SHARE PURCHASE AGREEMENT by and between COMPASS GROUP DIVERSIFIED HOLDINGS LLC, COMPASS DIVERSIFIED TRUST CGI DIVERSIFIED HOLDINGS, LP Dated as of April 3, 2007
Exhibit 10.16
by and between
COMPASS DIVERSIFIED TRUST
CGI DIVERSIFIED HOLDINGS, LP
Dated as of April 3, 2007
SUBSCRIPTION INSTRUCTIONS — PLEASE READ CAREFULLY
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND HAVE NOT BEEN QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. THE PURCHASER OF THESE
SECURITIES, BY MAKING SUCH PURCHASE, AGREES FOR THE BENEFIT OF THE ISSUER THAT THE SECURITIES
OFFERED HEREBY MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A)(1) PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT TO AN INSTITUTIONAL INVESTOR THAT THE PURCHASER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER, WHOM THE SELLER HAS INFORMED, IN
EACH CASE, THAT THE SALE, OFFER FOR SALE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (2)
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT, OR (3)
PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH RULES 903 OR 904 OF REGULATION S
UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES
OF THE UNITED STATES, IN EACH CASE, THE SATISFACTION OF WHICH CONDITIONS IS SUPPORTED BY AN OPINION
OF COUNSEL DELIVERED TO THE ISSUER THAT IS IN FORM, SCOPE AND SUBSTANCE REASONABLY SATISFACTORY TO
THE ISSUER.
COMPASS DIVERSIFIED TRUST
SHARE PURCHASE AGREEMENT (this “Agreement”), dated as of April 3, 2007 by and among Compass
Group Diversified Holdings LLC, a Delaware limited liability company (the “Company”), on its own
behalf and as sponsor of Compass Diversified Trust, a Delaware statutory business trust (“Issuer”),
the Issuer and CGI Diversified Holdings, LP a Bahamian exempted limited partnership (“Buyer”).
WHEREAS:
A. The Company and Issuer wish to sell, and Buyer wishes to purchase, shares of the Issuer
representing an undivided beneficial interest in the Issuer (the “Shares”) upon the terms and
subject to the conditions set forth in this Agreement;
B. The Shares (such Shares, the “Restricted Shares”) will be sold pursuant to an exemption
from registration under the Securities Act of 1933, as amended (the “1933 Act”), and the rules and
regulations promulgated thereunder by the United States Securities and Exchange Commission (the
“SEC”);
C. Simultaneous with the closing of the purchase of Shares by the Buyer, the Company and the
Issuer intend and expect to close a public offering (the “IPO”) of Shares to the public (such
Shares, the “Registered Shares”), as described in the Issuer’s prospectus (the “Prospectus”)
included in Issuer’s Registration Statement on Form S-1 (Securities Act File No. 333-141856) filed
with the Securities and Exchange Commission on April 3, 2007;
D. The Restricted Shares and the Registered Shares will be identical in all respects and
constitute the same class of equity of the Issuer, except as to the status of the Restricted Shares
under the 1933 Act; and
E. The Company and Issuer will, in connection with the issuance of the Restricted Shares and
pursuant to the terms of the Registration Rights Agreement substantially in the form of Exhibit A
attached hereto (the “Registration Rights Agreement”), grant to Buyer certain rights to register
the Restricted Shares for resale by Buyer under the 1933 Act and the rules and regulations
promulgated thereunder by the SEC, and applicable state securities laws.
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NOW THEREFORE, in consideration of the mutual covenants, representations, warranties and
agreements contained herein, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. PURCHASE AND SALE OF SHARES
a. Purchase of Restricted Shares. Subject to Section 1(b) below, at the Closing (defined
below), the Company, as sponsor of the Issuer, will cause the Issuer to issue the Restricted Shares
to the Company in exchange for, and as consideration for, an equal number of trust interests of the
Company, as provided for in the Company’s Second Amended and Restated Operating Agreement, dated as
of January 9, 2007 (the “Operating Agreement”), and the Company shall sell that number of
Restricted Shares to the Buyer equal to the result of (i) the Aggregate Purchase Price (as defined
below) divided by (ii) the Per Share Price (as defined below), and the Buyer shall purchase that
number of Restricted Shares from the Company. The per share purchase price (the “Per Share Price”)
for the Restricted Shares shall be the same as the per Share purchase price of the Registered
Shares to be offered in the IPO of the Issuer, as set forth in the Prospectus. The aggregate
purchase price (the “Aggregate Purchase Price”) for the Restricted Shares shall be Thirty Million
Dollars ($30,000,000); provided, however, that in the event the Per Share Price would otherwise
result in the issuance of a fraction of a Share, the Company shall sell and the Buyer shall
purchase one more Restricted Share and the Aggregate Purchase Price to be paid by Buyer shall be
increased accordingly. The Restricted Shares shall be sold at the Closing as hereinafter provided.
