EXHIBIT 2.0
STOCK PURCHASE AGREEMENT
THIS AGREEMENT, made as of December 16, 1999, by and between (i) Xxxx
X. Xxxxx; Xxxxx X. Xxxxx; Xxxxx Xxxxx Xxxxx, Trustee, Xxxxx Xxxxxx Trust u/i/t
dated July 21, 1998; Xxxxx Xxxxx Xxxxx, Trustee, Xxxxxxx Xxxxx Trust u/i/t dated
July 21, 1998; Xxxxx Xxxxx Xxxxx, Trustee, Sydney Xxxxxx Xxxxx Trust u/i/t dated
July 21, 1998; and Xxxxx Xxxxx Xxxxx, Trustee, Xxx X. Xxxxx Trust u/i/t dated
July 21, 1998 (each a "Seller" and collectively the "Sellers"); and (ii) Semele
Group Inc., a Delaware corporation (the "Buyer");
W I T N E S S E T H:
WHEREAS, the Sellers are the owners of all the issued and outstanding
shares of capital stock of Equis II Corporation, a Delaware corporation (the
"Company");
WHEREAS, the Sellers desire to sell to the Buyer, and the Buyer desires
to purchase from the Sellers, 85 percent of such shares upon the terms and
subject to the conditions set forth herein;
WHEREAS, the Buyer has received from Josephthal & Co. Inc. a "fairness
opinion" with respect to the fairness to the Buyer from a financial point of
view of this acquisition and a related acquisition by the Buyer from Equis
Financial Group Limited Partnership of the entire Special Beneficiary Interest
in four Delaware business trusts, which opinion is acceptable to the Special
Committee of the Board of Directors of the Buyer consisting of the Buyer's
independent directors;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.1. PURCHASE AND SALE OF SHARES. At the Closing, as defined in Section
1.3 hereof, the Sellers shall sell, assign, transfer and deliver to the Buyer,
and the Buyer shall purchase, acquire and accept from the Sellers, the number of
shares of Voting Common Stock and Non-Voting Common Stock, each $.01 par value,
of the Company set forth opposite their respective names on EXHIBIT A-1 under
the heading "Number of Shares to be Sold" (collectively, the "Shares"). The
Shares comprise 85 percent of the shares of Voting and Non-Voting Common Stock
of the Company owned by each Seller. At the Closing, the Buyer and the Sellers
will enter into an agreement giving the Buyer a call right to purchase from the
Sellers, and giving the Sellers a put right to sell to the Buyer, the 15 percent
of the shares of Voting and Non-Voting Common Stock of the Company not being
sold to the Buyer hereunder. The purchase price for such 15 percent will be
510,000 shares of the Common Stock, $.10 par value, of the Buyer. Such rights to
purchase and sell will only be exercisable, however, if the stockholders of the
Buyer approve of such payment in shares of Common Stock of the Buyer. If
stockholder approval is not obtained, the purchase and sale rights will
terminate.
1.2. PURCHASE PRICE; DELIVERY OF SHARES. In consideration of the sale
of the Shares to the Buyer, subject to the terms and conditions provided herein,
the Buyer shall pay to the Sellers a total purchase price of $19,586,000 (the
"Purchase Price"). The Purchase Price shall be paid at the Closing by the Buyer
to the Sellers by delivery of Promissory Notes of the Buyer (the "Notes"), each
in the form of EXHIBIT B-1 as to $14,600,000, in the form of EXHIBIT B-2 as to
$3,085,000 and in the form of EXHIBIT B-3 as to $1,901,000, payable to the
Sellers in the principal amounts shown on EXHIBIT A-2. The Buyer acknowledges
that the Shares are currently subject to a pledge executed by the Sellers
securing indebtedness of the Company totalling approximately $19.5 million at
September 30, 1999. The Buyer agrees that it will secure its obligations under
the Notes by a pledge of the Shares to the Sellers pursuant to a Security
Agreement and Collateral Agency Agreement in the form of EXHIBIT C hereto, which
pledge shall be junior only to the currently existing pledge and which pledge
shall be a first priority pledge as soon as such consent of existing
indebtedness has been repaid and such currently existing pledge has been
released. At the Closing, each Seller shall deliver to the Buyer the certificate
or certificates representing the Shares being sold by such Seller accompanied by
a stock power duly endorsed in blank by such Seller and otherwise in form
reasonably acceptable to the Buyer. Xxxx X. Xxxxx and Xxxxx X Xxxxx agree that,
effective as of the Closing the Buyer shall also cancel the option dated
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December 30, 1997, held by Xxxx X. Xxxxx to purchase 40,000 shares of Common
Stock of the Buyer and the option dated December 30, 1997, held by Xxxxx X.
Xxxxx to purchase 40,000 shares of Common Stock of the Buyer (together, the
"Options").
1.3. CLOSING. The closing of the transaction provided for in this
Agreement (the "Closing") shall take place at the offices of Xxxxx Peabody LLP,
000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, at 10:00 a.m. on December 22, 1999,
or such other date as may be mutually agreed upon in writing by the parties (the
"Closing Date").
