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EXHIBIT 10.14(a)
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
BARRIER FILMS LTD. - NEW YORK
AND
OUTLOOK GROUP CORP.
DATED AS OF MAY 12, 1997
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TABLE OF CONTENTS
PAGE
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Accounts . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Agreement . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Breakup Event . . . . . . . . . . . . . . . . . . . . . . 1
1.5 Breakup Fee . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Buildings . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Closing . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 Closing Balance Sheet . . . . . . . . . . . . . . . . . . 2
1.10 Closing Date . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 Company . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.12 Contracts . . . . . . . . . . . . . . . . . . . . . . . . 2
1.13 Disclosure Schedule . . . . . . . . . . . . . . . . . . . 2
1.14 Earn-Out Payment . . . . . . . . . . . . . . . . . . . . . 2
1.15 Employment Agreements . . . . . . . . . . . . . . . . . . 3
1.16 Equipment . . . . . . . . . . . . . . . . . . . . . . . . 3
1.17 Financial Statements . . . . . . . . . . . . . . . . . . . 3
1.18 Initial Cash Payment . . . . . . . . . . . . . . . . . . . 3
1.19 Inventory . . . . . . . . . . . . . . . . . . . . . . . . 3
1.20 Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.21 Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.22 Litigation . . . . . . . . . . . . . . . . . . . . . . . . 3
1.23 OGC . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.24 OGC's Knowledge . . . . . . . . . . . . . . . . . . . . . 3
1.25 Permits . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.26 Real Properties . . . . . . . . . . . . . . . . . . . . . 4
1.27 Rebate and Supply Agreement . . . . . . . . . . . . . . . 4
1.28 Secured Promissory Note . . . . . . . . . . . . . . . . . 4
1.29 Security Agreement . . . . . . . . . . . . . . . . . . . . 4
1.30 September Balance Sheet . . . . . . . . . . . . . . . . . 4
1.31 Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.32 Total Purchase Price . . . . . . . . . . . . . . . . . . . 4
1.33 Working Capital Adjustment . . . . . . . . . . . . . . . . 4
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ARTICLE II PURCHASE AND SALE; WORKING CAPITAL ADJUSTMENT; EARN-
OUT PAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Purchase and Sale . . . . . . . . . . . . . . . . . . . . 5
2.2 Payment of Purchase Price . . . . . . . . . . . . . . . . 5
2.3 Liabilities Adjustment . . . . . . . . . . . . . . . . . . 5
2.4 Working Capital Adjustment . . . . . . . . . . . . . . . . 5
2.5 Earn-Out Payment . . . . . . . . . . . . . . . . . . . . . 6
2.6 Rebate and Supply Arrangement . . . . . . . . . . . . . . 7
2.7 Retained Accounts Receivable . . . . . . . . . . . . . . . 7
2.8 Xxxxxxxx Payment . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF OGC . . . . . . . . . . 8
3.1 Ownership of Purchased Shares . . . . . . . . . . . . . . 8
3.2 Enforceability; Conflicting Obligations . . . . . . . . . 8
3.3 No Broker . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 Organization; Authority . . . . . . . . . . . . . . . . . 8
3.5 Capitalization . . . . . . . . . . . . . . . . . . . . . . 8
3.6 No Violation or Conflict . . . . . . . . . . . . . . . . . 9
3.7 Title to and Condition of Assets . . . . . . . . . . . . . 9
3.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 Financial Statements . . . . . . . . . . . . . . . . . . . 10
3.10 Absence of Certain Changes . . . . . . . . . . . . . . . . 10
3.11 Contracts . . . . . . . . . . . . . . . . . . . . . . . . 10
3.12 No Violation of Law . . . . . . . . . . . . . . . . . . . 10
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14 Permits . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.15 Governmental Approvals . . . . . . . . . . . . . . . . . . 11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE BUYER . . . . . . . 11
4.1 Organization; Authority . . . . . . . . . . . . . . . . . 11
4.2 Authorization; Enforceability . . . . . . . . . . . . . . 11
4.3 No Violation or Conflict . . . . . . . . . . . . . . . . . 11
4.4 No Broker . . . . . . . . . . . . . . . . . . . . . . . . 11
4.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . 11
4.6 Consents and Approvals . . . . . . . . . . . . . . . . . . 11
ARTICLE V CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER . . . 12
5.1 Representations and Warranties . . . . . . . . . . . . . . 12
5.2 Compliance with Agreement . . . . . . . . . . . . . . . . 12
5.3 Proceedings Taken . . . . . . . . . . . . . . . . . . . . 12
5.4 No Litigation . . . . . . . . . . . . . . . . . . . . . . 12
5.5 No Adverse Change . . . . . . . . . . . . . . . . . . . . 12
5.6 Material Damage to the Business or the Assets . . . . . . 12
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5.7 Conveyance of Stock . . . . . . . . . . . . . . . . . . . 12
5.8 Repayment of Loans . . . . . . . . . . . . . . . . . . . . 12
5.9 Closing Balance Sheet . . . . . . . . . . . . . . . . . . 13
5.10 Rebate and Supply Agreement . . . . . . . . . . . . . . . 13
5.11 Other Documents . . . . . . . . . . . . . . . . . . . . . 13
5.12 Approvals and Consents . . . . . . . . . . . . . . . . . . 13
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATIONS OF OGC . . . . . . 13
6.1 Representations and Warranties . . . . . . . . . . . . . . 13
6.2 Compliance with Agreement . . . . . . . . . . . . . . . . 13
6.3 Proceedings Taken . . . . . . . . . . . . . . . . . . . . 13
6.4 No Litigation . . . . . . . . . . . . . . . . . . . . . . 14
6.5 Employment Agreement and Related Consents . . . . . . . . 14
6.6 Third Party Consents . . . . . . . . . . . . . . . . . . . 14
6.7 Deliveries at Closing . . . . . . . . . . . . . . . . . . 14
ARTICLE VII INDEMNITIES . . . . . . . . . . . . . . . . . . . . . . . 14
7.1 OGC's Indemnity . . . . . . . . . . . . . . . . . . . . . 14
7.2 Buyer's Indemnity . . . . . . . . . . . . . . . . . . . . 15
7.3 Provisions Regarding Indemnities . . . . . . . . . . . . . 16
ARTICLE VIII CERTAIN MATTERS PENDING THE CLOSING . . . . . . . . . . 17
8.1 Full Access . . . . . . . . . . . . . . . . . . . . . . . 17
8.2 Carry on in Regular Course . . . . . . . . . . . . . . . . 17
8.3 Use of Assets . . . . . . . . . . . . . . . . . . . . . . 17
8.4 Preservation of Relationships . . . . . . . . . . . . . . 17
8.5 No Default . . . . . . . . . . . . . . . . . . . . . . . . 17
8.6 Publicity . . . . . . . . . . . . . . . . . . . . . . . . 18
8.7 Insurance Policies . . . . . . . . . . . . . . . . . . . . 18
8.8 Contracts and Commitments . . . . . . . . . . . . . . . . 18
8.9 Compliance with Laws . . . . . . . . . . . . . . . . . . . 18
8.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.11 Amendments . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IX MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 18
9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . 18
9.2 Rights on Termination; Waiver . . . . . . . . . . . . . . 18
9.3 Survival of Representations and Warranties . . . . . . . . 19
9.4 Entire Agreement; Amendment . . . . . . . . . . . . . . . 19
9.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . 19
9.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . 19
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9.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.9 Counterparts; Headings . . . . . . . . . . . . . . . . . . 20
9.10 Interpretation . . . . . . . . . . . . . . . . . . . . . . 20
9.11 Severability . . . . . . . . . . . . . . . . . . . . . . . 21
9.12 No Reliance . . . . . . . . . . . . . . . . . . . . . . . 21
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
LIST OF EXHIBITS
A. Rebate and Supply Agreement
B. Secured Promissory Note
C. Security Agreement
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 12th day of May, 1997, by and
between BARRIER FILMS LTD. - NEW YORK and OUTLOOK GROUP CORP.
