EXHIBIT 10.1
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STOCK PURCHASE AGREEMENT
BY AND AMONG
BRAZOS SPORTSWEAR, INC.
AND
THE STOCKHOLDERS
OF
SOLARCO, INC.
------------------------------------
MAY 8, 1997
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TABLE OF CONTENTS
PAGE NO.
ARTICLE I
PURCHASE AND SALE OF STOCK .......................................... 1
1.1. PURCHASE AND SALE OF STOCK .................................... 1
1.2. ADDITIONAL CONSIDERATION ...................................... 2
1.2.1. DELAYED CLOSING AMOUNT ................................ 2
1.2.2. TAX BENEFIT AMOUNT .................................... 2
1.3. ESCROW AGREEMENT .............................................. 2
1.4. CLOSING ....................................................... 3
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS .................. 3
2.1. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS ............ 3
2.1.1. ORGANIZATION AND STANDING ............................. 3
2.1.2. AUTHORITY; NONCONTRAVENTION; STATUTORY APPROVALS;
COMPLIANCE ............................................ 4
2.1.2.1. AUTHORITY ..................................... 4
2.1.2.2. NONCONTRAVENTION .............................. 4
2.1.2.3. STATUTORY APPROVALS ........................... 5
2.1.2.4. COMPLIANCE .................................... 5
2.1.3. CAPITALIZATION AND TITLE TO SHARES .................... 6
2.1.4. FINANCIAL STATEMENTS .................................. 6
2.1.5. ADDITIONAL SOLARCO INFORMATION ........................ 6
2.1.5.1. REAL ESTATE ................................... 6
2.1.5.2. MACHINERY AND EQUIPMENT ....................... 6
2.1.5.3. INVENTORY ..................................... 7
2.1.5.4. RECEIVABLES ................................... 7
2.1.5.5. PAYABLES ...................................... 7
2.1.5.6. INSURANCE ..................................... 7
2.1.5.7. MATERIAL CONTRACTS ............................ 7
2.1.5.8. EMPLOYEE COMPENSATION PLANS ................... 7
2.1.5.9. CERTAIN SALARIES .............................. 7
2.1.5.10. EMPLOYEE AGREEMENTS .......................... 8
2.1.5.11. PATENTS ...................................... 8
2.1.5.12. TRADE NAMES .................................. 8
2.1.5.13. PROMISSORY NOTES ............................. 8
(i)
2.1.5.14. GUARANTIES ................................... 8
2.1.6. NO UNDISCLOSED DEFAULTS ............................... 8
2.1.7. ABSENCE OF CERTAIN CHANGES OR EVENTS .................. 9
2.1.8. TAXES ................................................. 9
2.1.9. INTELLECTUAL PROPERTY ................................. 9
2.1.10. TITLE TO PROPERTIES .................................. 10
2.1.11. LITIGATION ........................................... 10
2.1.12. ENVIRONMENTAL COMPLIANCE ............................. 10
2.1.12.1. ENVIRONMENTAL CONDITIONS ..................... 10
2.1.12.2. PERMITS, ETC ................................. 10
2.1.12.3. COMPLIANCE ................................... 11
2.1.12.4. PAST COMPLIANCE .............................. 11
2.1.12.5. ENVIRONMENTAL CLAIMS ......................... 11
2.1.12.6. RENEWALS ..................................... 11
2.1.13. FINDER'S FEE ......................................... 11
2.1.14. EMPLOYMENT MATTERS ................................... 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BRAZOS ............................ 13
3.1. REPRESENTATIONS AND WARRANTIES OF BRAZOS ...................... 13
3.1.1. ORGANIZATION AND STANDING ............................. 13
3.1.2. AUTHORITY; NONCONTRAVENTION; STATUTORY APPROVALS;
COMPLIANCE ............................................ 13
3.1.2.1. AUTHORITY ..................................... 13
3.1.2.2. NONCONTRAVENTION .............................. 14
3.1.2.3. STATUTORY APPROVALS ........................... 14
3.1.2.4. COMPLIANCE .................................... 14
3.1.3. FINDER'S FEE .......................................... 15
ARTICLE IV
OBLIGATIONS PENDING CLOSING DATE .................................... 15
4.1. AGREEMENTS .................................................... 15
4.1.1. MAINTENANCE OF PRESENT BUSINESS ....................... 15
4.1.2. INSPECTION ............................................ 15
4.2. ADDITIONAL AGREEMENTS OF THE SHAREHOLDERS ..................... 16
4.2.1. PROHIBITION OF CERTAIN EMPLOYMENT CONTRACTS ........... 16
4.2.2. PROHIBITION OF CERTAIN LOANS .......................... 16
4.2.3. PROHIBITION OF CERTAIN COMMITMENTS .................... 16
4.2.4. DISPOSAL OF ASSETS .................................... 16
4.2.5. MAINTENANCE OF INSURANCE .............................. 17
(ii)
4.2.6. NO AMENDMENT TO ARTICLES OF INCORPORATION, ETC ........ 17
4.2.7. NO ISSUANCE, SALE, OR PURCHASE OF SECURITIES .......... 17
4.2.8. PROHIBITION ON DIVIDENDS .............................. 17
4.3. ADDITIONAL AGREEMENTS OF THE SHAREHOLDERS AND BRAZOS .......... 17
4.3.1. XXXX-XXXXX-XXXXXX ..................................... 17
4.3.2. NOTICE OF MATERIAL DEVELOPMENTS ....................... 17
4.4. DISCLOSURE STATEMENT .......................................... 17
4.5. COMMERCIALLY REASONABLE EFFORTS ............................... 18
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS ................................. 18
5.1. CONDITIONS PRECEDENT TO OBLIGATIONS OF BRAZOS ................. 18
5.1.1. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS;
PERFORMANCE OF OBLIGATIONS ............................ 18
5.1.2. NO INJUNCTION ......................................... 18
5.1.3. OPINION OF COUNSEL .................................... 18
5.1.4. XXXX-XXXXX-XXXXXX, ETC ................................ 19
5.1.5. CONSENT OF CERTAIN PARTIES IN PRIVITY WITH SOLARCO .... 19
5.1.6. TENDER OF STOCK ....................................... 19
5.1.7. RESIGNATIONS .......................................... 19
5.1.8. FINANCING ............................................. 19
5.1.10. ADOPTION AGREEMENT ................................... 19
5.1.11. ESCROW AGREEMENT ..................................... 20
5.1.12. EMPLOYEE COMPENSATION MATTERS ........................ 20
5.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SHAREHOLDERS ....... 20
5.2.1. REPRESENTATIONS AND WARRANTIES OF BRAZOS;
PERFORMANCE OF OBLIGATIONS ............................ 20
5.2.2. NO INJUNCTION ......................................... 20
5.2.3. OPINION OF BRAZOS' COUNSEL ............................ 20
5.2.4. XXXX-XXXXX-XXXXXX, ETC ................................ 21
5.2.5. SATISFACTION OR ASSUMPTION OF INDEBTEDNESS AND
OTHER OBLIGATIONS ..................................... 21
5.2.6. ESCROW AGREEMENT....................................... 21
5.2.7. PAYMENT OF CONSIDERATION............................... 21
ARTICLE VI
TERMINATION AND ABANDONMENT.......................................... 21
6.1. TERMINATION.................................................... 21
6.1.1. BY MUTUAL CONSENT...................................... 21
6.1.2. BY THE SHAREHOLDERS OR BRAZOS.......................... 21
6.2 WAIVER......................................................... 22
6.3 EXPENSE ON TERMINATION......................................... 22
(iii)
6.4. AGREEMENT WITH RESPECT TO INITIAL PAYMENT...................... 22
ARTICLE VII
INDEMNIFICATION ..................................................... 22
7.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES .................... 22
7.2. INDEMNIFICATION OF BRAZOS ..................................... 23
7.3. INDEMNIFICATION OF SHAREHOLDERS ............................... 23
7.4. INDEMNIFICATION PROCEDURE ..................................... 23
7.5. ADDITIONAL PROVISIONS REGARDING INDEMNIFICATION ............... 24
ARTICLE VIII
MISCELLANEOUS ....................................................... 24
8.1. ENTIRETY ...................................................... 24
8.2. COUNTERPARTS .................................................. 24
8.3. NOTICES AND WAIVERS ........................................... 25
8.4. TABLE OF CONTENTS AND CAPTIONS ................................ 25
8.5. SUCCESSORS AND ASSIGNS ........................................ 25
8.6. SEVERABILITY .................................................. 25
8.7. APPLICABLE LAW ................................................ 26
8.8. PUBLIC ANNOUNCEMENTS .......................................... 26
(iv)
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT ("Agreement"), dated as of May 8, 1997, by and
among Brazos Sportswear, Inc., a Delaware corporation ("Brazos"), and the
shareholders (the "Shareholders") of Solarco, Inc. a Washington corporation
("Solarco"). On the date hereof, the following shareholders have executed and
delivered this Agreement: Xxxxxx X. Xxxxx ("Xxxxx"), TCR International Partners,
L.P., a Delaware limited partnership, Terbem Limited, a British Virgin Island
corporation, Tinvest Limited, a British Virgin Island corporation, Bobst
Investment Corp., a British Virgin Island corporation, and Mitvest Limited, a
British Virgin Island corporation; on the date hereof, such Shareholders hold
72.8% of the fully diluted capital stock of Solarco. Prior to the Closing Date
(as hereinafter defined), those Shareholders listed on SCHEDULE A hereto who are
not signatories to this Agreement shall execute an adoption agreement (the
"Adoption Agreement") wherein such Shareholders adopt this Agreement as if they
were parties hereto on the date hereof.