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
The Sellers jointly and severally represent and warrant to the Buyer as
follows:
2.1. OWNERSHIP OF SHARES.
(a) Each Seller has good and marketable title to the Shares to
be sold to the Buyer by him pursuant to this Agreement, free and clear of all
restrictions, liens, charges, encumbrances, options and adverse claims or rights
whatsoever except as set forth on SCHEDULE 2.1. Except as set forth on SCHEDULE
2.1, there are no voting trusts, proxies or other arrangements or understandings
to which any Seller is a party with respect to the Shares. EXHIBIT A-1 sets
forth a true and correct listing of (i) all shares of Voting and Non-Voting
Common Stock of the Company owned by each Seller and (ii) the Shares to be sold
to the Buyer by each Seller hereunder.
(b) Each Seller has the full right, power and authority to
enter into this Agreement and to transfer, convey and sell to the Buyer the
Shares to be sold by him pursuant to this Agreement and, upon consummation of
the purchase contemplated by this Agreement, the Buyer will acquire from each
Seller good and marketable title to such Shares, free and clear of all
restrictions, liens, charges, encumbrances, options and adverse claims or rights
whatsoever except as set forth on SCHEDULE 2.1. This Agreement constitutes the
valid and binding obligation of each Seller enforceable in accordance with its
terms.
(c) No Seller is a party to, subject to or bound by any
agreement or any judgment, order, writ, prohibition, injunction or decree of any
court or other governmental body that would prevent the execution or delivery of
this Agreement by him or the transfer, conveyance and sale of the Shares to be
sold by him to the Buyer pursuant to this Agreement.
2.2. ORGANIZATION, GOOD STANDING AND AUTHORITY OF THE COMPANY. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the requisite power and
authority to own its properties and assets and to carry on its business as it is
now being conducted. The Company is duly qualified to do business and is in good
standing as a foreign corporation in the Commonwealth of Massachusetts.
2.3. CHARTER DOCUMENTS OF THE COMPANY. The Sellers have provided the
Buyer with true, accurate and complete copies of the Certificate of
Incorporation and By-Laws of the Company. Such Certificate of Incorporation and
By-Laws are in full force and effect. The Company is not in default under or in
violation of any provision of its Certificate of Incorporation or By-Laws. The
minute and stock record book of the Company (which has been made available for
inspection by the Buyer and its representatives) is true and complete in all
material respects.
2.4. NO COMPANY DEFAULT; NO CONFLICT WITH OTHER INSTRUMENTS. The
Company is not in default under or in violation of any material agreement or
other instrument or contract to which it is a party or by which it or any of its
properties or assets is bound or any judgment, decree, order, statute, rule or
regulation to which it is subject or by which it or any of its properties or
assets is bound. The execution, delivery and performance of this Agreement by
the Sellers and the consummation of the transactions contemplated hereby do not
and will not constitute a default under any of the terms, conditions or
provisions of (i) the Certificate of Incorporation or By-Laws of the Company or
(ii) any material agreement or other instrument or contract or any judgment,
decree, order, statute, rule or regulation to which the Company is a party or
subject or result in the creation of any lien, charge or encumbrance on any of
the properties or assets of the Company or the Shares.
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2.5. CAPITAL STOCK OF THE COMPANY. The authorized capital stock of the
Company consists of 500 shares of Voting Common Stock, $.01 par value, and 2,500
shares of Non-Voting Common Stock, $.01 par value. All such shares are issued
and outstanding. The Shares are duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding options, convertible securities,
warrants, rights agreements, restrictions, contracts, calls or commitments of
any character which entitle any person to acquire from the Company or otherwise
relate to the issuance by the Company of any shares of capital stock of the
Company or, except as set forth in SCHEDULE 2.1, which restrict or otherwise
relate to or provide for the transfer of any of such shares. Except as set forth
on SCHEDULE 2.1, there are no voting trusts, proxies or other arrangements or
understandings to which the Company or a Seller is a party with respect to the
voting of the Shares.
2.6. SUBSIDIARIES, OTHER INTERESTS, ETC., OF THE COMPANY. The Company
has one subsidiary, AFG XXXX Corporation ("AFG XXXX"). AFG XXXX is a corporation
duly organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the requisite power and authority to own
its properties and assets and to carry on its business as it is now being
conducted. AFG XXXX is the Managing Trustee of four Delaware business trusts,
AFG Investment Trust A, AFG Investment Trust B, AFG Investment Trust C and AFG
Investment Trust D (collectively the "Trusts"), each of which is a reporting
company under the Securities Exchange Act of 1934 (the "'34 Act"). The
authorized capital stock of AFG XXXX consists of 30,000 shares of Common Stock,
$.01 par value, of which 1,000 shares are issued and outstanding and owned by
the Company (the "AFG XXXX Shares"). The AFG XXXX Shares are duly authorized,
validly issued, fully paid and nonassessable. There are no outstanding options,
convertible securities, warrants, rights agreements, restrictions, contracts,
calls or commitments of any character which entitle any person to acquire from
AFG XXXX or otherwise relate to the issuance by AFG XXXX of any shares of
capital stock of AFG XXXX or, except as set forth on SCHEDULE 2.6, which
restrict or otherwise relate to or provide for the transfer of any of such
shares. Except for the Voting Trust Agreement dated December 16, 1999, between
the Company and Xxxx X. Xxxxx, as Trustee, and except as set forth on SCHEDULE
2.6, there are no voting trusts, proxies or other arrangements or understandings
to which AFG XXXX or the Company is a party with respect to the voting of the
AFG XXXX Shares. The Company also owns an aggregate of 7,980,139 Class B
Subordinated Beneficiary Interests in the Trusts, as shown on SCHEDULE 2.6 (the
"Class B Interests"). AFG XXXX as Managing Trustee has the powers, duties,
rights, obligations and economic interests set forth in the Second Amended and
Restated Declaration of Trust, as amended to date, of each of the Trusts (each a
"Declaration of Trust" and collectively the "Declarations of Trust"). The
Company, as record and beneficial owner of the Class B Interests, is entitled to
all rights with respect to the Class B Interests set forth in the Declaration of
Trust of each of the Trusts, including the rights to distributions and
allocations set forth therein. Except as provided in the Declaration of Trust of
each of the Trusts and except as set forth on SCHEDULE 2.6, there are no
agreements, restrictions, contracts, calls or commitments which restrict or
otherwise relate to or provide for the transfer of any of the Class B Interests.
