EXHIBIT 10.3
STOCK PURCHASE AGREEMENT
Among
XXXX X. XXXXXXX,
XXXXXX X. XXXXXXX,
XXXX X. XXXXXXX IRREVOCABLE FAMILY TRUST,
R.E. XXXXXXX IRREVOCABLE FAMILY TRUST,
CONTAINER MANAGEMENT SERVICES, INC.
and
XXXXXXX-XXXXXXX CORP.
dated as of
July 1, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I
PURCHASE AND SALE OF SHARES...............................................1
1.1 Transfer by Sellers of Shares..............................................1
1.2 Consideration..............................................................1
1.3 The Closing................................................................1
1.4 Contingent Consideration...................................................3
1.5 Further Assurances.........................................................3
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS.................................3
2.1 Corporate Organization...............................................3
2.2 Capitalization.......................................................4
2.3 Ownership of Stock...................................................4
2.4 Authorization, Etc...................................................4
2.5 Financial Statements.................................................5
2.6 No Undisclosed Liabilities...........................................5
2.7 No Approvals or Conflicts............................................5
2.8 Compliance with Law; Governmental Authorizations.....................6
2.9 Litigation...........................................................6
2.10 Assets...............................................................6
2.11 Absence of Certain Changes...........................................7
2.12 Taxes................................................................7
2.13 Employee Benefits....................................................8
2.14 Labor Relations......................................................9
2.15 Patents, Trademarks, Trade Names, Etc...............................10
2.16 Contracts...........................................................10
2.17 Environmental Matters...............................................11
2.18 Insurance...........................................................12
2.19 Transactions with Affiliates........................................12
2.20 Material Customers and Suppliers....................................12
2.21 Real Property.......................................................12
2.22 Investment Company Act Status.......................................13
2.23 Product Liability...................................................13
2.24 Books and Records...................................................13
2.25 No Brokers' or Other Fees...........................................13
PAGE
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER..................................13
3.1 Organization.........................................................13
3.2 Authorization Etc....................................................13
3.3 No Approvals or Conflicts............................................14
3.4 Financing............................................................14
3.5 No Brokers' or Other Fees............................................14
ARTICLE IV
CONDITIONS TO SELLERS' OBLIGATIONS.......................................14
4.1 Representations and Warranties.......................................14
4.2 Performance..........................................................15
4.3 Officer's Certificate................................................15
4.4 HSR Act..............................................................15
4.5 Injunctions..........................................................15
4.6 Consents.............................................................15
4.7 Employment/Noncompetition, Option and Stay-Pay Agreements............15
4.8 Equity Agreements....................................................15
ARTICLE V
CONDITIONS TO BUYER'S OBLIGATION.........................................15
5.1 Representations and Warranties.......................................15
5.2 Performance..........................................................16
5.3 Officer's Certificate................................................16
5.4 Resignation of Directors.............................................16
5.5 HSR Act..............................................................16
5.6 Injunctions..........................................................16
5.7 Consents.............................................................16
5.8 Affiliate Agreements.................................................16
5.9 Existing Indebtedness................................................16
5.10 Financing............................................................16
5.11 Employment/Noncompetition and Option Agreements......................17
5.12 Equity Agreements....................................................17
5.13 IRS Form.............................................................17
PAGE
ARTICLE VI
COVENANTS AND AGREEMENTS.................................................17
6.1 Conduct of Business by Company.......................................17
6.2 Access to Books and Records; Cooperation.............................18
6.3 Filings and Consents.................................................19
6.4 Tax Matters..........................................................19
6.5 WARN Act.............................................................25
6.6 No Negotiation.......................................................25
6.7 Covenant to Satisfy Conditions.......................................25
ARTICLE VII
TERMINATION..............................................................26
7.1 Termination..........................................................26
7.2 Procedure and Effect of Termination..................................26
ARTICLE VIII
INDEMNIFICATION..........................................................26
8.1 Indemnification......................................................26
ARTICLE IX
MISCELLANEOUS............................................................29
9.1 Fees and Expenses....................................................29
9.2 Governing Law........................................................29
9.3 Amendment............................................................29
9.4 No Assignment........................................................29
9.5 Waiver...............................................................29
9.6 Notices..............................................................30
9.7 Complete Agreement...................................................31
9.8 Counterparts.........................................................31
9.9 Publicity............................................................31
9.10 Headings.............................................................32
9.11 Severability.........................................................32
9.12 Third Parties........................................................32
9.13 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.......................32
9.14 WAIVER OF JURY TRIAL.................................................33
9.15 Sellers' Representative..............................................33
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "AGREEMENT"), dated as
of July 1, 1997, is entered into by and among Xxxx X. Xxxxxxx, Xxxxxx X.
Xxxxxxx, Xxxx X. Xxxxxxx Irrevocable Family Trust and R.E. Xxxxxxx Irrevocable
Family Trust (each such individual and trust is referred to herein as a "SELLER"
and all such individuals and trusts are referred to herein collectively as the
"SELLERS"), Container Management Services, Inc., a South Carolina corporation
(the "COMPANY"), and Xxxxxxx-Xxxxxxx Corp., a New Jersey corporation (the
"BUYER").
WHEREAS, the Sellers collectively own, beneficially and of
record, an aggregate of 90,000 shares (all such shares collectively, the "CLASS
A SHARES") of Class A common stock, no par value (the "CLASS A COMMON STOCK"),
and 10,000 shares (all such shares collectively, the "CLASS B SHARES"; together
with the Class A Shares, the "SHARES") of Class B common stock, par value $1.00
per share (the "CLASS B COMMON STOCK"; together with the Class A Common Stock,
the "COMMON STOCK"), of the Company, which constitute all of the issued and
outstanding equity securities of the Company;
WHEREAS, the Buyer desires to purchase from the Sellers, and
the Sellers desire to sell to the Buyer, all of the Shares upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises
and the mutual covenants contained herein, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.1 TRANSFER BY SELLERS OF SHARES. On the Closing Date (as
defined in Section 1.3) and subject to the terms and conditions set forth in
this Agreement, the Sellers will sell, assign, transfer and deliver to the Buyer
the Shares, free and clear of all options, pledges, mortgages, security
interests, liens, restrictions on voting or transfer or other encumbrances of
any nature ("ENCUMBRANCES"), other than the restrictions imposed by Federal and
state securities laws.
1.2 CONSIDERATION. On the Closing Date and subject to the
terms and conditions set forth in this Agreement, in reliance on the
representations, warranties, covenants and agreements of the parties contained
herein and in consideration of the sale, assignment, transfer and delivery of
the Shares, the Buyer will pay the consideration set forth in Section 1.3(b)
hereof (the "PURCHASE PRICE").
1.3 THE CLOSING. Unless this Agreement shall have been
terminated and the transactions contemplated herein shall have been abandoned
pursuant to Article VII, subject to Articles IV and V, the closing (the
"CLOSING") of the transactions contemplated by this Agreement shall take place
at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, as soon as practicable following the satisfaction or waiver of
all of the conditions set forth in Articles IV and V hereof (the "CLOSING
DATE"), or at such other place and
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time as may be agreed upon by the Sellers' Representative
(as defined in Section 9.15) and the Buyer.
(a) DELIVERIES BY SELLERS. At or prior to the Closing, the
Sellers shall deliver or cause to be delivered to the Buyer the following:
(i) certificates evidencing the Shares, which certificates
shall be properly endorsed for transfer or accompanied by duly executed stock
powers, in either case executed in blank or in favor of the Buyer, and otherwise
in a form acceptable for transfer on the books of the Company;
(ii) resignations of directors of the Company as
contemplated by Section 5.4 hereof; and
(iii) all other previously undelivered documents required by
this Agreement to be delivered by the Sellers to the Buyer at or prior to the
Closing Date in connection with the transactions contemplated hereby.
(b) DELIVERIES BY THE BUYER. At or prior to the Closing, the
Buyer shall deliver or cause to be delivered to or for the benefit of the
Sellers the following:
(i) to Carolina First Bank ("CFB"), an amount in cash equal
to the principal amount of all indebtedness of the Company and the Sellers owed
to CFB as of the Closing Date, all accrued and unpaid interest thereon through
the Closing Date and all other obligations of the Company and the Sellers owed
to CFB, by wire transfer of immediately available funds to an account designated
by CFB in writing at least three business days prior to the Closing Date;
(ii) to each of Xxxxxxx X. Xxxxx, Xxxxxx XxXxx, Xxx Xxxxx
and Xxxxx X. Xxxxx (the "FORMER STOCKHOLDERS"), an amount in cash equal to the
principal amount of all indebtedness of the Company and the Sellers owed to each
such Former Stockholder as of the Closing Date, all accrued and unpaid interest
thereon through the Closing Date and all other obligations of the Company and
the Sellers owed to such Former Stockholder, by wire transfer of immediately
available funds to an account designated by Xxxxxxxxxxx Xxxxxx Xxxx & Xxxx,
P.C., as agent for Xxxx X. Xxxxxxx, in writing at least two business days prior
to the Closing Date, which amounts shall be immediately sent by wire transfer by
such agent to accounts designated by the Former Stockholders to such agent;
(iii) to the Sellers, an aggregate amount equal to
$32,500,000 minus the total amount delivered pursuant to Sections 1.3(b)(i) and
(ii), by wire transfer of immediately available funds to the accounts designated
by the Sellers in writing at least two business days prior to the Closing Date
or, if no such account has been designated, by bank check, which amount shall be
allocated among the Sellers and their respective designated accounts in
accordance with Exhibit 1.3(b)(iii) hereto; and
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(iv) all other previously undelivered documents required by
this Agreement to be delivered by the Buyer to the Sellers at or prior to the
Closing Date in connection with the transactions contemplated hereby.
(c) All instruments and documents executed and delivered to
the Buyer pursuant hereto shall be in form and substance, and shall be executed
in a manner, reasonably satisfactory to the Buyer. All instruments and documents
executed and delivered to the Sellers pursuant hereto shall be in form and
substance, and shall be executed in a manner, reasonably satisfactory to the
Sellers.
1.4 CONTINGENT CONSIDERATION. As additional consideration
for the Shares, the Company shall pay the Sellers (i) an aggregate amount equal
to $1,000,000 if the net income of the Company for the fiscal year ended
December 31, 1997 equals or exceeds $5,000,000 and (ii) an aggregate amount
equal to $1,000,000 if the net income of the Company for the fiscal year ended
December 31, 1998 equals or exceeds $8,000,000. For the purposes of this Section
1.4, "net income" shall mean the net income of the Company as reflected on the
relevant unaudited year-end financial statements of the Company, which shall be
prepared in accordance with generally accepted accounting principles in
existence as of the Closing Date and prior to any purchase accounting
adjustments consistently applied by the Company. Any amounts payable under this
Section 1.4 shall be paid within 10 business days after the date on which the
relevant financial statements have become available by wire transfer of
immediately available funds to the accounts designated by the Sellers in writing
at least two business days prior to the relevant payment date or, if no such
account has been designated, by bank check, and such amounts shall be allocated
among the Sellers and their respective designated accounts in accordance with
Exhibit 1.3(b)(iii) hereto.
