STOCK PURCHASE AGREEMENT
among
CLUBCORP, INC.,
THE TRUSTEES OF THE XXXXXX XXXXXX TRUST #1,
THE TRUSTEES OF THE XXXXXX XXXXXX TRUST #2,
THE XXXXXX FOUNDTION,
THE XXXXXX AND XXXXX
XXXXXX FOUNDATION,
CYPRESS MERCHANT BANKING PARTNERS L.P.,
CYPRESS OFFSHORE PARTNERS L.P.,
CYPRESS MERCHANT BANKING PARTNERS II L.P.,
CYPRESS MERCHANT BANKING II C.V.
and
00xx XXXXXX PARTNERS II L.P.
dated as of October 26, 1999
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
Section 1.1 Certain Defined Terms
Section 1.2 Other Defined Terms
Section 1.3 Other Definitional Provisions
ARTICLE II PURCHASE AND SALE
Section 2.1 The Closings
Section 2.2 Purchase and Sale; Consideration
Section 2.3 Closing Deliveries by the Company
Section 2.4 Closing Deliveries by the Selling Stockholders
Section 2.5 Closing Delivers by the Purchasers and the Subsequent Purchasers
ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING
THE SELLING STOCKHOLDERS
Section 3.1 Organization
Section 3.2 Authority
Section 3.3 Title to Shares
Section 3.4 Non-Contravention
Section 3.5 Consents and Approvals
Section 3.6 Brokers
Section 3.7 No Other Representations or Warranties
ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING
THE COMPANY
Section 4.1 Organization
Section 4.2 Authority
Section 4.3 Capitalization
Section 4.4 Non-Contravention
Section 4.5 Consents and Approvals
Section 4.6 Subsidiaries
Section 4.7 SEC Reports
Section 4.8 Financial Information
Section 4.9 No Undisclosed Liabilities
Section 4.10 Absence of Certain Changes or Events
Section 4.11 Certain Contracts and Agreements
Section 4.12 Benefit Plans; ERISA
Section 4.13 Compliance with Law; Other Instruments
Section 4.14 Litigation
Section 4.15 Real Property
Section 4.16 Intellectual Property
Section 4.17 Tax Matters
Section 4.18 Environmental Laws
Section 4.19 Insurance
Section 4.20 Brokers
Section 4.21 Transactions with Affiliates
Section 4.22 No Conflicting Interests of Selling Stockholders
Section 4.23 Labor Matters
Section 4.24 Year 2000 Problem
Section 4.25 No Other Representations or Warranties
ARTICLE V REPRESENTATIONS AND WARRANTIES
REGARDING THE PURCHASERS
Section 5.1 Organization
Section 5.2 Authority
Section 5.3 Non-Contravention
Section 5.4 Consents and Approvals
Section 5.5 Purchase for Investment
Section 5.6 Financial Capability
Section 5.7 No Other Representations or Warranties
Section 5.8 Brokers
ARTICLE VI ADDITIONAL AGREEMENTS
Section 6.1 Conduct of Business Prior to the First Closing
Section 6.2 Regulatory and Other Authorizations; Notices and Consents
Section 6.3 Access to Information
Section 6.4 Further Action
Section 6.5 Reservation of Shares
Section 6.6 Appointment of Directors
Section 6.7 New Credit Agreement
Section 6.8 D&O Insurance
Section 6.9 Operating Company
ARTICLE VII CONDITIONS TO CLOSINGS
Section 7.1 Conditions to Obligations of the Purchasers
Section 7.2 Conditions to Obligations of the Company and the Selling Stockholders
ARTICLE VIII INDEMNIFICATION
Section 8.1 Survival of Representations and Warranties
Section 8.2 Indemnification
Section 8.3 Indemnification Amounts
Section 8.4 Indemnification Procedures
Section 8.5 Non-Exclusive Remedy
Section 8.6 Certain Limitations
ARTICLE IX TERMINATION AND WAIVER
Section 9.1 Termination
ARTICLE X GENERAL PROVISIONS
Section 10.1 Expenses
Section 10.2 Notices
Section 10.3 Interpretation
Section 10.4 Counterparts
Section 10.5 Entire Agreement; No Third Party Beneficiaries
Section 10.6 Governing Law; Consent to Jurisdiction
Section 10.7 Severability
Section 10.8 Assignment
Section 10.9 Other Agreements
Section 10.10 Amendment
Section 10.11 Waiver of Jury Trial
Section 10.12 Public Disclosure
Exhibits
Exhibit A Stockholders Agreement
Exhibit B Warrant
Exhibit C-1 Officer's Certificate of ClubCorp
Exhibit C-2 Certificate of Selling Stockholder
Exhibit D-1 Legal Opinion of Xxxxxxxx & Xxxxxxxx
Exhibit D-2 Legal Opinion of Xxxxxx & Xxxx, L.L.P.
Exhibit D-3 Legal Opinion of Morris, Nichols, Arsht & Xxxxxxx
Exhibit E Certificate of Purchasers
Exhibit F Legal Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of October 26, 1999, among Cypress
Merchant Banking Partners L.P., a Delaware limited partnership ("CMBP"), Cypress
Offshore Partners L.P., a Cayman Islands exempt limited partnership ("COP"),
Cypress Merchant Banking Partners II L.P., a Delaware limited partnership ("CMBP
II"), Cypress Merchant Banking II C.V., a "commanditaire vennootschap" in
accordance with Netherlands Law ("CMBCV"), 00xx Xxxxxx Partners II L.P., a
Delaware limited partnership ("00xx Xxxxxx" and, collectively with CMBP, COP,
CMBP II and CMBCV, the "Purchasers"), ClubCorp, Inc., a Delaware corporation
(the "Company"), and Xxxxxxx Xxxxxx, Xxxxxx X. Xxxxxx, Xx., Xxxx Xxxxx, Xxxxxxxx
Xxxxxx Xxxxx, Xxxxx X. Xxxxxxxxx, Xxxx Xxxxx, Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxxx
Xxxxxx and Xxx Xxxxx, as trustees of the Xxxxxx Xxxxxx Trust #1, an inter vivos
trust established under the laws of the State of Texas by an indenture made and
entered on December 6, 1969, Xxxxxxx Xxxxxx, Xxxxxx X. Xxxxxx, Xx., Xxxx Xxxxx,
Xxxxxxxx Xxxxxx Xxxxx, Xxxxx X. Xxxxxxxxx, Xxxx Xxxxx, Xxxxx Xxxxx, Xxx Xxxxx,
Xxxxxxx Xxxxxx and Xxx Xxxxx, as trustees of the Xxxxxx Xxxxxx Trust #2, an
inter vivos trust established under the laws of the State of Texas by an
indenture made and entered on December 6, 1969, The Xxxxxx Foundation, a Texas
non-profit corporation, and The Xxxxxx and Xxxxx Xxxxxx Foundation, a Texas
non-profit corporation (collectively, the "Selling Stockholders").
W I T N E S S E T H :
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Selling Stockholders have agreed to sell to the Purchasers and
the Purchasers have agreed to purchase from the Selling Stockholders, shares of
common stock, par value $0.01 per share, of the Company (the "Common Stock");
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company has agreed to issue and sell to the Purchasers and the
Purchasers have agreed to purchase from the Company, shares of Common Stock and
warrants to purchase shares of Common Stock;
WHEREAS, as a condition and inducement to the parties' willingness to
enter into this Agreement, at the First Closing (as defined in Section 2.1) the
Company, the Selling Stockholders and certain other stockholders of the Company
will execute and deliver to the Purchasers a stockholders agreement in the form
of Exhibit A hereto, dated as of the First Closing Date (as defined in Section
2.1) (the "Stockholders Agreement"), and each of the Purchasers will execute
and deliver to the Company, each of the Selling Stockholders and such other
stockholders the Stockholders Agreement; and
WHEREAS, the parties hereto are entering into this Agreement to
provide for the purchase and sale of the Common Stock and the warrants to
purchase shares of Common Stock.
NOW, THEREFORE, in consideration of the premises and the mutual terms,
conditions and agreements set forth herein, the Purchasers, the Company and the
Selling Stockholders hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Define Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person, for so
long as such Person remains so associated to the specified Person.
"Agreement" means this Stock Purchase Agreement, as it may be amended,
supplemented, restated or modified from time to time.
"Board" means the Board of Directors of the Company.
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which banks are required or authorized by law to be closed in The City of
New York or in Dallas, Texas.
[CONFIDENTIAL TREATMENT REQUESTED]
"control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly, of the power to direct or
cause the direction of the affairs or management of a Person, whether through
the ownership of voting securities, as trustee or executor, by contract or
otherwise.
"Encumbrance" means any security interest, pledge, mortgage, lien
(statutory or other), charge, option to purchase, lease or otherwise acquire any
interest or any claim, restriction, covenant, title defect, hypothecation,
assignment, deposit arrangement or other encumbrance of any kind or any
preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles applied on a
consistent basis, set forth in the Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants, or their successors
which are applicable in the circumstances as of the date in question. The
requirement that such principles be applied on a consistent basis shall mean
that the accounting principles applied in a current period are comparable in all
material respects to those applied in connection with the preparation of the
Company's Annual Report on Form 10-K for the fiscal year ended December 29,
1998.
"Governmental Authority" means any federal, state, local or foreign
governmental, regulatory or administrative agency, authority, instrumentality or
commission or any court, tribunal or judicial or arbitral body.
"Government Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.
"Group" shall have the meaning assigned to it in Section 13(d)(3) of
the Exchange Act.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all indebtedness of such Person, whether or not contingent, for borrowed
money (including reimbursement obligations in respect of letters of credit,
guarantees or similar instruments), (b) all obligations of such Person for the
deferred purchase price of property or services, (c) all other indebtedness of
such Person evidenced by notes, bonds, debentures, letters of credit or other
similar instruments, (d) all obligations under leases required to be classified
and accounted for as capital leases in accordance with GAAP, and (e) all
indebtedness of others referred to in clauses (a) through (d) above guaranteed
directly or indirectly in any manner by such Person.
"Intellectual Property" means all intellectual property rights,
including, without limitation: (a) copyrights and copyrightable works, including
computer applications, programs, software, databases and related items, (b)
trademarks, service marks, trade names, brand names, product names, corporate
names and logos, and (c) all registrations, applications, recordings, licenses
or other agreements and common-law or other rights related to the foregoing.
"knowledge", with respect to any Person, shall mean the actual
knowledge of such Person, or in the case of the Company or its Subsidiaries, the
actual knowledge of the Persons listed on Schedule 1.1 hereto, in each case,
after reasonable inquiry (by at least one such Person) with respect to the facts
or matters specified.
"Material Adverse Effect" means a material adverse effect upon the
business, operations, properties, assets, liabilities, financial condition or
results of operations of the Company and its Subsidiaries, taken as a whole, or
on the ability of the parties hereto to perform their respective obligations
under this Agreement and the other Transaction Agreements (as defined below) and
to consummate the transactions consummated hereby and thereby; provided,
however, that an effect resulting from a change in GAAP or Financial Accounting
Standards Board or SEC interpretation thereof applicable to the Company shall
not be considered in determining if a Material Adverse Effect has occurred.
"Permits" means all licenses, permits, orders, consents, approvals,
registrations, authorizations, qualifications and filings with and under all
federal, state, local or foreign laws and Governmental Authorities and all
industry or other non-governmental self-regulatory organizations (including,
without limitation, all state and city operating licenses issued by the
regulatory authorities of the jurisdictions in which the Company transacts
business).
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivisions thereof or any Group comprised of two or more of the foregoing.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of the Common Stock.
"Transaction Agreements" means this Agreement, the Stockholders
Agreement and the Warrants (as defined in Section 2.2(b)(ii)).
The following terms shall have the meanings defined for such terms in the
sections set forth below:
TERM SECTION
---- ---------
00xx Xxxxxx Recitals
[CONFIDENTIAL TREATMENT REQUESTED]
CMBCV Recitals
CMBP Recitals
CMBP II Recitals
Code 4.12(c)
Common Stock Recitals
Company Recitals
Company IP 4.16(a)
Company Plans 4.12(a)
Company Reports 4.7
Contracts 3.4
Controlled Group 4.12(c)
COP Recitals
Damages 8.2 (a)
Deductible 8.3 (a)
Environmental Laws 4.18(d)
Environmental Permits 4.18(d)
Environmental Report 4.18(d)
ERISA 4.12(a)
Existing Shares 2.2 (a)
Existing Shares Purchase Price 2.2 (a)
First Closing 2.1 (a)
First Closing Date 2.1 (a)
Government Approval 3.5
HSR Approval 3.5
Improvements 4.15(b)
Indemnitee 8.4 (a)
Indemnitor 8.4 (a)
Initial New Shares 2.2 (b)
Initial New Shares Purchase Price 2.2 (b)
Insurance Policies 4.19
Initial Purchase 2.2 (b)
Initial Warrants 2.2 (b)
Land 4.15(b)
Law 3.4
Lease 4.15(a)
Leased Improvements 4.15(b)
Leased Properties 4.15(b)
Leasehold 4.15(a)
Litigation 4.14
Material Contracts 4.11
Materials of Environmental Concern 4.18(d)
Membership Contracts 4.15(a)
New Credit Agreement 4.3(f)
New Shares 2.2(b)
New Shares Purchase Price 2.2(b)
Notice 8.4(a)
Owned Properties 4.15(b)
Properties 4.15(b)
Purchasers Recitals
Second Closing 2.1 (b)
Second Closing Date 2.1 (b)
Selling Stockholders Recitals
Software 4.24
Stockholders Agreement Recitals
Subsequent New Shares 2.2 (b)
Subsequent New Shares Purchase Price 2.2 (b)
Subsequent Purchase 2.2 (b)
Subsequent Purchasers 2.2 (b)
Subsequent Warrants 2.2 (b)
Subsidiary 4.6 (a)
Tax Return 4.17(b)
Taxes 4.17(b)
Warrants 2.2 (b)
Year 2000 Compliant 4.24
SECTION 1.3. Other Definitional Provisions. (a) The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Article, Schedule, Section, and Exhibit references are to
this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
ARTICLE II
PURCHASE AND SALE
SECTION 2.1. The Closings.
(a) The First Closing. The closing (the "First Closing") of the
Initial Purchase (as defined in Section 2.2(b)(i)) as provided for in this
Agreement shall be held at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, five Business Days after the
conditions to the First Closing set forth in Sections 7.1(a) and 7.2(a) hereof
have been satisfied or waived (other than the conditions which by their terms
are to be satisfied at the First Closing), or at such other time, date and place
as shall be agreed upon by the parties hereto. The actual time and date of the
First Closing are herein called the "First Closing Date".
