EXHIBIT 10.54
EXECUTION COPY
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PREFERRED STOCK
PURCHASE AGREEMENT
BY AND AMONG
ROLLER BEARING HOLDING COMPANY, INC.,
ROLLER BEARING COMPANY OF AMERICA, INC.,
XX. XXXXXXX X. XXXXXXXX
AND
WHITNEY V, L.P.
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DATED AS OF JULY 25, 2002
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TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS............................................................1
1.01 Definitions...........................................................1
1.02 Accounting Terms: Financial Statements................................9
1.03 Knowledge of the Company..............................................9
ARTICLE 2 PURCHASE AND SALE OF THE CLASS B SHARES................................9
2.01 Purchase and Sale of the Class B Shares...............................9
2.02 Closing...............................................................9
2.03 Payment for and Delivery of Class B Shares...........................10
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................10
3.01 Existence and Power..................................................10
3.02 Authorization; No Contravention......................................10
3.03 Governmental Authorization; Third Party Consents.....................10
3.04 Binding Effect.......................................................11
3.05 Litigation...........................................................11
3.06 Compliance with Laws; Private Sale; Voting Agreements................11
3.07 No Default or Breach.................................................11
3.08 Capitalization; Class B Shares and Conversion Shares.................12
3.09 Subsidiaries.........................................................12
3.10 Title to Properties..................................................13
3.11 Use of Real Property.................................................13
3.12 Taxes................................................................14
3.13 SEC Reports; Financial Condition.....................................15
3.14 Disclosure...........................................................16
3.15 Absence of Certain Changes or Events.................................16
3.16 Environmental Matters................................................17
3.17 Broker's, Finder's or Similar Fees...................................18
3.18 Labor Relations......................................................18
3.19 Employee Benefit Plans...............................................18
3.20 Patents, Trademarks, Etc.............................................20
3.21 Potential Conflicts of Interest......................................21
3.22 Trade Relations......................................................21
3.23 Material Contracts...................................................22
3.24 Insurance............................................................22
3.25 Operating Company....................................................22
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS......................22
4.01 Representations and Warranties of Xxxxxxx X..........................22
4.02 Representations and Warranties of Xxxxxxxx...........................23
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ARTICLE 5 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS TO PURCHASE THE
CLASS B SHARES..................................................................24
5.01 Representations and Warranties.......................................25
5.02 Consents and Approvals...............................................25
5.03 No Material Judgment or Order........................................25
5.04 No Litigation........................................................25
5.05 Purchase of Securities Permitted by Applicable Laws..................25
5.06 Restated Charter.....................................................26
5.07 Opinion of Counsel...................................................26
5.08 Stockholders' Agreement..............................................26
5.09 Management Services Agreement........................................26
5.10 Good Standing Certificates...........................................26
5.11 Appointment of Whitney Director......................................26
5.12 Secretary's Certificate..............................................26
5.13 RBCA Resolution......................................................26
5.14 Contemporaneous Funding..............................................27
5.15 Fairness Opinion.....................................................27
ARTICLE 6 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY TO ISSUE THE CLASS B
SHARES..........................................................................27
6.01 Stockholders' Agreement..............................................27
6.02 Purchase Price.......................................................27
6.03 No Material Judgment or Order........................................27
6.04 No Litigation........................................................27
ARTICLE 7
COVENANTS.......................................................................28
7.01 Public Announcements.................................................28
7.02 Use of Proceeds; Debenture Repurchase................................28
ARTICLE 8
INDEMNIFICATION.................................................................29
8.01 Indemnification......................................................29
8.02 Procedure; Notification..............................................29
8.03 Limitations on Indemnification.......................................30
8.04 Manner of Payment....................................................31
8.05 Put/Call Arrangements................................................31
8.06 Priority of Indemnification Shares...................................32
8.07 Reservation of Shares; Other Assurances..............................32
8.08 Exclusive Remedy.....................................................33
ARTICLE 9
MISCELLANEOUS...................................................................33
9.01 Survival of Representations and Warranties...........................33
9.02 Notices..............................................................33
9.03 E-Documents..........................................................34
9.04 Successors and Assigns...............................................34
9.05 Amendment and Waiver.................................................34
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9.06 Signatures; Counterparts.............................................35
9.07 Headings.............................................................35
9.08 GOVERNING LAW........................................................35
9.09 JURISDICTION, WAIVER OF JURY TRIAL, ETC..............................35
9.10 Severability.........................................................36
9.11 Rules of Construction................................................36
9.12 Entire Agreement.....................................................36
9.13 Expenses.............................................................37
9.14 Publicity............................................................37
9.15 Further Assurances...................................................37
9.16 No Strict Construction...............................................37
DISCLOSURE SCHEDULES
Schedule 3.03 -- Appraisals and Covenants
Schedule 3.05 -- Litigation
Schedule 3.06 -- Compliance with Laws
Schedule 3.09 -- Subsidiaries
Schedule 3.10 -- Real Property
Schedule 3.11 -- Use of Real Property
Schedule 3.12 -- Taxes
Schedule 3.13 -- Projections
Schedule 3.15 -- Absence of Changes
Schedule 3.16 -- Environmental Matters
Schedule 3.18 -- Labor Matters
Schedule 3.19 -- Employee Benefits Matters
Schedule 3.20 -- Patents, Trademark, Etc.
Schedule 3.21 -- Conflicts of Interest
Schedule 3.22 -- Material Contract
Schedule 3.23 -- Trade Relations
Schedule 3.23 -- Insurance
EXHIBITS
Exhibit A -- Restated Charter and Bylaws
Exhibit B -- Management Services Agreement
Exhibit C -- Stockholders' Agreement
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PREFERRED STOCK PURCHASE AGREEMENT
This
Preferred STOCK PURCHASE AGREEMENT is dated as of July
25, 2002 (this "AGREEMENT"), and made by and among Roller Bearing Holding
Company, Inc., a Delaware corporation (the "COMPANY"), Roller Bearing Company of
America, Inc., a Delaware corporation and wholly-owned Subsidiary of the Company
("RBCA"), Xx. Xxxxxxx X. Xxxxxxxx ("XXXXXXXX") and Xxxxxxx V, L.P., a Delaware
limited partnership ("WHITNEY V"). Whitney V and Xxxxxxxx are sometimes referred
to herein collectively as the "PURCHASERS" and each individually as a
"PURCHASER". The Purchasers, the Company and RBCA are sometimes referred to
herein collectively as the "PARTIES" and each individually as a "PARTY".
The Purchasers are parties to a Stockholders' Agreement dated
as of December 18, 2000, by and among the Company, Xxxxxxxx, Xxxxxxx V (as
successor in interest to Whitney Acquisition II, Corp.) and certain other
parties thereto (as in effect from time to time, the "EXISTING STOCKHOLDERS'
AGREEMENT").
Pursuant to (i) the right of first offer granted to Whitney V
in Section 3 of the Existing Stockholders' Agreement, and (ii) the participation
rights granted to Xxxxxxxx in Section 3 of the Existing Stockholders' Agreement,
the Purchasers desire to purchase from the Company, and the Company desires to
sell and issue to the Purchasers, an aggregate amount of 240,000 shares of the
Company's Class B Exchangeable Convertible Participating Preferred Stock, par
value $.01 per share (the "CLASS B PREFERRED STOCK").
In consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.01 DEFINITIONS. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"AFFILIATE" shall mean any Person (a) directly or indirectly
controlling, controlled by, or under common control with, the Company, (b)
directly or indirectly owning or holding five percent (5%) or more of any equity
interest in the Company, or (c) five percent (5%) or more of whose voting stock
or other equity interest is directly or indirectly owned or held by the Company.
For purposes of this definition, "control" (including with correlative meanings,
the terms "controlling", "controlled by" and "under common control with") means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"AFFILIATED GROUP" shall have the meaning assigned to that term in
Section 1504(a) of the Code.
"AUDITED FINANCIAL STATEMENTS" shall have the meaning assigned to
that term in Section 5.11(b).
"BLOCKAGE AMOUNT' shall have the meaning assigned to that term in
Section 8.04.
"BLOCKAGE OPINION" shall have the meaning assigned to that term in
Section 8.04.
"BOARD OF DIRECTORS" shall mean the board of directors of the
Company.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in the City of
New York are authorized or
required by law or executive order to close.
"BY-LAWS" shall mean, unless the context in which such term is used
otherwise requires, the By-laws of the Company or any of its Subsidiaries as in
effect on the date hereof (a copy of which is attached hereto (together with the
Restated Charter) as EXHIBIT A).
"CALL" shall have the meaning assigned to that term in Section
8.05(a).
"CALL NOTICE" shall have the meaning assigned to that term in
Section 8.05(b).
"CERCLA" shall have the meaning assigned to that term in the
definition of "Environmental Laws" below.
"CLASS A COMMON" shall mean the Class A Common Stock, par value $.01
per share, of the Company.
"CLASS B COMMON" shall mean the Class B Supervoting Common Stock,
$0.01 par value per share, of the Company.
"CLASS B SHARES" means the shares of Class B Preferred Stock to be
acquired by the Purchasers pursuant to Section 2.01.
"CLASS B PREFERRED STOCK" shall have the meaning assigned to that
term in the first recital hereof.
"CLASS C PREFERRED STOCK" means the Class C Redeemable Preferred
Stock, par value $.01 per share, of the Company.
"CLASS D PREFERRED STOCK" means the Class D Redeemable Preferred
Stock, par value $.01 per share, of the Company.
"CLOSING" shall have the meaning assigned to that term in Section
2.02.
"CLOSING DATE" shall have the meaning assigned to that term in
Section 2.02.
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"CODE" shall mean the Internal Revenue Code of 1986, as amended, or
any successor statute thereto.
"COMMISSION" shall mean the Securities and Exchange Commission or
any similar agency then having jurisdiction to enforce the Securities Act.
"COMMON STOCK" shall mean, collectively, the Class A Common and the
Class B Common.
"COMPANY" shall have the meaning assigned to that term in the first
paragraph of this Agreement.
"COMPANY INDENTURE" shall mean the Indenture Agreement dated as of
June 15, 1997, among the Company and United States Trust Company of
New York, as
Trustee.
"CONDITION OF THE COMPANY" shall mean the assets, business,
properties, prospects, operations or financial condition of the Company and its
Subsidiaries, taken as a whole.
"CONTINGENT OBLIGATION" as applied to any Person, shall mean any
direct or indirect liability, contingent or otherwise, of that Person: (i) with
respect to any indebtedness, lease, dividend or other obligation of another
Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such liability
will be protected (in whole or in part) against loss with respect thereto; (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings; or (iii)
under any foreign exchange contract, currency swap agreement, interest rate swap
agreement or other similar agreement or arrangement designed to alter the risks
of that Person arising from fluctuations in currency values or interest rates.
Contingent Obligations shall include (a) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of nonperformance by any other party or
parties to an agreement, and (c) any liability of such Person for the
obligations of another through any agreement to purchase, repurchase or
otherwise acquire such obligation or any property constituting security
therefor, to provide funds for the payment or discharge of such obligation or to
maintain the solvency, financial condition or any balance sheet item or level of
income of another. The amount of any Contingent Obligation will be equal to the
amount of the obligation so guaranteed or otherwise supported or, if not a fixed
and determined amount, the maximum amount so guaranteed.
"CONTRACTUAL OBLIGATIONS" shall mean as to any Person, any provision
of any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument or arrangement
(whether in writing or otherwise) to which such Person is a party or by which it
or any of such Person's property is bound.
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"CONVERSION SHARES" shall mean, collectively, the shares of Class A
Common, the shares of Class C Preferred Stock and the shares of Class D
Preferred Stock issuable upon conversion of the Class B Shares in accordance
with the Restated Charter.
"CREDIT AGREEMENT" shall mean the Credit Agreement dated as of May
30, 2002, by and among RBCA, certain of its Subsidiaries, the lenders signatory
thereto and General Electric Capital Corporation and GECC Capital Markets Group,
Inc. (including without limitation the term loans and revolving loans
thereunder, any guarantees and security documents), as amended, extended,
renewed, restated, supplemented or otherwise modified (in whole or in part, and
without limitation as to amount, terms, conditions, covenants and other
provisions) from time to time.