1.5 FURTHER ASSURANCES. After the Closing, each party hereto
shall from time to time, at the request of the other party and without further
cost or expense to such other party, execute and deliver such other instruments
of conveyance and transfer and take such other actions as such other party may
reasonably request in order to more effectively consummate the transactions
contemplated hereby and to vest in the Buyer good and valid title to the Shares.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
The Sellers, jointly and severally, hereby represent and
warrant to the Buyer as follows:
2.1 CORPORATE ORGANIZATION. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of South Carolina. The Company has full corporate power and authority to
own its assets and to carry on its business as now being conducted and is duly
qualified or licensed to do business as a foreign corporation in good standing
in the jurisdictions in which the ownership of its property or the conduct of
its business requires such qualification or license, except jurisdictions in
which the failure to be so qualified or licensed would not, individually or in
the aggregate, reasonably be expected to cause
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either the Sellers or the Company to suffer a loss or pay a claim in excess of
$50,000 (hereinafter referred to as a "MATERIAL ADVERSE EFFECT"). The Sellers
have delivered to the Buyer complete and correct copies of the Certificate of
Incorporation and all amendments thereto, the Bylaws as presently in effect and
the minute books and stock transfer records of the Company. The Company does not
own or have any option or right to acquire, directly or indirectly, any capital
stock or other equity securities of, or have any direct or indirect equity or
ownership interest or debt investment in, any corporation, association,
partnership, joint venture or other business.
2.2 CAPITALIZATION. The authorized capital stock of the
Company consists of 240,000 shares of Class A Common Stock and 10,000 shares of
Class B Common Stock, of which 90,000 shares of Class A Common Stock and 10,000
shares of Class B Common Stock are issued and outstanding, and no other shares
of any other class or series of capital stock of the Company or securities
exercisable or convertible into or exchangeable for capital stock of the Company
("CAPITAL STOCK EQUIVALENTS") are authorized, issued or outstanding. Except as
set forth in Section 2.2 of the Disclosure Schedule, there are no subscriptions,
options, warrants, calls, rights, contracts, commitments, understandings,
restrictions or arrangements relating to the issuance, sale, transfer or voting
of any shares, whether issued or unissued, of capital stock of the Company or
Capital Stock Equivalents, including any rights of issuance, conversion or
exchange under any outstanding securities or other instruments, other than
restrictions imposed by Federal and state securities laws. All of the Shares are
validly issued, outstanding and fully paid, nonassessable and free of preemptive
rights. The Company does not have any outstanding debt securities or other
indebtedness or guarantees, except as specifically disclosed in the Financial
Statements (as defined in Section 2.5) (which, except for those debt securities
and the other indebtedness or guarantees expressly set forth in Section 2.2 of
the Disclosure Schedule, the Sellers shall cause to be fully repaid or cancelled
at or prior to the Closing without the expenditure of any funds of the Company).
2.3 OWNERSHIP OF STOCK. Each Seller is the record and
beneficial owner of the number of shares of Class A Common Stock and Class B
Common Stock set forth opposite such Seller's name in Section 2.3 of the
Disclosure Schedule. The Shares are owned free and clear of all Encumbrances,
other than the restrictions imposed by Federal and state securities laws and the
pledge securing the obligations referred to in Section 1.3(b)(i) (which the
Sellers shall cause to be fully released at or prior to the Closing). Upon the
consummation of the transactions contemplated hereby, the Buyer will acquire
title to the Shares free and clear of all Encumbrances, other than the
restrictions imposed by Federal and state securities laws and Encumbrances
arising as a result of any action taken by the Buyer or any of its affiliates
("AFFILIATES") as defined in Rule 12b-2 of the regulations promulgated pursuant
to the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT").
2.4 AUTHORIZATION, ETC. Each Seller has full power and
authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby. This Agreement has been duly and validly
executed by each Seller and, assuming this Agreement constitutes the legal,
valid and binding agreement of the other parties hereto, constitutes a legal,
valid and binding agreement of each Seller, enforceable against such Seller in
accordance with its terms, except that (i) the enforcement hereof may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally and (ii) the
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remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
2.5 FINANCIAL STATEMENTS. The Sellers have previously
delivered to the Buyer the audited balance sheet of the Company as of December
31, 1996 and the related audited statements of income, stockholders' equity and
cash flows for the fiscal year then ended, and the notes thereto (the "FINANCIAL
STATEMENTS"). The Financial Statements present fairly the assets, liabilities,
financial position, results of operations and cash flows of the Company as of
the dates and for the period indicated, and have been prepared in accordance
with United States generally accepted accounting principles ("GAAP")
consistently applied by the Company.
2.6 NO UNDISCLOSED LIABILITIES. Except as disclosed in
Section 2.6 of the Disclosure Schedule, the Company has no liabilities or
obligations, whether accrued, absolute, contingent, matured or unmatured, that
are required to be reflected, accrued or reserved for in an audited balance
sheet of the Company or the notes thereto prepared in accordance with GAAP,
other than (i) liabilities and obligations that are reflected, accrued or
reserved for in the balance sheet included in the Financial Statements (the
"1996 BALANCE SHEET"), (ii) liabilities and obligations incurred in the ordinary
course of business and consistent with past practice since the date of the 1996
Balance Sheet and (iii) liabilities and obligations which in the aggregate would
not have a Material Adverse Effect.
2.7 NO APPROVALS OR CONFLICTS. (a) Except as set forth in
Section 2.7(a) of the Disclosure Schedule, the execution, delivery and
performance by the Sellers of this Agreement and the consummation by the Sellers
of the transactions contemplated hereby will not (i) violate, conflict with or
result in a breach by the Sellers or the Company of any provision of the
Certificate of Incorporation or Bylaws of the Company, (ii) violate, conflict
with or result in a breach of any provision of, or constitute a default by the
Sellers or the Company (or an event which, with notice or lapse of time or both,
would constitute a default) or give rise to any right of termination,
cancellation or acceleration under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties of the
Company or on the Sellers' interest in the Shares under, any note, bond,
mortgage, indenture, deed of trust, license, franchise, permit, lease, contract,
agreement or other instrument to which any of the Sellers, the Company or any of
their respective properties may be bound, (iii) violate or result in a breach of
any order, injunction, judgment, ruling, law or regulation of any court or
governmental authority applicable to any of the Sellers, the Company or any of
their respective properties or (iv) require any order, consent, approval or
authorization of, or notice to, or declaration, filing, application,
qualification or registration with, any governmental or regulatory authority,
excluding from the foregoing clauses (ii) and (iii) above, such violations,
conflicts and breaches which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
(b) The following information has been and will be relied
upon by Buyer in making its determination as to the notification and disclosure
requirements under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR ACT"): (i) the audited balance sheet of the Company at
December 31, 1997 reflects that the total assets of the Company as of that date
are $7,433,079; (ii) the internally prepared balance sheet of the Company at May
6
31, 1997, which is the last regularly prepared balance sheet of the Company,
reflects that the total assets of the Company as of that date are $8,354,774.99;
(iii) the personal financial statement of Xxxx X. Xxxxxxx prepared for CFB dated
December 19, 1995, which has heretofore been delivered to counsel for Buyer, is
the last regularly prepared balance sheet of Xxxx X. Xxxxxxx and reflects that
the total assets of Xxxx X. Xxxxxxx as of that date are $5,688,000 (including
his ownership interest in the Company as of that date); and (iv) Xxxx X. Xxxxxxx
does not own investment assets, other than his interest in the Company, with a
value of in excess of $1,000,000.
2.8 COMPLIANCE WITH LAW; GOVERNMENTAL AUTHORIZATIONS. The
Company is not in violation of any order, injunction, judgment, ruling, law or
regulation of any court or governmental authority applicable to the property or
business of the Company. The Company has all material licenses, permits and
other governmental authorizations reasonably necessary to conduct its business
as currently conducted and such licenses, permits and authorizations are valid
and in full force and effect.
2.9 LITIGATION. Except as set forth in Section 2.9 of the
Disclosure Schedule, as of the date hereof, there are no suits, actions,
proceedings or investigations pending or, to the best knowledge of the Sellers
and the Senior Managers, threatened against the Company or the transactions
contemplated by this Agreement before any arbitrator, court or governmental or
regulatory authority or body, which, if decided unfavorably to the Company,
would have a MATERIAL ADVERSE EFFECT. Except as set forth in Section 2.9 of the
Disclosure Schedule, neither the Sellers nor the Senior Managers have received
any notice that the Company or any of its assets is subject to any decree, order
or judgment which would have a Material Adverse Effect. As used in this
Agreement, "SENIOR MANAGERS" means Xxxxxx Xxxx, Xxx Xxxxx, Xxx Xxxxx, Xxxx
Xxxxxxx and Xxxx Xxxxxxx.
2.10 ASSETS. Except as set forth in Section 2.10 of the
Disclosure Schedule, on December 31, 1996, the Company had and, except with
respect to assets disposed of or acquired in the ordinary course of business and
consistent with past practice since such date, the Company now has, good and
valid title to, or holds by valid and existing lease or license, all the assets
reflected as assets of the Company on the 1996 Balance Sheet or which would have
been reflected on the 1996 Balance Sheet if acquired prior to such date, free
and clear of all Encumbrances of any nature except for: (i) Encumbrances which
secure indebtedness or obligations which are properly reflected on the 1996
Balance Sheet; (ii) liens for Taxes (as defined in Section 2.12) not yet payable
or being contested in good faith; (iii) liens arising as a matter of law in the
ordinary course of business, provided that the obligations secured by such liens
are not delinquent or are being contested in good faith; and (iv) such
imperfections of title and Encumbrances which, individually or in the aggregate,
would not have a Material Adverse Effect. Except as set forth in Section 2.10 of
the Disclosure Schedule, the Company owns, or has valid leasehold interests in,
all material tangible assets necessary for the operation or conduct of the
Company's business as currently conducted and all such assets are in reasonably
good maintenance, operating condition and repair, normal wear and tear excepted,
other than machinery and equipment under repair or out of service in the
ordinary course of the Company's business.
2.11 ABSENCE OF CERTAIN CHANGES. Except as disclosed in
Section 2.11 of the Disclosure Schedule and as otherwise provided herein, since
December 31, 1996, (i) the business
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of the Company has been conducted only in the ordinary course and consistent
with past practice in all material respects, (ii) there has not been any event
or development prior to the date hereof which, if it had occurred or existed
after the date hereof, would be a violation of Section 6.1(c); and (iii) there
has not been any change, event or development which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
2.12 TAXES. (a) The Company has filed or caused to be filed
all Tax Returns (including estimated Tax Returns) required to be filed by the
Company. To the best knowledge of the Sellers and the Senior Managers, all Tax
Returns are complete and accurate in all material respects. All Taxes required
to be shown on such Tax Returns or otherwise due or payable and all additional
assessments of any such Taxes received prior to the date hereof have been paid
in full on the due date for payment thereof. The Company is not required to file
any income or franchise tax returns in any jurisdiction other than the United
States and the State of South Carolina. The amounts set up as accruals for Taxes
on the Financial Statements are sufficient for the payment of all Taxes of the
Company, whether or not disputed, for all periods ended on and prior to the
respective dates thereof. In addition, the amounts set up as accruals for Taxes
on the financial books of the Company on the date hereof are and will be
sufficient for the payment of all Taxes of the Company, whether or not disputed,
for all periods ended on and prior to the Closing Date. Except as disclosed in
Section 2.12 of the Disclosure Schedule, the United States federal, state and
local income tax returns of the Company have been audited by the Internal
Revenue Service or other Tax Authority or are closed and, to the best knowledge
of the Sellers and the Senior Managers, there are no proceedings or claims
relating thereto or any facts that could give rise to the reopening thereof. No
deficiency in the payment of Taxes by the Company for any period has been
asserted or, to the best knowledge of the Sellers and the Senior Managers,
threatened against the Company or any Seller by any Tax Authority and remains
unsettled as of the date of this Agreement. All Taxes required to be withheld,
collected or deposited by the Company have been timely withheld, collected or
deposited and, to the extent required, have been paid to the relevant Tax
Authorities. The Company does not owe any amount pursuant to any written or
unwritten Tax sharing agreement or arrangement, or will have any liability after
the date hereof in respect of any written or unwritten Tax sharing agreement or
arrangement executed or agreed prior to the date hereof. There are no Tax liens
on any of the assets of the Company, other than liens for current Taxes which
are not yet due or payable. Except as set forth in Section 2.12 of the
Disclosure Schedule, neither the Sellers nor the Company have made any
agreement, waiver or other arrangement providing for an extension of time with
respect to the assessment or collection of any Tax against the Company. The
Company is, and has been at all times, an "S corporation" within the meaning of
Section 1361(a) of the Internal Revenue Code of 1986, as amended (the "CODE"). A
valid election under Section 1362 of the Code has been in effect with respect to
the Company at all times since its incorporation. A valid S corporation or
similar election has been in effect with respect to the Company at all times in
the State of South Carolina and the State of New Jersey. Each Seller has filed
in a timely fashion with the Internal Revenue Service a consent to such S
corporation election with respect to the Company. The Company has not been, and
will not be, subject to Tax under Section 1374 or Section 1375 of the Code for
any taxable year ending on or prior to the Closing Date. Neither the Company nor
the Sellers has filed a consent with the Internal Revenue Service pursuant to
Section 341(f) of the Code or with any other Tax Authority to any similar effect
or made an election under Section 338 of the Code other than as provided for in
the terms of this Agreement.