Except for the Voting Trust Agreement dated December 16, 1999, between the
Company and Xxxx X. Xxxxx, as Trustee, and except as set forth on SCHEDULE 2.6,
there are no voting trusts, proxies or other arrangements or understandings to
which the Company is a party with respect to the voting of the Class B
Interests. The Company has good and marketable title to the AFG XXXX Shares and
the Class B Interests, free and clear of all restrictions, liens, charges,
encumbrances, options and adverse claims or rights whatsoever except as set
forth on SCHEDULE 2.6. The Company does not own, directly or indirectly, any
capital stock or other equity or ownership interest in any other corporation,
partnership, association, trust, joint venture or other entity.
2.7. ORGANIZATIONAL DOCUMENTS OF AFG XXXX, TRUSTS. The Sellers have
provided the Buyer with true, accurate and complete copies of the Articles of
Organization and By-Laws of AFG XXXX and with the Declaration of Trust of each
of the Trusts, all as amended to date. Such Articles of Organization, By-Laws
and Declarations of Trust are in full force and effect. AFG XXXX is not in
violation of any provision of its Articles of Organization or By-Laws or of the
Declaration of Trust of any of the Trusts. None of the Trusts is in violation of
its Declaration of Trust. The minute and stock record books of AFG XXXX (which
have been made available for inspection by the Buyer and its representatives)
are true and complete in all material respects.
2.8. NO AFG XXXX DEFAULT; NO CONFLICT WITH OTHER INSTRUMENTS. AFG XXXX
is not in default under or in violation of any material agreement or other
instrument or contract to which it is a party or by which it or any of its
properties or assets is bound or any judgment, decree, order, statute, rule or
regulation to which it is subject or by which it or any of its properties or
assets is bound. The execution, delivery and performance of this Agreement by
the Sellers and the consummation of the transactions contemplated hereby do not
and will not constitute a default under any of the terms, conditions or
provisions of (i) the Articles of Organization or By-Laws of AFG XXXX or the
Declarations of Trust of the Trusts or (ii) any material agreement or other
instrument or contract or any judgment, decree, order, statute rule or
regulation to which AFG XXXX is a party or subject or result in the creation of
any lien, charge or encumbrance on any of the properties or assets of AFG XXXX.
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2.9. SEC FILINGS. The Managing Trustee on behalf of the Trusts has
filed all forms, reports and documents required to be filed by them with the
Securities and Exchange Commission (the "SEC") since December 31, 1995 (the "SEC
Reports"). The SEC Reports, including all SEC Reports filed after the date
hereof and prior to the Closing, (i) were or will be prepared in accordance with
the Securities Act of 1933 (the "'33 Act") and the '34 Act, as the case may be,
and the rules and regulations thereunder and (ii) did not at the time they were
filed, or will not at the time they are filed, contain any untrue statement of a
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. The Sellers have provided the Buyer with true, accurate
and complete copies of the Annual Report on Form 10-K for the year ended
December 31, 1998, and the Quarterly Report on Form 10-Q for the periods ended
June 30 and September 30, 1999, filed with the SEC under the '34 Act by each of
the Trusts and (ii) the Prospectus dated June 10, 1997, of each of the Trusts
relating to the offering by such Trust under the '33 Act of the Class B
Subordinated Interests of which the Class B Interests are a part.
2.10. FINANCIAL STATEMENTS; ABSENCE OF UNDISCLOSED LIABILITIES. The
Sellers have delivered to the Buyer a copy of the audited consolidated balance
sheet of the Company as of December 31, 1998, and the related consolidated
statement of operations, consolidated statement of changes in stockholders'
equity and consolidated statement of cash flows and the notes thereto for the
period then ended and the unaudited consolidated balance sheet of the Company as
of September 30, 1999 (the September 1999 balance sheet is hereinafter referred
to as the "Balance Sheet"). All such financial statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated (except as otherwise indicated in the
notes to such financial statements and, in the case of the Balance Sheet,
subject to year end adjustments) and fairly present the financial condition and
results of operations of the Company as, at and for the periods indicated.
Except as set forth on SCHEDULE 2.10 or incurred in connection with the
transactions contemplated hereby, the Company is not subject to any liability
other than (i) liabilities reflected, reserved against or otherwise disclosed in
the Balance Sheet and (ii) liabilities arising since the date of the Balance
Sheet in the ordinary course of business consistent (in amount and kind) with
past practice which do not, individually or in the aggregate, materially
adversely affect the business, assets, liabilities, condition (financial or
otherwise), results of operations or prospects of the Company.
