STOCK PURCHASE AGREEMENT
Dated as of June 27, 1996
By and Among
AEROSOL COMPANIES HOLDING CORPORATION,
XXXXXX X. GARRETS0N,
GAERETSON, X'XXXXXXXX CHARITABLE TRUST,
AND OTHER SHAREHOLDERS
and
PIEDMONT LABORATORIES, INC.
TABLE OF CONTENTS
Page
ARTICLE I GENERAL . . . . . . . . . . . . . . . . . . . . . 2
1.1 Sale and Purchase of Company Common Stock . . . . 2
1.2 Purchase Price . . . . . . . . . . . . . . . . . . 2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF
SELLERS AND COMPANY . . . . . . . . . . . . . . . 2
2.1 Organization . . . . . . . . . . . . . . . . . . . 2
2.2 Authorization . . . . . . . . . . . . . . . . . . 2
2.3 No Conflict . . . . . . . . . . . . . . . . . . . 3
2.4 Capitalization; No Subsidiaries . . . . . . . . . 4
2.5 Financial Statements . . . . . . . . . . . . . . . 4
2.6 Absence of Certain Facts or Events . . . . . . . . 5
2.7 Property, Leases and Liens . . . . . . . . . . . . 7
2.8 Contracts and Commitments . . . . . . . . . . . . 7
2.9 Permits and Authorizations . . . . . . . . . . . . 8
2.10 No Violations . . . . . . . . . . . . . . . . . . 9
2.11 Proceedings . . . . . . . . . . . . . . . . . . . 9
2.12 Insurance . . . . . . . . . . . . . . . . . . . . 10
2.13 Proprietary Information and Rights . . . . . . . . 10
2.14 Employee Benefits . . . . . . . . . . . . . . . . 10
2.15 Employment Laws . . . . . . . . . . . . . . . . . 13
2.16 Environmental Laws . . . . . . . . . . . . . . . . 14
2.17 Taxes . . . . . . . . . . . . . . . . . . . . . . 15
2.18 No Unlawful Contributions . . . . . . . . . . . . 16
2.19 No Insider Transactions . . . . . . . . . . . . . 16
2.20 Accounts Receivable; Customers . . . . . . . . . . 17
2.21 Inventories . . . . . . . . . . . . . . . . . . . 17
2.22 Bank Accounts . . . . . . . . . . . . . . . . . . 18
2.23 Warranties . . . . . . . . . . . . . . . . . . . . 18
2.24 Delivery of Documents . . . . . . . . . . . . . . 18
2.25 No Finders or Brokers . . . . . . . . . . . . . . 18
ARTICLE III REPRESENTATIONS AND WARRANTIES OF
PURCHASER . . . . . . . . . . . . . . . . . . . . 18
3.1 Organization . . . . . . . . . . . . . . . . . . . 18
3.2 Authorization . . . . . . . . . . . . . . . . . . 19
3.3 No Conflict . . . . . . . . . . . . . . . . . . . 19
3.4 Investment Intent . . . . . . . . . . . . . . . . 19
3.5 No Finders or Brokers . . . . . . . . . . . . . . 20
ARTICLE IV COVENANTS . . . . . . . . . . . . . . . . . . . . 20
4.1 Confidentiality . . . . . . . . . . . . . . . . . 20
4.2 Delivery of Financial Statements . . . . . . . . . 21
4.3 Fulfillment of Conditions . . . . . . . . . . . . 21
4.4 Purchaser's Access to Records and
Inspection Rights . . . . . . . . . . . . . . . . 22
4.5 Operation in Ordinary Course . . . . . . . . . . . 22
4.6 Post-Closing Access by Sellers . . . . . . . . . . 22
4.7 Termination of Affiliate Relationships . . . . . . 23
4.8 Bank Accounts . . . . . . . . . . . . . . . . . . 23
4.9 Indebtedness of Sellers to Company . . . . . . . . 23
ARTICLE V CONDITIONS OF CLOSING . . . . . . . . . . . . . . 23
5.1 Conditions of Obligations of Purchaser . . . . . . 23
(a) Representations and Warranties;
Performance of Obligations . . . . . . . 23
(b) Certificate and Deliveries by
Sellers . . . . . . . . . . . . . . . . 24
(c) No Injunction . . . . . . . . . . . . . 24
(d) Management Equity Purchase . . . . . . . 24
(e) Financing . . . . . . . . . . . . . . . 24
(f) Other Consents . . . . . . . . . . . . . 24
(g) Certificates and Instruments of
Transfer . . . . . . . . . . . . . . . . 24
(h) Stockholders Agreement . . . . . . . . . 25
(i) Employment and Non-Competition
Agreement . . . . . . . . . . . . . . . 25
(j) Opinion of Counsel to Sellers and
Company . . . . . . . . . . . . . . . . 25
(k) Due Diligence . . . . . . . . . . . . . 25
(l) No Material Adverse Change . . . . . . . 25
5.2 Conditions of Obligations of Sellers . . . . . . . 25
(a) Representations and Warranties;
Performance of Obligations . . . . . . . 25
(b) Certification by Purchaser . . . . . . . 26
(c) No Injunction . . . . . . . . . . . . . 26
(d) Employment and Non-Competition
Agreement . . . . . . . . . . . . . . . 26
(e) Opinion of Counsel to Purchaser . . . . 26
(f) Purchase Price . . . . . . . . . . . . . 26
(g) Release of Guaranties . . . . . . . . . 26
ARTICLE VI CLOSING DATE AND TERMINATION OF
AGREEMENT . . . . . . . . . . . . . . . . . . . . 27
6.1 Closing Date . . . . . . . . . . . . . . . . . . . 27
6.2 Termination of Agreement . . . . . . . . . . . . . 27
6.3 Effect of Termination . . . . . . . . . . . . . . 27
ARTICLE VII INDEMNIFICATION . . . . . . . . . . . . . . . . . 27
7.1 Indemnification by Sellers . . . . . . . . . . . . 27
7.2 Indemnification by Purchaser . . . . . . . . . . . 29
7.3 Survival of Representations and
Warranties; Reliance . . . . . . . . . . . . . . . 30
7.4 Sole Remedy . . . . . . . . . . . . . . . . . . . 31
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . 31
8.1 Further Actions . . . . . . . . . . . . . . . . . 31
8.2 Expenses . . . . . . . . . . . . . . . . . . . . . 31
8.3 Entire Agreement . . . . . . . . . . . . . . . . . 32
8.4 Descriptive Headings . . . . . . . . . . . . . . . 32
8.5 Notices . . . . . . . . . . . . . . . . . . . . . 32
8.6 Governing Law . . . . . . . . . . . . . . . . . . 33
8.7 Assignability . . . . . . . . . . . . . . . . . . 34
8.8 Waivers and Amendments . . . . . . . . . . . . . . 34
8.9 Third Party Rights . . . . . . . . . . . . . . . . 34
8.10 Public Announcements . . . . . . . . . . . . . . . 34
8.11 Counterparts . . . . . . . . . . . . . . . . . . . 35
APPENDIX A
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Encumbrance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . 38
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated as of June 27, 1996 (this
"Agreement") by and among AEROSOL COMPANIES HOLDING CORPORATION, a Delaware
corporation ("Purchaser"), XXXXXX X. XXXXXXXXX, an individual ("Xxxxxxxxx")
XXXXXXX X. XXXXXXXXX and XXXXXXX X. XXXXXXXXX (together with XXXXXXXXX (the
"Garretsons"), XXX XXXXXX ("Xxxxxx"), XXXX X. XXXXXXXXXX ("Trieshmann"),
XXXXXXXXX, X'XXXXXXXX CHARITABLE TRUST (the "Xxxxxxxxx Trust" and with
Garretsons, Trieshmann and Gecker the "Sellers") and PIEDMONT LABORATORIES,
INC., a Georgia corporation ("Company). Capitalized terms not otherwise
defined in this Agreement are used as defined in Appendix A hereto.
W I T N E S S E T H
WHEREAS, Sellers are the record and beneficial owners all issued
and outstanding shares of Common Stock, no par value per share (the
"Company Common stock"), of Company;
WHEREAS, Sellers desire to sell all outstanding Company Common
Stock to Purchaser upon the terms and conditions set forth below;
WHEREAS, Purchaser desires to purchase all Company Common Stock
from Sellers upon the terms and conditions set forth below; and
WHEREAS, Company expects to benefit from the consummation of the
transactions contemplated hereby and, to induce Purchaser to enter into
this Agreement, agrees to be bound by the terms and provisions in this
Agreement.
NOW, THEREFORE, in consideration of the mutual benefits to be
derived and the representations and warranties, conditions and promises
herein contained, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I.
GENERAL
1.1 Sale and Purchase of Company Common Stock. At the Closing,
Sellers shall sell, transfer, assign and deliver unto Purchaser and its
successors and assigns forever, and Purchaser shall purchase, all
outstanding Company Common Stock for the purchase price hereinafter set
forth.
1.2 Purchase Price
Amount of Purchase Price. In consideration for the purchase
of Company Common Stock, Purchaser shall pay to Sellers at the Closing pro
rata based on the number of shares of Company Common Stock held by each at
the Closing, Thirteen Million Dollars ($13,000,000) (the "Purchase Price")
. Purchaser shall also obtain the releases of any guarantees of Company
indebtedness made by Sellers and acknowledges that the Company's
indebtedness to third parties will remain outstanding.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF SELLERS AND COMPANY
A. Company and each of the Sellers hereby represent and warrant to
Purchaser as follows:
2.1 Organization. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Georgia and has the corporate power and authority to conduct its business
as it is presently being conducted and to own and lease its properties and
assets. Company is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which (i) such
qualification is necessary under the applicable law as a result of its
conduct of its business, and (ii) where the failure to be so qualified
would have a Material Adverse Effect.
2.2 Authorization. The execution and delivery of this Agreement
by Company and the performance of its obligations hereunder have been duly
authorized by the directors and the stockholders of Company and no other
corporate action or approval by Company is necessary for the execution,
delivery or performance of this Agreement by Company. This Agreement has
been- duly executed and delivered by Company and Sellers and is a valid and
binding obligation of Company and each Seller, enforceable against each of
them in accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium or other
similar laws, now or hereafter in effect, relating to or limiting
creditors' rights generally and (b) general principles of equity (whether
considered in an action in equity or at law).
2.3 No Conflict. Neither the execution and delivery of this
Agreement by Company or any Seller nor the consummation of the transactions
contemplated hereunder nor the fulfillment by Company or any Seller of any
of its terms will, except as described on Schedule 2.3:
(a) conflict with or result in a breach by Company or any Seller
of, or constitute default by it under, or create an event that, with the
giving of notice or the lapse of time, or both, would be a default under or
breach of, any of the terms, conditions or provisions of (i) any indenture,
mortgage, lease, deed of trust, pledge, loan or credit agreement involving
$25,000 or more, or any other material contract, arrangement or agreement
to which Company or Seller is a party or to which any material portion of
the assets of Company is subject, (ii) the Articles of Incorporation or
Bylaws of Company, or (iii) any judgment, order, writ, injunction, decree
or demand of any Governmental Entity which materially affects Sellers or
Company, or materially affects the Company's ability to conduct its
business or own or convey its assets;
(b) result in the creation or imposition of any lien, charge or
Encumbrance of any nature whatsoever upon any material portion of the
assets of Company or which materially affects the Company's ability to
conduct its business as conducted prior to the date of this Agreement; or
(c) cause a loss or adverse modification of any permit, license,
or other authorization granted by a Governmental Entity to or otherwise
held by Company which is necessary or materially useful to Company's
business.
Except for this Agreement, neither any Seller nor Company has any legal
obligation, absolute or contingent, to any other Person to sell any capital
stock, the business, or substantially all of the assets of Company or to
effect any merger, consolidation or other reorganization of Company or to
enter into any agreement with respect thereto.
2.4 Capitalization; No Subsidiaries. Company's authorized capital
stock consists of (a) 1,000 shares of Company Common Stock, of which 170
shares are issued and outstanding. All outstanding shares of Company Common
Stock are duly authorized, validly issued, fully paid and non-assessable.
There are no outstanding options, warrants or other rights to acquire, or
any securities or obligations convertible into or exchangeable for, any
shares of the capital stock of Company which have been issued or granted by
or are binding upon Sellers or Company or, to the knowledge of Sellers, by
any other Person. Each Seller is the record and beneficial owner of the
number of shares of Company Common Stock set forth opposite such person's
name on Schedule 2.4, free and clear of all Encumbrances. Company has no
Subsidiaries. The delivery to Purchaser at Closing of certificates
evidencing all outstanding Company Common Stock will convey and transfer to
Purchaser, good, complete and marketable title to all capital stock of
Company, free and clear of restrictions or conditions to transfer or
assignment (other than restrictions on transfer imposed by federal or state
securities laws) and free and clear of all defects of title or
Encumbrances.
2.5 Financial Statements
(a) Company has delivered to Purchaser the audited balance sheets
of Company as of October 1, 1995, October 2, 1994, and October 3, 1993, and
the related statements of income and retained earnings and cash flows for
the fiscal years then ended, accompanied by the unqualified opinion of
Xxxxx, Xxxxxx and Company, P.C., and the unaudited balance sheets and
related statements of income and retained earnings and cash flow for the
seven-month period ended May 4, 1996 (the "Financial Statements") . Except
as set forth in Schedule 2.5, the Financial Statements (i) are prepared in
accordance with GAAP consistently applied as at the dates and for the
periods covered thereby (except that the May 4, 1996 statements are subject
to year-end adjustments and are not accompanied by footnote disclosures),
(ii) present fairly in all material respects the financial position and
results of operations and cash flows of Company as of the dates and for the
periods then ended, (iii) are in agreement with the books and records of
Company in all material respects, and (iv) contain and reflect adequate
reserves, in accordance with GAAP, for all reasonably anticipated losses,
costs and expenses.