"DEBENTURE REPURCHASE" shall have the meaning set forth in Section
7.02(a).
"DEFINED BENEFIT PLAN" shall mean a defined benefit plan within the
meaning of Section 3(35) of ERISA or Section 414(j) of the Code, whether funded
or unfunded, qualified or non-qualified (whether or not subject to ERISA or the
Code).
"DISCOUNT DEBENTURES" shall mean the 13% Senior Discount Debentures
Due 2009 of the Company in an aggregate principal amount at maturity of
$74,882,000.
"ENVIRONMENTAL LAWS" shall mean any applicable federal, state,
territorial, provincial, foreign or local law, common law doctrine, rule, order,
decree, judgment, injunction, license, permit or regulation relating to
environmental matters, including those pertaining to air, soil, surface water,
ground water (including the protection, cleanup, removal, remediation or damage
thereof), public or employee health or safety or any other environmental matter,
together with any other laws (federal, state, territorial, provincial, foreign
or local) relating to emissions, discharges, releases or threatened releases of
any pollutant or contaminant including, without limitation, medical, chemical,
biological, biohazardous or radioactive waste and materials, into ambient air,
land, surface water, groundwater, personal property or structures, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transportation, discharge or handling of any contaminant, including,
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. 9601 ET SEQ.) ("CERCLA"), the Hazardous Material
Transportation Act (49 U.S.C. 1801 ET SEQ.), the Resource Conservation and
Recovery Act (42 U.S.C. 6901 ET SEQ.) ("RCRA"), the Federal Water Pollution
Control Act (33 U.S.C. 1251 ET SEQ.), the Clean Air Act (42 U.S.C. 1251 ET
SEQ.), the Toxic Substances Control Act (15 U.S.C. 2601 ET SEQ.), and the
Occupational Safety and Health Act (29 U.S.C. 651 ET SEQ.).
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended and the rules and regulations promulgated thereunder.
"ERISA AFFILIATE" shall mean a corporation that is or was a member
of a controlled group of corporations with the Company within the meaning of
Section 4001(a) or (b) of ERISA or Section 414(b) of the Code, a trade or
business (including a sole proprietorship, partnership, trust, estate or
corporation) that is under common control with the Company within
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the meaning of Section 414(m) of the Code, or a trade or business which together
with the Company is treated as a single employer under Section 414(o) of the
Code.
"ESCROW ACCOUNT" shall mean the escrow account administered by
LaSalle Bank National Association pursuant to the Escrow Agreement.
"ESCROW AGREEMENT" shall mean the Escrow Agreement dated as of May
30, 2002, by and among General Electric Capital Corporation (as agent to the
lenders under the Credit Agreement) and LaSalle Bank National Association (as
escrow agent)
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"EXISTING WARRANTS" shall have the meaning assigned to that term in
Section 3.08(a).
"FINANCIAL STATEMENTS" shall mean the Audited Financial Statements
and the Unaudited Financial Statements.
"GAAP" shall mean generally accepted accounting principles in effect
from time to time within the United States, consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean the government of any nation,
state, city, locality or other political subdivision of any thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, regulation or compliance, and any
corporation or other entity owned or controlled, through stock or capital
ownership or otherwise, by any of the foregoing.
"HAZARDOUS MATERIALS" shall mean any material, substance or waste
with respect to which liability or standards of conduct are imposed pursuant to
any Environmental Laws.
"INDEBTEDNESS" shall mean as to any Person (i) all obligations of
such Person for borrowed money (including, without limitation, reimbursement and
all other obligations with respect to surety bonds, unfunded credit commitments,
letters of credit and bankers' acceptances, whether or not matured), (ii) all
indebtedness, obligations or liability of such Person (whether or not evidenced
by notes, bonds, debentures or similar instruments) whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, or joint or several, that should be classified as liabilities in
accordance with GAAP, including, without limitation, any items so classified on
a balance sheet and any reimbursement obligations in respect of letters of
credit or obligations in respect of bankers acceptances, (iii) all obligations
of such Person to pay the deferred purchase price of property or services,
except trade accounts payable and accrued commercial or trade liabilities
arising in the ordinary course of business, (iv) all interest rate and currency
swaps, caps, collars and similar agreements or hedging devices under which
payments are obligated to be made by such Person, whether periodically or upon
the happening of a contingency, (v) all indebtedness created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the
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rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (vi) all
obligations of such Person under leases which have been or should be, in
accordance with GAAP, recorded as capital leases, (vii) all indebtedness secured
by any Lien (other than Liens in favor of lessors under leases other than leases
included in clause (vi) above) on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is non-recourse to the credit of that Person, and
(viii) any Contingent Obligation of such Person.
"INDEMNIFICATION SHARES" shall have the meaning assigned to that
term in Section 8.04.
"INDEMNIFICATION STOCK" means the Class A Preferred Stock, par value
$.01 per share, of the Company.
"JEFFERIES" shall mean Xxxxxxxxx & Company, Inc.
"JUNIOR SECURITIES" shall mean all series and classes of capital
stock of the Company or its successor other than the Indemnification Stock.
"LIEN" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other), charge,
claim, restriction or preference, priority, right or other security interest or
preferential arrangement of any kind or nature whatsoever including, without
limitation, (i) those created under applicable community property laws or
similar laws, (ii) those created by, arising under or evidenced by any
conditional sale or other title retention agreement, (iii) the interest of a
lessor under a capital lease obligation, or (iv) any financing lease having
substantially the same economic effect as any of the foregoing.
"LIQUIDATION" shall mean a liquidation, dissolution or winding up of
the Company or any of its Subsidiaries.
"MANAGEMENT SERVICES AGREEMENT" shall mean that certain Amended and
Restated Management Services Agreement to be entered into on the Closing Date by
and among the Purchaser, Whitney and RBCA, in the form attached hereto as
EXHIBIT B.
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan within the
meaning of Section 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code.
"ORDINARY COURSE ENVIRONMENTAL ACTIVITIES" shall mean environmental
activities of the Company and its Subsidiaries that have been or, in the case of
future activities, shall be undertaken in compliance with Environmental Laws,
the costs for which (i) in the case of prior activities, have been accurately
reflected in the Company's Financial Statements in accordance with GAAP, and
(ii) in the case of future activities, shall not exceed $300,000 in any one
fiscal year. For the avoidance of doubt, to the extent the future costs of the
activities described in the prior sentence exceed $300,000 in any one fiscal
year (net of any amounts recovered by the Company from third parties within 3
months of the end of the fiscal year in which any of such
6
costs were incurred, including, but not limited to, amounts recovered pursuant
to any indemnification agreement or insurance policy), such activities shall not
be deemed to be Ordinary Course Environmental Activities to the extent of such
excess.
"PERSON" shall mean any individual, firm, corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, Governmental Authority or other
entity of any kind, and shall include any successor (by merger or otherwise) of
such entity.
"PLANS" shall have the meaning assigned to that term in Section 5.19
of this Agreement.
"PURCHASER" and "PURCHASERS" shall have the meanings assigned to
those terms in the first paragraph of this Agreement.
"PURCHASE PRICE shall have the meaning assigned to that term in
Section 2.01.
"PUT" shall have the meaning assigned to that term in Section
8.05(a).
"PUT NOTICE" shall have the meaning assigned to that term in Section
8.05(b).
"PUT/CALL PRICE" shall have the meaning assigned to that term in
Section 8.05(a).
"RBCA" shall have the meaning assigned to that term in the first
paragraph of this Agreement.
"RBCA INDENTURE" shall mean the Indenture Agreement dated as of June
15, 1997, among the RBCA and United States Trust Company of
New York, as
Trustee.
"RCRA" shall have the meaning assigned to that term in the
definition of "Environmental Laws."
"REQUIREMENTS OF LAW" shall mean as to any Person, provisions of the
Certificate of Incorporation and By-laws or other organizational or governing
documents of such Person, or any law, treaty, code, rule, regulation, right,
privilege, qualification, license or franchise or determination of an arbitrator
or a court or other Governmental Authority, in each case applicable or binding
upon such Person or any of such Person's property or to which such Person or any
of such Person's property is subject or pertaining to any or all of the
transactions contemplated or referred to herein.
"RESTATED CHARTER" shall mean the Amended and Restated Certificate
of Incorporation of the Company which shall be in effect as of the Closing in
the form attached hereto (together with the By-Laws) as EXHIBIT A.
"SALE OF THE COMPANY" shall mean any: (i) consolidation or merger of
the Company into or with any other entity or entities which results in the
exchange of outstanding
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shares of the Company for securities or other consideration issued or paid or
caused to be issued or paid by any such entity or affiliate thereof (except a
consolidation or merger into a subsidiary or merger in which the Company is the
surviving corporation and the holders of the Company's voting stock outstanding
immediately prior to the transaction hold a majority of the voting stock of the
Company outstanding immediately following the transaction); (ii) sale or
transfer by the Company of all or substantially all its assets (it being
understood that, in addition to and not in limitation of applicable law, any
sale or series of related sales of assets representing 60% or more of the (A)
fair market value of the assets, (B) revenues or (C) earnings before interest,
taxes, depreciation and amortization of the Company and its subsidiaries taken
as a whole shall constitute a sale of "all or substantially all" of the
Company's assets for purposes hereof); (iii) sale of a majority of the
outstanding Common Stock in a single transaction or a series of related
transactions; or (iv) sale of less than a majority of the outstanding Common
Stock in a single transaction or a series of related transactions where after
giving effect to such sale or series of sales more than a majority of
outstanding voting power of the Company would be held by individuals or entities
other than stockholders of the Company immediately before such event or the
first of such series of events
"SEC REPORTS" shall mean all forms, reports, statements and other
documents (including exhibits, annexes, supplements and amendments to such
documents) required to be filed by the Company or any of its Subsidiaries, or
sent or made available by any such Person to its security holders, under the
Exchange Act or the Securities Act since January 1, 1998.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations thereunder as the
same shall be in effect at the time.
"STATED VALUE" shall have the meaning assigned to that term in
Section 8.05(a).
"STOCKHOLDERS' AGREEMENT" shall mean the Amended and Restated
Stockholders' Agreement of the Company to be entered into on the Closing Date by
and among the Purchasers and the Company, in the form attached hereto as EXHIBIT
C.
"SUBSIDIARY" shall mean, with respect to any Person, a corporation
or other entity of which 50% or more of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company.
"TAX" shall mean any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or
add-on-minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not.
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"TAX RETURN" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"TRANSACTION DOCUMENTS" shall mean collectively, this Agreement, the
Stockholders' Agreement and the Management Services Agreement.
"TRIGGER EVENT" shall have the meaning assigned to that term in
Section 8.05(a).
"UNAUDITED FINANCIAL STATEMENTS" shall have the meaning assigned to
that term in Section 5.11(b).
"WHITNEY" shall mean Whitney & Co, LLC.
"WHITNEY DIRECTORS" shall mean Xxxxxxx X. Xxxxx and Xxxxxx X.
Xxxxxxxxx, Xx., so long as they are members of the Board of Directors, together
with any other member of the Board of Directors nominated by Whitney or the
Purchaser from time to time in accordance with the Stockholders' Agreement.
"WHITNEY FEES" shall mean the fees and expenses required to be paid
by RBCA to Whitney on the Closing Date under the Management Services Agreement.
1.02 ACCOUNTING TERMS: FINANCIAL STATEMENTS. All accounting terms used
herein and not expressly defined in this Agreement shall have the respective
meanings given to them in conformance with GAAP.
1.03 KNOWLEDGE OF THE COMPANY. All references to the knowledge of the
Company or to facts known by the Company shall mean actual knowledge or notice
of the individuals whose names appear on SCHEDULE 1.03.
ARTICLE 2
PURCHASE AND SALE OF THE CLASS B SHARES
2.01 PURCHASE AND SALE OF THE CLASS B SHARES. Subject to the terms and
conditions set forth herein, at the Closing the Company shall issue and sell to
each Purchaser, and each Purchaser shall purchase from the Company, the number
of shares of Class B Preferred Stock set forth opposite such Purchaser's name on
Schedule I hereto for an aggregate purchase price of $24,000,000 (the "PURCHASE
PRICE").