2.11. OTHER PERSONAL PROPERTY. Except as described in SECTION 2.6,
neither the Company nor AFG XXXX has any personal property.
2.12. REAL PROPERTY. Neither the Company nor AFG XXXX currently owns
or leases nor has the Company or AFG XXXX ever owned or leased any real property
or interests in real property.
2.13. NO MATERIAL ADVERSE CHANGE. Except as set forth on SCHEDULE 2.13
since the date of the Balance Sheet there has not been any material adverse
change in, relating to or affecting the business, assets, condition (financial
or otherwise), results of operations or prospects of the Company, and no facts
are known which may reasonably be expected to give rise to any such material
change.
2.14. TAXES. All taxes have been properly paid or accrued and all tax
returns currently required to be filed have been properly filed with respect to
the Company and all of its operations, income, profits and assets in accordance
with the requirements of the applicable laws of all federal, state, local and
foreign jurisdictions. No waivers of the statute of limitations are in effect
with respect to federal or state income taxes payable by or on behalf of the
Company. Except as set forth on SCHEDULE 2.14, none of the federal or state
income tax returns filed by the Company with respect to its last six fiscal
years have been examined by the Internal Revenue Service (the "IRS") or any
similar state, local or foreign tax authority, and none of the periods during
which any assessment may be made by the IRS or any similar state, local or
foreign tax authority has been extended.
2.15. CONTRACTS, COMMITMENTS, ETC. Except as set forth in SCHEDULE 2.15
and except for the Declarations of Trust of each of the Trusts, neither the
Company nor AFG XXXX is, as of the date of this Agreement, a party to or bound
by any contracts or agreements with third parties.
2.16. COMPLIANCE WITH LAWS. The Company and AFG XXXX are in compliance
with all applicable federal, state and local laws, rules, regulations and
ordinances.
2.17. LITIGATION. Except as described in SCHEDULE 2.17, no action,
suit, arbitration, mediation, investigation or proceeding is pending or, to the
knowledge of the Sellers, threatened before any court, administrative agency or
tribunal which affects or involves the Company, AFG XXXX or any of the Sellers
or any of their respective rights or properties or which seeks
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to prevent or challenge the transactions contemplated hereby. There is no
existing state of facts, circumstances or contemplated events that is likely to
give rise to an action, proceeding or investigation against the Company or AFG
XXXX.
2.18. ENVIRONMENTAL PROTECTION.
(a) The Company and AFG XXXX have complied in all material
respects with all federal and state environmental, health and safety laws, codes
and ordinances and all rules, regulations and ecological standards promulgated
thereunder ("Environmental Laws").
(b) There is no pending or, to the knowledge of the Sellers,
threatened civil, criminal or administrative action, demand, hearing, notice of
violation, notice or demand letter that affects or applies to the Company or AFG
XXXX, or their respective businesses, properties or assets, relating in any way
to any Environmental Laws or any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered, promulgated or
approved thereunder.
2.19. DIVIDENDS AND DISTRIBUTIONS TO THE SELLERS. Except as described
in SCHEDULE 2.19, the Company has never declared or paid any dividends or made
any other distributions to any holder of its outstanding capital stock or
redeemed any shares of its capital stock.
2.20. INSURANCE. The Company and AFG XXXX are named insureds on
policies of insurance purchased and maintained by an affiliate of the Company
providing coverage to the Company and AFG XXXX of such types and in such amounts
as are legally required or are otherwise appropriate for their respective
businesses. Each such policy of insurance is legal, valid, binding, enforceable
and in full force and effect. Following the consummation of the transaction
contemplated hereby, neither the Company nor AFG XXXX will be covered by any of
such policies. There is no default with respect to any provision contained in
any such policy, nor has the Company or AFG XXXX failed to give any notice or
present any claim under any such policy in due and timely fashion. None of the
Trusts is a named insured on policies of insurance, but each lessee of equipment
owned by any of the Trusts is required to insure the leased equipment under the
terms if its equipment lease.
2.21. REQUIRED CONSENTS AND APPROVALS. Except as set forth on SCHEDULE
2.21, the execution and delivery of this Agreement by the Sellers does not, and
the performance of this Agreement by the Sellers will not, require any consent,
approval, order, authorization, registration, qualification or designation from
any governmental authority or pursuant to any agreement or other instrument by
which the Sellers, the Company or AFG XXXX or any of their respective properties
is bound.
2.22. EMPLOYEE BENEFITS. Neither the Company nor AFG XXXX now has, or
has ever had, any employees. Neither the Company nor AFG XXXX has ever made, or
had any obligation to make, any contributions to any employee benefit plan
within the meaning of Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended. Neither the Company nor AFG XXXX has any liability with
respect to any such employee benefit plan maintained by an affiliate.
2.23. LICENSES AND PERMITS. The Company, AFG XXXX and the Trusts have
each obtained all licenses, permits and other approvals required from federal,
state or local authorities, if any, in order for them to conduct their
respective businesses as currently conducted.
2.24. NO BROKER. No broker, finder or investment banker is entitled to
any brokerage, finders or other fee or commission in connection with the
transaction contemplated by this Agreement based upon arrangements made by or on
behalf of the Company, AFG XXXX or the Sellers.
