EXECUTION COPY
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STOCK PURCHASE AGREEMENT
AMONG
GRAPHIC HOLDINGS, INC.,
BESSEMER HOLDINGS, L.P.,
THE STOCKHOLDERS NAMED HEREIN,
AND
TYCO GROUP S.A.R.L.
Dated as of September 21, 1998
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TABLE OF CONTENTS
Page
1. Purchase and Sale of the Shares.....................................1
2. Closing; Buyer's Obligations; Sellers' Representative...............2
(a) Closing; Buyer's Obligations................................2
(b) Sellers' Representative; Attorney-in-Fact...................4
3. Conditions to Closing...............................................5
(a) Buyer's Obligation..........................................5
(b) Sellers' Obligation.........................................7
(c) Frustration of Closing Conditions...........................8
4. Representations and Warranties of the Company.......................8
(a) Authority...................................................8
(b) No Conflicts; Consents......................................9
(c) Organization and Standing; Books and Records...............10
(d) Capital Stock of the Company and the
Subsidiaries.............................................10
(e) Equity Interests...........................................12
(f) Financial Statements.......................................12
(g) Taxes......................................................12
(h) Assets Other than Real Property Interests..................15
(i) Title to Real Property.....................................15
(j) Intellectual Property......................................16
(k) Contracts..................................................18
(l) Litigation.................................................20
(m) Insurance..................................................20
(n) Benefit Plans..............................................21
(o) Absence of Changes or Events...............................23
(p) Compliance with Applicable Laws............................23
(q) Employee and Labor Matters.................................25
(r) Certain Business Relationships with the
Company..................................................25
(s) No Undisclosed Liabilities.................................25
(t) Prepayment Penalty.........................................26
5. Representations and Warranties of Sellers..........................26
(a) Execution..................................................26
(b) No Conflicts...............................................26
(c) The Shares.................................................27
(d) Foreign Persons............................................27
6. Covenants of the Company...........................................27
(a) Access.....................................................27
(b) Ordinary Conduct...........................................28
(c) Redemption of Preferred Stock..............................31
(d) Options....................................................31
(e) Resignations of Directors..................................32
(f) Bring-Along Rights.........................................32
7. Representations and Warranties of Buyer............................33
(a) Authority..................................................33
(b) No Conflicts; Consents.....................................33
(c) Securities Act.............................................34
(d) Actions and Proceedings, etc...............................34
(e) Availability of Funds......................................34
8. Covenants of Buyer.................................................34
(a) Confidentiality............................................34
(b) No Additional Representations..............................35
(c) Nonobstruction.............................................35
(d) Supplemental Disclosure....................................36
(e) Payment of Certain Taxes...................................36
(f) Redemption of Preferred Stock..............................36
(g) Option Payments............................................36
(h) Certain Company Indebtedness...............................37
9. Mutual Covenants...................................................38
(a) Consents...................................................38
(b) Post-Closing Access........................................38
(c) Publicity..................................................39
(d) Reasonable Best Efforts....................................39
(e) Antitrust Notification.....................................39
10. Further Assurances................................................39
11. Assignment........................................................40
12. No Third-Party Beneficiaries......................................40
13. Termination.......................................................40
14. Survival of Representations, Warranties
and Covenants...................................................41
15. Expenses..........................................................41
16. Amendments........................................................42
17. Notices...........................................................42
18. Interpretation; Exhibits and Schedules; Certain Definitions.......44
(a) Interpretation; Exhibits and Schedules.....................44
(b) Certain Definitions........................................44
19. Counterparts......................................................49
20. Entire Agreement..................................................50
21. Brokers...........................................................50
22. Severability......................................................50
23. Consent to Jurisdiction...........................................50
24. Indemnification...................................................51
(b) Exclusive Remedy...........................................51
(c) Procedures Relating to Indemnification.....................51
(d) Other Claims...............................................53
25. WAIVER OF JURY TRIAL..............................................54
26. GOVERNING LAW......................................................54
Exhibit A Form of Cravath, Swaine & Xxxxx Opinion
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated as of September 21,
1998, among Graphic Holdings, Inc., a Delaware corporation
(the "Company"), Bessemer Holdings, L.P., a Delaware limited
partnership ("Bessemer"), the other stockholders of the
Company whose names appear on the signature pages of this
Agreement (Bessemer and such other stockholders referred to
herein collectively as "Principal Sellers" and individually
as a "Principal Seller"), and Tyco Group S.a.r.l., a
Luxembourg company ("Buyer").
Buyer desires to purchase from Principal Sellers, and Principal
Sellers desire to sell to Buyer, all the issued and outstanding shares of
Common Stock, $.01 par value (the "Common Stock"), and Nonvoting Common
Stock, $.01 par value (the "Nonvoting Common Stock"), of the Company owned
by Principal Sellers on the terms and conditions set forth herein. Pursuant
to a Stockholders Agreement dated as of September 28, 1995 (the
"Stockholders Agreement"), among the Company, the Principal Sellers and
certain other persons named therein (the "Other Sellers", and together with
the Principal Sellers, the "Sellers"), the Company will exercise its right
to cause each such Other Seller to sell its shares of Common Stock to Buyer
on the terms and subject to the conditions set forth in this Agreement (the
shares of Common Stock and Nonvoting Common Stock held by the Principal
Sellers and the shares of Common Stock held by the Other Sellers being
hereafter referred to collectively as the "Shares"). Upon consummation of
the transactions contemplated hereby, Buyer shall own 100% of the capital
stock and rights to acquire the capital stock of the Company. The payment
and performance of the obligations of Buyer hereunder are guaranteed by
Tyco International Ltd., a Bermuda company ("Tyco"), pursuant to a Guaranty
dated as of the date hereof (the "Guaranty").
Accordingly, the Company, Sellers and Buyer hereby agree as
follows:
1. Purchase and Sale of the Shares. On the terms and subject to
the conditions of this Agreement, each Principal Seller severally shall
sell, transfer and deliver or cause to be sold, transferred and delivered
to Buyer, and Buyer shall purchase from such Principal Seller the Shares
owned by such Principal Seller at the Per Share Purchase Price (as defined
below). The "Per Share Purchase Price" shall be equal to the Purchase Price
(as defined below) divided by the number of Shares outstanding as of the
Closing Date. The "Purchase Price" shall be equal to:
(a) $460,000,000, less
(b) the sum of:
(i) Net Long Term Debt (as defined in Section 18(b)(viii));
(ii) the Preferred Share Redemption Amount (as defined in Section
2(a)(ii)(E)) payable to all holders of the issued and outstanding
shares of the Company's 15% Cumulative Redeemable Preferred Stock (the
"Preferred Shares"); and
(iii) the aggregate Option Amounts (as defined in Section
2(a)(ii)(C)) payable to all holders of Options (as defined in Section
18(b)(ix)) in connection with the cancelation of all such Options as
of the Closing Date as provided in Section 6(d)); and
(iv) the amount of Supplemental Payments to be paid at Closing;
plus
(c) $4,000,000, the amount agreed to by the parties as
representing the estimated tax benefit relating to payment of the
Option Amounts and the Supplemental Payments.