b. Closing. The closing (the “Closing”) of the issuance and sale of the Restricted Shares
shall occur contemporaneously with, and shall be conditioned upon, the closing of the IPO with
respect to the sale and delivery of any firm securities thereat. The date of the occurrence of the
Closing shall be referred to herein as the “Closing Date.” For the avoidance of doubt, if for
whatever reason the IPO is not completed, Issuer will not be obligated to issue the Restricted
Shares, the Company shall not be obligated to sell the Restricted Shares and Buyer shall not be
required to purchase the Restricted Shares and this Agreement may be terminated in accordance with
Section 5(k) below.
c. Form of Payment. At the Closing, the Buyer shall pay the Aggregate Purchase Price by net
settlement process in accordance with the Escrow Agreement entered into by and among the Buyer, the
Company and other parties named therein, to be dated as of the Closing Date.
d. Form of Delivery. At the Closing, the Company shall deliver to the Buyer a Trust Interest
Certificate (as defined in the Operating Agreement), duly executed by the Issuer and authenticated
by the Transfer Agent (as defined in the Operating Agreement) representing that number of
Restricted Shares purchased by the Buyer in accordance with Section 1(a) above and including
appropriate legends for the Restricted Shares.
e. Registration Rights Agreement. At the Closing, the parties hereto shall execute and deliver
the Registration Rights Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE BUYER
Buyer hereby represents and warrants to the Company and Issuer as of the date hereof and as of
the date of the Closing that:
a. Organization and Qualification. Buyer is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation, has the requisite corporate power to
own its properties and to carry on its business as now being conducted.
b. Authorization; Enforceability. (i) Buyer has the requisite corporate power and authority to
enter into and perform its obligations under this Agreement and the Registration Rights Agreement;
(ii) the execution and delivery of this Agreement and the Registration Rights Agreement by Buyer
and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly
authorized and no further consent or corporate authorization is required therefor; (iii) this
Agreement has been, and at Closing the Registration Rights Agreement will be, duly executed and
delivered by Buyer; and (iv) assuming due execution and delivery by the Company and Issuer, this
Agreement constitutes, and the Registration Rights Agreement will constitute, the valid and binding
obligations of Buyer enforceable against it in accordance with their respective terms, except as
such enforceability may be limited by applicable bankruptcy,
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insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally, the enforcement of creditors’ rights and remedies or by other equitable principles of
general application or by the public policy provisions of federal securities laws.
c. Knowledge and Experience. Buyer: (i) has such knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of an investment in the
Issuer and the Company; (ii) is prepared to bear the economic risk of such an investment; and (iii)
has consulted with its own legal, financial, tax and other advisors to the extent it has deemed
appropriate in connection with any investment in the Issuer and the Company, as well as the
purchase of the Restricted Shares and the status thereof.
d. Prospectus. Buyer has received and read the Prospectus relating to the IPO and has
requested and reviewed such other information concerning the Issuer and the Company as it deems
necessary or advisable in the circumstances.
e. Accredited Investor. Buyer is: (i) familiar with or has otherwise been advised by counsel
regarding the rules and regulations of the 1933 Act, that are and would be applicable to it in
connection with the acquisition of the Restricted Shares; (ii) familiar with the term “accredited
investor,” as defined in Rule 501(a) under the 1933 Act; and (iii) an institutional accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7) under the 1933 Act.