(b) Except as set forth in Schedule 2.5 hereto, Company has no
liabilities or obligations, either accrued, contingent or otherwise, which,
individually or in the aggregate, are material to Company, and which have
not been reflected in the Financial Statements. Except as set forth in the
Financial Statements or Schedule 2.5 hereto, there are no facts known to
Company or to any Seller or any other reasonable legal basis known to the
Company or any Seller which the Company or any Seller has recognized as
reasonably likely to give rise to any material claims against or
liabilities or obligations of Company.
(c) Company has, in accordance with good business practices,
maintained substantially complete and accurate books and records, including
financial records which fairly present its financial condition in all
material respects and substantially correct records of all its material
corporate proceedings.
2.6 Absence of Certain Facts or Events. Except as listed on
Schedule 2.6, since October l, 1995 there has not been:
(a) any material adverse change in (i) the financial condition of
Company from that shown on the October l, 1995 balance sheet, or (ii) the
results of operations of Company from that shown in the statements of
operations and cash flows of Company for the twelve-month period ended
October l, 1995;
(b) any material damage, destruction or loss to the assets or
business of Company, whether covered by insurance or not;
(c) any increase in the compensation payable or to become payable
by Company to any employee, officer or director whose fiscal 1995 annual
remuneration exceeded $50,000, or in the coverage or benefits under any
bonus, insurance, pension or other Benefit Plan (excluding annual length-
of-service and similar adjustments to the benefits of individual
participants);
(d) any issuance of capital stock of Company or options or rights
to acquire capital stock of Company, any redemption or repurchase of
outstanding shares of capital stock of Company, any declaration, setting
aside or payment of any dividend or distribution thereon, any merger of
Company with any Person, any purchase or other acquisition by Company of
capital stock or other interest in any other Person, any purchase or other
acquisition by Company of all or substantially all of the business or
assets of any other Person, any transfer or sale of a substantial portion
of the Company's business or assets to any Person, any transaction between
Company and Sellers or their Affiliates, or any agreement to take any such
actions;
(e) any sale, assignment or transfer of any contractual rights,
claims or other assets of Company valued at more than $50,000 individually,
or more than $150,000 in the aggregate, other than in the ordinary course
of business consistent with past practice;
(f) any mortgage, pledge, or other lien placed on Company assets
to secure debt, or Encumbrance placed on assets of the Company which would
prevent or materially limit the use, modification or sale of an asset
valued at $50,000 or more;
(g) the incurrence of any obligation or liability of Company as a
result of borrowed money (except pursuant to existing credit agreements) or
any capital expenditure in either case, in excess of $20,000 and not
described as planned or contemplated on Schedule 2.6, or, to the knowledge
of Sellers or the Company, any commitment to borrow money entered into by
Company, or any increase in any loans made or agreed to be made by Company;
(h) any failure to pay or perform any obligation of Company
involving more than $50,000 as, when and to the extent due other than
pursuant to a good faith defense or right of setoff;
(i) any intentional or, to the knowledge of any Seller or the
Company, other waiver of any rights of substantial value to Company or any
amendment or termination of any agreement to which Company is a party which
materially adversely affects, or is reasonably likely to materially
adversely affect, the Company's results of operations or its financial
condition;
(j) any material transaction entered into or consummated by
Company, except in the ordinary course of business consistent with past
practice;
(k) any material addition to or modification of the Benefit Plans
of Company or other arrangements or practices affecting personnel of
Company (other than extensions of coverage thereunder to employees of
Company who became eligible after October l, 1995 in accordance with the
terms of such Benefit Plans); or
(l) any formal notification, or, to the best knowledge of Sellers
and the Company, any informal notice, from any customer of Company
identified on Schedule 2.20 that such customer anticipates its annual
purchases from Company to decrease in any material respect.
2.7 Property Leases and Liens
(a) Schedule 2.7 hereto accurately sets forth as of June 30, 1996
all owned or leased real properties and all items of equipment and other
personal property of Company having an individual book value in excess of
$1,000 which are used or necessary for the conduct of Company's business in
accordance with past practice (the "Properties") and contains with respect
to each of the Properties a list of (i) all leases, franchises and similar
agreements creating, or materially modifying or altering rights to such
Property, including zoning or use restrictions, and (ii) all Indebtedness
secured by any Encumbrance on any such Property, specifying the nature
thereof and the holder of such Indebtedness. To Sellers' and Company's
knowledge, the agreements, contracts and commitments listed in schedule 2.7
are in full force and effect without any material default, waiver or
indulgence thereunder by Company or by any other party thereto. Except as
noted on Schedule 2.7, Company has good and marketable title to all
Properties and other assets of Company, in each case, free and clear of all
Encumbrances of any nature whatsoever.
(b) Except as noted on Schedule 2.7, all Properties of Company are
in a reasonably good state of repair (subject to ordinary wear and tear),
are in operable condition, have been maintained in accordance with
Company's historical practice and are suitable for the uses for which they
are presently being used in the business of Company.
2.8 Contracts and Commitments
(a) Except as set forth in Schedule 2.8, Company has no (i)
collective bargaining agreements, or any agreements that contain any
severance pay liabilities or obligations; (ii) employment, consulting or
similar agreement, contract or commitment which is not terminable without
penalty or cost by Company on notice of thirty (30) days or less or
contains an obligation of Company to pay and/or accrue more than $50,000
per year; (iii) lease of real or personal property having a term in excess
of one year or remaining payments of $25,000 or more (as lessor or lessee);
(iv) note or other evidence of Indebtedness for borrowed money or the
deferred purchase price of property or services which involves a liability
of more than $25,000; (v) agreement of guaranty or indemnification (other
than rights of indemnification to which officers, directors, employees and
agents of Company may be entitled by reason of the laws of any state, or by
the Bylaws or the Articles of Incorporation of Company); (vi) agreement,
contract or commitment limiting the freedom of Company to engage in any
line of business or compete with any Person; (vii) agreement, contract or
commitment relating to expenditures in excess of $50,000; (viii) agreement,
contract or commitment relating to the acquisition of assets of, or any
interest in, any business enterprise involving individual or aggregate
payments in excess of $50,000; or (ix) other agreement, contract or
commitment (with customers or other Persons) which involves $50,000 or more
and is not cancelable without penalty or cost within sixty (60) days.
(b) Except as set forth in Schedule 2.8: (i) Company is not
materially in violation of, nor has Company received in writing any claim
that it has breached, any of the terms or conditions of any agreement,
contract or commitment set forth or required to be set forth in any of the
schedules to this Agreement (collectively the "Contracts") in such manner
as would permit any other party there to cancel or terminate the same or
impose a fee or charge as a result of such breach, if any such breach or
breaches singly or in the aggregate is reasonably likely to have a Material
Adverse Effect; (ii) to the knowledge of Company and Sellers, each Contract
is in full force and effect in the form delivered to Purchaser and there is
no material breach or default by any party thereto; and (iii) to the
knowledge of Company and Sellers, there are no facts or conditions which
have occurred or are, based on facts presently known to exist, anticipated
which, through the passage of time or the giving of notice, or both, would
constitute a material default under any Contract or would cause the
acceleration of any obligation of any party thereto or the creation of an
Encumbrance which is reasonably likely to materially limit the use,
modification or sale of any asset of Company valued at more than $50,000.
2.9 Permits and Authorizations
(a) Schedule 2.9 lists each consent, license, permit, grant or
other authorization of a Governmental Entity pursuant to which Company
conducts all or a material part of its business or holds any of its
material assets (herein collectively called "Authorizations"). To the
knowledge of Company and Sellers, all Authorizations are in full force and
effect and constitute all Authorizations required to permit Company to
operate its assets and conduct its business following the Closing Date as
such assets and business are presently operated and conducted. schedule 2.9
also discloses all proposed or pending applications for Authorizations, and
all applications for variances from compliance, or postponement of the
dates for compliance with any laws or regulations affecting Company or its
business.
(b) Schedule 2.9 identifies all Authorizations which materially
restrict the present output of Company, which limit the term of possession
or operation of any material assets of the Company, or which pertain to
environmental discharge.
(c) Except as shown on Schedule 2.9, neither Company nor any
Seller has been notified or presently has reason to believe any of the
Authorizations will not in the ordinary course be renewed upon its
expiration. The foregoing statement shall not be deemed inaccurate by
reason of the ordinary expiration of routine Authorizations, the renewal of
which is expected to be obtained in the ordinary course without
interruption of existing operations.
(d) Except as shown on Schedule 2.9, Company has not received in
writing, or to the knowledge of Company or sellers, otherwise, any claim or
assertion that it has breached any of the terms or conditions of any
Authorizations in such manner (i) as would permit any other Person to
cancel, terminate or materially amend any Authorization necessary to permit
the continued operation of the Company as presently conducted or (ii) that
any such breach or breaches singly or in the aggregate is reasonably likely
to have a Material Adverse Effect.
2.10 No Violations
(a) Except as described on schedule 2.10 hereto, to the knowledge
of Company and Sellers, Company is not in violation of any applicable law,
statute, order, rule or regulation promulgated or judgment entered (or,
with respect to rules and regulations of administrative agencies, known by
Sellers to be proposed) by any Governmental Entity in a manner which is
reasonably likely to have a Material Adverse Effect.
(b) Except for those filings listed on schedule 2.10 hereto, no
consent, approval or authorization of, or declaration, filing or
registration with, any Governmental Entity is required to be made or
obtained by any Seller or Company in connection with the execution,
delivery and performance by Sellers and Company of this Agreement and the
consummation of the transactions contemplated hereby.
2.11 Proceedings. Schedule 2.11 lists all suits, actions and other
legal proceedings and all other controversies, and, to Sellers' or
Company's knowledge, governmental investigations, pending against a Seller
or Company or as to which either a seller or the Company has received in
writing any claim or assertion. Except as set forth on schedule 2.11
hereto, there are no facts which Seller or the Company has recognized as
reasonably likely to lead to any additional investigation being conducted
or to any other suit, action or legal proceeding.
2.12 Insurance. Schedule 2.12 lists all insurance policies under
which Company is an insured or a beneficiary or for which it is liable to
pay premiums and further sets forth the name of the insurer, type of
coverage, policy limits and deductibles, if any, and the annual premium for
each such policy. Company has furnished Purchaser copies of all such
policies and a history of all claimed losses in the past five (5) years.
Except as noted on Schedule 2.12, the policies listed thereon will be
outstanding and in full force and effect on the Closing Date.
2.13 Proprietary Information and Rights. Schedule 2.13 hereto
accurately lists all patents, patent applications, patent and know-how
licenses, proprietary formulae, trademarks, service marks, trademark
registrations and applications, trade names, fictitious business names,
computer software and other intellectual property rights (collectively,
"Business Rights") used by Company. schedule 2.13 discloses the identity of
each other person which, to the knowledge of sellers or the Company, owns
any right, title or interest in and to the Business Rights. To the
knowledge of sellers and the Company, no Business Rights conflict with,
infringe on or otherwise violate any rights of others, or require payments
to be made to any Person, or are subject to any pending or overtly
threatened litigation or other adverse claims or infringement by other
Persons, except as set forth in schedule 2.11 or Schedule 2.13. There has
been no written, or to the knowledge of Company or Sellers, other claim of
infringement by Company of any domestic or foreign patents, trademarks,
service marks or copyrights of any other Person.
2.14 Employee Benefits
(a) Schedule 2.14 sets forth a list of all "employee benefit
plans" (as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended, ("ERISA")) and all other profit-sharing,
deferred compensation, bonus, stock option, stock purchase, vacation pay,
holiday pay, pension, retirement plans, medical and other compensation or
benefit arrangements maintained or contributed to or required to be
contributed to by Company for the benefit of its employees (or former
employees) and/or their beneficiaries; including a complete listing of all
plans with respect to which Company has made contributions or payments
within six (6) years prior to Closing or is required to make payments,
transfers or contributions (collectively, "Benefit Plans").
(b) Company has delivered to Purchaser true and complete copies
of:
(i) Each Benefit Plan and any related funding agreements
(e.g., insurance contracts or trusts), including all amendments;
(ii) The current draft of the Summary Plan Description
pertaining to each Benefit Plan for which a Summary Plan Description is
required by ERISA or by the terms of such Benefit Plan;
(iii) The three (3) most recent annual reports for each
Benefit Plan (including all relevant schedules) for which such annual
reports are required;
(iv) The most recently filed PBGC Form l (if applicable); and
(v) The Internal Revenue Service determination letter (if
applicable) for each Benefit Plan and each amendment thereto.