2.02 CLOSING. The closing of the purchase and sale of the Class B Shares
hereunder (the "CLOSING") shall take place at the offices of Xxxxxxxx & Xxxxx at
000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 A.M. local time on July
29, 2002, or at such other place and hour as the parties may mutually agree. The
date upon which the Closing occurs is referred to herein as the "CLOSING DATE".
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2.03 PAYMENT FOR AND DELIVERY OF CLASS B SHARES. At the Closing, the
Company shall issue and deliver to each Purchaser a stock certificate duly
executed and registered in the name of such Purchaser evidencing ownership of
the number of Class B Shares to be acquired by such Purchaser hereunder, against
payment by such Purchaser of the portion of the Purchase Price set forth
opposite such Purchaser's name on Schedule I hereto by wire transfer of
immediately available funds to the account designated by the Company.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Each of the Company and RBCA hereby jointly and severally represents
and warrants to the Purchasers as follows:
3.01 EXISTENCE AND POWER. Each of the Company and its Subsidiaries (i) is
a corporation, limited liability company or partnership duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation and (ii) has the corporate power and authority to
execute, deliver and perform its obligations under each Transaction Document to
which it is or shall be a party. Each of the Company and its Subsidiaries (a)
has all requisite power and authority to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently, or is currently proposed to be, engaged, and (b) is duly qualified as
a foreign corporation or business entity, licensed and in good standing under
the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification, except to
the extent that the failure to so qualify would not have a material adverse
effect on the Condition of the Company.
3.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by the Company and RBCA of this Agreement and each other Transaction
Document to which the Company or RBCA shall be a party, and the consummation of
the transactions contemplated hereby and thereby: (i) has been duly authorized
by all necessary corporate action; (ii) do not and shall not contravene the
terms of the Certificate of Incorporation, the Restated Charter (when
effective), the Bylaws or similar governing documents of RBCA, or any
Requirement of Law applicable to the Company or RBCA's assets, business or
properties; (iii) do not and shall not (a) conflict with, contravene, result in
any violation or breach of or default under (with or without the giving of
notice or the lapse of time or both), (b) create in any other Person a right or
claim of termination or amendment, or (c) require modification, acceleration or
cancellation of any Contractual Obligation of the Company or any of its
Subsidiaries, and (iv) do not and shall not result in the creation of any Lien
(or obligation to create a Lien) against any property, asset or business of the
Company or any of its Subsidiaries. The payment of the Whitney Fees by RBCA and
the creation and performance of the obligations under Section 7.02 and Article 8
hereof have been specifically approved by the Board of Directors and the board
of directors of RBCA.
3.03 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. Except as set
forth on SCHEDULE 3.03, no approval, consent or, compliance, exemption,
authorization, or other action by,
10
or notice to, or filing with, any Governmental Authority or any other Person in
respect of any Requirement of Law or Contractual Obligation, and no lapse of a
waiting period under a Requirement of Law or Contractual Obligation, is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, the Company or its Subsidiaries of the Transaction
Documents to which each is a party or the consummation of the transactions
contemplated hereby or thereby (including, without limitation, the payment of
the Whitney Fees and the creation and performance of the obligations under
Section 7.02 and Article 8 hereof).
3.04 BINDING EFFECT. This Agreement and each of the Transaction Documents
to which the Company or RBCA is a party has been duly executed and delivered by
the Company and this Agreement and the Transaction Documents constitute the
legal, valid and binding obligation of the Company and RBCA enforceable against
the Company and RBCA in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency or other
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity relating to enforceability.
3.05 LITIGATION. Except as set forth on SCHEDULE 3.05, there are no legal
actions, suits, proceedings, claims or disputes pending or, to the knowledge of
the Company, threatened, at law, in equity, in arbitration or before any
Governmental Authority against or affecting the Company or any of its
Subsidiaries (or, as applicable, to the Company's knowledge, any of their
respective shareholders, directors, officers, employees or agents). No
injunction, writ, temporary restraining order, decree or any order of any nature
has been issued by any court or other Governmental Authority purporting to
enjoin or restrain the execution, delivery or performance of the Transaction
Documents.
3.06 COMPLIANCE WITH LAWS; PRIVATE SALE; VOTING AGREEMENTS.
(a) Except as set forth on SCHEDULE 3.06, the Company and each of
its Subsidiaries are in material compliance with all Requirements of Law.
(b) The Company has not violated any applicable federal or state
securities laws in connection with the offer, sale and issuance of any of its
capital stock. Assuming the accuracy of the Purchasers' representations and
warranties contained herein, neither the offer, sale and issuance of the Class B
Shares hereunder nor the issuance and delivery of any Conversion Shares requires
or will require registration under the Securities Act or any state securities
laws.
(c) To the Company's knowledge, other than the Stockholders'
Agreement there are no agreements obligating any of its stockholders to vote as
directed by another Person or any proxies granted by any stockholder.
3.07 NO DEFAULT OR BREACH. Neither the Company nor any Subsidiary is in,
and the creation and performance of the obligations of the Company or RBCA
contemplated by the Transaction Documents do not constitute, nor with the giving
of notice or lapse of time or both would constitute, a default under or with
respect to any Contractual Obligation of any Company or Subsidiary in any
material respect.
11
3.08 CAPITALIZATION; CLASS B SHARES AND CONVERSION SHARES.
(a) As of the date hereof prior to the effectiveness of the
Restated Charter: (i) the authorized capital stock of the Company consists of
(x) 10,000,000 shares of Class A Common and 10,000,000 shares of Class B Common,
of which 2,475,460.8 shares of Class A Common and 100 shares of Class B Common
are issued and outstanding, and (y) 3,500 shares of Class A Preferred Stock, par
value $.01 per share, of which no shares are issued and outstanding; (ii)
sufficient shares of Class A Common are reserved for issuance upon conversion of
the Class B Common; (iii) 476,847 shares of Class A Common and 549,146 shares of
Class B Common are reserved for issuance upon the exercise of outstanding
warrants (the "EXISTING WARRANTS"); and (iv) sufficient shares of Class A Common
are reserved for issuance pursuant to the exercise of stock options issued or
issuable in accordance with the terms of one or more stock option plans of the
Company, which plans shall have been approved by the Board of Directors
("MANAGEMENT OPTIONS"). The Management Options, the Existing Warrants and all
outstanding shares of capital stock of the Company have been duly authorized by
all necessary corporate action. All outstanding shares of capital stock of the
Company are, and shares of Common Stock issuable upon exercise of the Management
Options or the Existing Warrants or upon the conversion of the Class B Common
Stock, when issued, shall be, validly issued, fully paid and nonassessable and
shall be free and clear of all Liens (other than Liens arising under the
Stockholders' Agreement or pursuant to applicable securities laws). Other than
the Management Options and the Existing Warrants, as of the date hereof there
are no outstanding securities convertible into or exchangeable for capital stock
of the Company or options, warrants or other rights to purchase or subscribe to
capital stock of the Company or contracts, commitments, agreements,
understandings or arrangements of any kind to which the Company is a party
relating to the issuance of any capital stock of the Company, any such
convertible or exchangeable securities or any such options, warrants or rights.
(b) The Class B Shares have been duly authorized and, when issued
and delivered in accordance with this Agreement, will be validly issued, fully
paid and nonassessable, and will be free of any Liens (other than any
restrictions on transfer under state and/or federal securities laws or the
Stockholders' Agreement). When issued, the Conversion Shares and the
Indemnification Shares will be duly authorized, validly issued, fully paid and
nonassessable, and will be free of any Liens (other than any restrictions on
transfer under state and/or federal securities laws or the Stockholders'
Agreement). The Conversion Shares and the Indemnification Shares have been duly
reserved for issuance upon conversion of the Class B Shares or the issuance
pursuant to Article 8 hereof, as the case may be. The issuance and delivery of
the Class B Shares, the Conversion Shares and the Indemnification Shares are not
subject to any preemptive right of any stockholder of the Company or to any
right of first refusal or other similar right in favor of any Person which has
not been waived.
3.09 SUBSIDIARIES.
(a) SCHEDULE 3.09 sets forth a complete and accurate list of all
of the Subsidiaries of the Company together with their respective jurisdictions
of incorporation or organization. All of the outstanding shares of capital stock
of, or other equity interests in, the
12
Subsidiaries are validly issued, fully paid and nonassessable. Except as set
forth on SCHEDULE 3.09, as of the Closing Date, all of the outstanding shares of
capital stock of, or other ownership interests in, each of the Subsidiaries are
owned by the Company or by a wholly owned Subsidiary free and clear of any
Liens. No Subsidiary has outstanding options, warrants, subscriptions, calls,
rights, convertible securities or other agreements or commitments obligating the
Subsidiary to issue, transfer or sell any securities of the Subsidiary.
(b) Except for the Subsidiaries of the Company, the Company does
not own of record or beneficially, directly or indirectly, (i) any shares of
outstanding capital stock or securities convertible into capital stock of any
other corporation, and (ii) any equity, voting or participating interest in any
limited liability company, partnership, joint venture or other non-corporate
business enterprises.
3.10 TITLE TO PROPERTIES.
(a) SCHEDULE 3.10(a) contains a true, complete and correct list of
all real property owned or used in connection with the operation of the
respective businesses of the Company and each of its Subsidiaries (the "REAL
PROPERTY"). The Company and/or its Subsidiaries have good, indefeasible and
marketable title in and to all of the owned Real Property, free and clear of all
Liens, liabilities and rights except as provided on SCHEDULE 3.10(a).
(b) SCHEDULE 3.10(b) contains a list of all real property leases
to which the Company or its Subsidiaries are a party. The Company and/or its
Subsidiaries hold all of the right, title and interest of the tenant under such
leases, free and clear of all Liens, liabilities and rights except as provided
on SCHEDULE 3.10(b).
3.11 USE OF REAL PROPERTY. Except as set forth on SCHEDULE 3.11,
the Real Property is used and operated in compliance and conformity with all
Contractual Obligations and Requirements of Law, except to the extent that the
failure so to comply would not, in the aggregate, have a material adverse effect
on the Condition of the Company; neither the Company nor any of its Subsidiaries
has received notice of violation of any applicable zoning or building
regulation, ordinance or other law, order, regulation or other Requirements of
Law relating to the operations of either the Company or any of its Subsidiaries.
To the knowledge of the Company, each lease relating to leased Real Property is
in full force and effect and the Company enjoys peaceful and undisturbed
possession thereunder. There is no default on the part of the Company or any of
its Subsidiaries or event or condition which (with notice or lapse of time, or
both) would constitute a material default on the part of the Company or any of
its Subsidiaries under any such lease. There are no actions, suits or
proceedings (including, without limitation, condemnation or eminent domain
proceedings) pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary, at law or in equity, before any Governmental
Authority which seek to affect the Company's or such Subsidiary's title to the
owned Real Property.
13
3.12 TAXES.
(a) Except as set forth on SCHEDULE 3.12(a), each of the Company
and its Subsidiaries has filed all Tax Returns that it was required to file. All
such Tax Returns were correct and complete in all respects. All Taxes owed by
the Company or any of its Subsidiaries (whether or not shown on any Tax Return)
have been paid. Except as set forth on SCHEDULE 3.12(a), neither the Company nor
any of its Subsidiaries currently is the beneficiary of any extension of time
within which to file any Tax Return. No claim is pending, and to the Company's
knowledge, no material claims have been made since January 1, 1997 by a
Governmental Authority in a jurisdiction where the Company or any of its
Subsidiaries does not file Tax Returns that the Company or any of its
Subsidiaries is or may be subject to taxation by that jurisdiction. There are no
Liens on any of the assets of the Company or any of its Subsidiaries that arose
in connection with any failure (or alleged failure) to pay any Tax.
(b) Each of the Company and its Subsidiaries has withheld and paid
all Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractors, creditor, stockholder,
or other third party since December 31, 1995.