f. No Registration. Buyer acknowledges that: (i) the Restricted Shares are not a part of the
IPO; (ii) the Restricted Shares are being offered in a transaction not involving any public
offering within the United States within the meaning of the 1933 Act; (iii) neither the Issuer nor
the Company has filed nor will file a registration statement in connection with, or otherwise
register, the offer and sale of the Restricted Shares under the 1933 Act or the securities laws of
any state except in accordance with the Registration Rights Agreement; and (iv) the solicitation of
bids and any offer or sale of the Restricted Shares are being made in reliance on an exemption from
the registration requirements of the 1933 Act.
g. Investment Purpose; No Distribution. Buyer is seeking to acquire the Restricted Shares for
its own account or an account or accounts with respect to which its exercises sole investment
discretion and each such account, if any, is an institutional accredited investor and each such
account, if any, is aware that the solicitation of bids and any offer or sale of the Restricted
Shares are being made in reliance on an exemption from the registration requirements of the 1933
Act. Buyer is seeking to acquire the Restricted Shares for investment purposes only, and not with a
view to the distribution thereof, in whole or in part.
h. Transfer Restrictions. Buyer acknowledges that any subsequent transfer of the Restricted
Shares may be restricted under the 1933 Act or the securities laws of any state, and that any
securities so acquired will bear legends to such effect.
i. Condition to Closing. Buyer acknowledges and agrees that the Closing is contingent upon the
closing of the IPO, and that if, for whatever reason, the IPO is not completed, Issuer will not be
obligated to issue the Restricted Shares, the Company shall not be obligated to sell the Restricted
Shares and Buyer shall not be required to purchase the Restricted Shares and this Agreement may be
terminated in accordance with Section 5(k) below.
j. Manner of Issuance. Buyer acknowledges and agrees that the issuance of the Restricted
Shares shall be effected in accordance with Section 1 above.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND ISSUER
The Company and Issuer hereby represent and warrant to Buyer as of the date hereof and as of
the Closing that:
a. Organization and Qualification. Each of the Company and Issuer is duly organized, validly
existing and, where applicable, in good standing under the laws of the jurisdiction of its
formation, has the requisite power and authority to own its properties and to carry on its business
as now being conducted and presently proposed to be conducted, as applicable.
b. Authorization; Enforceability. (i) Each of the Company and Issuer has the requisite power
and authority to enter into and perform this Agreement and the Registration Rights Agreement, and
to issue and/or sell the Restricted Shares in accordance with the terms hereof; (ii) the execution
and delivery of this
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Agreement and the Registration Rights Agreement by the Company and Issuer and the consummation
by them of the transactions contemplated hereby and thereby, including the issuance of the
Restricted Shares, have been duly authorized and no further consent or authorization is required
therefor; (iii) this Agreement has been, and at Closing the Registration Rights Agreement will be,
duly executed and delivered by the Company and Issuer; and (iv) assuming due execution and delivery
by Buyer, this Agreement constitutes, and the Registration Rights Agreement will constitute, the
valid and binding obligations of the Company and Issuer enforceable against them in accordance with
their respective terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally, the enforcement of creditors’ rights and remedies or by other equitable principles of
general application or by the public policy provisions of federal securities laws.
c. Issuance of Securities. The Restricted Shares have been duly authorized and, upon issuance
in accordance with the terms hereof and thereof, shall be validly issued and fully paid, and free
from all taxes, liens and charges with respect to the issue thereof.
4. TRANSFER AGENT INSTRUCTIONS
The Company shall cause the Issuer to instruct its transfer agent to issue certificates,
registered in the name of the Buyer or its nominee, for the Restricted Shares in such amounts as
specified from time to time by the Buyer to Issuer. All such certificates shall bear a restrictive
legend of the type referred to in Section 2(h) of this Agreement. Issuer warrants and covenants
that no instruction other than such instructions referred to in this Section 4, and stop transfer
instructions to give effect to Section 2(h) hereof or any applicable provision of the Registration
Rights Agreement, will be given by Issuer to its transfer agent and that the Restricted Shares
shall otherwise be freely transferable on the books and records of the Issuer as and to the extent
provided in this Agreement. Nothing in this Section 4 shall affect in any way Buyer’s obligations
and agreement to comply with all applicable securities laws upon the sale, assignment or other
transfer of the Shares. If Buyer provides Issuer with an opinion of counsel, reasonably
satisfactory in form, scope, substance to Issuer, that registration of the sale, assignment or
other transfer by Buyer of any of the Restricted Shares is not required under the 1933 Act, Issuer
shall permit the transfer, and promptly instruct its transfer agent to issue one or more
certificates in such name and in such denominations as specified by Buyer.