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(b) For purposes of this Agreement, the term "Tax" or
"Taxes" shall mean all taxes, charges, fees, levies, penalties or other
assessments imposed by any United States federal, state, local or foreign Tax
Authority, including, but not limited to, income, service, leasing, occupation,
excise, property, sales and use, transfer, franchise, payroll, withholding,
social security or other taxes, including any interest, penalties or additions
attributable thereto.
(c) For purposes of this Agreement, the term "Tax Return"
shall mean any return, report, information return or other document (including
any related or supporting information) filed or required to be filed with any
Tax Authority with respect to Taxes.
(d) For purposes of this Agreement, the term "Tax Authority"
shall mean the Internal Revenue Service and any similar state, local or foreign
authority having jurisdiction over Taxes.
2.13 EMPLOYEE BENEFITS. (a) Section 2.13 of the Disclosure
Schedule 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 transaction contemplated by this Agreement or
otherwise), whether formal or informal, oral or written, legally binding or not,
under which any employee or former employee of the Company has any present or
future right to benefits or under which the Company 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 Sellers have
delivered to the Buyer 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 to its employees concerning the extent of the
benefits provided under a Company Plan; and (iv) for the three most recent years
(A) the Form 5500 and attached schedules, (B) audited financial statements, (C)
actuarial valuation reports and (D) attorney's response to an auditor's request
for information.
(c) None of the Company Plans is an "employee benefit plan"
(within the meaning of section 3(3) of the ERISA).
(d) (i) Each Company Plan has been established and
administered in accordance with its terms, and in compliance with the applicable
provisions of ERISA, the Code and other applicable laws, rules and regulations;
and (ii) no event has occurred and no condition exists that would subject the
Company either directly or by reason of its affiliation with any member of its
"Controlled Group" (defined as any organization which is a member of a
controlled group of
9
organizations within the meaning of Code sections 414(b), (c), (m) or (o)), to
any tax, fine, lien or penalty imposed by ERISA, the Code or other applicable
laws, rules and regulations.
(e) With respect to any multiemployer plan (within the
meaning of ERISA section 4001(a)(3)) to which the Company or any member of its
Controlled Group has any liability or contributes (or has at any time
contributed or had an obligation to contribute): (i) none of the Company or any
member of its Controlled Group has incurred any withdrawal liability under Title
IV of ERISA or would be subject to such liability if, as of the Closing Date,
the Company or any member of its 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; and (ii) no such
multiemployer plan is in reorganization or insolvent (as those terms are defined
in ERISA sections 4241 and 4245, respectively).
(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 threatened, and (ii) no facts or circumstances exist that could give
rise to any such actions, suits or claims.
(g) Except as set forth in Section 2.13 of the Disclosure
Schedule, no Company Plan exists that could result in the payment to any present
or former employee of the Company of any money or other property or accelerate
or provide any other rights or benefits to any present or former employee of the
Company as a result of the transactions contemplated by this Agreement, whether
or not such payment would constitute a parachute payment within the meaning of
Code section 280G.
2.14 LABOR RELATIONS. Except as set forth in Section 2.14 of
the Disclosure Schedule, (i) the Company is not a party to any collective
bargaining agreement applicable to employees of the Company, nor is any such
contract or agreement presently being negotiated; (ii) the Company is not a
party to any employment agreement or consulting agreement with any person or
entity obligating the Company to make payments in excess of $50,000 per year,
nor is any such contract or agreement presently being negotiated; (iii) there is
no unfair labor practice charge or complaint pending or, to the best knowledge
of the Sellers and the Senior Managers, threatened against or otherwise
affecting the Company which, if adversely determined, would reasonably be likely
to result in a liability having a Material Adverse Effect; (iv) there is no
labor strike, slowdown, work stoppage, or lockout in effect, or, to the best
knowledge of the Sellers and the Senior Managers, threatened against or
otherwise affecting the Company, and the Company has not experienced any such
labor controversy within the past three years; (v) the Company is not a party
to, or otherwise bound by, any consent decree with, or citation by, any
governmental authority relating to employees or employment practices; (vi) the
Company will not have any material liability under any benefit or severance
policy, practice, agreement, plan, or program which exists or arises, or may be
deemed to exist or arise, under any applicable law or otherwise, as a result of
the transactions contemplated hereunder; and (vii) the Company is in compliance
with its obligations pursuant to the Worker Adjustment and Retraining
Notification Act of 1988 ("WARN ACT"), and all other notification and bargaining
obligations arising under any collective bargaining agreement, statute or
otherwise. To the best knowledge of the Sellers and the Senior Managers, there
is no effort to organize employees of the Company which is pending or
threatened.
10
2.15 PATENTS, TRADEMARKS, TRADE NAMES, ETC. Section 2.15 of
the Disclosure Schedule contains a true and complete list of all patents,
trademarks, trade names, copyrights and pending applications therefor
(collectively, the "INTELLECTUAL PROPERTY") used or owned by the Company and a
list of all licenses and other agreements (collectively, the "LICENSE
AGREEMENTS") relating thereto. Except as set forth in Section 2.15 of the
Disclosure Schedule, (i) the consummation of the transactions contemplated by
this Agreement will not materially impair any right to use the Intellectual
Property or the License Agreements, (ii) all Intellectual Property and Licensing
Agreements are valid, in good standing and free and clear of liens or other
security interests, and (iii) the Company has not received written or, to the
best knowledge of the Sellers and the Senior Managers, oral, notice of any
claims by any person to the use of any such Intellectual Property, or
challenging or questioning the validity or effectiveness of any such License
Agreement.
2.16 CONTRACTS. The contracts and agreements listed in
Section 2.16 of the Disclosure Schedule constitute each contract, instrument,
lease, deed or agreement which is material to the business or operations of the
Company (the "CONTRACTS"). Complete copies (or, if oral, written summaries) of
each Contract have been made available to the Buyer, including all of the
following Contracts: (i) any indenture, note, mortgage, installment obligation,
or other instrument for or relating to any borrowing of money; (ii) any guaranty
of any obligation; (iii) any agreement, contract, commitment or arrangement
containing any covenant limiting the ability of the Company to engage in any
line of business or to compete with any business or person; (iv) any agreement,
contract, commitment or arrangement relating to capital expenditures with
respect to the Company and involving future payments which exceed $50,000 in any
12-month period; (v) any agreement, contract, commitment or arrangement relating
to the acquisition of assets or any capital stock of any business enterprise;
(vi) any real property lease; (vii) any contract, commitment, agreement or
arrangement which requires payments in excess of $50,000 in any 12-month period,
to the extent such contract, commitment, agreement or arrangement is not
terminable within 30 days without payment of premium or penalty; and (viii) any
contract, commitment, agreement or arrangement with any director, stockholder or
affiliate of the Company. Each Contract is in full force and effect, and is a
legal, valid and binding obligation of the Company and, to the best knowledge of
the Sellers and the Senior Managers, each of the other parties thereto,
enforceable in accordance with its terms, except that (x) enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and (y)
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought. No condition exists or
event has occurred which (whether with or without notice or lapse of time or
both, or the happening or occurrence of any other event) would constitute a
default by the Company or, to the best knowledge of the Sellers and the Senior
Managers, any other party thereto under, or result in a right in termination of,
any Contract, by any other party thereto. To the best knowledge of the Sellers
and the Senior Managers, no party to any Contract intends (x) to terminate such
Contract or materially amend the terms thereof, (y) to refuse to renew such
Contract upon expiration thereof or (z) to renew such Contract upon expiration
thereof on terms and conditions which are materially more onerous to the Company
than those pertaining to such existing Contract.
11
2.17 ENVIRONMENTAL MATTERS. Except as set forth in Section
2.17 of the Disclosure Schedule, (i) the Company has not, as of the date hereof,
received any notice alleging the material violation of, or any material actual
or potential liability relating to, any applicable Federal, state or local
statutes, laws, regulations, rules, decrees, orders, judgments, ordinances, or
common law related to the protection of human health or the environment,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, the Emergency Planning and Community
Right-To-Know Act, the Solid Waste Disposal Act, the Resource Conservation and
Recovery Act, the Clean Air Act, the Water Pollution Control Act, the Toxic
Substances Control Act, the Hazardous Materials Transportation Act, and the
Occupational Safety and Health Act, each as amended and supplemented, and any
regulations promulgated pursuant to such laws, and any similar state or local
statutes or regulations ("ENVIRONMENTAL LAWS"), which violation has not been
resolved and, to the best knowledge of the Sellers and the Senior Managers, no
such notice is threatened or otherwise expected, (ii) the Company is and has
been in material compliance with all applicable Environmental Laws and, to the
best knowledge of the Sellers and the Senior Managers, there is no condition
that could prevent or materially interfere with such compliance in the future,
(iii) the Company has obtained and is and has been in material compliance with
all required governmental environmental permits, registrations and
authorizations with respect to the business of the Company as currently
conducted, (iv) no hazardous waste, substance, material, or chemical, including,
without limitation, petroleum and petroleum products, asbestos and any other
material regulated under, or that can result in liability under, applicable
Environmental Laws ("HAZARDOUS MATERIALS"), has been transported, stored,
treated or disposed of by the Company on the real estate owned, operated or
otherwise used by the Company or at any other location, except as would not
result in material liability under any applicable Environmental Laws, (v) the
Company has not assumed, contractually or by operation of law, any liabilities,
potential liabilities or obligations of any other person or entity under any
applicable Environmental Laws, (vi) the Company has not entered into, agreed to,
or is subject to any judgment, decree, order or other similar requirement of any
governmental authority under any Environmental Laws, (vii) there are no (w)
underground or aboveground storage tanks, (x) surface impoundments, (y)
landfills or (z) sewer or septic systems currently or formerly present at or
about any of the properties or facilities currently or, to the best knowledge of
the Sellers and the Senior Managers, formerly owned, operated or otherwise used
by the Company that could result in material liability to the Company under any
applicable Environmental Laws, and (viii) there are no actions, activities,
events, conditions or circumstances occurring or, to the best knowledge of the
Sellers and the Senior Managers, existing during the time of the Company's
operations and ownership of its properties or, to the best knowledge of the
Sellers and the Senior Managers, prior to such time, including without
limitation the release, threatened release, emission, discharge, generation,
treatment, storage or disposal of Hazardous Materials, that could result in any
material liability or obligation of the Company under or relating to any
Environmental Laws.