(c) Each Benefit Plan has been established, maintained and
administered in all material respects in accordance with its terms and any
related agreements, and with all applicable laws, and, if intended to
qualify under Code Section 401(a), is so qualified and with respect to each
Benefit Plan that is subject to Title IV of ERISA:
(i) Neither Company nor any Affiliate of Company has ever
contributed or been obligated to contribute to any "multi-employer plan"
(as defined in Section 3(37) of ERISA) on account of any withdrawal from
such Benefit Plan;
(ii) No such Benefit Plan subject to a funding requirement has
been terminated at a time when such Benefit Plan was not sufficiently
funded;
(iii) Except as otherwise provided on Schedule 2.14, the
value, determined on a termination basis, of all accrued benefits
(whether or not vested) under each such Benefit Plan did not exceed, as
of the most recent valuation date, and will not exceed as of the time of
filing, the then current fair market value of the assets of such Benefit
Plan.
(d) All contributions and other payments to be made to each
Benefit Plan under the terms of that Benefit Plan, ERISA, the Internal
Revenue Code ("Code") or any other applicable law have been timely made and
all contributions made have been fully deductible under the Code. The
books of Company properly reflect all amounts required to be accrued as
liabilities to date under each Benefit Plan.
(e) In the case of each Benefit Plan, there is no accumulated
funding deficiency (within the meaning of Section 4971 of the Code),
whether or not such deficiency has been waived, or any other unfunded
liability.
(f) Each Benefit Plan complies currently, and in all material
respects, in form and operation, with all applicable law including ERISA,
the Code, and the continuation coverage rules of the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA"), Code section 4980B or part 6
of Title I of ERISA.
(g) Except as set forth on Schedule 2.14, to the knowledge of
Company and Sellers, no "prohibited transactions" (as defined in Section
4975(c)(1) of the Code) or breaches of fiduciary duty involving Company, a
Seller, or a director or officer of Company, have occurred with respect to
any of the Benefit Plans.
(h) All trusts maintained in connection with a Benefit Plan,
including trusts that are intended to comply with the provisions of Code
section 501(c)(9) or section 501(c)(17) , are exempt from federal income
taxation under Code section 501(a) and there has been no written or, to
Sellers' and Company's knowledge, other claims, of noncompliance or failure
to properly maintain, operate or administer any Benefit Plan (or a related
trust) which has rendered or is reasonably likely to render such Benefit
Plan or trust, or Company, subject to or liable for any taxes, penalties or
liabilities to any person.
(i) There is no contract, agreement, or benefit arrangement
covering any employee of Company which, individually or collectively, could
give rise to the payment of any amount which would constitute an "excess
parachute payment" (within the meaning of Section 280G of the Code).
(j) Neither Company nor any of its Affiliates maintains any
Benefit Plan that provides severance pay or medical benefits to one or more
former employees (including retirees), or provides for post-retirement
benefits to present or former employees, other than benefits that are
required to be provided pursuant to COBRA or state law conversion rights.
(k) To the knowledge of Company and Sellers, there are no
investigations, proceedings, or lawsuits, either currently in progress, or,
on the basis of facts or circumstances recognized by Company or Sellers,
expected to be instituted in the future, against (i) any Benefit Plan, or
(ii) any Fiduciary of such plan (within the meaning of Section 3(21)(A) of
ERISA) brought on behalf of any participant, beneficiary or Fiduciary
thereunder, or by any Governmental Entity.
2.15 Employment Laws. Except as shown on Schedule 2.15:
(a) Company 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, wages and hours,
affirmative action and occupational safety (except for violations or
failures to comply which are not reasonably likely to result in a Material
Adverse Effect), and has not received notice of, and, to the knowledge of
Company and Sellers, is not engaged in, any unfair labor practice.
(b) No unfair labor practice complaint against Company is pending
before the National Labor Relations Board.
(c) There is no labor strike, dispute, slowdown or stoppage
actually pending or, to Sellers' knowledge, threatened against or affecting
Company.
(d) Except to the extent expressly provided herein, there are no
material claims, grievances or arbitration proceedings, workers'
compensation proceedings, labor disputes (including charges of violations
of any federal, state or local laws or regulations relating to current or
former employees (including retirees) or current or former applicants for
employment), governmental investigations, or administrative proceedings of
any kind pending or, to the best knowledge of Company and Sellers,
threatened against or relating to Company, its employees or employment
practices, or operations as they pertain to conditions of employment; nor
is Company or a Seller to their knowledge, subject to any order, judgment,
decree, award, or administrative ruling arising from any such matter.
(e) No collective bargaining agreement is currently in existence
or is being negotiated by Company and as of the date of this Agreement no
labor organization has been certified or recognized as the representative
of any employees of Company or, to the knowledge of Company or Sellers, is
seeking such certification or recognition.
(f) Company's contracts with temporary personnel agencies
represent bona-fide, arms-length agreements and the personnel provided by
such agencies are not, to the knowledge of Company or Sellers, Company's
employees for purposes of any federal, state or local laws, including laws
pertaining to tax withholding, provision of benefits or union
representation.
2.16 Environmental Laws
(a) Except as disclosed on Schedule 2.16, (i) the assets and the
business of Company have been operated in compliance in all material
respects with all applicable Environmental Laws, (ii) to the knowledge of
Sellers and the Company, there has been no production, storage, Release, or
disposal of any Hazardous Materials in any material quantity at, in, on
under, about or from any of the Properties by or on behalf of Company or by
any previous owner or tenant of the Properties, (iii) to the knowledge of
Sellers and Company, there has been no production, storage, Release or
disposal of any Hazardous Materials in any material quantity by or on
behalf of Company at any other site, (iv) there are no underground storage
tanks or electrical equipment containing PCB's on the Properties, or, to
the knowledge of Sellers and Company any asbestos-containing materials on
the Properties, and (v) no Governmental Entity or any other Person has
issued to Company or, to the knowledge of Company or Sellers, commenced any
notice of violation, notice to comply, compliance schedule, administrative
or judicial complaint, enforcement action or lien with respect to alleged
violations of Environmental Laws by or on behalf of Company or relating to
the Properties, or, to the knowledge of Company and Sellers, any proceeding
or inquiry with respect to any actual or alleged violation of any
Environmental Law or any release or alleged release of a Hazardous Material
by or on behalf of Company or relating to the Properties.
(b) "Environmental Law" shall mean all laws, federal, state or
local, including statutes, regulations, rules, ordinances and orders which
purport to regulate the Release of Hazardous Materials to the environment,
or impose requirements relating to environmental protection or public or
employee health and safety, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. Section 9601 et seq., the Resource Conservation and
Recovery Act of 1976, as amended, 42 U.S.C. Section 6901 et seq., the
Emergency Planning and Community Right-to-Know Act, as amended, 42 U.S.C.
Section 11001 et seq., the Clean Air Act, as amended, 42 U.S.C. Section
7401 et seq., the Federal Water Pollution Control Act, as amended, 33
U.S.C. Section 1251 et seq., the Toxic Substances Control Act, as amended,
15 U.S.C. Section 2601 et seq., the Safe Drinking Water Act, as amended,
42 U.S.C. Section 300f et seq., the Federal Insecticide, Fungicide &
Rodenticide Act, as amended, 7 U.S.C. Section 136 et seq., the Federal
Food, Drug and Cosmetic Act, as amended, 21 U.S.C. Section 301 et seq., and
the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651
et seq.
(c) "Hazardous Material(s)" shall mean any substance which is (i)
defined as a hazardous substance, hazardous material, hazardous waste,
pollutant, contaminant or words of similar import under any Environmental
Law, (ii) a petroleum hydrocarbon, including crude oil or any fraction
thereof, (iii) hazardous, toxic, corrosive, flammable, explosive,
infectious, radioactive, carcinogenic or a reproductive toxicant, or (iv)
regulated pursuant to any Environmental Law.
(d) "Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, or
disposing into the environment (including the abandonment or discarding of
barrels, containers, and other receptacles containing any Hazardous
Material).
(e) The Company does not ship to, or distribute its products in,
any country outside the United States except pursuant to arrangements in
which the Company's customers assume responsibility to comply with the
environmental and safety laws of such country.
2.17 Taxes
Except as set forth in Schedule 2.17 hereto, (i) all federal,
state, foreign and local tax returns and tax reports (including information
returns) required to be filed by Company have been filed with the
appropriate Governmental Entities in all jurisdictions in which such
returns and reports are required to be filed, and all such returns and
reports are, in all material respects, complete, accurate and in accordance
with all legal requirements applicable thereto; (ii) all federal, state,
foreign and material local income, profits, franchise, sales, use,
occupation, property, excise, withholding and other taxes, duties, charges
and assessments (including interest and penalties) due from Company, (A)
have been fully paid or adequately provided for on the books and financial
statements of Company in accordance with GAAP or (B) are disclosed on
Schedule 2.17 and are being contested in good faith by appropriate
proceedings; (iii) the Company has not received any written notice or
inquiry from the Internal Revenue Service or any other taxing authority in
connection with any of the returns and reports referred to in the foregoing
clause (i) of any pending or threatened examination or audit which,
individually or in the aggregate, if adversely decided against Company
would reasonably be likely to have a Material Adverse Effect; (iv) no
waivers of statutes of limitation have been given or requested with respect
to Company, (v) the federal and state tax returns of Company have been
examined (or are no longer subject to examination) by the appropriate
agency for all periods prior to and including the dates set forth on
Schedule 2.17 for each category of tax return, and (vi) deficiencies
asserted or assessments made as a result of examination by any taxing
authorities have been fully paid or fully reflected on the books of
Company. Company has not made an election under Section 341(f) of the
Code.
2.18 No Unlawful Contributions. To the knowledge of Company and
Sellers, neither Company nor any director, officer, agent, employee or
other Person associated with or acting on behalf of Company, has made or
used any corporate funds to make any unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity,
made any direct or indirect unlawful payments to officials or employees of
any Governmental Entity from corporate funds; failed to file any reports
required with respect to lawful contributions; established or maintained
any unlawful or unrecorded fund of corporate monies or other assets; made
any intentionally false or fictitious entries on the books or records of
Company; or made or received any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment.
2.19 No Insider Transactions. Except as disclosed in Schedule
2.19, no Seller nor any Affiliate (including any member of a Seller's
"immediate family", as such term is defined under Rule l6a-l(e) of the
Securities Exchange Act of 1934) of any such Persons, or any trust,
partnership or corporation in which any of such Persons has an interest,
has, directly or indirectly, (a) any interest (other than as a holder of
not more than 3% of the issued and outstanding securities of a corporation
whose securities are traded on a national securities exchange or the Nasdaq
Stock Market) in any Person which furnishes or sells, services or products
which Company furnishes or sells, (b) any interest (other than as a holder
of not more than 3% of the issued and outstanding securities of a
corporation whose securities are traded on a national securities exchange
or the Nasdaq Stock Market) in any Person which purchases from or sells or
furnishes to Company any goods or services, (c) a beneficial interest in
any contract, commitment, agreement or understanding to which Company is a
party or by which it may be bound or affected (except for written
employment contracts listed on a schedule to this Agreement); or (d) any
interest or claim against Company or any of its assets which could result
in a claim against Company or could materially and adversely affect
Company's assets, Company's title to or its right to use its assets, or
Company's right to conduct its business following the Closing. Except as
disclosed on Schedule 2.19, none of the assets of Company include any
receivables from any officer, director, shareholder or employee of Company.
2.20 Accounts Receivable; Customers. The accounts receivable
reflected on the Financial Statements, or thereafter acquired by Company
through the Closing Date were earned by performance in the ordinary course
of business and, to the knowledge of Company and Sellers except as set
forth on Schedule 2.20, are not subject to any material dispute. Schedule
2.20 discloses, as of October 2, 1994 and October 1, 1995 the identity of
each of Company's ten (10) largest customers for the fiscal year then
ended, and the amounts receivable from each such customer at the respective
dates, and also discloses, as of May 4, 1996, the fiscal year-to-date sales
for each customer identified on Schedule 2.20 and the amount owing from
such customer on May 4, 1996. Except as disclosed on Schedule 2.20,
Company has not received any written or, to the best knowledge of Sellers
and Company, any other notice that any customer identified on Schedule 2.20
expects or intends that its future purchases from Company, as compared to
its purchases in the year ended October 1, 1995, will decrease in any
material respects.
2.21 Inventories. The inventories reflected on the Financial
Statements, and thereafter acquired by Company through the Closing Date,
taken as a whole, are in all material respects of a quality and quantity
usable in the normal course of the business of Company. The values at
which such inventories are carried on the Financial Statements reflect the
normal inventory valuation policy of Company stating inventories at the
lower of cost (on a first-in, first-out basis) or market. Schedule 2.21
lists all inventories of raw materials, finished goods, packaging supplies
or ingredients owned or in the custody of Company ("Inventory") and, with
respect to Inventory owned by or held for the account of a customer,
identifies such customer and Inventory in reasonable detail, and specifies
the location of such Inventory.
2.22 Bank Accounts. Schedule 2.22 lists all bank accounts, safe
deposit boxes, money market funds, certificates of deposit, stocks, bonds,
notes and other securities owned directly or indirectly, beneficially or of
record, by Company.
2.23 Warranties. Schedule 2.23 contains a copy of the Company's
written warranty terms to its customers. Except as set forth on Schedule
2.23, Company has not given or made any other written or, to the knowledge
of Company and Sellers, oral warranties to any Person with respect to any
products sold or services performed. Company and Sellers have no written
or, to their knowledge, other notice of a claim against Company, whether or
not fully covered by insurance, for liability on account of products
liability or on account of any express or implied warranty, except for
warranty obligations and returns in the ordinary course of business
consistent with past practice for which appropriate reserves have been
reflected in the Financial Statements.