(b) The Second Closing. The closing (the "Second Closing") of the
Subsequent Purchase (as defined in Section 2.2(b)(ii)) as provided for in this
Agreement shall be held at the place set forth in Section 2.1(a), two Business
Days after the conditions to the Second Closing set forth in Sections 7.1(b) and
7.2(b) hereof have been satisfied or waived (other than the conditions which by
their terms are to be satisfied at the Second Closing), or at such other time,
date and place as shall be agreed upon by the Company and the Purchasers. The
actual time and date of the Second Closing are herein called the "Second Closing
Date".
SECTION 2.2. Purchase and Sale; Consideration
(a) Subscription and Purchase of Existing Shares. Upon the terms and
subject to the conditions of this Agreement, at the First Closing, each of the
Purchasers, severally and not jointly, hereby agrees to purchase from the
Selling Stockholders the number of Shares set forth opposite such Purchaser's
name on Schedule 2.2(a) (collectively, the "Existing Shares"), free and clear of
all Encumbrances, for a price of $16.00 per share, representing an aggregate
purchase price of $75.0 million (the "Existing Shares Purchase Price"). Each of
the Selling Stockholders, severally and not jointly, hereby agrees to sell and
deliver to the Purchasers against payment of the purchase price therefor in
immediately available funds the number of Shares set forth opposite such Selling
Stockholder's name on Schedule 2.2(a) for a purchase price of $16.00 per share.
Each Selling Stockholder shall sell and deliver its Existing Shares to the
particular Purchaser or Purchasers designated by the Purchasers.
(b) Subscription and Purchase of New Shares and the Warrants.
(i) First Closing. Upon the terms and subject to the conditions of
this Agreement, at the First Closing, each of the Purchasers hereby agrees to
purchase from the Company the number of Shares and warrants to purchase Shares
in the form of Exhibit B hereto (the "Initial Warrants") set forth opposite its
name on Schedule 2.2(b)(i), and the Company hereby agrees to issue, sell and
deliver to the Purchasers against payment of the purchase price in immediately
available funds an aggregate of 9,375,000 Shares (the "Initial New Shares") and
Initial Warrants to purchase 1,012,500 Shares (without giving effect to any
adjustment as provided in the Initial Warrants), in each case, free and clear of
all Encumbrances, for an aggregate purchase price of $150.0 million (the
"Initial New Shares Purchase Price"). The purchase by the Purchasers of the
Existing Shares, the Initial New Shares and the Initial Warrants is hereinafter
collectively referred to as the "Initial Purchase".
(ii) Second Closing. Upon the terms and subject to the conditions of
this Agreement, at the Second Closing, each of CMBP II, CMBCV and 00xx Xxxxxx
(collectively, the "Subsequent Purchasers") hereby agrees to purchase from the
Company the number of Shares and warrants to purchase Shares in the form of
Exhibit B hereto (the "Subsequent Warrants" and, collectively with the Initial
Warrants, the "Warrants") set forth opposite its name on Schedule 2.2(b)(ii),
and the Company hereby agrees to issue, sell and deliver to the Subsequent
Purchasers against payment of the purchase price in immediately available funds
an aggregate number of Shares determined in accordance with the next succeeding
sentence (the "Subsequent New Shares " and, collectively with the Initial New
Shares, the "New Shares") and Warrants to purchase an aggregate number of Shares
determined in accordance with the second succeeding sentence, in each case, free
and clear of all Encumbrances, for an aggregate purchase price of not less than
$50.0 million and not greater than $75.0 million (the "Subsequent New Shares
Purchase Price" and, collectively with the Initial New Shares Purchase Price,
the "New Shares Purchase Price"), as determined in accordance with Section
5.3(iv) of the Stockholders Agreement. At the Second Closing, the Company will
issue, sell and deliver to the Subsequent Purchasers and the Subsequent
Purchasers will purchase from the Company an aggregate number of Subsequent New
Shares equal to the quotient of the Subsequent New Shares Purchase Price divided
by $16.00. At the Second Closing, the Company will issue, sell and deliver to
the Subsequent Purchasers and the Subsequent Purchasers will purchase from the
Company Subsequent Warrants to purchase an aggregate number of Shares (without
giving effect to any adjustment as provided in the Subsequent Warrants) equal to
the product of the Subsequent New Shares Purchase Price multiplied by 0.0045.
The purchase by the Subsequent Purchasers of the Subsequent New Shares and the
Subsequent Warrants is hereinafter collectively referred to as the "Subsequent
Purchase".
SECTION 2.3. Closing Deliveries by the Company
(a) At the First Closing, the Company shall deliver to the Purchasers:
(i) certificates evidencing the Initial New Shares, registered in the
name of the applicable Purchaser;
(ii) the executed Initial Warrants;
(iii) a receipt for the Initial New Shares Purchase Price;
(iv) an executed Stockholders Agreement;
(v) the certificate required to be delivered pursuant to Section
7.1(a)(i);
(vi) the opinions required to be delivered pursuant to Section
7.1(a)(v); and
(vii) (A) a financing fee payable to the Purchasers or an Affiliate
of the Purchasers in an amount in cash equal to $2.25 million by wire transfer
of immediately available funds to a bank account or accounts to be designated by
the Purchasers in writing at least two Business Days prior to the First Closing
Date and (B) an amount representing the expenses of the Purchasers in accordance
with Section 10.1
(b) At the Second Closing, the Company shall deliver to the Subsequent
Purchasers:
(i) certificates evidencing the Subsequent New Shares, registered in
the name of the applicable Subsequent Purchaser;
(ii) the executed Subsequent Warrants;
(iii) a receipt for the Subsequent New Shares Purchase Price;
(iv) the certificate required to be delivered pursuant to Section
7.1(b)(i);
(v) the opinion required to be delivered pursuant to Section
7.1(b)(vii); and
(vi) a financing fee payable to the Subsequent Purchasers or an
Affiliate of the Subsequent Purchasers in an amount in cash equal to 1% of the
Subsequent New Shares Purchase Price by wire transfer of immediately available
funds to a bank account or accounts to be designated by the Subsequent
Purchasers in writing at least two Business Days prior to the Second Closing
Date.
SECTION 2.4. Closing Delivers by the Selling Stockholder. At the
First Closing, each of the Selling Stockholders shall deliver to the Purchasers:
(i) certificates evidencing the Existing Shares to be sold by such
Selling Stockholder pursuant to Section 2.2(a), duly endorsed for transfer or
accompanied by stock powers duly executed, in either case executed in blank or
in favor of the applicable Purchaser as designated in writing at least two
Business Days prior to the First Closing Date, and otherwise in a form
acceptable for transfer on the books of the Company;
(ii) a receipt for the applicable Existing Shares Purchase Price;
(iii) an executed Stockholders Agreement;
(iv) the certificate required to be delivered pursuant to Section
7.1(a)(i); and
(v) the opinions required to be delivered pursuant to Section
7.1(a)(v).
SECTION 2.5. Closing Deliveries by the Purchasers and the Subsequent
Purchasers.
(a) At the First Closing, each of the Purchasers shall deliver:
(i) to the Company:
(A) the Initial New Shares Purchase Price for the Initial New
Shares and the Initial Warrants to be purchased by such Purchaser pursuant to
Section 2.2(b)(i), by wire transfer of immediately available funds to a bank
account or accounts to be designated by the Company in writing at least two
Business Days prior to the First Closing Date;
(B) receipts for the Initial New Shares and the Initial Warrants
purchased by such Purchaser pursuant to Section 2.2(b)(i);
(C) an executed Stockholders Agreement;
(D) the certificate required to be delivered pursuant to Section
7.2(a)(i); and
(E) the opinions required to be delivered pursuant to Section
7.2(a)(v).
(ii) to each of the Selling Stockholders:
(A) the applicable Existing Shares Purchase Price for the
Existing Shares to be purchased by such Purchaser pursuant to Section 2.2(a), by
wire transfer of immediately available funds to a bank account or accounts to be
designated by the applicable Selling Stockholder in writing at least two
Business Days prior to the First Closing Date;
(B) receipts for the Existing Shares purchased by such Purchaser
pursuant to Section 2.2(a);
(C) an executed Stockholders Agreement;
(D) the certificate required to be delivered pursuant to Section
7.2(a)(i); and
(E) the opinions required to be delivered pursuant to Section
7.2(a)(v).
(b) At the Second Closing, each of the Subsequent Purchasers shall
deliver to the Company:
(i) the Subsequent New Shares Purchase Price for the Subsequent New
Shares and the Subsequent Warrants to be purchased by such Subsequent Purchaser
pursuant to Section 2.2(b)(ii), by wire transfer of immediately available funds
to a bank account or accounts to be designated by the Company in writing at
least two Business Days prior to the Second Closing Date;
(ii) receipts for the Subsequent New Shares and the Subsequent
Warrants purchased by such Subsequent Purchaser pursuant to Section 2.2(b)(ii);
(iii) the certificate required to be delivered pursuant to Section
7.2(b)(i); and
(iv) the opinion required to be delivered pursuant to Section
7.2(b)(vii).
ARTICLE III
REPRESENTATIONS AND WARRANTIES REGARDING THE SELLING
STOCKHOLDERS
Each of the Selling Stockholders, severally and not jointly, hereby
represents and warrants to the Purchasers as follows:
SECTION 3.1. Organization. Such Selling Stockholder, (a) if a trust,
has been duly established and is a valid trust under the laws of the State of
Texas and (b) if a corporation, has been duly incorporated and is validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each Selling Stockholder has provided to the Purchasers a
complete and correct copy of its certificate of incorporation and by-laws or
indenture creating the trust, as the case may be, and all amendments thereto, as
in effect on the date of this Agreement.
SECTION 3.2. Authority. If such Selling Stockholder is a trust, the
trustees of that trust have all necessary trust power and authority, and, if
such Selling Stockholder is a corporation, that corporation has all necessary
corporate power and authority to enter into this Agreement and the Stockholders
Agreement and has taken all action necessary to execute and deliver such
agreements, to consummate the transactions contemplated hereby and thereby and
to perform its obligations hereunder and thereunder. This Agreement and the
Stockholders Agreement have been or will be duly executed and delivered by such
Selling Stockholder. Assuming the due execution of this Agreement and the
Stockholders Agreement by the Company, the Purchasers and the other Selling
Stockholders (and, in the case of the Stockholders Agreement, by each of the
other stockholders of the Company party thereto), this Agreement constitutes and
the Stockholders Agreement will constitute legal, valid and binding obligations
of such Selling Stockholder, enforceable against it in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights, general equitable principles (whether considered
in a proceeding in equity or at law) and an implied covenant of good faith and
fair dealing.
SECTION 3.3. Title to Shares. Such Selling Stockholder is the record
and beneficial owner of the Existing Shares set forth opposite such Selling
Stockholder's name on Schedule 2.2(a), free and clear of all Encumbrances and
has full authority to sell such Existing Shares. Such Selling Stockholder is
not a party to any other agreement, and no such option, right or agreement
exists, that requires, or that may require, upon the passage of time, the
payment of money or the occurrence of any other event, such Selling Stockholder
to transfer any of such Existing Shares to anyone other than the Purchasers.
Upon consummation of the transactions contemplated hereby, such Selling
Stockholder will transfer good and valid title to the Existing Shares set forth
opposite such Selling Stockholder's name on Schedule 2.2(a) to the Purchasers,
free and clear of all Encumbrances (other than Encumbrances created by the
Purchasers or the Stockholders Agreement).
SECTION 3.4. Non-Contravention. Neither the execution or delivery of
this Agreement or the Stockholders Agreement by such Selling Stockholder nor the
performance by such Selling Stockholder of its obligations hereunder or
thereunder nor the consummation by such Selling Stockholder of the transactions
contemplated hereby or thereby, will result in (a) a violation of or a conflict
with the certificate of incorporation or by-laws of such Selling Stockholder or
the indenture creating such Selling Stockholder, (b) a breach or violation of,
or a default under (with or without notice or lapse of time or both), any term
or provision of, or any right of termination, cancellation, modification or
acceleration arising under, any note, bond, mortgage, indenture, license,
contract, commitment, arrangement, agreement, lease or other instrument or
obligation ("Contracts") or Permit to which such Selling Stockholder is a party
or is subject or by which any of its properties or assets are bound, (c) a
violation by such Selling Stockholder of any Government Order, or statute, law,
ordinance, rule or regulation, whether federal, foreign, state or local ("Law"),
to which such Selling Stockholder is subject or by which any of its properties
or assets are bound, or (d) the imposition of any Encumbrance on the business,
properties or assets of such Selling Stockholder or the Existing Shares owned by
it, except in the case of clauses (b), (c) and (d), for those breaches,
defaults, rights, violations or impositions which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
SECTION 3.5. Consents and Approvals. No consent, approval, order or
authorization of, notice to, or declaration, filing or registration with
("Government Approval") any Governmental Authority, or consent, approval or
waiver of any other Person, is required to be made or obtained by such Selling
Stockholder in connection with the execution, delivery and performance of this
Agreement or the Stockholders Agreement and the consummation of the transactions
contemplated hereby or thereby except those that have been made or obtained
prior to the date hereof, and except for the filing of all notices, reports and
other documents required by, and the expiration or termination of all waiting
periods under, the HSR Act ("HSR Approval"), and except for those Government
Approvals or consents, approvals or waivers of any other Person which,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
SECTION 3.6. Brokers. No broker, finder or investment banker is
entitled to any broker's, finder's or other fee or commission in connection with
the transactions contemplated by this Agreement and the other Transaction
Agreements based upon agreements or other arrangements made by or on behalf of
such Selling Stockholder, except for Xxxxxxx Xxxxx & Co., the fees of whom shall
be the responsibility of the Company, and the material terms of which have been
previously disclosed to the Purchasers.