2.18 INSURANCE. Section 2.18 of the Disclosure Schedule
lists all insurance policies of the Company covering the assets, employees and
operations of the Company as of the date hereof. All such policies are in full
force and effect, all premiums due thereon have been paid by the Company and the
Company has complied in all material respects with the provisions of such
policies and has not received any notice from any of its insurance brokers or
carriers that such broker or carrier will not be willing or able to renew their
existing coverage.
12
2.19 TRANSACTIONS WITH AFFILIATES. Except as disclosed in
Section 2.19 of the Disclosure Schedule, there are no Contracts, agreements or
arrangements between the Company and any Seller (or any affiliate of a Seller).
2.20 MATERIAL CUSTOMERS AND SUPPLIERS. Section 2.20 of the
Disclosure Schedule sets forth the names of the ten suppliers of the Company
whom the Company paid the greatest sum of money in respect of products and
materials sold to the Company and the ten customers of the Company from whom the
Company received the greatest sum of money in respect of products or services
provided by the Company between January 1, 1996 and April 30, 1997.
2.21 REAL PROPERTY. (a) The Company does not own any real
property. The leases listed in Section 2.16 of the Disclosure Schedule
constitute all the real property leases which are used in the conduct of the
business of the Company as it is presently being conducted and/or to which the
Company is a party (the "LEASES", and such property, "LEASED PROPERTY"). To the
best knowledge of the Sellers and the Senior Managers, all of the Leased
Property conforms in all material respects to all zoning laws, ordinances and
regulations. The Leased Property are all of the real property which is used for
the conduct of the business of the Company as it is presently conducted.
(b) Since December 31, 1996, the Company has not sold,
assigned, transferred or otherwise disposed of, or granted any security interest
in or lien on, any Lease. With respect to each Lease, (i) all accrued and
payable rents required by each Lease to be paid by the Company have been paid or
adequate provision for such payment has been made, and (ii) no written notice of
default or termination has been given or received by the Company, and, to the
best knowledge of the Sellers and the Senior Managers, no material event of
default has occurred, no condition exists and no event has occurred that, with
the giving of notice or the lapse of time, would become a material default or
permit early termination, under the Lease. Except as set forth in Section 2.21
of the Disclosure Schedule, no third-party consent or approval under any Lease
is required for the consummation of the transactions contemplated herein.
2.22 INVESTMENT COMPANY ACT STATUS. The Company is not an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940.
2.23 PRODUCT LIABILITY. Except as set forth in Section 2.23
of the Disclosure Schedule, the Company has not received written notice of any
claim or threatened claim against the Company for product liability, nor, to the
best knowledge of the Sellers and the Senior Managers, has the Company received
oral notice of any claim or threatened claim against the Company for product
liability.
2.24 BOOKS AND RECORDS. The financial books and records
pertaining to the business of the Company are complete and correct in all
material respects, have been maintained in accordance with good business
practice, and reflect the basis for the financial condition and results of
operations of the Company set forth in the financial statements referred to in
Section 2.5 hereto.
13
2.25 NO BROKERS' OR OTHER FEES. No broker, finder or
investment banker is entitled to any fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
the Sellers or the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer hereby represents and warrants to the Sellers as
follows:
3.1 ORGANIZATION. The Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of New Jersey.
3.2 AUTHORIZATION ETC. The Buyer has full corporate power
and authority to execute and deliver this Agreement and to carry out the
transactions contemplated hereby to be carried out by it. The execution and
delivery by the Buyer of this Agreement and the consummation by the Buyer of the
transactions contemplated hereby have been duly approved and authorized by all
necessary corporate action on the part of the Buyer, and no other proceedings on
the part of the Buyer are necessary to approve and authorize the execution and
delivery by the Buyer of this Agreement and the consummation by the Buyer of the
transactions contemplated hereby. This Agreement has been duly and validly
executed by the Buyer and, assuming this Agreement constitutes the legal, valid
and binding agreement of the other parties hereto, constitutes a legal, valid
and binding agreement of the Buyer, enforceable against the Buyer in accordance
with its terms, except that (i) the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
3.3 NO APPROVALS OR CONFLICTS. Except as set forth in
Section 3.3 of the Disclosure Schedule, the execution, delivery and performance
by the Buyer of this Agreement and the consummation by the Buyer of the
transactions contemplated hereby to be consummated by it will not (i) violate,
conflict with or result in a breach by the Buyer of any provision of the
Certificate of Incorporation or By-laws of the Buyer, (ii) violate, conflict
with or result in a breach of any provision of, or constitute a default by the
Buyer (or an event which, with notice or lapse of time or both, would constitute
a default) or give rise to any right of termination, cancellation or
acceleration under, or result in the creation of any lien, security interest,
charge or encumbrance upon any of the Buyer's properties under, any note, bond,
mortgage, indenture, deed of trust, license, franchise, permit, lease, contract,
agreement or other instrument to which the Buyer or any of its properties may be
bound, (iii) violate or result in a breach of any order, injunction, judgment,
ruling, law or regulation of any court or governmental authority applicable to
the Buyer or any of its properties, or (iv) except for applicable requirements
of the HSR Act, require any order, consent, approval or authorization of, or
notice to, or declaration, filing, application, qualification or registration
with, any governmental or regulatory authority, excluding from the foregoing
clauses (ii) and (iii) above, such violations, conflicts and breaches which,
individually or in the aggregate, would not reasonably be likely to have a
material adverse effect on the ability of
14
the Buyer to consummate the transactions contemplated hereby to be consummated
by it or cause the Buyer to suffer a loss or pay a claim in excess of $50,000.
3.4 FINANCING. The Buyer has obtained written commitments to
provide the financing required to pay the cash Purchase Price and all
contemplated fees and expenses of the Buyer related to the transactions
contemplated hereby. The Buyer has provided the Sellers' Representative with
true and complete copies of such written commitments.
3.5 NO BROKERS' OR OTHER FEES. No broker, finder or
investment banker (other than Vestar Capital Partners) is entitled to any fee or
commission in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of the Buyer.
ARTICLE IV
CONDITIONS TO SELLERS' OBLIGATIONS
The obligations of the Sellers to effect the Closing under
this Agreement are subject to the satisfaction, at or prior to the Closing, of
each of the following conditions, unless validly waived in writing by the
Sellers' Representative.
4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Buyer in this Agreement shall be true on and as of the
Closing Date as though such representations and warranties were made on such
date, except that any representations and warranties that are made as of a
specified date shall be true as of such date.
4.2 PERFORMANCE. The Buyer shall have performed and complied
in all material respects with all agreements and obligations required by this
Agreement to be so performed or complied with by it prior to the Closing.
4.3 OFFICER'S CERTIFICATE. The Buyer shall have delivered to
the Sellers a certificate, dated as of the Closing Date and executed by the
President or a Senior Vice President of the Buyer, certifying to the fulfillment
of the conditions specified in Sections 4.1 and 4.2 hereof.
4.4 HSR ACT. All applicable waiting periods under the HSR
Act with respect to the transactions contemplated hereby shall have expired or
been terminated.
4.5 INJUNCTIONS. On the Closing Date there shall be no
injunction, writ, preliminary restraining order or other order in effect of any
nature issued by a United States federal or state court or governmental
authority of competent jurisdiction directing that the transactions provided for
herein not be consummated as provided herein.
4.6 CONSENTS. All orders, consents, approvals, permits,
authorizations, notices, declarations, filings, applications, qualifications and
registrations identified in Section 3.3 of the Disclosure Schedule and necessary
to effect the Closing shall have been obtained.
15
4.7 EMPLOYMENT/NONCOMPETITION, OPTION AND STAY-PAY
AGREEMENTS. Xxxxxxx- Xxxxxxx Holdings, Inc. shall have executed and delivered to
Xxxx X. Xxxxxxx (a) the Employment/Noncompetition Agreement in substantially the
form of Exhibit 4.7(a) hereto, (b) the Option Agreement in substantially the
form of Exhibit 4.7(b) hereto and (c) the Stay-Pay Agreement in substantially
the form of Exhibit 4.7(c) hereto.
4.8 EQUITY AGREEMENTS. Xxxxxxx-Xxxxxxx Holdings, Inc. shall
have executed and delivered to Xxxx X. Xxxxxxx the CMS Management Investors'
Agreement, the Registration Rights Agreement, the Amended and Restated
Stockholders Transfer Rights Agreement and the Amended and Restated Voting
Agreement in substantially the forms of Exhibits 4.8(a), 4.8(b), 4.8(c) and
4.8(d) hereto.
ARTICLE V
CONDITIONS TO BUYER'S OBLIGATION
The obligation of the Buyer to effect the Closing under this
Agreement are subject to the satisfaction, at or prior to the Closing, of each
of the following conditions, unless validly waived in writing by the Buyer.
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Sellers in this Agreement shall be true on and as of the
Closing Date as though such representations and warranties were made on such
date, except that any representations and warranties that are made as of a
specified date shall be true as of such date.
5.2 PERFORMANCE. The Sellers shall have performed and
complied in all material respects with all agreements and obligations required
by this Agreement to be so performed or complied with by the Sellers prior to
the Closing.
5.3 OFFICER'S CERTIFICATE. The Sellers shall have delivered
to the Buyer a certificate, dated as of the Closing Date and executed by the
President of the Company and by the Sellers' Representative, certifying to the
fulfillment of the conditions specified in Sections 5.1 and 5.2 hereof.
5.4 RESIGNATION OF DIRECTORS. The Sellers shall have
delivered to the Buyer the written resignations of all directors of the Company
other than Xxxx X. Xxxxxxx, effective as of the Closing Date.
5.5 HSR ACT. All applicable waiting periods under the HSR
Act with respect to the transactions contemplated hereby shall have expired or
been terminated.
5.6 INJUNCTIONS. On the Closing Date there shall be no
injunction, writ, preliminary restraining order or other order in effect of any
nature issued by a United States federal or state court or governmental
authority of competent jurisdiction directing that the transactions provided for
herein not be consummated as provided herein.
16
5.7 CONSENTS. All orders, consents, approvals, permits,
authorizations, notices, declarations, filings, applications, qualifications and
registrations identified in Section 2.7 of the Disclosure Schedule and necessary
to effect the Closing or continue the business of the Company after the Closing
shall have been obtained.
5.8 AFFILIATE AGREEMENTS. The Buyer shall have received
evidence satisfactory to it that all agreements between the Company, on the one
hand, and the affiliates of the Company, on the other hand, have been terminated
without any penalty to the Company.
5.9 EXISTING INDEBTEDNESS. CFB, each Former Stockholder and
any other holder of any outstanding indebtedness for borrowed money of the
Company (or beneficiary of any guarantee made by the Company of the indebtedness
of any other person) (except the debt securities and other indebtedness and
guarantees expressly set forth in Section 2.2 of the Disclosure Schedule) shall
have released and discharged the same and any lien securing the same against
payment by or on behalf of the Sellers of the outstanding balance of such
indebtedness and any related obligations without premium or penalty, and the
Buyer shall have received written evidence satisfactory to it of the foregoing.
Xxxxxxxxxxx Xxxxxx Xxxx & Xxxx, P.C., as agent for Xxxx X. Xxxxxxx, shall
confirm in writing to the Buyer the transmission of funds by wire transfer to
the accounts of the Former Stockholders of the amounts sufficient to satisfy the
indebtedness of Xxxx X. Xxxxxxx to the Former Stockholders.