2.24 Delivery of Documents. Sellers and Company have delivered to
Purchaser true and correct copies of all documents, and any and all
amendments to any such documents, referred to in this Agreement or in any
Schedule delivered to Purchaser pursuant to this Agreement.
2.25 No Finders or Brokers. Neither any Seller or Company nor any
of their Affiliates has entered into any agreement, arrangement or
understanding with any Person which could result in the obligation to pay
any finder's fee, brokerage commission, advisory fee or similar payment in
connection with the transactions contemplated hereby.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers as follows:
3.1 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, and has full corporate power and authority to perform this
Agreement. Purchaser is qualified to do business as a foreign corporation
and in good standing in the State of Georgia to the extent necessary to
perform its obligations under this Agreement.
3.2 Authorization. The execution and delivery of this Agreement
by Purchaser and the performance of its obligations hereunder have been
duly authorized by the directors of Purchaser and no other corporate action
or approval by Purchaser is necessary for the execution, delivery or
performance of this Agreement by Purchaser. This Agreement has been duly
executed and delivered by Purchaser, and is a valid and binding obligation
of Purchaser, enforceable against it in accordance with its terms, except
as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in
effect, relating to or limiting creditors' rights generally, and (b)
general principles of equity (whether considered in an action in equity or
at law).
3.3 No Conflict. Neither the execution and delivery of this
Agreement by Purchaser nor the consummation of the transactions
contemplated hereunder nor the fulfillment by Purchaser of any of its terms
will, except as described in Schedule 3.3:
(a) conflict with or result in a breach by Purchaser of, or
constitute a default by it under, or create an event that, with the giving
of notice or the lapse of time, or both, would be a default under or breach
of, any of the terms, conditions or provisions of (i) any indenture,
mortgage, lease, deed of trust, pledge, loan or credit agreement or any
other material contract, arrangement or agreement to which Purchaser is a
party or to which a material portion of its assets is subject, (ii)
Certificate of Incorporation or Bylaws of Purchaser, or (iii) any judgment,
order, writ, injunction, decree or demand of any Governmental Entity which
materially affects Purchaser or which materially affects the Purchaser's
ability to conduct its business;
(b) result in the creation or imposition of any lien, charge or
Encumbrance of any nature whatsoever upon any material portion of the
assets of Purchaser or which materially affects the Purchaser's ability to
conduct its business as conducted prior to the date of this Agreement; or
(c) cause a loss or adverse modification of any permit, license,
or other authorization granted by any Governmental Entity to or otherwise
necessary or materially useful to Purchaser's business.
3.4 Investment Intent. Purchaser is acquiring Company Common
Stock for investment purposes, and not with a view to the resale or
distribution thereof; Purchaser has the knowledge and sophistication to
purchase the Company Common Stock; Purchaser has had access to all
information regarding Company that it has requested and has had the
opportunity to ask questions regarding Company, its operations and such
other matters that Purchaser has deemed material to its investment
decision; and Purchaser will not dispose of Company Common Stock without
compliance with all applicable federal and state securities laws.
3.5 No Finders or Brokers. Purchaser has not entered into any
agreement, arrangement or understanding with any Person which could result
in the obligation to pay any finder's fee, brokerage commission, advisory
fee or similar payment in connection with this Agreement or the
transactions contemplated hereby, except The Xxxxxx+Xxxxxx Group, whose
fees and expenses will be paid by Purchaser or its Affiliates.
ARTICLE IV.
COVENANTS
4.1 Confidentiality
(a) Until the Closing, Purchaser shall treat in confidence all
non-public documents, materials and other information which Purchaser shall
have obtained regarding Company during the course of the negotiations
leading to the transactions contemplated hereby, the investigation of
Company and the preparation of this Agreement, and in the event the sale
and purchase hereunder shall not be consummated, Purchaser shall return all
copies of non-public documents and materials which have been furnished in
connection therewith. However, nothing contained herein shall prohibit
Purchaser hereto from:
(i) using such documents, materials and other information in
connection with any action or proceeding brought or any claim asserted
by Sellers or Company hereto in respect of any breach of any
representation, warranty or covenant made in or pursuant to this
Agreement, or
(ii) supplying or filing such documents, materials or other
information to or with any Governmental Entity or other Person which
Purchaser and Seller deem reasonably necessary in connection with the
obtaining of any consent, waiver, amendment, modification, approval,
authorization, permit or license which may be necessary to effectuate
this Agreement and to consummate the transactions contemplated hereby.
(b) From and after the date hereof, each Seller shall treat, and
shall cause each of its Affiliates to treat, in confidence all documents,
materials and other information regarding Purchaser or Company or their
respective Affiliates which are in his or its possession or control.
4.2 Delivery of Financial Statements. As soon as practical after
the end of each of Company's fiscal months ending after May 4, 1996, but in
any event at least twenty (20) days following each month end, Sellers and
Company will deliver to Purchaser Company's unaudited balance sheet as of
such month end and the related statements of income and retained earnings
and cash flows for the fiscal month then ended (the "Monthly Financials")
which shall (i) be prepared in accordance with GAAP consistently applied as
at the dates and for the periods covered thereby (except that they are
subject to year-end adjustments and are not accompanied by footnote
disclosures); (ii) present fairly in all material respects the financial
condition and results of operations and cash flows of Company as of the
date and for the periods then ended; (iii) be in agreement with the books
and records of Company in all material respects, and (iv) contain and
reflect adequate reserves, to the extent required by GAAP and Company's
prior practice, for all reasonably anticipated losses, costs and expenses.
4.3 Fulfillment of Conditions
(a) Each Seller will use all reasonable efforts, and each Seller
will cause Company to use all reasonable efforts, to perform, comply with
and fulfill all obligations, covenants and conditions required by this
Agreement to be performed, complied with or fulfilled by Sellers or Company
prior to or as of the Closing Date. Purchaser will use all reasonable
efforts to perform, comply with and fulfill all obligations, covenants and
conditions required by this Agreement to be performed, complied with or
fulfilled by Purchaser prior to or as of the Closing Date.
(b) Each Seller will use all reasonable efforts, and will cause
Company to use all reasonable efforts, to secure all necessary consents,
waivers, permits, approvals, licenses and authorizations and will make, and
will cause Company to make, all necessary filings in order to enable
Sellers or Company to consummate the transactions contemplated hereby.
Purchaser will use all reasonable efforts to secure all necessary consents,
waivers, permits, approvals, licenses and authorizations and will make all
necessary filings in order to enable Purchaser to consummate the
transactions contemplated hereby.
4.4 Purchaser's Access to Records and Inspection Rights. Each
Seller will make reasonable efforts to cause Company to allow Purchaser and
its lenders and other representatives, through its officers, employees,
counsel, accountants and other authorized representatives, to inspect the
properties and records of Company and to discuss the affairs and accounts
of Company with such officers, employees, counsel, accountants and other
agents of Company as shall have been approved (including the procedures in
respect of such inspection and discussions) in advance by Company, which
approval will not be unreasonably withheld. Purchaser shall conduct any
inspection or discussion in a manner that does not unreasonably interfere
with normal business of Company.
4.5 Operation in Ordinary Course. From the execution of this
Agreement until the Closing, Sellers shall cause Company to operate its
business only in a manner consistent with its present and historical
practice, and, in particular, to assure that unless Purchaser otherwise
consents in writing, no action or event within the control of Company or
Sellers occurs which, had it occurred prior to the execution of this
Agreement, would have been required to be disclosed on Schedule 2.6.
4.6 Post-Closing Access by Sellers. After the Closing, Purchaser
shall cause Company to cooperate with Sellers to the extent reasonably
requested by any of the Sellers, and to make available to Sellers all
financial, insurance, tax and other information (including reasonable
access to books and records) of Company with respect to any fiscal period
of Company ending on or prior to the Closing Date to the extent reasonably
required by any of the Sellers in connection with (a) any audit or other
investigation by any taxing authority, or (b) the prosecution or defense of
any tax claims or related litigation that might give rise to
indemnification payments hereunder, or the preparation by any of Sellers of
tax returns or any other reports or submissions to any Governmental Entity
required to be made by any of Sellers with respect to Company; provided
that such cooperation and availability of information do not unreasonably
interfere with normal business of Company and provided, further, that each
of the Sellers reimburses Company for any third-party expenses incurred to
provide such information. Purchaser shall cause Company to preserve all
such information, including without limitation, the books and records of
Company, for at least six (6) years after the Closing Date, provided that
if any Seller delivers written notice within three months prior to the
sixth anniversary to Purchaser of its desire to remove and retain such
identified information, books and records after the end of such six-year
period, then Purchaser shall give such party the opportunity (at such
party's expense) to remove and retain such information, books and records
prior to their destruction. In the event of conflicting requests or
directions by Sellers, Xxxxxxxxx'x decision about which Seller shall
receive original documents shall be followed and other Sellers may have
copies.
4.7 Termination of Affiliate Relationships. Prior to the Closing,
Sellers will cause any and all obligations of Company to or for the benefit
of any Seller or any Affiliate of any Seller to be discharged or terminated
prior to the Closing.
4.8 Bank Accounts. Sellers shall, on or prior to the Closing Date
cause Company to cancel the authority of each Person listed in Schedule
2.22 who is specified by Purchaser in a written notice delivered to Sellers
on or prior to the Closing Date, to draw checks on any of the bank accounts
maintained by Company and Sellers shall submit evidence satisfactory to
Purchaser of such cancellation.
4.9 Indebtedness of Sellers to Company. On the Closing Date, each
Seller will repay in full to Company all principal and accrued interest
outstanding under any Indebtedness of such Seller to Company.
ARTICLE V.
CONDITIONS OF CLOSING
5.1 Conditions of Obligations of Purchaser. The obligation of
Purchaser to consummate the purchase of Company Common Stock pursuant to
this Agreement is subject to the satisfaction of the following conditions,
any of which may be waived by Purchaser:
(a) Representations and Warranties: Performance of Obligations.
The representations and warranties of Sellers and Company set forth in
Article II hereof and in all agreements, documents and instruments executed
and delivered pursuant hereto or in connection with the Closing shall have
been and be true and correct in all material respects as of the date hereof
and as of the Closing Date as though made on and as of the Closing Date.
Each Seller and Company shall have performed in all material respects the
agreements and obligations necessary to be performed by him or it under
this Agreement prior to the Closing Date. This condition shall not be
deemed unsatisfied if Sellers deliver new, revised or updated Schedules to
this Agreement; provided that no information on such Schedules is, in
Purchaser's reasonable judgment, adverse to Company's or Purchaser's
ability to operate its business following the Closing, or Company's
financial condition or prospects, or to Purchaser's financing.
(b) Certificate and Deliveries by Sellers. Purchaser shall have
received a certificate, dated the Closing Date, signed by each of Sellers,
certifying that the conditions specified in Section 5.1(a) have been
fulfilled.
(c) No Injunction. No preliminary or permanent injunction or
order that would prohibit or restrain the consummation of the transactions
contemplated hereunder shall be in effect and no Governmental Entity or
other Person shall have commenced or threatened to commence an action or
proceeding seeking to enjoin the consummation of such transactions or to
impose liability on the parties hereto in connection therewith.
(d) Management Equity Purchase. Purchaser shall have received
subscriptions satisfactory to Purchaser from the employees of Company who
have agreed to purchase shares of Purchaser Common Stock and shall have
received payment of the related purchase amount in cash.
(e) Financing. Purchaser shall have received, within 60 days of
execution of this Agreement, commitments from one or more lenders
acceptable to Purchaser, on terms and conditions acceptable to Purchaser,
to make loans resulting in proceeds in an amount sufficient to pay the
Purchase Price and to provide working capital for Company and, at Closing,
no such lender shall have refused to close for reasons which are reasonably
within Purchaser' s control.
(f) Other Consents. Purchaser shall have received all other
consents required to be obtained from persons who are not Affiliates of
Purchaser in connection with the consummation of the transactions
contemplated hereunder.
(g) Certificates and Instruments of Transfer. Each Seller shall
have delivered to Purchaser certificates representing Company Common Stock,
accompanied by duly executed stock powers, with all required stock transfer
tax stamps affixed. All certificates, instruments and documents delivered
by each Seller in connection with the transactions contemplated hereby and
necessary to evidence such transactions shall be in form and substance
reasonably satisfactory to Purchaser and its counsel.
(h) Stockholders Agreement. Purchaser shall have received an
executed Stockholders Agreement in a form reasonably acceptable to
Purchaser (the "Stockholders Agreement"), duly executed by the existing
stockholders of Purchaser, each Seller and each employee of Company who
purchases Purchaser Common Stock in connection with the transactions
contemplated by this Agreement.
(i) Employment and Non-Competition Agreement. Purchaser shall
have received an original Employment and Non-Competition Agreement, between
Company and Xxxxxxxxx, substantially in the form of Exhibit 1 hereto (the
"Employment and Non-Competition Agreement") duly executed by Xxxxxxxxx.
(j) Opinion of Counsel to Sellers and Company. Purchaser shall
have received the opinion of Seyfarth, Shaw, Xxxxxxxxxxx & Xxxxxxxxx,
counsel to Sellers and the Company, dated the Closing Date, substantially
in the form of Exhibit 2 hereto.
(k) Due Diligence. Purchaser and its lenders shall have completed
prior to Closing a due diligence investigation of the business, operations,
condition (financial and otherwise) and prospects of Company, and the
results of such investigation shall be satisfactory to Purchaser in its
sole discretion and to its lenders. Unless Purchaser notifies Xxxxxxxxx,
on or before the forty-fifth day after the execution of this Agreement,
that Purchaser is not satisfied, this condition shall be regarded as
satisfied.