2. Closing; Buyer's Obligations; Sellers' Representative. (a)
Closing; Buyer's Obligations. (i) The closing (the "Closing") of the
purchase and sale of the Shares shall be held at the offices of
Cravath, Swaine & Xxxxx, Worldwide Plaza, 825 Eighth Avenue, New York,
New York, at 10:00 a.m. on October 20, 1998, or, if the conditions to
the Closing set forth below in Section 3 shall not have been satisfied
by such date, as soon as practicable after such conditions shall have
been satisfied. The date on which the Closing shall occur is referred
to herein as the "Closing Date".
(ii) At the Closing,
(A) Buyer shall deliver to Bessemer, on behalf of the Sellers, by
wire transfer to the bank account specified in writing by Bessemer, on
behalf of the
Sellers, immediately available funds in an amount equal to the
Purchase Price,
(B) each Seller shall deliver or cause to be delivered to Buyer
certificates representing the Shares to be sold hereunder, duly
endorsed in blank or accompanied by stock powers duly endorsed in
blank in proper form for transfer, with appropriate transfer stamps,
if any, affixed,
(C) Buyer shall deliver to the Company on behalf of the holders
of Options, by wire transfer to the bank account specified in writing
by the Company, on behalf of the holders of Options, immediately
available funds in an amount equal to the sum of the Common Stock
Option Amount, the Common Stock Rollover Option Amount, the Preferred
Share Option Amount and the Preferred Share Rollover Option Amount
(the foregoing shall be collectively referred to herein as the "Option
Amounts"),
(D) the Company shall deliver to Bessemer, on behalf of the
holders of Options, the Option Amounts, net of applicable withholding
taxes,
(E) Buyer shall deliver to the Company on behalf of the holders
of Preferred Shares, by wire transfer to the bank account specified in
writing by the Company, on behalf of the holders of Preferred Shares,
the amount, in immediately available funds, necessary to effect the
redemption of the Preferred Shares contemplated by Section 6(c)
including, without limitation, funds necessary to pay, in cash, the
liquidation preference thereof and all accrued and unpaid dividends
thereon to the Closing Date (the "Preferred Share Redemption Amount"),
(F) the Company shall effect the redemption of the Preferred
Shares by paying to Bessemer, on behalf of the holders of the
Preferred Shares, the Preferred Share Redemption Amount, and
(G) the Company shall make the Supplemental Payments to be paid
at Closing.
(b) Sellers' Representative; Attorney-in-Fact. (i) Each Seller
(other than Bessemer) hereby appoints Bessemer as the sole
representative of such Seller to act as the agent and on behalf of
such Seller for all purposes under this Agreement, including for the
purposes of: (A) acceptance of the Purchase Price, the Option Amounts
and the Preferred Share Redemption Amount (in each case net of
applicable withholding taxes) and delivery of wire instructions to
Buyer in connection therewith, as provided in Section 2(a); (B)
determining the Option Amounts and the Preferred Share Redemption
Amount; (C) determining whether the conditions to Closing in Section
3(b) have been satisfied and supervising the Closing, including
waiving any such condition if Bessemer, in its sole discretion,
determines that such waiver is appropriate; (D) taking any action that
may be necessary or desirable, as determined by Bessemer in its sole
discretion, in connection with the termination of this Agreement in
accordance with Section 13; (E) taking any and all actions that may be
necessary or desirable, as determined by Bessemer in its sole
discretion, in connection with the amendment of this Agreement in
accordance with Section 16; (F) accepting notices on behalf of such
Seller in accordance with Section 17; (G) taking any and all actions
that may be necessary or desirable, as determined by Bessemer in its
sole discretion, in connection with the payment of the costs and
expenses incurred with respect to the Company or such Seller in
accordance with Section 15; (H) delivering or causing to be delivered
to Buyer at the Closing certificates representing the Shares to be
sold by such Seller hereunder; (I) executing and delivering, in
Bessemer's capacity as the representative of such Seller, any and all
notices, documents or certificates to be executed by Bessemer, on
behalf of such Seller, in connection with this Agreement and the
transactions contemplated hereby; and (J) taking any and all other
actions and doing any and all other things provided in or contemplated
by this Agreement to be performed by Bessemer on behalf of Sellers. As
the representative of Sellers, Bessemer shall act as the agent for all
such persons, shall have authority to bind each such person in
accordance with this Agreement, and Buyer may rely on such appointment
and authority until the receipt of notice of the appointment of a
successor upon 30 days' prior written notice to Buyer.
(ii) Each Seller (other than Bessemer) hereby appoints Bessemer
as such Seller's true and lawful attorney-in-fact and agent
("Attorney-in- Fact"), with full power of substitution and
resubstitution, in such Seller's name, place and stead, in any and all
capacities, in connection with the transactions contemplated by this
Agreement, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite
and necessary to be done in connection with the sale of such Seller's
Shares and cancelation of such Seller's Options, if any, as fully to
all intents and purposes as such Seller might or could do in person.
(iii) Bessemer shall have no liability to Buyer for any default
under this Agreement by any Seller (other than Bessemer).
3. Conditions to Closing. (a) Buyer's Obligation. The obligation
of Buyer to purchase and pay for the Shares is subject to the satisfaction
(or waiver by Buyer) as of the Closing of the following conditions:
(i) The respective representations and warranties of the Company
and of Sellers made in this Agreement qualified as to materiality
shall be true and correct, and those not so qualified shall be true
and correct in all material respects, as of the date hereof and as of
the time of the Closing as though made as of such time, except to the
extent such representations and warranties expressly relate to an
earlier date (in which case such representations and warranties
qualified as to materiality shall be true and correct, and those not
so qualified shall be true and correct in all material respects, on
and as of such earlier date). The Company and each Seller shall have
performed or complied in all material respects with all obligations
and covenants required by this Agreement to be performed or complied
with by them at or prior to the Closing. The Company shall have
delivered to Buyer a certificate dated the Closing Date and signed on
behalf of the Company by an authorized officer of the Company
confirming the foregoing to the extent applicable to the Company's
representations, warranties and covenants. Each Principal Seller shall
have delivered to Buyer a certificate dated the Closing Date signed by
or on behalf of such Principal Seller confirming the foregoing to the
extent applicable to such Principal Seller's representations,
warranties and covenants.
(ii) No statute, rule, regulation or executive order ("Law") or
judgment, decree, temporary restraining order, preliminary or
permanent injunction or other order ("Order") enacted, entered,
promulgated, enforced or issued by any Federal, state, local or
foreign government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (a "Governmental Entity"), or
other legal restraint or prohibition preventing the purchase and sale
of the Shares shall be in effect.
(iii) The waiting period under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"), if applicable to the
purchase and sale of the Shares, shall have expired or been
terminated.
(iv) The Company shall have called for redemption all the issued
and outstanding Preferred Shares, as provided in Section 6(c).
(v) The Company shall have canceled, effective as of a time
immediately prior to the Closing and subject to the making of the
payments described in Section 6(d), all outstanding Options that have
not been exercised as of a time immediately prior to the Closing, as
provided in Section 6(d).
(vi) Each of the Sellers (other than any Seller that is a
"foreign person" within the meaning of Section 1445 of the Code) shall
have delivered a duly executed and acknowledged certificate, in form
and substance acceptable to Buyer and in compliance with the Code and
Treasury regulations thereunder, certifying such facts as to establish
that the sale of the Shares and any other transaction contemplated
hereby each are exempt from withholding under Section 1445 of the
Code. Buyer may withhold from the Purchase Price any amount that is
required to be withheld under Section 1445 of the Code.
