.1 lists each "employee welfare
--------------------- --------------
benefit plan" (within the meaning of Section 3(l) of the Employee
Retirement Income Security Act of 1974 ("ERISA")) maintained by the
Companies or to which the Companies contribute or are required to
contribute, including any multiemployer plan ("Welfare Benefit Plan") and
sets forth as of the most recent valuation date (i) the amount of any
liability of the Companies for payments due with respect to any Welfare
Benefit Plan, (ii) the amount of any payment made and to be made, stated
separately, by the Companies with respect to any Welfare Benefit Plan for
the plan year during which the Closing is to occur, and (iii) with respect
to any Welfare Benefit Plan to which Section 505 of the Code applies, a
statement of assets and liabilities for such Welfare Benefit Plan as of the
most recent valuation date. Without limiting the foregoing, Exhibit 2.18.1
--------------
discloses any obligations of the Companies to provide retiree health
benefits to current or former employees of the Companies, respectively.
(b) Pension Benefit Plans. Exhibit 2.18.2 lists each "employee pension
--------------------- --------------
benefit plan" (within the meaning of Section 3(2) of ERISA) maintained by
the Companies or to which the Companies contribute or are required to
contribute, including any multiemployer plan ("Pension Benefit Plan"). All
costs of the Pension Benefit Plans have been provided for on the basis of
consistent methods and, if applicable, in accordance with sound actuarial
assumptions and practices that are acceptable under ERISA. With
14
resect to each Pension Benefit Plan that is subject to Title I, Part 3 of
ERISA (concerning "funding"), Exhibit 2.18.2 sets forth as of the valuation
--------------
date (i) the unfunded liability for all accrued benefits, (ii) the funding
method, (iii) the actuarially computed value of vested benefits, (iv) the
fair market value of the assets held for funding purposes, (v) the amount
and plan year of any "accumulated funding deficiency," as defined in
Section 302(a)(2) of ERISA (arising for any reason whatever) that exists
with respect to any plan year, and (vi) the amount of any contribution by
the Companies paid and to be paid, stated separately, for the plan year
during which the Closing is to occur. With respect to each Pension Benefit
Plan that is not subject to Title I, Part 3 of ERISA, Exhibit 2.18.2 sets
---------------
forth as of the valuation date (i) the amount of any liability of the
Companies for any contributions due with respect to such Pension Benefit
Plan and (ii) the amount of any contribution paid and to be paid, stated
separately, by the Companies with respect to such Pension Benefit Plan for
the plan year during which the Closing is to occur.
(c) Compliance with Applicable Law. Each of the Pension Benefit Plans,
------------------------------
Welfare Benefit Plans, any related trust agreements, annuity contracts, and
other fundinginstruments, comply with the provisions of ERISA and the Code
and all other statutes, orders, governmental rules and regulations
applicable to such Welfare Benefit Plans and Pension Benefit Plans. The
Companies have performed all of their respective obligations currently
required to have been performed under all Welfare Benefit Plans and Pension
Benefit Plans. There are no actions, suits or claims (other than routine
claims for benefits) pending or threatened against or with respect to any
Welfare Benefit Plans, Pension Benefit Plans or the assets of such plans,
and no facts exist that could give rise to any actions, suits or claims
(other than routine claims for benefits) against such plans or the assets
of such plans. Each Pension Benefit Plan is qualified in form and operation
under Section 401(a) of the Code, the Internal Revenue Service has issued a
favorable determination letter with respect to each Pension Benefit Plan,
and no event has occurred that will or could give rise to a
disqualification of any Pension Benefit Plan under Code Section 401(a). No
event has occurred that will or could subject any Welfare Benefit Plan or
Pension Benefit Plan to tax under Section 511 of the Code.
(d) Administration of Plans. Each Welfare Benefit Plan and each
-------------------------
Pension Benefit Plan has been administered to date in compliance with the
requirements of ERISA and the Code. No plan fiduciary of any Welfare
Benefit Plan or Pension Benefit Plan has engaged in (i) any transaction in
violation of Section 406(a) or (b) of ERISA, or (ii) any "prohibited
transaction" (within the meaning of Section 4975(c)(1) of the Code) for
which no exemption exists under Section 408 of ERISA or Section 4975(d) of
the Code.
(e) Title IV Plans. With respect to each Pension Benefit Plan which is
--------------
subject to the provisions of Title IV of ERISA in which the Companies (for
purposes of this subsection the Companies shall include each trade or
business, whether or not incorporated, which is a member of a group of
which the Companies are a member and which is under common control within
the meaning of Section 414 of the Code and the regulations thereunder)
participate or have participated, (i) neither of the Companies has
15
withdrawn from such Pension Benefit Plan during a plan year in which it was
a "substantial employer" (as defined in Section 4001(a)(2) of ERISA), (ii)
neither of the Companies has completely or partially withdrawn from a
Pension Benefit Plan that is a multiemployer plan, and the liability to
which it would become subject under ERISA if it were to withdraw completely
from all multiemployer plans in which it currently participates is not in
excess of $5,000 as of the most recent valuation date applicable thereto,
(iii) neither of the Companies has filed a notice of intent to terminate
any such Pension Benefit Plan or adopted any amendment to treat such
Pension Benefit Plan as terminated, (iv) the Pension Benefit Guaranty
Corporation has not instituted proceedings to terminate any such Pension
Benefit Plan, (v) no other event or condition has occurred that might
constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a Trustee to administer, any such Pension Benefit Plan,
(vi) all required premium payments to the Pension Benefit Guaranty
Corporation have been paid when due, and (vii) no "reportable event" (as
described in Section 4043 of ERISA and the regulations thereunder) has
occurred with respect to said Pension Benefit Plan.
(f) Other Employee Benefit Plans and Agreements. Exhibit 2.18.3 lists
------------------------------------------- --------------
each fringe benefit, profit sharing, deferred compensation, bonus, stock
option, stock purchase, pension, retainer, consulting, retirement, welfare,
or other incentive plan or agreement, employment agreement not terminable
on 30 days or less written notice, and any other employee benefit plan,
agreement, arrangement, or commitment not previously listed on the Exhibits
to this Section that is maintained by the Companies, respectively, or to
which they contribute or are required to contribute. Exhibit 2.18.3 also
--------------
contains a complete list of all employees of the Companies, respectively,
and the amount of vacation pay currently accrued to each such employee.
(g) Copies of Plans. True and complete copies have been provided to
---------------
representatives of Buyer of the Companies': Welfare Benefit Plans; Pension
Benefit Plans; related trust agreements, annuity contracts and other
funding instruments; each plan, agreement, arrangement, and commitment
referred to in subsection(f) of this Section; favorable determination
letters; annual reports (Form 5500 series) required to be filed with any
governmental agency for each Welfare Benefit Plan, Pension Benefit Plan,
and fringe benefit plan for the three most recent plan years, including,
without limitation, all schedules thereto and all consolidated financial
statements with attached opinions of independent accountants; current
summary plan descriptions; and actuarial reports as of the last valuation
date for each Pension Benefit Plan that is subject to Title IV of ERISA.