SECTION 3.7. No Other Representations or Warranties. Except for the
representations and warranties contained in this Article III, none of the
Selling Stockholders nor any other Person has made or makes any other express or
implied representation or warranty, either oral or written, on behalf of any of
the Selling Stockholders.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY
The Company hereby represents and warrants to the Purchasers as
follows:
SECTION 4.1. Organization. The Company is a corporation duly
incorporated and validly existing and in good standing under the laws of the
State of Delaware and each of its Subsidiaries is a corporation, limited
liability company or limited partnership duly incorporated or organized (as the
case may be), validly existing and in good standing under the laws of the
jurisdiction of its organization, except where the failure of such Subsidiaries
to be in good standing, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect. The Company and each of its
Subsidiaries have full power and authority to conduct their respective
businesses as they are currently being conducted and to own, lease and operate
their respective properties and assets, except where the failure to have such
power and authority, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. The Company and each of its
Subsidiaries are duly qualified to do business as foreign entities and are in
good standing in each jurisdiction in which the character or location of the
properties and assets owned or operated by them or the nature of the businesses
conducted by them makes such qualification necessary, except where the failure
to be so qualified or in good standing, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect. The Company has
provided to the Purchasers a complete and correct copy of its certificate of
incorporation and by-laws, and all amendments thereto, as in effect on the date
of this Agreement.
SECTION 4.2. Authority. The Company has all necessary corporate
power and authority to enter into this Agreement and the other Transaction
Agreements and perform its obligations hereunder and thereunder and consummate
the transactions contemplated hereby and thereby and the Company has taken all
corporate action necessary to execute and deliver such agreements, to consummate
the transactions contemplated hereby and thereby and to perform its obligations
hereunder and thereunder. This Agreement and the other Transaction Agreements
have been or will be duly executed and delivered by the Company. Assuming the
due execution of this Agreement and the Stockholders Agreement by the Purchasers
and the Selling Stockholders (and, in the case of the Stockholders Agreement, by
each of the other stockholders of the Company party thereto), this Agreement
constitutes and the other Transaction Agreements will constitute legal, valid
and binding obligations of the Company, enforceable against it in accordance
with their terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing.
SECTION 4.3. Capitalization. (a) As of October 22, 1999, the
capitalization of the Company consisted of:
(i) 250,000,000 authorized shares of Common Stock, of which
85,003,740 shares were issued or outstanding;
(ii) 150,000,000 authorized shares of preferred stock of the Company,
of which no shares were issued or outstanding; and
(iii) no shares of any other class or series of capital stock were
authorized, issued or outstanding.
Since October 22, 1999, no shares of Common Stock have been issued,
other than upon the exercise of Company options described in Schedule 4.3(b) or
as otherwise described on Schedule 4.3(a). All of the outstanding Shares
(including, without limitation, the Existing Shares) have been duly and validly
authorized and validly issued and are fully paid and nonassessable and were not
issued in violation of, or subject to, any preemptive, subscription or other
similar rights of any other Person.
(b) Except as set forth on Schedule 4.3(b), and except for the
Warrants, there are no subscriptions, options, warrants, calls, commitments,
contracts, preemptive rights or other rights of any kind outstanding for the
purchase of, nor any securities convertible into or exchangeable for, any equity
interests of the Company, nor has the Company taken or agreed to take any action
to issue or grant the same. Except as set forth in the Stockholders Agreement
and except for redemption obligation pursuant to Section 6.05 of The ClubCorp
Employee Stock Ownership Plan, effective as of January 1, 1999, the Company is
not obligated to purchase, redeem or otherwise acquire any shares of its capital
stock or other equity interests. There are no restrictions upon the voting or
transfer of any Shares pursuant to the certificate of incorporation or by-laws
of the Company or, except as described on Schedule 4.3(b), any agreement or
other instrument to which the Company or any of its stockholders are a party or
by which the Company or, to the knowledge of the Company, any of the
stockholders of the Company are bound (other than the Stockholders Agreement).
Except as set forth on Schedule 4.3(b), the consummation of the transactions
contemplated by this Agreement will not trigger the anti-dilution provisions or
other price adjustment mechanisms of any outstanding subscriptions, options,
warrants, calls, commitments, contracts, preemptive rights, demands, conversion
rights or other agreements or arrangements of any character or nature whatsoever
under which the Company is or may be obligated to issue or acquire Shares or any
other capital stock.
(c) The New Shares and the Shares to be issued upon the exercise of
the Warrants have been duly and validly authorized and, when issued pursuant to
the terms of this Agreement and the Warrant, will be validly issued, fully paid
and nonassessable and shall be delivered to the Purchasers free and clear of all
Encumbrances (other than Encumbrances created by the Purchasers and the
Stockholders Agreement) and shall not be issued in violation of, nor subject to,
any preemptive, subscription or other similar rights of any other Person (other
than as set forth in the Stockholders Agreement). The Company has reserved for
issuance an aggregate of 1,350,000 Shares for issuance upon exercise of the
Warrants. The Warrants have been duly authorized and, on the First Closing Date
or the Second Closing Date, as the case may be, will be duly executed and
delivered by the Company and will constitute valid and legally binding
obligations of the Company, enforceable against the Company in accordance with
their terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied covenant
of good faith and fair dealing.
(d) Except as set forth on Schedule 4.3(d), and except for the
Stockholders Agreement, the Company has not granted or agreed to grant any
rights relating to the registration of its securities under applicable federal
and state securities laws, including piggyback rights.
(e) Except as set forth on Schedule 4.3(e), and except for the
Stockholders Agreement, neither the Company nor, to the knowledge of the
Company, any of its stockholders is a party to, or has knowledge of any, voting
trusts, proxies or any other agreements with respect to the voting of the
Shares.
(f) As of the date hereof, the only outstanding Indebtedness for
borrowed money of the Company and its Subsidiaries is (i) Indebtedness under the
First Amendment and Restated Credit Agreement, dated as of September 24, 1999,
among the Company, Bank of America, N.A., as administrative agent, and the other
lenders named therein (the "New Credit Agreement "), and (ii) the Indebtedness
set forth on Schedule 4.3(f). (i) There exists no default or event of default
(with or without notice or lapse of time or both) by the Company or any of its
Subsidiaries under the provisions of the New Credit Agreement and (ii) there
exists no default or event of default (with or without notice or lapse of time
or both) by the Company or any of its Subsidiaries under the provisions of any
instrument evidencing such other Indebtedness or of any agreement relating
thereto, that, in either case, permits or would reasonably be expected to result
in the counterparty thereto accelerating all or any part of such Indebtedness
except, in the case of clause (ii), where such acceleration, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
SECTION 4.4. Non-Contravention. Except as set forth on Schedule 4.4,
neither the execution or delivery of this Agreement or the other Transaction
Agreements by the Company nor the performance by the Company of its obligations
hereunder or thereunder nor the consummation by the Company of the transactions
contemplated hereby or thereby, will result in (a) a violation of or a conflict
with any provision of the certificate of incorporation or by-laws of the Company
or the organizational documents of any of its Subsidiaries, (b) a breach of, or
a default under (with or without notice or lapse of time or both), any term or
provision of, or any right of termination, cancellation or acceleration arising
under, any Contract or Permit to which the Company or any of its Subsidiaries is
a party or is subject or by which any of its properties or assets are bound, (c)
a violation by the Company or any of its Subsidiaries of any Government Order or
Law to which the Company or any of its Subsidiaries is subject or by which any
of its properties or assets are bound, or (d) the imposition of any Encumbrance
on the business, properties or assets of the Company or any of its Subsidiaries,
except in the case of clauses (b), (c) and (d), for those breaches, defaults,
rights, violations or impositions which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.
SECTION 4.5. Consents and Approvals. Except as set forth on Schedule
4.5, no Government Approval with any Governmental Authority, or consent,
approval or waiver of any other Person, is required to be made or obtained by
the Company in connection with the execution, delivery and performance of this
Agreement or the other Transaction Agreements and the consummation of the
transactions contemplated hereby or thereby except those that have been made or
obtained prior to the date hereof, and except for the HSR Approval, and except
for those Government Approvals or consents, approvals or waivers of any other
Person which, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect.
SECTION 4.6. Subsidiaries (a) As used herein, "Subsidiary" shall
mean (i) any corporation of which a majority of the securities entitled to vote
generally in the election of directors thereof, at the time as of which any
determination is being made, are owned by another entity, either directly or
indirectly and (ii) any joint venture, general or limited partnership, limited
liability company or other legal entity in which an entity is the record or
beneficial owner, directly or indirectly, of a majority of the voting interests
or the general partner;
[CONFIDENTIAL TREATMENT REQUESTED]
Schedule 4.6(a) accurately sets forth each Subsidiary of the Company, other than
Subsidiaries that, individually or in the aggregate, are not material to the
operations of the Company and its Subsidiaries, taken as a whole, including its
name, place of incorporation or formation, and if not wholly owned directly or
indirectly by the Company, the record ownership as of the date of this Agreement
of all capital stock or other equity interests issued thereby. All shares of
capital stock or other equity interests of any Subsidiary directly or indirectly
owned by the Company have been duly authorized and validly issued, are fully
paid, and, in the case of corporations, nonassessable and, except as set forth
on Schedule 4.6(a), are directly or indirectly owned by the Company free and
clear of all Encumbrances and have not been issued in violation of, nor subject
to, any preemptive, subscription or other similar rights of any other Person
(other than as described on Schedule 4.6(a)).
(b) Except as set forth on Schedule 4.6(b), there are no outstanding
subscriptions, options, warrants, calls, contracts, preemptive rights, demands,
commitments, conversion rights or other agreements or arrangements of any
character or nature whatsoever under which any Subsidiary of the Company is or
may be obligated to issue or acquire its capital stock or other equity
interests.
(c) Except as set forth on Schedule 4.6(c), there are no voting
trusts, proxies or any other agreements with respect to the voting of any
capital stock or other equity interests of any Subsidiary of the Company.
(d) Except for the Subsidiaries and as set forth on Schedule 4.6(d),
the Company does not own any capital stock, membership interests, security or
other interest in any other Person that is material, in the aggregate, to the
Company, and, except as set forth in Schedule 4.6(d), neither the Company nor
any of its Subsidiaries has any written, or to the knowledge of the Company,
oral understanding or agreement to provide funds to, or make any investment (in
the form of a loan, capital contribution or otherwise) in, any other Person that
is material, in the aggregate, to the Company, other than a wholly-owned
Subsidiary of the Company.
SECTION 4.7. SEC Reports. The Company has made available to the
Purchasers an accurate and complete copy of each report filed since January 1,
1997 by the Company with the SEC pursuant to the Exchange Act as amended or
supplemented (collectively, and in each case including all exhibits and
schedules thereto and documents incorporated by reference therein, the "Company
Reports"). As of its date of filing, each Company Report complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to such Company Report.
No such Company Report (including any and all financial statements included
therein) contained when filed or (except to the extent revised or superseded by
a subsequent filing with the SEC prior to the date hereof) contains any untrue
statement of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances in which they were made, not misleading.
Since January 1, 1997, the Company has filed all reports and other documents
required to be filed by it under the Securities Act and the Exchange Act on a
timely basis. The Company is not required to, and has not been required to,
register its Shares under the Exchange Act in accordance with the Exchange Act
and the rules and regulations promulgated by the SEC thereunder.
SECTION 4.8. Financial Information. Each of the consolidated
financial statements (including the notes thereto) included in the Company
Reports complied as to form, as of its date of filing with the SEC, in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, has been prepared in
accordance with GAAP applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly presents the
consolidated financial position of Company and its consolidated Subsidiaries as
of the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended. The books and records of Company and its
consolidated Subsidiaries have been, and are being, maintained in all material
respects in accordance with GAAP.
SECTION 4.9. No Undisclosed Liabilities. Except for (a) liabilities
included or reserved for in the audited consolidated balance sheet of the
Company included in its Annual Report on Form 10-K for the fiscal year ended
December 29, 1998 or the unaudited consolidated balance sheet of the Company
included in its Quarterly Report on Form 10-Q for the quarter ended September 7,
1999, each as filed with the SEC, (b) liabilities or obligations disclosed on
Schedule 4.9, (c) liabilities or obligations incurred since December 29, 1998 in
the ordinary course of business consistent with past practice, which are not, in
the aggregate, material to the Company and its Subsidiaries, taken as a whole,
and (d) obligations to be performed or satisfied after the date hereof under the
Material Contracts (as defined below), at December 29, 1998, neither Company nor
any of its Subsidiaries had, and since such date none of them has incurred, any
material liabilities or material obligations of any nature whatsoever (whether
accrued, absolute, contingent or otherwise and whether or not required to be
reflected in Company's financial statements in accordance with GAAP).
SECTION 4.10. Absence of Certain Changes or Events. (a) Except as
set forth in the Company Reports filed and publicly available prior to the date
hereof, since December 29, 1998, no event, change or circumstance has occurred
which has had, or would reasonably be expected to result in, individually or in
the aggregate, a Material Adverse Effect.
(b) Except as set forth in the Company Reports filed and publicly
available prior to the date hereof, since December 29, 1998, Company and its
Subsidiaries have carried on their respective businesses only in the ordinary
and usual course consistent with their past practices.
(c) Except as disclosed on Schedule 4.10(c) and in the Company
Reports filed and publicly available prior to the date hereof and except for the
execution of this Agreement, since December 29, 1998, the Company has not taken
any action or omitted to take any action and there has not occurred any event
which, if it had taken place following the First Closing, would not have been
permitted by Section 5.3 of the Stockholders Agreement (other than the actions
specified in clause (xiv) thereof) without the prior consent of the Purchasers.