(vii) The Company shall have delivered to Buyer a certificate in
form and substance acceptable to Buyer and in compliance with Treas.
Regs. ss. 1.897-2(h) certifying that no interest in the Company is a
"United States real property interest" within the meaning of Section
897(c)(1) of the Code.
(viii) Buyer shall have received the opinion of Cravath, Swaine
and Xxxxx, counsel to the Company,
dated the Closing Date and substantially in the form of Exhibit A
hereto.
(ix) Each of the Other Sellers shall have entered into an
agreement pursuant to which such Other Seller shall (A) make the
representations set forth in Section 5 to Buyer and (B) agree to
indemnify the Buyer with respect to any breach of the representation
and warranty set forth in Section 5(c) by such Seller on the terms and
conditions set forth in Section 24.
(x) The holders of more than 75% of the outstanding Common Stock
and Preferred Shares shall have (A) ratified and approved all stock
option grants made to employees of GCC and all employment, consulting
and severance agreements between GCC and its employees, in each case
which are outstanding or in effect immediately prior to the Closing
and (B) approved the Supplemental Payments and Buyer shall have
received reasonably satisfactory evidence of such ratification and
approval.
(b) Sellers' Obligation. The obligation of Sellers to sell and
deliver the Shares to Buyer is subject to the satisfaction (or waiver by
Sellers) as of the Closing of the following conditions:
(i) The representations and warranties of Buyer made in this
Agreement qualified as to materiality shall be true and correct, and
those not so qualified shall be true and correct in all material
respects, as of the date hereof and as of the time of the Closing as
though made as of such time, except to the extent such representations
and warranties expressly relate to an earlier date (in which case such
representations and warranties qualified as to materiality shall be
true and correct, and those not so qualified shall be true and correct
in all material respects, on and as of such earlier date). Buyer shall
have performed or complied in all material respects with all
obligations and covenants required by this Agreement to be performed
or complied with by Buyer at or prior to the Closing. Buyer shall have
delivered to Sellers a certificate dated the Closing Date and signed
by an authorized officer of Buyer confirming the foregoing.
(ii) No statute, rule, regulation, executive order, decree,
temporary restraining order, preliminary or permanent injunction or
other order enacted, entered, promulgated, enforced or issued by any
Governmental
Entity or other legal restraint or prohibition preventing the purchase
and sale of the Shares shall be in effect.
(iii) The waiting period under the HSR Act, if applicable to the
purchase and sale of the Shares, shall have expired or been
terminated.
(iv) Buyer shall have, as of the Closing, provided to the Company
the funds described in Section 8(f).
(v) Buyer shall have, as of the Closing, provided the Company the
funds described in Section 8(g).
(vi) Buyer shall have, as of the Closing, either (x) provided the
Company with funds necessary for the Company to repay, and caused the
Company to repay, in full each of the Credit Facility (as defined in
Section 18(b)(iii) and the GC Spain Credit Facility (as defined in
Section 18(b)(vii) upon the consummation of the transactions
contemplated by this Agreement or (y) obtained a waiver of any
breaches of the provisions of the Credit Facility, the GC Spain Credit
Facility or both, as the case may be, that occur or, with the passage
of time or notice or both, will occur as a result of the consummation
of the transactions contemplated by this Agreement and a waiver of the
applicability of any change of control provisions of the Credit
Facility, the GC Spain Credit Facility or both.
(vii) The Guaranty shall not have been amended, rescinded or
terminated and shall be in full force and effect.
(c) Frustration of Closing Conditions. None of Buyer or any
Seller may rely on the failure of any condition set forth in Section 3(a)
or 3(b), respectively, to be satisfied if such failure was caused by such
party's failure to act in good faith or to use reasonable best efforts to
cause the Closing to occur, as required by Section 9(d).
4. Representations and Warranties of the Company. The Company
hereby represents and warrants to Buyer as follows:
(a) Authority. The Company has all requisite power and authority
to enter into this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. All acts and other
proceedings
required to be taken by the Company to authorize the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and properly taken. This Agreement has
been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
(b) No Conflicts; Consents. (i) Except as set forth in Schedule
4(b) of the Disclosure Schedule dated as of the date hereof, relating
to this Agreement (the "Disclosure Schedule"), the execution and
delivery of this Agreement by the Company does not, and the
consummation of the transactions contemplated hereby and compliance
with the terms hereof by the Company will not, conflict with, or
result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or to loss of a material
benefit under, or result in the creation of any lien, claim,
encumbrance, security interest, option, charge or restriction of any
kind upon ("Lien") any of the properties or assets of the Company or
any Subsidiary under any provision of (A) the Articles of
Incorporation or By-laws of the Company or the comparable governing
instruments of any Subsidiary, (B) any note, bond, mortgage,
indenture, deed of trust, license, lease, contract, commitment,
agreement or arrangement to which the Company or any Subsidiary is a
party or by which any of their respective properties or assets are
bound or (C) any Law or Order applicable to the Company or any
Subsidiary or their respective properties or assets, other than, in
the case of clauses (B) and (C) above, any such items that,
individually or in the aggregate, would not have a material adverse
effect on the business, assets, financial condition or results of
operations of the Company and the Subsidiaries, taken as a whole, or
on the ability of the Company to consummate the transactions
contemplated hereby (a "Company Material Adverse Effect").
(ii) No consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with
respect to the Company or any Subsidiary in connection with the
execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby other than (A)
compliance with and filings under the HSR Act, if applicable, (B)
compliance with and filings and notifications under applicable
environmental laws, (C) those that may be required solely by reason of
Buyer's (as opposed to any other third party's) participation in the
transactions contemplated hereby and (D) such consents, approvals,
licenses, permits, orders, authorizations, registrations, declarations
and filings the absence of which, or the failure to make which,
individually or in the aggregate, would not have a Company Material
Adverse Effect.
(c) Organization and Standing; Books and Records. Each of the
Company and the Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each of the Company and each Subsidiary has full corporate
power and authority and possesses all governmental franchises, licenses,
permits, authorizations and approvals necessary to enable it to own, lease
or otherwise hold its properties and assets and to carry on its business as
presently conducted, other than such franchises, licenses, permits,
authorizations and approvals the lack of which, individually or in the
aggregate, would not have a Company Material Adverse Effect. Each of the
Company and the Subsidiaries is duly qualified and in good standing to do
business as a foreign corporation in each jurisdiction in which the conduct
or nature of its business or the ownership, leasing or holding of its
properties makes such qualification necessary, except such jurisdictions
where the failure to be so qualified or in good standing, individually or
in the aggregate, would not have a Company Material Adverse Effect.
The Company has, prior to the execution of this Agreement, made
available to Buyer true and complete copies of (i) the Articles of
Incorporation and By-laws, each as amended to date, of the Company and (ii)
the comparable governing instruments, each as amended to date, of each
Subsidiary. Each Subsidiary (as defined in Section 18(b)(xiii)), and the
jurisdiction of its incorporation, is listed in Schedule 4(c) of the
Disclosure Schedule.