(h) Continuation Coverage Requirements for Health Plans. All group
------------------------------------------------------
health plans of the Companies (including any plans of affiliates of them
that must be taken into account under Section 4980B of the Code) have been
operated in compliance with the group health plan continuation coverage
requirements of Section 4980B of the Code and Title I, Part 6 of ERISA.
16
(i) Valid Obligations. All Welfare Benefit Plans, Pension Benefit
------------------
Plans, related trust agreements, annuity contracts or other funding
instruments, and all plans, agreements, arrangements and commitments
referred to in subsection (f) of this Section are legal, valid and binding
and in full force and effect, and there are no defaults thereunder. Except
as specified in Exhibit 2.18.5, none of the rights of the Companies
---------------
thereunder will be impaired by the consummation of the transactions
contemplated by this Agreement, and all of the rights of the Companies
thereunder will be enforceable by Buyer at and after the Closing without
the consent or agreement of any other party other than consents and
agreements specifically listed in Exhibit 2.18.5.
--------------
2.19 Intellectual Property. The Companies, respectively, have good and
----------------------
marketable title to, own all worldwide right, title, and interest in, to, and
under, and Exhibit 2.19 contains a detailed listing of, each copyright,
-------------
trademark, trade name, service xxxx, trade dress, patent, franchise, trade
secret, product designation, formula, process, know-how, right of publicity,
design, registration of any of the foregoing, and application for any patent or
registration, and other similar rights (collectively "Intellectual Property
Rights") used in, or necessary for, the operation of its business as currently
conducted. Except as otherwise set forth on Exhibit 2.19, all of said
-------------
Intellectual Property Rights, the right to use them and the right to convey them
are free and clear of all royalty and other obligations, security interests,
liens and encumbrances. The Companies, respectively, have the right to use all
Intellectual Property Rights used in, or necessary for, the operation of its
business as currently conducted. The Companies have taken all action necessary
to protect against and defend against, and have no knowledge of, any conflicting
use of any such Intellectual Property Rights. Except as set forth in Exhibit
-------
2.19, (i) the Companies are not a party in any capacity to any franchise,
----
license, royalty or other agreement respecting or restricting any Intellectual
Property Rights and (ii) the Intellectual Property Rights used by the Companies
in the operation of their respective businesses as currently conducted do not
conflict with the Intellectual Property Rights or other rights of any third
party. No product, including final and intermediate products, made, imported,
offered for sale, sold or distributed by the Companies, service provided by the
Companies or process used by the Companies violates any license or infringes any
Intellectual Property Rights or other rights of any third party, and, except as
set forth on Exhibit 2.19, there are no pending claims or demands by any third
------------
party to the contrary. None of the Companies, Xxxxx Xxxxxxx, and, to the
knowledge of the Companies and Xxxxx Xxxxxxx, the other Sellers, are aware that
any such claim or demand will be, or is likely to be, made or of any fact or
circumstance that could reasonably give rise to such claim or demand. To the
knowledge of the Companies and Xxxxx Xxxxxxx, the Intellectual Property Rights
are valid and enforceable.
2.20 Warranties. Except as set forth in Exhibit 2.20, there are no claims
---------- ------------
existing or threatened under or pursuant to any warranty, whether expressed or
implied, on products or services sold by the Companies, and the Balance Sheet
reserves, if any, for anticipated claims are adequate to cover any such claims.
2.21 Labor Relations. Except as set forth in Exhibit 2.21, there have been
--------------- ------------
no strikes, work stoppages or any demands for collective bargaining by any union
or labor organization since
17
January 1, 1994; there is no collective bargaining relationship between either
of the Companies and any union; there is no dispute or controversy with any
union or other organization of the Companies' employees; there are no
arbitration proceedings pending or to the knowledge of the Companies threatened
involving a dispute or controversy and the Companies have not received any
notice from any labor union or group that it represents or intends to represent
the Companies' employees. The Companies are in full compliance in all material
respects with all Laws respecting employment and employment practices, terms and
conditions of employment and wages and hours including, without limitation, the
Fair Labor Standards Act, the Family and Medical Leave Act of 1993, the
Americans with Disabilities Act of 1990, the Veterans Reemployment Rights Act,
the Equal Employment Opportunities Act, as amended by the Civil Rights Act of
1991, the Occupational Safety and Health Act, the Employment Retirement Income
Security Act of 1974, the Immigration Reform and Control Act of 1986, the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the
Older Workers Benefit Protection Act, and all other Laws, each as amended to
date, relating to employer/employee rights and obligations. The Companies
currently have satisfactory relationships with their respective employees.
2.22 Insurance. Exhibit 2.22 lists coverage regarding all of the Companies'
--------- ------------
existing insurance policies, the premiums therefor and the coverage of each
policy. Such policies and the amount of coverage and the risks insured are, in
the aggregate, commercially reasonable to insure the Companies against perils
which good business practice demands be insured against. Each such policy is in
full force and effect, the premiums are paid to the extent due thereunder and
there are no defaults under any such policies which could, in the aggregate,
cause a Material Adverse Effect.
2.23 Liability for Services. There exist no known claims against the
------------------------
Companies for injury to person or property of their employees or any third
parties suffered as a result of the performance of any service by the Companies,
respectively, including, but not limited to, claims arising out of the defective
or unsafe nature of its products or services.
2.24 Environmental.
-------------
(a) For purposes of this Section:
(i) "Hazardous Materials" means any hazardous, infectious or
toxic substance, chemical, pollutant, contaminant, emission or waste
which is or becomes regulated by any local, state, federal or foreign
authority. Hazardous Materials include, without limitation, anything
which is: (i) defined as a "pollutant" pursuant to 33 U.S.C. ss.
1362(6); (ii) defined as a "hazardous waste" pursuant to 42 U.S.C. ss.
6921; (iii) defined as a "regulated substance" pursuant to 42 U.S.C.
ss. 6991; (iv) defined as a "hazardous substance" pursuant to 42
U.S.C. ss. 9601(14); (v) defined as a "pollutant or contaminant"
pursuant to 42 U.S.C. ss. 9601(33); (vi) petroleum; (vii) asbestos;
and (viii) polychlorinated biphenyl.
18
(ii) "Environmental Laws and Regulations" means all limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any Laws relating
to pollution, nuisance, or the environment including, without
limitation, (i) the Federal Clean Air Act, 42 U.S.C. xx.xx. 7401 et
--
seq.; (ii) the Comprehensive Environmental Response, Compensation, and
---
Liability Act, 42 U.S.C. xx.xx. 9601 et seq.; (iii) the Federal
-- ---
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. xx.xx.
1101 et seq.; (iv) the Federal Insecticide, Fungicide and Rodenticide
-- ---
Act, 7 U.S.C. xx.xx. 136 et seq.; (v) the Federal
-- ---
Water Pollution Control Act, 33 U.S.C. xx.xx. 1251 et seq.; (vi) the
-- ---
Solid Waste Disposal Act, 42 U.S.C. xx.xx. 6901 et seq.; (vii) the
-- ---
Toxic Substances Control Act, 15 U.S.C. xx.xx. 2601 et seq.; (viii)
-- ---
Laws relating in whole or part to emissions, discharges, releases, or
threatened releases of any Hazardous Material; and (ix) Laws relating
in whole or part to the manufacture, processing, distribution, use
coverage, disposal, transportation, storage or handling of any
Hazardous Material.