2.25. DISCLOSURE. The representations and warranties contained in this
Article II (including the schedules required to be delivered by the Sellers to
the Buyer pursuant to this Agreement) and any certificate or other instrument
furnished or to be furnished by the Sellers to the Buyer hereunder do not
contain and will not contain any untrue statement of a material fact or omit to
state any fact necessary in order to make the statements and information
contained in this Article II not misleading. There is no material fact relating
to the Company or AFG XXXX or their respective assets, properties or businesses
which may materially adversely affect the same which has not been disclosed in
writing in this Agreement to the Buyer.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to each of the Sellers as follows:
3.1. ORGANIZATION, GOOD STANDING AND AUTHORITY OF THE BUYER. The Buyer
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite power and authority to own,
lease and operate all its properties and assets and to carry on its business as
it is now being conducted.
3.2. AUTHORIZATION. The Buyer has full corporate power and authority to
enter into this Agreement and the other transactions contemplated hereby and to
carry out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by the Board of Directors of the Buyer and, except for the
approval of the stockholders of the Buyer to the issuance of the shares of
Common Stock of the Buyer contemplated to be issued to the Sellers no other
corporate proceedings or actions on the part of the Buyer are necessary to
authorize this Agreement and the transactions contemplated herein. This
Agreement constitutes a valid and binding obligation of the Buyer enforceable in
accordance with its terms.
3.3. NO BROKER. Except for Josephthal & Co. Inc. in connection with
its "fairness opinion," no broker, finder or investment banker is entitled to
any brokerage, finders or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Buyer.
ARTICLE IV
COVENANTS OF SELLERS
The Sellers will comply with the following covenants during the period
between the date hereof and the earlier of the date on which the Buyer purchases
15 percent of the Company not being purchased by the Buyer hereunder or the put
and call agreement relating to the purchase of such 15 percent expires:
4.1. ACCESS. The Sellers shall give the Buyer and its counsel,
accountants and other representatives full access, at reasonable times on
reasonable notice, throughout the period prior to the Closing Date, to all of
the properties, assets, books and records of the Company or relating thereto and
the Sellers shall furnish to the Buyer during such period all information
concerning the Company and its affairs as the Buyer may reasonably request.
4.2. MAINTENANCE OF EXISTENCE AND GOOD STANDING. The Sellers shall
cause the Company, AFG XXXX and the Trusts to maintain their respective
existences as corporations or business trusts, as applicable, in good standing
under the laws of the State of Delaware and the Commonwealth of Massachusetts,
as applicable, and under the laws of any other jurisdiction in which they are
qualified to do business as foreign corporations or entities.
4.3. CONDUCT OF BUSINESS IN ORDINARY COURSE. The Sellers shall cause
the Company, AFG XXXX and the Trusts to conduct their respective businesses only
in the ordinary course, unless the Sellers shall obtain the written consent of
the Buyer to any act or transaction by the Company, AFG XXXX or any of the
Trusts or on behalf of any of them which is not in the ordinary course of its
business.
4.4. PRESERVATION OF ORGANIZATION. The Sellers shall cause the Company,
AFG XXXX and the Trusts to preserve their respective business organizations, and
use their best efforts to preserve their business relations and to retain the
services of their present officers.
4.5. PRESERVATION OF PROPERTIES. The Sellers shall cause the Company,
AFG XXXX and the Trusts to maintain and preserve the properties owned or used by
them in their respective businesses.
4.6. PERFORMANCE OF CONTRACTS. The Sellers shall cause the Company,
AFG XXXX and the Trusts to fulfill their respective contractual obligations in
all material respects.
4.7. TAXES AND SIMILAR CHARGES. The Sellers shall cause the Company,
AFG XXXX and the Trusts to punctually pay and discharge all taxes, assessments
and governmental charges lawfully imposed upon them or any of their respective
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properties or those properties used by them in their respective businesses or
upon the income and profits thereof and to file all tax returns required to be
filed by them.
4.8. COMPLIANCE WITH LAWS. The Sellers shall cause the Company, AFG
XXXX and the Trusts to comply in all material respects with all laws,
governmental regulations, rules and ordinances, and judicial orders, judgments,
decrees and similar determinations to which they and their respective properties
are subject.
4.9. INSURANCE. The Sellers shall cause the Company and AFG XXXX to
continue as named insureds on the insurance policies referred to in Section
2.21, and shall cause such policies to be continued in full force and effect or
be replaced with other policies providing substantially equivalent or greater
coverage.
4.10. NOTICE OF BREACH, LITIGATION, ETC. The Sellers will promptly give
written notice to the Buyer of (i) the occurrence of any event or the failure of
any event to occur which results or will result in a breach of or a failure to
comply with any representation, warranty, covenant, condition or agreement by
the Sellers contained herein or (ii) the commencement of any litigation,
proceeding, investigation or inquiry seeking to enjoin or prevent the
consummation of the transactions contemplated by this Agreement or to obtain
damages or other relief by reason of such consummation.
4.11. CONSENTS FROM THIRD PARTIES. The Sellers will use their best
efforts to obtain the consent of any party necessary to approve the transactions
contemplated hereby.
4.12. SATISFACTION OF REPRESENTATIONS AND CONDITIONS. The Sellers will
use their best efforts to take all actions necessary to render all
representations and warranties made by them herein accurate on and as of the
Closing Date in all material respects and to satisfy each covenant or condition
to be performed or satisfied by them on or before the Closing Date.