RECITALS
WHEREAS, the Company is engaged in the business of manufacturing,
distributing and selling co-extruded film and related materials;
WHEREAS, OGC owns the Stock, which constitutes all of the issued and
outstanding capital stock of the Company; and
WHEREAS, OGC desires to sell the Stock to the Buyer and the Buyer desire to
purchase the Stock from OGC.
NOW THEREFORE, in consideration of the mutual covenants, conditions and
agreements set forth herein, the sufficiency of which are hereby acknowledged,
it is hereby agreed that:
ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the meanings
specified below:
1.1 Accounts. "Accounts" shall mean all accounts receivable of the Company
(other than intercompany accounts involving OGC and its other subsidiaries).
1.2 Agreement. "Agreement" shall mean this Stock Purchase Agreement,
together with the Exhibits and Schedules attached hereto, as the same may be
amended from time to time in accordance with the terms hereof.
1.3 Assets. "Assets" shall mean the Accounts, the Contracts, the Buildings,
the Equipment, the Inventory, the Permits, the Real Properties and any other
assets of the Company.
1.4 Breakup Event. "Breakup Event" shall mean (a) Buyer's failure to obtain
the financing necessary to purchase the Stock or to otherwise make the various
payments and deliveries at Closing as contemplated by this Agreement, or (b)
Buyer's withdrawal of its proposal to acquire the Stock and such withdrawal is
not due to OGC's failure to disclose any material fact to Buyer or the parties'
failure to agree, after good faith negotiations, on the terms and conditions of
the Note.
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1.5 Breakup Fee. "Breakup Fee" shall mean the payment by Buyer to OGC upon
the occurrence of a Breakup Event of Fifty Thousand and no/100 Dollars
($50,000), as currently held in escrow in Buyer's Counsel's fiduciary escrow
account.
1.6 Buildings. "Buildings" shall mean all buildings, fixtures, structures
and improvements leased or owned by the Company.
1.7 Buyer. "Buyer" shall mean Barrier Films Ltd. - New York, a newly formed
New York corporation controlled by Xxxxxx Xxxxxxx, Xxxxx Xxxxxxx and Xxx Xxxxx.
1.8 Closing. "Closing" shall mean the conference to be held at 9:00 A.M.
local time, on the Closing Date, at the offices of Xxxxxxx & Xxxxx, 000 Xxxx
Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000 or at such other time and place as
the parties may mutually agree to in writing, at which the transactions
contemplated by this Agreement shall be consummated.
1.9 Closing Balance Sheet. "Closing Balance Sheet" shall mean the estimated
balance sheet for the Company as of the Closing Date, to be prepared in good
faith and delivered by OGC at the Closing. A final Closing Balance Sheet,
certified by an executive officer of OGC, shall be prepared in good faith and
delivered by OGC within 14 days after the Closing. The final Closing Balance
Sheet shall be prepared in accordance with generally accepted accounting
principles and on a basis consistent with the September Balance Sheet, except
that the Inventory for purposes of the Closing Balance Sheet shall be valued in
a manner consistent with the March 28, 1997 balance sheet.
1.10 Closing Date. "Closing Date" shall mean May 12, 1997, or such other
date as the parties may mutually agree to in writing.
1.11 Company. "Company" shall mean Barrier Films Corporation, a Nevada
corporation.
1.12 Contracts. "Contracts" shall mean all of the contracts, agreements,
leases and legally binding commitments, written and oral, to which the Company
is a party or by which it is bound.
1.13 Disclosure Schedule. "Disclosure Schedule" shall mean the disclosure
schedule delivered by OGC to the Buyer contemporaneously with the execution and
delivery of this Agreement and, as amended, on the Closing Date.
1.14 Earn-Out Payment. "Earn-Out Payment" shall mean an amount equal to Five
Hundred and no/100 Dollars ($500,000.00) to be paid by the Buyer to OGC
pursuant to Section 2.4 hereof.
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1.15 Employment Agreements. "Employment Agreements" shall mean the
Employment Agreements between the Company and each of Xxxxxxx X. Xxxxxx,
Xxxxxxx Xxxxxx and Xxxxxxx Xxxxxxxx.
1.16 Equipment. "Equipment" shall mean all machinery, vehicles, equipment
(including so-called "Line No. 2"), furniture, fixtures, furnishings, molds,
parts, office equipment, computers and other items of tangible personal
property, which are either presently owned and used, or are owned and used on
the Closing Date, by the Company, including without limitation those items of
Equipment set forth on Schedule A attached hereto.
1.17 Financial Statements. "Financial Statements" shall mean the unaudited
balance sheet and income statement for the interim period ended September 27,
1996, as certified by an executive officer of OGC.
1.18 Initial Cash Payment. "Initial Cash Payment" shall mean the cash
payment from Buyer to OGC at Closing in the amount of Four Million Ninety-Six
Thousand Six Hundred Ninety-Five and no/100 Dollars ($4,096,695.00) subject to
adjustment as set forth in Sections 2.3 and 2.4 hereof.
1.19 Inventory. "Inventory" shall mean all of the Company's inventories of
raw materials, supplies, repair parts, works-in-process and finished goods.