(b) The operations and activities of the Companies comply in all
material respects with all Environmental Laws and Regulations.
(c) The Companies have obtained all material permits, licenses
and other authorizations which are required with respect to its
respective operations, as well as the transactions contemplated hereby
under all Environmental Laws and Regulations. Exhibit 2.24 lists each
------------
such permit, license or other authorization.
(d) There is no civil, criminal, administrative or other action,
suit, demand, claim, hearing, notice of violation, notice or demand
pending, received, or, to the best knowledge of the Companies and
Xxxxx Xxxxxxx, threatened against the Companies relating in any way to
any Environmental Laws and Regulations, which if determined adversely
to the Companies could cause a Material Adverse Effect.
(e) Neither of the Companies has caused or experienced any past
or present events, conditions, circumstances, plans or other matters
which: (i) are not in material compliance with all Environmental Laws
and Regulations; or (ii) may give rise to any claim, action, demand,
suit, proceeding, hearing, notice of violation or investigation of or
against the Companies based on or relating to Hazardous Materials
including, without limitation, such matters relating to any property
owned or leased by the Companies.
(f) No asbestos, polychlorinated biphenyls, lead-based paints, or
radon are on any real property or in any building now or previously
owned, operated, leased or utilized by the Companies.
(g) No employee or former employee of the Companies has been
exposed to any Hazardous Material owned, produced or utilized by the
Companies or any former subsidiary.
19
(h) Neither of the Companies has received any written notice or
indication from any governmental agency or private or public entity
advising it that it is, or may be, responsible for any investigation
or response costs with respect to a release, threatened release or
cleanup of chemicals or materials produced by or resulting from any
business, commercial or industrial activities, operations or
processes, including, without limitation, any Hazardous Materials.
None of the Companies, nor, to the knowledge of the Companies and
Xxxxx Xxxxxxx, the other Sellers, are aware of any facts which might
give rise to such notices.
(i) No underground tanks, piping or subsurface structures of any
type exist or have existed on any real property now or previously
owned, operated, leased or utilized by the Companies.
(j) Exhibit 2.24 contains complete copies of all environmental
------------
investigations, assessments, audits, studies, tests and related
materials in possession of the Companies, or known to them to exist,
which relate to the current or prior operations of the Companies or
any real property now or previously owned, operated, leased or
utilized by the Companies.
(k) Except in compliance with Environmental Laws and Regulations,
the Company has not used, generated or stored any Hazardous Materials.
2.25 Capital Expenditures. The Companies have outstanding commitments for
--------------------
capital expenditures as set forth in Exhibit 2.25, which includes a schedule of
------------
substantially all moneys disbursed on account of capital expenditures made by
the Companies between the Financial Statement Date and the date hereof. After
the date hereof, no capital expenditures or commitments in excess of $25,000 in
the aggregate will be made by the Companies, except as set forth in Exhibit 2.25
------------
or with Buyer's prior written consent.
2.26 Suppliers. No suppliers of goods or services to the Companies that has
---------
made sales or provided services representing, individually or in the aggregate,
more than $10,000 in payments or commitments by the Companies within the last 12
months has (i) ceased, or indicated any intention to cease, doing business with
the Companies, respectively, or (ii) changed or indicated any intention to
change any terms or conditions for future supply or sale of products or services
from the terms or conditions that existed with respect to the supply or sale of
such products or services during the 12 month period ending on the date hereof,
and which changes are not within such suppliers ordinary course of business.
2.27 Dealings with Affiliates. Exhibit 2.27 sets forth a complete list
-------------------------- ------------
(including the parties) and copies (or a detailed summary in the case of an oral
agreement) of all oral or written contracts, arrangements or other agreements to
which the Companies are, will be or have been a party at any time from January
1, 1997, to the Closing Date, and to which any other Affiliate or the Companies
was or is also a party.
20
2.28 Bank Accounts. Exhibit 2.28 is a list of all bank accounts, lock
-------------- -------------
boxes, post office boxes and safe deposit boxes maintained in the name of or
controlled by the Companies and the names of the persons having access thereto.
2.29 Compensation. Exhibit 2.29 lists the current job title and total
------------ -------------
remuneration (including, without limitation, salary, commissions and bonuses)
for each officer, director, employee or consultant of the Companies who received
total remuneration in excess of $50,000 from either of the Companies during any
of the past two fiscal years and who is expected to receive total remuneration
in excess of such amount during the current fiscal year. Except as disclosed on
Exhibit 2.29, neither of the Companies has since the Financial Statement Date
------------
nor will prior to the Closing Date, increase or commit to increase the base
compensation, commission, bonus or the rate (or any other component) of total
compensation payable or to become payable by the Companies, respectively, to any
employee (including any director or officer), whether such person is listed on
Exhibit 2.29 or not, and no extraordinary compensation or bonus will be paid by
------------
the Companies.
2.30 Credit Facility. Listed in Exhibit 2.30 is a complete and accurate
---------------- -------------
description of all outstanding advances to the Companies as of the date of this
Agreement, and the date five (5) days prior to the Closing (to be delivered by
Sellers to Buyer three days prior to the Closing), under that certain Credit
Agreement referenced in the Balance Sheet and consisting of the following: (i)
Step-down Revolving Term Loan, (ii) $1,500,000 Working Capital Commitment, and
(iii) Term Loan (collectively, the "Credit Facility").
2.31 Accounts Receivable. All accounts receivable of the Companies have
--------------------
been incurred in the ordinary course of business and are accurately reflected in
all material respects in the books and records of the Companies consistent with
past practice and represent bona fide transactions.
2.32 Customers. There are no pending or, to the knowledge of Xxxxx Xxxxxxx
---------
and the Companies, threatened disputes between the Companies and any of its
customers which could reasonably be expected to have a Material Adverse Effect.
Since December 31, 1997, (i) there has been no material adverse change in the
business relationship between the Companies and any material customer, and (ii)
the Companies have not received any communications from a material customer to
terminate the relationship or materially reduce purchases.
2.33 Powers of Attorney. The Companies have not granted a power of attorney
------------------
to any person, which is outstanding as of the date hereof, to commit or bind the
Companies.
2.34 Complete Disclosure. No representation or warranty made by Sellers or
-------------------
the Companies in this Agreement, and no exhibit, schedule, certificate or other
writing furnished to Buyer by or on behalf of Sellers, pursuant to this
Agreement or in connection with the transactions contemplated hereby, contains
any untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained herein and therein not misleading.
21
2.35 Year 2000 Compliance. The Companies have reviewed their products,
---------------------
businesses and operations which could be adversely affected by the Year 2000
problem (as defined below). The Companies have developed, or are developing, a
program to address, on a timely basis, the risk that computer applications
developed, marketed, sold or used by the Companies may be unable to recognize
and properly perform date-sensitive functions involving dates prior to and after
December 31, 1999 (the "Year 2000 Problem"). The Companies' applications
delivered to their customers and their internal information and business systems
are Year 2000 compliant. The Year 2000 Problem has not resulted in, and, to the
knowledge of the Companies and Xxxxx Xxxxxxx, is not reasonably expected to
have, a Material Adverse Effect on the Companies.