(d) Capital Stock of the Company and the Subsidiaries. The
authorized capital stock of the Company consists of (i) 6,000,000 shares of
15% Cumulative Redeemable Preferred Stock, $.01 par value, of which, as of
the date hereof, (A) 937,047.955 shares are duly authorized, validly issued
and outstanding, fully paid and nonassessable and have accrued paid in kind
dividends of 2,316.876 shares
as of the date hereof, (B) 138,856.316 shares are issuable pursuant to the
Preferred Share Options (as defined in Section 18(b)(xi)) and (C)
12,137.116 shares are issuable pursuant to the Preferred Share Rollover
Options (as defined in Section 18(b)(xii); (ii) 4,000,000 shares of Common
Stock, $.01 par value, of which, as of the date hereof, (A) 1,916,769
shares are duly authorized, validly issued and outstanding, fully paid and
nonassessable, (B) 300,511 shares are issuable pursuant to the Common Stock
Options (as defined in Section 18(b)(i)) and (C) 25,952 shares are issuable
pursuant to the Common Stock Rollover Options (as defined in Section
18(b)(ii)); and (iii) 1,000,000 shares of Nonvoting Common Stock, $.01 par
value, of which, as of the date hereof, 119,789 shares are duly authorized,
validly issued and outstanding, fully paid and nonassessable. Except as set
forth above, there are no shares of capital stock or other equity
securities of the Company outstanding. Schedule 4(d) of the Disclosure
Schedule sets forth for each Subsidiary the amount of its authorized
capital stock, the amount of its outstanding capital stock and the record
owners of its outstanding capital stock. All the outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly
issued and are fully paid and nonassessable. Except as set forth in
Schedule 4(d) of the Disclosure Schedule, there are no shares of capital
stock or other equity securities of any Subsidiary outstanding. Except as
set forth in Schedule 4(d) of the Disclosure Schedule, neither the Shares
nor any shares of capital stock of any Subsidiary have been issued in
violation of, and none of the Shares or such shares of capital stock are
subject to, any purchase option, call, right of first refusal, preemptive,
subscription or similar rights under any provision of applicable law, the
Articles of Incorporation or By-laws of the Company or the comparable
governing instruments of any Subsidiary, any contract, agreement or
instrument to which the Company or any Subsidiary is subject, bound or a
party or otherwise. Except for the Options and except as otherwise set
forth in Schedule 4(d) of the Disclosure Schedule, there are not any
outstanding warrants, options, rights, "phantom" stock rights, agreements,
convertible or exchangeable securities or other commitments (other than
this Agreement) pursuant to which any of the Company or any Subsidiary is
or may become obligated to issue, sell, purchase, return or redeem any
shares of capital stock or other securities of the Company or any
Subsidiary. Except as set forth in Schedule 4(d) of the Disclosure
Schedule, there are not any equity securities of the Company reserved for
issuance for any purpose. Except as set forth in Schedule 4(d) of the
Disclosure Schedule, there are no outstanding bonds, debentures, notes
or other indebtedness having the right to vote on any matters on which
stockholders of the Company or any Subsidiary may vote. Upon consummation
of the transactions contemplated hereby, Buyer shall own 100% of the
capital stock and rights to acquire capital stock of the Company.
(e) Equity Interests. Except as set forth in Schedule 4(e) of the
Disclosure Schedule and except for the Subsidiaries, the Company does not
directly or indirectly own any capital stock of or other equity interests
in any corporation, partnership or other person and neither the Company nor
any of the Subsidiaries is a member of or participant in any partnership,
joint venture or similar person.
(f) Financial Statements. Schedule 4(f) of the Disclosure
Schedule includes the audited consolidated balance sheets of the Company
and Subsidiaries as of December 31, 1996 and December 31, 1997, the audited
consolidated statements of income and cash flows of the Company and
Subsidiaries for the years ended December 31, 1996 and December 31, 1997,
the unaudited consolidated balance sheet of the Company and Subsidiaries as
of June 30, 1998 (the "June 30 Balance Sheet") and the unaudited
consolidated statement of income and cash flows of the Company and the
Subsidiaries for the quarter ended June 30, 1998 (such financial
statements, together with the notes to such financial statements,
collectively, the ("Financial Statements"). The Financial Statements have
been prepared in conformity with generally accepted accounting principles
consistently applied (except in each case as described in the notes thereto
and except that in preparing the unaudited financial statements certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted). On that basis the financial
statements referred to above present fairly, in all material respects, the
consolidated financial position and results of operations of the Company
and Subsidiaries as of the respective dates thereof and for the respective
periods indicated (subject to normal year-end adjustments in the case of
the unaudited quarterly financial statements). Nothing in this Section 4(f)
shall be construed as relating to Taxes, which are the subject of Section
4(g).
(g) Taxes. (i) For purposes of this Agreement, (A) "Tax" means
any of the Taxes, and "Taxes" means (x) all net income, capital gains,
gross income, gross receipts, sales, use, ad valorem, franchise,
capital,
profits, license, and other withholding, employee payroll withholding,
employment, payroll, social security, transfer, conveyance,
documentary, stamp, property, value added, customs duties, minimum
taxes, and any other taxes, fees, charges, levies, excises, duties or
assessments of any kind whatsoever, together with additions to tax or
additional amounts, interests and penalties relating thereto that may
be imposed by the Federal government or any state, local or foreign
government and (y) any liability for the payment of any amount of the
type described in clause (x) as a result of the Company and/or
Subsidiaries being a transferee or a member of an affiliated or
combined group prior to the Closing Date, (B) "Tax Returns" means all
returns, reports and forms required to be filed in respect of any
Taxes, and (C) "Code" means the Internal Revenue Code of 1986, as
amended.
(ii) Except as set forth on Schedule 4(g) of the Disclosure
Schedule, the Company and/or Subsidiaries have (A) timely filed or
will file when due (or have filed and have paid all assessed penalties
and interest), including extensions thereof, all material Tax Returns
required to be filed by or with respect to the Company and/or
Subsidiaries prior to the Closing Date, and all such Tax Returns are
true, complete and correct in all material respects and (B) timely
paid or accrued on the June 30 Balance Sheet all Taxes for all periods
ending on or before June 30, 1998 and will timely pay all Taxes for
all periods ending on or before the Closing Date that become due on or
before the Closing Date. Except as set forth on Schedule 4(g) of the
Disclosure Schedule, none of the Company or Subsidiaries is a party to
any pending action or proceeding, nor, to the best knowledge of the
Company or Subsidiaries, is any such action or proceeding threatened
by any governmental authority, for the assessment or collection of any
Taxes, and no claim for the assessment or collection of any Taxes has
been asserted against any of the Company or Subsidiaries that has not
been settled with all amounts due having been paid. No material liens
for Taxes exist with respect to any of the assets of the Company or
the Subsidiaries.
The Federal consolidated income tax returns of the Company and
the Subsidiaries have been examined by the Internal Revenue Service
for all taxable years through the year ended December 31, 1995. All
material
deficiencies resulting from such examinations have either been paid or
adequately provided for.
(iii) Except as set forth in Schedule 4(g) of the Disclosure
Schedule, (A) neither the Company nor any of the Subsidiaries has made
any consent under Section 341 of the Code, (B) no property of the
Company or any of the Subsidiaries is "tax exempt use property" within
the meaning of Section 168(h) of the Code and (C) neither the Company
nor any of the Subsidiaries is a party to any lease made pursuant to
Section 168(f)(8) of the Internal Revenue Code of 1954.
(iv) Except as set forth in Schedule 4(g) of the Disclosure
Schedule, there are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any material Tax Returns
required to be filed with respect to the Company or any of the
Subsidiaries and neither the Company nor any of the Subsidiaries has
requested any extension of time within which to file any material Tax
Return, which Tax Return has not yet been filed.