(c) Neither the Company nor any of its Subsidiaries expects any
Governmental Authority to assess any additional Taxes for any period for which
Tax Returns have been filed. Except as set forth on SCHEDULE 3.12(c), there is
no dispute or claim concerning any Tax liability of the Company or any of its
Subsidiaries either (i) claimed or raised by any Governmental Authority in
writing or (ii) as to which the Company has knowledge based upon personal
contact with any agent of such authority. The Company has made available to the
Purchaser correct and complete copies of all federal income Tax Returns,
examination reports and statements of deficiencies assessed against or agreed to
by any of the Company and its Subsidiaries since December 31, 1995.
(d) Neither the Company nor any of its Subsidiaries has waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.
(e) Neither the Company nor any of its Subsidiaries has filed a
consent under Code Section 341(f) concerning collapsible corporations. Neither
the Company nor any of its Subsidiaries has made any payments, is obligated to
make any payments, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that would not be
deductible under Code Section 280G. Neither the Company nor any of its
Subsidiaries has been a United States real property holding corporation within
the meaning of Code Section 897(c)(2) during the applicable period specified in
Code Section 897(c)(1)(A)(ii). Each of the Company and its Subsidiaries has
disclosed on its federal income Tax Returns all positions taken therein that
could give rise to a substantial understatement of federal income Tax within the
meaning of Code Section 6621. Neither the Company nor any of its Subsidiaries is
a party to any Tax allocation or sharing agreement, except for those listed in
SCHEDULE 3.12(e). Neither the Company nor any of
14
its Subsidiaries has been a member of an Affiliated Group filing a consolidated
federal income Tax Return other than a group consisting solely of the Company
and its current Subsidiaries.
(f) SCHEDULE 3.12(f) sets forth the following information with
respect to each of the Company and its Subsidiaries (or, in the case of clause
(ii) below, with respect to each of the Subsidiaries) as of the most recent
practicable date; (i) the basis of the Company or Subsidiary in its assets; (ii)
the basis of the stockholder(s) of the Subsidiary in its stock (or the amount of
any excess loss account); (iii) the amount of any net operating loss, net
capital loss, unused investment, foreign tax, or other credit or excess
charitable contribution allocable to the Company or Subsidiary; and (iv) the
amount of any deferred gain or loss allocable to the Company or Subsidiary
arising out of any deferred intercompany transaction.
(g) The unpaid Taxes of the Company and its Subsidiaries (i) did
not, as of December 31, 2001, exceed the reserve for Tax liability (rather than
any reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the balance sheet included in the
Unaudited Financial Statements (rather than in any notes thereto) for such date
and (ii) do not exceed that reserve as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of the Company
and its Subsidiaries in filing their Tax Returns.
(h) Neither the Company nor any of its Subsidiaries has any
liability for the Taxes of any person or entity other than the Company and its
Subsidiaries (i) under Reg. Section 1.1502-6 (or any similar provision of state,
local or foreign law), (ii) as a transferee or successor, (iii) by contract, or
(iv) otherwise.
3.13 SEC REPORTS; FINANCIAL CONDITION.
(a) The Company and its Subsidiaries have filed all SEC Reports
and have made available to the Purchaser each SEC Report. The SEC Reports,
including, without limitation, any financial statements or schedules included or
incorporated therein by reference, (i) comply in all material respects with the
requirements of the Exchange Act or the Securities Act or both, as the case may
be, applicable to those SEC Reports and (ii) did not at the time they were filed
contain any untrue statement of a material fact or omit to state a material fact
required to be stated or necessary in order to make the statements made in those
SEC Reports, in light of the circumstances under which they were made, not
misleading.
(b) The Company has furnished the Purchaser with true and complete
copies of (i) the audited consolidated balance sheets of the Company and its
Subsidiaries as of their fiscal year end for each of 1999, 2000, 2001 and the
related consolidated statements of income, stockholders' equity and cash flow,
together with the notes thereto, of the Company and its Subsidiaries for the
years then ended, together with the report of Xxxxxx Xxxxxxxx LLP thereon (the
"AUDITED FINANCIAL STATEMENTS"), and (ii) the unaudited consolidated balance
sheets of the Company and its Subsidiaries as of March 30, 2002 and the related
consolidated statements of income, stockholders' equity and cash flow, together
with the notes thereto, of the Company and its Subsidiaries for the fiscal year
ended March 30, 2002 (the "UNAUDITED
15
FINANCIAL STATEMENTS"). The Audited Financial Statements and the Unaudited
Financial Statements fairly present, in all material respects, the consolidated
financial position of the Company and its Subsidiaries as of the respective
dates thereof, and the consolidated results of operations and cash flows of the
Company and its Subsidiaries as of the respective dates or for the respective
periods set forth therein, all in conformity with GAAP consistently applied
during the periods involved, except as otherwise set forth in the notes thereto
and subject, in the case of the Unaudited Financial Statements, to normal
year-end audit adjustments. As of the dates of the Financial Statements, the
Company had no obligation, indebtedness or liability (whether accrued, absolute,
contingent or otherwise, known or unknown, and whether due or to become due),
which was not reflected or reserved against in the balance sheets or the notes
thereto which are part of the Financial Statements, except for those incurred in
the ordinary course of business and which are fully reflected on the Company's
books of account and which, individually or in the aggregate, would not have a
material adverse effect on the Condition of the Company.
(c) The projections of the Company and its Subsidiaries attached
hereto as SCHEDULE 3.13(c) (i) are, as of the date hereof, the most current
projections prepared by the Company relating to the periods covered thereby, and
(ii) are made in good faith, based on assumptions which were reasonable when
made and such assumptions and projections are reasonable on the date hereof.
Neither the Company nor any of its Subsidiaries has delivered to any Person any
later dated projections.
3.14 DISCLOSURE. This Agreement, together with all exhibits and
schedules hereto, and the agreements, certificates and other documents furnished
to each of Whitney and Xxxxxxxx by the Company and its Subsidiaries at the
Closing, do not contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading.
3.15 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 30, 2002,
except as set forth on SCHEDULE 3.15, neither the Company nor any of its
Subsidiaries has (i) issued any stock, bonds or other corporate securities, (ii)
borrowed any amount or incurred any liabilities (absolute or contingent), other
than in the ordinary course of business, in excess of $100,000, (iii) discharged
or satisfied any Lien or incurred or paid any obligation or liability (absolute
or contingent), other than in the ordinary course of business, in excess of
$100,000, (iv) declared or made any payment or distribution to stockholders or
purchased or redeemed any shares of its capital stock or other securities, (v)
mortgaged, pledged or subjected to Lien any of its assets, tangible or
intangible, (vi) sold, assigned or transferred any of its tangible assets, other
than sales of inventory or obsolete equipment in the ordinary course of
business, or canceled any debts or claims, (vii) sold, assigned, licensed (other
than grant of non-exclusive licenses in the ordinary course of business) or
transferred any patents, trademarks, trade names, copyrights, trade secrets or
other intangible assets, (viii) suffered any losses of property, or waived any
rights of substantial value, (ix) suffered any adverse change in the Condition
of the Company, (x) granted any bonuses or extraordinary salary increases other
than in the ordinary course of business, (xi) entered into any transaction
involving consideration in excess of $250,000 other than in the
16
ordinary course of business or as contemplated hereby or (xii) entered into any
agreement or transaction, or amended or terminated any agreement, with an
Affiliate.
3.16 ENVIRONMENTAL MATTERS. Except as described on Schedule 3.16:
(a) Attached hereto as SCHEDULE 3.16(a) are certain disclosures
respecting environmental matters applicable to the Company and its Subsidiaries.
While Purchaser is hereby acknowledging receipt thereof, and the parties agree
that certain matters set forth therein would, but for this subsection (a),
constitute exceptions to subsections (b) through (h) below, the parties hereby
agree that, for purposes of the indemnification set forth in Section 8.01
hereof, the contents thereof shall not constitute exceptions to the
representations set forth in subsections (b) through (h) below.
(b) Except in respect of Ordinary Course Environmental Activities,
the property, assets and operations of the Company and its Subsidiaries are and,
except for such past noncompliance as has been, along with related enforcement
actions, fully resolved, have been, in compliance, in all material respects,
with all applicable Environmental Laws.
(c) None of the property, assets or operations of the Company or
its Subsidiaries is the subject of any pending or, to the knowledge of the
Company, threatened, federal, state or local investigation evaluating whether
(i) any remedial action is needed to respond to a release or threatened release
of any Hazardous Materials into the environment or (ii) any release or
threatened release of any Hazardous Materials into the environment is in
contravention of any Environmental Law.
(d) Neither the Company nor any of its Subsidiaries has received
any currently unresolved written notice or claim, nor are there pending or, to
the knowledge of the Company, threatened lawsuits or proceedings against any of
them, with respect to violations of an Environmental Law or in connection with
the presence of or exposure to any Hazardous Materials in the environment or any
release or threatened release of any Hazardous Materials into the environment,
and neither the Company nor its Subsidiaries is the owner or operator of any
property which (i) pursuant to any Environmental Law has been placed on any list
of Hazardous Materials disposal sites, including, without limitation, the
"National Priorities List" or "CERCLIS List," (ii) to the knowledge of the
Company, has any subsurface storage tanks located thereon, or (iii) to the
knowledge of the Company, has ever been used as or for a waste disposal
facility, a mine, a gasoline service station or, other than for petroleum
substances stored in the ordinary course of business, a petroleum products
storage facility.
(e) Except in respect of Ordinary Course Environmental Activities,
neither the Company nor any of its Subsidiaries has any present or contingent
material liability in connection with the presence either on or off the property
or assets of the Company or its Subsidiaries of any Hazardous Materials in the
environment or any release or threatened release of any Hazardous Materials into
the environment.
(f) None of the Company, its Subsidiaries, or their respective
predecessors or Affiliates has treated, stored, disposed of, arranged for or
permitted the disposal of, transported,
17
handled, or released any substance, including without limitation any Hazardous
Materials, or owned or operated any property or facility, and no such property
or facility is contaminated by any such Hazardous Materials, in a manner that
has given or would give rise to material liabilities, including any material
liability for response costs, corrective action costs, personal injury, property
damage, natural resources damages or attorney fees, pursuant to CERCLA, the
Solid Waste Disposal Act, as amended ("SWDA") or any other Environmental Laws
except in respect of Ordinary Course Environmental Activities.
(g) Neither the Company nor any of its Subsidiaries are currently
subject to any material action, claim, notice, investigation or proceeding
regarding debarment or cancellation or revocation of any government contracts
nor do any grounds exist for any such debarment or loss of government contracts
based on any actual or alleged violation of or liability or obligation under any
Environmental Laws.
(h) All environmental reports and studies addressing the current
or former properties, assets or operations of the Company or its Subsidiaries
that, to the knowledge of the Company, have been prepared by or on behalf of the
Company, any of its Subsidiaries, or any third party, which are in the
possession or under the reasonable control of the Company, have been provided by
the Company to the Purchaser.
3.17 BROKER'S, FINDER'S OR SIMILAR FEES. Except as provided in the
Management Services Agreement, there are no brokerage commissions, finder's fees
or similar fees or commissions payable in connection with the transactions
contemplated hereby based on any agreement, arrangement or understanding with
the Company or any of its Subsidiaries or on any action taken by any such
Person.
3.18 LABOR RELATIONS. Neither the Company nor any of its
Subsidiaries has committed or is engaged in any unfair labor practice. Except as
set forth in SCHEDULE 3.18, there is (i) no unfair labor practice complaint
pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries before the National Labor Relations Board and no
grievance or arbitration proceeding arising out of or under collective
bargaining agreements is so pending or, to the knowledge of the Company,
threatened, (other than genuine proceedings arising in the ordinary course of
the Company's business operations), (ii) no strike, labor dispute, slowdown or
stoppage pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries, (iii) no union representation question
existing with respect to the employees of the Company or any of its Subsidiaries
and no union organizing activities are taking place, and (iv) no employment
contract with any employee or independent contractor of the Company or any
Subsidiary equal to or in excess of $150,000. The Company and each Subsidiary is
in compliance in all material respects with all federal, state or other
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours. Except as set forth on SCHEDULE
3.18, neither the Company, nor any of its Subsidiaries, is a party to any
collective bargaining agreement.