1.20 Law. "Law" means any federal, state, local or other law, statute,
ordinance or similar governmental requirement, and any rule, regulation or
order promulgated thereunder.
1.21 Lien. "Lien" shall mean, with respect to any asset: (a) any mortgage,
pledge, lien, charge, claim, restriction, reservation, condition, easement,
covenant, lease, encroachment, title defect, imposition, security interest or
other encumbrance of any kind; and (b) the interest of a vendor or lessor under
any conditional sale agreement, financing lease or other title retention
agreement relating to such asset.
1.22 Litigation. "Litigation" shall mean all suits, audit inquiries,
charges, litigation, arbitrations, proceedings, governmental investigations,
citations and actions of any kind against or by the Company.
1.23 OGC. "OGC" shall mean Outlook Group Corp., a Wisconsin corporation.
1.24 OGC's Knowledge. "OGC's Knowledge" shall mean the best knowledge and
belief of the executive officers of OGC after reasonable inquiry of officers of
the Company.
1.25 Permits. "Permits" shall mean all permits, licenses, certifications and
governmental authorizations required for the conduct of the Business or
ownership or use of the Assets.
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1.26 Real Properties. "Real Properties" shall mean all real properties and
improvements thereto owned or leased by the Company.
1.27 Rebate and Supply Agreement. "Rebate and Supply Agreement" shall mean
the rebate and supply agreement among the Company, World Class Film Corp. and
OGC (solely on behalf of its operating subsidiary, Outlook Packaging, Inc.),
regarding the supply of monolayer and co-extruded films to OGC, in the form set
forth as Exhibit A attached hereto.
1.28 Secured Promissory Note. "Secured Promissory Note" shall mean the
secured promissory note from the Buyer to OGC delivered at Closing in the
amount of Two Million Three Hundred Thousand and no/100 Dollars
($2,300,000.00), as adjusted, in the form set forth as Exhibit B attached
hereto.
1.29 Security Agreement. "Security Agreement" shall mean the Security
Agreement made by the Company in favor of OGC, in the form set forth as Exhibit
C attached hereto.
1.30 September Balance Sheet. "September Balance Sheet" shall mean the
Company's unaudited balance sheet as of September 27, 1996, as certified by an
executive officer of OGC.
1.31 Stock. "Stock" shall mean all 91,100 shares of the common stock, $.01
par value, of the Company issued and outstanding now and at the Effective Time
of Closing, which shares represent, all of the issued and outstanding equity
securities of the Company.
1.32 Total Purchase Price. "Total Purchase Price" shall mean: (a) Six
Million Eight Hundred Ninety-Six Thousand Six Hundred Ninety-Five and no/100
Dollars ($6,896,695.00), less the liabilities shown on the Closing Balance
Sheet and assumed by the Buyer as set forth in Section 2.3 hereof, consisting
of the Initial Cash Payment, the Secured Promissory Note and the Earn-Out
Payment; (b) plus or minus the Working Capital Adjustment. The Total Purchase
Price as finally determined shall be reflected on a closing statement.
1.33 Working Capital Adjustment. "Working Capital Adjustment" shall mean the
adjustment to the Initial Cash Payment and Total Purchase Price, as set forth
in Section 2.4 hereof.
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ARTICLE II
PURCHASE AND SALE; WORKING CAPITAL ADJUSTMENT;
EARN-OUT PAYMENT
2.1 Purchase and Sale. At the Closing, and upon all of the terms and
subject to all of the conditions of this Agreement, OGC shall sell, assign,
convey and deliver to the Buyer, and the Buyer shall purchase and accept from
OGC, the Stock free and clear of all Liens.
2.2 Payment of Purchase Price. At the Closing, upon delivery of the Stock
free and clear of all Liens, and upon all of the terms and subject to all of
the conditions of this Agreement, the Buyer shall pay and/or deliver to OGC the
following as part of the Total Purchase Price:
(a) The Initial Cash Payment, as adjusted pursuant to Sections 2.3 and
2.4 hereof, to be paid by certified or bank cashier's check made in the name
of OGC or by wire transfer into an account designated by OGC; and
(b) The Secured Promissory Note.
2.3 Liabilities Adjustment. As soon as practicable after the execution of
this Agreement and in any event not less than one week prior to the Closing
Date, OGC shall deliver to the Buyer a pro forma Closing Balance Sheet setting
forth the estimated liabilities which will be assumed by the Buyer and applied
to reduce the Total Purchase Price as set forth below. At the Closing, OGC
shall deliver to the Buyer an estimated Closing Balance Sheet, together with an
itemized list of the liabilities stated thereon to be assumed by the Buyer.
Such Closing Balance Sheet shall exclude all debts and liabilities of the
Company to be retained by OGC (including bank debt and intercompany account
balances). The Buyer shall have the right, in its reasonable discretion, not
to assume certain liabilities stated on the Closing Balance Sheet, in which
event any such liabilities will be retained by OGC and not be applied to reduce
the Purchase Price. All of the liabilities stated on the Closing Balance Sheet
to be assumed by the Buyer shall reduce the Initial Cash Payment on a
dollar-for-dollar basis. Within 14 days following the Closing Date, OGC shall
deliver to the Buyer a final Closing Balance Sheet and itemized list of the
liabilities stated thereon assumed by the Buyer, and any difference between the
amount of the liabilities as shown on such final Closing Balance Sheet and
those shown on the estimated Closing Balance Sheet shall be applied to increase
or decrease, as the case may be, the amounts otherwise payable following the
Closing Date under Section 2.4 below. The Buyer agrees to assume all of the
liabilities shown on the final Closing Balance Sheet which are applied to
reduce the Initial Cash Payment, and OGC shall be responsible for all debts,
obligations and liabilities which should have been shown on such Closing
Balance Sheet but which were not.
2.4 Working Capital Adjustment. At the Closing, OGC shall deliver to the
Buyer its determination of the Working Capital Adjustment (as defined below),
based on amounts shown on the estimated Closing Balance Sheet. OGC shall
permit the Buyer (or its
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representatives) to observe the taking of any Inventory, and to receive copies
of invoices and other documents supporting the Accounts and liabilities assumed
by the Buyer, in connection with the preparation of the Closing Balance Sheet
and Working Capital Adjustment. The Working Capital Adjustment shall be equal
to the aggregate value of the Company's Accounts and Inventory as shown on the
Closing Balance Sheet minus the value of such items as shown on the September
Balance Sheet; provided, however, that the value of Retained Accounts (as
defined in Section 2.7 hereof) shall be excluded from the Closing Balance Sheet
for purposes of determining the Working Capital Adjustment and shall,
therefore, reduce the Initial Cash Payment and the Total Purchase Price. The
Inventory on the Closing Balance Sheet will be valued in a manner consistent
with the manner of valuing the Inventory on the March 28, 1997 balance sheet.