4.13. AMENDMENT OF ARTICLES OR BY-LAWS. The Sellers will not amend nor
permit to be amended the Certificate of Incorporation of the Company, the
Articles of Organization of AFG XXXX or the By-Laws of either of them or the
Declaration of Trust of any of the Trusts or make any change in the authorized
or issued capital stock of either the Company or AFG XXXX or the beneficiary
interests of any of the Trusts without the written consent of the Buyer.
4.14. PUBLIC ANNOUNCEMENTS. The Sellers will not make or permit to be
made any public announcement or disclosure concerning the transactions
contemplated hereby without the written consent of the Buyer.
ARTICLE V
COVENANTS OF THE BUYER
The Buyer covenants as follows with respect to the period between the
date hereof and the Closing Date:
5.1. CONSENTS FROM THIRD PARTIES. The Buyer will use its best efforts
to obtain the consent of any party, including its stockholders and any
governmental authority, necessary to approve the transactions contemplated
hereby.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF SELLERS
The obligation of the Sellers to sell and deliver the Shares is subject
to the satisfaction (or waiver by the Sellers) on or prior to the Closing Date
of the following conditions:
6.1. REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties of the Buyer contained in this Agreement shall be true and correct on
and as of the Closing Date as if such representations and warranties were made
on and as of that date.
6.2. COMPLIANCE WITH AGREEMENT. The Buyer shall have performed and
complied in all material respects with all its obligations and covenants under
this Agreement to be performed or complied with by it prior to the Closing Date.
48
6.3. CONSENTS. The consent of every party necessary to approve the
transactions contemplated hereby shall have been obtained.
6.4. NO LITIGATION. At the Closing Date, no litigation, proceeding,
investigation or inquiry shall be pending or threatened seeking to enjoin or
prevent the consummation of the transactions contemplated by this Agreement or
to obtain damages or other relief by reason of such consummation.
6.5. PUT/CALL AGREEMENT. The Buyer and the Sellers shall have executed
and delivered an agreement in the form of EXHIBIT D hereto giving the Buyer a
call right to purchase from the Sellers, and giving the Sellers a put right to
sell to the Buyer, the 15 percent of the Voting and Non-Voting Common Stock of
the Company not being sold to the Buyer hereunder.
6.6. REGISTRATION RIGHTS AGREEMENT. The Buyer and the Sellers shall
have executed and delivered a registration rights agreement in the form of
EXHIBIT E hereto.
6.7. OPINION OF COUNSEL. The Sellers shall have received from Xxxxxxx &
Xxxxxxxx Ltd., counsel to the Special Committee of the Board of Directors of the
Buyer, an opinion as of the Closing Date in form and substance reasonably
acceptable to counsel to the Sellers as to certain tax matters.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE BUYER
The obligation of the Buyer to purchase and pay for the Shares is
subject to the satisfaction (or waiver by the Buyer, provided, however, that the
Buyer cannot waive obtaining the consent of its stockholders) on or prior to the
Closing Date of the following conditions:
7.1. REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties of the Sellers contained in this Agreement shall be true and correct
on and as of the Closing Date as if such representations and warranties were
made on and as of that date.
7.2. COMPLIANCE WITH AGREEMENT. The Sellers shall have performed and
complied in all material respects with all their obligations and covenants under
this Agreement to be performed or complied with prior to the Closing Date.
7.3. SELLERS' CERTIFICATE. The Buyer shall have received a Certificate
dated as of the Closing Date executed by each of the Sellers to the effect that
the representations and warranties of the Sellers contained in this Agreement
are true and correct on and as of that date and that the Sellers have performed
or complied with all their obligations and covenants to be performed or complied
with by them prior to the Closing Date.
7.4. CONSENTS. The consent of every party necessary to approve the
transactions contemplated hereby shall have been obtained.
7.5. NO LITIGATION. At the Closing Date, no litigation, proceeding,
investigation or inquiry shall be pending or threatened seeking to enjoin or
prevent the consummation of the transactions contemplated by this Agreement or
to obtain damages or other relief by reason of such consummation.
7.6. DUE DILIGENCE REVIEW. The Buyer and its representatives shall have
conducted a due diligence review of the Company and in the Buyer's sole
discretion, the Buyer shall be satisfied on the basis of such review that Buyer
should proceed with the transactions contemplated hereby.
7.7. PUT/CALL AGREEMENT. The Buyer and the Sellers shall have executed
and delivered an agreement in the form of EXHIBIT D hereto giving the Buyer a
call right to purchase from the Sellers, and giving the Sellers a put right to
sell to the Buyer, the 15 percent of the Voting and Non-Voting Common Stock of
the Company not being sold to the Buyer hereunder.
7.8. OPTIONS. The Options shall have been canceled with the consent
of Xxxx X. Xxxxx and Xxxxx X. Xxxxx.
49
7.9. OPINION OF COUNSEL. The Buyer shall have received from Xxxxx
Peabody LLP, counsel to the Sellers, an opinion as of the Closing Date in form
and substance reasonably acceptable to counsel to the Special Committee of the
Board of Directors of the Buyer as to ownership of the shares and certain
corporate and trust matters.