SECTION 4.11. Certain Contracts and Agreements. All contracts
material to the business of the Company and its Subsidiaries to which the
Company or its Subsidiaries is a party as of the date hereof, including, but not
limited to, all (i) contracts requiring by their terms payments by or to the
Company or any of its Subsidiaries of, or the provision of services valued at,
amounts in excess of $15.0 million per year, which are not terminable by the
Company or any of its Subsidiaries upon 90 days' notice, (ii) management
contracts with respect to properties of third parties that are managed by the
Company or any of its Subsidiaries, (iii) partnership agreements and joint
venture agreements to which the Company or any of its Subsidiaries is a party
(including any management agreements relating thereto), (iv) employment,
severance or consulting agreements, (v) agreements granting to any third party a
right of first refusal, first offer or other right to purchase any of the
Properties, (vi) agreements materially limiting or restricting the ability of
the Company or any of its Subsidiaries to enter into or engage in any line of
business or any geographic area, (vii) agreements or contracts with any Selling
Stockholder or any other Affiliate of the Company or any Selling Stockholder
(other than agreements covered by clause (iv)), (viii) contracts or agreements
entered into within the last three years relating to the acquisition by the
Company or any of its Subsidiaries of any other Person or any investment
interests in any other Person or the disposition of any assets by the Company or
any of its Subsidiaries or any such investment interest, in each case, in an
amount in excess of $1.0 million, (ix) contracts or agreements under which the
Company or any of its Subsidiaries has outstanding Indebtedness in excess of
$5.0 million, and (x) contracts or agreements under which the Company or any of
its Subsidiaries has indemnification obligations, other than obligations in the
ordinary course of business (collectively, the "Material Contracts"), are set
forth on Schedule 4.11. Each of the Material Contracts is in full force and
effect, and, assuming the due authorization, execution and delivery thereof by
the counterparties thereto, is the legal, valid and binding obligation of the
Company or its Subsidiary, as the case may be, enforceable against it in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing, except where the failure to be
in full force and effect or be a legal, valid and binding obligation,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect. Except as set forth on Schedule 4.11, there are no
existing defaults, nor have any events or circumstances occurred which, with or
without notice or the lapse of time or both, would constitute defaults by the
Company or its Subsidiaries, or, to the knowledge of the Company, any other
party, under any of the Material Contracts, except for defaults as, individually
or in the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
SECTION 4.12. (a) Schedule 4.12 contains a true and complete list
of each "employee benefit plan" (within the meaning of section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
including, without limitation, multiemployer plans within the meaning of ERISA
section 3(37)), stock purchase, stock option, severance, employment,
change-in-control, fringe benefit, collective bargaining, bonus, incentive,
deferred compensation and all other employee benefit plans, agreements,
programs, policies or other arrangements, whether or not subject to ERISA
(including any funding mechanism therefor now in effect or required in the
future as a result of the transactions contemplated by this Agreement and the
other Transaction Agreements or otherwise), under which any employee or former
employee of the Company or any of its Subsidiaries has any present or future
right to benefits and under which the Company or any of its Subsidiaries has any
present or future liability. All such plans, agreements, programs, policies and
arrangements shall be collectively referred to as the "Company Plans".
(b) With respect to each Company Plan, the Company has made available
to the Purchasers a current, accurate and complete copy (or, to the extent no
such copy exists, an accurate description) thereof and, to the extent
applicable: (i) any related trust agreement or other funding instrument; (ii)
the most recent determination letter, if applicable; (iii) any summary plan
description and other written communications (or a description of any oral
communications) by the Company or any of its Subsidiaries to their employees
concerning the extent of the benefits provided under a Company Plan; and (iv)
for the two most recent years (A) the Form 5500 and attached schedules, (B)
audited financial statements and (C) actuarial valuation reports.
(c) (i) Each Company Plan has been established and administered in
substantial compliance with the applicable provisions of ERISA, the U.S.
Internal Revenue Code of 1986, as amended (the "Code"), and other applicable Law
and with the terms of such Company Plan; (ii) each Company Plan which is
intended to be qualified within the meaning of Code section 401(a) has received
a favorable determination letter as to its qualification, and to the knowledge
of the Company nothing has occurred, whether by action or failure to act, that
could reasonably be expected to cause the loss of such qualification; (iii) no
event has occurred and no condition exists that would subject the Company or any
of its Subsidiaries, either directly or by reason of their affiliation with any
member of their "Controlled Group" (defined as any organization which is a
member of a controlled group of organizations within the meaning of Code
sections 414(b), (c), (m) or (o)), to any tax, fine, lien, penalty or other
liability imposed by ERISA, the Code or other applicable Law which would be
material to the Company and its Subsidiaries, taken as a whole; (iv) no
"reportable event" for which the 30-day reporting requirement has not been
waived (as such term is defined in ERISA section 4043), "prohibited
transaction", that, assuming the taxable period of such transaction expired as
of the date hereof, could subject the Company or any Subsidiary to a tax or
penalty imposed by either Code section 4975 or ERISA section 502(i) in an
amount which would be material, or "accumulated funding deficiency" (as such
term is defined in ERISA section 302 and Code section 412 (whether or not
waived)) has occurred with respect to any Company Plan; (v) no Company Plan
provides retiree welfare benefits and neither the Company nor any of its
Subsidiaries have any obligation to provide any retiree welfare benefits other
than as required by section 4980B of the Code; and (vi) within the five years
prior to the date hereof, neither the Company nor any member of its Controlled
Group has engaged in, or is a successor or parent corporation to an entity that
has engaged in, a transaction described in sections 4069 or 4212(c) of ERISA.
(d) With respect to each of the Company Plans that is not a
multiemployer plan within the meaning of section 4001(a)(3) of ERISA but is
subject to Title IV of ERISA, as of the First Closing Date and the Second
Closing Date, the assets of each such Company Plan are at least equal in value
to the actuarially determined present value of all benefit liabilities within
the meaning of section 412 of the Code or section 302 of ERISA, based on the
actuarial methods and assumptions indicated in the most recent actuarial
valuation reports.
(e) With respect to any multiemployer plan (within the meaning of
ERISA section 4001(a)(3)) to which the Company, its Subsidiaries or any member
of their Controlled Group has any liability or contributes (or has within the
past 12 months contributed or had an obligation to contribute), none of the
Company, its Subsidiaries or any member of their Controlled Group has incurred
any withdrawal liability exceeding $5.0 million under Title IV of ERISA or would
be subject to such liability if, as of the First Closing Date and the Second
Closing Date, the Company, its Subsidiaries or any member of their Controlled
Group were to engage in a complete withdrawal (as defined in ERISA section 4203)
or partial withdrawal (as defined in ERISA section 4205) from any such
multiemployer plan.
(f) With respect to any Company Plan, (i) no actions, suits or claims
(other than routine claims for benefits in the ordinary course) are pending or,
to the knowledge of the Company, threatened, (ii) no facts or circumstances
exist that could reasonably be expected to give rise to any such actions, suits
or claims, and (iii) no written or oral communication has been received from the
U.S. Pension Benefit Guaranty Corporation in respect of any Company Plan subject
to Title IV of ERISA concerning the funded status of any such plan or any
transfer of assets and liabilities from any such plan in connection with the
transactions contemplated herein.
(g) No Company Plan exists that could result in the payment to any
present or former employee of the Company or any of its Subsidiaries of any
money or other property or accelerate or provide any other rights or benefits to
any present or former employee of the Company or any of its Subsidiaries as a
result of the transactions contemplated by this Agreement and the other
Transaction Agreements. There is no contract, plan or arrangement (written or
otherwise) covering any employee or former employee of the Company or any of its
Subsidiaries that, individually or collectively, could give rise to the payment
of any material amount that would not be deductible pursuant to the terms of
section 280G of the Code.
(h) The Company constitutes an "operating company" as defined in 29
CFR Section 2510.3-101(c).
SECTION 4.13. Compliance with Law; Other Instruments. (a) Except as
set forth on Schedule 4.13(a), the Company and its Subsidiaries are in
compliance with, and are not in default under, all applicable Laws and
Government Orders except for such failures to be in compliance or such defaults
which, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect. The Company and its Subsidiaries have not
received any notice of, and to the knowledge of the Company, no investigation or
review is in process or threatened by any Governmental Authority with respect
to, any material violation or alleged material violation of any Law or
Government Order.
(b) Except as set forth on Schedule 4.13(b), the Company and its
Subsidiaries hold all Permits necessary for the ownership and conduct of their
respective businesses in each of the jurisdictions in which they conduct or
operate their respective businesses in the manner now conducted and all of such
Permits are in full force and effect, except for those failures to hold or to
remain in full force and effect which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect. There are no
pending or, to the knowledge of the Company, threatened, suits, actions,
proceedings or investigations with respect to the possible revocation,
cancellation, suspension, limitation or nonrenewal of any such Permits, and
there has occurred no event which (whether with notice or lapse of time or both)
could reasonably be expected to result in or constitute the basis for such a
revocation, cancellation, suspension, limitation or nonrenewal thereof, except
in such cases where such revocation, cancellation, suspension, limitation or
nonrenewal, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect.
SECTION 4.14. Litigation. Except as disclosed on Schedule 4.14,
there is no action, order, writ, injunction, judgment, fine or decree
outstanding or suit, litigation, proceeding, arbitral action, investigation or
claim ("Litigation"), including, without limitation, those involving any
Governmental Authority, pending or, to the knowledge of the Company, threatened
by or against or relating to (a) the Company or any of its Subsidiaries, which,
if adversely determined, would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, or (b) the transactions contemplated
by this Agreement and the other Transaction Agreements, nor does the Company
have any knowledge of any event which could lead to any such Litigation.
SECTION 4.15. Real Property. (a) Except as, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect:
(i) Owned Properties. Except for the Encumbrances described in
Section 4.15(a)(iv) or disclosed on Schedule 4.15(a)(i), the Company and its
Subsidiaries own good and marketable fee simple title to all of the Owned
Properties, free and clear of any liens or security interests;
(ii) Leased Properties. (1) Except for the Encumbrances described in
Section 4.15(a)(iv) and except as set forth on Schedule 4.15(a)(ii)(1), the
Company or its Subsidiary identified therein holds a valid leasehold interest
(each, a "Leasehold") in the Leased Properties described on Schedule 4.15(e)(ii)
pursuant to a valid lease or ground lease (each, a "Lease"), (2) each of the
Leases is in full force and effect, (3) the Company or its Subsidiary which is
the lessee under each Lease is not in default under any such Lease in respect of
any monetary obligation or otherwise, subject however to obtaining the consents
identified on Schedule 4.15(a)(ii)(3) as it relates to the Leases, (iv) each of
the Leases represents the agreement between the Company or its Subsidiary and
the lessor thereunder with respect to the applicable Leasehold, and (v) the
Company or its Subsidiary which is the lessee under each Lease enjoys peaceable
and quiet possession thereunder;
(iii) Improvements in Operable Condition. All Improvements and
Leased Improvements are in operable condition and are free from defects or
damage which would render them unfit for their continued use in the manner in
which they currently are used. All water, sewer, gas, electric, telephone,
access and drainage facilities and all other utilities required by Law and by
the normal operation of the Improvements (1) are available to the Improvements
with valid permits (where required), and (2) are adequate to service the
Improvements for their intended purposes and to permit compliance in all
respects with all applicable Law;
(iv) Encumbrances. Except as set forth below and as set forth on
Schedule 4.15(a)(iv), the Properties are not subject to any Encumbrances except
for (1) Encumbrances identified in the Company Reports filed and publicly
available prior to the date hereof, (2) Encumbrances imposed or promulgated by
Law or any Governmental Authority with respect to real property, including
Encumbrances for Taxes, assessments or other governmental charges not yet due
and payable or due but not delinquent or being contested in good faith by
appropriate proceedings; and (3) mechanics', carriers', workmen's, repairmen's
or other like liens arising or incurred in the ordinary course of business;
provided that the same which relate to amounts owed in excess of $25,000 are
being contested in good faith by appropriate proceedings;
(v) Condemnation. There is no pending or, to the knowledge of the
Company, threatened condemnation, expropriation, eminent domain or similar
proceeding affecting all or any part of the Properties, and the Company and its
Subsidiaries have not received any written or oral notice of any of the same or
have any knowledge that any such proceeding is contemplated;
(vi) Access. The Company and its Subsidiaries have, or have obtained
all easements and rights of way required from all Governmental Authorities or
from private parties for the normal use and operation of the Properties and to
ensure adequate vehicular and pedestrian ingress and egress from each such
Property; and
(vii) Memberships. Except as set forth on Schedule 4.15(a)(vii),
the Company and its Subsidiaries are not in default under any membership
contract or other agreement, direct or indirect, written or verbal, which gives
rights with regard to the use of any of the Properties to any party ("Membership
Contracts"), nor, to the knowledge of the Company, is any member in default of
its obligations under any Membership Contract.
(b) No memberships pertaining to any club or golf course located at
any Property have been issued in violation of any federal or state securities
laws or regulations.
(c) Except as set forth on Schedule 4.15(c), no member of any club or
golf course located at any Property has any ownership interest in any part of
such Property granted by such member's membership contract or by the applicable
club's or golf course's by-laws.
(d) The Properties constitute all of the material real property which
is either owned or leased by the Company and its Subsidiaries.
(e) For purposes of this Agreement, the terms below are defined as
follows:
(i) "Owned Properties" means: (1) the real property set forth on
Schedule 4.15(e)(i)(1) hereto (the "Land"); (2) all existing buildings,
structures and other improvements, located upon the Land, including without
limitation all hotels, conference center buildings, restaurants, athletic
buildings, clubhouse buildings, maintenance facilities, golf courses, driving
ranges, practice areas, landscaping improvements, man-made lakes, irrigation
systems (including sprinklers, pipe, and fittings), lakeliners, pumps, flood
control works, paving, walkways, road improvements, parking facilities and all
other improvements of whatever kind owned by the Company and its Subsidiaries
which have previously been made, installed or erected and are now located on the
Land (collectively, the "Improvements"); and (3) all appurtenances,
hereditaments, easements, reversionary rights, and all other rights, privileges,
and entitlements belonging to or running with the Land; and
(ii) "Leased Improvements" include all existing buildings, structures
and other improvements located upon each of the parcels of real property
comprising a golf facility, resort, or athletic club or other business facility
leased by the Company and its Subsidiaries as set forth on Schedule 4.15(e)(ii)
hereto (the "Leased Properties"), which buildings, structures and other
improvements include without limitation all hotels, conference center buildings,
restaurants, athletic buildings, clubhouse buildings, maintenance facilities,
golf courses, driving ranges, practice areas, landscaping improvements, man-made
lakes, irrigation systems (including sprinklers, pipes and fittings),
lakeliners, pumps, flood control works, paving, walkways, road improvements,
parking facilities, and all other improvements of whatever kind owned by the
Company and its Subsidiaries which have previously been made, installed or
erected and are now located on such Leased Properties (collectively, the "Leased
Improvements," and together with the Leaseholds, the Improvements, the Owned
Properties and the Leased Properties, the "Properties").
SECTION 4.16. Intellectual Property (a) Schedule 4.16(a) sets forth
a complete and accurate list of all material Intellectual Property that the
Company and its Subsidiaries own or are licensed to use (in each case, as set
forth on Schedule 4.16(a)) (the "Company IP"). All of the Company IP is valid,
enforceable, unexpired, is free of Encumbrances, has not been abandoned and, to
the knowledge of the Company, does not infringe or otherwise impair the
Intellectual Property of any third party. The Company IP constitutes
substantially all of the Intellectual Property used in or necessary for the
conduct of its business as currently conducted.