18
3.19 EMPLOYEE BENEFIT PLANS.
(a) EMPLOYEE BENEFIT PLANS AND LIABILITIES. SCHEDULE 3.19(a) sets
forth all of the Company's Employee Benefit Plans. Neither the Company nor any
ERISA Affiliate has contributed to nor has any actual or contingent, direct or
indirect, liability in respect of any employee benefit plan (as defined in
Section 3(3) of ERISA) or other employee benefit arrangement (collectively, the
"PLANS"), within the five-consecutive-year period immediately preceding the
first day of the year in which the Closing Date occurs other than liabilities
with respect to such Plans. At no time during such five year period has the
Company or any ERISA Affiliate participated in or contributed to any
Multiemployer Plan, nor during such period has the Company or any ERISA
Affiliate had an obligation to participate in or contribute to any such
Multiemployer Plan. No agreement subject to section 4204 of ERISA has been
entered into in connection with the transactions contemplated in this Agreement.
There are no actions, suits or claims, other than for benefits in the ordinary
course, pending or, to the knowledge of the Company, threatened against the
Company, an ERISA Affiliate or the Plans which might subject the Company or any
ERISA Affiliate to any material liability. The Company has made available to the
Purchaser accurate and complete copies of all of the Plans.
(b) PLAN COMPLIANCE. The Company and each of its Subsidiaries is
in compliance in all material respects with all reporting, disclosure and
registration requirements applicable to it under the Code, ERISA and all federal
and state securities laws, and Department of Labor, Internal Revenue Service and
Commission rules and regulations promulgated thereunder, with respect to all of
the Plans, and is not subject to any liability, whether asserted or not, for any
penalties to any Governmental Authority for late filing of any return, report or
other governmental filing. To the Company's knowledge, no civil or criminal
action was brought pursuant to the provisions of Title I, Subtitle B, Part 5 of
ERISA or any other federal or state law or is pending or threatened against any
fiduciary of the Plans. Except as set forth in SCHEDULE 3.19(b), to the
knowledge of the Company, no Plan has been, or is currently, the direct or
indirect subject of an audit, investigation or examination by any Governmental
Authority. All of the Plans comply currently, and have complied in the at all
times, both as to form and operation, in all material respects, with their terms
and with all Requirements of Law. Each of the Plans maintained by the Company or
any Subsidiary that is an "employee benefit pension plan" (within the meaning of
Section 3(2)(A) of ERISA) has obtained a favorable determination (covering all
changes or amendments applicable under Requirements of Law) from the Internal
Revenue Service as to its qualification under Sections 401(a) and 501(a) of the
Code or is within the remedial amendment period (as provided in Section 401(b)
of the Code) for making any required changes or amendments, and nothing has
occurred before or after the date of each such determination letter as would
adversely affect such qualification (except occurrences that may be corrected
without material expense). All amounts that are currently owing to Plan
participants (including, without imitation, former Plan participants), or
contributions required to be made to the Plans have been timely paid or
contributed with respect to all periods prior to the Closing Date or provided
for by adequate reserves on the Audited Financial Statements or Unaudited
Financial Statements.
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(c) PROHIBITED TRANSACTIONS. No Plan, nor any related trust, nor
the Company, nor any Subsidiary thereof, nor any trustee, administrator or other
"party in interest" or "disqualified person" (within the meaning of Section
3(14) of ERISA or Section 4975(e)(2) of the Code, respectively) with respect to
the Plans, has engaged in any nonexempt "prohibited transaction" (within the
meaning of Section 406 of ERISA or Section 4975(c) of the Code, respectively)
with respect to the participation of Company or any of its Subsidiaries therein,
which could subject the Company, any Subsidiary of the Company or the Purchaser
to the penalties or excise tax imposed on prohibited transactions by Section 502
of ERISA or Section 4975 of the Code which could have a material adverse effect
on the Condition of the Company.
(d) COBRA. The Company and each of its Subsidiaries has complied
with the continuation coverage requirements of group health plans provided in
Section 4980B of the Code, Sections 601 et seq. of ERISA, the Family and Medical
Leave Act of 1994, and the regulations promulgated thereunder.
(e) MISCELLANEOUS. Except as set forth on SCHEDULE 3.19(e),
neither the Company, its Subsidiaries nor any Plan provides for or promises
retiree, medical, disability or life insurance benefits to any current or former
employee, officer or director of the Company or any of its Subsidiaries, other
than continuation coverage required by section 4980B of the Code. Except as set
forth in SCHEDULE 3.19(e), neither the Company nor any of its Subsidiaries is a
party to or obligated under any agreement, plan, contract or other arrangements
that shall result in the payment of any fees, bonuses or other compensation as a
result of the consummation of the transactions contemplated by this Agreement.
3.20 PATENTS, TRADEMARKS, ETC. The Company and its Subsidiaries own or
are licensed or otherwise have the right to use all patents, trademarks, service
marks, trade names, domain names, copyrights, know-how, trade secrets, licenses,
franchises and other rights, including, without limitation, with respect to all
software developed, owned or licensed by the Company (collectively, the
"RIGHTS"), being used to conduct their businesses as now operated. SCHEDULE 3.20
sets forth a complete list of licenses or other Contractual Obligations relating
to the Company's and its Subsidiaries' Rights, patents and registrations and
applications for registration of such Rights and material unregistered Rights
used in the conduct of the business of the Company and its Subsidiaries. No
Right or product, process, method, substance or other material presently sold by
or employed by the Company or any of its Subsidiaries, or which the Company or
any of its Subsidiaries contemplates selling or employing, infringes upon the
Rights that are owned by others. No litigation is pending and no claim has been
made against the Company or any of its Subsidiaries or, to the knowledge of the
Company, is threatened, contesting the right of the Company or any of its
Subsidiaries to sell or use any Right or product, process, method, substance or
other material presently sold by or employed by the Company or any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries has asserted any
claim of infringement, misappropriation or misuse by any Person of any Rights
owned by the Company or any of its Subsidiaries or to which any of them have
exclusive use. Except as set forth on SCHEDULE 3.20, no employee, officer or
consultant of the Company or any of its Subsidiaries has any proprietary,
financial or other interest in any Rights owned or used by the Company or its
Subsidiaries in their businesses. Except as set forth on SCHEDULE 3.20, neither
the
20
Company nor any of its Subsidiaries has any obligation to compensate any Person
for the use of any Rights and neither the Company nor any of its Subsidiaries
has granted any license or other right to use any of the Rights of the Company
or it Subsidiaries, whether requiring the payment of royalties or not. The
Company and its Subsidiaries have taken all reasonable measures to protect and
preserve the security, confidentiality and value of their Rights, including
trade secrets and other confidential information, including, without limitation,
all algorithms, methods, technology or know-how incorporated or embedded in, or
underlying, software licensed by the Company to third parties. All trade secrets
and other confidential information of the Company and its Subsidiaries are
presently valued and protectible and are not part of the public domain or
knowledge, nor have they been used, divulged or appropriated for the benefit of
any Person other than the Company or its Subsidiaries or otherwise to the
detriment of the Company or its Subsidiaries. No employee or consultant of the
Company or its Subsidiaries has used any trade secrets or other confidential
information of any other Person in the course of his work for the Company or its
Subsidiaries. To the Company's knowledge, no patent, invention, device,
principle or any statute, law, rule, regulation, standard or code is pending or
proposed which would restrict the Company's or any Subsidiary's ability to use
any of the Rights.
3.21 POTENTIAL CONFLICTS OF INTEREST. Except as set forth on SCHEDULE
3.21, no officer, director, stockholder or other security holder of the Company
or any of its Subsidiaries (other than Purchaser or any Affiliate of Purchaser):
(i) owns, directly or indirectly, any interest in (excepting less than 5% stock
holdings for investment purposes in securities of publicly held and traded
companies), or is an officer, director, employee or consultant of, any Person
that is, or is engaged in business as, a competitor, lessor, lessee, supplier,
distributor, sales agent or customer of, or lender to or borrower from, the
Company or any of its Subsidiaries; (ii) owns, directly or indirectly, in whole
or in part, any tangible or intangible property that the Company or any of its
Subsidiaries uses in the conduct of business; or (iii) has any cause of action
or other claim whatsoever against, or owes or has advanced any amount to, the
Company or any of its Subsidiaries, except for claims in the ordinary course of
business such as for accrued vacation pay, accrued benefits under employee
benefit plans, and similar matters and agreements existing on the date hereof.
3.22 TRADE RELATIONS. Set forth on Schedule 3.22 is a true and correct
list of the twenty largest customers of the Company and the Subsidiaries taken
as a whole in terms of sales for the fiscal years ended March 31, 2001 and March
30, 2002, and any other customers who accounted for more than 3% of such sales,
and a list of the five largest suppliers to the Company and the Subsidiaries
taken as a whole in terms of purchases for the fiscal years ended March 31, 2001
and March 30, 2002. Except as set forth on Schedule 3.22, there exists no actual
or, to the knowledge of the Company, threatened termination, cancellation or
limitation of, or any adverse modification or change in, the business
relationship of the Company, its Subsidiaries or their business with customers
or any group of customers whose purchases are individually or in the aggregate
consists of more than five percent (5%) of the sales of the Company and its
Subsidiaries, taken as a whole, or with any material supplier, and to the
Company's knowledge there exists no present condition or state of facts or
circumstances relating to the customers of the Company that could reasonably be
expected to have a material adverse effect on the Condition of the Company.
21
3.23 MATERIAL CONTRACTS. SCHEDULE 3.22 lists all contracts, agreements,
commitments and other Contractual Obligations of the Company and its
Subsidiaries as of the Closing Date, whether written or oral, other than (i) the
Transaction Documents, (ii) purchase orders in the ordinary course of business,
and (iii) any other contracts, agreements, commitments and other Contractual
Obligations of the Company or any Subsidiary that do not extend beyond one year
and involve the receipt or payment of not more than $250,000. Except as could
not reasonably be expected to have a material adverse effect on the Condition of
the Company, each of the contracts, agreements, commitments and other
Contractual Obligations of the Company and its Subsidiaries required to be set
forth on SCHEDULE 3.22 is in full force and effect. The Company has satisfied in
full or provided for all of its material liabilities and obligations under each
Material Contract requiring performance prior to the date hereof in all material
respects, and is not in material default under any of them, nor, to the
knowledge of the Company, does any condition exist that with notice or lapse of
time or both would constitute such a material default. To the knowledge of the
Company, no other party to any such Material Contract is in material default
thereunder, nor does any condition exist that with notice or lapse of time or
both would constitute such a default. Except as set forth on SCHEDULE 3.22, the
performance of this Agreement and the transactions contemplated hereunder shall
not constitute a "change of control" or "event of default" under any Contractual
Obligation of the Company or any of its Subsidiaries.
3.24 INSURANCE. SCHEDULE 3.24 accurately summarizes all of the insurance
policies or programs of the Company and each Subsidiary in effect as of the date
hereof, and indicates the insurer's name, policy number, expiration date, amount
of coverage, type of coverage, annual premiums, exclusions and deductibles, and
also indicates any self-insurance program that is in effect. All such policies
are in full force and effect, are underwritten by financially sound and
reputable insurers, are sufficient for all applicable Requirements of Law. All
such policies shall remain in full force and effect and shall not in any way be
affected by, or terminate or lapse by reason of any of the transactions
contemplated hereby.
3.25 OPERATING COMPANY. The Company is "an entity that is primarily
engaged, directly or through a majority owned subsidiary or subsidiaries, in the
production or sale of a product or service other than the investment of capital"
within the meaning of the U.S. Department of Labor plan asset regulations, 29
C.F.R.Section 2510.3-101.
ARTICLE 4
REPRESENTATIONS AND
WARRANTIES OF THE PURCHASERS
4.01 REPRESENTATIONS AND WARRANTIES OF XXXXXXX X. Xxxxxxx V hereby
represents and warrants to the Company as follows:
(a) AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by it of this Agreement (i) is within its power and authority and
has been duly authorized by all necessary action, (ii) does not contravene the
terms of its organizational
22
documents or any amendment thereof, and (iii) shall not violate, conflict with
or result in any breach or contravention of any Requirement of Law or any of its
Contractual Obligations, or any order or decree directly relating to it.