The Working Capital Adjustment shall be applied, dollar for dollar, to the
Initial Cash Payment. Within 14 days following the Closing Date, OGC shall
deliver to the Buyer a final Working Capital Adjustment based on a final
Closing Balance Sheet. The Working Capital Adjustment, as finally determined
(plus or minus any difference between the amount of the assumed liabilities
estimated at Closing and finally determined under Section 2.3 above), shall be
paid by the Buyer or OGC, as the case may be, interest free, within 90 days
following the Closing Date.
2.5 Earn-Out Payment. In addition, as part of the Total Purchase Price, the
Buyer shall pay to OGC the Earn-Out Payment pursuant to the following payment
schedule:
(a) One percent (1%) of the Company's gross sales during the first year
following the Closing Date;
(b) Two percent (2%) of the Company's gross sales during each of the
second, third, fourth and fifth years following the Closing Date;
(c) Three percent (3%) of all Company sales made to and paid for by OGC
during each of the first, second, third, fourth and fifth years following the
Closing Date.
The Buyer shall determine and pay such portions of the Earn-Out Payment
within 60 days following the end of each applicable year, which determination
shall be subject to review and audit by OGC. If any inaccuracy in the Buyer's
determination of the Royalties is discovered by OGC in its review and/or audit,
the Buyer shall be responsible for reimbursing OGC for its costs and expenses
incurred in connection with such review and/or audit.
Notwithstanding the above schedule for making the Earn-Out Payment, the
minimum payments to be paid to OGC shall be $50,000 in the first year, $75,000
in the second year, $100,000 in the third year, $125,000 in the fourth year,
and $150,000 in the fifth and final year, for a total of $500,000. Any accrued
portion of the Earn-Out Payment which is not paid when due shall bear interest
at 12% per annum. Notwithstanding anything herein to the contrary, the total
amount of the Earn-Out Payment shall not exceed $500,000 (plus any applicable
interest upon default) under any circumstances.
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2.6 Rebate and Supply Arrangement. Upon Closing, OGC shall and Buyer shall
cause the Company and World Class Film Corp. ("World Class") to enter into the
Rebate and Supply Agreement. As consideration for OGC's agreement to enter
into the Rebate and Supply Agreement and for the other business opportunities
available as a result of the transactions contemplated by this Agreement and
the Rebate and Supply Agreement, the Company agrees to secure such obligations
by granting to OGC a qualified secondary security interest in the Company's
assets, as set forth in the Security Agreement.
2.7 Retained Accounts Receivable.
(a) The parties agree that the Wesprint account receivable (the
"Wesprint Account") set forth on the Closing Balance Sheet shall be retained by
OGC and not transferred to the Buyer. The retention of the Wesprint Account
shall be excluded from the value of the Accounts set forth on the Closing
Balance Sheet, which will reduce the Working Capital Adjustment and thus the
Initial Cash Payment and the Total Purchase Price. OGC shall have the right to
take such action as it deems necessary to collect the full amount on the
Wesprint Account, provided that any collection efforts made by OGC shall not
adversely affect the Company's continuing relationship (if any) with Wesprint.
The Buyer shall provide reasonable cooperation to OGC in connection with OGC's
collection efforts on the Wesprint Account. The Buyer agrees to provide a
$50,000 line of credit to Wesprint, make arrangements with Wesprint for the
weekly payment by Wesprint of amounts in excess of those otherwise payable by
Wesprint on invoices provided by the Company and/or World Class after the
Closing Date, and immediately forward to OGC any such excess amounts which will
be applied to reduce the Wesprint Account. The Buyer shall also provide weekly
payment reports with respect to the Wesprint Account and prompt notification of
any failure by Wesprint to make payments on the Wesprint Account or otherwise.
(b) The parties agree that accounts receivable from Xxxxx-Standard,
Mesa Fibres, Respire, Sierra Converting, Trico Converting and Dove Medical
outstanding as of the Closing Date (together with the Wesprint Account, the
"Retained Accounts") shall be retained by OGC and not transferred to the Buyer.
The value of such Retained Accounts shall be excluded from the value of the
Accounts set forth on the Closing Balance Sheet, which will reduce the Working
Capital Adjustment and thus the Initial Cash Payment and the Total Purchase
Price. OGC shall have the right to take such action as it deems necessary to
collect the full amount on the Retained Accounts, and the Buyer agrees to
immediately forward to OGC any amounts received by the Buyer relating to the
Retained Accounts.
2.8 Xxxxxxxx Payment. The parties understand that Xxxxxxx Xxxxxxxx has
indicated that he intends to retire. OGC and the Buyer agree to share equally
the cost of any payments made to Xxxxxxx Xxxxxxxx in connection with continued
short-term employment or retirement, provided that OGC shall not be responsible
for paying more than $5,000. OGC's $5,000 payment obligation with regard to
Xxxxxxx Xxxxxxxx shall reduce the Initial Cash Payment and thus the Total
Purchase Price.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF OGC
OGC represents and warrants to the Buyer that, except as set forth on the
Disclosure Schedule:
3.1 Ownership of Purchased Shares. OGC owns and, at the Closing, will own
of record and beneficially the Stock and has and, at the Closing, will have
good and marketable title to the Stock free and clear of any and all Liens.
3.2 Enforceability; Conflicting Obligations. OGC has full right, power,
authority and capacity to enter into and perform this Agreement. All consents,
approvals, authorizations and orders of, or other action by or filing with, any
person, business entity, court or governmental authority or agency necessary
for the execution, delivery and performance by OGC of this Agreement have been
obtained, taken or made. This Agreement is OGC's valid and binding obligation,
enforceable against OGC in accordance with its terms. The making, execution,
delivery and performance of this Agreement do not violate, conflict with, or
result in a default under, any material agreement to which OGC is a party or by
which the Stock is bound, or any material Law, order, rule, regulation, writ,
injunction or decree having jurisdiction over OGC or the Stock.
3.3 No Broker. OGC has not incurred any brokers', finders' or similar fee
in connection with the transactions contemplated by this Agreement.