5. GOVERNING LAW; MISCELLANEOUS
a. Governing Law. This Agreement shall be governed by and interpreted in accordance with, the
laws of the State of New York without regard to the principles of conflict of laws to the extent
that such principles would require or permit the application of laws of another jurisdiction.
b. Counterparts. This Agreement may be executed in two or more identical counterparts,
including, without limitation, by facsimile transmission (with copies sent by United States mail to
the other parties), all of which counterparts shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and delivered to the other
party. In the event any signature page is delivered by facsimile transmission, the party using such
means of delivery shall cause four (4) additional original executed signature pages to be
physically delivered to the other party within five (5) days of the execution and delivery hereof.
c. Headings. The headings of this Agreement are for convenience of reference and shall not
form part of, or affect the interpretations of, this Agreement.
d. Severability. If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability
of the remainder of this Agreement.
e. Entire Agreement; Amendments. This Agreement and the Registration Rights Agreement contain
the entire understanding of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, none of the parties hereto makes any
representation, warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived or amended other than by an instrument in writing signed by the party
to be charged with enforcement.
f. Notices. Any notices required or permitted to be given under the terms of this Agreement
shall be sent by mail or delivered personally, by courier or by facsimile (with a copy by U.S.
mail) and shall be effective
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five days after being placed in the mail, if mailed, certified or registered, return receipt
requested, or upon receipt, if delivered personally or by courier or by facsimile (with a copy by
U.S. mail), in each case properly addressed to the party to receive the same. The addresses for
such communications shall be:
If to the Company or Issuer:
Compass Group Diversified Holdings LLC
00 Xxxxxx Xxxx, Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: I. Xxxxxx Xxxxxxx
00 Xxxxxx Xxxx, Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: I. Xxxxxx Xxxxxxx
With a copy to:
Squire, Xxxxxxx & Xxxxxxx LLP
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
If to the Buyer:
CGI Diversified Holdings, LP
Teekay House
Bayside Executive Park
West Bay Street and Xxxxx Xxxx
X.X. Xxx XX00000
Xxxxxx, Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
Teekay House
Bayside Executive Park
West Bay Street and Xxxxx Xxxx
X.X. Xxx XX00000
Xxxxxx, Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxx
Each party hereto shall provide notice to the other party of any change in address.
g. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of
the parties. Neither the Company nor Issuer shall assign this Agreement or any rights or
obligations hereunder without the prior written consent the Buyer. Buyer may not assign its rights
hereunder without the consent of the Company and Issuer.
h. No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other person.
i. Publicity. The parties shall have the right to approve before issuance any press releases
or any other public statements with respect to the transactions contemplated hereby; provided,
however, that Issuer shall be entitled, without the prior approval of Buyer, to make any press
release or other public disclosure with respect to such transactions as is required by applicable
law and regulations (although the Buyer shall be consulted by Issuer in connection with any such
press release or other public disclosure prior to its release and shall be provided with a copy
thereof).
j. Further Assurances. Each party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purpose of this Agreement and the consummation of the
transactions contemplated hereby.
k. Termination. In the event that the IPO is terminated, this Agreement shall automatically be
terminated and be of no further force and effect.
[signature pages follow]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the day
and year first above written.
Title: Chief Executive Officer |
| COMPASS DIVERSIFIED TRUST | ||||
By:
|
COMPASS GROUP DIVERSIFIED HOLDINGS LLC, | |||
| as Sponsor | ||||
By: |
||||
| Title: Chief Financial Officer | ||||
| CGI DIVERSIFIED HOLDINGS, LP | ||||
By:
|
NAVCO MANAGEMENT, INC., | |||
| as General Partner | ||||
By: |
||||
| Title: Director | ||||
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Exhibit A
REGISTRATION RIGHTS AGREEMENT
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