WHEREAS, Brazos desires to purchase from the Shareholders all of the
issued and outstanding capital stock of Solarco, and the Shareholders desire to
sell such capital stock to Brazos.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties and covenants herein contained, the parties hereto
agree as follows:
ARTICLE I
PURCHASE AND SALE OF STOCK
1.1. PURCHASE AND SALE OF STOCK. (i) Subject to the terms and conditions
of this Agreement, at the Closing, the Shareholders agree to sell and convey to
Brazos, and Brazos agrees to purchase and accept from the Shareholders, all of
the Class A Voting Common Stock of Solarco, par value $.25 per share ("Class A
Shares"), and Class B Non-Voting Common Stock of Solarco, par value $.25 per
share ("Class B Shares") (the Class A Shares and Class B Shares are collectively
referred to as the "Solarco Capital Stock"). In consideration of the sale of the
Solarco Capital Stock, Brazos shall pay to the Shareholders an aggregate of (a)
$30,000,000 (which amount shall be reduced by the amount of the excess (the
"Excess Amount") of the payments described in Section 5.2.5 of the Solarco
Disclosure Statement over $2,500,000), of which (i) $29,250,000 (less the Excess
Amount) shall be paid in immediately available funds at Closing (except for any
amount escrowed under Section 1.3 hereof) and (ii) $750,000 shall be paid by the
issuance to Xxxxx (in partial payment of the consideration for the Solarco
Capital Stock held by Xxxxx) of 73,171 shares of Brazos common stock, par value
$.001 per share, (b) the Additional Consideration (as hereinafter defined) and
(c) the payment described in Section 1.1(ii) below (the consideration payable as
described in items (a), (b) and (c) above is collectively referred to as the
"Consideration"). Except as otherwise provided herein, the Consideration shall
be paid at the Closing to the Shareholders in the percentages set forth in
SCHEDULE A hereto. Not less than two days prior to Closing, the Shareholders
shall provide wire transfer or other delivery instructions to Brazos.
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(ii) On the date hereof, Brazos shall pay to Solarco, for the benefit of
the Shareholders, the amount of $350,000 in immediately available funds (the
"Initial Payment").
1.2. ADDITIONAL CONSIDERATION. The Shareholders shall be entitled to
receive additional consideration for the sale of the Solarco Capital Stock (the
"Additional Consideration") as set forth in Sections 1.2.1 and 1.2.2 below:
1.2.1. DELAYED CLOSING AMOUNT. If the Closing has not occurred on or
before May 31, 1997, a "Delayed Closing Amount" shall be payable on the
Closing Date to the Shareholders based on the percentages set forth in
SCHEDULE A. The Delayed Closing Amount is equal to the "Prime Rate" times
the amount of the Consideration payable under Section 1.1(i)(a) for the
time period from June 1, 1997 through the Closing Date; such amount to be
calculated on a per annum basis. The Prime Rate shall be the rate reported
by THE WALL STREET JOURNAL.
1.2.2. TAX BENEFIT AMOUNT. A "Tax Benefit Amount" shall be deposited
and distributed pursuant to the Escrow Agreement described in Section 1.3.
The Tax Benefit Amount shall be equal to the excess, if any, of (A) the
federal and state income and payroll tax liability of the Solarco
Consolidated Group (as hereafter defined) for tax periods ending on or
before the Closing Date (the "Tax Cost") assuming none of the options to
purchase Solarco Capital Stock set forth in Section 2.1.3(a) of the
Solarco Disclosure Statement were exercised over (B) the actual Tax Cost
of the Solarco Consolidated Group. For purposes of this Section 1.2.2, the
term "Solarco Consolidated Group" shall include Solarco and any Solarco
Subsidiary which is a member of the same "affiliated group" as defined in
Section 1504 of the Internal Revenue Code of 1986, as amended, and
together with Solarco has elected to file a consolidated federal income
tax return. If the Tax Benefit Amount is greater than $2,000,000, such
excess amount shall be paid to the Shareholders in cash in the percentages
set forth in SCHEDULE A at the time the Tax Benefit Amount is paid to the
Escrow Agent.
The Tax Benefit Amount shall be computed at or before the Closing Date.
Brazos will make all required filings with the Internal Revenue Service
and take all other reasonably practicable steps to obtain a tax refund
after the Closing with respect to the Tax Benefit Amount, and upon receipt
of such amount, it shall cause an equal amount (up to $2,000,000) to be
deposited with the Escrow Agent.
1.3. ESCROW AGREEMENT. On the Closing Date, the Consideration which is
payable in cash (the "Cash Consideration") shall be reduced by the amount, if
any, deposited in escrow as set forth in this Section 1.3. Brazos and the
Shareholders shall establish an escrow account with an escrow agent mutually
acceptable to the parties hereto (the "Escrow Agent") pursuant to a mutually
acceptable Escrow Agreement (the "Escrow Agreement") for the purpose of
satisfying claims, if any, of Brazos under Article VII. Subject to adjustment
under this Section 1.3, the escrow account shall be funded with $2,000,000,
which shall consist of (i) the Tax Benefit Amount computed in
2
Section 1.2 and (ii) if necessary, the amount of the Cash Consideration required
to bring the aggregate amount of the Escrow Funds to $2,000,000 (collectively,
the "Escrow Funds"). Among other mutually agreed upon terms, the Escrow
Agreement shall provide that (i) the Escrow Funds shall be disbursed in the
percentages set forth in SCHEDULE A upon the expiration of one year from the
Closing Date unless Brazos shall have exercised its rights under Article VII and
pursuant to the Escrow Agreement with respect to any claims under such article,
(ii) the Escrow Agent shall invest the Escrow Funds in a money market fund or
similar investment specified by the Shareholders and the investment income
earned on the Escrow Funds shall be disbursed to the Shareholders and to Brazos
in the percentages that the Escrow Funds are distributed under the terms of this
Agreement and the Escrow Agreement, and (iii) if upon the expiration of such one
year period the parties have not mutually agreed on the disbursement of the
Escrow Funds because of a claim by Brazos under Article VII, the Escrow Agent
shall interplead the portion of such funds in dispute into a court of competent
jurisdiction, pending final disposition of Brazos' claims. The Escrow Agreement
will provide that Three Cities Research, Inc. will be appointed attorney-in-fact
for the Shareholders for the purpose of the operation of the Escrow Agreement.
1.4. CLOSING. The closing (the "Closing") of the transactions contemplated
by this Agreement shall take place at the offices of Xxxxxx & Xxxxxx, L.L.P.,
000 Xxxxxxxxx, Xxxxxxx, Xxxxx 00000 at 10:00 a.m., local time, on or before July
15, 1997, or at such other time and date and place as Brazos and the
Shareholders shall mutually agree (the "Closing Date").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE SHAREHOLDERS
2.1. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. Each of the
Shareholders represents and warrants to Brazos as follows:
2.1.1.ORGANIZATION AND STANDING. (a) Solarco is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Washington, has full requisite corporate power and authority to
carry on its business as it is currently conducted, and to own and operate
the properties currently owned and operated by it, and is duly qualified
or licensed to do business and is in good standing as a foreign
corporation authorized to do business in all jurisdictions in which the
character of the properties owned or the nature of the business conducted
by it would make such qualification or licensing necessary, except where
the failure to be so qualified or licensed would have a material adverse
effect on Solarco and the Solarco Subsidiaries taken as a whole. As used
in this Agreement, (i) the term "subsidiary" of a person shall mean any
corporation or other entity (including partnerships and other business
associations) in which such person directly or indirectly owns at least a
majority of any class of the outstanding voting securities or equity and
(ii) the term "Solarco Subsidiaries" means all direct or indirect
subsidiaries of Solarco,
3
including Morning Sun, Inc., a Washington corporation. True, accurate and
complete copies of the charter documents and bylaws of Solarco and the
Solarco Subsidiaries, in effect on the date hereof, have been delivered to
Brazos.
(b) All outstanding shares of stock of the Solarco Subsidiaries are
validly issued, fully paid, and nonassessable and owned by Solarco, and
Solarco has good and indefeasible title thereto free and clear of any
Encumbrance (as hereinafter defined). Each such subsidiary is a
corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction under which it is incorporated and has full
requisite corporate power and authority to own its property and carry on
its business as presently conducted by it and is duly qualified or
licensed to do business and is in good standing as a foreign corporation
authorized to do business in all jurisdictions in which the character of
the properties owned or the nature of the business conducted makes such
qualification or licensing necessary, except where the failure to be so
qualified or licensed would have a material adverse effect on Solarco and
the Solarco Subsidiaries taken as a whole.
2.1.2.AUTHORITY; NONCONTRAVENTION; STATUTORY APPROVALS; COMPLIANCE.
2.1.2.1. AUTHORITY. Each Shareholder severally represents and
warrants that it has all requisite power and authority and/or
capacity to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by the Shareholders and, assuming the
due authorization, execution and delivery hereof by Brazos,
constitutes the valid and binding obligation of the Shareholders
enforceable against the Shareholders in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, debtor relief or similar laws affecting the rights
of creditors' generally.