3.4 Organization; Authority. The Company is a corporation, duly and validly
organized and existing and in good standing under the laws of the State of
Nevada. The Company is qualified to do business in all other jurisdictions
wherein the ownership or leasing of property by the Company, or the conduct of
the Company's business, requires qualification as a foreign corporation. The
Company has no subsidiaries and does not own, directly or indirectly, the
capital stock of any other corporation or any interest in any partnership,
joint venture or other business enterprise. The Company has full corporate
power and authority and all necessary permits, licenses, approvals,
authorizations, franchises and registrations to carry on its business as it is
now conducted, and to own its assets and properties. The Company owns or has
the right to use all Assets which are necessary for the operation of its
business.
3.5 Capitalization. The entire authorized capital stock of the Company
consists solely of 200,000 shares of common stock, $.01 par value, of which
91,100 shares are issued and outstanding. All of the outstanding capital stock
of the Company is duly authorized, validly issued, fully paid and
nonassessable. There are no options, warrants, conversion or preemptive rights
or other rights to subscribe for or purchase, or other commitments,
arrangements, understandings or contracts with respect to, any capital stock of
the Company. All of the issued and outstanding shares of capital stock of the
Company are owned by OGC.
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3.6 No Violation or Conflict. The execution, delivery and performance of
this Agreement by OGC do not and will not, in any material respect, conflict
with, violate or constitute a default under any Law, judgment, order, decree,
the Articles of Incorporation or Bylaws of OGC, the Company or any contract or
agreement to which OGC or the Company is a party or by which OGC, the Company
or the Stock is bound.
3.7 Title to and Condition of Assets.
(a) The Company owns good, valid and marketable title to all of the
Assets it owns or purports to own, in all cases free and clear of any and all
Liens.
(b) The Buildings and Equipment are in good operating condition and
repair, ordinary wear and tear excepted, are reasonably suited for the purposes
for which they are used and are performing the functions for which they are
intended. No notice of violation of any building, zoning or other law relating
to their respective uses has been received by the Company.
(c) The Inventory is of a quality and quantity merchantable and
useable or saleable within a reasonable time period in the ordinary course of
business.
(d) All of the Accounts (other than the Retained Accounts) have arisen
from bona fide transactions in the ordinary course of business and are valid
and enforceable claims. No portion of any Account is subject to a counterclaim
or set off or, to OGC's Knowledge, is in dispute. No payments due on any of
the Accounts (other than the Retained Accounts) have been outstanding and
unpaid or more than 90 days after billing.
(e) All leases pursuant to which the Company leases from others
material amounts of real or personal property (including Real Properties,
Buildings and Equipment) and in full force and effect and constitute the legal
and binding obligations of the Company and, to OGC's Knowledge, the other
parties thereto. To OGC's Knowledge, no party is in default under any such
leases. No such lease will require the consent of the lessor in connection with
the transactions contemplated by this Agreement. The consummation of the
transactions contemplated by this Agreement will not cause the termination of,
or a breach, violation or default under, any such lease.
(f) The Real Properties constitute all real property and improvements
leased by the Company. The Company owns no real estate or other real property.
OGC has no notice or knowledge of any planned or contemplated public
improvements which may result in special assessments against the Real
Properties or otherwise materially affect the availability of utility service
or access to the Real Properties; or any increase in the assessed value of the
Real Properties from any tax assessing authorities which would increase the
estimated real estate taxes for the Real Properties.
3.8 Litigation. The Company is not subject to any outstanding judgment,
order, writ, injunction or decree of, or settlement agreement with, any person,
corporation,
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business entity, court, arbitrator or governmental agency or authority,
limiting, restricting or adversely affecting the Company or the Business. The
Company is not a party to any pending or, to OGC's Knowledge, threatened
Litigation.
3.9 Financial Statements. The Financial Statements were prepared in
accordance with generally accepted accounting principles consistently applied
throughout all periods (other than the preparation of notes thereto and subject
to normal year-end adjustments) and fairly present the financial condition and
the results of operation of the Company as of the relevant date and for the
periods thereof.
3.10 Absence of Certain Changes. Since September 27, 1996, there has not
been any, and no event has occurred and no facts or circumstances exist which,
will likely result in any: (a) material adverse change in the financial
condition, properties or operations of the Company; or (b) damage, destruction
or loss which has materially and adversely affected, or will materially and
adversely affect, the business or assets of the Company or the Stock.
3.11 Contracts. Each of the Contracts is in full force and effect and
constitutes the legal and binding obligation of the Company and, to OGC's
Knowledge, the other parties thereto. To OGC's Knowledge, no party is in
default under such Contracts. No Contract requires the written consent of, or
prior notice to, any third party in connection with the transactions
contemplated hereby.
3.12 No Violation of Law. The Company is not in violation of any Permits,
any Law, or any decree, judgment or order, or any zoning, building, planning,
use or other similar restriction.
3.13 Taxes. The Company has paid or made full and adequate provision for all
federal, state and local taxes or other governmental charges (including all
income, franchise, sales, payroll, property, employee withholding, social
security and unemployment taxes) with respect to its business or the Assets
prior to the date hereof. The Company has filed or will file all required
returns and reports with respect to such taxes and charges. No deficiencies or
claims for additional taxes have been proposed or assessed by the IRS or other
governmental entity or taxing authority against either Company.
3.14 Permits. The Company has all material Permits necessary for the
ownership of the Assets and the operation of its business. The Company is
operating in compliance with all such Permits. Each Permit has been lawfully
and validly issued, and no proceeding is pending or, to OGC's Knowledge,
threatened looking toward the revocation, suspension, termination or limitation
of any Permit. The consummation of the transactions contemplated hereby will
not result in the revocation, suspension, termination or limitation of any
Permit, and no Permit will require the consent of, filing with or payment to
its issuing authority as a result of the consummation of the transactions
contemplated by this Agreement.
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3.15 Governmental Approvals. No permission, approval, determination, consent
or waiver by, or any declaration, filing or registration with, any governmental
or regulatory authority is required in connection with the execution, delivery
and performance of this Agreement by the Company or OGC.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to OGC that:
4.1 Organization; Authority. The Buyer is a corporation, duly and validly
organized and existing and in good standing under the laws of the State of New
York. The Buyer has full corporate power and authority and all necessary
permits, licenses, approvals, authorizations, franchises and registrations to
carry on its business and to own its assets and properties. The Buyer has only
recently been formed, and has nominal assets and liabilities.
4.2 Authorization; Enforceability. The Buyer has full right, power,
authority and capacity to execute, deliver and perform this Agreement and the
other agreements and documents contemplated hereby. This Agreement and the
Secured Promissory Note have been duly executed and delivered by the Buyer.