ARTICLE III
-----------
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby represents and warrants to the Sellers, as follows:
3.1 Corporate Organization, etc. Buyer is a corporation duly organized,
-----------------------------
validly existing and in good standing under the laws of the state of Delaware
and will be qualified to do business in Delaware on the Closing Date.
3.2 Authorization, etc. Buyer has full corporate power and authority to
-------------------
enter into this Agreement and to carry out the transactions contemplated hereby.
The Board of Directors and stockholders of Buyer have duly authorized the
execution and delivery of this Agreement and the transactions contemplated
hereby, and no other corporate proceedings on its part are necessary to
authorize this Agreement and the transactions contemplated hereby. This
Agreement and all other related agreements constitute legal, valid and binding
obligations of Buyer, enforceable against Buyer in accordance with their
respective terms.
3.3 No Violation. Buyer is not subject to or obligated under any
-------------
certificate of incorporation, bylaw, Law, or any agreement or instrument, or any
license, franchise or permit, which would be breached or violated by its
execution, delivery or performance of this Agreement. Buyer will comply with all
Laws in connection with its execution, delivery and performance of this
Agreement and the transactions contemplated hereby.
3.4 Governmental Authorities. Assuming that the Ultimate Parent Entity of
-------------------------
the Companies has less than $100 million of HSR Assets and Revenues, Buyer is
not required to submit any notice, report or other filing with and no consent,
approval or authorization is required by any governmental or regulatory
authority or third party in connection with Buyer's execution or delivery of
this Agreement or the consummation of the transactions contemplated hereby.
3.5 Capitalization. The authorized capital stock of Buyer consists of (i)
--------------
10,000,000 shares of common stock, par value $.01 per share ("Buyer Common
Stock") and (ii) 5,000,000 shares of preferred stock, par value $.01 per share,
none of which are issued and outstanding. As of November 12, 1998, 5,089,858
shares of Buyer Common Stock were issued and outstanding. Except as set forth on
Schedule 3.5, there are no outstanding options, warrants or
------------
22
contracts, commitments, understandings, or arrangements by which the Buyer is or
may become bound to issue additional shares of Buyer Common Stock, or securities
or rights convertible or exchangeable into shares of Buyer Common Stock. The
capital stock of the Buyer is duly authorized and all issued capital stock has
been duly and validly issued and is fully paid and nonassessable and free of
preemptive rights.
3.6 SEC Reports and Financial Statements. Buyer has filed with the
----------------------------------------
Securities and Exchange Commission (the "SEC"), and has heretofore made
available to the Sellers true and complete copies of all forms, reports,
schedules, statements and other documents required to be filed by it under the
Securities Act of 1933, as amended (the "Securities Act") and the Securities and
Exchange Act of 1934, as amended (the "Exchange Act") (as such documents have
been amended or supplemented since the time of their filing, collectively, the
"SEC Reports"). As of their respective dates, the SEC Reports (including without
limitation, any financial statements or schedules included therein) (a) did not
contain any untrue statement of a 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, and (b) complied in all material
respects with the applicable requirements of the Securities Act and Exchange Act
(as the case may be) and all applicable rules and regulations of the SEC
promulgated thereunder. Each of the consolidated financial statements included
in the SEC Reports have been prepared from, and are in accordance with, the
books and records of the Buyer, comply in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with U.S. GAAP applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present in all material respects the consolidated
results of operations and cash flows (and changes in financial position, if any)
of the Buyer as at the dates thereof or for the periods presented therein.
ARTICLE IV
COVENANTS OF THE SELLERS
Except as otherwise consented to or approved by Buyer in writing, until the
Closing, the Sellers covenant and agree (and will cause the Companies to act or
refrain from acting where required hereinafter) as follows:
4.1 Regular Course of Business. The Companies will: (i) operate their
---------------------------
respective businesses in the ordinary course, diligently and in good faith,
consistent with past management practices; (ii) maintain all of its respective
properties in customary repair, order and condition, reasonable wear and tear
excepted; (iii) maintain (except for expiration due to lapse of time) all leases
and contracts described herein in effect without change except as expressly
provided herein; (iv) comply with the provisions of all Laws applicable to the
conduct of its business; (v) not engage in any significant or unusual
transaction; (vi) not cancel, release, waive or compromise any debt, claim or
right in its favor having a value in excess of $25,000 other than in connection
with returns for credit or replacement in the ordinary course of business; (vii)
23
maintain insurance coverage up to the Closing Date in amounts adequate to
protect and insure the Companies against perils which good business practice
demands be insured against or which are normally insured against by other
industry members similarly situated. Notwithstanding the foregoing, the
Companies shall be permitted, on or prior to the Closing Date, to pay cash
dividends to the Sellers, to make payments to the Sellers, including without
limitation to pay the Sellers' expenses incurred in connection with this
transaction, to pay management fees to Regent Capital Management Corp. or to
repay borrowings under the Credit Facility or otherwise ("Permitted
Distributions").
4.2 Amendments. Except as required for the transactions contemplated in
----------
this Agreement, no change or amendment shall be made in either Companies'
articles or certificate of incorporation or bylaws. Neither of the Companies
will merge into or consolidate with any other corporation or person, or change
the character of its business.
4.3 Capital Changes. Neither of the Companies will (i) issue or sell any
----------------
shares of its capital stock of any class or issue or sell any securities
convertible into, or options, warrants to purchase or rights to subscribe to,
any shares of its capital stock of any class or (ii) directly or indirectly,
redeem, purchase or otherwise acquire any shares of its capital stock.
4.4 Capital and Other Expenditures. Until the Closing, neither of the
--------------------------------
Companies will make any capital expenditures, or commitments with respect
thereto, except as set forth in Exhibit 2.25. Other than those agreed upon
-------------
amounts set forth in Exhibit 2.25, and repayment of amounts advanced under the
------------
Credit Facility during such period, neither of the Companies will repay or
prepay any principal or interest on any indebtedness or obligation (except for
prepaying trade accounts payable in the normal course of business to take
advantage of cash discounts).
4.5 Borrowing. Except with respect to permitted advances under the Credit
---------
Facility, neither of the Companies will (i) incur, assume or guarantee any
indebtedness or capital leases or (ii) create or permit to become effective any
mortgage, pledge, lien, encumbrance or charge of any kind upon its assets other
than in the ordinary course of business.
4.6 Other Commitments. Except in the ordinary course of business consistent
-----------------
with past practices or with the written consent of Buyer, neither of the
Companies will enter into any transaction, make any commitment or incur any
obligation.
4.7 Interim Financial Information. The Sellers will supply Buyer with
--------------------------------
unaudited monthly adjusted consolidated financial statements of Holding within
fifteen (15) business days of the end of each month ending between the Financial
Statement Date and the Closing Date. All such financial statements shall be
accompanied by a certificate of the President and the financial officer of
Holding certifying that such financial statements were prepared in accordance
with generally accepted accounting principles applied on a basis consistent with
the unaudited consolidated financial statements for the preceding months.