2.1.2.2. NONCONTRAVENTION. Except as set forth in Section
2.1.2.2 of the Solarco Disclosure Statement, the execution and
delivery of this Agreement by the Shareholders does not, and the
consummation of the transactions contemplated hereby will not,
violate, conflict with, or result in a breach of any provision of,
or constitute a default (with or without notice or lapse of time or
both) under, or result in the termination or modification of, or
accelerate the performance required by, or result in a right of
termination, modification, cancellation or acceleration of any
obligation or the loss of a material benefit under, or result in the
creation of any lien, security interest, charge or encumbrance
(herein, an "Encumbrance") upon any of the properties or assets of
Solarco or any of the Solarco Subsidiaries (any such violation,
conflict, breach, default, right of termination, modification,
cancellation or acceleration, loss or creation, a "Violation" with
respect to Solarco or any of the Solarco Subsidiaries) pursuant to
any provisions of (i) the articles of incorporation, bylaws or
similar governing documents of Solarco or any of the Solarco
Subsidiaries, (ii) any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction,
4
writ, permit or license of any Governmental Authority (as defined in
Section 2.1.2.3) applicable to Solarco or any of the Solarco
Subsidiaries or any of their respective properties or assets or
(iii) subject to obtaining the third-party consents or other
approvals set forth in Section 2.1.2.2 of the Solarco Disclosure
Statement (the "Solarco Required Consents"), any note, bond,
mortgage, indenture, deed of trust, license, franchise, permit,
concession, contract, lease or other instrument, obligation or
agreement of any kind to which Solarco or any Solarco Subsidiaries
is now a party or by which it or any of its properties or assets may
be bound or affected.
2.1.2.3. STATUTORY APPROVALS. Except as required pursuant to
the Xxxx-Xxxxx- Xxxxxx Antitrust Improvement Act of 1976 and the
rules and regulations promulgated thereunder, no declaration, filing
or registration with, or notice to or authorization, consent or
approval of, any court, federal, state, local or foreign
governmental or regulatory body or authority (each, a "Governmental
Authority") is necessary for the execution and delivery of this
Agreement by the Shareholders or the consummation of the
transactions contemplated hereby, except as described in Section
2.1.2.3 of the Solarco Disclosure Statement (the "Solarco Required
Statutory Approvals," it being understood that references in this
Agreement to "obtaining" such Solarco Required Statutory Approvals
shall mean making such declarations, filings or registrations;
giving such notices; obtaining such authorizations, consents or
approvals; and having such waiting periods expire as are necessary
to avoid a violation of law).
2.1.2.4. COMPLIANCE. Except as set forth in Section 2.1.2.4 of
the Solarco Disclosure Statement, neither Solarco nor any Solarco
Subsidiary is in material violation of or is under investigation or
review, nor to any Shareholder's knowledge, is any investigation or
review threatened, with respect to any material violation of, or has
been given notice or been charged with any material violation of,
any law, statute, order, rule, regulation, ordinance or judgment
(including, without limitation, any applicable environmental law,
ordinance or regulation) of any Governmental Authority. Except as
set forth in Section 2.1.2.4 of the Solarco Disclosure Statement,
Solarco and the Solarco Subsidiaries have all permits, licenses,
franchises and other governmental authorizations, consents and
approvals necessary to conduct their business as currently conducted
in all material respects. Except as set forth in Section 2.1.2.4 of
the Solarco Disclosure Statement, neither Solarco nor any Solarco
Subsidiary is in material breach or violation of or in material
default in the performance or observance of any term or provision
of, and no event has occurred which, with lapse of time or action by
a third party, could result in a material default under, (i) its
articles of incorporation or bylaws or similar governing documents
or (ii) any contract, commitment, agreement, indenture, mortgage,
loan agreement, note, lease, bond, license, approval or other
instrument to which it is a party or by which it is bound or to
which any of its property is subject.
5
2.1.3.CAPITALIZATION AND TITLE TO SHARES. (a) The authorized
capitalization of Solarco consists of 7,625,800 shares of Class A Voting
Common Stock, $.25 par value per share, of which at the date hereof,
2,700,912 shares were issued and outstanding, and 2,675,800 shares of
Class B Non-Voting Common Stock, at which at the date hereof 1,592,088
shares were issued and outstanding. Except as set forth in Section 2.1.3
of the Solarco Disclosure Statement, there exist no (a) outstanding
options, subscriptions, warrants, calls, or similar commitments to
purchase, issue or sell or to convert any securities or obligations into
any of the authorized or issued capital stock of Solarco or any securities
or obligations convertible into or exchangeable for such capital stock or
(b) registration rights, stockholder agreements or voting agreements with
respect to the outstanding shares of capital stock of Solarco.
(b) Each Shareholder severally represents and warrants that it holds
good and valid title to all of the Class A Shares and Class B Shares owned
by such Shareholder, free and clear of all Encumbrances; the number of
such shares held by each Shareholder is as set forth in Section 2.1.3(b)
of the Solarco Disclosure Statement.
0.0.0.XXXXXXXXX STATEMENTS. Section 2.1.4 of the Solarco Disclosure
Schedule contains a true and correct copy of the balance sheets and
related statements of income, stockholders' equity and cash flows for
Solarco which have been audited by Xxxx Xxxxx, LLP as of and for each of
the periods ended December 31, 1995 and December 29, 1996 (the "Annual
Statements"), and the unaudited balance sheet and related statement of
income as of and for the three-month period ended March 31, 1997 (the
"1997 Statement," and together with the Annual Statements collectively
referred to as the "Financial Statements"). The Financial Statements
fairly present the financial position and results of operation of Solarco
and the Solarco Subsidiaries as of and for the periods indicated. The
Annual Statements have been prepared in accordance with GAAP applied on a
basis consistent with prior periods. The 1997 Statement has been prepared
on a basis consistent with prior periods. Since December 29, 1996, Solarco
has not changed any significant accounting method or practice.
2.1.5.ADDITIONAL SOLARCO INFORMATION. Section 2.1.5 of the Solarco
Disclosure Statement contains true, complete and correct lists of the
following items, and the Shareholders have furnished to Brazos true,
complete and correct copies of all documents referred to in such lists:
2.1.5.1. REAL ESTATE. All real property and structures thereon
owned, leased or subject to a contract of purchase and sale, or
lease commitment, by Solarco or any Solarco Subsidiary, with a
description of the nature and amount of any Encumbrances thereto;
2.1.5.2. MACHINERY AND EQUIPMENT. All machinery,
transportation equipment, tools, equipment, furnishings, and
fixtures (excluding such items as did
6
not have a cost basis of $5,000 or more at their respective dates of
acquisition by Solarco or any Solarco Subsidiary) owned, leased or
subject to a contract of purchase and sale, or lease commitment, by
Solarco or any Solarco Subsidiary with a description of the nature
and amount of any Encumbrances thereon;
2.1.5.3. INVENTORY. All inventory items or groups of inventory
items owned by Solarco or any Solarco Subsidiary, together with the
amount of any Encumbrances thereon;
2.1.5.4. RECEIVABLES. All accounts and notes receivable of
Solarco or any Solarco Subsidiary, together with (i) aging schedules
by invoice date and due date, (ii) the amounts provided for as an
allowance for bad debts, (iii) the identity and location of any
asset in which Solarco or any Solarco Subsidiary holds a security
interest to secure payment of the underlying indebtedness, and (iv)
a description of the nature and amount of any Encumbrances on such
accounts and notes receivable;
2.1.5.5. PAYABLES. All accounts and notes payable of Solarco
or any Solarco Subsidiary, together with an appropriate aging
schedule;
2.1.5.6. INSURANCE. All insurance policies or bonds currently
maintained by Solarco or any Solarco Subsidiary, including title
insurance policies, with respect to Solarco or any Solarco
Subsidiary, including those covering their respective properties,
buildings, machinery, equipment, fixtures, employees and operations,
as well as a listing of any premiums, audit adjustments or
retroactive adjustments due or pending on such policies or any
predecessor policies;
2.1.5.7. MATERIAL CONTRACTS. All material contracts and
license agreements, which shall include, but shall not be limited
to, all agreements or commitments to purchase raw materials or
inventory and all agreements which are to be performed in whole or
in part after the Closing Date, and which involve or may involve
aggregate payments by or to Solarco or any Solarco Subsidiary of
$50,000 or more after such date; such list shall also include any
obligations of Solarco or any Solarco Subsidiary to make any
payments or provide any consideration to any person as a result of
the consummation of this Agreement;
2.1.5.8. EMPLOYEE COMPENSATION PLANS. All bonus, incentive
compensation, deferred compensation, profit-sharing, retirement,
pension, welfare, group insurance, death benefit, or other fringe
benefit plans, arrangements or trustee agreements of Solarco or any
Solarco Subsidiary, with respect to such plans;
2.1.5.9. CERTAIN SALARIES. The names and salary rates of all
present officers and employees of Solarco or any Solarco Subsidiary
whose current regular annual salary rate is $50,000 or more,
together with any bonuses paid or payable to such
7
persons for the fiscal year ended December 29, 1996, and, to the
extent existing on the date of this Agreement, all arrangements with
respect to any bonuses to be paid to them from and after the date of
this Agreement;
2.1.5.10. EMPLOYEE AGREEMENTS. Any collective bargaining
agreements of Solarco or any Solarco Subsidiary with any labor union
or other representative of employees, including amendments and
supplements, and all employment and consulting agreements of Solarco
or any Solarco Subsidiary;
2.1.5.11. PATENTS. All patents, trademarks, copyrights and
other material intellectual property rights owned, licensed, or used
by Solarco or any Solarco Subsidiary;
2.1.5.12. TRADE NAMES. All trade names and fictitious names
used or held by Solarco or any Solarco Subsidiary, whether and where
such names are registered and where used;
2.1.5.13. PROMISSORY NOTES. All long-term and short-term
promissory notes, installment contracts, loan agreements, credit
agreements, and any other agreements of Solarco or any Solarco
Subsidiary relating thereto or with respect to collateral securing
the same; and
2.1.5.14. GUARANTIES. All indebtedness, liabilities and
commitments of others and as to which Solarco or any Solarco
Subsidiary is a guarantor, endorser, co-maker, surety, or
accommodation maker, or is contingently liable therefor (excluding
liabilities as an endorser of checks and the like in the ordinary
course of business) and all letters of credit, whether stand-by or
documentary, issued by any third party.