ARTICLE VIII
INDEMNIFICATION; SET OFF
8.1. INDEMNIFICATION BY THE SELLERS. The Sellers, jointly and
severally, shall indemnify and hold harmless the Buyer, its officers, directors,
controlling persons and affiliates (including, without limitation, the Company)
from and against any loss, liability, claim, damage (including, incidental and
consequential damages), expense (including reasonable legal fees and costs), or
diminution in value arising, directly or indirectly, from or in connection with
any (i) breach or inaccuracy of any of the representations or warranties made by
the Sellers in this Agreement, (ii) breach of any covenant or agreement of the
Sellers contained in this Agreement, and (iii) any and all costs and expenses
(including but not limited to legal costs and expenses) incurred by the Buyer in
connection with the enforcement of its rights hereunder. The representations and
warranties of the Sellers contained in this Agreement or any Schedules hereto,
other than the Special Warranties as defined below, shall survive until the
18-month anniversary of the Closing Date and thereafter shall terminate and be
of no further force or effect, except as to matters as to which the Buyer has
given notice to the Sellers of the basis for indemnification during such
18-month period.
For purposes of this Agreement, the Special Warranties shall be the
representations and warranties of the Sellers contained in (i) Section 2.1
hereof regarding the Shares and (ii) Section 2.14 hereof regarding certain tax
matters. The Special Warranties shall survive indefinitely. This Section 8.1 may
not be amended without the approval of a majority of the independent directors
of the Buyer.
8.2. INDEMNIFICATION BY THE BUYER. The Buyer shall indemnify and hold
harmless the Sellers from and against any and all loss, liability, claim,
damage, expense (including reasonable legal fees and costs), or diminution in
value arising, directly or indirectly, from or in connection with any (i) breach
or inaccuracy of any of the representations or warranties made by the Buyer in
this Agreement and (ii) breach of any covenant or agreement of the Buyer
contained in this Agreement.
8.3. PROCEDURE FOR INDEMNIFICATION - THIRD PARTY CLAIMS.
(a) Promptly after receipt by an indemnified party under
Section 8.1 or 8.2 hereof of notice of the commencement of any claim, demand,
action or proceeding ("Proceeding") against it, such indemnified party will, if
a claim is to be made against an indemnifying party under such Section, give
notice to indemnifying party of the commencement of such claim, but the failure
to notify the indemnifying party will not relieve the indemnifying party of any
liability that it may have to any indemnified party, except to the extent that
the indemnifying party demonstrates that the defense of such action is
prejudiced by the indemnifying party's failure to give such notice.
(b) If any Proceeding referred to in Section 8.3(a) is brought
against an indemnified party and it gives notice to the indemnifying party of
the commencement of such Proceeding, the indemnifying party will be entitled to
participate in such Proceeding and, to the extent that it wishes (unless the
indemnifying party fails to provide reasonable assurance to the indemnified
party of its financial capacity to defend such Proceeding and provide
indemnification with respect to such Proceeding), to assume the defense of such
Proceeding with counsel satisfactory to the indemnified party and, after notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such Proceeding, the indemnifying party will not, as long as it
diligently conducts such defense, be liable to the indemnified party under this
Article IV for any fees of other counsel or any other expenses with respect to
the defense of such Proceeding, in each case subsequently incurred by the
indemnified party in connection with the defense of such Proceeding, other than
reasonable costs of investigation. If the indemnifying party assumes the defense
of a Proceeding, (i) it will be conclusively established for purposes of this
Agreement that the claims made in that Proceeding are within the scope of and
subject to indemnification and (ii) no compromise or settlement of such claims
may be effected by the indemnifying party without the indemnified party's
written consent. If notice is given to an indemnifying party of the commencement
of any Proceeding and the indemnifying party does not, within ten days after the
indemnified party's notice is given, give notice to the indemnified party of its
election to assume the defense of such Proceeding, the indemnifying party will
be bound by any determination made in such Proceeding
50
or any compromise or settlement effected by the indemnified party.
8.4. BUYER'S RIGHT OF OFFSET. In addition to other remedies available
to the Buyer at law or in equity, the Buyer shall have the right to offset any
and all sums due from the Sellers to the Buyer pursuant to Section 8.1 hereof
against future payments due from the Buyer to the Sellers under the Notes. As an
absolute condition precedent, at least ten days prior to any such offset, the
Buyer shall provide the Sellers with a written notice describing in reasonable
detail the basis for such offset.
ARTICLE IX
RIGHT TO PROCEED, WAIVER, MODIFICATION AND TERMINATION
9.1. RIGHT TO PROCEED. Anything in this Agreement to the contrary
notwithstanding, if any of the conditions specified in Article VII has not been
satisfied at the Closing, the Buyer shall have the right to proceed with the
transactions contemplated hereby; if any of the conditions specified in Article
VI hereof has not been satisfied at the Closing, the Sellers shall have the
right to proceed with the transactions contemplated hereby.
9.2. TERMINATION AND ABANDONMENT. This Agreement may be terminated
and the transactions hereby provided for may be abandoned:
(a) by mutual consent of the Buyer and the Sellers;
(b) by the Buyer if any of the conditions provided for in
Article VII of this Agreement has not been satisfied on or before the Closing
Date or in the reasonable judgment of the Buyer will not be satisfied at any
time prior to the Closing Date and has not been waived by the Buyer;
(c) by the Sellers if any of the conditions provided for in
Article VI has not been satisfied on or before the Closing Date or in the
reasonable judgment of the Sellers will not be satisfied at any time prior to
the Closing Date and has not been waived by the Sellers; and
(d) by of the Buyer or by the Sellers if the Closing shall not
have occurred by March 31, 2000; PROVIDED, HOWEVER, that the party terminating
this Agreement in accordance with Sections 9.2(b), (c) or (d) has satisfied or
is ready, willing and able to satisfy all of its conditions to Closing and is
not then in breach of any of its obligations hereunder.