24
4.8 Full Access and Disclosure.
--------------------------
(a) The Companies shall afford to Buyer and its counsel, accountants
and other authorized representatives access during business hours to the
Companies' plants, properties, books and records in order that Buyer may
have full opportunity to make such reasonable investigations as it shall
desire to make of the affairs of the Companies, and the Companies will
cause their officers and employees to furnish such additional financial and
operating data and other information as Buyer shall from time to time
reasonably request.
(b) From time to time prior to the Closing Date, the Companies will
promptly supplement or amend in writing information previously delivered to
Buyer with respect to any matter hereafter arising which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or disclosed.
4.9 Consents. The Companies will use all commercially reasonable efforts to
--------
obtain on or prior to the Closing Date all consents necessary to the
consummation of the transactions contemplated hereby.
4.10 Breach of Agreement. None of the Sellers or the Companies will take
-------------------
any action which, if taken prior to the Closing Date, would constitute a breach
of this Agreement.
4.11 Further Assurances. The Companies and the Sellers will furnish Buyer
-------------------
with such other and further documents, certificates, opinions, consents and
information as (a) Buyer shall reasonably request to enable Buyer to borrow
funds from a bank or other lending entity or individual(s) for the purchase of
the Shares, and (b) to evidence compliance with the terms and conditions of any
credit agreement to be entered into between Buyer and a bank and/or other
lending entities or individuals.
4.12 Fulfillment of Conditions. The Sellers and the Companies will take all
-------------------------
commercially reasonable steps necessary or desirable, and proceed diligently and
in good faith, to satisfy each condition to the obligations of Buyer contained
in this Agreement and will not take or fail to take any action that could
reasonably be expected to result in the nonfulfillment of any such condition.
ARTICLE V
---------
COVENANTS OF BUYER
------------------
Buyer hereby covenants and agrees with the Sellers that:
5.1 Post-Closing Course of Business. From and after the Closing through
--------------------------------
December 31, 1998, the Buyer, with the cooperation of Xxxxx Xxxxxxx, will
operate the
25
Companies in the ordinary course, diligently and in good faith, consistent with
past management practices.
5.2 Books and Records. Buyer shall preserve and keep the Companies' books
-----------------
and records delivered hereunder for a period of five (5) years from the date
hereof and shall, during such period, make such books and records available to
former officers and directors of each such company for any reasonable purpose.
5.3 Further Assurances. The Buyer will furnish the Companies and the
-------------------
Sellers with such other and further documents, certificates, opinions, consents
and information reasonably required by the Companies and Sellers in connection
with the performance of this Agreement.
5.4 Fulfillment of Conditions. The Buyer will take all commercially
---------------------------
reasonable steps necessary or desirable, and proceed diligently and in good
faith, to satisfy each condition to the obligations of Sellers and the Companies
contained in this Agreement and will not take or fail to take any action that
could reasonably be expected to result in the nonfulfillment of any such
condition.
ARTICLE VI
----------
OTHER AGREEMENTS
----------------
Buyer and the Sellers covenant and agree that:
6.1 Agreement to Defend. In the event any action, suit, proceeding or
--------------------
investigation of the nature specified in Section 7.4 or Section 8.2 hereof is
----------- -----------
commenced, whether before or after the Closing Date, all the parties hereto
agree to cooperate and use their best efforts to defend against and respond
thereto.
6.2 Consultants, Brokers and Finders. The Sellers and Buyer each represent
---------------------------------
and warrant that they have not retained any consultant, broker or finder in
connection with the transactions contemplated by this Agreement, except for CIBC
Xxxxxxxxxxx Corp. retained by Buyer and Regent Capital Management Corp. retained
by Sellers. The Sellers and Buyer each hereby agree to indemnify, defend and
hold the other party and its offices, directors, employees and Affiliates,
harmless from and against any and all claims, liabilities or expenses for any
brokerage fees, commissions or finders' fees due to any consultant, broker or
finder retained by the indemnifying party.
6.3 Noncompetition Agreement. At the Closing, Buyer and each of Regent
-------------------------
Capital Equity Partners, L.P., Nantucket SuperGraphics II, L.L.C., Nantucket
SuperGraphics, L.L.C., the directors and officers of Holding and Xxxxxxx Xxxxxxx
shall enter into a Noncompetition Agreement in substantially the form set forth
in Exhibit 6.3.
-----------
6.4 Taxes.
-----
26
(a) The Sellers shall cause the Companies to prepare and file all tax
returns and reports of the Companies due on or prior to the Closing Date,
which returns and reports shall be prepared and filed timely and on a basis
consistent with existing procedures for preparing such returns and reports
and in a manner consistent with prior practice with respect to the
treatment of specific items on the returns or reports; provided, however,
-------- -------
that if the treatment of any item on any such return or report has not been
provided by prior practice, the Sellers shall cause the Companies to report
such items in a manner that would result in the least amount of tax
liability to the Companies and Buyer for periods ending after the Closing
Date. Buyer shall cause the Companies to prepare and file all tax returns
and reports of the Companies due after the Closing Date, which returns and
reports, to the extent they relate to taxable periods beginning prior to,
but including the Closing Date, shall be prepared and filed timely and on a
basis consistent with existing procedures for preparing such returns and in
a manner consistent with prior practice with respect to the treatment of
specific items on the returns and reports, unless such treatment does not
have sufficient legal support to avoid the imposition of penalties.
(b) Buyer, the Companies and the Sellers shall provide each other with
such assistance as may reasonably be requested by the others in connection
with the preparation of any return or report of Taxes, any audit or other
examination by any taxing authority, or any judicial or administrative
proceedings relating to liabilities for Taxes. Buyer, the Companies and the
Sellers will retain for the full period of any statute of limitations and
provide the others with any records or information which may be relevant to
such preparation, audit, examination, proceeding or determination.
(c) If in connection with any examination, investigation, audit or
other proceeding in respect of any tax return covering the operations of
the Companies during a taxable period on or before the Closing Date, any
governmental body or authority issues to the Companies a written notice of
deficiency, a notice of reassessment, a proposed adjustment, an assertion
of claim or demand concerning the taxable period covered by such return,
Buyer or the Companies shall notify the Sellers of its receipt of such
communication from the governmental body or authority within 30 business
days after receiving such notice of deficiency, reassessment, adjustment or
assertion of claim or demand. No failure or delay of Buyer or the Companies
in the performance of the foregoing shall reduce or otherwise affect the
obligations or liabilities of the Sellers pursuant to this Agreement,
except to the extent that such failure or delay shall have adversely
affected the Sellers' ability to defend against any liability or claim for
Taxes that the Sellers are obligated to pay hereunder. Except as provided
below, the Sellers shall, at their expense, have the nonexclusive right to
participate in the contest of any such assessment, proposal, claim,
reassessment, demand or other proceedings in connection with any tax return
covering taxable periods of the Companies ending on or before the Closing
Date. Buyer and the Companies will not be obligated to settle or resolve
any issue related to Taxes for such a period, which, if so settled or
resolved, could have an adverse effect on the Companies or Buyer for
periods after the Closing Date, unless the Sellers agree in writing with
Buyer and the Companies, in terms reasonably satisfactory
27
to Buyer and the Companies, to indemnify Buyer and the Companies from any
cost, damage, loss or expense relating to such settlement or resolution.