(b) BINDING EFFECT. This Agreement has been duly executed and
delivered by it and this Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
(c) PURCHASE FOR OWN ACCOUNT. The Class B Shares to be acquired by
Whitney V pursuant to this Agreement are being or shall be acquired for its own
account and with no intention of distributing or reselling such securities or
any part thereof in any transaction that would be in violation of the securities
laws of the United States of America, or any state, without prejudice, however,
to its right at all times to sell or otherwise dispose of all or any part of its
Class B Shares or Conversion Shares under an effective registration statement
under the Securities Act, or under an exemption from such registration available
under the Securities Act, and subject, nevertheless, to the disposition of its
property being at all times within its control. If Whitney V should in the
future decide to dispose of any of its Class B Shares or Conversion Shares,
Whitney V understands and agrees that it may do so only in compliance with the
Securities Act, applicable state securities laws and the Stockholders'
Agreement, each as then in effect. Whitney V agrees to the imprinting of a
legend on the certificates representing all of its Class B Shares and Conversion
Shares in the form and substance set forth in Section 2.1 of the Stockholders'
Agreement.
(d) BROKER'S, FINDER'S OR SIMILAR FEES. Except as provided in the
Management Services Agreement, there are no brokerage commissions, finder's fees
or similar fees or commissions payable in connection with the transactions
contemplated hereby based on any agreement, arrangement or understanding with
Whitney V or any action taken by Xxxxxxx X.
(e) GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENT. No approval,
consent, compliance, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person in respect of any
Requirement of Law, and no lapse of a waiting period under a Requirement of Law,
is necessary or required in connection with the execution, delivery or
performance by it or enforcement against it of this Agreement or the
transactions contemplated hereby.
4.02 REPRESENTATIONS AND WARRANTIES OF XXXXXXXX. Xxxxxxxx hereby
represents and warrants to the Company as follows:
(a) AUTHORIZATION; NO CONTRAVENTION. Xxxxxxxx is competent and has
all requisite authority to execute, deliver and perform this Agreement and the
other Transaction Documents to which he is or shall be a party. The execution,
delivery and performance by Xxxxxxxx of this Agreement shall not violate,
conflict with or result in any breach or contravention of any Requirement of Law
or any of his, the Company's or its Subsidiaries' Contractual
23
Obligations, or any order or decree directly relating to him or such other
Persons.(b) BINDING EFFECT. This Agreement constitutes a legal, valid and
binding obligation of Xxxxxxxx, enforceable against him in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
(c) PURCHASE FOR OWN ACCOUNT. The Class B Shares to be acquired by
Xxxxxxxx pursuant to this Agreement are being or shall be acquired for his own
account and with no intention of distributing or reselling such securities or
any part thereof in any transaction that would be in violation of the securities
laws of the United States of America, or any state, without prejudice, however,
to his right at all times to sell or otherwise dispose of all or any part of the
his Class B Shares or Conversion Shares under an effective registration
statement under the Securities Act, or under an exemption from such registration
available under the Securities Act, and subject, nevertheless, to the
disposition of its property being at all times within its control. If Xxxxxxxx
should in the future decide to dispose of any of his Class B Shares or
Conversion Shares, Xxxxxxxx understands and agrees that he may do so only in
compliance with the Securities Act, applicable state securities laws and the
Stockholders' Agreement, each as then in effect. Xxxxxxxx agrees to the
imprinting of a legend on the certificates representing his Class B Shares and
Conversion Shares in the form and substance set forth in Section 2.1 of the
Stockholders' Agreement.
(d) BROKER'S, FINDER'S OR SIMILAR FEES. There are no brokerage
commissions, finder's fees or similar fees or commissions payable in connection
with the transactions contemplated hereby based on any agreement, arrangement or
understanding with Xxxxxxxx or any action taken by Xxxxxxxx.
(e) GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENT. No approval,
consent, compliance, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person in respect of any
Requirement of Law, and no lapse of a waiting period under a Requirement of Law,
is necessary or required in connection with the execution, delivery or
performance by it or enforcement against it of this Agreement or the
transactions contemplated hereby.
(f) FISCAL 2002 BONUS. Xxxxxxxx acknowledges that Whitney has
recommended to the Board of Directors that the annual bonus payable by RBCA to
Xxxxxxxx for the fiscal year ended March 31, 2002, should be $300,000. Xxxxxxxx
hereby agrees to support such recommendation and not to challenge the
determination of such bonus in any way.
ARTICLE 5
CONDITIONS TO THE OBLIGATIONS OF THE
PURCHASERS TO PURCHASE THE CLASS B SHARES
The obligation of each Purchaser to purchase the Class B Shares to
be acquired by such Purchaser from the Company at the Closing shall be subject
to the satisfaction of, or waiver
24
by such Purchaser of, the following conditions precedent on or before the
Closing Date; PROVIDED, HOWEVER, that the waiver by any Purchaser of any
condition set forth in this Article 5 shall not be deemed a waiver of any breach
of any representation, warranty, agreement, term or covenant or of any
misrepresentation by the Company, except to the extent expressly so waived.
5.01 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company and RBCA contained herein shall be true and correct in all
respects (other than any such representations and warranties that are qualified
by materiality or material adverse effect, which shall be true and correct in
all respects) at and as of the Closing Date (except for representations and
warranties made as to a specific date, which representations and warranties
shall be true and correct at and as of such date).
5.02 CONSENTS AND APPROVALS. All applicable waiting periods (and any
extensions thereof) under the HSR Act, if any, shall have expired or otherwise
been terminated and all consents, exemptions, authorizations, or other actions
by, or notices to, or filings with, Governmental Authorities and other Persons
in respect of all Requirements of Law and with respect to those material
Contractual Obligations of the Company and its Subsidiaries necessary,
desirable, or required in connection with the execution, delivery or performance
by the Company and RBCA, or enforcement against the Company and RBCA, of the
Transaction Documents to which each is a party shall have been obtained and be
in full force and effect, and the Purchaser shall have been furnished with
appropriate evidence thereof, and all waiting periods, if any, shall have lapsed
without extension or the imposition of any conditions or restrictions.
5.03 NO MATERIAL JUDGMENT OR ORDER. There shall not be any judgment or
order of a court of competent jurisdiction or any ruling of any Governmental
Authority or any condition imposed under any Requirement of Law which, in the
reasonable judgment of such Purchaser, would prohibit the purchase of the Class
B Shares hereunder or subject such Purchaser to any material penalty or other
commercially unreasonable condition under or pursuant to any Requirement of Law
if the Class B Shares were to be purchased hereunder.
5.04 NO LITIGATION. No action, suit, investigation or proceeding before
any court or any Governmental Authority shall have been commenced against such
Purchaser, the Company or any of its Subsidiaries (i) seeking to restrain,
prevent or change the transactions contemplated hereby or questioning the
validity or legality of any of such transactions, or (ii) which would, if
resolved adversely to any such Person, severally or in the aggregate, have a
material adverse effect on the Condition of the Company.
5.05 PURCHASE OF SECURITIES PERMITTED BY APPLICABLE LAWS. The acquisition
of and payment for the Class B Shares hereunder and the consummation of each
other transaction contemplated under this Agreement or the other Transaction
Documents (i) shall not be prohibited by any Requirement of Law, (ii) shall not
subject any Purchaser to any material penalty or other commercially unreasonable
condition under or pursuant to any Requirement of Law, and (iii) shall be
permitted by all Requirements of Law to which such Purchaser or the transactions
contemplated by or referred to herein or in the Transaction Documents are
subject.
25
5.06 RESTATED CHARTER. The Company shall have filed the Restated Charter
with the Secretary of State of Delaware and shall have delivered to such
Purchaser evidence of the effectiveness of such filing.
5.07 OPINION OF COUNSEL. Such Purchaser shall have received an opinion of
outside counsel to the Company and RBCA, dated as of the Closing Date, in form
and substance reasonably acceptable to his or its counsel. Such opinion, among
other things, shall opine on the subject matter of the representations and
warranties made by the Company and RBCA in Section 7.02(b) hereof.
5.08 STOCKHOLDERS' AGREEMENT. The Stockholders' Agreement shall have been
duly executed and delivered by all of the parties thereto (other than such
Purchaser).
5.09 MANAGEMENT SERVICES AGREEMENT. In the case of Whitney V only, the
Management Services Agreement shall have been duly executed and delivered by all
of the parties thereto and all portions of the Whitney Fees to be paid
thereunder on the Closing Date shall have been paid.
5.10 GOOD STANDING CERTIFICATES. The Company shall have delivered to such
Purchaser as of the Closing Date, good standing certificates for the Company and
RBCA for each of their respective jurisdictions of incorporation and all other
jurisdictions where they do business, in each case dated within five (5) days of
the Closing Date.
5.11 APPOINTMENT OF WHITNEY DIRECTOR. In the case of Whitney V only, the
Company shall deliver Whitney V at the Closing evidence of the election of
Xxxxxx X. Xxxxxxxxx, Xx. to the Board of Directors and the board of directors of
RBCA.
5.12 SECRETARY'S CERTIFICATE. Such Purchaser shall have received a
certificate of a duly authorized officer of the Company dated as of the Closing
Date certifying: (i) that the closing conditions set forth in Sections 5.01
through 5.06 have been satisfied; (ii) that the resolutions of the Board of
Directors attached thereto (which resolutions shall have, among other things,
(A) authorized all of the transactions contemplated by this Agreement and the
Transaction Documents, (B) approved this Agreement and the Transaction
Documents, (C) duly nominated and elected the Xxxxxx X. Xxxxxxxxx, Xx. to the
Board of Directors effective as of the Closing Date, and (D) resolved that the
Whitney Directors shall be "Continuing Directors" as such term is defined in the
Company and RBCA's institutional debt agreements) were duly adopted and have not
been rescinded or amended; and (iii) certifying the incumbency and specimen
signature of each officer of the Company executing the this Agreement and the
Transaction Documents on behalf of the Company.
5.13 RBCA RESOLUTION. Such Purchaser shall have received a certificate of
a duly authorized officer of RBHC dated as of the Closing Date certifying: (i)
that the closing conditions set forth in Sections 5.01 through 5.06 have been
satisfied; (ii) that the resolutions of the board of directors of RBCA attached
thereto (which resolutions shall have, among other things, (A) authorized all of
the transactions contemplated by this Agreement and the Management Services
Agreement, (B) approved this Agreement and the Management Services
26
Agreement and may be required to provide the Company with funds sufficient to
satisfy its obligations under Article 8 hereof and to the extent any such
payments are required, approving such payments, (C) duly nominated and elected
Xxxxxx X. Xxxxxxxxx, Xx. to the board of directors of RBCA effective as of the
Closing Date, and (D) resolved that the Whitney Directors shall be "Continuing
Directors" as such term is defined in the Company and RBCA's institutional debt
agreements) were duly adopted and have not been rescinded or amended; and (ii)
certifying the incumbency and specimen signature of each officer of RBCA
executing this Agreement and the Management Services Agreement on behalf of
RBCA.
5.14 CONTEMPORANEOUS FUNDING. Each other Purchaser shall have
contemporaneously funded the portion of the Purchase Price payable by such
Purchaser to the Company as contemplated under Section 2.03.
5.15 FAIRNESS OPINION. Such Purchaser shall have received an opinion from
Valuations Research, Inc. dated as of the Closing Date and addressed to the
Company and RBCA to the effect that the transactions contemplated under this
Agreement and the other Transaction Documents are fair from a financial
standpoint to the Company and its Subsidiaries.
ARTICLE 6
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
TO ISSUE THE CLASS B SHARES
The obligations of the Company to sell the Class B Shares to each
Purchaser shall be subject to the satisfaction of, or waived by, the Company of
the following conditions precedent on or before the Closing Date.
6.01 STOCKHOLDERS' AGREEMENT. The Stockholders' Agreement shall have been
duly executed and delivered by such Purchaser.
6.02 PURCHASE PRICE. Such Purchaser shall have delivered the portion of
the Purchase Price payable by such Purchaser to the Company as contemplated
under Section 2.03.