(v) Except as set forth in Schedule 4(g) of the Disclosure
Schedule, none of the Sellers is a "foreign person" within the meaning
of Section 1445 of the Code.
(vi) Neither the Company nor any of the Subsidiaries is a United
States real property holding company within the meaning of Section
897(c) of the Code.
(vii) There are no outstanding powers of attorney enabling any
party to represent the Company or any Subsidiary with respect to Tax
matters.
(viii) Except as set forth in Schedule 4(g) of the Disclosure
Schedule, neither the Company nor any of the Subsidiaries is a party
to any agreement, arrangement or practice for the sharing of Taxes, or
is obligated to indemnify any other party for Taxes.
(ix) Except as set forth in Schedule 4(g) of the Disclosure
Schedule, neither the Company, any of the Subsidiaries nor any of the
Sellers is a party to any agreement, contract, arrangement or plan
that has resulted, or would result, separately or in the aggregate, in
the payment by the Company or any Subsidiary of any "excess parachute
payments" within
the meaning of Section 280G of the Code to any employee of the Company
or any Subsidiary.
(x) The Company and the Subsidiaries have duly withheld and
collected and paid over to the proper governmental authority, or
settled or adequately reserved for on the June 30 Balance Sheet all
Taxes for all taxable periods ending on or before June 30, 1998 and
will duly withhold, collect and pay to the proper governmental
authority or settle all Taxes for all taxable periods ending on or
before the Closing Date that become due on or before the Closing Date.
(h) Assets Other than Real Property Interests. The Company or a
Subsidiary has good and valid title to all material assets reflected on the
June 30 Balance Sheet or thereafter acquired, except those listed in
Schedule 4(h) of the Disclosure Schedule or those sold or otherwise
disposed of since the date of the June 30 Balance Sheet in the ordinary
course of business consistent with past practice, in each case free and
clear of all Liens except (i) such as are set forth in Schedule 4(h) of the
Disclosure Schedule, (ii) mechanics', carriers', workmen's, repairmen's or
other like liens arising or incurred in the ordinary course of business,
liens arising under original purchase price conditional sales contracts and
equipment leases with third parties entered into in the ordinary course of
business and liens for Taxes which are not due and payable or which may
thereafter be paid without penalty, (iii) Liens which secure debt that is
reflected as a liability on the June 30 Balance Sheet or the existence of
which is indicated in the notes thereto and (iv) other imperfections of
title or encumbrances, if any, which do not, individually or in the
aggregate, materially impair the continued use and operation of the assets
to which they relate in the business of the Company and the Subsidiaries,
taken as a whole, as presently conducted (the Liens and imperfections of
title described in clauses (ii), (iii) and (iv) above are hereinafter
referred to collectively as "Permitted Liens"). This Section 4(h) does not
relate to real property or interests in real property, such items being the
subject of Section 4(i) or to Intellectual Property, such items being the
subject of Section 4(j); however, the defined term "Permitted Liens" shall
be applicable to Sections 4(i) and 4(j).
(i) Title to Real Property. Schedule 4(i) of the Disclosure
Schedule sets forth a complete list of all real property and interests in
real property owned in fee by the Company and the Subsidiaries
(individually, an "Owned
Property"). Schedule 4(i) of the Disclosure Schedule also sets forth a
complete list of all real property and interests in real property leased by
the Company and the Subsidiaries (individually, a "Leased Property"). The
Company or a Subsidiary has (i) good and insurable fee title to all Owned
Property and (ii) good and valid title to the leasehold estates in all
Leased Property (an Owned Property or Leased Property being sometimes
referred to herein, individually, as a "Company Property" and,
collectively, as "Company Properties"), in each case free and clear of all
Liens except (A) such as are set forth in Schedule 4(i) of the Disclosure
Schedule, (B) leases, subleases and similar agreements set forth in
Schedule 4(i) of the Disclosure Schedule, (C) Permitted Liens, (D)
easements, covenants, rights-of-way and other similar restrictions of
record, (E) any conditions that may be shown by a current, accurate survey
or physical inspection of any Company Property made prior to Closing and
(F) (I) zoning, building and other similar restrictions, (II) mortgages,
liens, security interests, encumbrances, easements, covenants,
rights-of-way and other similar restrictions that have been placed by any
developer, landlord or other third party on property over which the Company
or a Subsidiary has easement rights or on any Leased Property and
subordination or similar agreements relating thereto, and (III) unrecorded
easements, covenants, rights- of-way and other similar restrictions, none
of which items set forth in clauses (I), (II) and (III), individually or in
the aggregate, materially impair the continued use and operation of the
property to which they relate in the business of the Company and the
Subsidiaries, taken as a whole, as presently conducted.
(j) Intellectual Property. Schedule 4(j) of the Disclosure
Schedule sets forth a true and complete list of all material patents,
patent rights, trademarks and trademark rights (registered or
unregistered), service marks and service xxxx rights (registered or
unregistered), and applications therefor (collectively, "Intellectual
Property"), owned, used, filed or registered by or licensed to the Company
or any of the Subsidiaries. Schedule 4(j) of the Disclosure Schedule sets
forth (A) the owner of each listed item of Intellectual Property and (B) if
the listed item of Intellectual Property is registered or filed with a
Governmental Entity, the countries in which each such listed item was
issued or was applied for and with respect to such listed items that are
registered trademarks or trademark applications, all registration and
application numbers. Except as set forth in Schedule 4(j) of the Disclosure
Schedule, the Company or one of the Subsidiaries owns, and the Company and
the Subsidiaries have the right to use,
execute, reproduce, display, perform, modify, enhance, distribute, prepare
derivative works of and sublicense, without payment to any other person,
all Intellectual Property listed in Schedule 4(j) of the Disclosure
Schedule and the consummation of the transactions contemplated hereby will
not conflict with, alter or impair any such rights.
Except as set forth in Schedule 4(j) of the Disclosure Schedule,
neither the Company nor any of the Subsidiaries has granted any material
options, licenses, sublicenses or agreements of any kind relating to
Intellectual Property listed in Schedule 4(j) of the Disclosure Schedule or
the marketing or distribution thereof, except nonexclusive licenses to
end-users in the ordinary course of business. Except as set forth in
Schedule 4(j) of the Disclosure Schedule, neither the Company nor any of
the Subsidiaries is bound by or a party to any material options, licenses,
sublicenses or agreements of any kind relating to the Intellectual Property
of any other person, except for agreements relating to computer software
licensed by or to the Company or any Subsidiary in the ordinary course of
business. Subject to the rights of third parties set forth in Schedule 4(j)
of the Disclosure Schedule and except for Permitted Liens, all Intellectual
Property listed in Schedule 4(j) of the Disclosure Schedule is free and
clear of all Liens. Except as set forth in Schedule 4(j) of the Disclosure
Schedule, to the knowledge of the Company, the conduct of the business of
the Company and the Subsidiaries as presently conducted does not violate,
conflict with or infringe the Intellectual Property of any other person.
Except as set forth in Schedule 4(j) of the Disclosure Schedule, (i) as of
the date of this Agreement, no claims are pending against the Company or
any Subsidiary by any person with respect to the ownership, validity,
enforceability, effectiveness or use of any Intellectual Property and (ii)
as of the date of this Agreement, the Company and the Subsidiaries have not
received any written communications alleging that the Company or any
Subsidiary has violated any rights relating to the Intellectual Property of
any person other than any such violations that, individually or in the
aggregate, are not reasonably likely to have a Company Material Adverse
Effect.