This Agreement and the Secured Promissory Note are the Buyer's valid and
binding obligations, enforceable against the Buyer in accordance with their
respective terms.
4.3 No Violation or Conflict. The making, execution, delivery and
performance of this Agreement by the Buyer do not conflict with or violate any
Law or agreement to which the Buyer is a party or by which the Buyer is bound.
4.4 No Broker. The Buyer has not incurred any brokers', finders' or any
similar fee in connection with the transactions contemplated by this Agreement.
4.5 Litigation. There are no actions, suits or proceedings pending or, to
the knowledge of the Buyer, threatened, by any person or governmental agency,
involving the Buyer, which question the validity, legality or propriety of the
transactions contemplated by this Agreement.
4.6 Consents and Approvals. No permission, approval, determination, consent
or waiver by, or any declaration, filing or registration with, or notice to any
governmental or regulatory authority or third party is required in connection
with the execution, delivery and performance of this Agreement by the Buyer.
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ARTICLE V
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER
Each and every obligation of the Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the
following express conditions precedent:
5.1 Representations and Warranties. The representations and warranties made
by OGC in this Agreement shall be true and correct in all material respects as
of the Closing Date with the same force and effect as though said
representations and warranties had been made on the Closing Date.
5.2 Compliance with Agreement. OGC shall have performed and complied with,
in all material respects, its obligations under this Agreement which are to be
performed or complied with by OGC prior to or on the Closing Date.
5.3 Proceedings Taken. All proceedings, corporate or other, required to be
taken by OGC in connection with the transactions contemplated by this Agreement
shall have been taken, and all corporate approvals necessary for the execution,
delivery and performance of this Agreement shall have been obtained by OGC.
5.4 No Litigation. No investigation, suit, action or other proceeding shall
be threatened or pending before any court or governmental agency that seeks the
restraint, prohibition, damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby.
5.5 No Adverse Change. During the period from the date hereof to the
Closing Date, there shall not have occurred any event, condition or fact which
is materially adverse to the financial condition, properties, business or
results of operations of the Company and which continues to exist on the
Closing Date.
5.6 Material Damage to the Business or the Assets. Between the date of this
Agreement and the Closing Date, neither the Business nor the Assets shall have
been materially and adversely affected by reason of any loss, taking,
condemnation, destruction or physical damage, whether or not insured against.
5.7 Conveyance of Stock. OGC shall have delivered to the Buyer certificates
representing all of the Stock, free and clear of all Liens, which certificates
shall be duly endorsed in blank or have duly executed stock powers attached
thereto and shall otherwise be in proper form for transfer.
5.8 Repayment of Loans. OGC shall have paid or made arrangements to repay
all borrowings incurred by the Company, and all Liens on the Assets shall have
been removed.
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5.9 Closing Balance Sheet. OGC shall have delivered to the Buyer the
Closing Balance Sheet, together with a calculation of the Working Capital
Adjustment.
5.10 Rebate and Supply Agreement. OGC shall have delivered to the Buyer the
Rebate and Supply Agreement, as properly executed and delivered.
5.11 Other Documents. OGC shall have delivered to the Buyer such
certificates and documents of officers of the Company and public officials as
shall be reasonably requested by the Buyer's counsel to establish the existence
and good standing of the Company and the due authorization of this Agreement
and the transactions contemplated hereby by OGC and the Company, including (a)
copies of the Articles of Incorporation of the Company, as amended to date,
certified as of a recent date by appropriate governmental officials; and (b)
certificates of appropriate governmental officials as to the good standing of
the Company, dated as of a recent date, in its jurisdiction of organization and
any other jurisdiction in which it is qualified to do business.
5.12 Approvals and Consents. There shall have been secured such permissions,
approvals, determinations, consents and waivers, if any, as may be required by
Law, regulatory authorities or the Contracts in order to consummate the
transactions contemplated by this Agreement.
5.13 Books and Records. OGC shall have delivered to the Buyer all corporate
minute books, stock transfer books, blank stock certificates and corporate
seals of the Company. Copies of the same shall have been delivered to the
Buyer at least one week prior to the Closing Date.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF OGC
Each and every obligation of OGC to be performed on the Closing Date shall be
subject to the satisfaction prior to or at the Closing of the following express
conditions precedent:
6.1 Representations and Warranties. The representations and warranties made
by the Buyer in this Agreement shall be true and correct as of the Closing Date
with the same force and effect as though such representations and warranties
had been made on the Closing Date.
6.2 Compliance with Agreement. The Buyer shall have performed and complied
with all of their obligations under this Agreement which are to be performed or
complied with by them prior to or on the Closing Date.
6.3 Proceedings Taken. All proceedings, corporate or other, required to be
taken by OGC in connection with the transactions contemplated by this Agreement
shall have
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been taken, and all corporate approvals necessary for the execution, delivery
and performance of this Agreement shall have been obtained by OGC.
6.4 No Litigation. No investigation, suit, action or other proceeding shall
be threatened or pending before any court or governmental agency that seeks the
restraint, prohibition, damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated hereby.
6.5 Employment Agreement and Related Consents. OGC shall have received the
consents of each of the Company's employees under the Employment Agreements to
the transactions contemplated hereby, and the Buyer shall have agreed to assume
the Employment Agreements (other than the stock option provisions included
therein and Xxxxxxx Xxxxxxxx'x Employment Agreement due to his intention to
retire).
6.6 Third Party Consents. OGC shall have obtained all necessary
governmental and third party consents and approvals for the consummation of the
transactions contemplated by this Agreement.
6.7 Deliveries at Closing. The Buyer shall have delivered and made to OGC
the payments contemplated by Sections 2.2 and 2.3 hereof and shall have
delivered the following documents, each properly executed and dated as of the
Closing Date: (a) the Secured Promissory Note; (b) the Security Agreement; and
(c) the Rebate and Supply Agreement.