(l) No Material Adverse Chance. Purchaser shall be satisfied in
its reasonable discretion, after review of the Monthly Financial
Statements, that there has been no material adverse change after the date
hereof in the business, operations, condition (financial or otherwise) or
prospects of Company since October l, 1995.
(m) Schedules. Any Schedule not attached to this Agreement on the
date hereof shall have been delivered to Purchaser and its lenders on or
before July 17, 1996 and shall be acceptable to Purchaser in its sole
reasonable discretion.
5.2 Conditions of Obligations of Sellers. The obligations of
Sellers to consummate the sale and purchase under this Agreement are
subject to the satisfaction of the following conditions, each of which may
be waived by Sellers:
(a) Representations and Warranties: Performance of Obligations.
The representations and warranties of Purchaser set forth in Article III
hereof and in all agreements, documents and instruments executed and
delivered pursuant hereto or in connection with the Closing shall have been
and be true and correct in all material respects as of the date hereof and
as of the Closing Date as though made on and as of the Closing Date.
Purchaser shall have performed in all material respects the agreements and
obligations necessary to be performed by it under this Agreement prior to
the Closing Date.
(b) Certification by Purchaser. Sellers shall have received a
certificate, dated the Closing Date, signed by an officer of Purchaser,
certifying that the conditions specified in Section 5.2(a) have been
fulfilled.
(c) No Injunction. No preliminary or permanent injunction or
order that would prohibit or restrain the consummation of the transactions
contemplated hereunder shall be in effect and no Governmental Entity or
other Person shall have commenced or threatened to commence an action or
proceeding seeking to enjoin the consummation of such transactions or to
impose liability on the parties hereto in connection therewith.
(d) Employment and Non-Competition Agreement. Garret son shall
have received an original Employment and NonCompetition Agreement, duly
executed by Company.
(e) Opinion of Counsel to Purchaser. Sellers shall have received
the opinion of Paul, Hastings, Xxxxxxxx & Xxxxxx, counsel to Purchaser,
dated the Closing Date, substantially in the form of Exhibit 3 hereto.
(f) Purchase Price. Sellers shall have received the Purchase
Price payable on the Closing Date pursuant to Section 1.2.
(g) Release of Guaranties. All personal guaranties by Xxxxxxxxx
with respect to any Indebtedness or other obligations of Company shall have
been terminated, cancelled or released.
ARTICLE VI.
CLOSING DATE AND TERMINATION OF AGREEMENT
6.1 Closing Date. The closing for the consummation of the
purchase and sale contemplated by this Agreement (the "Closing") shall,
unless another date or place is agreed to in writing by Sellers and
Purchaser, take place at the offices of Paul, Hastings, Xxxxxxxx & Xxxxxx,
at 000 Xxxx Xxxxxx Xxxxx, Xxxxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000,
on the date (the "Closing Date") on which each condition set forth in
Article V is satisfied or waived.
6.2 Termination of Agreement. This Agreement may be terminated
and abandoned at any time prior to the Closing Date:
(a) By mutual consent of Purchaser, on the one hand, and Sellers,
on the other hand; or
(b) By Purchaser or Sellers if, without fault of such terminating
party, the Closing shall not have been consummated on or before September
30, 1996.
6.3 Effect of Termination. In the event of termination of this
Agreement as provided in Section 6.2, notice thereof shall be promptly
given by the terminating party to the other parties and thereafter this
Agreement shall forthwith become void, and there shall be no liability or
obligation on the part of Purchaser or Sellers or any of their respective
Affiliates (a) except that Section 4.1 shall remain in full force and
effect, and (b) except that nothing herein will relieve any party from
liability for any willful breach of any agreement or covenant herein or any
Seller from liability for breach of its representations in Sections 2.2 and
2.4 herein as they pertain to such Seller and the shares such Seller
purports to own.
ARTICLE VII.
INDEMNIFICATION
7.1 Indemnification by Sellers
(a) Subject to the provisions of Sections 7.1(b) and 7.3 below,
Sellers, shall severally indemnify Purchaser and its Affiliates including,
without limitation, Company, and each of their respective stockholders,
officers, directors, employees and representatives (each a "Purchaser
Indemnitee") against, and hold each Purchaser Indemnitee harmless from, any
and all loss, damage, liability, payment, and obligation, and all expenses,
including without limitation reasonable legal fees (collectively "Losses")
, incurred, suffered, sustained or required to be paid, directly or
indirectly, by, or sought to be imposed upon, such Purchaser Indemnitee
after the Closing Date resulting from, related to or arising out of any
inaccuracy in or breach of any of the representations, warranties or
covenants made by Sellers or Company in or pursuant to this Agreement or in
any agreement, document or instrument executed and delivered pursuant
hereto or in connection with the Closing of the transactions contemplated
hereunder.
(b) No Purchaser Indemnitee shall be entitled to indemnification
pursuant to this Section 7.1 in respect of an inaccuracy in or breach of
any representation or warranty (other than with respect, to the
representations and warranties in Sections 2.2 (Authorization); or 2.4
(Capitalization; No Subsidiaries) and with respect to any breach or
inaccuracy of any representation or warranty known by Sellers, or Company,
prior to Closing), until such time as the Losses of all Purchaser
Indemnitees exceed Three Hundred Twenty-Five Thousand Dollars ($325,000)
("Sellers' Basket") in the aggregate; provided that all claims by Purchaser
Indemnitees for indemnification shall accrue in the aggregate until the
Losses of all Purchaser Indemnitees exceed the Sellers' Basket and
thereupon Sellers shall become obligated to indemnify the Purchaser
Indemnitees only for the amount by which all such claims exceed Sellers'
Basket. In no event shall the Indemnitor's indemnification obligations in
this Section 7.1 exceed an aggregate of One Million Dollars ($1,000,000),
or for any Seller, its proportionate share thereof as determined by the
portion of the Purchase Price received by or for the benefit of such
Indemnitor.
(c) Each Purchaser Indemnitee shall promptly give written notice
to Indemnitors of the assertion by any Person of any claim, action, suit or
proceeding with respect to which Indemnitors are obligated to provide
indemnification hereunder; provided, however, that the rights of a
Purchaser Indemnitee to be indemnified hereunder shall only be affected by
the failure to give such notice if and to the extent such failure
prejudices Indemnitors in the defense of such third party claim. Amounts
due with respect to Losses covered by this Section 7.1 shall be paid
promptly after delivery of reasonably documented written notice of the
amount of Losses incurred. Indemnitors shall have the right, but not the
obligation, to contest, defend or litigate, and to retain counsel of their
choice in connection with, any claim, action, suit or proceeding by any
third party alleged or asserted against a Purchaser Indemnitee that is
subject to indemnification by Indemnitors hereunder, and the cost and
expense thereof shall be subject to the indemnification obligations of
Indemnitors hereunder; provided, that each Purchaser Indemnitee shall have
the right and option to participate in, but not control, the defense of
such action at its own expense; and provided, further, that, (i) if
Indemnitors elect not to defend any such action or (ii) if a Purchaser
Indemnitee shall have defenses not available to Indemnitors and if counsel
to Purchaser shall advise in a written opinion that common representation
is not appropriate, then such Purchaser Indemnitee shall be entitled, at
its option through counsel of its choice, but at Indemnitors' expense, to
assume and control the defense of such action. Neither Indemnitors, on the
one hand, nor any Purchaser Indemnitee, on the other hand, shall be
entitled to settle or compromise any such claim, action, suit or proceeding
without the prior written consent of such Purchaser Indemnitee or
Indemnitor, as the case may be, which consent shall not be unreasonably
withheld. Decisions about counsel and the course of any defense and
consents to settlements shall be made by Xxxxxxxxx if Sellers are unable,
among themselves, to agree, except that no Seller shall be subject to a
settlement which provides for anything but the payment of money or the
release of claims without such Seller's consent.
7.2 Indemnification by Purchaser
(a) Subject to the provisions of Section 7.2(b) and 7.3 below,
Purchaser shall indemnify Sellers and their Affiliates (other than Company)
and each of their respective stockholders, officers, directors, employees
and representatives (each a "Seller Indemnitee") against, and hold each
Seller Indemnitee harmless from, any and all Losses incurred, suffered,
sustained or required to be paid, directly or indirectly, by or sought to
be imposed upon, such Seller Indemnitee resulting from, related to or
arising out of any inaccuracy in or breach of any of the representations,
warranties or covenants made by Purchaser in or pursuant to this Agreement
or in any agreement, document or instrument executed and delivered pursuant
hereto or in connection with the Closing of the transactions contemplated
hereunder.
(b) No Seller Indemnitee shall be entitled to indemnification
pursuant to this Section 7.2 in respect of an inaccuracy in or breach of
any representation or warranty, until such time as the Losses of all Seller
Indemnitees exceed Three Hundred Twenty-Five Thousand Dollars ($325,000)
("Purchaser's Basket") in the aggregate; provided that all claims by Seller
Indemnitees for indemnification shall accrue in the aggregate until the
Losses of all Seller Indemnitees exceed the Purchaser's Basket and
thereupon Purchaser shall become obligated to indemnify the Seller
Indemnitees only for the amount by which all such claims exceed Purchaser's
Basket. In no event shall Purchaser's indemnification obligations in this
Section 7.2 in the aggregate exceed One Million Dollars ($1,000,000).
(c) Each Seller Indemnitee shall promptly give written notice to
Purchaser of the assertion by any Person of any claim, action, suit or
proceeding with respect to which Purchaser is obligated to provide
indemnification hereunder; provided, however, that the rights of a Seller
Indemnitee to be indemnified hereunder shall only be affected by the
failure to give such notice if and to the extent such failure prejudices
Purchaser in the defense of such third party claim. Amounts due with
respect to Losses covered by this Section 7.2 shall be paid promptly after
delivery of reasonably documented written notice of the amount of Losses
incurred and if the provisions of Section 7.2(b) apply to limit the payment
of all amounts claimed, shall be paid on a pro-rata basis according to the
number of shares sold. Purchaser shall have the right, but not the
obligation, to contest, defend or litigate, and to retain counsel of its
choice in connection with, any claim, action, suit or proceeding by any
third party alleged or asserted against a Seller Indemnitee that is subject
to indemnification by Purchaser hereunder, and the cost and expense thereof
shall be subject to the indemnification obligations of Purchaser hereunder;
provided, that each Seller Indemnitee shall have the right and option to
participate in, but not control, the defense of such action at its own
expense; and provided, further, that (i) if Purchaser elects not to defend
any such action or (ii) if a Seller Indemnitee shall have defenses not
available to Purchaser and if counsel to Sellers shall in a written opinion
advise that common representation is not appropriate, then such Seller
Indemnitee shall be entitled, at its option through counsel of its choice,
but at Purchaser's expense, to assume and control the defense of such
action. Neither any Seller Indemnitee, on one hand, nor Purchaser, on the
other hand, shall be entitled to settle or compromise any such claim,
action, suit or proceeding without the prior written consent of such seller
Indemnitee or Purchaser, as the case may be, which consent shall not be
unreasonably withheld.
7.3 Survival of Representations and Warranties; Reliance
(a) All representations and warranties contained herein or made
pursuant hereto shall survive the Closing hereunder until January 16, 1998,
or, if such date is earlier, the date on which Purchaser receives an audit
report on Company financial statements covering a full twelve-month period
after the Closing, except that the representations and warranties in
Sections 2.4 (Capitalization; No Subsidiaries), 2.14 (Employee Benefits)
and 2.17 (Taxes) shall survive the Closing until the expiration of the
applicable statute of limitations. The expiration of any representation
and warranty shall not affect any claim for indemnification made prior to
the date of such expiration.
(b) The representations and warranties made by any party in this
Agreement or in any agreement, certificate, schedule or exhibit delivered
in connection with this Agreement may be fully and completely relied upon
by each other party unless the party seeking to avoid such representation
or warranty can demonstrate that the investigation made by or on behalf of
such other party actually revealed or disclosed the inaccuracy in question.
7.4 Sole Remedy. Following the Closing, the indemnification
provided in this Article VII shall be the sole remedy of the parties for a
breach of this Agreement except for claims based upon actual fraud inducing
a party to execute and perform obligations under this Agreement.
ARTICLE VIII.
MISCELLANEOUS
8.1 Further Actions. From time to time, as and when requested by
Purchaser, Sellers shall execute and deliver, or cause to be executed and
delivered, such documents and instruments and shall take, or cause to be
taken, such further or other actions as Purchaser may reasonably deem
necessary or desirable to carry out the intent and purposes of this
Agreement, to transfer, assign and deliver to Purchaser effective as of the
Closing, and its successors and assigns, Company Common Stock (or to
evidence the foregoing) and to consummate and give effect to the other
transactions, covenants and agreements contemplated hereby.
8.2 Expenses. Except as otherwise specifically provided herein,
Sellers and Purchaser shall each bear their own legal fees and other costs
and expenses with respect to the negotiation, execution and delivery of
this Agreement and the consummation of the transactions hereunder, except
that Company may pay up to $50,000 of legal and accounting costs, or other
expenses, directly related to the preparation, execution and consummation
of the transactions contemplated by this Agreement. Purchaser shall pay
all sales, transfer and documentary taxes and other expenses incident to
the transfer of Company Common Stock.