(b) The Company has not licensed or otherwise granted to others any
rights to use the Company IP except as set forth on Schedule 4.16(b).
(c) To the knowledge of the Company, the use of the Company IP by the
Company does not infringe on or otherwise violate the rights of any Person and
is in accordance with any applicable licenses pursuant to which the Company
acquired the right to use such Intellectual Property.
(d) Except as disclosed on Schedule 4.16(d) and to the Company's
knowledge, no Person is challenging, infringing on or otherwise violating any
right of the Company with respect to the Company IP, and no Government Order has
been rendered or is, to the knowledge of the Company, threatened, by any
Governmental Authority that would limit, cancel or question the validity of the
right of the Company or any Subsidiary to own or use any Company IP.
SECTION 4.17. Tax Matters. (a) Except as set forth on Schedule
4.17(a), (i) all material Tax Returns that are required to be filed by or with
respect to the Company and its Subsidiaries have been duly filed, (ii) all
material Taxes of the Company and its Subsidiaries due and payable, whether or
not shown on the Tax Returns referred to in clause (i), have been paid in full,
(iii) the Tax Returns referred to in clause (i) have been examined by the
Internal Revenue Service or the appropriate state, local or foreign taxing
authority or the period for assessment of the Taxes in respect of which such Tax
Returns were required to be filed has expired, (iv) all material deficiencies
asserted or assessments made as a result of such examinations have been paid in
full, (v) no material issues that have been raised by the relevant taxing
authority in connection with the examination of any of the Tax Returns referred
to in clause (i) are currently pending, (vi) no waiver of statutes of limitation
have been given by or requested with respect to any Taxes of the Company or its
Subsidiaries, (vii) there are no liens for Taxes on any asset of the Company or
any of its Subsidiaries other than for current Taxes not yet due and payable, or
if due, (A) not delinquent or (B) being contested in good faith by appropriate
proceedings, (viii) no consent has been filed relating to the Company or any of
its Subsidiaries pursuant to Section 341(f) of the Code, and (ix) the federal
taxable net operating loss of the Company and its Subsidiaries is not subject to
a limitation under Section 382 of the Code, and will not be subject to such a
limitation as a result of the transactions contemplated by this Agreement and
the other Transaction Agreements.
(b) For purposes of this Agreement, the terms below are defined as
follows:
(i) "Taxes" means all taxes, charges, fees, levies, penalties or
other assessments imposed by any United States federal, state, local or foreign
taxing authority, including, but not limited to, income, excise, property, sales
and use, transfer, franchise, payroll, withholding, social security or other
taxes, including any interest, penalties or additions attributable thereto.
(ii) "Tax Return" means any return, report, information return or
other document (including any related or supporting information) filed or
required to be filed with any taxing authority with respect to Taxes.
SECTION 4.18. Environmental Laws. (a) Except as disclosed on
Schedule 4.18 hereto or as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect: (i) the Company and
its Subsidiaries comply and have complied, during all applicable statute of
limitations periods, with all applicable Environmental Laws; and possess and
comply, and have possessed and complied during all applicable statute of
limitations periods, with all Environmental Permits; (ii) there are and have
been no releases of Materials of Environmental Concern or other physical
conditions at any property owned, operated, or otherwise used by the Company or
any of its Subsidiaries, now or, to the knowledge of the Company, in the past,
or, to the knowledge of the Company, at any other location (including without
limitation any facility to which Materials of Environmental Concern from the
Company or any of its Subsidiaries or the Properties have been sent), that could
reasonably be expected to give rise to any liability of or costs to the Company
or any of its Subsidiaries arising out of any Environmental Law; (iii) no
judicial, administrative, or arbitral proceeding (including any notice of
violation or alleged violation), under any Environmental Law or with respect to
any Materials of Environmental Concern to which the Company or any of its
Subsidiaries is, or to the knowledge of the Company will be, named as a party,
or affecting the Properties, is pending or, to the knowledge of or the Company,
threatened; nor is the Company or any of its Subsidiaries the recipient of any
request for information or, to the knowledge of the Company, the subject of any
investigation, in connection with any such proceeding or potential proceeding;
(iv) there are no (A) orders, judgments, decrees, or agreements with any
Governmental Authority under any Environmental Law or with respect to any
Materials of Environmental Concern or (B) agreements with any Person to
investigate or remediate any Materials of Environmental Concern, in either case,
to which the Company or any of its Subsidiaries is a party or affecting the
Properties; (v) to the knowledge of the Company, there are no events,
conditions, circumstances, practices, plans, or legal requirements (in effect or
reasonably anticipated), that would be reasonably likely within the next five
years to prevent the Company or any of its Subsidiaries from, or materially
increase the burden on the Company or any of its Subsidiaries of: (A)
complying with applicable Environmental Laws, or (B) complying with all
Environmental Permits; and (vi) to the knowledge of the Company, each of the
foregoing representations and warranties is true and correct with respect to any
entity for which the Company or any of its Subsidiaries has assumed or retained
liability, whether by contract or operation of law.
(b) The Company has furnished to the Purchasers true and complete
copies of all Environmental Reports.
(c) This Section 4.18 contains the only representations and
warranties of the Company and its Subsidiaries in this Agreement relating to any
Environmental Law or Materials of Environmental Concern.
(d) For purposes of this Agreement, the terms below are defined as
follows:
(i) "Environmental Laws" means any and all Laws of any Governmental
Authority, regulating, relating to or imposing liability or standards of conduct
concerning protection of the environment or of human health, or employee health
and safety as it relates to the presence of or exposure to any substances of any
kind.
(ii) "Environmental Permits" means any and all Permits and any other
authorizations required of the Company under any Environmental Law.
(iii) "Environmental Report" means any environmental report, study,
assessment, audit, or other similar document in the possession or control of the
Company or any of its Subsidiaries that primarily concerns any issue of actual
or potential noncompliance with, actual or potential liability under or cost
arising out of, or actual or potential impact on business in connection with,
any Environmental Law or any proposed or anticipated change in or addition to
Environmental Law, that may affect the Company or any of its Subsidiaries or any
entity for which it may be liable.
(iv) "Materials of Environmental Concern" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances of any kind, whether or
not any such substance is defined as hazardous or toxic under any Environmental
Law, that is regulated pursuant to or could reasonably be expected to give rise
to liability under any Environmental Law.
SECTION 4.19. Insurance. The Company maintains policies of fire,
flood and casualty, general liability, errors and omissions, directors and
officers liability and other forms of insurance in such amounts, with such
deductibles and against such risks and losses as are set forth on Schedule 4.19
(the "Insurance Policies"). (i) All such Insurance Policies are sufficient for
compliance in all material respects with Law, Leases and all other material
agreements to which the Company or any of its Subsidiaries is a party and are
reasonable for the business and assets of the Company and its Subsidiaries and
the Properties, (ii) all such Insurance Policies are in full force and effect,
and all premiums due and payable thereon have been paid and the Company and its
Subsidiaries have complied with the provisions of such Insurance Policies, (iii)
no insurer under any such policy has canceled or generally disclaimed liability
under any such policy or indicated any intent to do so or to increase the
premiums payable under or not renew any such policy and (iv) to the knowledge of
the Company, there is no fact or circumstance that could invalidate the
Insurance Policies or make them unenforceable, except, in the case of clauses
(ii), (iii) and (iv), as, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect.
SECTION 4.20. Brokers. No broker, finder or investment banker is
entitled to any broker's, finder's or other fee or commission in connection with
the transactions contemplated by this Agreement and the other Transaction
Agreements based upon agreements or other arrangements made by or on behalf of
the Company, except for Xxxxxxx Xxxxx & Co., the fees of whom shall be the
responsibility of the Company, and the material terms of which have been
previously disclosed to the Purchasers.
SECTION 4.21.Transactions with Affiliates. Except as set forth in the
Company Reports filed and publicly available prior to the date hereof and as set
forth on Schedule 4.21 and except for the Stockholders Agreement, since December
29, 1998, there have been no contracts, agreements, arrangements or
understandings of any kind between any Selling Stockholder or any Affiliate of
such Selling Stockholder, any of the other stockholders party to the
Stockholders Agreement or a member of such stockholder's immediate family, any
officer or director of the Company or any of its Subsidiaries or any other
Affiliate of the Company (other than a Subsidiary of the Company), on the one
hand, and the Company or any of its Subsidiaries, on the other hand, that would
be required to be disclosed under Item 404 of Regulation S-K under the
Securities Act.
SECTION 4.22. No Conflicting Interests of SellingStockholders. To
the Company's knowledge and except as set forth on Schedule 4.22, no Selling
Stockholder or any of the other stockholders party to the Stockholders Agreement
nor any member of such stockholder's immediate family has any interest, direct
or indirect, in, or any material relationship with, any business other than the
Company which is or would reasonably be expected to become competitive with, the
business of the Company as conducted on the date of this Agreement.
SECTION 4.23. Labor Matters. Except as set forth on Schedule 4.23,
neither the Company nor any of its Subsidiaries is a party to any collective
bargaining agreement or other contract or agreement with any labor organization
or other representative of any of the Company's or any of its Subsidiaries'
employees, nor is there pending or, to the knowledge of the Company, threatened
any strike, walkout or other work stoppage or any union organizing effort by or
respecting any of the Company's or any of its Subsidiaries' employees, and the
Company and its Subsidiaries have not experienced any such labor controversy
within the past three years.
SECTION 4.24. Labor Matters Except as set forth on Schedule 4.24, to
the knowledge of the Company, (a) except for Software described in clause (b) of
this Section 4.24, all computer hardware, software, databases and systems and
all other automated systems and other equipment (collectively, "Software")
owned, held, and/or used by the Company and its Subsidiaries can be used prior
to, during and after the calendar year 2000 A.D., and will operate in all
material respects during each such time period, either on a stand-alone basis,
or by interacting or interoperating with third-party Software without error
relating to the processing, calculating, comparing, sequencing or other use of
date data, including any errors relating to the occurrence or non-occurrence of
a "leap year" in 1900 or 2000 (the foregoing ability, "Year 2000 Compliant");
(b) for any Software that is not Year 2000 Compliant, the Company expects such
Software to be Year 2000 Compliant sufficiently promptly so as to avoid any
disruption or harm to the business or operations of the Company; and (c) the
Company and its Subsidiaries have taken all reasonable measures to address the
impact that the year 2000 date change may have on other computer software
licensed and/or used by them and have assigned resources reasonably believed to
be necessary to the execution of any necessary remediation efforts to provide
uninterrupted millennium functionality to record, store, process and present
calendar dates falling on or after January 1, 2000 in substantially the same
manner and with the same functionality as such software records, stores,
processes and presents such calendar dates falling on or before December 31,
1999.
SECTION 4.25. No Other Representations or Warranties. Except for the
representations and warranties contained in this Article IV, neither the Company
nor any of its Subsidiaries nor any other Person has made or makes any other
express or implied representation or warranty, either oral or written, on behalf
of the Company or its Subsidiaries.
ARTICLE V
REPRESENTATIONS AND WARRANTIES REGARDING THE PURCHASERS
Each of the Purchasers, severally and not jointly, hereby represents
and warrants to the Company and the Selling Stockholders as follows:
SECTION 5.1. Organization. Such Purchaser is duly organized, validly
existing and in good standing as a limited partnership under the laws of the
jurisdiction of its organization.
SECTION 5.2. Authority. Such Purchaser has all necessary limited
partnership power and authority to enter into this Agreement and the
Stockholders Agreement and has taken all action necessary to execute and deliver
such agreements, to consummate the transactions contemplated hereby and thereby
and to perform its obligations hereunder and thereunder. This Agreement and the
Stockholders Agreement have been or will be duly executed and delivered by such
Purchaser. Assuming the due execution of this Agreement and the Stockholders
Agreement by the Company, the other Purchasers and the Selling Stockholders
(and, in the case of the Stockholders Agreement, by each of the other
stockholders of the Company party thereto), this Agreement constitutes and the
Stockholders Agreement will constitute legal, valid and binding obligations of
such Purchaser, enforceable against it in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
SECTION 5.3. Non-Contravention. Neither the execution and delivery
of this Agreement or the Stockholders Agreement by such Purchaser nor the
performance by such Purchaser of its obligations hereunder or thereunder nor the
consummation by such Purchaser of the transactions contemplated hereby or
thereby, will result in (a) a violation of or a conflict with any provision of
the limited partnership agreement of such Purchaser, (b) a breach or violation
of, or a default under (with or without notice or lapse of time or both), any
term or provision of, or any right of termination, cancellation, modification or
acceleration arising under, any Contract or Permit to which such Purchaser is a
party or is subject or by which any of its properties or assets are bound, (c) a
violation by such Purchaser of any Government Order or Law to which such
Purchaser is subject or by which any of its properties or assets are bound, or
(d) the imposition of any Encumbrance on the business, properties or assets of
such Purchaser, except in the case of clauses (b), (c) and (d), for those
breaches, defaults, rights, violations or impositions which, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
SECTION 5.4. Consents and Approvals. No Government Approval with any
Governmental Authority, or consent, approval or waiver of any other Person, is
required to be made or obtained by such Purchaser in connection with the
execution, delivery and performance of this Agreement or the Stockholders
Agreement and the consummation of the transactions contemplated hereby or
thereby except those that have been made or obtained prior to the date hereof,
and except for the HSR Approval, and except for those Government Approvals or
consents, approvals or waivers of any other Person which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
SECTION 5.5. Purchase for Investment. Such Purchaser acknowledges
that the Shares and Warrants have not been registered under the Securities Act
or under any state securities laws. Such Purchaser (a) is acquiring its
respective Shares and Warrants pursuant to an exemption from registration under
the Securities Act solely for investment with no present intention to distribute
any of its Shares or Warrants to any Person, (b) will not sell or otherwise
dispose of any of its Shares or Warrants, except in compliance with the
registration requirements or exemption provisions of the Securities Act and any
other applicable securities laws and (c) has such knowledge and experience in
financial and business matters and in investments of this type that it is
capable of evaluating the merits and risks of its investment in the Shares and
the Warrants and of making an informed investment decision.
SECTION 5.6. Financial Capability. On the First Closing Date and the
Second Closing Date, such Purchaser will have sufficient funds to make the
Initial Purchase and the Subsequent Purchase, respectively, on the terms and
conditions contemplated by this Agreement.
SECTION 5.7. No Other Representations or Warranties, Except for the
representations and warranties contained in this Article V, neither such
Purchaser nor any other Person has made or makes any other express or implied
representation or warranty, either oral or written, on behalf of such Purchaser.