5.10 FINANCING. The Buyer shall have received or otherwise
have available, on terms and conditions reasonably satisfactory to the Buyer,
financing sufficient to pay the cash Purchase Price and all fees and expenses
incurred by the Buyer in connection with the transactions contemplated hereby
and to satisfy the ongoing working capital requirements of the Company.
5.11 EMPLOYMENT/NONCOMPETITION AND OPTION AGREEMENTS. Xxxx
X. Xxxxxxx and the Company shall have executed and delivered to Xxxxxxx-Xxxxxxx
Holdings, Inc. (a) the Employment/Noncompetition Agreement in substantially the
form of Exhibit 4.7(a) hereto, (b) the Option Agreement in substantially the
form of Exhibit 4.7(b) hereto and (c) the Stay-Pay Agreement in substantially
the form of Exhibit 4.7(c) hereto.
5.12 EQUITY AGREEMENTS. Xxxx X. Xxxxxxx shall have executed
and delivered to Xxxxxxx-Xxxxxxx Holdings, Inc. the CMS Management Investors'
Agreement, the Registration Rights Agreement, the Amended and Restated
Stockholders Transfer Rights Agreement and the Amended and Restated Voting
Agreement in substantially the forms of Exhibits 4.8(a), 4.8(b), 4.8(c) and
4.8(d) hereto.
5.13 IRS FORM. The Sellers' Representative shall have
delivered to the Buyer an IRS Form 8023 which has been signed by each Seller.
17
ARTICLE VI
COVENANTS AND AGREEMENTS
6.1 CONDUCT OF BUSINESS BY COMPANY. The Sellers, jointly and
severally, covenant that, except (i) as otherwise expressly contemplated by this
Agreement or (ii) as consented to by the Buyer in writing, from and after the
date of this Agreement and until the Closing Date the Sellers shall cause the
Company to:
(a) use all reasonable efforts consistent with good business
judgment to (i) preserve intact the present business organization of the Company
and pay payables and collect receivables in a manner consistent with past
practice and otherwise operate the Company in the ordinary and regular course of
business consistent with past practice; (ii) maintain the Company's books and
records in accordance with past practices; (iii) keep available the services of
the Company's officers and employees; and (iv) maintain satisfactory
relationships with licensors, suppliers, creditors, distributors, customers and
others having material business relationships with the Company;
(b) notify the Buyer of any change in the normal course of
business or operations of the Company and of any governmental complaints,
investigations or hearings of which the Sellers or the Company are notified (or
communications received by the Sellers or the Company indicating that the same
may be contemplated), or the institution or settlement of litigation, in each
case involving the Company, and to keep the Buyer informed of such events;
(c) not (i) cause to be issued or sold any shares of capital
stock or debt or equity securities of the Company or issue, grant or enter into
any options, warrants, rights, subscription agreements or commitments of any
kind with respect thereto; (ii) directly or indirectly cause to be purchased,
redeemed or otherwise acquired or disposed of any shares of capital stock of the
Company; (iii) declare, set aside or pay any dividend or other distribution,
except that the Company may make dividends and other distributions (A) to
stockholders of the Company after December 31, 1996 in an aggregate amount not
to exceed (1) the sum of (X) $1,173,716 (all cash on hand of the Company as
reflected on the 1996 Balance Sheet as of December 31, 1996) and (Y) $355,783 of
accounts receivable reflected on the 1996 Balance Sheet collected by the Company
on or before January 3, 1997, (2) minus $150,000 and (B) to the extent permitted
under Section 6.4(f) of this Agreement; (iv) permit or allow the Company to
borrow or agree to borrow any funds or incur, whether directly or by way of
guarantee, any obligation for borrowed money, other than in the ordinary course
of business and consistent with past practice; (v) subject any of the assets of
the Company (real, personal or mixed, tangible or intangible) to any Encumbrance
or otherwise permit or allow the sale, lease, transfer or disposition of any
assets of the Company (real, personal or mixed, tangible or intangible), other
than in the ordinary course of business and consistent with past practice; (vii)
assume, guarantee, or otherwise become responsible for the obligations of, or
make any loans or advances to, any other individual, firm or corporation; (viii)
waive or release any rights of material value, or cancel, compromise, release or
assign any material indebtedness owed to it or any material claims held by it;
(ix) except for capital expenditures not to exceed $50,000, make any investment
or expenditure of a capital nature either by purchase of stock or securities,
contributions to capital, property transfer or otherwise, or by
18
the purchase of any property or assets of any other individual, firm or
corporation; (x) cancel or terminate any insurance policy naming it as a
beneficiary or a loss payable payee; (xi) enter into any collective bargaining
agreements; (xii) increase the compensation or fringe benefits of any of its
officers or, other than in accordance with past practice, effect any material
general increase in the compensation or fringe benefits of its employees or pay
or agree to pay any pension, retirement allowance, or other benefit not required
by any existing employee benefit plan to any such officers or employees, commit
itself to any employment agreement or employee benefit plan with or for the
benefit of any of its officers or employees or any other person, or alter,
amend, terminate in whole or in part, or curtail or permanently discontinue
contributions to, any pension plan or any other employee benefit plan; (xiii)
amend its certificate of incorporation or by-laws; or (xiv) agree to do any of
the foregoing; and
(d) comply in all material respects with all applicable
laws, including, without limitation, applicable Environmental Laws.
6.2 ACCESS TO BOOKS AND RECORDS; COOPERATION.
(a) Except as otherwise provided in Section 6.4, the Buyer
agrees that from the Closing Date and until the fifth anniversary of the Closing
Date, during normal business hours upon reasonable advance notice, it shall
permit, at no cost to the Buyer and its affiliates and without disruption of the
business of the Buyer and its affiliates, the Sellers and their respective
counsel, accountants and other authorized representatives to have access to the
officers, directors, employees, accountants and other advisors and agents,
properties, books, records and contracts of the Company, and the right to make
copies and extracts from such books, records and contracts, in each case to the
extent necessary to investigate and defend any threatened or actual litigation
and in connection with any Tax matters involving the Company.
(b) The Buyer agrees not to, and to cause its subsidiaries
not to, destroy at any time any files or records which are subject to Section
6.2(a) without giving written notice to the Sellers' Representative, and giving
the Sellers' Representative 30 days following receipt of such notice to request
in writing that all or a portion of the records intended to be destroyed be
delivered to the Sellers' Representative at the Sellers' expense.
(c) During the period commencing on the date hereof and
ending on the Closing Date, the Company will, and the Sellers will cause the
Company to, afford to the Buyer and its counsel, accountants and other
authorized representatives access at all reasonable times upon reasonable
advance notice to the officers, directors, employees, accountants and other
advisors and agents, properties, books, records and contracts, of the Company,
and the right to make copies and extracts from such books, records and
contracts, and to furnish the Buyer with all financial, operating and other data
and information concerning the Company as Buyer and its advisors may reasonably
request.
(d) During the period commencing on the date hereof and
ending on the Closing Date, the Buyer will afford to the Company and its
counsel, accountants and other authorized representatives access at all
reasonable times upon reasonable advance notice to the officers, directors,
employees, accountants and other advisors and agents, books, records and
contracts of
19
the Buyer, and the right to make copies and extracts from such books, records
and contracts, and to furnish the Company with all financial, operating and
other data and information concerning the Buyer as the Company may reasonably
request.
6.3 FILINGS AND CONSENTS. Each of the Sellers and the
Company, on the one hand, and the Buyer, on the other hand, shall use all
reasonable efforts to obtain and to cooperate in obtaining any consent,
approval, authorization or order of, and in making any registration or filing
with, any governmental agency or body or other third party required in
connection with the execution, delivery or performance of this Agreement. The
parties agree to cause to be made all appropriate filings under the HSR Act
within three business days of the date of this Agreement and to diligently
pursue early termination of the waiting period under such act.
6.4 TAX MATTERS.
(a) CODE SECTION 338(H) (10) ELECTION. Buyer shall notify
the Sellers' Representative in writing (the "338(h)(10) Notification"), on or
prior to the 120th day following the Closing, of its intention to make an
election under Sections 338(g) and 338(h)(10) of the Code, with respect to the
Company and Buyer shall attach a copy of the Allocation (as defined in (b)
below) to the 338(h)(10) Notification. The Sellers' Representative shall
determine, or shall cause to be determined, the Tax Election Amount (as defined
in 6.4(c) below) for each Seller within 30 days of its receipt of the 338(h)(10)
Notification. After the Tax Election Amount has been finally agreed, or
determined, in accordance with Section 6.4(d) below, Buyer shall have 30 days
from the date of such determination to notify the Sellers' Representative as to
whether it will make the Code Section 338(h)(10) Election described herein. If
Buyer notifies the Sellers' Representative that it will make the Code Section
338(h)(10) Election, Buyer shall file the IRS Form , which has been signed by
each Seller and provided to Buyer pursuant to Section 5.16 of this Agreement,
with the Internal Revenue Service and each Seller hereby agrees that such Seller
shall join with Buyer in timely making a joint Code Section 338(h)(10) election
and any similar election as may be available under applicable state or local law
(collectively, the "CODE SECTION 338(H)(10) ELECTION") and that each Seller
shall take all steps necessary to effectuate the same.
(b) DETERMINATION AND ALLOCATION OF THE MODIFIED AGGREGATE
DEEMED SALE PRICE. If a Code Section 338(h)(10) Election is made, the "modified
aggregate deemed sale price" ("MADSP") shall be determined and allocated in
accordance with Section 338 of the Code and the applicable treasury regulations
promulgated thereunder. For purposes of making the Code Section 338(h)(10)
Election, the Buyer shall determine the value of the Company's tangible and
intangible assets and shall provide the Sellers' Representative with a copy of
the Buyer's allocation of its "adjusted grossed-up basis" (within the meaning of
the treasury regulations promulgated under Section 338 of the Code) to such
assets (the "ALLOCATION"). The Allocation shall be binding upon the Sellers and
the Buyer for purposes of allocating the MADSP among such assets, and none of
the parties hereto shall file, or cause to be filed, any Tax Return, or take a
position with any Tax Authority, that is inconsistent with the Allocation.
(c) The Buyer shall pay to each Seller as additional
Purchase Price such amount (the "TAX ELECTION AMOUNT"), if any, as shall equal
the excess of (A) the amount of federal, state and local income and franchise
taxes actually incurred by such Seller as a result of the deemed sale
20
of the assets of the Company pursuant to the Code Section 338(h)(10) Election,
including any additional amount of Purchase Price that may be payable by the
Buyer under this subsection 6.4(c) (the "ACTUAL SECTION 338(H)(10) TAX
LIABILITY"), over (B) the amount of federal, state and local income and
franchise taxes that would have been incurred by such Seller solely as a result
of a transaction in which the Shares actually being sold by such Seller were
sold without making a Section 338(h)(10) Election; PROVIDED, HOWEVER, that the
calculation of the Tax Election Amount shall not take into consideration any
Taxes imposed on a Seller as a result of such Seller not being eligible for
installment sale treatment under Section 453 of the Code (or similar state,
local or foreign provisions) or any Taxes imposed by any jurisdiction other than
the United States, South Carolina and New Jersey.