8.3 Entire Agreement. This Agreement, which includes the
Appendix, the Schedules and the Exhibits hereto and the other documents,
agreements and instruments executed and delivered pursuant to this
Agreement, contain the entire agreement between the parties hereto with
respect to the transactions contemplated by this Agreement and supersedes
all prior arrangements or understandings with respect thereto.
8.4 Descriptive Headings. The descriptive headings of this
Agreement are for convenience only and shall not control or affect the
meaning or construction of any provision of this Agreement.
8.5 Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if (a)
delivered personally or (b) sent by registered or certified mail, postage
prepaid, or (c) sent by overnight courier with a nationally recognized
courier, or (d) via facsimile confirmed in writing in any of the foregoing
manners, as follows:
If to Sellers:
Xxxxxx X. Xxxxxxxxx
0000 Xxxxxxx Xxx, X.X.
Xxxxxxx, Xxxxxxx 00000
With a Copy to:
Xxxxx X. Xxxxx, Esq.
Seyfarth, Shaw, Xxxxxxxxxxx & Xxxxxxxxx
Suite 4200
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
FAX: (000) 000-0000
If to Company:
Piedmont Laboratories, Inc.
Attention: Corporate Secretary
0000 Xxx Xxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
FAX: (000) 000-0000
If to Purchaser:
Aerosol Companies Holding Corporation
Attention: Secretary
c/o The Xxxxxx+Xxxxxx Group
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
FAX: (000) 000-0000
With a Copy to:
Xxxxx X. Xxxxxxxx, Esq.
Paul, Hastings, Xxxxxxxx & Xxxxxx
Seventeenth Floor
000 Xxxx Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
FAX: (000) 000-0000
If sent by mail, notice shall be considered delivered five (5) business
days after the date of mailing, and if sent by any other means set forth
above, notice shall be considered delivered upon receipt thereof. Any
party may by notice to the other parties change the address to which notice
or other communications to it are to be delivered or mailed.
8.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia (other than
the choice of law principles thereof). Any action, suit or other
proceeding initiated by Sellers or Purchaser against any other party under
or in connection with this Agreement may be brought in any Federal or state
court in the State of Georgia, as the party bringing such action, suit or
proceeding shall elect, having jurisdiction over the subject matter
thereof. Sellers and Purchaser hereby submit themselves to the
jurisdiction of any such court and agree that service of process on them in
any such action, suit or proceeding may be effected by the means by which
notices are to be given to it under this Agreement.
8.7 Assignability. This Agreement shall not be assignable by any
party without the written consent of the other parties and any such
purported assignment by any party without such consent shall be void,
except that:
(a) any or all rights of Purchaser to receive the performance of
the obligations of Sellers hereunder (but not the obligations of Purchaser
to Sellers hereunder) and rights to assert claims against Sellers in
respect of any inaccuracy in or breach of any representations, warranties
or covenants of Sellers hereunder, may be assigned by Purchaser to a direct
or indirect subsidiary of Purchaser, and
(b) Purchaser may assign to any bank, insurance company or other
financial institution providing financing or extending credit to Purchaser
or Company any or all of its rights to assert claims against Sellers in
respect of any inaccuracy in or breach of representations, warranties or
covenants under this Agreement, but any assignee of such rights under
clause (a) or clause (b) shall take such rights subject to any defenses,
counterclaims and rights of set-off to which Sellers might be entitled
under this Agreement. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and
permitted assigns.
8.8 Waivers and Amendments. Any waiver of any term or condition
of this Agreement, or any amendment or supplementation of this Agreement,
shall be effective only if in writing. A waiver of any breach or failure
to enforce any of the terms or conditions of this Agreement shall not in
any way affect, limit or waive a party's rights hereunder at any time to
enforce strict compliance thereafter with every term or condition of this
Agreement.
8.9 Third Party Rights. Notwithstanding any other provision of
this Agreement, and except as expressly provided in Section 7.1 or 7.2
hereof or as permitted pursuant to Section 8.7 hereof, this Agreement shall
not create benefits on behalf of any shareholder or employee of Purchaser
or Company, or any other Person (including without limitation any broker or
finder), and this Agreement shall be effective only as between the parties
hereto, their successors and permitted assigns.
8.10 Public Announcements. Purchaser and Sellers will consult
with each other before issuing any press release or otherwise making any
public statements with respect to the transactions contemplated by this
Agreement and neither Purchaser, nor Sellers shall issue any such press
release or make any such public statement without the prior approval of the
other parties both as to the making of such release or statement and as to
the form and content thereof, except to the extent that such party is
advised by counsel, in good faith, that such release or statement is
required as a matter of law.
8.11 Counterparts. This Agreement may be executed in any number
of counterparts, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute
but one agreement. Facsimile signatures shall be treated as if they were
originals.
IN WITNESS WHEREOF, the undersigned have executed and delivered
this Agreement as of the date first above written.
"Purchaser"
AEROSOL COMPANIES HOLDING
CORPORATION
By: Xxxx X. Xxxxxx
--------------------------------
Name:
Title:
"Sellers"
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
XXXXXX X. XXXXXXXXX
/s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
XXXXXXX X. XXXXXXXXX
/s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
XXXXXXX X. XXXXXXXXX
/s/ Xxx Xxxxxx
--------------------------------
XXX XXXXXX
/s/ Xxxx X. Xxxxxxxxxx
--------------------------------
XXXX X. XXXXXXXXXX
XXXXXXXXX, X'XXXXXXXX CHARITABLE
TRUST
/s/ Xxxxxx X. Xxxxx
--------------------------------
By:
Its: Trustee
"Company"
PIEDMONT LABORATORIES, INC.
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
By: Xxxxxx X. Xxxxxxxxx
President
APPENDIX A
Definitions
Capitalized terms in this Agreement shall have the meanings
ascribed to them in this Appendix A unless such terms are defined elsewhere
in this Agreement:
Affiliate: With respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" means the power to direct the management and
policies of another Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Encumbrance: Any lien, mortgage, pledge, security interest, charge
or encumbrance of any kind, whether voluntary or involuntary, (including
any conditional sale or other title retention agreement, any lease in the
nature thereof, and any agreement to give any security interest) and, with
respect to capital stock, any option or other right to purchase or any
restriction on voting or other rights.
GAAP: Generally accepted accounting principles as set forth in
statements from Auditing Standards No. 69 entitled "The Meaning of 'Present
Fairly in Conformance with Generally Accepted Accounting Principles in the
Independent Auditors Reports'" issued by the Auditing Standards Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board that are
applicable to the circumstances as of the date of determination.
Governmental Entity: Any nation or any state, commonwealth,
territory, possession or tribe and any political subdivision, courts,
departments, commissions, boards, bureaus, agencies or other
instrumentalities of any of the foregoing.
Indebtedness: With respect to any Person (a) all indebtedness for
borrowed money; (b) that portion of obligations with respect to capital
leases that is properly classified as a liability on a balance sheet in
conformity with GAAP; (c) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money; (d) any obligation owed for all or any part of the deferred purchase
price of property or services if the purchase price is due more than six
months from the date the obligation is incurred or is evidenced by a note
or similar written instrument; and (e) all indebtedness secured by any
Encumbrance 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 nonrecourse to the credit of that Person.
"Knowledge" of the Company or statements about facts or
circumstances recognized by the Company shall refer to the actual
knowledge, after such inquiry of Company personnel and review of Company
records (but without independent inquiry) as they deem appropriate, of
Xxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxx, Xxx
Xxxxxx and Xxxxx Xxxxxxxx.
Material Adverse Effect: A material adverse effect on the
business, operations, condition (financial or otherwise) or prospects of
Company.
Person: An individual, corporation, partnership, joint venture,
trust or unincorporated organization or association or other form of
business enterprise or a Governmental Entity.
Subsidiary: With respect to any Person, any other Person whose
voting securities or other ownership interests directly or indirectly are
owned by such Person.
Tax: Any and all license and registration fees, taxes (including,
without limitation, income, minimum or alternative minimum tax, gross
receipts, ad valorem, value added, environmental tax, turnover, sales, use,
personal property (tangible and intangible), stamp, leasing, lease, user,
leasing use, excise, payroll, franchise, transfer, fuel, excess profits,
occupational, interest equalization and other taxes), levies, imposts,
duties, charges or withholdings of any nature whatsoever, imposed by any
Governmental Entity, together with any and all penalties, fines, additions
to tax and interest thereon, whether or not such Tax shall be existing or
hereafter adopted.
Other Definitions: The following terms have the meanings ascribed
to them in the Sections noted:
Section
Agreement Recitals
Stockholders Agreement 5.1(h)
Monthly Financials 4.2
Authorizations 2.9(a)
Benefit Plans 2.14(a)
Business Rights 2.13
Closing 6.1
Closing Date 6.1
COBRA 2.14(f)
Code 2.14(d)
Company Recitals
Company Common Stock Recitals
Contracts 2.8(b)
Employment and Non-Competition
Agreement 5.1(i)
Environmental Law 2.16(b)
ERISA 2. 14 (a)
Financial Statements 2.5(a)
Xxxxxxxxx Recitals
Xxxxxxxxx Trust Recitals
Hazardous Materials 2.16(c)
Inventory 2.21
Losses 7.1(a)
Properties 2.7(a)
Purchase Price 1.2
Purchaser Recitals
Purchaser Indemnitee 7.1(a)
Purchaser's Basket 7.2(b)
Release 2.16(d)
Seller Indemnitee 7.2(a)
Sellers Recitals
Sellers' Basket 7.1(b)
EXHIBIT l
EMPLOYMENT AND NON-COMPETITION AGREEMENT
THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (this "Agreement") is
made this ____ day of _____________, 1996, by and between PIEDMONT
LABORATORIES, INC., a Georgia corporation having its principal place of
business at 0000 Xxx Xxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx 00000 (the
"Company"), and XXXXXX X. XXXXXXXXX, whose address is 0000 Xxxxxxx Xxx,
X.X., Xxxxxxx, Xxxxxxx 00000 (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the business of providing aerosol
and liquid filling and packaging services and has need for management
personnel with experience in said business; and
WHEREAS, the Employee is experienced in the business of providing
aerosol and liquid filling and packaging services and in the management of
such business and is simultaneously selling a majority of Company's stock
pursuant to a Stock Purchase Agreement dated June , 1996; and
WHEREAS, the Company desires to continue to employ the Employee in the
same or similar capacity as that previously existing between the Employee
and the Company upon the terms and conditions hereinafter set forth; and
WHEREAS, the Employee is willing to enter into this Agreement with
respect to the Employee's employment and services upon the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the foregoing recitals and the
promises herein contained, the parties agree as follows:
I. TERM
Section 1.01. Employment. Subject to the provisions of Section 4.01
hereof, the Company hereby employs the Employee and the Employee hereby
accepts employment with the Company for a period of two (2) years beginning
on [closing date, 1996 and terminating at the close of business on [closing
date), 1998 (the "Employment Term"). The Employment Term may be extended by
a mutual agreement in writing for two years on the same or mutually
agreeable terms.
II. DUTIES
Section 2.01. General Duties. The Employee shall serve as the
President of the Company during the Employment Term. Further, Employee
shall serve as a member of the Board of Directors of the Company, its
parent company and of Aerosol Services Holding Corporation ("ASHC"). The
Employee shall, during the Employment Term, subject to the policies of the
Board of Directors of the Company, manage and direct the day-to-day
business of the Company, performing those acts and doing those things
customarily done by the president for companies comparable to the Company.
Section 2.02. Devotion of Time to the Company's Business. The Employee
agrees during the Employment Term, to devote his best efforts to his
employment, and perform such duties consistent with his capacity as
President of the Company as shall be determined by the Board of Directors
of the Company. The Employee further agrees to (i) devote such time as is
reasonably necessary to fulfill the duties of his office to the business
and affairs of the Company, (ii) devote his time and resources to the
training and development of individuals capable of managing and directing
the day-to-day business of the Company so that in the future such
individuals may be promoted to senior executive positions within the
Company, and (iii) faithfully observe his duties to preserve as
confidential all trade and other secrets of the Company. The Employee shall
not, during the Employee's employment, unless otherwise agreed to in
advance and in writing by the Company, seek or accept other employment,
become self-employed in any other capacity during the Employment Term, or
engage in any activities which are detrimental to the business of the
Company. Notwithstanding the foregoing, the Employee may engage in personal
investment activities which do not interfere with the Employee's duties
under this Agreement.
III. COMPENSATION
Section 3.01. Base Salary. As compensation for his services hereunder,
during the Employment Term, the Employee shall receive an annual base
salary of Two Hundred Thousand Dollars ($200,000). Such base salary shall
be payable in cash at the times and in the installments consistent with the
Company's payroll practices.
Seciton 3.02. Bonus Plan. The Employee shall be a full participant in
any performance bonus plan made available to senior executives of the
Company except for any such plan established to assist executives to
purchase shares of stock.
Section 3.03. Continuation of Salary. If the Employee dies or becomes
disabled during the Employment Term so that he is unable to perform his
duties hereunder, if Company terminates this Agreement for any reason
except as specified in Section 4.01, or if Employee resigns for "good
reason" as described in Section 4.02 the Company agrees to continue to pay
the Employee or his estate his base salary monthly, but not beyond the end
of the Employment Term, and to continue to provide the benefits described
in Section 3.04.