Section 2.1.5 of the Solarco Disclosure Statement shall be true,
complete and correct as of the Closing Date, except for items contained in
Paragraphs 2.1.5.3; 2.1.5.4; and 2.1.5.5, which are true, complete and
correct as of March 31, 1997 or such other date as therein indicated.
Prior to the Closing Date, the Shareholders shall update the information
contained in Paragraph 2.1.5.7 by providing such updated information in
writing to Brazos.
0.0.0.XX UNDISCLOSED DEFAULTS. Except as may be specified in the
Financial Statements or in Section 2.1.6 of the Solarco Disclosure
Statement, neither Solarco nor any Solarco Subsidiary is a party to, or
bound by, any material contract or arrangement of any kind to be performed
after the Closing Date, nor is Solarco or any Solarco Subsidiary in
default in any material obligation or covenant on its part to be performed
under any material obligation, lease, contract, order, plan or other
arrangement.
8
2.1.7.ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Solarco Disclosure Statement, from March 31, 1997, through the date
hereof, (a) Solarco and the Solarco Subsidiaries have conducted their
business, in all material respects, only in the ordinary course of
business consistent with past practice and (b) there has not been, and no
fact or condition exists which, to the knowledge of the Shareholders
(which term, shall for purposes of this Agreement, mean the knowledge of
the Shareholders listed in Section 2.1.7 of the Solarco Disclosure
Statement), would have or, is reasonably likely to have, a material
adverse effect on the business, operations, assets, liabilities or results
of operations of Solarco and the Solarco Subsidiaries taken as a whole.
2.1.8. TAXES. Except as set forth in Section 2.1.8 of the Solarco
Disclosure Statement, proper and accurate federal, state and local income,
value added, sales, use, franchise, gross revenue, turnover, excise,
payroll, property, employment, customs duties and any and all other tax
returns, reports, and estimates have been filed with appropriate
governmental agencies, domestic and foreign, by Solarco and the Solarco
Subsidiaries for each period for which any returns, reports, or estimates
were due (taking into account any extensions of time to file before the
date hereof); all taxes shown by such returns to be payable and any other
taxes due and payable have been paid other than those being contested in
good faith by Solarco or any Solarco Subsidiary; and the tax provision
reflected in Annual Statements is adequate, in accordance with generally
accepted accounting principles, to cover liabilities of Solarco or any
Solarco Subsidiary at the date thereof for all taxes, including any
interest, penalties and additions to taxes of any character whatsoever
applicable to Solarco or any Solarco Subsidiary or their respective assets
or business. Except as set forth on Section 2.1.8 of the Solarco
Disclosure Statement, no waiver of any statute of limitations executed by
Solarco or any Solarco Subsidiary with respect to federal or state income
or other tax is in effect for any period. The federal income tax returns
of Solarco or any Solarco Subsidiary have never been examined by the
Internal Revenue Service. There are no tax liens on any assets of Solarco
or any Solarco Subsidiary except for taxes not yet currently due.
2.1.9. INTELLECTUAL PROPERTY. Except as set forth in Section 2.1.9
of the Solarco Disclosure Statement, Solarco and the Solarco Subsidiaries
own or possess licenses to use all patents, patent applications,
trademarks and service marks (including registrations and applications
therefor), trade names, copyrights and written know-how, trade secrets and
all other similar proprietary data and the goodwill associated therewith
(collectively, the "Intellectual Property") that is either material to the
business of Solarco and the Solarco Subsidiaries or that is necessary for
the manufacture, use or sale of any products manufactured, used or sold by
Solarco and the Solarco Subsidiaries. The Intellectual Property is owned
or licensed by Solarco or the Solarco Subsidiaries free and clear of any
Encumbrance other than such Encumbrances as are listed in Section 2.1.9 of
the Solarco Disclosure Statement. Except as otherwise indicated in such
section, neither Solarco nor any Solarco Subsidiary has granted to any
other person any license to use any Intellectual Property. Except as
described in Section 2.1.9 of the Solarco Disclosure Statement, none of
9
the Intellectual Property violates, conflicts with or infringes the rights
of any third parties. Neither Solarco nor any Solarco Subsidiary has
received any notice of infringement, misappropriation, or conflict with,
the intellectual property rights of others in connection with the use by
Solarco or the Solarco Subsidiaries of their Intellectual Property.
2.1.10. TITLE TO PROPERTIES. With exceptions which in the aggregate
are not material, and except for merchandise and other property sold, used
or otherwise disposed of in the ordinary course of business, Solarco and
the Solarco Subsidiaries have good and indefeasible title to all their
properties, interests in properties and assets, real and personal,
reflected in the Financial Statements, free and clear of any Encumbrance
of any nature whatsoever, except (i) liens and Encumbrances reflected in
the December 31, 1996 balance sheet of Solarco included in the Financial
Statements, (ii) liens for current taxes not yet due and payable, and
(iii) such imperfections of title, easements and Encumbrances, if any, as
are not substantial in character, amount, or extent and do not and will
not materially detract from the value, or interfere with the present use,
of the property subject thereto or affected thereby, or otherwise
materially impair business operations. All leases pursuant to which
Solarco or any Solarco Subsidiary leases (whether as lessee or lessor) any
real or personal property for rental or lease payments in excess of
$100,000 on an annualized basis are in good standing, valid, and
effective; and there is not, under any such leases, any existing or
prospective default or event of default or event which with notice or
lapse of time, or both, would constitute a default by Solarco or any
Solarco Subsidiary and in respect to which Solarco or any Solarco
Subsidiary has not taken adequate steps to prevent a default from
occurring.
2.1.11. LITIGATION. Except as set forth in Section 2.1.11 of the
Solarco Disclosure Statement, (a) there are no material claims, suits,
actions or proceedings, pending or, to the knowledge of the Shareholders,
threatened, nor are there, to the knowledge of the Shareholders, any
material investigations or reviews pending or threatened against, relating
to or affecting Solarco or any Solarco Subsidiary, and (b) there are no
judgments, decrees, injunctions, rules or orders of any court,
governmental department, commission, agency, instrumentality or authority
or any arbitrator applicable to Solarco or any Solarco Subsidiary.
2.1.12. ENVIRONMENTAL COMPLIANCE. Except as set forth in Section
2.1.12 of the Solarco Disclosure Statement:
2.1.12.1. ENVIRONMENTAL CONDITIONS. There are no materially
adverse environmental conditions or circumstances such as the
presence or release of any hazardous substance on any property
presently or previously owned by Solarco or any Solarco Subsidiary.
2.1.12.2. PERMITS, ETC. Solarco and the Solarco Subsidiaries
have in full force and effect all environmental permits, licenses,
approvals and other authorizations required to conduct their
respective operations and are operating in material compliance
thereunder.
10
2.1.12.3. COMPLIANCE. Solarco's and the Solarco Subsidiaries'
operations and use of their assets do not violate in any material
respect any applicable federal, state or local law, statute,
ordinance, rule, regulation, order or notice requirement pertaining
to (a) the condition or protection of air, groundwater, surface
water, soil, or other environmental media, (b) the environment,
including natural resources or any activity which affects the
environment, or (c) the regulation of any pollutants, contaminants,
waste, substances (whether or not hazardous or toxic), including,
without limitation, the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. ss. 9601 ET SEQ.), the
Hazardous Materials Transportation Act (42 U.S.C. ss. 1801 ET SEQ.),
the Resource Conservation and Recovery Act (42 U.S.C. ss. 1609 ET
SEQ.), the Clean Water Act (33 U.S.C. 1251 ET SEQ. the Clean Air Act
(42 U.S.C. ss. 7401 ET SEQ.), the Toxic Substances Control Act (17
U.S.C. ss.2601 ET SEQ.), the Federal Insecticide Fungicide and
Rodenticide Act (7 U.S.C. ss. 136 ET SEQ.), thE Safe Drinking Water
Act (42 U.S.C. ss.201 and ss.300f ET SEQ.), the Rivers and HarbORS
Act (33 U.S.C. ss.401 ET SEQ.), the Oil Pollution Act (33 U.S.C. ss.
2701 ET SEQ.), AND analogous state and local provisions, as any of
the foregoing may have been amended or supplemented from time to
time (collectively the "Applicable Environmental Laws").
2.1.12.4. PAST COMPLIANCE. To the knowledge of the
Shareholders, none of the operations or assets of Solarco or any
Solarco Subsidiary has ever been conducted or used in such a manner
as to constitute a material violation of any of the Applicable
Environmental Laws.
2.1.12.5. ENVIRONMENTAL CLAIMS. No notice has been served on
Solarco or any Solarco Subsidiary from any entity, governmental
agency or individual regarding any existing, pending or threatened
investigation or inquiry related to alleged material violations
under any Applicable Environmental Laws.