6.03 NO MATERIAL JUDGMENT OR ORDER. There shall not be on the Closing
Date any judgment or order of a court of competent jurisdiction or any ruling of
any Governmental Authority or any condition imposed under any Requirement of Law
which, in the reasonable judgment of the Company, would prohibit the purchase of
the Class B Shares hereunder or subject the Company to any penalty or other
commercially unreasonable condition under or pursuant to any Requirement of Law.
6.04 NO LITIGATION. No action, suit, investigation or proceeding before
any court or any Governmental Authority shall have been commenced against the
Purchasers, the Company, or any of its Subsidiaries seeking to restrain, prevent
or change the transactions contemplated hereby or questioning the validity or
legality of any of such transactions.
27
ARTICLE 7
COVENANTS
7.01 PUBLIC ANNOUNCEMENTS. The parties agree to consult with each other
before issuing any press release or making any public statement with respect to
this Agreement or the transactions contemplated hereby and, except as may be
required by applicable law or the rules of, or any listing agreement with, any
national securities exchange, shall not issue any such press release or make any
such public statement prior to such consultation.
7.02 USE OF PROCEEDS; DEBENTURE REPURCHASE.
(a) Without the prior written consent of Whitney V, neither the
Company nor RBCA shall use the proceeds from sale of the Class B Shares
hereunder for any purpose other than (i) for the purchase by the Company of
Discount Debentures as described below or (ii) for payment of the Whitney Fees
under the Management Services Agreement. The Company shall not loan or
contribute any portion of such proceeds to RBCA in excess of the amounts
required to make the payments contemplated in clause (ii) above. The Company
acknowledges that it has agreed to acquire Discount Debentures having an
aggregate principal amount of $30,400,000 from Jefferies for a total purchase
price equal to $28,766,000, which price shall increase at a daily rate of
$10,977.78 if such purchase is not consummated on July 30, 2002 (the "DEBENTURE
REPURCHASE").
(b) Prior to or contemporaneously with the Closing, RBCA shall
distribute to the Company (or cause to be paid to the Company from the Escrow
Account) an amount of cash in immediately available funds which, together with
the cash proceeds from the sale of the Class B Shares hereunder, shall be
sufficient to satisfy the entire purchase price required to be paid by the
Company to Jefferies under the terms of the Debenture Repurchase. On July 30,
2002, the Company shall consummate the Debenture Repurchase. The Company and
RBCA, jointly and severally, represent and warrant to the Company that: (A) the
uses of proceeds described in Section 7.02(a) are not and will not be prohibited
under the terms of any agreement, instrument or understanding to which the
Company or RBCA is a party or by which it is bound (including without limitation
the Credit Agreement, the RBCA Indenture and the Company Indenture); (B) neither
the distribution nor the payment of the cash amount to the Company as described
in the first sentence of this Section 7.02(b), as the case may be, is or will be
prohibited under the terms of any agreement, instrument or understanding to
which the Company or RBCA is a party or by which it is bound (including without
limitation the Credit Agreement, the RBCA Indenture, the Company Indenture and
the Escrow Agreement); and (C) the Debenture Repurchase will not violate
applicable federal or state securities laws.
28
ARTICLE 8
INDEMNIFICATION
8.01 INDEMNIFICATION. In addition to all other sums due hereunder or
provided for in this Agreement, the Company agrees to indemnify and hold
harmless the Purchasers and their Affiliates and each of their respective
officers, directors, agents, employees, Subsidiaries, partners, members,
attorneys, accountants and controlling persons (each, an "INDEMNIFIED PARTY") to
the fullest extent permitted by law from and against any and all losses, claims,
damages (other than consequential damages or lost profits), expenses (including,
without limitation, reasonable fees, disbursements and other charges of counsel
and costs of investigation incurred by an Indemnified Party in any action or
proceeding between the Company (or any of its Subsidiaries) and such Indemnified
Party (or Indemnified Parties) or between an Indemnified Party (or Indemnified
Parties) and any third party or otherwise) or other liabilities, losses, or
diminution in value (collectively, "LIABILITIES") resulting from or arising out
of any breach of any representation or warranty, covenant or agreement of the
Company or any of its Subsidiaries in this Agreement, including without
limitation, the failure to make payment when due of amounts owing pursuant to
this Agreement, on the due date thereof; PROVIDED, HOWEVER, that the Company
shall not be liable under this Section 8.01 to an Indemnified Party: (a) for any
amount paid by the Indemnified Party in settlement of claims by the Indemnified
Party without the Company's consent (which consent shall not be unreasonably
withheld), (b) to the extent that it is finally judicially determined that such
Liabilities resulted primarily from the willful misconduct or gross negligence
of such Indemnified Party or (c) to the extent that it is finally judicially
determined that such Liabilities resulted primarily from the breach by such
Indemnified Party of any representation, warranty, covenant or other agreement
of such Indemnified Party contained in this Agreement; PROVIDED, FURTHER, that
if and to the extent that such indemnification is unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction
of such Liabilities which shall be permissible under applicable laws. In
connection with the obligation of the Company to indemnify for expenses as set
forth above, the Company further agrees, upon presentation of appropriate
invoices containing reasonable detail, to reimburse each Indemnified Party for
all such expenses (including, without limitation, fees, disbursements and other
charges of counsel and costs of investigation incurred by an Indemnified Party
in any action or proceeding between the Company (or any of its Subsidiaries) and
such Indemnified Party (or Indemnified Parties) or between an Indemnified Party
(or Indemnified Parties) and any third party or otherwise) as they are incurred
by such Indemnified Party; PROVIDED, HOWEVER, that if an Indemnified Party is
reimbursed hereunder for any expenses, such reimbursement of expenses shall be
refunded to the extent it is finally judicially determined that the Liabilities
in question resulted primarily from (i) the willful misconduct or gross
negligence of such Indemnified Party or (ii) the breach by such Indemnified
Party of any representation, warranty, covenant or other agreement of such
Indemnified Party contained in this Agreement.
8.02 PROCEDURE; NOTIFICATION. Each Indemnified Party under this Article 8
shall, promptly after the receipt of notice of the commencement of any action,
investigation, claim or other proceeding against such Indemnified Party in
respect of which indemnity may be sought
29
from the Company under this Article 8, notify the Company in writing of the
commencement thereof. The omission of any Indemnified Party so to notify the
Company of any such action shall not relieve the Company from any liability
which it may have to such Indemnified Party unless, and only to the extent that,
such omission results in the forfeiture by any such Person of substantive rights
or defenses. In case any such action, claim or other proceeding shall be brought
against any Indemnified Party and it shall notify the Company of the
commencement thereof, the Company shall be entitled to assume the defense
thereof at its own expense, with counsel satisfactory to such Indemnified Party
in its reasonable judgment; PROVIDED, HOWEVER, that any Indemnified Party may,
at its own expense, retain separate counsel to participate in such defense.
Notwithstanding the foregoing, in any action, claim or proceeding in which the
Company, on the one hand, and an Indemnified Party, on the other hand, is, or is
reasonably likely to become, a party, such Indemnified Party shall have the
right to employ separate counsel at the expense of the Company and to control
its own defense of such action, claim or proceeding if, in the reasonable
opinion of counsel to such Indemnified Party, a conflict or potential conflict
exists between the Company, on the one hand, and such Indemnified Party, on the
other hand, that would make such separate representation advisable; PROVIDED,
HOWEVER, that in no event shall the Company be required to pay fees and expenses
under this Article 8 for more than one firm of attorneys in any jurisdiction in
any one legal action or group of related legal actions. The Company agrees that
it shall not, without the prior written consent of Whitney V, settle, compromise
or consent to the entry of any judgment in any pending or threatened claim,
action or proceeding relating to the matters contemplated hereby (if any
Indemnified Party is a party thereto or has been actually threatened to be made
a party thereto) unless such settlement, compromise or consent includes an
unconditional release of Whitney V and each other Indemnified Party from all
liability arising or that may arise out of such claim, action or proceeding. The
Company shall not be liable for any settlement of any claim, action or
proceeding effected against an Indemnified Party without its written consent,
which consent shall not be unreasonably withheld.
8.03 LIMITATIONS ON INDEMNIFICATION. Notwithstanding anything set forth
in this Article 8 to the contrary, the Company shall not be liable to any
Purchaser (or in the case of Whitney V, to any Indemnified Party affiliated with
Whitney V) pursuant to Section 8.01 for any Liability arising from a breach of a
representation or warranty set forth in Article 3 hereof (other than breaches of
any of the representations and warranties contained in Sections 3.01 through
3.04, 3.08, 3.09, 3.17 and 3.21) (i) unless and until the aggregate amount of
all such Liabilities exceeds $500,000 (in which case each Indemnified Party
shall be liable for such Liability from the first dollar thereof) and (ii) to
the extent the amount of such Liability, separately or together with all other
Liabilities arising from breaches of such representations and warranties,
exceeds 50% of the aggregate purchase price paid by such Purchaser for his or
its Class B Shares hereunder. In addition, the Company shall not be liable to
any Indemnified Party pursuant to Section 8.01 for any Liabilities arising from
a breach of a representation or warranty set forth in Article 3 hereof unless
such Indemnified Party gives the Company written notice asserting the breach in
question on or prior to the expiration of the survival period for the applicable
representation and warranty specified in Section 9.01 hereof.
30
8.04 MANNER OF PAYMENT. Any indemnification of the Indemnified Parties
pursuant to Section 8.01 shall be paid by the Company by wire transfer of
immediately available funds to an account designated by the applicable
Purchaser. Notwithstanding the foregoing to the contrary, if the Company
delivers to such Purchaser an opinion of outside counsel of the Company (a
"BLOCKAGE OPINION"), relying upon any facts provided by the Company and cited in
such opinion, in form and substance reasonably satisfactory to such Purchaser,
to the effect that a Contractual Obligation governing the Company or its
Subsidiaries' Indebtedness would prohibit the Company from paying all or any
portion of an indemnification payment as described above, the Company shall
promptly pay the prohibited portion of such payment (the "BLOCKAGE AMOUNT") by
issuing to such Purchaser (or its designee) that number of shares of
Indemnification Stock determined by dividing (i) the Blockage Amount by (ii)
$3,000. Each Blockage Opinion shall describe in reasonable detail the basis for
any prohibition on the relevant indemnification payment, which description
shall, among other things, identify the relevant Contractual Obligations. The
Company agrees that at such time as the prohibitions described in any Blockage
Opinion would no longer prohibit the payment by the Company in cash of the
applicable indemnification payment, the Company shall repurchase from such
Purchaser (or its Permitted Transferees) the maximum number of Indemnification
Shares permitted to be repurchased by the Company under applicable law. If the
Company's (or its Subsidiaries') funds which are legally available for
repurchase of the Indemnification Shares are insufficient to repurchase all of
the Indemnification Shares outstanding, (i) the Company shall use commercially
reasonably efforts to arrange for financing sufficient to repurchase all of the
Indemnification Shares outstanding and (ii) in the event that the Company is
unable to arrange for such financing, at any time thereafter when additional
funds of the Company (or its Subsidiaries) are legally available for the
repurchase of the Indemnification Shares, such funds will immediately be used to
repurchase the balance of the Indemnification Shares which the Company has
become obligated to repurchase hereunder but which it has not repurchased. For
purposes hereof, the term "INDEMNIFICATION SHARES" shall mean all shares of
Indemnification Stock issued pursuant to this Section 9.04.
8.05 PUT/CALL ARRANGEMENTS.
(a) PUT/CALL. In the event of a Sale of the Company, the holders
of the Indemnification Shares shall be entitled to compel the Company to
purchase from such holders (the "PUT"), all of the Indemnification Shares, and
the Company shall be entitled at anytime and from time to time to compel such
holders to sell to the Company (the "CALL") all or any portion of the
Indemnification Shares, in any such case at a per share purchase price equal to
the Put/Call Price; PROVIDED, HOWEVER that the Company shall have no such
obligation or right for so long as the prohibitions described in an outstanding
Blockage Opinion would prohibit the purchase of Indemnification Shares hereunder
or applicable law would otherwise prohibit payment thereof. For purposes hereof,
with respect to each Indemnification Share the term "PUT/CALL PRICE" shall mean
the Stated Value of such share PLUS all accumulated and accrued and unpaid but
not yet accumulated dividends thereon (calculated in accordance with the terms
of the Restated Charter). For purposes hereof, with respect to each
Indemnification Share the term "STATED VALUE" shall mean $3,000.