(d) The Tax Election Amount shall be determined by the
Sellers and an accounting firm selected by the Sellers' Representative,
PROVIDED, HOWEVER, that the Tax Election Amount shall be subject to the right of
review by the Buyer and its accounting firm. The Sellers' Representative shall
provide to the Buyer no later than the 25th day following the effective date of
the Buyer's initial request the calculation of the Tax Election Amount. In the
event the Buyer or its accounting firm disagrees with such calculation, the
Buyer shall give the Sellers' Representative written notice thereof within 15
days of the date the Sellers' Representative provided such calculation. The
Buyer shall pay to each Seller the portion of the Tax Election Amount that the
Buyer does not dispute (the "UNDISPUTED AMOUNT") at least three days prior to
the due date of such Seller's tax return for the federal income tax period that
includes the Closing Date. If the Sellers and the Buyer are unable to settle or
compromise such dispute within fifteen days after the Buyer's notice of
disagreement, Sellers' and Buyer's accounting firms shall jointly select a third
independent "Big Six" accounting firm to determine the Tax Election Amount and
the determination of such third firm shall be final. In the event it is
determined that the Buyer owes any Seller any portion of the Disputed Amount,
the Buyer shall bear the portion of the costs of the third accounting firm
determined by multiplying such costs by a fraction, the numerator of which is
the additional amount that such third accounting firm determines that the Buyer
owes such Seller (or Sellers) and the denominator of which is the Disputed
Amount, and the Buyer shall pay to such Seller (or Sellers) any such additional
amount plus interest thereon at the "overpayment rate" as defined in Section
6621(a) of the Code from the due date of such Seller's return to the date of
payment. The relevant Seller (or Sellers) shall bear all costs of the third
accounting firm that are not paid by the Buyer pursuant to the preceding
sentence.
(e) SELLERS' INDEMNITY FOR TAXES. From and after the Closing
Date, each Seller shall jointly and severally indemnify and hold harmless the
Buyer Indemnified Persons (as defined in Section 8.1(a)) against the following
Taxes and, against any loss, damage, liability or expense, including, but not
limited to, reasonable fees for attorneys and other outside consultants,
incurred in contesting or otherwise in connection with any such Taxes: (i) Taxes
imposed on the Sellers or the Company with respect to taxable years or periods
ending on or before the Closing Date; (ii) with respect to taxable years or
periods beginning before the Closing Date and ending after the Closing Date,
Taxes imposed on the Sellers or the Company which are allocable, pursuant to
Section 6.4(f) below, to the portion of such taxable year or period ending on
the Closing Date (an "INTERIM PERIOD") (Interim Periods and any taxable years or
periods that end on or prior to the Closing Date being referred to collectively
hereinafter as "PRE-CLOSING PERIODS"); (iii) Taxes imposed on any member of any
affiliated group (other than the Company) with which the Sellers
21
or the Company files or has filed a Tax Return on a consolidated, combined or
unitary basis for a taxable year or period ending on or before the Closing Date;
(iv) Taxes required to be paid or reimbursed by the Sellers under Section 6.4(i)
or Section 6.4(j) hereof (to the extent such Taxes have not been paid by the
Sellers); (v) Taxes or additional Taxes imposed on any Buyer Indemnified Person
as a result of a breach of the representations and warranties set forth in
Section 2.12 of this Agreement or of the covenants contained in this Section
6.4; (vi) Taxes or other payments required to be made after the date hereof by
the Company to any party under any Tax sharing, indemnity or allocation
agreement (whether or not written); or (vii) any United States federal, state or
local income or franchise taxes imposed on the Company under Section 1374(a) of
the Code (or any similar state or local income or franchise tax provision) as a
result of making the Code Section 338(h)(10) Election.
(f) COMPANY LIABILITY FOR TAXABLE PERIODS COMMENCING AFTER
CLOSING DATE; DISTRIBUTION IN RESPECT OF PRE-CLOSING PERIOD TAXES. The Company
shall be liable for, and shall indemnify and hold the Sellers and any of their
affiliates harmless against each of the following: (i) any and all Taxes of, or
payable by, the Company for any taxable year or taxable period commencing after
the Closing Date, (ii) any Taxes relating to operations, acts or omissions of
the Company or any of its affiliates that occur after the Closing and (iii) any
costs or expenses attributable to any item in clauses (i) or (ii) above. The
Company shall make a distribution to each Seller on or prior to the Closing Date
in an amount equal to the aggregate amount of the United States federal, state
and local income taxes that will be imposed on such Seller with respect to the
taxable income of the Company allocated to such Seller for the period beginning
after December 31, 1996 through the Closing Date. The amount of such taxes, if
any (and, therefore, the amount of such distribution), shall be determined by
the Sellers and an accounting firm selected by the Sellers' Representative at
least 15 days prior to the Closing Date; PROVIDED, HOWEVER, that such
determination shall be subject to the right of review by the Buyer and its
accounting firm.
(g) APPORTIONMENT OF TAXES. In order to apportion
appropriately any Taxes relating to any taxable year or period that includes an
Interim Period, the parties hereto shall, to the extent permitted under
applicable law, elect with the relevant Tax Authority to treat for all purposes,
the Closing Date as the last day of the taxable year or period of the Company,
and such Interim Period shall be treated as a short taxable year and a
Pre-Closing Period for purposes of this Section 6.4. In any case where
applicable law does not permit the Company to treat the Closing Date as the last
day of the taxable year or period of the Company with respect to Taxes that are
payable with respect to an Interim Period, the portion of any such Tax that is
allocable to the portion of the Interim Period ending on the Closing Date shall
be:
(x) in the case of Taxes that are either (1) based upon or
related to income or receipts, or (2) imposed in connection with any sale or
other transfer or assignment of property (real or personal, tangible or
intangible) (other than conveyances pursuant to this Agreement, which are
covered under Section 6.4(j)), deemed equal to the amount which would be payable
if the taxable year or period ended on the Closing Date (except that, solely for
purposes of determining the marginal tax rate applicable to income or receipts
during such period in a jurisdiction in which such tax rate depends upon the
level of
22
income or receipts, annualized income or receipts may be
taken into account, if appropriate, for an equitable sharing of such Taxes); and
(y) in the case of Taxes not described in subparagraph (x)
above that are imposed on a periodic basis and measured by the level of any
item, deemed to be the amount of such Taxes for the entire period (or, in the
case of such Taxes determined on an arrears basis, the amount of such Taxes for
the immediately preceding period) multiplied by a fraction the numerator of
which is the number of calendar days in the Interim Period ending on the Closing
Date and the denominator of which is the number of calendar days in the entire
relevant period.
(h) TERMINATION OF THE COMPANY'S S CORPORATION STATUS AND
TAXABLE YEAR. The transactions contemplated by this Agreement will cause the
Company to terminate its status as an S corporation, effective as of the Closing
Date. Pursuant to section 1362(e)(1) of the Code, the Company shall have two
short taxable years for United States federal income tax purposes for the year
that includes the Closing Date, an "S short year" beginning January 1 of such
year and ending on the day before the Closing Date and a "C short year"
beginning on the Closing Date and ending on the next succeeding close of the
Buyer's consolidated return taxable year. The Sellers shall cause the Company to
elect and shall consent, pursuant to section 1362(e)(3) of the Code, to allocate
Tax items to the Company's S short year and C short year pursuant to normal Tax
accounting rules (i.e., the "closing of the books method"). The allocation of
such items shall be done on a basis consistent with the Company's past
accounting practice and in a manner satisfactory to the Buyer.
(i) PREPARATION OF TAX RETURNS. The Sellers' Representative
shall prepare and file or otherwise furnish to the appropriate party (or cause
to be prepared and filed or so furnished) in a timely manner the United States
federal income tax return of the Company for the Company's S short year. In
addition, the Sellers' Representative shall prepare and file, or cause to be
prepared and filed, any and all other Tax Returns required to be filed by the
Company (after giving effect to any valid extensions of the due date for filing
any such Tax Returns) on or prior to the Closing Date. All such Tax Returns
shall be prepared in a manner consistent with the prior Tax Returns of the
Company, unless otherwise required under applicable law. The Sellers shall
timely pay (or cause to be timely paid) all Taxes shown as due and owing on all
such Tax Returns. The Buyer shall prepare and file, or cause to be prepared and
filed any and all other Tax Returns required to be filed by the Company. Subject
to its right to indemnification under this Section 6.4, the Buyer shall pay (or
cause to be paid) all Taxes shown as due and owing on all such Tax Returns. The
Sellers, the Company and Buyer shall reasonably cooperate, and shall cause their
respective affiliates, officers, employees, agents, auditors and other
representatives reasonably to cooperate, in preparing and filing all Tax
Returns, including maintaining and making available to each other all records
necessary in connection with Taxes and in resolving all disputes and audits with
respect to all taxable periods relating to Taxes. The Buyer and the Sellers
recognize that the Sellers and Sellers' agents and other representatives will
need access, from time to time, after the Closing Date, to certain accounting
and Tax records and information held by the Company to the extent such records
and information pertain to events occurring prior to the Closing Date;
therefore, each of the Buyer and the Company agrees (i) to use all reasonable
efforts to properly retain and maintain such records until such time as the
Sellers' Representative agrees that such
23
retention and maintenance is no longer necessary (but in no event longer than
six years after the Closing Date) and (ii) to allow the Sellers and Sellers'
agents and other representatives, at times and dates mutually acceptable to the
parties, to inspect, review and make copies of such records as the Sellers,
their agents and other representatives may deem necessary or appropriate from
time to time, such activities to be conducted during normal business hours and
at the Sellers' expense.
(j) TRANSFER AND CONVEYANCE TAXES. The Sellers shall be
liable for and shall pay all applicable sales, transfer, recording, deed, stamp
and other similar taxes, including, without limitation, any real property
transfer or gains taxes (if any), resulting from the consummation of the
transactions contemplated by this Agreement.
(k) CONTESTS. The Buyer shall promptly notify the Sellers'
Representative in writing of any written notice of a proposed assessment or
claim in an audit or administrative or judicial proceeding involving the Company
which, if determined adversely to the taxpayer, would be grounds for
indemnification under this Section 6.4; PROVIDED, HOWEVER, that a failure to
give such notice will not affect the Buyer's right to indemnification hereunder,
except to the extent, if any, that, but for such failure, the Sellers'
Representative could have avoided the Tax liability in question. In the case of
an audit or administrative or judicial proceeding that relates to any
Pre-Closing Period, PROVIDED that within 30 days after the Sellers'
Representative receives the written notice from the Buyer required under this
Section 6.4(k) and prior to taking any action with respect to such audit or
administrative or judicial proceeding, the Sellers' Representative acknowledges
in writing the Sellers' liability under this Section 6.4 to hold the Buyer and
the Company harmless against the full amount of any adjustment which may be made
as a result of such audit or proceeding, the Sellers' Representative shall have
the right at his, her or its own expense to control the conduct of such audit or
proceeding; PROVIDED, HOWEVER, that the Sellers' Representative shall not settle
or otherwise compromise any issue or matter without the Buyer's prior written
consent if such issue or matter will have a material affect on the Tax liability
of the Buyer or the Company for a post-Closing taxable year or period (or for an
Interim Period). The Buyer also may participate in any such audit or proceeding
at its own expense and, if the Sellers' Representative does not assume the
defense of any such audit or proceeding, the Buyer may, without any effect to
its or the Company's right to indemnification under this Section 6.4, defend the
same in such manner as it may deem appropriate, including, but not limited to,
settling such audit or proceeding. Except as provided otherwise in this Section
6.4(k), the Buyer shall control at its own expense any and all audit,
administrative and judicial proceedings related to the Company or the Company's
Taxes.
(l) TIME OF PAYMENT. Payment of any amounts due under this
Section 6.4 in respect of Taxes shall be made by the Sellers at least three
business days before the due date of the applicable estimated or final Tax
Return required to be filed by the Buyer on which is required to be reported
income for an Interim Period for which the Sellers are responsible under
Sections 6.4(i) or (j) of this Agreement without regard to whether the Tax
Return shows overall net income or loss for such period, or, with respect to
indemnity payments due under Section 6.4(e) of this Agreement, within three
business days following a settlement or compromise of an assessment of a Tax by
a Tax Authority or a "determination" as defined in Section 1313(a) of the Code.