ARTICLE VII
-----------
CONDITIONS TO THE OBLIGATIONS OF BUYER
--------------------------------------
Each and every obligation of Buyer under this Agreement shall be subject to
the satisfaction, on or before the Closing Date, of each of the following
conditions unless waived in writing by Buyer.
7.1 Representations and Warranties; Performance. The representations and
--------------------------------------------
warranties made by the Companies and the Sellers herein shall be true and
correct in all material respects on the date of this Agreement and on the
Closing Date with the same effect as though made on such date; the Sellers shall
have performed and complied in all material respects with all agreements,
covenants and conditions required by this Agreement to be performed and complied
with by them prior to the Closing Date; the Sellers shall have, and shall have
caused the President of Holding to have delivered to Buyer a certificate, dated
the Closing Date, in the form designated Exhibit 7.1 hereto, certifying to such
-----------
matters and the other conditions contained in this Article VII.
-----------
7.2 Consents and Approvals. All consents from and filings with third
------------------------
parties, regulators and governmental agencies required to consummate the
transactions contemplated hereby, or which, either individually or in the
aggregate, if not obtained, would cause an adverse effect on the financial
condition or business of the Companies shall have been obtained and delivered to
Buyer.
7.3 Opinion of the Sellers' Counsel. Buyer shall have received an opinion
--------------------------------
of the Sellers' counsel, dated the Closing Date, substantially in the form
attached hereto as Exhibit 7.3.
-----------
7.4 No Proceeding or Litigation. No action, suit or proceeding before any
---------------------------
court or any governmental or regulatory authority shall have been commenced or
threatened, and no investigation by any governmental or regulatory authority
shall have been commenced or threatened against the Sellers, the Companies,
Buyer or any of their respective principals, officers or directors seeking to
restrain, prevent or change the transactions contemplated hereby or questioning
the validity or legality of any of such transactions or seeking damages in
connection with any of such transactions.
7.5 Credit Facility. The Companies shall have no borrowings under the
----------------
Credit Facility and the Credit Facility shall have been terminated.
7.6 Other Agreements. The Agreements described in Section 6.3 shall have
----------------- -----------
been entered into and delivered.
28
7.7 Escrow Agreement. Buyer shall have entered into an Escrow Agreement
-----------------
with Xxxxx Xxxxxxx on terms reasonably satisfactory to Buyer.
7.8 Employment Agreement. Buyer shall have entered into an Employment
---------------------
Agreement with Xxxxx Xxxxxxx on terms reasonably satisfactory to Buyer.
7.9 Prior Owner Earn-Out. The Sellers shall have satisfied all payment
---------------------
obligations relating to earn-out payments due in connection with their original
acquisition of the Companies.
7.10 Credit Facility Balance. Buyer shall have received, pursuant to
-------------------------
Section 2.30 hereto, a description of all outstanding advances to the Companies
as of a date five (5) days prior to the Closing.
7.11 Options. All outstanding options to purchase common stock of Holding
-------
set forth on Exhibit 2.2 hereto shall have been terminated.
-----------
7.12 Financial Statements. Buyer shall have received unaudited monthly
---------------------
adjusted consolidated statements of income of the Companies for the tenth months
ended October 31, 1998 and 1997.
7.13 Financing. Buyer shall have consummated on or before the Closing Date
---------
a financing in an amount sufficient to enable Buyer to pay the Purchase Price at
the Closing.
ARTICLE VIII
------------
CONDITIONS TO THE OBLIGATIONS OF THE SELLERS
--------------------------------------------
Each and every obligation of the Sellers under this Agreement shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions unless waived in writing by the Sellers:
8.1 Representations and Warranties; Performance. The representations and
--------------------------------------------
warranties made by Buyer herein shall be true and correct in all material
respects on the date of this Agreement and on the Closing Date with the same
effect as though made on such date; Buyer shall have performed and complied in
all material respects with all agreements, covenants and conditions required by
this Agreement to be performed and complied with by it prior to the Closing
Date; Buyer shall have delivered to Sellers a certificate of its President,
dated the Closing Date, certifying to the fulfillment of the conditions set
forth herein, in the form designated as Exhibit 8.1 and the other conditions
-----------
contained in this Article VIII.
------------
8.2 No Proceeding or Litigation. No action, suit or proceeding before any
---------------------------
court or any governmental or regulatory authority shall have been commenced, or
threatened, and no investigation by any governmental or regulatory authority
shall have been commenced, or threatened, against the Companies, Buyer, the
Sellers, or any of their respective principals, officers or directors, seeking
to restrain, prevent or change the transactions contemplated hereby
29
or questioning the validity or legality of any of such transactions or seeking
damages in connection with any of such transactions.
8.3 Opinion of Counsel. The Sellers shall have received an opinion of
-------------------
counsel to Buyer dated the Closing Date substantially in the form of Exhibit
-------
8.3.
----
8.4 Payment. The payment(s) and deliveries described in Section 1.2 shall
------- -----------
have been made, to the extent required.
8.5 Other Documents. Buyer will furnish the Sellers with such other
----------------
documents and certificates to evidence compliance with the conditions set forth
in this Article as may be reasonably requested by the Sellers.
8.6 Other Agreements. The agreements described in Section 6.3 shall have
----------------- -----------
been entered into and delivered.
8.7 Employment Agreement. Buyer shall have entered into an Employment
---------------------
Agreement with Xxxxx Xxxxxxx on terms reasonably satisfactory to Xx. Xxxxxxx.
ARTICLE IX
----------
CLOSING
-------
9.1 Closing. Unless this Agreement shall have been terminated or abandoned
-------
pursuant to the provisions of Article X hereof, a closing (the "Closing") shall
---------
be held on November 25, 1998, or at such other time as Buyer and the Sellers may
agree, and shall occur at such place or places as Buyer and the Sellers shall
agree. The date on which the Closing occurs is referred to herein as the
"Closing Date."
9.2 Deliveries at Closing.
---------------------
(a) At the Closing, the Sellers shall transfer and assign to Buyer all
of the Shares by delivering certificates representing each of the Shares,
duly endorsed for transfer to Buyer and the other agreements,
certifications and other documents required to be executed and delivered
hereunder at the Closing shall be duly and validly executed and delivered.
(b) From time to time after the Closing, at Buyer's request and
without further consideration from Buyer, the Sellers shall execute and
deliver such other instruments of conveyance and transfer and take such
other action as Buyer reasonably may require to convey, transfer to and
vest in Buyer and to put Buyer in possession of the Shares to be sold,
conveyed, transferred and delivered hereunder.
(c) Buyer shall pay the Purchase Price as provided in Section 1.2
-----------
hereof.
30
9.3 Specific Performance. The parties agree that if any party hereto is
---------------------
obligated to, but nevertheless does not, consummate this transaction, then any
other party, in addition to all other rights or remedies, shall be entitled to
the remedy of specific performance mandating that the other party or parties
consummate this transaction. In an action for specific performance by any party
hereto against any other party, the other party shall not plead adequacy of
damages at law.