31
(b) METHOD OF EXERCISE. The Company shall give written notice (the
"PUT NOTICE") to the Purchasers of a Sale of the Company at least 20 days prior
to the consummation or effectiveness thereof. On or prior to the tenth (10th)
day after receiving the Put Notice, the holders of the Indemnification Shares
may exercise their rights under the Put by sending written notice to the
Company. For the avoidance of doubt, the failure by the Company to give the Put
Notice shall in no way whatsoever limit the ability of the holders of the
Indemnification Shares to exercise their rights under the Put. The Company may
exercise its Call at anytime by providing written notice thereof (the "CALL
NOTICE").
(c) OBLIGATION TO SELL/PURCHASE; CLOSING. In the event that the
holders of the Indemnification Shares or the Company elect to exercise their
rights under the Put or Call, as applicable, concurrently with the consummation
of the Sale of the Company in the case of a Put, or not earlier than 10 days
after delivery of the Call Notice, the Company shall be obligated to purchase
from the holders of the Indemnification Shares (and such holders shall be
obligated to sell to the Company) the Indemnification Shares at the Put/Call
Price, payable by wire transfer of immediately available funds to the account or
accounts designated by Purchaser. The closing of the purchase and sale of the
Indemnification Shares pursuant to this Section 9.05 shall take place at the
principal office of the Company, or at such other place as the Parties may agree
on the date on which the Sale of the Company occurs or, as applicable, on the
date set forth in the Call Notice.
8.06 PRIORITY OF INDEMNIFICATION SHARES. So long as any
Indemnification Share remains outstanding, without the prior approval of the
holders of a majority of the Indemnification Shares then outstanding, the
Company shall not declare or pay any dividends (other than dividends declared in
connection with any stock splits, stock dividends, share combinations, share
exchanges, or other recapitalizations in which such dividends are made in the
form of Common Stock) or other distributions of any kind on, nor shall the
Company redeem, purchase or acquire any shares of Junior Securities (other than
repurchases of shares of Common Stock from present or former employees of the
Company and its Subsidiaries pursuant to written agreements in effect as of the
Original Issue Date of the Indemnification Shares) unless and until the Put/Call
Price is paid in full or set aside for payment or the Indemnification Shares are
otherwise purchased by the Company.
8.07 RESERVATION OF SHARES; OTHER ASSURANCES. The Company agrees that it
shall at all times reserve and keep available out of its authorized but unissued
shares of Indemnification Stock, solely for the purpose of issuance pursuant to
Section 8.04 above, such number of shares of Indemnification Stock that may be
required to be issued hereunder. All shares of Indemnification Stock which are
so issuable shall, when issued, be duly and validly issued, fully paid and
nonassessable and free from all taxes, Liens (other than those arising under the
Stockholders' Agreement or pursuant to applicable securities laws) and charges.
The Company agrees to take all such actions as may be necessary to assure that
all such shares of Indemnification Stock may be so issued without violation of
any applicable law or governmental regulation or any requirements of any
domestic securities exchange upon which shares of Indemnification Stock may be
listed (except for official notice of issuance which shall be immediately
delivered by the Company upon each such issuance). The Company shall assist and
32
cooperate with the Purchasers to the extent that it is required to make any
governmental filings or obtain any governmental approval prior to or in
connection with any issuance of Indemnification Shares hereunder (including,
without limitation, making any filings required to be made by the Company).
8.08 EXCLUSIVE REMEDY. This Article 8 shall be the exclusive remedy of
the Purchasers with regard for losses, claims, damages, expenses or other
liabilities arising from the transactions contemplated by this Agreement (other
than with respect to losses arising out of fraud).
ARTICLE 9
MISCELLANEOUS
9.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties made by the Company and RBCA in Article 3 hereof
shall survive the execution and delivery of this Agreement and any investigation
made by or on behalf of the Purchasers, in each case until 30 days after the
completion of the Company and RBCA's audits for the fiscal year 2003; PROVIDED,
HOWEVER, that the representations and warranties contained in Sections 3.01
through 3.04, 3.08, 3.09, 3.17 and 3.21 shall survive indefinitely, and the
representations set forth in Sections 3.12 and 3.16 shall survive until 30 days
after the expiration of the applicable statutory period of limitations (giving
effect to any waiver, mitigation or extension thereof), if later. All of the
representations and warranties made by the Company and RBCA in Section 7.02
hereof shall survive the execution and delivery of this Agreement and any
investigation made by or on behalf of the Purchasers. Notwithstanding the
preceding sentence, any representation or warranty in respect of which indemnity
may be sought under Section 8.01 shall survive the time at which it would
otherwise terminate pursuant to the preceding sentence, if notice of the
inaccuracy or breach thereof giving rise to such right to indemnity shall have
been given to the party against whom such indemnity may be sought prior to such
time.
9.02 NOTICES. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier
(with receipt confirmed), courier service or personal delivery:
IF TO THE WHITNEY V, TO:
Whitney V, L.P.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier No.:(000) 000-0000
Attention:. Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxxx
Xxxxx Xxxxxx
with a copy (which shall not constitute notice to
Whitney V), to:
33
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.:(000) 000-0000
Attention: Xxxxxxxxx Xxxxx, Esq.
IF TO ANY OF XXXXXXXX, THE COMPANY OR RBCA, TO:
Roller Bearing Holding Company, Inc.
00 Xxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telecopier No.:(000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxxxxx, C.E.O.
with a copy (which shall not constitute notice to such
Party), to:
XxXxxxxxx, Will & Xxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.:(000) 000-0000
Attention: C. Xxxxx Xxxxxxx, Esq.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; if mailed, five
Business Days after being deposited in the mail, postage prepaid; or if
telecopied, when receipt is acknowledged.
9.03 E-DOCUMENTS. The Company shall, promptly following the Closing,
cause its counsel to deliver via e-mail to Whitney and Xxxxxxxx & Xxxxx,
electronic versions of the Transaction Documents prepared by the Company in
either MicroSoft Word or PDF Format. The Whitney copies shall be e-mailed to
xxxxxxxxxx@xxxxxxx.xxx, with copies to xxxxxxxxx@xxxxxxx.xxx.
9.04 SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of the parties hereto.
Subject to applicable securities laws, the Purchasers may assign any of its
rights under any of the Transaction Documents to any Person. The Company may not
assign any of its rights, or delegate any of its obligations, under this
Agreement without the prior written consent of the Purchasers, and any such
purported assignment by the Company without the written consent of the
Purchasers shall be void and of no effect. Except as provided in Article 9, no
Person other than the parties hereto and their successors and permitted assigns
is intended to be a beneficiary of any of the Transaction Documents.
9.05 AMENDMENT AND WAIVER.
34
(a) No failure or delay on the part of any of the Parties hereto
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the Parties
hereto at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by any party from the terms of any provision of
this Agreement, shall be effective (i) only if it is made or given in writing
and signed by all of the parties hereto, and (ii) only in the specific instance
and for the specific purpose for which made or given. No amendment, supplement
or modification of or to any provision of this Agreement or any of the other
Transaction Documents, or any waiver of any such provision or consent to any
departure by any party from the terms of any such provision may be made orally.
Except where notice is specifically required by this Agreement, no notice to or
demand on the Company in any case shall entitle the Company to any other or
further notice or demand in similar or other circumstances.
9.06 SIGNATURES; COUNTERPARTS. Telefacsimile transmissions of any
executed original document and/or retransmission of any executed telefacsimile
transmission shall be deemed to be the same as the delivery of an executed
original. At the request of any party hereto, the other parties hereto shall
confirm telefacsimile transmissions by executing duplicate original documents
and delivering the same to the requesting Party or Parties. This Agreement may
be executed in any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
9.07 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
9.08 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN
ACCORDANCE WITH, AND ENFORCED UNDER, THE LAW OF THE STATE OF
NEW YORK APPLICABLE
TO AGREEMENTS OR INSTRUMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN SUCH
STATE.
9.09 JURISDICTION, WAIVER OF JURY TRIAL, ETC.
(a) EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT
THE ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE CLASS B SHARES, OR ANY AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF
NEW YORK AND HEREBY EXPRESSLY
SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES
THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF
35
IMPROPER VENUE AND ANY CLAIM THAT SUCH COURTS ARE AN INCONVENIENT FORUM. EACH
PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS
SET FORTH IN SECTION 9.02, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH
MAILING.
(b) EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, THE CLASS B SHARES OR ANY OF THE OTHER TRANSACTION DOCUMENTS,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS. EACH OF THE COMPANY AND ITS SUBSIDIARIES (i) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF WHITNEY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT WHITNEY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT PURCHASER HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS TO
WHICH IT IS PARTY BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED HEREIN.
9.10 SEVERABILITY. If any one or more of the provisions contained in this
Agreement, or the application thereof in any circumstance, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the
benefits of the remaining provisions of this Agreement. The parties hereto
further agree to replace such invalid, illegal or unenforceable provision of
this Agreement with a valid, legal and enforceable provision that shall achieve,
to the extent possible, the economic, business and other purposes of such
invalid, illegal or unenforceable provision.
9.11 RULES OF CONSTRUCTION. Unless the context otherwise requires, "or"
is not exclusive, and references to sections or subsections refer to sections or
subsections of this Agreement.
9.12 ENTIRE AGREEMENT. This Agreement, together with the exhibits and
schedules hereto and the other Transaction Documents, is intended by the parties
as a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or therein. This Agreement, together with the exhibits and
schedules hereto, and the other Transaction Documents supersede all prior
agreements and understandings between the parties with respect to such subject
matter (including, without limitation, the letters of intent between the Company
and Whitney dated as of February 14, 2002 and July 19,2002).
36
9.13 EXPENSES. Except as provided in the Management Services Agreement,
the parties hereto shall pay their respective expenses (including, without
limitation, fees, charges and disbursements of counsel) incurred in connection
with the negotiation, execution and performance of this Agreement and the other
Transaction Documents.
9.14 PUBLICITY. Except as may be required by applicable law, none of the
parties hereto shall issue a publicity release or announcement or otherwise make
any public disclosure concerning this Agreement or the transactions contemplated
hereby, without prior approval by the other party hereto. If any announcement is
required by law to be made by any party hereto, prior to making such
announcement such party shall deliver a draft of such announcement to the other
parties and shall give the other parties an opportunity to comment thereon.
Notwithstanding the foregoing, Whitney and its affiliates may list the Company's
name and logo, and describe the Company's business in their marketing materials
and may post such information on their website.
9.15 FURTHER ASSURANCES. Each of the parties shall execute such documents
and perform such further acts (including, without limitation, obtaining any
consents, exemptions, authorizations, or other actions by, or giving any notices
to, or making any filings with, any Governmental Authority or any other Person)
as may be reasonably required or desirable to carry out or to perform the
provisions of this Agreement, including, without limitation, any post-closing
assignment(s) by the Purchaser of a portion of the Securities to a Person not
currently a party hereto.
9.16 NO STRICT CONSTRUCTION. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement and the other Transaction
Documents. In the event an ambiguity or question of intent or interpretation
arises under any provision of this Agreement or any Transaction Document, this
Agreement or such other Transaction Document shall be construed as if drafted
jointly by the parties thereto, and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement or any other Transaction Document.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
37
IN WITNESS WHEREOF, the parties hereto have caused this
Preferred
Stock Purchase Agreement to be executed and delivered by their respective
officers hereunto duly authorized as of the date first above written.
ROLLER BEARING HOLDING COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
ROLLER BEARING COMPANY OF AMERICA, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
WHITNEY V, L.P.
By: Whitney Equity Partners V, LLC,
its general partner
By: /s/ Xxxxxx Xxxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxx
Title:
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Xx. Xxxxxxx X. Xxxxxxxx
EXHIBIT A
RESTATED CHARTER AND BYLAWS
(SEE ATTACHED)
A-1
EXHIBIT B
MANAGEMENT SERVICES AGREEMENT
(SEE ATTACHED)
B-1
EXHIBIT C
STOCKHOLDERS' AGREEMENT
(SEE ATTACHED)
F-1