2.1.12.6. RENEWALS. The Shareholders do not know of any reason
Solarco or any Solarco Subsidiary would not be able to renew any of
the permits, licenses, or other authorizations required pursuant to
any Applicable Environmental Laws to operate and use any of
Solarco's or any Solarco Subsidiary's assets for their current
purposes and uses.
2.1.13. FINDER'S FEE. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried on the
Shareholders and their respective counsel, directly with Brazos and its
counsel, without the intervention of any other person as the result of an
act of Solarco, any Solarco Subsidiary, or the Shareholders and, so far as
known to the Shareholders, without the intervention of any other person in
such manner as to give rise to any valid claim against any of the parties
hereto for a brokerage commission, finder's fee, or any similar payments.
11
2.1.14. EMPLOYMENT MATTERS. (a) The Shareholders have delivered to,
or upon request will deliver to, Brazos copies of any material health and
life insurance plans, bonus, deferred compensation, pension, profit
sharing and retirement plans and all other material employee benefit
plans, programs or arrangements providing benefits for employees (or
former employees) of Solarco or any Solarco Subsidiary, all of which are
listed on Section 2.1.5.8 of the Solarco Disclosure Statement (the
"Solarco Benefit Plans"); a copy of the most recent favorable
determination letter received with respect to a Solarco Benefit Plan from
the Internal Revenue Service (if the plan is a tax-qualified plan under
the Code); the most recent annual report (Form 5500) filed with the
Internal Revenue Service with respect to each Solarco Benefit Plan (if any
such report was required); and the most recent summary plan description
for each Solarco Benefit Plan for which a summary plan description is
required. Each of the Solarco Benefit Plans has been administered and
maintained in material compliance with the requirements of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and, if
applicable, the Code and all other applicable laws. There is no
"accumulated funding deficiency" (as such term is defined in Section 302
of ERISA or Section 412 of the Code) with respect to a Solarco Benefit
Plan that is an "employee pension benefit plan" (as defined in Section
3(2) of ERISA), and there has been no application for a waiver of the
minimum funding standards imposed by Code Section 412 with respect to any
such plan. There are no pending or, to the knowledge of the Shareholders,
threatened claims by or on behalf of the Solarco Benefit Plans, the United
States Department of Labor, the Internal Revenue Service, or by any
current or former employee of Solarco or any Solarco Subsidiary or
beneficiary of such current or former employee alleging a breach of any
fiduciary duties or a violation of applicable state or federal law which
is reasonably likely to result in a material liability on the part of
Solarco, or Solarco Subsidiary or a Solarco Benefit Plan under ERISA or
any other law (other than benefit claims and funding obligations in the
ordinary course of business). Neither Solarco nor any Solarco Subsidiary
has suffered or otherwise caused a "complete withdrawal" or "partial
withdrawal," as such terms are respectively defined in Sections 4203 and
4205 of ERISA, from any Multiemployer Pension Plan, as such term is
defined in Section 3(37) of ERISA; neither Solarco nor any Solarco
Subsidiary is a party to any such Multiemployer Pension Plan.
(b) Except as set forth in Section 2.1.14 of the Solarco Disclosure
Statement, (i) Neither Solarco nor any Solarco Subsidiary is a party to
any collective bargaining agreement or other labor agreement with any
union or labor organization; (ii) to the knowledge of the Shareholders,
there is no current union representation election or controversy involving
employees of Solarco or any of the Solarco Subsidiaries, nor do the
Shareholders know of any activity or proceeding of any labor organization
(or representative thereof) or employee group (or representative thereof)
to organize any such employees; (iii) there is no material unfair labor
practice charge or material grievance arising out of a collective
bargaining agreement or other material grievance procedure against Solarco
or any Solarco Subsidiary pending, or to the knowledge of the
Shareholders, threatened; (iv) there is no material complaint, lawsuit or
proceeding in any forum by or on behalf of any present or former employee,
any applicant for employment or classes of the foregoing alleging breach
of any
12
express or implied contract of employment, any law or regulation governing
employment or the termination thereof or other discriminatory, wrongful or
tortious conduct in connection with the employment relationship against
Solarco or any Solarco Subsidiary pending, or to the knowledge of the
Shareholders, threatened; (v) there is no strike, dispute, slowdown, work
stoppage or lockout pending, or to the knowledge of the Shareholders,
threatened, against or involving Solarco or any Solarco Subsidiary or any
Solarco Subsidiary; (vi) Solarco and the Solarco Subsidiaries are in
compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment,
wages, hours of work and occupational safety and health; and (vii) there
is no proceeding, claim, suit, action or governmental investigation
pending or, to the knowledge of the Shareholders, threatened, in respect
of which any director, officer, employee or agent of Solarco or any
Solarco Subsidiary is or may be entitled to claim indemnification from
Solarco or any Solarco Subsidiary pursuant to its respective articles of
incorporation or bylaws (or similar governing documents) or as provided in
any indemnification agreements.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF BRAZOS
3.1. REPRESENTATIONS AND WARRANTIES OF BRAZOS. Brazos represents and
warrants to the Shareholders as follows:
3.1.1.ORGANIZATION AND STANDING. Brazos is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware, has full requisite corporate power and authority to
carry on its business as it is currently conducted, and to own and operate
the properties currently owned and operated by it, and is duly qualified
or licensed to do business and is in good standing as a foreign
corporation authorized to do business in all jurisdictions in which the
character of the properties owned or the nature of the business conducted
by it would make such qualification or licensing necessary, except where
the failure to be so qualified or licensed would have a material adverse
effect on Brazos.
3.1.2. AUTHORITY; NONCONTRAVENTION; STATUTORY APPROVALS; COMPLIANCE
3.1.2.1. AUTHORITY. Brazos has all requisite power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation by Brazos of the transactions
contemplated hereby, have been duly authorized by all necessary
corporate action. This Agreement has been duly and validly executed
and delivered by Brazos and, assuming the due authorization,
execution and delivery hereof by the Shareholders, constitutes the
valid and binding obligation of Brazos enforceable against it in
accordance with its terms, except as enforceability may be limited
by
13
bankruptcy, insolvency, reorganization, debtor relief or similar
laws affecting the rights of creditors' generally.
3.1.2.2. NONCONTRAVENTION. Except as set forth in Section
3.1.2.2 of the Brazos Disclosure Statement, the execution and
delivery of this Agreement by Brazos does not, and the consummation
of the transactions contemplated hereby will not, violate, conflict
with, or result in a breach of any provision of, or constitute a
default (with or without notice or lapse of time or both) under, or
result in the termination or modification of, or accelerate the
performance required by, or result in a right of termination,
modification, cancellation or acceleration of any obligation or the
loss of a material benefit under, or result in the creation of any
encumbrance upon any of their respective properties or assets (any
such violation, conflict, breach, default, right of termination,
modification, cancellation or acceleration, loss or creation, a
"Violation" with respect to Brazos pursuant to any provisions of (i)
the charter documents, bylaws or similar governing documents of
Brazos, (ii) any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction, writ, permit or license of any
Governmental Authority applicable to Brazos or any of its properties
or assets or (iii) subject to obtaining the third-party consents or
other approvals set forth in Section 3.1.2.2 of the Brazos
Disclosure Statement (the "Brazos Required Consents"), any note,
bond, mortgage, indenture, deed of trust, license, franchise,
permit, concession, contract, lease or other instrument, obligation
or agreement of any kind to which Brazos is now a party or by which
it or any of its properties or assets may be bound or affected.
3.1.2.3. STATUTORY APPROVALS. No declaration, filing or
registration with, or notice to or authorization, consent or
approval of, any Governmental Authority is necessary for the
execution and delivery of this Agreement by Brazos or the
consummation by Brazos of the transactions contemplated hereby,
except as described in Section 3.1.2.3 of the Brazos Disclosure
Statement (the "Brazos Required Statutory Approvals," it being
understood that references in this Agreement to "obtaining" such
Brazos Required Statutory Approvals shall mean making such
declarations, filings or registrations; giving such notices;
obtaining such authorizations, consents or approvals; and having
such waiting periods expire as are necessary to avoid a violation of
law).
3.1.2.4. COMPLIANCE. Except as set forth in Section 3.1.2.4 of
the Brazos Disclosure Statement, Brazos, is not in material
violation of or is under investigation with respect to any material
violation of, or has been given notice or been charged with any
violation of, any law, statute, order, rule, regulation, ordinance
or judgment (including, without limitation, any applicable
environmental law, ordinance or regulation) of any Governmental
Authority except. Except as set forth in Section 3.1.2.4 of the
Brazos Disclosure Statement, Brazos has all permits, licenses,
franchises and other governmental authorizations, consents and
approvals necessary
14
to conduct its businesses as currently conducted in all material
respects. Except as set forth in Section 3.1.2.4 of the Brazos
Disclosure Statement, Brazos is not in material breach or violation
of or in material default in the performance or observance of any
term or provision of, and no event has occurred which, with lapse of
time or action by a third party, could result in a material default
under, (i) charter documents or bylaws or (ii) any contract,
commitment, agreement, indenture, mortgage, loan agreement, note,
lease, bond, license, approval or other instrument to which it is a
party or by which it is bound or to which any of its property is
subject.
3.1.3. FINDER'S FEE. Except as set forth on Section 3.1.3 of the
Brazos Disclosure Statement, all negotiations relative to this Agreement
and the transactions contemplated hereby have been carried on by Brazos
and its counsel directly with the Shareholders and their counsel, without
the intervention of any other person as the result of any act of Brazos,
and so far as is known to Brazos, without the intervention of any other
person in such manner as to give rise to any valid claim against any of
the parties hereto for a brokerage commission, finder's fee or any similar
payments.