(k) Contracts. Except as set forth in Schedule 4(k) of the
Disclosure Schedule, neither the Company nor any Subsidiary is a party to
or bound by any:
(i) employment agreement or employment contract that has an
aggregate future liability in excess of $200,000 and is not terminable
by the Company or a Subsidiary by notice of not more than 90 days for
a cost of less than $200,000;
(ii) employee collective bargaining agreement or other contract
with any labor union;
(iii) covenant of the Company or a Subsidiary not to compete
(other than pursuant to any radius restriction contained in any lease,
reciprocal easement or develop ment, construction, operating or
similar agreement and other than exclusivity arrangements with respect
to territories and/or products with distributors, dealers, sales or
manufacturers' representatives, customers or other persons with
similar relationships with the Company or such Subsidiary) that
materially impairs the operation of the business of the Company and
its Subsidiaries as presently conducted;
(iv) agreement (other than this Agreement), contract or other
arrangement with (A) any Seller or any affiliate of such Seller (other
than the Company or a Subsidiary) or (B) any officer, director or
employee of the Company, a Subsidiary, any Seller or any affiliate of
such Seller (other than employment agreements covered by clause (i)
above), except in any case, for agreements, contracts or other
arrangements that will terminate at or prior to the Closing;
(v) lease, sublease or similar agreement with any person (other
than the Company or a Subsidiary) under which the Company or a
Subsidiary is a lessor or sublessor of, or makes available for use to
any person (other than the Company or a Subsidiary), (A) any Company
Property or (B) any portion of any premises otherwise occupied by the
Company or a Subsidiary;
(vi) lease or similar agreement with any person under which (A)
the Company or a Subsidiary is lessee of, or holds or uses, any
machinery, equipment, vehicle or other tangible personal property
owned by any person or (B) the Company or a Subsidiary is a lessor or
sub lessor of, or makes available for use by any person, any tangible
personal property owned or leased by the
Company or a Subsidiary, in any such case which has an aggregate
future liability or receivable, as the case may be, in excess of
$200,000 and is not terminable by the Company or a Subsidiary by
notice of not more than 90 days for a cost of less than $200,000;
(vii) material license, option or other agreement relating in
whole or in part to the Intellectual Property listed in Schedule 4(j)
of the Disclosure Schedule (including any license or other agreement
under which the Company or a Subsidiary is licensee or licensor of any
such Intellectual Property);
(viii) agreement, contract or other instrument under which the
Company or a Subsidiary has borrowed any money from, or issued any
note, bond, debenture or other evidence of indebtedness to, any person
(other than the Company or a Subsidiary) or any other note, bond,
debenture or other evidence of indebtedness issued to any person
(other than the Company or a Subsidiary);
(ix) agreement, contract or other instrument under which (A) any
person (including the Company or a Subsidiary) has directly or
indirectly guaranteed indebtedness, liabilities or obligations of the
Company or a Subsidiary or (B) the Company or a Subsidiary has
directly or indirectly guaranteed indebtedness, liabilities or
obligations of any person (in each case other than endorsements for
the purpose of collection in the ordinary course of business) in any
such case which, individually, is in excess of $200,000;
(x) agreement, contract or other instrument under which the
Company or a Subsidiary has, directly or indirectly, made any advance,
loan, extension of credit or capital contribution to, or other
investment in, any person (other than the Company or a Subsidiary) in
any such case which, individually, is in excess of $200,000;
(xi) material mortgage, pledge, security agreement, deed of trust
or other instrument granting a Lien upon any Company Property other
than Permitted Liens; or
(xii) other agreement, contract, lease, license, commitment or
instrument (other than customer's contracts) to which the Company or
any Subsidiary is a party or by or to which it or any of its assets or
business is bound or subject to any person (other than the Company or
a Subsidiary) involving aggregate payments in excess of $200,000 and
is not terminable by the Company or a Subsidiary by notice of not more
than 90 days for a cost of less than $200,000.
Except as set forth in Schedule 4(k) of the Disclosure Schedule, to the
knowledge of the Company, all agreements, contracts, leases, licenses,
commitments or instruments of the Company or any Subsidiary listed in
Schedule 4(k) of the Disclosure Schedule (collectively, the "Contracts")
are valid, binding and in full force and effect. Except as set forth in
Schedule 4(k) of the Disclosure Schedule, the Company and the Subsidiaries
have performed all material obligations required to be performed by them to
date under the Contracts and they are not (with or without the lapse of
time or the giving of notice, or both) in breach or default in any material
respect thereunder and, to the knowledge of the Company, no other party to
any of the Contracts is (with or without the lapse of time or the giving of
notice, or both) in breach or default in any material respect thereunder.
(l) Litigation. Schedule 4(l) of the Disclosure Schedule sets
forth a list as of the date of this Agreement, of all pending and, to the
knowledge of the Company, threatened since January 1, 1996, actions, suits,
proceedings or claims against the Company or any Subsidiary or any of their
respective properties, assets, operations or businesses and which (i)
relate to or involve uninsured amounts of more than $100,000, (ii) seek any
material injunctive relief or (iii) may give rise to any legal restraint on
or prohibition against the transactions contemplated by this Agreement. To
the knowledge of the Company, neither the Company nor any Subsidiary is a
party or subject to or in default under any material Order applicable to it
or any of its respective properties, assets, operations or business. Except
as set forth in Schedule 4(l) of the Disclosure Schedule, to the knowledge
of the Company, there are no pending or threatened investigations of the
Company or a Subsidiary by any Governmental Entity, other than such
investigations that, if resulting in entry of any Order, would not,
individually or in the aggregate, have a Company Material Adverse Effect.
(m) Insurance. The insurance policies owned and maintained by the
Company or any Subsidiary which are material to the Company and its
Subsidiaries, taken as a whole, are in full force and effect, all premiums
due and payable thereon have been paid (other than retroactive or
retrospective premium adjustments or other payments that may be required
under the relevant policy that are not yet, but may be, required to be paid
with respect to any period ending prior to the Closing Date), and no notice
of cancelation or termination has been received with respect to any such
policy which has not been replaced on substantially similar terms prior to
the date of such cancelation.
(n) Benefit Plans. (i) Schedule 4(n) of the Disclosure Schedule
identifies each significant employee pension, retirement, profit
sharing, stock bonus, stock option, stock purchase, bonus, incentive,
deferred compensation, hospitalization, medical, dental, vision,
vacation, insurance, sick pay, disability, severance, or other plan,
fund, program, policy, contract or arrangement providing employee
benefits maintained or contributed to by the Company or any Subsidiary
in which any employees or former employees of the Company or any
Subsidiary participates or under which any of them has accrued and
remains entitled to any benefits (all such plans, funds, programs,
policies, contracts and arrangements, other than any such plan that is
a "multiemployer plan" described in Section 4001(a)(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), being
referred to as the "Plans"). The Company has made available to Buyer
copies of all written Plans.