Section 3.04. Benefits. During the Employment Term, the Employee shall
be entitled to a monthly car allowance of $1,200.00 per month and to
reimbursement of reasonable operating, repair and maintenance expenses and
company-provided automobile insurance for two automobiles, equivalent to
those now provided Employee by Company. In addition, the Employee shall be
entitled to insurance benefits substantially similar to those now provided
under [Insert Plan Name/Number ]and may continue such benefits after any
termination of this Agreement by paying the applicable premium to the
extent allowed by applicable law. However, the Company may cease providing
such benefits if any law or regulation prohibits making benefits available
except on an equal basis for all employees. The Employer shall continue to
pay the dues, fees and assessments relating to Employee's current club
memberships during the Employment Term. When Employee's employment
terminates, Company agrees to transfer such memberships to the Employee,
and to execute such documents and instruments necessary and appropriate to
effect such transfers.
Section 3.05. Director Compensation. After the Employment Term,
Employee shall receive compensation for any service as a director of the
Company or its affiliates equivalent to the compensation of other "outside"
directors. Employee shall not receive additional compensation for serving
as a director during the Employment Term.
IV. TERMINATION
Section 4.01. Termination by the Company. Any of the following acts or
omissions shall constitute grounds for the Company to terminate this
Agreement:
(a) Conduct on the part of the Employee which constitutes the
breach of any statutory or common law duty of loyalty to the Company which
has a material adverse effect on Company;
(b) Any illegal act by the Employee (as evidenced by a
conviction) which materially and adversely affects the business of the
Company; or
(c) Intentional wrongful engagement in any competitive activity
prohibited by Section 5.01 hereof.
It shall be presumed that the Employee's participation in a business
enterprise other than the Company, except as a member of the Board of
Directors of the Company, Employee's parent company, ASHC and Aerosol
Service Company, constitutes cause for termination under clause (c) of this
section unless the Employee demonstrates otherwise to the reasonable
satisfaction of the Board of Directors of the Company. Termination by the
Company shall be accomplished by written notice to the Employee and, if
pursuant to paragraph (a) or (b) above, shall be preceded by a written
notice providing a reasonable opportunity for the Employee to correct his
conduct, if the conduct in question can be corrected.
Section 4.02. Resignation for Good Reason. Employee may resign for
"good reason" and thereby terminate his employment (but not his other
obligations hereunder) as a result of the following:
(a) Without the Employee's prior written consent, a reduction in
his current salary;
(b) The taking of any action by the Company that would
substantially diminish the aggregate value of the benefits provided to the
Employee under the Employee's medical, health, accident, disability, life
insurance, thrift and retirement plans in which he was participating on the
date of this Agreement, other than any such reduction which is (i) required
by law, (ii) implemented in connection with a general concessionary
arrangement affecting all employees or affecting the group of employees
(senior management) of which the Employee is a member or (iii) generally
applicable to all beneficiaries of such plans;
(c) An involuntary relocation of the Employee's place of
employment outside the general North Georgia area;
(d) Resignation as a result of unlawful discrimination or other
unlawful acts committed against employee, as evidenced by a settlement,
arbitration award or final court order;
(e) A reduction in duties and responsibilities which results in
the Employee no longer having the customary duties of a president; or
(f) The Xxxxxx + Xxxxxx Investment Partnership, L.P. or its
successors and Employee, collectively shall cease to Control (as
hereinafter defined) the Company.
Section 4.03. Damages for Breach of Contract. In the event of a
breach of this Agreement by either the Company or the Employee resulting in
damages to the other party, that party may recover from the party breaching
this Agreement any and all damages that may be sustained, excluding
incidental, consequential and punitive damages.
Section 4.04. Arbitration. With the exception of suits for specific
enforcement of the provisions of Sections 5.01 and 5.02, any controversy,
dispute or claim arising out of, relating to, or concerning this Agreement,
the breach of this Agreement, the employment of the Employee, or the
termination of the Employee's employment will be resolved pursuant to this
Section 4.04. This includes all claims, whether arising in tort or
contract, and whether arising under statute or common law. Any such
controversy, dispute or claim will be submitted to the American Arbitration
Association ("AAA") in Atlanta, Georgia, for final and binding arbitration
in accordance with its Employment Dispute Rules then existing; provided
that, if the rules of the AAA differ from those in this section, the
provisions of this section will control. Any demand for resolution of such
a matter must be sent to the AAA and served on the other party within the
period covered by the applicable statute of limitations. No arbitrator
will have any authority to extend, modify, or suspend any of the terms of
this Agreement. The arbitrator must make his award in writing and must
accompany it with an opinion discussing the evidence and setting forth the
reasons for the award. The decision of the arbitrator within the scope of
the submission will be final and binding on both parties, and any right to
judicial action on any matter subject to resolution by arbitration
hereunder hereby is waived unless otherwise required by applicable law,
except suit to enforce an award by the arbitrator or in the event
resolution by an arbitrator is not available for any reason. This Section
4.04 will be specifically enforceable. Judgment upon any award rendered by
the AAA and/or any other arbitrator may be entered in any court having
jurisdiction.
Section 4.05. Attorneys' Fees and Costs. If any action in law or in
equity is necessary to enforce or interpret the terms of this Agreement,
the prevailing party shall be entitled to reasonable attorneys' fees, costs
and necessary disbursements in addition to any other relief to which he may
be entitled.
V. RESTRICTIVE COVENANTS
The following restrictive covenants shall apply to this Agreement:
Section 5.01. Non-Competition. Until five (5) years after the date
Employee is no longer employed by Company, or, if such period would be
shorter, until a date which is seven years after the closing under the
Stock Purchase Agreement, the Employee will not directly or indirectly,
participate in a managerial or supervisory capacity as an executive
officer, member of senior management or consultant in any business or
enterprise competing with the Company or any Affiliate in the Territory
described on Exhibit A. "A business or enterprise competing with the
Company or any Affiliate" means any business or enterprise which does
research with respect to, designs, develops, fills, packages, produces or
manufactures any products or provides any services within the aerosol and
liquid filling contract packaging field. "Affiliate" means any
corporation, company, partnership, joint venture and/or firm which
controls, is controlled by or is under common control with the Company.
"Control" means (a) in the case of corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the stock or participating
shares entitled to vote for the election of directors; and (b) in the case
of non-corporate entities (such as joint venture partnerships or limited
partnerships), either (x) direct or indirect ownership of at least fifty
percent (50%) of the equity interest, or (y) the power to direct the
management and policies of the noncorporate entity. "Territory" means the
states listed on Exhibit A hereto.
The Employee acknowledges that the Company is and has been conducting
business throughout the entire Territory and that Employee's duties as
President and his status prior to the closing under the Stock Purchase
Agreement, have involved him in all aspects of the Company's business. The
Employee agrees and acknowledges the Company has a valid and legitimate
business interest in protecting its business in the Territory from any
activity prohibited by this Section 5.01.
This Section 5.01 shall not apply to the Employee's ownership of three
percent (3%) or less of the outstanding voting securities of any
corporation or other entity which has its securities listed on a national
securities exchange or on the Nasdaq Stock Market.
Section 5.02. No Adverse Acts. During the Employment Term and
continuing for two (2) years after the date of the expiration of the
Employment Term, the Employee will not directly or indirectly, solicit,
take away, or attempt to solicit or take away any employee of the Company
either on the Employee's behalf or on behalf of any other person or entity
in the Territory which competes with Company.
Section 5.03. Equitable Relief. The Employee acknowledges and agrees
that his services are as of a special, unique and extraordinary value to
the Company and its Affiliates and that damages alone may be an inadequate
remedy for any breach of this Agreement. Accordingly, in the event of the
breach by the Employee of any of the provisions of this Agreement, the
Company may, in addition and supplementary to other rights and remedies
existing in its favor, apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive or other relief in
order to enforce, or prevent any violations of, the provisions of this
Agreement.
VI. MISCELLANEOUS
Section 6.01. Notices. Any notices to be given hereunder by either
party to the other shall be in writing and may be effected by personal
delivery, by courier, or by mail (registered or certified), postage prepaid
with return receipt requested, or by facsimile confirmed by mail. Mailed
notices shall be addressed to the parties at the addresses appearing in the
introductory paragraph. Mailed notices shall be deemed communicated as of
four (4) calendar days after mailing. Notices delivered personally or by
courier shall be deemed delivered when actually received.
Section 6.01. Entire Agreement. This Agreement, together with the
Stock Purchase Agreement, supersedes any and all other agreements, either
oral or in writing, between the parties hereto with respect to the
employment of the Employee by the Company and contains all of the covenants
and agreements between the parties with respect to such employment in any
manner whatsoever. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, orally or otherwise,
have been made by any party, which are not embodied herein, and that no
other prior agreement, statement or promise not contained in this Agreement
shall be valid and binding. Any modification of this Agreement, statement
or promise not contained in this Agreement shall not be valid or binding.
Any modification of this Agreement will be effective only if it is in
writing signed by the party to be charged.
Section 6.03. Partial Invalidity. If any provision in this Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remaining provisions shall nevertheless continue in full
force without being impaired or invalidated in any way.
Section 6.04. Law Governing Agreement. This Agreement shall be
governed by and construed in accordance with the law of the State of
Georgia.
Section 6.05. Successors and Assigns. The rights and obligations of
the Company and the Employee under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the
Company.
Section 6.06. Waiver. Either party's failure to enforce any
provision or provisions of this Agreement shall not in any way be construed
as a waiver of any such provision or provisions, nor prevent that party
thereafter from enforcing each and every other provision of this Agreement.
The rights granted both parties herein are cumulative and shall not
constitute a waiver of either party's right to assert all other legal
remedies available to it under the circumstances.
[SIGNATURES ON FOLLOWING PAGE)
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the day and year first above written.
"Company"
PIEDMONT LABORATORIES, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
"Employee"
------------------------------------
Xxxxxx X. Xxxxxxxxx
EXHIBIT A
Territory
[insert list of states/countries in which
Company has customers or to which it ships)
EXHIBIT 2 DRAFT
[OPINION OP SEYFARTH, SHAW, XXXXXXXXXXX & XXXXXXXXX]
___________________, 1996
Aerosol Companies Holding Corporation
c/o The Xxxxxx+Xxxxxx Group
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Re: Stock Purchase Agreement, dated June __, 1996 (the "Agreement"),
by and among Aerosol Companies Holding Corporation, the Sellers
named therein and Piedmont Laboratories, Inc.
Ladies and Gentlemen:
We have acted as special counsel to Xxxxxx X. Xxxxxxxxx, an individual
("Xxxxxxxxx"), Xxxxxxx X. Xxxxxxxxx and Xxxxxxx X. Xxxxxxxxx, individua1s
(together with Xxxxxxxxx, the "Garretsons"), Xxx Xxxxxx, an individual
("Gecker"), Xxxx X. Xxxxxxxxxx, an individual ("Trieshmann"), the
Xxxxxxxxx, X'Xxxxxxxx Charitable Trust (the "Xxxxxxxxx Trust" and with
Garretsons, Gecker and Trieshmann, the "Sellers") and Piedmont
Laboratories, Inc., a Georgia corporation (the "Company"), in connection
with that certain Stock Purchase Agreement, dated June , 1996 (the
"Agreement"), by and among Aerosol Companies Holding Corporation, a
Delaware corporation ("Purchaser"), the Sellers and the Company.
This opinion is being delivered pursuant to Section 5.1(j) of the
Agreement. Capitalized terms used herein without definition have the
meaning specified therefor in the Agreement. The Agreement and the
Employment and Non-Competition Agreement which were prepared in connection
with the consummation of the transactions reflected in the Agreement are
sometimes referred to herein collectively as the "Documents."
For purposes of rendering this opinion we have reviewed and examined
originals or copies of the Documents and such other agreements, documents,
instruments, records and matters of law as we have deemed necessary in
order to render the opinions set forth herein. As to all factual matters
relating to the opinions set forth herein, we have without independent
investigation or verification relied upon the representation and warranties
by the various parties in the Documents and upon certificates of the
Company and Sellers. We have also relied upon and assumed the accuracy of
such corporate records, documents, certificates, opinions, memoranda and
other instruments with respect to the facts stated therein as in our
judgments are necessary or appropriate to enable us to render the opinions
expressed below.
In rendering the opinions expressed below, we have assumed without
independent investigation or verification on the following:
(a) the signatures of all persons signing all agreements, documents
or instruments in connection with this opinion is rendered are
genuine, including but not limited to the Documents;
(b) all agreements, documents and instruments submitted to us as
originals or duplicate originals are authentic;
(c) all agreement, documents and instruments submitted to us as
copies, whether certified or not, conform to authentic original
documents;
(d) all parties to the agreements, documents or instruments reviewed
by us (other than the Documents), including without limitation,
the Company, Sellers and Purchaser or any person executing any
such agreement, document or instrument on behalf of the Company,
Sellers or Purchaser, have full power and authority to execute,
deliver and perform their obligations under such agreements,
documents and instruments and under the agreements, documents and
instruments required or permitted to be delivered and performed
thereunder, and that all such agreements, documents and
instruments have been duly authorized by all necessary action,
have been duly executed by such parties and are or will be valid,
binding and enforceable obligations of the parties thereto;
(e) all consents, approvals, waivers, exemptions and authorizations
to be obtained by any party, including, without limitation, the
Company, Sellers or Purchaser, in connection with the
consummation of the transactions reflected in or contemplated by
the Agreement have been obtained and that all other actions
described in Section __ of the Agreement to be taken by any
party, including, without limitation, the Company, Sellers or
Purchaser, have been taken; and
(f) there have been no changes since the respective dates of the
governmental certificates examined by us which would make untrue
or qualify any statement contained therein.