ARTICLE VII
INDEMNITIES
7.1 OGC's Indemnity. Subject to the provisions of Section 7.3 hereof, OGC
hereby indemnifies and holds the Buyer and their agents (the "Buyer Parties")
harmless from and against, and agree to promptly defend the Buyer Parties from
and reimburse the Buyer Parties for, any and all losses, damages, costs,
expenses, liabilities, obligations and claims of any kind (including, without
limitation, reasonable attorneys' fees, other legal costs and expenses, and
costs and expenses relating to or resulting from any lawsuits, actions or
proceedings, whether by a governmental agency or otherwise) which the Buyer
Parties may at any time suffer or incur, or become subject to, as a result of
or in connection with:
(a) any breach or inaccuracy of any of the representations and
warranties made by OGC in or pursuant to this Agreement;
(b) any failure by OGC to carry out, perform, satisfy and discharge
any of his or her covenants, agreements, undertakings, liabilities or
obligations under this Agreement or under any of the documents and materials
delivered by OGC pursuant to this Agreement;
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(c) any litigation or proceeding commenced after the Closing Date to
the extent it results from activities conducted by the Company prior to the
Closing Date;
(d) any taxes owed in respect of the ownership and operation of the
Company prior to the Closing Date;
(e) the amount of the deferred income tax liabilities as shown on the
Closing Balance Sheet, constituting book to tax differences in the method
of depreciating certain of the Company's assets, when and as the accumulated tax
benefit of accelerated depreciation of such assets for tax purposes reverses and
becomes an aggregate net tax liability;
(f) any debts, liabilities and obligations of the Company incurred
prior to the Closing Date which should have been shown on the Closing Balance
Sheet but which were not so shown (other than continuing obligations or future
performance under the Contracts or outstanding purchase or sales orders and
confirmations).
7.2 Buyer's Indemnity. Subject to the provisions of Section 7.3 hereof, the
Buyer hereby indemnify and hold OGC and its officers, directors, employees,
subsidiaries, affiliates and agents (the "OGC Parties") harmless from and
against, and agree to promptly defend OGC Parties from and reimburse OGC
Parties for, any and all losses, damages, costs, expenses, liabilities,
obligations and claims of any kind (including, without limitation, reasonable
attorneys' fees and other legal costs and expenses, and costs and expenses
relating to or resulting from any lawsuits, actions or proceedings, whether by
a governmental agency or otherwise) which OGC Parties may at any time suffer or
incur, or become subject to, as a result of or in connection with:
(a) any breach or inaccuracy of any representations and warranties
made by the Buyer in or pursuant to this Agreement;
(b) any failure by the Buyer to carry out, perform, satisfy and
discharge any of their covenants, agreements, undertakings or obligations under
this Agreement, the Secured Promissory Note or under any of the documents and
materials delivered by Buyer pursuant to this Agreement;
(c) any taxes owed in respect of the ownership and operation of the
Company on and after the Closing Date;
(d) any debts, liabilities and obligations of the Company as shown on
the final Closing Balance Sheet;
(e) any debts, liabilities and obligations of the Buyer or the Company
incurred on and after the Closing Date.
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7.3 Provisions Regarding Indemnities.
(a) The amounts for which an indemnifying party shall be liable under
Sections 7.1 and 7.2 of this Agreement shall be: (i) net of any tax benefit
realized by the indemnified party by reason of the facts and circumstances
giving rise to the liability; and (ii) calculated by taking into account any
tax required to be paid by the indemnified party as a result of any payment
made to the indemnified party pursuant to Sections 7.1, 7.2 and 7.3 of this
Agreement, but not including any tax that arises as a result of a reimbursement
for tax pursuant to this clause; and (iii) net of any insurance proceeds
received by the indemnified party in connection with the facts giving rise to
the right of indemnification.
(b) The indemnified party shall promptly notify the indemnifying party
in reasonable detail of any claim, demand, action or proceeding for which
indemnification will be sought under Section 7.1, 7.2 or 7.3 of this Agreement,
and if such claim, demand, action or proceeding is a third party claim, demand,
action or proceeding, the indemnifying party will have the right at its expense
to assume the defense thereof using counsel reasonably acceptable to the
indemnified party. The indemnified party shall have the right to participate,
at its own expense, with respect to any such third party claim, demand, action
or proceeding. In connection with any such third party claim, demand, action or
proceeding, the parties shall cooperate with each other and provide each other
with access to relevant books and records in their possession. No such third
party claim, demand, action or proceeding shall be settled without the prior
written consent of the indemnified party, which shall not be unreasonably
withheld. If a firm written offer is made to settle any such third party claim,
demand, action or proceeding and the indemnifying party proposes to accept such
settlement and the indemnified party refuses to consent to such settlement,
then: (i) the indemnifying party shall be excused from, and the indemnified
party shall be solely responsible for, all further defense of such third party
claim, demand, action or proceeding; (ii) the maximum liability of the
indemnifying party relating to such third party claim, demand, action or
proceeding shall be the amount of the proposed settlement if the amount
thereafter recovered from the indemnified party on such third party claim,
demand, action or proceeding is greater than the amount of the proposed
settlement; and (iii) the indemnified party shall pay all attorneys' fees and
legal costs and expenses incurred after rejection of such settlement by the
indemnified party, but if the amount thereafter recovered by such third party
from the indemnified party is less than the amount of the proposed settlement,
the indemnified party shall be reimbursed by the indemnifying party for such
attorneys' fees and legal costs and expenses up to a maximum amount equal to the
difference between the amount recovered by such third party and the amount of
the proposed settlement.
(c) OGC shall not be required to indemnify the Buyer Parties under
Section 7.1 hereof unless and until the aggregate of the Buyer's losses,
damages, costs, expenses, liabilities, obligations and claims subject to such
indemnification obligation exceeds Fifty Thousand Dollars ($50,000), and then
OGC shall be responsible for the first $50,000 of such losses, damages, costs,
expenses, liabilities, obligations and claims in addition to any amounts in
excess thereof.
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(d) The Buyer Parties agree that their indemnification rights under
this Article VII shall be their exclusive remedy for any breach or inaccuracy
of the representations and warranties made by OGC in or pursuant to this
Agreement, except in instances of fraud or intentional misconduct on the part of
OGC.
ARTICLE VIII
CERTAIN MATTERS PENDING THE CLOSING
From and after the date of this Agreement and until the Closing Date:
8.1 Full Access.
(a) The Buyer, and its authorized agents, officers and representatives,
shall have full access to the Company's books, records and Assets, to conduct
such examination and investigation of the Company as it deems necessary,
provided that such examinations shall be during the Company's normal business
hours and shall not unreasonably interfere with its operations and activities.
(b) If the transactions provided for herein are not consummated, the
Buyer, and its officers, agents and representatives, will hold in strict
confidence, and not utilize in any manner, all information obtained from OGC,
the Company and their officers, agents or representatives, excepting however,
any such information which: (i) was or is in the public domain, (ii) was in
fact known to the Buyer prior to disclosure to the Buyer by the Company or OGC,
(iii) is disclosed to the Buyer by a third party (other than officers,
directors, employees and agents of the Company or OGC) who was not obligated to
maintain the confidentiality of such information after disclosure by the
Company or OGC, or (iv) thereafter through an act or failure to act on the part
of the Company or OGC becomes information generally available to the public.