ARTICLE IV
OBLIGATIONS PENDING CLOSING DATE
4.1. AGREEMENTS. The Shareholders agree that from the date hereof to the
Closing Date, except as otherwise set forth in the Solarco Disclosure Statement,
Solarco and the Solarco Subsidiaries have and the Shareholders will cause
Solarco and each of the Solarco Subsidiaries to:
4.1.1. MAINTENANCE OF PRESENT BUSINESS. Other than as contemplated
by this Agreement, operate its business only in the usual, regular, and
ordinary manner.
4.1.2. INSPECTION. Permit Brazos and its officers, directors,
employees, accountants, counsel, investment bankers, financial advisors
and other authorized representatives (collectively the "Representatives"),
during normal business hours, to inspect its records and to consult with
its officers, employees, attorneys, and agents for the purpose of
determining the accuracy of the representations and warranties hereinabove
made and the compliance with covenants contained in this Agreement. Brazos
agrees that it and its Representatives shall hold all data and information
obtained with respect to Solarco and the Solarco Subsidiaries hereto in
confidence and Brazos further agrees that it will not use such data or
information or disclose the same to others, except to the extent such data
or information either are, or become, published or a matter of public
knowledge; without the consent of Three Cities Research, Inc., as agent
for the shareholders, Brazos will not, prior to the Closing, require or
utilize the participation of Xxxxx or other Morning Sun personnel in the
business or financial activities of Brazos.
15
4.1.3. ACQUISITION PROPOSALS. Neither Solarco nor the Shareholders
shall, nor shall they permit any Solarco Subsidiary, or any of their
respective officers, directors or representatives to directly or
indirectly (i) solicit, initiate or encourage any inquiries or Acquisition
Proposals (defined below) from any person or (ii) participate in any
discussions or negotiations regarding, furnish to any person other than
Brazos or its representatives any information with respect to, or
otherwise assist, facilitate or encourage any Acquisition Proposal by any
other person. "Acquisition Proposal" means any proposal for a merger,
consolidation or other business combination involving Solarco or any
Solarco Subsidiary or the acquisition or purchase of any equity interest
in, or a material portion of the assets of, Solarco or any Solarco
Subsidiary. The Shareholders shall promptly communicate to Brazos the
terms of any such Acquisition Proposals which they or Solarco may receive
or any inquiries made to them or their directors, officers,
representatives or agents.
4.2. ADDITIONAL AGREEMENTS OF THE SHAREHOLDERS. Except as otherwise set
forth in the Solarco Disclosure Statement, the Shareholders agree that from the
date hereof to the Closing Date, they will cause Solarco and each Solarco
Subsidiary to:
4.2.1.PROHIBITION OF CERTAIN EMPLOYMENT CONTRACTS. Not enter into
any contracts of employment which (i) cannot be terminated on notice of 14
days or less or (ii) provide for any severance payments or benefits
covering a period beyond the termination date except as may be required by
law;
4.2.2.PROHIBITION OF CERTAIN LOANS. Not incur any borrowings except
(i) the refinancing of indebtedness now outstanding or additional
borrowings under its existing revolving credit facilities not exceeding
$9.5 million if the Closing occurs on or before July 15, 1997 (or an
amount not exceeding the sum of $1.3 million plus the amount of borrowings
shown on the business plan heretofore presented to Brazos for the end of
the month in which the Closing occurs after such date), (ii) the
prepayment by customers of amounts due or to become due for goods sold or
services rendered or to be rendered in the future, (iii) trade payables
incurred in the ordinary course of business, (iv) as is otherwise agreed
to in writing by Brazos;
4.2.3.PROHIBITION OF CERTAIN COMMITMENTS. Not (a) enter into
commitments for capital expenditures which would exceed $250,000, in the
aggregate for Solarco and all Solarco Subsidiaries, except (i) as may be
necessary for the maintenance of existing facilities, machinery and
equipment in good operating condition and repair in the ordinary course of
business, (ii) as may be required by law or (iii) as is otherwise agreed
to in writing by Brazos or (b) enter into any agreement with any affiliate
of Solarco or any Solarco Subsidiary without Brazos's written consent;
4.2.4.DISPOSAL OF ASSETS. Not sell, dispose of, or encumber, any
property or assets, except (i) in the ordinary course of business or (ii)
as is otherwise agreed to in writing by Brazos;
16
4.2.5.MAINTENANCE OF INSURANCE. Maintain insurance upon all its
properties and with respect to the conduct of its business of such kinds
and in such amounts as is customary in the type of business in which it is
engaged, but not less than that presently carried by it, which insurance
may be added to from time to time in its discretion;
0.0.0.XX AMENDMENT TO ARTICLES OF INCORPORATION, ETC. Not amend its
articles of incorporation or bylaws or other organizational documents or
merge into any other corporation or change in any manner the rights of its
capital stock or the character of its business;
0.0.0.XX ISSUANCE, SALE, OR PURCHASE OF SECURITIES. Except with
respect to exercises of currently outstanding warrants or options which
are described in the Solarco Disclosure Schedule, not issue or sell, or
issue options or rights to subscribe to (or cancel or amend any options
currently outstanding), or enter into any contract or commitment to issue
or sell (upon conversion or otherwise), any shares of its capital stock or
subdivide or in any way reclassify any shares of its capital stock, or
acquire, or agree to acquire, any shares of its capital stock; and
4.2.8.PROHIBITION ON DIVIDENDS. Except with respect to any
distribution of the Initial Payment, not declare or pay any dividend on
shares of its capital stock or make any other distribution of assets to
the holders thereof.
4.3. ADDITIONAL AGREEMENTS OF THE SHAREHOLDERS AND BRAZOS. The
Shareholders and Brazos agree to take the following actions after the date
hereof:
4.3.1.XXXX-XXXXX-XXXXXX. Within 10 days of the date hereof, each
party (or their affiliates) shall file such materials as are required
under the HSR Act with respect to the transaction contemplated hereby and
shall cooperate with the other party to the extent necessary to assist the
other party in the preparation of such filings.
4.3.2. NOTICE OF MATERIAL DEVELOPMENTS. The Shareholders will
promptly notify Brazos in writing of any material adverse effect on the
business, operations, assets, liabilities or result of operations of
Solarco and the Solarco Subsidiaries taken as a whole.
4.4. DISCLOSURE STATEMENT. On the date of this Agreement, (i) Brazos has
delivered to Solarco a statement (the "Brazos Disclosure Statement"), and (ii)
the Shareholders have delivered to Brazos a statement (the "Solarco Disclosure
Statement"). The Brazos Disclosure Statement and the Solarco Disclosure
Statement are collectively referred to herein as the "Disclosure Statements."
The Disclosure Statements, when so delivered, shall be deemed to constitute an
integral part of this Agreement and to modify or otherwise affect the respective
representations, warranties, covenants or agreements of the parties hereto
contained herein to the extent that such representations, warranties, covenants
or agreements expressly refer to the Disclosure Statements. Except as otherwise
contained herein or in the Disclosure Statements, any and all statements,
representations,
17
warranties or disclosures set forth in the Disclosure Statements shall be deemed
to have been made on and as of the date of this Agreement.
4.5. COMMERCIALLY REASONABLE EFFORTS. The parties hereto shall use
commercially reasonable efforts to cause the occurrence of the events contained
in Sections 5.1 and 5.2, respectively, to be satisfied at or before the Closing,
to the extent the occurrence of such events is in control of any such party.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS
5.1. CONDITIONS PRECEDENT TO OBLIGATIONS OF BRAZOS. The obligations of
Brazos to consummate and effect the transactions contemplated hereunder shall be
subject to the satisfaction of the following conditions, or to the waiver
thereof by Brazos in the manner contemplated by Section 6.2 on or before the
Closing Date:
5.1.1.REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS;
PERFORMANCE OF OBLIGATIONS. The representations and warranties of the
Shareholders herein contained shall be true and correct in all material
respects as of the date hereof and as of the Closing Date with the same
effect as though made at such date (except to the extent such
representations and warranties speak only as of any other date, which need
only be true and correct as of such other date), except as affected by
transactions permitted or contemplated by this Agreement. The Shareholders
shall have performed and complied, in all material respects, with all its
agreements and covenants contained in or contemplated by this Agreement to
be performed or complied with by them before the Closing Date; and the
Shareholders shall have delivered to Brazos a certificate, dated the
Closing Date and signed by each Shareholder, to the effect that such
conditions have been satisfied.
0.0.0.XX INJUNCTION. No injunction or restraining order shall be in
effect in any court of competent jurisdiction which would restrain or
prohibit the consummation of the transactions contemplated hereby.
5.1.3.OPINION OF COUNSEL. Brazos shall have received a favorable
opinion, dated as of the Closing Date, from Xxxx, Weiss, Rifkind, Xxxxxxx
& Xxxxxxxx, counsel for the Shareholders (and/or local counsel reasonably
acceptable to Brazos), in form and substance reasonably satisfactory to
Brazos, to the effect that (i) Solarco has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Washington; and (ii) this Agreement has been duly executed and
delivered by, and is the legal, valid and binding obligation of the
Shareholders and is enforceable against them in accordance with its
respective terms, except as enforceability may be limited by (a) equitable
principles of general applicability or (b) bankruptcy, insolvency,
reorganization, fraudulent conveyance or similar laws affecting the rights
of creditors generally. Such opinion also
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shall cover such other matters incident to the transactions herein
contemplated as Brazos and its counsel may reasonably request. In
rendering such opinion, such counsel may rely upon certificates of public
officials and of officers of Solarco as to matters of fact.