SECTION 5.8. Brokers. No broker, finder or investment banker is
entitled to any broker's, finder's or other fee or commission in connection with
the transactions contemplated by this Agreement and the other Transaction
Agreements based upon agreements or other arrangements made by or on behalf of
such Purchaser.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1. Conduct of Business Prior to the First Closing. Except
as contemplated by this Agreement and the other Transaction Agreements and
except as set forth on Schedule 6.1 or consented to in writing by the
Purchasers, prior to the First Closing, the Company and its Subsidiaries shall
conduct their respective businesses in all material respects only in the
ordinary course and consistent with past practice, shall use all reasonable
efforts to preserve substantially intact their respective business
organizations, and shall use all reasonable efforts consistent with past
practices to preserve their respective relationships with members of golf
courses and city clubs and other Persons with whom the Company or any of its
Subsidiaries has business dealings and keep available the services of their
present employees to the extent material to the operation of the businesses of
the Company and its Subsidiaries. Without limiting the generality of the
foregoing, except as contemplated by this Agreement and the other Transaction
Agreements, prior to the First Closing neither the Company nor any of its
Subsidiaries shall do any of the following without the prior written consent of
the Purchasers:
(a) amend the certificate of incorporation or by-laws of the Company;
(b) (i) sell, lease, transfer, mortgage, encumber or otherwise
dispose of any of the Company's or its Subsidiaries properties or assets, in one
transaction or a series of related transactions, including, without limitation,
capital stock in any Subsidiaries of the Company, to any Person other than its
wholly-owned Subsidiaries, except for such properties or assets having an
aggregate fair market value, as determined in good faith by the Board, of less
than $30.0 million or (ii) the transfer of properties or assets to joint
ventures, partnerships, corporations or other business entities in which it is
or thereby becomes a participant, except for such properties or assets having an
aggregate fair market value, as determined in good faith by the Board, of less
than $25.0 million;
(c) merge or consolidate (in the case of the Company) or sell,
directly or indirectly, all or substantially all of the Company's assets;
(d) (i) acquire (directly or through any of its Subsidiaries) by
merging or consolidating with, or by purchasing all or a substantial portion of
the stock or assets of, or by any other manner acquiring, any business,
properties, assets or Person, in one transaction or a series of related
transactions, for consideration (including assumed debt) in excess of $50.0
million in the aggregate or (ii) make any investment in any other Person, in one
transaction or a series of related transactions, in excess of $10.0 million in
the aggregate;
(e) incur of any Indebtedness (other than (1) short-term
Indebtedness incurred to refinance existing short-term Indebtedness or otherwise
incurred in the ordinary course of business consistent with past practice, (2)
Indebtedness incurred under the New Credit Agreement, as in effect on the date
hereof, and (3) Indebtedness of the Company or any of its Subsidiaries to the
Company or any of its wholly-owned Subsidiaries), assume, guarantee, endorse or
otherwise as an accommodation become responsible for the obligations of any
other Person, or make any loan, advance or capital contribution (other than to
the Company or any of its wholly-owned Subsidiaries) in excess of $25.0 million
in the aggregate;
(f) make or commit to make any capital expenditures in excess of $50.0
million in the aggregate;
(g) redeem, repurchase or prepay any Indebtedness of the Company or
any of its Subsidiaries prior to its scheduled maturity, or amend or modify the
terms of any Indebtedness existing on the date hereof or incurred hereafter in
compliance with the provisions of this Section 6.1, in each case, except with
respect to Indebtedness of less than $20.0 million in the aggregate;
(h) make, declare, set aside or pay of any dividend or make any other
distribution on, or directly or indirectly redeem, purchase or otherwise
acquire, any shares of its capital stock or other equity interests (or those of
any of its Subsidiaries) or any securities or obligations convertible into or
exchangeable for any shares of its capital stock or other equity interests
(other than dividends by a wholly-owned Subsidiary of the Company to the Company
or any other wholly-owned Subsidiary);
(i) enter into any direct or indirect transaction by the Company or
any of its Subsidiaries with an Affiliate of the Company, any Selling
Stockholder or any of the other stockholders of the Company party to the
Stockholders Agreement or a family member or an Affiliate thereof (including
without limitation, the purchase, sale, lease or exchange of any property, or
rendering of any service or modification or amendment of any existing agreement
or arrangement), other than a transaction which satisfies all three of the
following criteria: such transaction (i) is in the ordinary course of business,
(ii) involves or has a potential value of $5.0 million or less and (iii) is no
less favorable to the Company than an arm's-length transaction with a third
party which is not such a party as determined in good faith by the Board;
(j) (i) remove or elect any Chief Executive Officer or a similar
officer whose responsibility is executive oversight of the Company's and its
Subsidiaries' operations or (ii) approve any new, or modify any existing,
executive, officer and director compensation plans or agreements offered by the
Company or any of its Subsidiaries;
(k) commence, undertake or engage in any new line of business or
otherwise materially change the nature of the business engaged in by the Company
and its Subsidiaries on the date hereof;
(l) commence any proceeding or file any petition in any court relating
to bankruptcy, reorganization, insolvency, liquidation or relief from debtors
involving the Company;
(m) settle or compromise any Litigation (whether or not commenced
prior to the date of this Agreement), other than settlements or compromises of
Litigation where the amount paid does not exceed $15 million for any single
Litigation matter or related group of Litigation matters (provided such
settlement or compromise agreements do not involve any material non-monetary
obligations on the part of Company or any of its Subsidiaries);
(n) issue or sell any Common Stock of the Company or other equity
interests in the Company (except, in each case, under the Company Plans, as
currently in effect on the date hereof);
(o) make any change in any method of accounting or accounting
practice or policy except as required by changes in GAAP and with the
concurrence of its independent accountants;
(p) take any action which would reasonably be expected to cause any
representation or warranty of the Company contained in this Agreement to be or
become untrue at the First Closing in any material respect; or
(q) agree to, or make any commitment to, take, or authorize, any of
the actions prohibited by this Section 6.1.
SECTION 6.2. Regulatory and Other Authorizations; Notices and
Consents. (a) Each of the Company and the Selling Stockholders shall promptly
make any and all filings which it is required to make under the HSR Act for the
sale of the New Shares and the Existing Shares, respectively, and the exercise
of the Warrants, and the Company and the Selling Stockholders agree to furnish
the Purchasers with such necessary information and reasonable assistance as the
Purchasers may reasonably request in connection with their preparation of any
necessary filings or submissions to the Federal Trade Commission ("FTC") or the
Antitrust Division of the U.S. Department of Justice (the "Antitrust Division"),
including, without limitation, any filings or notices necessary under the HSR
Act. Any such actions with respect to the exercise of the Warrants shall be
taken by the Company or the Selling Stockholders, as the case may be, at such
times as the Purchasers reasonably shall so request. The Company and the
Selling Stockholders shall each, at its own expense, utilize all reasonable
efforts to respond to any request for additional information, or other formal or
informal request for information, witnesses or documents which may be made by
any Governmental Authority pertaining to the Company with respect to the sale of
the New Shares and the Existing Shares, respectively, and the exercise of the
Warrants, and shall keep the Purchasers fully apprised of their actions with
respect thereto.
(b) Each of the Purchasers shall promptly make any and all filings
which it is required to make under the HSR Act with respect to the purchase of
the New Shares and the Existing Shares, and the exercise of the Warrants, and
the Purchasers agree to furnish the Selling Stockholders and the Company with
such necessary information and reasonable assistance as they may request in
connection with their preparation of any necessary filings or submissions to the
FTC or the Antitrust Division, including, without limitation, any filings or
notices necessary under the HSR Act. The Purchasers shall, at their own
expense, utilize all reasonable efforts to respond promptly to any request for
additional information, or other formal or informal request for information,
witnesses or documents which may be made by any Governmental Authority
pertaining to the Purchasers with respect to the purchase of the New Shares and
the Existing Shares, and the exercise of the Warrants, and shall keep the
Company and the Selling Stockholders fully apprised of its actions with respect
thereto.
(c) Each of the parties hereto shall use their commercially
reasonable efforts to give such notices and obtain all other authorizations,
consents, orders and approvals of all Governmental Authorities and other third
parties that may be or become necessary for its execution and delivery of, and
the performance of its obligations pursuant to, this Agreement and the other
Transaction Agreements and will cooperate fully with the other parties hereto in
promptly seeking to obtain all such authorizations, consents, orders and
approvals.
SECTION 6.3. Access to Information. (a) The Company and its
Subsidiaries shall, and shall cause their respective officers, employees,
counsel, financial advisors and other representatives to, afford to the
Purchasers and their representatives reasonable access during normal business
hours prior to the Second Closing to their respective properties, books,
contracts, personnel, records, Tax Returns and related work papers and, during
such period, the Company and its Subsidiaries shall, and shall cause their
respective officers, employees and representatives to, furnish promptly to the
Purchasers all information concerning their respective businesses, properties,
financial condition, operations and personnel as the Purchasers may from time to
time reasonably request.
(b) All information provided or obtained pursuant to clause (a) above
shall be held by the Purchasers (and the Purchasers shall make certain that it
agents are informed of the confidential nature of such information and agree to
maintain such information) in accordance with and subject to the terms of the
Confidentiality Agreement, dated as of April 19, 1999, between the Company and
The Cypress Group LLC as if each of the Purchasers was a party thereto with the
obligations of The Cypress Group LLC thereunder.
(c) No investigation pursuant to this Section 6.3 shall affect any
representations or warranties of the parties herein or the conditions to the
obligations of the parties hereto.
SECTION 6.4. Further Action. Each of the parties hereto shall use
its commercially reasonable efforts to take, or cause to be taken, all
appropriate action, do or cause to be done all things necessary, proper or
advisable under applicable law, and execute and deliver such documents and other
papers, as may be required to consummate the transactions contemplated by this
Agreement and the other Transaction Agreements.
SECTION 6.5. Reservation of Shares. From and after the First Closing
Date, the Company shall at all times reserve and keep available for issuance (i)
upon the exercise of the Warrants, such number of its authorized but unissued
Shares as shall be sufficient to permit the exercise in full of all outstanding
Warrants and (ii) such number of its authorized but unissued Shares as the
Company, in its reasonably good faith judgment, believes shall be sufficient to
permit the issuance of all of the Subsequent New Shares.
SECTION 6.6. Appointment of Directors. Prior to the First Closing,
the Company shall take all action necessary to increase the size of its Board of
Directors by adding three directorships and to elect two designees of the
Purchasers to the Board of Directors, with the one remaining vacancy to be
filled by an independent director at or subsequent to the First Closing in
accordance with the terms of the Stockholders Agreement. Each of the Selling
Stockholders hereby agrees to take such action as may be required under
applicable law to effect the foregoing.
SECTION 6.7. New Credit Agreement. Prior to the First Closing, the
Company shall use its commercially reasonable efforts to cause the New Credit
Agreement to be amended to allow for the Company to perform its obligations
under this Agreement and the Stockholders Agreement.
SECTION 6.8. D&O Insurance. Prior to the First Closing, the Company
shall amend its directors' and officers' liability insurance policy to include
the persons designated by the Purchasers to serve on the Company's Board of
Directors as named insureds and to provide for minimum annual coverage of at
least $10.0 million.
SECTION 6.9. Operating Company. So long as the Purchasers shall have
the right to designate at least one member of the Board of Directors of the
Company pursuant to Section 5.1 of the Stockholders Agreement, the Company shall
constitute an "operating company" within the meaning of 29 CFR Section
2510.3-101(c).
ARTICLE VII
CONDITIONS TO CLOSINGS
SECTION 7.1. Conditions to Obligations of the Purchasers.
(a) The obligations of each of the Purchasers to consummate the
Initial Purchase and the other transactions contemplated by this Agreement
(other than the Subsequent Purchase) and the other Transaction Agreements shall
be subject to the fulfillment, at or prior to the First Closing, of each of the
following conditions (provided that any such condition may be waived with
respect to any Purchaser by such Purchaser in its sole discretion):
(i) Representations, Warranties and Covenants. Each of the
representations and warranties of the Company and the Selling Stockholders
contained in this Agreement that is qualified as to materiality or Material
Adverse Effect shall be true and correct, and each of the representations and
warranties of the Company and the Selling Stockholders contained in this
Agreement that is not so qualified as to materiality or Material Adverse Effect
shall be true and correct in all material respects, in each case as of the date
of this Agreement and as of the First Closing Date, with the same force and
effect as if made on and as of the First Closing Date, except for those
representations and warranties which address matters only as of a particular
date (which shall be true and correct, or true and correct in all material
respects, as the case may be, as of such date), and each of the Company and the
Selling Stockholders shall have performed in all material respects all
agreements, obligations, covenants and conditions required hereby to be
performed and complied with by it prior to or on the First Closing Date. The
Purchasers shall have received a certificate from the Company signed by its
Chief Executive Officer and from a duly authorized designee of the trustees in
the case of a Selling Stockholder that is a trust, or a duly authorized officer
in the case of each Selling Stockholder that is a foundation, in each case dated
as of the First Closing Date, with respect to the matters described in this
Section 7.1(a)(i) in the forms attached hereto as Exhibits C-1 and C-2,
respectively.
(ii) Approvals; Consents. All consents, approvals and waivers from
Governmental Authorities and other parties (including under all of the Material
Contracts) necessary to permit the consummation of the Initial Purchase and the
other transactions contemplated by this Agreement and the other Transaction
Agreements shall have been obtained, and no such consent, approval or waiver of
any Governmental Authority or such other third party shall contain any term or
condition that the Purchasers in their reasonable discretion determine to be
unduly burdensome.
(iii) No Proceeding or Litigation. No action, suit, investigation or
proceeding shall have been commenced by any Governmental Authority against any
party hereto seeking to restrain or delay the Initial Purchase or the other
transactions contemplated by this Agreement and the other Transaction
Agreements.
(iv) No Order. There shall not be in effect any Law or Government
Order directing that the Initial Purchase and the other transactions
contemplated by this Agreement and the other Transaction Agreements not be
consummated or which has the effect of rendering it unlawful to consummate such
transactions.
(v) Legal Opinions. The Company and the Selling Stockholders shall
have delivered to the Purchasers the opinions of Xxxxxxxx & Xxxxxxxx, counsel to
the Company, Xxxxxx & Xxxx L.L.P., counsel to the Selling Stockholders, and
Morris, Nichols, Arsht & Xxxxxxx, special Delaware counsel to the Company and
the Selling Stockholders, in each case dated as of the First Closing Date, in
the forms attached hereto as Exhibits X-0, X-0 and D-3, respectively.