8.2 Carry on in Regular Course. The Company shall diligently carry on its
business in the regular course and substantially in the same manner as
heretofore and shall not make or institute any unusual or novel methods of
manufacture, purchase, sale, lease, management, accounting or operation.
8.3 Use of Assets. The Company shall use, operate, maintain and repair the
Assets in a normal business manner.
8.4 Preservation of Relationships. The Company will use its reasonable best
efforts to preserve its business intact, to retain the services of its
employees, and to maintain business with suppliers, customers and others having
business relationships with the Company.
8.5 No Default. The Company shall not intentionally do any act or omit to
do any act, or permit any act or omission to act, which will cause a breach of
any of the Contracts.
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8.6 Publicity. No party shall make any further public announcement, issue
any press release or otherwise make any communication to employees, suppliers
and customers of either party or to the general public, without the prior
written consent of the other party. Notwithstanding the above, the Buyer
understands and agrees that OGC may be required to issue a press release
regarding this Agreement or the transactions contemplated hereby pursuant to
applicable securities laws and the rules of the Nasdaq National Market.
8.7 Insurance Policies. The Company shall maintain all of its insurance
policies in full force and effect.
8.8 Contracts and Commitments. The Company shall not enter into any
contract or commitment or engage in any transaction not in the usual and
ordinary course of business and consistent with their normal business
practices, and the Company shall not purchase, lease, sell or dispose of any
capital asset other than in the ordinary course of business without the prior
written consent of the Buyer.
8.9 Compliance with Laws. The Company shall comply with all applicable Laws
and orders of any court or federal, state, local or other governmental entity.
8.10 Taxes. The Company shall file all federal and state tax returns which
are required to be filed, and shall pay or make provision for the payment of
all taxes owed by it.
8.11 Amendments. OGC shall take no action to amend the Company's Articles of
Incorporation or Bylaws, or make any change in its authorized or issued capital
stock.
ARTICLE IX
MISCELLANEOUS
9.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date, as
follows: (a) by mutual written agreement of OGC and the Buyer; or (b) by the
Buyer if any of the conditions set forth in Article V of this Agreement shall
not have been fulfilled by the Closing Date, if any of the covenants set forth
in Article VIII of this Agreement shall have been breached, or if the Closing
shall not have occurred on or about May 15, 1997; or (c) by OGC if any of the
conditions set forth in Article VI of this Agreement shall not have been
fulfilled by the Closing Date or if the Closing shall not have occurred on or
about May 15, 1997.
9.2 Rights on Termination; Waiver.
(a) If this Agreement is terminated pursuant to Section 9.1, all
further obligations of the parties under or pursuant to this Agreement shall
terminate without further liability of any party to the others, except that the
obligations under Sections 8.1(b), 9.2(b),
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and 9.6 shall survive, and except further that nothing herein shall limit the
right of any party to seek damages for breach of this Agreement. If any of the
conditions set forth in Article V of this Agreement have not been satisfied or
if any of the covenants set forth in Article VIII of this Agreement have not
been complied with, the Buyer may nevertheless elect to proceed with the
consummation of the transactions contemplated hereby, and if any of the
conditions set forth in Article VI have not been satisfied, OGC may
nevertheless elect to proceed with the consummation of the transactions
contemplated hereby.
(b) Notwithstanding any provision to the contrary contained herein,
upon the occurrence of a Breakup Event, the Breakup Fee shall be paid to OGC.
9.3 Survival of Representations and Warranties. All representations and
warranties of the Buyer and OGC contained in this Agreement or made pursuant
hereto shall survive the Closing Date and the consummation of the transactions
contemplated by this Agreement.
9.4 Entire Agreement; Amendment. This Agreement and the documents referred
to herein and to be delivered pursuant hereto constitute the entire agreement
between the parties pertaining to the subject matter hereof, and supersede all
prior and contemporaneous agreements, understandings, negotiations and
discussions of the parties, whether oral or written, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof, except as specifically set forth
herein. No amendment, supplement, modification, waiver or termination of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provision of this Agreement, whether
or not similar, not shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
9.5 Expenses. Whether or not the transactions contemplated by this
Agreement are consummated, each of the parties hereto shall pay the fees and
expenses of its respective counsel, accountants and other experts incident to
the negotiation and preparation of this Agreement and consummation of the
transactions contemplated hereby.
9.6 Governing Law. This Agreement shall be construed and interpreted
according to the laws of the State of New York, without giving effect to its
choice of law provisions.
9.7 Assignment. This Agreement shall not be assigned by any party without
the prior written consent of the other party. Notwithstanding the above, the
Buyer's post-closing obligations under this Agreement may be assigned to an
affiliated entity so long as the ownership of such affiliated entity is
substantially similar to that of the Buyer and such affiliated entity agrees in
writing to honor all of the Buyer's obligations under this Agreement assigned
to such entity.
9.8 Notices. All communications or notices required or permitted by this
Agreement shall be in writing and shall be deemed to have been given at the
earlier of the date when actually delivered to an individual party or to an
officer of a corporate party or
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three (3) business days after deposited in the United States mail, certified or
registered mail, postage prepaid, return receipt requested, and addressed as
follows, or by fax, receipt confirmed, to the indicated number, unless and
until either of such parties notifies the other in accordance with this Section
of a change of address:
If to OGC: Outlook Group Corp.
Attn: Xxxxxx X. Xxxxxx, President and
Chief Operating Officer
0000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxx
Attn: Xxxxxxx X. Xxxxxxx, Esq.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
If to the Buyer: Xxxxxx Xxxxxxx
c/o World Class Film Corp.
00 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxx Xxxxx, Esq.
000 Xxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx Xxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
9.9 Counterparts; Headings. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement. The Table of
Contents and Article and Section headings in this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
9.10 Interpretation. Unless the context requires otherwise, all words used
in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the
singular, and all words in any gender shall extend to and include all genders.
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9.11 Severability. If any provision, clause, or part of this Agreement, or
the application thereof under certain circumstances, is held invalid, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby.
9.12 No Reliance. No third party is entitled to rely on any of the
representations, warranties and agreements of the Buyer and OGC contained in
this Agreement. The parties hereto assume no liability to any third party
because of any reliance on the representations, warranties and agreements of
the Buyer or OGC contained in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Stock Purchase
Agreement as of the date first above written.
BARRIER FILMS LTD. - NEW YORK
_________________________________
Xxxxxx Xxxxxxx, President
OUTLOOK GROUP CORP.
By:
_____________________________
Xxxxxx X. Xxxxxx, President
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