5.1.4.XXXX-XXXXX-XXXXXX, ETC. All waiting periods required by HSR
shall have expired with respect to the transactions contemplated by this
Agreement, or early termination with respect thereto shall have been
obtained without the imposition of any governmental request or order
requiring the sale or disposition or holding separate (through a trust or
otherwise) of particular assets or businesses of Solarco, any Solarco
Subsidiary or their affiliates or any component of Brazos or its
subsidiaries or affiliates or other actions as a precondition to the
expiration of any waiting period or the receipt of any necessary
governmental approval or consent.
5.1.5.CONSENT OF CERTAIN PARTIES IN PRIVITY WITH SOLARCO. The
holders of any material indebtedness of Solarco or any Solarco Subsidiary,
the lessors of any material property leased by Solarco or any Solarco
Subsidiary, and the other parties to any other material agreements to
which Solarco or any Solarco Subsidiary is a party shall have, if required
by the terms of the respective agreement, consented to the transactions
contemplated hereby (which consents shall have been obtained without any
material charge or expense imposed by the consenting party and without any
material adverse amendments to any underlying agreements).
5.1.6. TENDER OF STOCK. The Shareholders shall have delivered to
Brazos certificates representing all of the issued and outstanding Solarco
Capital Stock, duly endorsed for transfer or accompanied by duly executed
stock powers, free and clear of any Encumbrance.
5.1.7.RESIGNATIONS. All officers and directors of Solarco and the
Solarco Subsidiaries shall have provided written resignations to Brazos
with respect to such positions.
5.1.8. FINANCING. Brazos shall have obtained financing to fund the
payment of the Cash Consideration on the Closing Date;
5.1.9. XXXXX AGREEMENTS. Xxxxx shall have executed an employment
agreement with Morning Sun, Inc. in the form attached hereto as EXHIBIT A.
In addition, Xxxxx shall have executed an agreement acknowledging, in
customary form (a) that the shares of Brazos common stock issued to him on
the Closing date are "restricted" securities and (b) that he is an
accredited investor acquiring such shares for investment purposes only.
5.1.10. ADOPTION AGREEMENT. All Shareholders who did not execute
this Agreement on the date hereof shall have executed and delivered to
Brazos the Adoption Agreement.
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5.1.11. ESCROW AGREEMENT. The Shareholders shall have executed and
delivered to Brazos the Escrow Agreement.
5.1.12. EMPLOYEE COMPENSATION MATTERS. (a) the Shareholders shall
have entered into an agreement regarding the assumption by the
Shareholders of existing salary continuation obligations upon the
voluntary resignation of certain Morning Sun employees within four months
of the Closing Date and (b) except as otherwise mutually agreed by the
parties, as of the Closing Date, Solarco shall have outstanding no stock
options or warrants to acquire any class of Solarco's capital stock.
5.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SHAREHOLDERS. The
obligations of the Shareholders to consummate and effect the transactions
contemplated hereunder shall be subject to the satisfaction of the following
conditions, or to the waiver thereof by the Shareholders in the manner
contemplated by Section 6.2 on or before the Closing Date:
5.2.1.REPRESENTATIONS AND WARRANTIES OF BRAZOS; PERFORMANCE OF
OBLIGATIONS. The representations and warranties of Brazos herein contained
shall be true and correct in all material respects as of the date hereof
and as of the Closing Date with the same effect as though made at such
date (except to the extent such representations and warranties speak only
as of any other date, which need only be true and correct as of such other
date), except as affected by transactions permitted or contemplated by
this Agreement. Brazos shall have performed and complied, in all material
respects, with all of its agreements and covenants contained in or
contemplated by this Agreement to be performed or complied with by Brazos
before the Closing Date; and Brazos shall have delivered to the
Shareholders a certificate, dated the Closing Date and signed by its
chairman of the board or its president, and by its chief financial or
accounting officer, and its secretary to the effect that such conditions
have been satisfied.
0.0.0.XX INJUNCTION. No injunction or restraining order shall be in
effect in any court of competent jurisdiction which would restrain or
prohibit the consummation of the transactions contemplated hereby.
5.2.3.OPINION OF BRAZOS' COUNSEL. The Shareholders shall have
received a favorable opinion, dated the Closing Date, from Xxxxxx &
Xxxxxx, L.L.P., counsel to Brazos, in form and substance reasonably
satisfactory to the Shareholders, to the effect that (i) Brazos has been
duly incorporated and is validly existing as a corporation in good
standing under the laws of Delaware; (ii) all corporate or other
proceedings required to be taken by or on the part of Brazos to authorize
the execution of this Agreement and the implementation of the transactions
contemplated hereby have been taken; and (iii) this Agreement has been
duly executed and delivered by, and is the legal, valid and binding
obligation of Brazos and is enforceable against Brazos in accordance with
its terms, except as the enforceability may be limited by (a) equitable
principles of general applicability or (b) bankruptcy, insolvency,
reorganization, fraudulent conveyance or similar laws affecting the rights
of creditors
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generally. Such opinion shall also cover such other matters incident to
the transactions herein contemplated the Shareholders and their counsel
may reasonably request. In rendering such opinion, such counsel may rely
upon certificates of public officials and of officers of Brazos as to
matters of fact.
5.2.4.XXXX-XXXXX-XXXXXX, ETC. All waiting periods required by HSR
shall have expired with respect to the transactions contemplated by this
Agreement, or early termination with respect thereto shall have been
obtained without the imposition of any governmental request or order
requiring the sale or disposition or holding separate (through a trust or
otherwise) of particular assets or businesses of Solarco or its affiliates
or other actions as a precondition to the expiration of any waiting period
or the receipt of any necessary governmental approval or consent.
5.2.5. SATISFACTION OR ASSUMPTION OF INDEBTEDNESS AND OTHER
OBLIGATIONS. Brazos shall have (i) repaid all indebtedness of Morning Sun,
Inc. to Seafirst Bank (which amount shall not exceed $12.0 million) and
(ii) assumed to the reasonable satisfaction of the Shareholders the 1997
Morning Sun, Inc. employee bonus payments and deferred earn-out amounts
not exceeding an aggregate of $2.5 million, which are described in Section
5.2.5 of the Solarco Disclosure Statement.
5.2.6. ESCROW AGREEMENT. Brazos shall have executed and delivered to
the Shareholders the Escrow Agreement.
5.2.7.PAYMENT OF CONSIDERATION. The Consideration shall have been
paid or delivered to the Shareholders in accordance with Article I hereof.
ARTICLE VI
TERMINATION AND ABANDONMENT
6.1. TERMINATION. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time before the Closing Date:
0.0.0.XX MUTUAL CONSENT. By mutual consent of the holders of not
less than 51% of the Solarco Capital Stock and Brazos; or
0.0.0.XX THE SHAREHOLDERS OR BRAZOS. By the holders of not less than
51% of the Solarco Capital Stock or Brazos if the terminating party or
parties is not in material breach of any of its obligations hereunder and
if the transactions contemplated by this Agreement have not been
consummated on or before July 15, 1997, except such date shall be extended
for an additional 60 days to the extent necessary to comply with the H-S-R
Act.
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6.2 WAIVER. Subject to the requirements of any applicable law, any of the
terms or conditions of this Agreement may be waived at any time by the party
which is entitled to the benefit thereof. The failure of any party at any time
or times to require performance of any provision hereof shall in no manner
affect the right to enforce the same. No waiver by any party of any condition,
or of the breach of any provision of this Agreement in one or more instances
shall be deemed to be or construed as a further or continuing waiver of any such
condition or breach or a waiver of any other condition or the breach of any
other provision.
6.3 EXPENSE ON TERMINATION. If the transactions contemplated hereby are
abandoned pursuant to and in accordance with the provisions of Section 6.1
hereof, all expenses will be paid by the party incurring them; PROVIDED, except
as otherwise set forth herein, this provision shall not limit any claim
resulting from the breach of this Agreement by any party hereto, PROVIDED,
FURTHER, that in the event this Agreement is terminated by any party in
accordance with Section 6.1.2, then Brazos shall pay to Three Cities Research
("TCR"), for the benefit of the Shareholders, the amount of $650,000 unless
either (a) at the time of such termination, the Shareholders are in material
breach of the Agreement or (b) the reason the transactions contemplated by this
Agreement were not consummated on or before July 15, 1997 (or such later date as
provided in Section 6.1.2) was the failure of any of the conditions set forth in
Section 5.1.1, 5.1.2, 5.1.3, 5.1.4, 5.1.5, 5.1.6, 5.1.7, 5.1.9, 5.1.10., 5.1.11,
or 5.1.12 (which failure was not the consequence of a breach by Brazos of its
covenants under this agreement) and upon receipt of such amount, the
Shareholders hereby irrevocably waive, release and agree not to xxx Brazos or
its stockholders, officers, directors, affiliates, employees, or their
successors, assigns, agents or representatives with respect to all claims,
causes of action, rights of contribution, cost recovery, losses, liabilities,
suits, costs, fees, judgments or expenses which may thereafter arise in
connection with this Agreement or any breach by Brazos of any of the
representations, warranties, covenants or agreements contained herein.