If liability under this Section 6.4 is in respect of costs or expenses other
than Taxes, payment by the Sellers of any amounts due under this Section 6.4
shall be made within five
24
business days after the date that the Sellers' Representative has been notified
by the Buyer that the Sellers have a liability for a determinable amount under
this Section 6.4 and is provided with calculations or other materials supporting
such liability.
(m) TERMINATION OF SELLERS' INDEMNITY OBLIGATIONS FOR TAXES.
Notwithstanding any provision herein to the contrary, the obligations of the
Sellers to indemnify and hold harmless the Buyer and the Company pursuant to
this Section 6.4 shall terminate at the close of business on the 120th day
following the expiration of the applicable statute of limitations with respect
to the Tax liabilities in question (giving effect to any waiver, mitigation or
extension thereof).
(n) TAX ELECTIONS. From and after the date hereof, the
Sellers shall not, without the prior written consent of the Buyer (which may not
unreasonably withhold such consent), make or revoke, or cause or permit to be
made or revoked, any Tax election, or adopt or change any method of accounting,
that would adversely affect the Company.
(o) TAX SHARING AGREEMENTS. As of the Closing Date, any and
all Tax sharing, indemnity or allocation agreements shall terminate as between
the Company on the one hand, and the Sellers and/or any affiliate of the
Sellers, on the other hand, and, after the date hereof, no Taxes or other
amounts shall be paid or reimbursed by the Company under any such agreement,
regardless of the taxable year or period for which such Taxes are imposed, and
the provisions of this Section 6.4 shall govern thereafter.
(p) RESOLUTION OF DISAGREEMENTS. If the Sellers and the
Buyer disagree as to the amount for which the Buyer or the Company and the
Sellers are liable under this Section 6.4, the Sellers' Representative and the
Buyer shall promptly consult with each other in an effort to resolve such
dispute. If any such point of disagreement cannot be resolved within 30 days of
the date of consultation, such dispute shall be submitted to a big-six
accounting firm which is mutually acceptable to the Buyer and the Sellers's
Representative to act as an arbitrator to resolve all points of disagreement
concerning Tax accounting matters with respect to this Agreement.
6.5 WARN ACT. The Buyer and the Sellers and the Company
agree that for purposes of the WARN Act, the Closing Date shall be the
"effective date" as such term is used in the WARN Act. The Buyer acknowledges
and represents that it has no present intent to engage in or permit a "mass
layoff" or "plant closing" with respect to the Company as defined in the WARN
Act. The Buyer agrees that from and after the Closing Date the Company shall be
responsible for any notification required under the WARN Act with respect to the
Company. The Sellers and the Company agree that between the date hereof and the
Closing Date, they will not effect or permit a "plant closing" or "mass layoff"
as these terms are defined in the WARN Act with respect to the Company without
notifying the Buyer in advance and without complying with the notice
requirements and all other provisions of the WARN Act.
6.6 NO NEGOTIATION. Neither the Company nor any of the
Sellers will, directly or indirectly, through any director, employee,
representative, affiliate or agent of the Sellers or the Company, or otherwise
(i) solicit, initiate, encourage or assist in the submission of any inquiries,
proposals or offers from any corporation, partnership, person or other entity or
group relating to any acquisition or purchase of any assets of, or any equity
interest in, the Company or any form of
25
recapitalization transaction, merger, consolidation,
business combination, spin-off, liquidation or similar transaction involving,
directly or indirectly, the Company (each an "ACQUISITION PROPOSAL"), (ii)
participate in any discussions or negotiations regarding any Acquisition
Proposal or furnish to any person or entity any information concerning the
Company or any Acquisition Proposal or (iii) otherwise cooperate in any way
with, or assist or participate in, facilitate or encourage, any effort or
attempt by any other person to make or enter into an Acquisition Proposal. The
Sellers agree not to pledge, encumber or dispose of the Shares or any other
securities of the Company beneficially owned by them prior to the Closing. If
the Company or any Seller receives any inquiry, proposal or offer to enter into
any transaction of any type referred to above, such party agrees to inform the
Buyer promptly of the terms thereof and the identity of the party making such
inquiry, proposal or offer.
6.7 COVENANT TO SATISFY CONDITIONS. Each party hereto agrees
to use all reasonable efforts to insure that the conditions set forth in Article
IV and Article V hereof are satisfied, insofar as such matters are within the
control of such party.
ARTICLE VII
TERMINATION
7.1 TERMINATION. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by the mutual consent of the Sellers' Representative and
the Buyer;
(b) by the Buyer if the Closing has not occurred on or
before July 31, 1997, unless the failure of such consummation shall be due to
the failure of the Buyer to comply in all material respects with the
representations, warranties, agreements and covenants contained herein to be
performed by the Buyer on or before July 31, 1997;
(c) by the Sellers' Representative if the Closing has not
occurred on or before July 31, 1997, unless the failure of such consummation
shall be due to the failure of the Sellers to comply in all material respects
with the representations, warranties, agreements and covenants contained herein
to be performed by the Sellers on or before July 31, 1997; or
(d)by either the Sellers' Representative or the Buyer if any
court or governmental authority of competent jurisdiction shall have issued an
order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated hereby and such order,
decree or ruling or other action shall have become final and nonappealable.
7.2 PROCEDURE AND EFFECT OF TERMINATION. In the event of the
termination of this Agreement and the abandonment of the transactions
contemplated hereby by the Sellers' Representative or the Buyer pursuant to
Section 7.1 hereof, written notice thereof shall forthwith be given to the other
parties. If this Agreement is terminated and the transactions contemplated
26
by this Agreement are abandoned as provided herein, no party to this Agreement
will have any liability under this Agreement to any other except (i) that
nothing herein shall relieve any party from any liability for any breach of any
of the representations, warranties, covenants and agreements set forth in this
Agreement and (ii) as contemplated by Section 9.1.
ARTICLE VII
INDEMNIFICATION
8.1 INDEMNIFICATION.(a) INDEMNIFICATION BY SELLERS. Subject
to the limits set forth in this Section 8.1, the Sellers agree, jointly and
severally, to indemnify, defend and hold the Buyer and its affiliates
(including, after the Closing Date, the Company) and their respective officers,
directors, partners, stockholders, employees, agents and representatives (the
"BUYER INDEMNIFIED PERSONS") harmless from and in respect of any and all losses,
damages, costs and reasonable expenses (including, without limitation,
reasonable fees and expenses of counsel) (collectively, "LOSSES"), that they may
incur arising: (i) out of or due to any inaccuracy of any representation or the
breach of any warranty, covenant, undertaking or other agreement of the Sellers
contained in this Agreement or the Disclosure Schedule; (ii) under any
Environmental Laws regarding conditions or events existing or occurring on or
prior to the Closing Date; or (iii) under the WARN Act for "plant closings" or
"mass layoffs" which occur or have occurred on or prior to the Closing Date with
respect to the Company. Anything to the contrary contained herein
notwithstanding, (x) none of the Buyer Indemnified Persons shall be entitled to
recover from the Sellers for any claims for indemnity with respect to any
inaccuracy or breach of any representations or warranties (other than recovery
for claims predicated upon the inaccuracy or breach of Sections 2.2, 2.3, 2.4,
2.7(b), 2.19 and 2.25 and the first sentence of Section 2.1), unless and until
the total of all such claims in respect of Losses pursuant to Section 8.1(a)(i)
and (ii) exceeds $250,000 (the "DEDUCTIBLE") and then only for the amount by
which such claims exceed such amount, (y) the Buyer Indemnified Parties shall
not be entitled to recover more than an aggregate of $2,500,000 from the Sellers
for any claims for indemnity with respect to inaccuracies or breaches of
representations or warranties (other than recovery for claims predicated upon
the inaccuracy or breach of Sections 2.2, 2.3, 2.4, 2.7(b), 2.17, 2.19 and 2.25
and the first sentence of Section 2.1) and (z) the Buyer Indemnified Parties
shall not be entitled to recover more than an aggregate of $1,500,000 from the
Sellers for any claims for indemnity under Section 8.1(a)(ii) or with respect to
inaccuracies or breaches of Section 2.17 (collectively, "INDEMNIFIABLE
ENVIRONMENTAL LOSSES") provided that (A) the Sellers shall be solely responsible
for the first $1,000,000 of Indemnifiable Environmental Losses in excess of the
unused Deductible, (B) the Sellers, on the one hand, and the Buyer, on the other
hand, shall share responsibility on a 50-50 basis for the next $1,000,000 of
Indemnifiable Environmental Losses and (C) the Buyer shall be solely responsible
for any additional Indemnifiable Environmental Losses.
(b) INDEMNIFICATION BY THE COMPANY. Subject to the limits
set forth in this Section 8.1, the Buyer and the Company agree that after the
Closing the Company shall indemnify, defend and hold the Sellers and their
respective agents and representatives (the "SELLER INDEMNIFIED PERSONS")
harmless from and in respect of any and all Losses that they may incur arising:
(i) out of or due to any inaccuracy of any representation or the breach of any
warranty, covenant, undertaking or other agreement of the Buyer contained in
this Agreement; (ii) as a result of the
27
conduct of business of the Company after the Closing Date; or (iii) under the
WARN Act for "plant closings" or "mass layoffs" which occur after the Closing
Date with respect to the Company. Anything to the contrary contained herein
notwithstanding, (x) none of the Seller Indemnified Persons shall be entitled to
recover from the Company for any claims for indemnity with respect to any
inaccuracy or breach of any representations or warranties, unless and until the
total of all such claims in respect of Losses pursuant to Section 8.1(b)(i)
exceeds $250,000, and then only for the amount by which such claims exceed such
amount and (y) the Seller Indemnified Parties shall not be entitled to recover
more than an aggregate of $2,500,000 from the Company for any claims for
indemnity with respect to inaccuracies or breaches of representations or
warranties.
(c) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the parties contained in this Agreement or in
any instrument delivered pursuant hereto will survive the Closing Date and will
remain in full force and effect thereafter until the 18 month anniversary of the
Closing Date, provided that (i) the representations and warranties set forth in
Sections 2.2, 2.3, 2.4, 2.7(b), 2.12, 2.19 and 2.25 and the first sentence of
Section 2.1 will survive the Closing Date and will remain in full force and
effect until the expiration of the applicable statute of limitations (after
giving effect to waiver, mitigation or extension thereof) and (ii) the
representations and warranties set forth in Section 2.17 will survive the
Closing Date and will remain in full force and effect until the third
anniversary of the Closing Date; PROVIDED, FURTHER, that such representations or
warranties shall survive (if at all) beyond such period with respect to any
inaccuracy therein or breach thereof, written notice of which shall have been
duly given within such applicable period in accordance with Section 8.1 (d)
hereof.