(ii) Neither the Company nor any Subsidiary would be liable for
any amount pursuant to Section 4062, 4063 or 4064 of ERISA if any Plan
which is subject to Title IV of ERISA (a "Title IV Plan") were to
terminate as of the date hereof. Neither the Company nor any
Subsidiary has been involved in any transaction that will cause the
Company or any such Subsidiary to be subject to liability with respect
to a Title IV Plan or any other plan subject to Title IV of ERISA to
which the Company or any Subsidiary contributed or was obligated to
contribute during the six year period ending on the Closing Date under
Section 4062 or 4069 of ERISA. Neither the Company nor any Subsidiary
has incurred any liability under Title IV of ERISA which may become or
remain a liability of the Company or any Subsidiary or Buyer after the
Closing Date.
(iii) Except as set forth in Schedule 4(n) of the Disclosure
Schedule, (A) all contributions to the Plans that may have been
required to be made in accordance with Section 302 of ERISA or Section
412 of the Code
have been timely made, (B) there has been no application for or waiver
of the minimum funding standards imposed by Section 412 of the Code
with respect to any Plan and (C) no Plan has an "accumulated funding
deficiency" within the meaning of Section 412(a) of the Code as of the
most recent plan year.
(iv) Except as set forth in Schedule 4(n) of the Disclosure
Schedule, each Plan that is intended to be "qualified" within the
meaning of Section 401(a) of the Code has been the subject of a
determination letter from the Internal Revenue Service to the effect
that such Plan is qualified and exempt from Federal income taxes under
Sections 401(a) and 501(a), respectively, of the Code, and no such
determination letter has been revoked nor, to the knowledge of the
Company, has revocation been threatened.
(v) None of the Company, any Subsidiary or, to the best knowledge
of the Company, any of the Plans, any trust created thereunder or any
trustee or administrator thereof, has knowingly engaged in a
transaction in connection with which the Company or any Subsidiary is
likely to be subject to either a liability or a civil penalty assessed
pursuant to Sections 409 or 502(i) or (1) of ERISA or a tax imposed
pursuant to Section 4975 of the Code. Each of the Plans has been
operated and administered in all respects in accordance with
applicable laws, including but not limited to ERISA and the Code.
There are no pending or, to the best knowledge of the Company,
threatened claims by or on behalf of any of the Plans, by any employee
or beneficiary covered under any such Plan, or otherwise involving any
such Plan (other than routine claims for benefits).
(vi) No condition exists and no event has occurred with respect
to any "multiemployer plan" (as defined in Section 4001(a)(3) of
ERISA) with respect to which the Company or any Subsidiary is
obligated to make contributions pursuant to a collective bargaining
agreement that presents a material risk of a complete or partial
withdrawal under Subtitle E of Title IV of ERISA, nor has the Company
or any Subsidiary been notified that any such multiemployer plan is
insolvent or in reorganization within the meaning of Section 4241 of
ERISA. Except as set forth in Schedule 4(n) of the Disclosure
Schedule, neither the Company nor any Subsidiary is obligated to
contribute, on behalf of any
current or former employee of the Company, to a multiemployer plan.
(o) Absence of Changes or Events. (i) Except as set forth in
Schedule 4(o) of the Disclosure Schedule, since June 30, 1998, there
has not been any material adverse change in the business, assets,
financial condition or results of operations of the Company and the
Subsidiaries, taken as a whole, other than changes relating to United
States or foreign economies in general or the Company's and the
Subsidiaries' industries in general and not specifically relating to
the Company or a Subsidiary. Buyer acknowledges that there may have
been disruption to the Company's and the Subsidiaries' business as a
result of the marketing of the Company by Sellers to potential buyers
(and there may be disruption to the Company's and the Subsidiaries'
business as a result of the execution of this Agreement, the public
announcement thereof and the consummation of the transactions
contemplated hereby), and Buyer agrees that such disruptions do not
and shall not constitute a breach of this Section 4(o). Except as set
forth in Schedule 4(o) of the Disclosure Schedule, from June 30, 1998
to the date of this Agreement, the Company has caused its business and
the business of the Subsidiaries to be conducted in the ordinary
course and in substantially the same manner as previously conducted.
(ii) From June 30, 1998 to the date of this Agreement, except as
set forth in Schedule 4(o) of the Disclosure Schedule, there has not
occurred with respect to the Company and/or Subsidiaries, any event of
the type set forth in Sections 6(b)(ii), (iii), (iv), (v), (vi),
(vii), (viii), (ix), (x), (xi) and (xii).
(p) Compliance with Applicable Laws. (i) Except as set forth in
Schedule 4(p) of the Disclosure Schedule, the Company and the
Subsidiaries are in compliance with all applicable statutes, laws,
ordinances, rules, orders and regulations of any Governmental Entity
("Applicable Laws"), including those relating to occupational health
and safety except for instances of noncompliance that, individually or
in the aggregate, would not have a Company Material Adverse Effect.
Except as set forth in Schedule 4(p) of the Disclosure Schedule,
neither the Company nor any Subsidiary has received any written
communication since the date of this Agreement from a Governmental
Entity
that alleges that the Company or any Subsidiary is not in compliance
in any material respect with any Applicable Laws except where such
noncompliance, individually or in the aggregate, would not have a
Company Material Adverse Effect. This Section 4(p)(i) does not relate
to matters with respect to environmental matters, which are the
subject of Section 4(p)(ii), ERISA or Benefit Plans, which are the
subject of Section 4(n), employee and labor matters, which are the
subject of Section 4(q) or Taxes, which are the subject of Section
4(g).
(ii) Except as set forth in Schedule 4(p)(ii) of the Disclosure
Schedule, (A) neither the Company nor any of the Subsidiaries has
received any written communication from a Governmental Entity or any
prior owner, the substance of which has not been resolved, that
alleges that the Company or any Subsidiary is not in compliance in any
material respect with Environmental Laws (as defined below), (B) the
Company and the Subsidiaries hold, and are in compliance with, all
permits, licenses, approvals, registrations and governmental
authorizations required for the Company and the Subsidiaries to
conduct their respective businesses under Environmental Laws
("Environmental Permits"), and are in compliance with Environmental
Laws, including having made all notifications and filings required
under applicable environmental property transfer laws, except for any
failure to obtain Environmental Permits or noncompliance with
Environmental Laws that would not have a Company Material Adverse
Effect, (C) the Company and Subsidiaries have not transported,
generated, stored or disposed of or arranged for disposal of Hazardous
Material in violation of Environmental Law, except to the extent that
any such violations, individually or in the aggregate, would not have
a Company Material Adverse Effect, and (D) no liens under
Environmental Laws currently in effect exist with respect to the
Company Properties.
(I) "Environmental Law" means any and all Federal, state, local
or municipal written and published laws, rules, orders, regulations,
statutes, ordinances or codes of any governmental authority regulating or
imposing standards of liability or standards of conduct (including common
laws) concerning air, water, solid waste, Hazardous Materials, noise,
natural resource protection and inland wetlands and watercourses.
(II) "Hazardous Materials" means any petroleum, petroleum
products, fuel oil, waste oil, explosives, reactive materials, ignitable
materials, corrosive materials, hazardous substances, toxic substances,
toxic chemicals, radioactive materials, medical waste, biomedical waste,
infectious materials, pollutants, toxic pollutants, herbicides, fungicides,
rodenticides, insecticides, contaminant or pesticides and including any
other element, compound, mixture, solution or substance regulated pursuant
to any Environmental Law.
(III) "Release" means releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, ejecting, escaping, leaching,
disposing, seeping, infiltrating, draining or dumping, or as otherwise
defined under Environmental Laws. This term shall be interpreted to include
both the noun form and the verb form, present, past and future tense, as
appropriate.