Based on the foregoing and subjects to the limitations and
qualifications expressed herein, we are of the opinion that:
1. The Company is a corporation validly existing and in good
standing under the laws of the State of Georgia and has the requisite
corporate power and authority to conduct its business as presently
conducted, to own and lease its properties and assets and to execute and
deliver the Documents and perform its obligations thereunder.
2. The Company is qualified to do business as a foreign
corporation in the jurisdiction set forth in Exhibit A hereto.
3. The Documents have been duly authorized, executed and
delivered by the Company and are valid and binding obligations of the
Company and the Agreement is enforceable against the Company in accordance
with its terms.
4. The Agreement has been duly executed and delivered by each
Seller and constitutes the valid and binding obligation of each Seller and
is enforceable against each Seller in accordance with its terms.
5. The authorized capital stock of the Company consists of
_________ shares of common stock, par value $___________ per share
("Company Common Stock"), of which 100 shares are issued and outstanding.
Such shares have been duly authorized, validly issued, and are fully paid
and non-assessable.
6. Neither the execution and delivery by the Company of the
Documents nor its performance of its obligations thereunder will (a) result
in the material violation of (i) any Federal or Georgia statute or
regulation applicable to the Company or (ii) any order or decree known to
us of any court or Governmental Authority binding upon the Company or its
property, (b) conflict with the Company's Articles of Incorporation or
Bylaws or (c) result in a material default or in the creation of a lien
under an indenture, loan agreement, or other agreement known to us by which
the Company is a party and bound.
7. Neither the execution and delivery by Sellers of the
Documents to which each is a party, nor the performance of their respective
obligations thereunder will (a) result in the violation of (i) any Federal
or Georgia statute or regulation applicable to a Seller to (ii) any order
or decree known to us of any court or Governmental Authority binding upon
any shares of Company Common Stock owned by a Seller, in either case which
would prevent such Seller from selling the Company Common Stock to
Purchaser or otherwise prevent such Seller from materially performing its
obligations under the Agreement (and with respect to Xxxxxxxxx, the
Employment and Non-Competition Agreement) or (b) result in a material
default or in the creation of a lien on the shares of Company Common Stock
owned by any Seller or any material property or assets of the Company,
under any indenture, loan agreement or other agreement which is known to us
and to which a Seller or any of the shares of Company Common Stock is
bound.
8. The execution and delivery of the Documents by the Company
and Sellers do not, and performance by each of them with the terms thereof
and consummation of the transactions contemplated thereby will not, require
any registration with or approval by any Federal or State of Georgia
Governmental Authority that has not been made or obtained, where the
failure to make or obtain such registration or approval, respectively,
would materially adversely affect the ability of the Company or Sellers to
perform any of their respective material obligations under the Documents to
which each is a party.
9. Assuming full payment by or on behalf of Purchaser of the
consideration for the Company Comon Stock set forth in the Agreement in the
manner and to the persons contemplated in the Agreement, the performance by
Purchaser of its obligations under the Agreement, the delivery by or on
behalf of each Seller to Purchaser of the certificates for the Company
Common Stock owned by such Seller and the executed stock powers for each
Seller therefor at the closing of the purchase and sale of the Company
Common Stock, and the acquisition of the Company Common Stock by Purchaser
in good faith without notice of any adverse claim, Purchaser will acquire
the interests of the Sellers in the Company Common Stock, free of any
adverse claim as a "bona fide purchaser" under Section of the
Georgia Uniform Commercial Code.
We are not acting as counsel for the Company or Xxxxxxxxx in any
pending litigation in which the Company or Xxxxxxxxx is a party, and
neither the Company nor Xxxxxxxxx has referred to us for legal advice or
legal representation any litigation matter that has been overtly
threatened, in writing, in which the Company or Xxxxxxxxx may reasonably be
expected to become a party.
The statement set forth in the preceding sentence is limited to those
matters that the Company or Xxxxxxxxx has referred to us for legal
representation or about which the Company or such Seller has consulted us
as counsel and with respect to which we have given substantive attention,
as reflected in our billing statements, subsequent to January 1, 199[5].
We have identified those matters by making inquiry of the lawyers presently
in the Chicago Office of our firm who, according to our billing statements,
have been engaged in legal services on behalf of the Company or Xxxxxxxxx
during that period. In that process we have not undertaken any independent
review of documents or records concerning the Company or Xxxxxxxxx that are
in our possession.
We are also able to advise you that, based only upon an inquiry of
those attorneys presently in the Chicago Office of our firm who have,
according to our billing statements, devoted time to the transactions
contemplated by the Documents, we do not have any knowledge of any action,
suit or proceeding pending against the Company or any Seller relating to
the shares of the Company Common Stock, in law or equity before any court,
arbitrator or administrative or governmental body, in which an injunction
or order has been entered (or a hearing to cause on injunction to be
entered is pending or with respect to which the Company or any Seller has
received written notice thereof) preventing the transactions contemplated
by the Documents.
The opinions set forth herein are subject to the following further
qualifications, assumptions, limitations and exceptions:
(a) Our opinions are subject in all cases to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to or affecting
creditors' rights and remedies generally;
(b) the legality, validity, enforceability and binding effect of the
Documents are subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding at law or in
equity), including without limitation, good faith, fair dealing,
unconscionability, materiality, reasonableness and the possible
unavailability of specific performance and injunctive relief;
(c) any provision contained in the Documents which purports to sever
from any such Document any provision therein which is prohibited
or unenforceable under applicable law without affecting the
enforceability or validity of the remainder of such Document is
subject to the qualification that such a provision may be
enforced only to the extent that a court of competent
jurisdiction determined that such prohibited or unenforceable
provision could be severed without impairing the interpretation
and application of the remainder of such Document;
(d) we express no opinion as to the enforceability of cumulative
remedies to the extent that such cumulative remedies purport to
compensate or would have the effect of compensating the party
entitled to the benefits thereof in amounts in excess of the
actual loss suffered by such party;
(e) requirements in the Documents specifying that provisions thereof
may only be waived in writing may not be valid, binding or
enforceable to the extent that an oral agreement or an implied
agreement by trade practice or course of conduct has been created
modifying any provision of such Document;
(f) we express no opinion as the enforceability of the
indemnification provisions to the Documents insofar as such
provisions contravene public policy or limit the remedies
available to any party otherwise entitled to indemnification,
contribution or other remedies under the laws, statutes,
regulations or rules of any jurisdiction;
(g) our opinions rendered in Paragraphs 6, 7 and 8 above are based
upon a review of those Federal and State of Georgia statutes and
regulations which, in our experience, are normally applicable to
transactions of the type contemplated in the Documents.
(h) a statement in our opinion or in this letter that a matter which
involves a question of fact is "to our knowledge" or "known to
us" refers exclusively to the current actual knowledge of facts
or other information of the attorneys of our firm who have given
substantive attention to matters concerning the Company or
Sellers in connection with the transactions which are the subject
of this opinion, and our knowledge of the Company and/or the
Sellers is limited to the representations made by the Company and
Sellers in the Documents, but beyond that we have made no
independent factual investigation for the purpose of rendering
the opinions contained herein and no inference as to our
knowledge concerning any facts should be drawn as a result of our
limited representation; and
(i) the opinions set forth herein are limited to the matters stated
herein as of the date hereof and we disavow any obligation to
update this opinion or advise you of any change in our opinions
in the event of changes in applicable law or facts becoming
effective after the date hereof or if additional or newly
discovered information is brought to our attention.
We call your attention to the fact that we are attorneys admitted to
practice law in the State of Illinois. We express no opinion as to any
laws, or matters governed by any laws, other than the laws of the State of
Illinois and the Federal laws of the United States. Insofar as the
opinions expressed herein relate to matters governed by the laws of the
State of Georgia, we have relied solely, with your consent and without
independent investigation, on the opinion of counsel attached as Exhibit B
hereto, as to the matters described therein, a copy of which is being
delivered to you herewith.
This opinion is rendered solely for the benefit of the addressees, and
may not be relied upon by any other person. It may not be disclosed or
referred to by you or anyone acting on your behalf to any person except for
purposes of review by your counsel in connection with the purchase and sale
of the Company Stock without the prior written consent of the undersigned.
Very truly yours,
[SEYFARTH, SHAW, XXXXXXXXXXX & XXXXXXXXX]
EXHIBIT 3
Form of Opinion (Purchaser's Counsel)
____________, 1996
Xxxxxx X. Xxxxxxxxx and the Other Sellers
0000 Xxxxxxx Xxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Piedmont Laboratories, Inc.
0000 Xxx Xxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Re: Stock Purchase Agreement, dated as of June __ 1996,
among Aerosol Companies Holding Corporation, Xxxxxx X. Xxxxxxxxx
and the other Sellers named therein and Piedmont Laboratories,
Inc.
Ladies and Gentlemen:
We have acted as special counsel to Aerosol Companies Holding
Corporation, a Delaware corporation ("Purchaser") in connection with the
Stock Purchase Agreement (the "Agreement"), dated as of June 27, 1996,
among Purchaser, Xxxxxx X. Xxxxxxxxx, an individual ("Xxxxxxxxx"), and the
other Sellers named therein (together with Xxxxxxxxx, "Sellers") and
Piedmont Laboratories, Inc., a Georgia corporation ("Company")
This opinion is rendered in compliance with Section 5.2(e) of the
Agreement. Capitalized terms used herein shall have the meanings ascribed
them in the Agreement, unless otherwise defined herein.
We have examined originals or copies of the Agreement.
We have also examined such other documents, records and matters
of law and fact as we have deemed necessary for the purposes of this
opinion. As to factual matters, we have relied upon the representations
and warranties by the various parties in the Agreement and the Employment
and Non-Competition Agreement and upon certificates of Purchaser. We have
also relied upon originals or copies of such records, documents,
certificates, opinions, memoranda and other instruments as in our judgment
are necessary or appropriate to enable us to render the opinion expressed
below.
Based upon the foregoing and subject to the assumptions, limitations,
qualifications and exceptions set forth below, we are of the opinion that:
1. Purchaser is incorporated, validly existing and in good
standing under the laws of the State of Delaware with corporate power and
authority to execute and deliver the Agreement and perform its obligations
thereunder.
2. Purchaser is qualified to do business as a foreign
corporation and is in good standing in the State of Georgia to the extent
necessary to perform its obligations under the Agreement.
3. The Agreement has been authorized, executed and delivered by
Purchaser and is a valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms.
4. Neither the execution and delivery by Purchaser of the
Agreement nor its performance of its obligations thereunder will (a) result
in the violation of (i) any federal or Georgia statute or regulation
applicable to Purchaser or (ii) any order or decree known to us of any
court or governmental authority binding upon Purchaser or its property, (b)
conflict with Purchaser's Certificate of Incorporation or Bylaws or (c)
result in a default or in creation of a lien under any indenture, loan
agreement, or other agreement known to us by which Purchaser is bound.
We are able to advise you that, based only upon an inquiry of
those attorneys presently in our firm who have, according to our records,
devoted time to the transactions contemplated by the Agreement, we are
aware of no action, suit, or proceeding pending against Purchaser, in law
or equity before any court, arbitrator or administrative or governmental
body, in which an injunction or order has been entered (or a hearing to
cause an injunction or order to be entered is pending or noticed)
preventing the transactions contemplated by the Agreement.
The foregoing opinions are subject to the following assumptions,
limitations, qualifications and exceptions:
A. We have assumed (i) the genuineness of all signatures and
the authenticity of all documents submitted to us as originals, (ii) the
conformity with the originals of all documents submitted to us as copies
thereof, (iii) the accuracy of all certificates from public officials and
authorized representatives of Purchaser submitted to us, (iv) the continued
accuracy of all certificates from public officials dated earlier than the
date of this letter, and (v) that the Agreement and the Employment and Non-
Competition Agreement have been duly authorized, executed and delivered by,
and constitute the valid and binding obligations of Company and each Seller
that is a party thereto, enforceable against Company and such Seller or
Sellers in accordance with their respective terms.
B. Our opinion rendered in Paragraph 3 above relating to the
enforceability of the Agreement is subject to and limited by the following:
(i) applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter affecting the remedies of creditors and (ii)
general equitable principles, including (without limitation) concepts of
materiality, reasonableness, good faith and fair dealing (regardless of
whether the issue of enforceability is considered in a proceeding in equity
or at law), public policy and the discretion of the court before which any
proceeding therefor may be brought.
C. Our opinion rendered in Paragraph 4 above regarding no
violation of federal or Georgia statutes or regulations applicable to
Purchaser is based upon a review of those statutes and regulations which,
in our experience, are normally applicable to transactions of the type
contemplated by the Agreement.
D. In rendering our opinion in Paragraph 4 above, we have
identified orders, decrees and agreements "known" to us by making inquiry
of Purchaser and the attorneys presently in our firm who, according to our
records, have been actively involved in the transaction covered by this
opinion.
E. In rendering the foregoing opinions, our examination of
matters of law has been limited to the laws of the State of Delaware (with
respect to the opinion set forth in Paragraph l above), the State of
Georgia, the State of California and the laws of the United States of
America.
This opinion is provided to you by us as special counsel to
Purchaser in connection with the execution and delivery of the Agreement
and is intended solely for your benefit and may not be relied upon by any
other person or in connection with any other transactions without our prior
written consent.
Very truly yours,