(d) NOTICE AND OPPORTUNITY TO DEFEND. If there occurs an
event which a party asserts is an indemnifiable event pursuant to Section 8.1(a)
or 8.1(b), the party or parties seeking indemnification shall notify the other
party or parties obligated to provide indemnification (the "INDEMNIFYING PARTY")
promptly. If such event involves (i) any claim or (ii) the commencement of any
action or proceeding by a third person, the party seeking indemnification will
give such Indemnifying Party prompt written notice of such claim or the
commencement of such action or proceeding; PROVIDED, HOWEVER, that the failure
to provide prompt notice as provided herein will relieve the Indemnifying Party
of its obligations hereunder only to the extent that such failure prejudices the
Indemnifying Party hereunder. In case any such action shall be brought against
any party seeking indemnification and it shall notify the Indemnifying Party of
the commencement thereof, the Indemnifying Party shall be entitled to
participate therein or, following the delivery by the Indemnifying Party to the
party or parties seeking indemnification of the Indemnifying Party's
acknowledgement in writing that the relevant Loss is an indemnified liability
hereunder and that the Indemnifying Party, in its good faith judgment, will be
able to pay any award of money damages against the indemnified party in
connection with such action, to assume the defense thereof, with counsel
reasonably satisfactory to such party or parties seeking indemnification and,
after notice from the Indemnifying Party to such party or parties seeking
indemnification of such election so to assume the defense thereof, the
Indemnifying Party shall not be liable to the party or parties seeking
indemnification hereunder for any legal expenses of other counsel or any other
expenses subsequently incurred by such party or parties in connection with the
defense thereof. The Indemnifying Party and the party seeking indemnification
agree to cooperate fully with each other and their respective counsel in
connection with the defense, negotiation or settlement of any
28
such action or asserted liability. The party or parties seeking indemnification
shall have the right to participate at their own expense in the defense of such
action or asserted liability. If the Indemnifying Party assumes the defense of
an action (a) no settlement or compromise thereof may be effected (i) by the
Indemnifying Party without the written consent of the indemnified party (which
consent shall not be unreasonably withheld or delayed) unless (x) there is no
finding or admission of any violation of law or any violation of the rights of
any person by any indemnified party and no adverse effect on any other claims
that may be made against any indemnified party and (y) all relief provided is
paid or satisfied in full by the Indemnifying Party or (ii) by the indemnified
party without the consent of the Indemnifying Party and (b) the indemnified
party may subsequently assume the defense of such action if a court of competent
jurisdiction determines that the Indemnifying Party is not vigorously defending
such action. In no event shall an Indemnifying Party be liable for any
settlement effected without its written consent (which consent shall not be
unreasonably withheld or delayed). If more than one Seller is an Indemnifying
Party with respect to any matter, the Sellers' Representative shall have the
authority to exercise all rights of the Indemnifying Party afforded by this
Section 8.1(d).
(e) PAYMENT. On each occasion that any indemnified party
shall be entitled to indemnification or reimbursement under this Section 8.1,
the Indemnifying Party shall, at each such time, promptly pay the amount of such
indemnification or reimbursement. If any indemnified party shall be entitled to
indemnification under this Section 8.1, the Indemnifying Party shall pay the
indemnified party's costs and expenses arising as a result of a proceeding
directly relating to an indemnifiable Loss (including, without limitation, any
reasonable fees paid to witnesses), periodically as incurred.
(f) TAX INDEMNITY. Notwithstanding anything to the contrary
in this Section 8.1, indemnification with respect to Taxes shall be governed
solely by Section 6.4.
ARTICLE IX
MISCELLANEOUS
9.1 FEES AND EXPENSES. Except as otherwise provided in this
Agreement, the Sellers shall bear their own expenses and the expenses of their
respective affiliates (including the Company) and the Buyer shall bear its own
expenses in connection with the preparation and negotiation of this Agreement
and the consummation of the transactions contemplated by this Agreement. Each of
the Sellers and the Buyer shall bear the fees and expenses of any broker or
finder retained by such party or parties and their respective affiliates
(including, in the case of the Sellers, the Company) in connection with the
transactions contemplated herein.
9.2 GOVERNING LAW. This Agreement shall be construed under
and governed by the laws of the State of New York applicable to contracts made
and to be performed therein.
9.3 AMENDMENT. This Agreement may not be amended, modified
or supplemented except upon the execution and delivery of a written agreement
executed by the Buyer and the Sellers' Representative.
29
9.4 NO ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any party hereto
without the prior written consent of the Buyer, in the case of assignment by any
Seller, and the Sellers' Representative, in the case of any assignment by the
Buyer; PROVIDED that the Buyer may assign its rights and interests under this
Agreement to any of its Affiliates.
9.5 WAIVER. Any of the terms or conditions of this Agreement
which may be lawfully waived may be waived in writing at any time by each party
which is entitled to the benefits thereof; PROVIDED, HOWEVER, that the Sellers'
Representative is authorized to make any such waiver on behalf of any and all
the Sellers. Any waiver of any of the provisions of this Agreement by any party
hereto shall be binding only if set forth in an instrument in writing signed on
behalf of such party. No failure to enforce any provision of this Agreement
shall be deemed to or shall constitute a waiver of such provision and no waiver
of any of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not similar) nor
shall such waiver constitute a continuing waiver.
9.6 NOTICES. Any notice, demand, or communication required
or permitted to be given by any provision of this Agreement shall be deemed to
have been sufficiently given or served for all purposes if (a) personally
delivered, (b) mailed by registered or certified first-class mail, prepaid with
return receipt requested, (c) sent by a nationally recognized overnight courier
service, to the recipient at the address below indicated or (d) delivered by
facsimile which is confirmed in writing by sending a copy of such facsimile to
the recipient thereof pursuant to clause (a) or (c) above:
If to the Buyer:
Xxxxxxx-Xxxxxxx Corp.
000 Xxxx Xxxx Xxxx
Xxx Xxxx, Xxx Xxxxxx 00000
Attn: President
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
With copies to:
Vestar Capital Partners III, L.P.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
30
and
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
If to the Sellers' Representative or any Seller:
Container Management Services, Inc.
X.X. Xxx 0000
0000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
With a copy to:
Xxxxxxxxxxx Xxxxxx Xxxx & Xxxx, P.c.
000 Xxxx Xxxxxx Xxxxxx
Xxxx Xxxxxx Xxx 00
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxx Few
(000) 000-0000 (telecopier)
(000) 000-0000 (telephone)
or to such other address as any party hereto may, from time to time, designate
in a written notice given in like manner.
Except as otherwise provided herein, any notice under this
Agreement will be deemed to have been given (x) on the date such notice is
personally delivered or delivered by facsimile, (y) four days after the date of
mailing if sent by certified or registered mail or (z) the next succeeding
business day after the date such notice is delivered to the overnight courier
service if sent by overnight courier; PROVIDED that in each case notices
received after 4:00 p.m. (local time of the recipient) shall be deemed to have
been duly given on the next business day.
9.7 COMPLETE AGREEMENT. This Agreement, the Confidentiality,
Non-Use and Non-Solicitation Agreement, dated March 3, 1997, between the Company
and the Buyer (the "CONFIDENTIALITY AGREEMENT") and the other documents and
writings referred to herein or delivered pursuant hereto contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof and thereof.
This Agreement shall
31
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
9.8 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and each of which shall be deemed an original.
9.9 PUBLICITY. The Sellers' Representative and the Buyer
will consult with each other and will mutually agree upon any publication or
press release of any nature with respect to this Agreement or the transactions
contemplated hereby and shall not issue any such publication or press release
prior to such consultation and agreement except as may be required by applicable
law or by obligations pursuant to any listing agreement with any securities
exchange or any securities exchange regulation, in which case the party
proposing to issue such publication or press release shall make all reasonable
efforts to consult in good faith with the other party or parties before issuing
any such publication or press release and shall provide a copy thereof to the
other party or parties prior to such issuance.
9.10 HEADINGS. The headings contained in this Agreement are
for reference only and shall not affect in any way the meaning or interpretation
of this Agreement.
9.11 SEVERABILITY. Any provision of this Agreement which is
invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability, without affecting in any way the remaining provisions hereof
in such jurisdiction or rendering that or any other provision of this Agreement
invalid, illegal or unenforceable in any other jurisdiction.
9.12 THIRD PARTIES. Except as specifically set forth or
referred to herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person or corporation, other than the
parties hereto and their permitted successors or assigns, any rights or remedies
under or by reason of this Agreement.
9.13 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. THE
PARTIES HERETO HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE AREA ENCOMPASSED BY THE SOUTHERN DISTRICT OF THE STATE OF NEW
YORK AND IRREVOCABLY AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. THE PARTIES HERETO
EACH ACCEPT FOR ITSELF AND HIMSELF, AS THE CASE MAY BE, AND IN CONNECTION WITH
ITS OR HIS, AS THE CASE MAY BE, RESPECTIVE PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION AND VENUE OF THE AFORESAID COURTS
AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREE TO BE BOUND
BY ANY NON-APPEALABLE JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT. THE SELLERS EACH DESIGNATE CT CORPORATION SYSTEM AND SUCH OTHER
PERSON AS MAY HEREINAFTER BE SELECTED BY THE SELLERS' REPRESENTATIVE WHO
IRREVOCABLY AGREES IN WRITING TO SO SERVE AS
32
AGENT FOR THE SELLERS TO RECEIVE ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH
COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY THE PARTIES HERETO TO BE
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. THE BUYER DESIGNATES XXXXXX X.
XXXXXX AT HIS BUSINESS ADDRESS SET FORTH IN SECTION 9.6 AND SUCH OTHER PERSON AS
MAY HEREINAFTER BE SELECTED BY THE BUYER WHO IRREVOCABLY AGREES IN WRITING TO SO
SERVE AS AGENT FOR THE BUYER TO RECEIVE ALL PROCESS IN ANY SUCH PROCEEDINGS IN
ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY THE PARTIES HERETO TO
BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF ANY SUCH PROCESS SO
SERVED SHALL BE MAILED BY REGISTERED MAIL TO THE PARTIES HERETO, AS PROVIDED
HEREIN, EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO
MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS.
9.14 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.
THE PARTIES HERETO ALSO WAIVE ANY BOND OR SURETY OR SECURITY UPON SUCH BOND
WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF ANY OF THE OTHER PARTIES. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE PARTIES HERETO
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. THE PARTIES HERETO FURTHER WARRANT AND REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS OR HIS, AS THE CASE MAY BE, LEGAL COUNSEL, AND
THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS OR HIS, AS THE CASE MAY BE, JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
9.15 SELLERS' REPRESENTATIVE. Each of the Sellers hereby
irrevocably makes, constitutes and appoints Xxxx X. Xxxxxxx as his, her or its
attorney-in-fact (the "SELLERS' REPRESENTATIVE") with full power to act in his,
her or its place and stead to compromise any claim
33
or take any other action, including, without limitation, pursuant to Section 6.4
or 8.1, with respect to this Agreement. Each of the Sellers hereby agrees and
acknowledges that any obligations or liabilities of any Seller under this
Agreement shall be joint and several obligations or liabilities of all Sellers.
34
IN WITNESS WHEREOF, each of the Sellers has executed this
Agreement, and each of the Company and the Buyer has caused this Agreement to be
executed by its duly authorized officer, in each case as of the day and year
first above written.
/s/ XXXX X. XXXXXXX
------------------------------
XXXX X. XXXXXXX
/s/ XXXXXX X. XXXXXXX
------------------------------
XXXXXX X. XXXXXXX
XXXX X. XXXXXXX IRREVOCABLE
FAMILY TRUST
By: /s/ XXXXXXX X. FEW, JR.
----------------------------
Name: Xxxxxxx X. Few, Jr.
Title: Trustee
R.E. XXXXXXX IRREVOCABLE
FAMILY TRUST
By: /S/ XXXXXXX X. FEW, JR.
------------------------------
Name: Xxxxxxx X. Few, Jr.
Title: Trustee
35
CONTAINER MANAGEMENT
SERVICES, INC.
By: /S/ XXXX X. XXXXXXX
------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
XXXXXXX-XXXXXXX CORP.
By: /S/ XXXXXX X. XXXXXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President & CEO
CONSENTED TO:
/s/ XXXXX X. XXXXXXX
-------------------------
/s/ XXXXXXXX X. XXXXXXX
-------------------------