ARTICLE X
---------
TERMINATION AND ABANDONMENT
---------------------------
10.1 Methods of Termination. This Agreement may be terminated and the
-----------------------
transactions herein contemplated may be abandoned at any time (notwithstanding
approval by the Board of directors of Buyer):
(a) by mutual consent of Buyer and the Sellers; or
(b) by either Buyer or the Sellers, if (i) such party is not in breach
hereunder and the other party is in breach hereunder and (ii) this
Agreement is not consummated on or before December 2, 1998 or such other
date as the Sellers and Buyer may agree.
10.2 Procedure Upon Termination. In the event of termination and
-----------------------------
abandonment pursuant to Section 10.1 hereof, this Agreement shall terminate and
------------
shall be abandoned, without further action by any of the parties hereto. If this
Agreement is terminated as provided herein:
(a) each party will upon request redeliver all documents and other
materials of any other party relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to the
party furnishing the same;
(b) no party hereto shall have any liability or further obligation to
any other party to this Agreement; and
(c) each party shall bear its own expenses.
ARTICLE XI
----------
INDEMNIFICATION
---------------
11.1 Indemnification by the Sellers. Each Seller hereby agrees to indemnify
------------------------------
and hold harmless Buyer and each of its shareholders, officers and directors
from and against any loss, damage, or expense (including, but not limited, to
reasonable attorneys' fees) ("Damages"), incurred or sustained by Buyer or any
of its shareholders, officers or directors as a result of (a) any breach or
nonfulfillment of any term, provision, covenant or agreement contained in this
Agreement by the Sellers; (b) any inaccuracy in any of the representations or
warranties made
31
by Xxxxx Xxxxxxx or the Companies in Article II of this Agreement; or (c) any
----------
inaccuracy or misrepresentation in any certificate or other document or
instrument delivered by the Sellers or the Companies in accordance with any
provision of this Agreement. The obligations of the Sellers as set forth in this
Section 11.1 shall be subject to and limited by the following:
(i) (A) No claim for Damages shall be paid until the cumulative
amount of such Damages shall equal or exceed $180,000, and then only
such claims for Damages shall be paid in excess of $180,000, (B) all
claims for Damages shall be paid severally by the Sellers pro rata
based on the percentages set forth opposite each Seller's name on
Exhibit 11.1, and (C) with respect to each Seller, the aggregate of
-------------
all claims for Damages paid by such Seller shall not exceed an amount
equal to such Seller's pro rata share of $3,500,000, determined in
accordance with Exhibit 11.1; and
------------
(ii) Buyer shall give written notice to the Sellers stating
specifically the basis for the claim for Damages, the amount thereof
and shall tender defense thereof to the Sellers as provided in Section
-------
11.2.
----
In addition to any other remedy, Buyer shall, subject to the provisions of this
Section 11.1, be entitled, but shall not be obligated, to offset all such claims
------------
for Damages against the Deferred Purchase Price Payment pursuant to Section 1.3.
-----------
11.2 Tender of Defense for Damages. Promptly upon receipt by Buyer of a
------------------------------
notice of an action, lawsuit, proceeding, investigation or other claim against
it (if by a third party) or upon discovering the liability, obligation or facts
giving rise to such claim for indemnification which may give rise to a claim for
Damages, Buyer shall give written notice thereof to the Sellers. No failure or
delay of Buyer in the performance of the foregoing shall relieve, reduce or
otherwise affect the Sellers' obligations and liability to indemnify Buyer
pursuant to this Agreement, except to the extent that such failure or delay
shall have adversely affected the Sellers' ability to defend against such claim
for Damages. If the Sellers give to Buyer an agreement in writing, in a form
reasonably satisfactory to Buyer's counsel, to defend such action, lawsuit,
proceeding, investigation or other claim for Damages, the Sellers may, at their
sole expense, undertake the defense against such claim and may contest or settle
such claim on such terms, at such time and in such manner as the Sellers, in
their sole discretion, shall elect and Buyer shall execute such documents and
take such steps as may be reasonably necessary in the opinion of counsel for the
Sellers to enable the Sellers to conduct the defense of such claim for Damages.
In the event Buyer notifies Sellers in writing that it will undertake the
defense against any such claim, at its sole expense, which Buyer may do in its
sole discretion, Sellers shall have no liability for Damages as relates to such
claim in excess of any amount which Sellers had previously offered in writing to
settle any such claim. If the Sellers fail or refuse to defend any claim for
Damages, the Sellers may nevertheless, at their own expense, participate in the
defense of such claim by Buyer and in any and all settlement negotiations
relating thereto. In any and all events, the Sellers shall have such access to
the records and files of Buyer relating to any claim for Damages as may be
reasonably necessary to effectively defend or participate in the defense
thereof.
32
ARTICLE XII
-----------
MISCELLANEOUS PROVISIONS
------------------------
12.1 Amendment and Modification. Subject to applicable law, this Agreement
--------------------------
may be amended, modified and supplemented only by written agreement of the
Sellers and Buyer.
12.2 Waiver of Compliance; Consents. Any failure of the Sellers on the one
-------------------------------
hand, or Buyer on the other hand, to comply with any obligation, covenant,
agreement or condition herein may be waived in writing by Buyer or the Sellers,
respectively, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 12.2.
------------
12.3 Expenses. Each party will pay its own legal, accounting and other
--------
expenses incurred by such party or on its behalf in connection with this
Agreement and the transactions contemplated herein.
12.4 Investigations; Survival of Warranties. The respective representations
--------------------------------------
and warranties of the Sellers and Buyer contained herein or in any certificates
or other documents delivered prior to or at the Closing shall not be deemed
waived or otherwise affected by any investigation made by any party hereto or by
the occurrence of the Closing. Each and every such representation and warranty
shall survive until March 15, 2000, provided, however, all representations and
warranties made pursuant to (i) Section 2.14 shall remain in full force and
effect until the expiration of the applicable statute of limitations and (ii)
Section 2.24 shall survive until the fifth anniversary of the Closing.
12.5 Notices. Any notice, request, consent or communication (collectively,
-------
a "Notice") under this Agreement shall be effective only if it is in writing and
(i) personally delivered, (ii) sent by certified or registered mail, return
receipt requested, postage prepaid, (iii) sent by a nationally recognized
overnight delivery service, with delivery confirmed, or (iv) telecopied, with
receipt confirmed, addressed as follows:
(a) If to the Sellers, to their addresses appearing on the signature
pages hereto.
in each case with a copy to:
33
Xxxxxx X. Xxxxxxxx
Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) If to Buyer, to:
Xxxxxxx X. Xxx, Chief Executive Officer
Unidigital Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxx, Esq.
Xxxxxxxx Xxxxxxxxx Professional Corporation
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or such other place or address as shall be furnished in writing by any party to
the other parties. A Notice shall be deemed to have been given as of the date
when (i) personally delivered, (ii) five (5) days after the date when deposited
with the United States mail properly addressed, (iii) when receipt of a Notice
sent by an overnight delivery service is confirmed by such overnight delivery
service, or (iv) when receipt of the telecopy is confirmed, as the case may be,
unless the sending party has actual knowledge that a Notice was not received by
the intended recipient.
12.6 Assignment. This Agreement and all of the provisions hereof shall be
----------
binding upon and inure to the benefit of the parties hereto and their respective
heirs, successors and permitted assigns, but neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by the Sellers
without the prior written consent of Buyer.