6.4. AGREEMENT WITH RESPECT TO INITIAL PAYMENT. In the event any party
terminates this Agreement in accordance with Section 6.1.2 and TCR is not
entitled to the payment of the $650,000 described in Section 6.3, then the
Shareholders shall cause Solarco to immediately refund the Initial Payment to
Brazos. In the event that TCR is entitled to receive (on behalf of the
Shareholders) the $650,000 payment described in Section 6.3 and retains (on
behalf of the Shareholders) the Initial Payment, the aggregate of such payments
shall be deemed consideration for an option to purchase the Solarco Capital
Stock which expired by reason of the termination of this Agreement.
ARTICLE VII
INDEMNIFICATION
7.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained herein or any instrument or document delivered or to be
delivered pursuant to or in connection with this Agreement, shall survive the
execution and delivery of this Agreement and the Closing without limitation
notwithstanding any investigation or due diligence theretofore made by or on
behalf of any party hereto; provided, however, that all representations and
warranties of each
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party hereto shall terminate on the one year anniversary of the Closing Date
except (a) as to the representations and warranties contained in Section
2.1.3(b) which shall continue and survive indefinitely, and (b) as to the
representations and warranties contained in Section 2.1.8 (Taxes), which shall
continue and survive for the full period of the applicable statutes of
limitations (giving effect to any waiver, mitigation or extension thereof). All
claims for indemnification by any party hereto with respect to a breach of a
representation or warranty must be asserted prior to the expiration of the
applicable survival period. Except with respect to any claim regarding the
breach of the representations and warranties contained in Section 2.1.8 (Taxes),
none of the parties hereto will make any claim for indemnification until such
party shall have incurred at least $250,000 in Claims (as herein defined) and
thereafter only for claims in excess of such aggregate amount.
7.2. INDEMNIFICATION OF BRAZOS. The Shareholders shall indemnify, defend
and hold harmless Brazos and its affiliates and subsidiaries against and in
respect of any and all claims, demands, actions, costs, damages, losses,
diminution in value, expenses, liabilities, judgments, settlements, suits,
causes of action or deficiencies, including interest, penalties and reasonable
attorneys' fees (collectively, "Claims") that such indemnified persons shall
incur or suffer, which arise, result from or relate to any breach of, or failure
by the Shareholders to perform, any of their representations, warranties,
covenants or agreements in or under this Agreement.
7.3. INDEMNIFICATION OF SHAREHOLDERS. Brazos shall indemnify, defend and
hold harmless the Shareholders against and in respect of any and all Claims that
the Shareholders shall incur or suffer, which arise, result from or relate to
any breach of, or failure by Brazos to perform, any of its representations,
warranties, covenants or agreements in or under this Agreement.
7.4. INDEMNIFICATION PROCEDURE. Promptly upon the discovery of facts
giving rise to a claim for indemnity under this Article VII or the receipt of
notice of any Claim, judicial or otherwise, with respect to any matter as to
which indemnification may be claimed under this Article VII, the indemnified
party shall give written notice thereof to the indemnifying party together with
such information respecting such matter as the indemnified party shall then
have; PROVIDED, HOWEVER, that the failure of the indemnified party to give
notice as provided herein shall not relieve the indemnifying party of any
obligations, to the extent the indemnifying party is not materially prejudiced
thereby. If indemnification is sought with respect to a third-party (I.E., one
who is not a party to this Agreement) Claim asserted or brought against an
indemnified party, the indemnifying party shall be entitled to participate in
and to assume the defense thereof, jointly with any other indemnifying party
similarly notified, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party. After such notice from the indemnifying
party to such indemnified party of its election to so assume the defense of such
a third-party Claim, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof, other than reasonable and
necessary costs of investigation, unless the indemnifying party has failed to
assume and diligently prosecute the defense of such third-party Claim and to
employ counsel reasonably satisfactory to such indemnified person. An
indemnifying party who elects not to assume the defense of a third-party Claim
shall not be liable for the fees and expenses of more than one counsel in any
single
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jurisdiction for all parties indemnified by such indemnifying party with respect
to such Claim or with respect to Claims separate but similar or related in the
same jurisdiction arising out of the same general allegations. Notwithstanding
any of the foregoing to the contrary, the indemnified party will be entitled to
select its own counsel and assume the defense of any action brought against it
if the indemnifying party fails to select counsel reasonably satisfactory to the
indemnified party or if counsel fails to diligently defend, and the expenses of
such defense shall be paid by the indemnifying party. No indemnifying party
shall consent to entry of any judgment or enter into any settlement with respect
to a claim without the consent of the indemnified party, which consent shall not
be unreasonably withheld. No indemnified party shall consent to entry of any
judgment or enter into any settlement of any such action the defense of which
has been assumed by an indemnifying party without the consent of such
indemnifying party, which consent shall not be unreasonably withheld.
7.5. ADDITIONAL PROVISIONS REGARDING INDEMNIFICATION.
(a) All claims for indemnification by Brazos hereunder shall be made
against the Escrow Funds or amounts which are payable by Brazos into escrow in
accordance with Section 1.3 hereof prior to making any claim for indemnification
against the Shareholders individually. Except with respect to any claim by
Brazos for indemnification which relates to the representations and warranties
contained in Section 2.1.3(b) or Section 2.1.8, the Shareholders' aggregate
obligation with respect to indemnification for a claim for breach of
representations and warranties hereunder shall be limited to the amount of
$3,000,000. With respect to claims for indemnification relating to breaches of
representations and warranties contained in Section 2.1.8 and to the extent
Brazos' claims for indemnification have exceeded $3,000,000, such claims shall
only be made against the Shareholders for the pro rata share of any liability
(based on the respective share holdings set forth in SCHEDULE A).
(b) The parties hereto agree that their remedies after the Closing Date
with respect to breaches of representations, warranties, covenants and
agreements contained herein are limited to claims for indemnification as
provided for in this Article VII.
ARTICLE VIII
MISCELLANEOUS
8.1. ENTIRETY. This Agreement and the agreements to be entered into in
connection herewith embody the entire agreement between the parties with respect
to the subject matter hereof, and all prior agreements between the parties with
respect thereto are hereby superseded in their entirety.
8.2. COUNTERPARTS. Any number of counterparts of this Agreement may be
executed and each such counterpart shall be deemed to be an original instrument,
but all such counterparts together shall constitute but one instrument.
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8.3. NOTICES AND WAIVERS. Any notice or waiver to be given to any party
hereto shall be in writing and shall be delivered by courier, sent by facsimile
transmission or first class registered or certified mail, postage prepaid.
IF TO BRAZOS
Addressed to: With a copy to:
Brazos Sportswear, Inc. Xxxxxx & Xxxxxx, L.L.P.
0000 Xxxxxxxx Xxxxxx 000 Xxxxxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxx 00000 Xxxxxxx, Xxxxx 00000-0000
Attention: President Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
IF TO SHAREHOLDERS
Addressed to: With a copy to:
Three Cities Research, Inc.,
as agent for the Shareholders Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxxx Xxxxx Attn: Xxxxxx Xxxxx
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Any communication so addressed and mailed by first-class registered or
certified mail, postage prepaid, shall be deemed to be received on the third
business day after so mailed, and if delivered by courier or facsimile to such
address, upon delivery during normal business hours on any business day.
8.4. TABLE OF CONTENTS AND CAPTIONS. The table of contents and captions
contained in this Agreement are solely for convenient reference and shall not be
deemed to affect the meaning or interpretation of any article, section, or
paragraph hereof.
8.5. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the successors and assigns
of the parties hereto.
8.6. SEVERABILITY. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. It is hereby stipulated and declared to be
the intention of the
25
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such which may be hereafter declared
invalid, void or unenforceable.
8.7. APPLICABLE LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware.
8.8. PUBLIC ANNOUNCEMENTS. The parties agree that before the Closing Date
that they shall consult with each other before the making of any public
announcement regarding the existence of this Agreement, the contents hereof or
the transactions contemplated hereby, and to obtain the prior approval of the
other party as to the content of such announcement, which approval shall not be
unreasonably withheld. However, the foregoing shall not apply to any
announcement or written statement which, upon the written advice of counsel, is
required by law or the National Association at Securities Dealers (the "NASD")
to be made, except that the party required to make such announcement shall,
whenever practicable, consult with and solicit prior approval from such other
party concerning the timing and content of such legally required announcement or
statement before it is made.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed all as of the day and year first above written.
BRAZOS SPORTSWEAR, INC.
By: /S/ XXXXXXX X. XXXX
Xxxxxxx X. Xxxx,
Chairman of the Board
SHAREHOLDERS:
TCR INTERNATIONAL PARTNERS, L.P.
By:
By: /S/ J. XXXXXXX XXXXX
Name: J. XXXXXXX XXXXX
Title: GENERAL PARTNER
TERBEM LIMITED
By: Attorney-in-Fact
By: /S/ XXXXXXXX XXXXX
Name: XXXXXXXX XXXXX
Title: ATTORNEY-IN-FACT
TINVEST LIMITED
By: Attorney-in-Fact
By: /S/ XXXXXXXX XXXXX
Name: XXXXXXXX XXXXX
Title: ATTORNEY-IN-FACT
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BOBST LIMITED
By: Attorney-in-Fact
By: /S/ XXXXXXXX XXXXX
Name: XXXXXXXX XXXXX
Title: ATTORNEY-IN-FACT
MITVEST LIMITED
By: Attorney-in-Fact
By: /S/ XXXXXXXX XXXXX
Name: XXXXXXXX XXXXX
Title: ATTORNEY-IN-FACT
XXXXXX XXXXX
Xxxxxx X. Xxxxx
--------------------------
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