(vi) Transaction Agreements. The Company, the Selling Stockholders
and the other stockholders of the Company party thereto shall have executed and
delivered the Stockholders Agreement.
(vii) Tax Certificates. Each of the Selling Stockholders shall have
delivered to the Purchasers an exemption certificate properly executed, which
meets the requirements of Treasury Regulation section 1.1445-2 and which is in a
form reasonably satisfactory to the Purchasers.
(viii) HSR Act. All applicable waiting periods under the HSR Act
with respect to the transactions contemplated by this Agreement and the other
Transaction Agreements (including the Initial Purchase and the Subsequent
Purchase) shall have expired or been terminated.
(ix) Appointment of Directors. The Company and the Selling
Stockholders shall have taken all actions required by Section 6.6.
(x) New Credit Agreement. The New Credit Agreement shall have been
amended as contemplated by Section 6.7.
(xi) D&O Insurance. The Company's directors' and officers' liability
insurance policy shall have been amended as contemplated by Section 6.8.
(b) The obligations of each of the Subsequent Purchasers to
consummate the Subsequent Purchase and the other transactions contemplated by
this Agreement and the other Transaction Agreements shall be subject to the
fulfillment, at or prior to the Second Closing, of each of the following
conditions (provided that any such condition may be waived with respect to any
Subsequent Purchaser by such Subsequent Purchaser in its sole discretion):
(i) Representations, Warranties and Covenants. Each of the
representations and warranties of the Company contained in this Agreement that
is qualified as to materiality or Material Adverse Effect shall be true and
correct, and each of the representations and warranties of the Company contained
in this Agreement that is not so qualified as to materiality or Material Adverse
Effect shall be true and correct in all material respects, in each case as of
the date of this Agreement and as of the Second Closing Date, with the same
force and effect as if made on and as of the Second Closing Date, except for
those representations and warranties which address matters only as of a
particular date (which shall be true and correct, or true and correct in all
material respects, as the case may be, as of such date), and the Company shall
have performed in all material respects all agreements, obligations, covenants
and conditions required hereby to be performed and complied with by it prior to
or on the Second Closing Date. The Subsequent Purchasers shall have received a
certificate from the Company signed by its Chief Executive Officer and dated as
of the Second Closing Date with respect to the matters described in this Section
7.1(b)(i) in the form attached hereto as Exhibit C-1.
(ii) Approvals; Consents. All consents, approvals and waivers from
Governmental Authorities and other parties (including under all of the Material
Contracts) necessary to permit the consummation of the Subsequent Purchase and
the other transactions contemplated by this Agreement and the other Transaction
Agreements shall have been obtained, and no such consent, approval or waiver of
any Governmental Authority or such other third party shall contain any term or
condition that the Subsequent Purchasers in their reasonable discretion
determine to be unduly burdensome.
(iii) No Proceeding or Litigation. No action, suit, investigation or
proceeding shall have been commenced by any Governmental Authority against any
party hereto seeking to restrain or delay the Subsequent Purchase or the other
transactions contemplated by this Agreement and the other Transaction
Agreements.
(iv) No Order. There shall not be in effect any Law or Government
Order directing that the Subsequent Purchase and the other transactions
contemplated by this Agreement and the other Transaction Agreements not be
consummated or which has the effect of rendering it unlawful to consummate such
transactions.
(v) Initial Purchase. The Initial Purchase shall have occurred.
[CONFIDENTIAL TREATMENT REQUESTED]
(vii) Legal Opinion. The Company shall have delivered to the
Subsequent Purchasers the opinion of Xxxxxxxx & Xxxxxxxx, counsel to the
Company, dated as of the Second Closing Date, addressing the matters specified
in paragraphs 4, 5, 6 and 7 of, and in the form attached hereto as, Exhibit D-1.
SECTION 7.2. Conditions to Obligations of the Company and the Selling
Stockholders.
(a) The obligations of the Company and the Selling Stockholders to
consummate the Initial Purchase and the other transactions contemplated by this
Agreement (other than the Subsequent Purchase) and the other Transaction
Agreements shall be subject to the fulfillment, at or prior to the First
Closing, of each of the following conditions (provided that any such condition
may be waived with respect to the Company or any Selling Stockholder by the
Company or such Selling Stockholder, as the case may be, in its sole
discretion):
(i) Representations, Warranties and Covenants. Each of the
representations and warranties of the Purchasers contained in this Agreement
that is qualified as to materiality or Material Adverse Effect shall be true and
correct, and each of the representations and warranties of the Purchasers
contained in this Agreement that is not so qualified as to materiality or
Material Adverse Effect shall be true and correct in all material respects, in
each case as of the date of this Agreement and as of the First Closing Date,
with the same force and effect as if made on and as of the First Closing Date,
except for those representations and warranties which address matters only as of
a particular date (which shall be true and correct, or true and correct in all
material respects, as the case may be, as of such date), and the Purchasers
shall have performed in all material respects all agreements, obligations,
covenants and conditions required hereby to be performed and complied with by it
prior to or on the First Closing Date. The Company and the Selling Stockholders
shall have received a certificate from each of the Purchasers signed by a
general partner thereof, in each case dated as of the First Closing Date, with
respect to the matters described in this Section 7.2(a)(i) in the form attached
hereto as Exhibit E.
(ii) No Proceeding or Litigation. No action, suit, investigation or
proceeding shall have been commenced by any Governmental Authority against any
party hereto seeking to restrain or delay the Initial Purchase or the other
transactions contemplated by this Agreement and the other Transaction
Agreements.
(iii) No Order. There shall not be in effect any Law or Government
Order directing that the Initial Purchase or the other transactions contemplated
by this Agreement and the other Transaction Agreements not be consummated or
which has the effect of rendering it unlawful to consummate such transactions.
(iv) Approvals; Consents. All consents, approvals and waivers from
Governmental Authorities and other parties necessary to permit the consummation
of the Initial Purchase and the transactions contemplated by this Agreement and
the other Transaction Agreements shall have been obtained.
(v) Legal Opinions. The Purchasers shall have delivered to the
Company and the Selling Stockholders the opinions of Xxxxxxx Xxxxxxx & Xxxxxxxx,
counsel to the Purchasers, and Morris, Nichols, Arsht & Xxxxxxx, special
Delaware counsel to the Company, in each case dated as of the First Closing
Date, in the forms attached hereto as Exhibits F and D-3, respectively.
(vi) Transaction Agreements. The Purchasers shall have executed and
delivered the Stockholders Agreement.
(vii) HSR Act. All applicable waiting periods under the HSR Act with
respect to the transactions contemplated by this Agreement and the other
Transaction Agreements (including the Initial Purchase and the Subsequent
Purchase) shall have expired or been terminated.
(b) The obligation of the Company to consummate the Subsequent
Purchase and the other transactions contemplated by this Agreement and the other
Transaction Agreements shall be subject to the fulfillment, at or prior to the
Second Closing, of each of the following conditions (provided that any such
condition may be waived by the Company in its sole discretion):
(i) Representations, Warranties and Covenants. Each of the
representations and warranties of the Subsequent Purchasers contained in this
Agreement that is qualified as to materiality or Material Adverse Effect shall
be true and correct, and each of the representations and warranties of the
Subsequent Purchasers contained in this Agreement that is not so qualified as to
materiality or Material Adverse Effect shall be true and correct in all material
respects, in each case as of the date of this Agreement and as of the Second
Closing Date, with the same force and effect as if made on and as of the Second
Closing Date, except for those representations and warranties which address
matters only as of a particular date (which shall be true and correct, or true
and correct in all material respects, as the case may be, as of such date), and
the Subsequent Purchasers shall have performed in all material respects all
agreements, obligations, covenants and conditions required hereby to be
performed and complied with by it prior to or on the Second Closing Date. The
Company shall have received a certificate from each of the Subsequent Purchasers
signed by a general partner thereof, in each case dated as of the Second Closing
Date, with respect to the matters described in this Section 7.2(b)(i) in the
form attached hereto as Exhibit E.
(ii) No Proceeding or Litigation. No action, suit, investigation or
proceeding shall have been commenced by any Governmental Authority against any
party hereto seeking to restrain or delay the Subsequent Purchase or the other
transactions contemplated by this Agreement and the other Transaction
Agreements.
(iii) No Order. There shall not be in effect any Law or Government
Order directing that the Subsequent Purchase or the other transactions
contemplated by this Agreement and the other Transaction Agreements not be
consummated or which has the effect of rendering it unlawful to consummate such
transactions.
(iv) Approvals; Consents. All consents, approvals and waivers from
Governmental Authorities and other parties necessary to permit the consummation
of the Subsequent Purchase and the transactions contemplated by this Agreement
and the other Transaction Agreements shall have been obtained.
(v) Initial Purchase. The Initial Purchase shall have occurred.
[CONFIDENTIAL TREATMENT REQUESTED]
(vii) Legal Opinion. The Subsequent Purchasers shall have delivered
to the Company the opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel to the
Subsequent Purchasers, dated as of the Second Closing Date, addressing the
matters specified in paragraph 4 of, and in the form attached hereto as, Exhibit
F.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. (a) (i) The representations and warranties contained in
Sections 3.3 and 4.3(c) and the last sentence of Section 4.3(a) of this
Agreement shall survive indefinitely.
(ii) All other representations and warranties contained in this
Agreement shall survive until the eighteen month anniversary of the First
Closing Date, with the exception of Sections 4.12, 4.17 and 4.18, which shall
survive until the later of (i) the eighteen month anniversary of the First
Closing Date or (ii) three months after the expiration of the applicable statute
of limitations with respect to the subject matter thereof.
(b) The representations and warranties contained in this Agreement,
and the rights and remedies that may be exercised by any Person seeking
indemnification hereunder, shall not be limited or otherwise affected by or as a
result of any information furnished to, or any investigation made by, any such
Person or its representatives.
(c) For purposes of this Agreement, each statement or other item of
information set forth by the Company on any Schedule hereto shall be deemed to
be a representation and warranty made by the Company in this Agreement.
SECTION 8.2. Indemnification. (a) From and after the First Closing
Date and subject to Sections 8.1, 8.3 and 8.6, the Company shall defend,
indemnify and hold harmless the Purchasers and their respective Affiliates and
each director, officer, member, partner, employee and agent of such Persons
against any loss, damage, claim, liability, judgment or settlement of any nature
or kind, including all costs and expenses relating thereto, including without
limitation, interest, penalties and reasonable attorneys' fees (collectively
"Damages"), arising out of, resulting from or relating to:
(i) the breach of any representation or warranty contained in Article
IV, or any certificate delivered by the Company pursuant hereto; and
(ii) the breach by the Company of any covenant or agreement (whether
to be performed prior to or after the First Closing) contained in this
Agreement, or any certificate delivered by the Company pursuant hereto.
(b) From and after the First Closing Date and subject to Sections
8.1, 8.3 and 8.6, each Selling Stockholder shall, severally and not jointly,
defend, indemnify and hold harmless the Purchasers and their respective
Affiliates and each director and officer of such Persons against Damages arising
out of, resulting from or relating to:
(i) the breach by such Selling Stockholder of any representation or
warranty made by it in Article III, or any certificate delivered by such Selling
Stockholder pursuant hereto; and
(ii) the breach by such Selling Stockholder of any covenant or
agreement (whether to be performed prior to or after the First Closing)
contained in this Agreement, or any certificate delivered by such Selling
Stockholder pursuant hereto.
(c) From and after the First Closing Date and subject to Sections
8.1, 8.3 and 8.6, each Purchaser shall, severally and not jointly, defend,
indemnify and hold harmless the Company and the Selling Stockholders and their
respective Affiliates and each trustee, director and officer of such Persons
against any Damages arising out of, resulting from or relating to:
(i) the breach by such Purchaser of any representation or warranty
contained in Article V, or any certificate delivered by such Purchaser pursuant
hereto; and
(ii) the breach by such Purchaser of any covenant or agreement
(whether to be performed prior to or after the First Closing) contained in this
Agreement, or any certificate delivered by such Purchaser pursuant hereto.
(d) The term "Damages" as used in this Article VIII is not limited to
matters asserted by third parties against any Person entitled to be indemnified
under this Article VIII, but includes Damages incurred or sustained by any such
Person in the absence of third party claims.
SECTION 8.3. Indemnification Amount. (a) No Indemnitor (as defined
below) shall have liability under Section 8.2(a)(i), (b)(i) or (c)(i), as the
case may be, until the aggregate amount of Damages theretofore incurred by the
Indemnitee (as defined below), as the case may be, exceeds $2.5 million (the
"Deductible"), in which case the Indemnitee shall be entitled to Damages in an
aggregate amount up to (i) in the case of the Company, the New Shares Purchase
Price, (ii) in the case of each Selling Stockholder, the amount of the Existing
Shares Purchase Price received by or for the benefit of such Selling Stockholder
and (iii) in the case of each Purchaser, an amount equal to the product of (x)
$1.0 million and (y) the quotient obtained by dividing the number of Shares
purchased by such Purchaser by the total number of Shares purchased by all of
the Purchasers; provided, however, that the Indemnitor shall be liable only for
the amount by which all Damages exceed the Deductible; provided, further, that
no individual claim for payment of Damages may be made under Section 8.2(a)(i),
(b)(i) or (c)(i) unless such claim (or the aggregate amount of related claims)
is in an amount of $50,000 or greater.
(b) The limitations on the indemnification obligations set forth in
this Section 8.3 shall not apply to any covenants or agreements of the parties
in this Agreement. In addition, notwithstanding the provisions of paragraph (a)
above, the limitations on the indemnification obligations of the parties set
forth therein shall not apply to breaches of the representations and warranties
made in Sections 3.3 and 4.3(c) and the last sentence of 4.3(a).
(c) Notwithstanding anything to the contrary set forth herein, no
limitation on the indemnification obligations set forth in this Section 8.3
shall apply to any breach of a representation or warranty made as of the date
hereof if such representation or warranty was made with knowledge by the party
making such representation or warranty that it (i) contained an untrue statement
of a material fact or (ii) omitted to state a material fact necessary to make
the statements contained therein not misleading. Solely for purposes of
calculating the amount of Damages incurred arising out of or relating to any
breach or representation or warranty (and not for purposes of determining
whether or not a breach has occurred), the references to "Material Adverse
Effect" or other materiality qualifications (or correlative terms), including as
expressed in accounting concepts, shall be disregarded.