12.7 Governing Law; Dispute Resolution.
---------------------------------
(a) This Agreement shall be governed by the laws of the state of New
York (regardless of the laws that might otherwise govern under applicable
principles of conflicts
34
of law of the state of New York) as to all matters including, but not
limited to, matters of validity, construction, effect, performance and
remedies.
(b) Other than as provided in Section 9.3, any dispute between
any of the parties hereto or any claim by a party against another party
arising out of or relating to this Agreement or relating to any alleged
breach thereof shall be determined by arbitration in accordance with
the rules then in force of the American Arbitration Association. The
arbitration proceedings shall take place in New York, New York or such
other location as the parties in dispute may agree upon. The
arbitration proceedings shall be subject to the substantive laws of the
state of New York. There shall be one arbitrator, as shall be agreed
upon by the parties in dispute, who shall be an individual skilled in
the legal and business aspects of the subject matter of this Agreement
and of the dispute. In the absence of such an agreement, each party in
dispute shall select one arbitrator and the arbitrators so selected
shall select a third arbitrator. In the event the arbitrators cannot
agree upon the selection of a third arbitrator, such third arbitrator
shall be appointed by the American Arbitration Association at the
request of any of the parties in dispute. The arbitrator shall be an
individual skilled in the legal and the business aspects of the subject
matter of this Agreement and of the dispute. The decision rendered by
the arbitrator shall be accompanied by a written opinion in support
thereof. Such decision shall be final and binding upon the parties in
dispute without right of appeal. Judgment upon any such decision may be
entered into in any court having jurisdiction thereof, or application
may be made to such court for a judicial acceptance of the decision in
an order of enforcement. Costs of the arbitration shall be assessed by
the arbitrator against all or any of the parties in dispute and shall
be paid promptly by the party or parties so assessed.
12.8 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.9 Neutral Interpretation. This Agreement constitutes the product of the
----------------------
negotiation of the parties hereto and the enforcement hereof shall be
interpreted in a neutral manner, and not more strongly for or against any party
based upon the source of the draftsmanship hereof.
12.10 Headings. The article and section 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 Entire Agreement. This Agreement, which term as used throughout
-----------------
includes the Exhibits hereto, embodies the entire agreement and understanding of
the parties hereto in respect of the subject matter contained herein. There are
no restrictions, promises, representations, warranties, covenants or
undertakings other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
35
12.12 Waiver; Alteration.
-------------------------
(a) Waiver. The waiver of a breach hereunder may be affected only by a
------
writing signed by the waiving party and shall not constitute, or be held to
be, a waiver of any other or subsequent breach, or to affect in any way the
effectiveness of such provision. Failure by any party to object to a breach
by any other party shall not constitute or be held to be a waiver of the
party's right to later object to, or to terminate this Agreement, due to
any other breach or subsequent breach.
(b) Alteration. Any modification or amendment to this Agreement shall
----------
be effective only if made in writing and signed by all parties hereto.
(The remainder of this page has been left blank intentionally.)
36
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
of the date first hereinabove set forth.
UNIDIGITAL INC.
By: /s/Xxxxxxx X. Xxx
--------------------------------
Name: Xxxxxxx X. Xxx
Title: Chief Executive Officer
37
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
of the date first hereinabove set forth.
SUPERGRAPHICS HOLDING COMPANY, INC.
By:/s/J. Xxxxxx Xxxxxxx
--------------------------------
Name: J. Xxxxxx Xxxxxxx
Title: Vice President
SUPERGRAPHICS CORPORATION
By:/s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
Title: President
38
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
REGENT CAPITAL EQUITY PARTNERS, L.P.
By: Regent Capital Holdings, L.P., as
General Partner
By: Regent Capital Holdings, Inc., as
General Partner
By: /s/J. Xxxxxx Xxxxxxx
---------------------------------
Name: J. Xxxxxx Xxxxxxx
Title: Managing Director
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
39
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
NANTUCKET SUPERGRAPHICS, L.L.C.
By: /s/Xxxx X. XxXxxx
---------------------------------
Name: Xxxx X. XxXxxx
Title:General Partner
Address:Two Sound View Drive
Greenwich, CT 06830
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
NANTUCKET SUPERGRAPHICS II, L.L.C.
By: /s/ Xxxx X. XxXxxx
---------------------------------
Name: Xxxx X. XxXxxx
Title:General Partner
Address:Two Sound View Drive
Greenwich, CT 06830
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
/s/Xxxxx Xxxxxxx
-------------------------------
XXXXX XXXXXXX
Address:
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
/s/Xxxxx Xxxxxxx
------------------------------
XXXXX XXXXXXX
Address:
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
/s/Xxxxx Xxxxx
------------------------------
XXXXX XXXXX
Address: 0000 Xxxxxxx Xxxxx Xxxxx
Xxx. X000
Xxxxxxxxxx, XX 00000
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
XXXXXX X. XXXXX AND XXXXXXXX X. XXXXXX
AS JOINT TENANTS
/s/Xxxxxx X. Xxxxx
-----------------------------
XXXXXX X. XXXXX
/s/Xxxxxxxx X. Xxxxxx
-----------------------------
XXXXXXXX X. XXXXXX
Address:
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
/s/Xxxx Xxxxxx
-----------------------------
XXXX XXXXXX
Address:
/s/Xxxxxx X. Xxxxxx
------------------------------
XXXXXX X. XXXXXX
Address:
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
/s/Xxxx Xxxxx
------------------------------
XXXX XXXXX
Address: 000 Xxxx 00xx Xxxxxx
Xxx. 00X
Xxx Xxxx, XX 00000
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
/s/Xxxxx Xxxxxxx
-------------------------------
XXXXX XXXXXXX
Address: 00 Xxxxxxxxx Xxxxx 0X
Xxx Xxxx, XX 00000
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
/s/Xxxxxxx X. Xxxxxx
--------------------------------
XXXXXXX X. XXXXXX
Address:
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
LS PARTNERS G.P.
By: /s/Xxxxxxx Xxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxx
Title: General Patner
Address: 000 Xxxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
GS HOLDINGS LLC
By: /s/Xxxx Xxxxx
----------------------------
Name: Xxxx Xxxxx
Title: President
Address: 000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
/s/Xxxxxx Xxxxxxxx, Xx.
---------------------------------
XXXXXX XXXXXXXX, XX.
Address: 00 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
/s/Xxxx Xxxxxx
-------------------------------
XXXX XXXXXX
Address: 000 Xxxxxxx Xx.
Xxxxxxxxx, XX 00000
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
/s/Xxxx Xxxxxx
-------------------------------
XXXX XXXXXX
Address:
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
/s/Xxxxx Xxxxxx
-------------------------------
XXXXX XXXXXX
Address: 00 Xxxx 00xx, #0000
Xxx Xxxx, XX 00000
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
/s/Xxxxxx Xxxxxx
-------------------------------
XXXXXX XXXXXX
Address: 00 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
[AGREEMENT FOR PURCHASE AND SALE OF STOCK SIGNATURE PAGE]
/s/Xxxx Xxxxxxxxx
-------------------------------
XXXX XXXXXXXXX
Address: 000 Xxxx Xxx Xxxxxx
Xxx Xxxx, XX 00000