ARTICLE X
OTHER PROVISIONS
10.1. GOVERNING LAW AND JURISDICTION. This Agreement and the rights and
obligations of the parties hereunder shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts without regard to
choice or conflict of law principles. The parties hereby submit to the
jurisdiction of the courts of The Commonwealth of Massachusetts and the United
States District Court for the Eastern District of Massachusetts in any action or
proceeding arising out of or relating to this Agreement. The parties hereby
waive any objection they may have to venue to any such action or proceeding and
to the defense of an inconvenient forum with respect thereto. Each party
consents to service of process in the manner provided for notices herein.
10.2. NOTICES. Unless otherwise provided herein, all notices required
or permitted by the terms hereof shall be in writing. Any written notice shall
become effective when received. All notices and other communications hereunder
shall be deemed to have been duly received if hand delivered or mailed, by
certified or registered mail, return receipt requested, postage prepaid or by
overnight delivery service to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section):
If to the Sellers:
Xxxx X. Xxxxx
Equis Financial Group Limited Partnership
00 Xxxxx Xxxxxx
00
Xxxxxx, XX 00000
with a copy to:
Xxxxx Peabody LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attn: Xxxx Xxxxxxxx Xxxx
and, if to the Buyer:
Semele Group Inc.
Xxx Xxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
with a copy to:
Xxxxxxx & Xxxxxxxx Ltd.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
10.3. AMENDMENT AND ALTERATION. No amendment or alteration of the terms
of this Agreement shall be valid or binding unless made in writing signed by the
appropriate parties to this Agreement specifically referring to this Agreement.
10.4. BINDING AGREEMENT/ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, permitted assigns and legal
representatives, PROVIDED, HOWEVER, that neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of each of the other parties.
10.5. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
10.6. INTEGRATION. This Agreement represents the entire agreement among
the parties hereto with respect to the subject matter hereof and supersedes any
prior agreements, negotiations, discussions or understandings with respect to
the subject matter hereof.
IN WITNESS WHEREOF, the Buyer has caused this Agreement to be executed
by its duly authorized representative and the Sellers have executed this
Agreement, under seal, as of the date first set forth above.
THE SELLERS: SEMELE GROUP INC.
/s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxx
------------------------------- ---------------------------
Xxxx X. Xxxxx Xxxx X. Xxxxxx, Chief Financial
Officer
/s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx X. Xxxxx
/s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx Xxxxx Xxxxx, Trustee, Xxxxx
Xxxxxx Trust u/i/t dated July 21, 1998
52
/s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx Xxxxx Xxxxx, Trustee, Xxxxxxx
Xxxxx Trust u/i/t dated July 21, 1998
/s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx Xxxxx Xxxxx, Trustee, Sydney
Xxxxxx Xxxxx Trust u/i/t dated July 21, 1998
/s/ Xxxxx X. Xxxxx
-------------------------------
Xxxxx Xxxxx Xxxxx, Trustee, Xxx X.
Xxxxx Trust u/i/t dated July 21, 1998
53
EXHIBIT A-1
Number of Shares Number of Shares
Name Owned to be Sold
---- ----- ----------
Voting Non-voting Voting Non-voting
------ ---------- ------ ----------
Xxxx X. Xxxxx 450 1,240 382 1,054
Xxxxx X. Xxxxx 50 960 42 816
Xxxxx Xxxxx Xxxxx, Trustee, Xxxxx Xxxxxx Xxxxx Xxxx 00 Xxxx 00
u/i/t dated July 21, 1998
Xxxxx Xxxxx Xxxxx, Trustee, Xxxxxxx Xxxxx Trust None 75 None 64
u/i/t dated July 21, 1998
Xxxxx Xxxxx Xxxxx, Trustee, Sydney Xxxxxx Xxxxx None 75 None 64
Trust u/i/t dated July 21, 1998
Xxxxx Xxxxx Xxxxx, Trustee, Xxx X. Xxxxx Trust None 75 None 64
---- -- ---- --
u/i/t dated July 21, 1998
TOTALS 500 2,500 424 2,126
54
EXHIBIT A-2
PURCHASE PRICE
--------------
NAME
----
Note B-1 Note B-2 Note B-3
-------- -------- --------
Xxxx X. Xxxxx $8,224,667 $1,737,883 $1,070,897
Xxxxx X. Xxxxx 4,915,333 1,038,617 640,003
Xxxxx Xxxxx Xxxxx, Trustee, Xxxxx Xxxxxx Trust 365,000 77,125 47,525
u/i/t dated July 21, 1998
Xxxxx Xxxxx Xxxxx, Trustee, Xxxxxxx Xxxxx Trust 365,000 77,125 47,525
u/i/t dated July 21, 1998
Xxxxx Xxxxx Xxxxx, Trustee, Xxxxxx Xxxxxx 365,000 77,125 47,525
Xxxxx Trust u/i/t dated July 21, 1998
Xxxxx Xxxxx Xxxxx, Trustee, Xxx X. Xxxxx Trust 365,000 77,125 47,525
u/i/t dated July 21, 1998 -------- ------------- ------------
TOTALS $14,600,000 $3,085,000 $1,901,000