SECTION 8.4. Indemnification Procedures (a) In the event that any
Person shall incur or suffer any Damages in respect of which indemnification may
be sought hereunder, such Person (the "Indemnitee") may assert a claim for
indemnification by written notice (the "Notice") to the party from whom
indemnification is being sought (the "Indemnitor"), stating the amount of
Damages, if known, and the nature and basis of such claim. In the case of
Damages arising or which may arise by reason of any third-party claim, promptly
after receipt by an Indemnitee of written notice of the assertion or the
commencement of any action with respect to any matter in respect of which
indemnification may be sought hereunder (but in no event more than 20 days after
receipt of such notice), the Indemnitee shall give Notice to the Indemnitor and
shall thereafter keep the Indemnitor reasonably informed with respect thereto,
provided that failure of the Indemnitee to give the Indemnitor prompt notice as
provided herein shall not relieve the Indemnitor of any of its obligations
hereunder, except to the extent that the Indemnitor is materially prejudiced by
such failure. In case any such action is brought against any Indemnitee, the
Indemnitor shall be entitled to assume the defense thereof, by written notice of
its intention to do so to the Indemnitee within 20 days after receipt of the
Notice. If the Indemnitor shall assume the defense of such action, it shall not
settle such action without the prior written consent of the Indemnitee, which
consent shall not be unreasonably withheld; provided that an Indemnitee shall
not be required to consent to any settlement that (i) does not include as an
unconditional term thereof the giving by the claimant or the plaintiff of an
unconditional release of the Indemnitee from all liability with respect to such
action or (ii) involves the imposition of equitable remedies or the imposition
of any material obligations on such Indemnitee other than financial obligations
for which such Indemnitee will be indemnified hereunder. As long as the
Indemnitor is contesting any such action in good faith and on a timely basis,
the Indemnitee shall not pay or settle any claims brought under such action.
Notwithstanding the assumption by the Indemnitor of the defense of any action as
provided in this Section 8.3, the Indemnitee shall be permitted to participate
in the defense of such action and to employ counsel at its own expense;
provided, however, that if (i) the defendants in any action shall include both
an Indemnitor and any Indemnitee and such Indemnitee shall have reasonably
concluded that counsel selected by Indemnitor has a potential conflict of
interest because of the availability of different or additional defenses to such
Indemnitee or (ii) the Indemnitor has not employed counsel reasonably
satisfactory to such Indemnitee, such Indemnitee shall have the right to select
one separate counsel to participate in the defense of such action on its behalf,
at the expense of the Indemnitor.
(b) If the Indemnitor shall fail to notify the Indemnitee of its
desire to assume the defense of any such action within the prescribed period of
time, or shall notify the Indemnitee that it will not assume the defense of any
such action, then the Indemnitee may assume the defense of any such action, in
which event it may do so acting in good faith in such manner as it may deem
appropriate, and the Indemnitor shall be bound by any determination made in such
action; provided, however, that the Indemnitee shall not be permitted to settle
such action without the consent of the Indemnitor, which consent shall not be
unreasonably withheld or delayed. The Indemnitor shall be permitted to join in
the defense of such action and to employ counsel at its own expense.
(c) Amounts payable by the Indemnitor to the Indemnitee in respect of
any Damages for which such party is entitled to indemnification hereunder shall
be payable by the Indemnitor as incurred by the Indemnitee.
(d) In the event of any dispute between the parties regarding the
applicability of the indemnification provisions of this Agreement, the
prevailing party shall be entitled to recover all Damages incurred by such party
arising out of, resulting from or relating to such dispute.
(e) Any payments pursuant to this Article VIII shall be treated as an
adjustment to the Existing Shares Purchase Price or the New Shares Purchase
Price, as the case may be.
SECTION 8.5. Non-Exclusive. Remedy The indemnification remedies
provided in this Article VIII shall not be deemed to be exclusive. Accordingly,
the exercise by any Person of any of its rights under this Article VIII shall
not be deemed to be an election of remedies and shall not be deemed to
prejudice, or to constitute or operate as a waiver of, any other right or remedy
that such Person may be entitled to exercise (whether under this Agreement,
under any other contract, under any law or otherwise).
SECTION 8.6. Certain Limitations. The indemnification obligations of
the parties hereto for any breach of a representation and warranty described in
Article III, IV or V of this Agreement shall survive for only the period
applicable to such representations and warranties as set forth in Section 8.1 of
this Agreement, and thereafter all such representations and warranties of the
parties hereto under this Agreement shall be extinguished; provided, however,
that such indemnification obligation shall not be extinguished in the event of
Damages incurred as a result of an investigation, review, suit, claim or action
that was instituted or begun prior to the expiration of the survival period set
forth in Section 8.1 if noticed to the Indemnitor in the time and in the manner
required by Section 8.4. Subject to the proviso at the end of the immediately
preceding sentence, no claim for the recovery of such Damages may be asserted by
an Indemnitee after such period; provided, however, that claims first asserted
in writing and noticed with particularity as required by Section 8.4 within such
period shall not thereafter be barred.
ARTICLE IX
TERMINATION AND WAIVER
SECTION 9.1. Termination. (a) This Agreement may be terminated, and
the transactions contemplated hereby abandoned, at any time prior to the First
Closing:
(i) by the Company and the Selling Stockholders on the one hand, or
the Purchasers on the other hand, in the event of a material breach or default
by the other party of or in any representation, warranty, covenant or agreement
of such other party contained in this Agreement which breach or default (x)
would permit the non-breaching or non-defaulting party to elect not to
consummate the transactions contemplated by this Agreement pursuant to Section
7.1(a) or 7.2(a) of this Agreement, and (y) either cannot by its terms be cured
or has not been cured within 30 days after written notice of such breach or
default, describing such breach or default in reasonable detail, is given by the
terminating party to the breaching or defaulting party;
(ii) by the Company, any Selling Stockholder or any Purchaser if the
First Closing shall not have occurred on or prior to 90 days after the date of
this Agreement; provided, however, that the right to terminate this Agreement
under this Section 9.1(a)(ii) shall not be available to any party whose failure
to fulfill any obligation under this Agreement shall have been the cause of, or
shall have resulted in, the failure of the First Closing to occur on or prior to
such date;
(iii) by the Company, any Selling Stockholder or any Purchaser in the
event that any Governmental Authority whose consent is necessary for the
consummation of the transactions contemplated by this Agreement shall have
issued a final, non-appealable Government Order or taken any other final,
non-appealable action restraining, enjoining, denying approval of or otherwise
prohibiting the transactions contemplated by this Agreement and the other
Transaction Agreements; or
(iv) by the mutual written consent of the Company, each Selling
Stockholder and each Purchaser.
(b) Upon termination of this Agreement pursuant to Section 9.1(a),
this Agreement and the other Transaction Agreements shall be void and of no
further force and effect and no party shall have any liability to any other
party under this Agreement and the other Transaction Agreements, except that
nothing herein shall relieve any party from any liability for the breach of any
of the representations, warranties, covenants and agreements set forth in this
Agreement and except as contemplated by Section 10.1.
(c) The Subsequent Purchase may be abandoned at any time prior to the
Second Closing:
(i) by the Company or the Subsequent Purchasers in the event of a
material breach or default by the other party of or in any representation,
warranty, covenant or agreement of such other party contained in this Agreement
which breach or default (x) would permit the non-breaching or non-defaulting
party to elect not to consummate the Subsequent Purchase pursuant to Section
7.1(b) or 7.2(b) of this Agreement, and (y) either cannot by its terms be cured
or has not been cured within 30 days after written notice of such breach or
default, describing such breach or default in reasonable detail, is given by the
terminating party to the breaching or defaulting party;
(ii) by the Company or any Subsequent Purchaser if the Second Closing
shall not have occurred on or prior to 150 days after the date of this
Agreement; provided, however, that the right to terminate the Subsequent
Purchase under this Section 9.1(c)(ii) shall not be available to any party whose
failure to fulfill any obligation under this Agreement shall have been the cause
of, or shall have resulted in, the failure of the Second Closing to occur on or
prior to such date;
(iii) by the Company or any Subsequent Purchaser in the event that
any Governmental Authority whose consent is necessary for the Subsequent
Purchase shall have issued a final, non-appealable Government Order or taken any
other final, non-appealable action restraining, enjoining, denying approval of
or otherwise prohibiting the Subsequent Purchase; or
(iv) by the mutual written consent of the Company and each Subsequent
Purchaser.
(d) Upon termination of the Subsequent Purchase pursuant to Section
9.1(c), the obligation of the Company and the Subsequent Purchasers to
consummate the Subsequent Purchase shall terminate and no party shall have any
liability to any other party under this Agreement and the other Transaction
Agreements with respect thereto; provided, however, that upon such termination,
this Agreement and the other Transaction Agreements shall remain in all other
respects in full force and effect and no party shall be relieved of any other
any obligation or liability hereunder or thereunder upon such termination.
ARTICLE X
GENERAL PROVISIONS
SECTION 10.1. Expenses. Except as otherwise specified in this
Agreement, the Company shall pay all costs and expenses, including, without
limitation, the filing fees under the HSR Act, fees and disbursements of
counsel, financial and other advisors and accountants incurred in connection
with this Agreement and the other Transaction Agreements, and the transactions
contemplated hereby and thereby; provided, however, that the Company shall not
pay any expenses incurred by the Purchasers hereunder if this Agreement is
terminated prior to the First Closing Date; and provided, further, that the
maximum amount of such costs and expenses of the Purchasers and their counsel,
financial and other advisors and accountants to be paid by the Company shall not
exceed $600,000. The Purchasers shall pay all transfer taxes and charges
attributable to the transfer of the New Shares and the Existing Shares.
SECTION 10.2. Notices. Any notice, request, claim, demand or other
communication under this Agreement shall be in writing, shall be either
personally delivered, delivered by facsimile transmission or sent by reputable
overnight courier service (charges prepaid) to the address for such Person set
forth below or such other address as the recipient party has specified by prior
written notice to the other parties hereto and shall be deemed to have been
given hereunder when receipt is acknowledged for personal delivery or facsimile
transmission or one day after deposit with a reputable overnight courier
service.
(a) if to the Purchasers:
c/o The Cypress Group
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
(b) if to the Company:
ClubCorp, Inc.
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
with a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
(c) if to the Selling Stockholders:
c/o ClubCorp, Inc.
0000 XXX Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
with a copy to each of:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
and
Xxxxxx & Xxxx, L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Xx., Esq.
SECTION 10.3. Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 10.4. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that each
party need not sign the same counterpart.
SECTION 10.5. Entire Agreement; No Third Party Beneiciaries. (a)
This Agreement constitutes the entire agreement and supersedes all prior
agreements and undertakings, both written and oral, between the parties with
respect to the subject matter hereof.
(b) Except for the provisions of Article VIII relating to Indemnified
Parties, this Agreement shall be binding upon and inure solely to the benefit of
each party hereto and their permitted successors and assigns, and nothing in
this Agreement, express or implied, is intended to or shall confer upon any
other Person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
SECTION 10.6. Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
New York. Each of the parties hereto hereby irrevocably and unconditionally
consents to submit to the exclusive jurisdiction of the courts of the State of
New York and the United States District Court for the Southern District of New
York for any Litigation in any court or before any Governmental Authority
arising out of or relating to this Agreement and the transactions contemplated
hereby and further agrees that service of any process, summons, notice or
document by U.S. mail to its respective address set forth in this Agreement
shall be effective service of process for any Litigation brought against it in
any such court. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any Litigation
arising out of this Agreement or the transactions contemplated hereby in the
courts of the State of New York sitting in the Borough of Manhattan in the City
of New York, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such Litigation brought
in any such court has been brought in an inconvenient forum.
SECTION 10.7. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.
SECTION 10.8. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto, in whole or in part (whether by operation of law or otherwise),
without the prior written consent of the other parties hereto, and any attempt
to make any such assignment without such consent shall be null and void;
provided, however, that the Purchasers may, without the consent of any of the
other parties to this Agreement, assign its rights and obligations hereunder to
any of its Affiliates (provided that no such assignment shall relieve the
Purchasers of their responsibility for the performance of their obligations
hereunder). Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by, the parties and their
respective successors and assigns.
SECTION 10.9. Other Agreements. The parties hereto acknowledge and
agree that, except as otherwise expressly set forth in this Agreement, the
rights and obligations of the Company, the Selling Stockholders and the
Purchasers under any other agreement between the parties shall not be affected
by any provision of this Agreement.
SECTION 10.10. Amendment. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto.
SECTION 10.11. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED
BY LAW, THE PARTIES HERETO HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION.
SECTION 10.12. Public Disclosure. Notwithstanding anything herein to the
contrary, each of the parties to this Agreement hereby agrees with the other
parties hereto that, except as may be required to comply with the requirements
of any applicable Law (including, without limitation, regulations of the SEC),
no press release or similar public announcement or communication shall be made
or caused to be made concerning the execution or performance of this Agreement
unless the parties shall have agreed in advance with respect thereto.
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
CLUBCORP, INC.
By: /s/Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx, Xx.
Title: CEO
THE XXXXXX FOUNDATION
By: /s/Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: President
THE XXXXXX AND XXXXX
XXXXXX FOUNDATION
By: /s/Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Chairman
XXXXXX XXXXXX TRUST #1
By: /s/Xxxxxxxx Xxxxxx Xxxxx
Name: Xxxxxxxx Xxxxxx Xxxxx
Title: Signatory by Trustee Consent
XXXXXX XXXXXX TRUST #2
By: /s/Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Signatory by Trustee Consent
CYPRESS MERCHANT BANKING PARTNERS L.P.
By: Cypress Associates L.P., its General Partner
By: The Cypress Group L.L.C., its General Partner
By: /s/Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Member
CYPRESS OFFSHORE PARTNERS L.P.
By: Cypress Associates L.P., its General Partner
By: The Cypress Group L.L.C., its General Partner
By: /s/Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Member
CYPRESS MERCHANT BANKING PARTNERS II L.P.
By: Cypress Associates II LLC, its General Partner
By: /s/Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Member
CYPRESS MERCHANT BANKING II C.V.
By: Cypress Associates II LLC, its Managing General Partner
By: /s/Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Member
55th STREET PARTNERS II L.P.
By: Cypress Associates II LLC, its General Partner
By: /s/Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Member