(q) Employee and Labor Matters. Except as set forth in Schedule
4(q) of the Disclosure Schedule, (i) there is, and since January 1, 1997,
there has been, no labor strike, work stoppage or lockout pending against
the Company or any Subsidiary, (ii) there is no unfair labor practice
charge or complaint against the Company or any Subsidiary pending, or, to
the knowledge of the Company, threatened, before the National Labor
Relations Board, (iii) no employee of the Company or the Subsidiaries is,
or has been within the last five years, subject to any collective
bargaining agreement, and (iv) there are no pending, or, to the knowledge
of the Company, threatened, union grievances against the Company or any
Subsidiary as to which there is a reasonable probability of adverse
determination and that, if so determined, individually or in the aggregate,
would have a Company Material Adverse Effect.
(r) Certain Business Relationships with the Company. Except as
set forth in Schedule 4(s) of the Disclosure Schedule, none of the Sellers
own any asset, tangible or intangible, which is used in the businesses of
the Company or Subsidiaries.
(s) No Undisclosed Liabilities. The Company and Subsidiaries have
no liabilities or obligations, whether accrued, absolute, contingent or
otherwise, of a nature required by US GAAP to be reflected on a
consolidated balance sheet of the business of the Company and the
Subsidiaries or in the notes thereto except (i) to the extent disclosed,
reflected or reserved for on the June 30 Balance Sheet or as disclosed in
GCC's Form 10-K dated
December 31, 1997 or in any document publicly filed by GCC with the
Securities and Exchange Commission since December 31, 1997, (ii)
liabilities and obligations incurred in the ordinary course of business
since the date of the June 30, 1998 Balance Sheet and not in violation of
this Agreement, (iii) disclosed in Schedule 4(s) of the Disclosure
Schedule, (iv) liabilities or obligations incurred in connection with this
Agreement, (v) where they constitute commitments under contracts entered
into in the ordinary course of business, or (vi) liabilities or obligations
which could not reasonably be expected to have a Material Adverse Effect.
This representation shall not be deemed breached as a result of a change in
law or US GAAP after the date hereof.
(t) Prepayment Penalty. Except as set forth in Schedule 4(t) of
the Disclosure Schedule, there are no prepayment penalties payable in
respect of the debt instruments described in clauses (A) through (C) of the
definition of "Long Term Debt" if such debt is prepaid on the Closing Date.
5. Representations and Warranties of Sellers. Each Seller
severally hereby represents and warrants to Buyer (as to such Seller only)
as follows:
(a) Execution. This Agreement has been duly executed and
delivered by such Seller and, assuming due authorization, execution and
delivery by the other parties hereto, constitutes a legal, valid and
binding obligation of such Seller, enforceable against such Seller in
accordance with its terms.
(b) No Conflicts. The execution and delivery of this Agreement by
such Seller does not, and the consummation of the transactions contemplated
hereby and compliance with the terms hereof will not, conflict with, or
result in any violation of or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, cancelation
or acceleration of any obligation or to loss of a material benefit under,
or result in the creation of any Lien upon any of the properties or assets
of such Seller under any provision of (i) the governing instruments (if
any) of such Seller, (ii) except as set forth in Schedule 5(b) of the
Disclosure Schedule, any material note, bond, mortgage, indenture, deed of
trust, license, lease, contract, commitment, agreement or arrangement to
which such Seller is a party or (iii) any Law or Order applicable to such
Seller, other than, in the case of clauses (ii) and (iii) above, any such
items that, individually or in the aggregate, would not have a material
adverse effect on the ability of such Seller to consummate the transactions
contemplated hereby.
(c) The Shares. Such Seller, directly or indirectly, has good and
valid title to the Shares to be sold by such Seller hereunder as set forth
in Schedule 5(c) of the Disclosure Schedule, free and clear of any Liens,
except as described in Schedule 5(c) of the Disclosure Schedule. Assuming
Buyer has the requisite power and authority to be the lawful owner of the
Shares, upon delivery to Buyer at the Closing of certificates representing
such Shares, duly endorsed by such Seller for transfer to Buyer, and upon
such Seller's receipt of the consideration to be received pursuant to
Section 2, good and valid title to such Shares will pass to Buyer, free and
clear of any Liens, other than those arising from acts of Buyer or its
affiliates.
(d) Foreign Persons. Except for any Seller listed in clause (v)
of Schedule 4(g) of the Disclosure Schedule, such Seller is not a foreign
person within the meaning of Section 1445 of the Code.
6. Covenants of the Company. The Company covenants and agrees as
follows:
(a) Access. Prior to the Closing, the Company shall, and shall
cause each Subsidiary to, give Buyer and its representatives, employees,
counsel and accountants reasonable access, during normal business hours and
upon reasonable notice, to the personnel, properties, books and records of
the Company and each Subsidiary; provided, however, that such access does
not unreasonably disrupt the normal operations of the Company or any
Subsidiary. Nothing set forth herein shall obligate any employee of the
Company or any Subsidiary to provide any information regarding the Company
or any Subsidiary in any other format or otherwise to manipulate or
reconfigure any data regarding the Company's or any Subsidiary's business,
business prospects, assets, financial performance or condition or
operations. Nothing set forth in this Agreement shall require any of the
Company or any of its Subsidiaries or the Sellers to provide Buyer with
access to or copies of (i) any information which must be maintained as
confidential in accordance with the terms of a written agreement with a
third party or (ii) sensitive customer information or pricing lists which
in the Company's business judgment should not be provided to Buyer until
the transactions contemplated hereby have been consummated in order to
avoid any adverse effect on the
Company's or any Subsidiary's business, assets or financial condition.
(b) Ordinary Conduct. Except as set forth in Schedule 6(b) of the
Disclosure Schedule or otherwise expressly permitted by the terms of this
Agreement, from the date hereof to the Closing, the business of the Company
and the Subsidiaries shall be conducted in the ordinary course in
substantially the same manner as presently conducted and the Company shall
make reasonable efforts consistent with past practices to preserve existing
material relationships with customers, suppliers and others with whom the
Company or any Subsidiary deals. Except as set forth in Schedule 6(b) of
the Disclosure Schedule or otherwise expressly permitted by the terms of
this Agreement, from the date hereof to the Closing, neither the Company
nor any Subsidiary shall do any of the following without the prior written
consent of Buyer:
(i) amend its Articles of Incorporation or By- laws, or
comparable governing instruments;
(ii) declare or pay any dividend or make any other distribution
to its stockholders whether or not upon or in respect of any shares of
its capital stock; provided, however, that (A) dividends and
distributions may continue to be made by the Subsidiaries to the
Company, and from one wholly owned Subsidiary to another wholly owned
Subsidiary and (B) paid-in-kind stock dividends with respect to the
Preferred Shares may continue to be paid by the Company;
(iii) redeem or otherwise acquire any shares of its capital stock
or issue any capital stock (except upon redemption of outstanding
Preferred Shares in accordance with Section 6(c) or the exercise of
Options in accordance with their present terms or in accordance with
Section 6(d)) or any option, warrant or right relating thereto or any
securities convertible into or exchangeable for any shares of capital
stock;
(iv) adopt or amend in any material respect any Plan or
collective bargaining agreement, except as required by law;
(v) grant to any executive officer or employee any increase in
compensation or benefits, except in the ordinary course of business
consistent with past practice or as may be required under existing
agreements;
(vi) incur or assume any liabilities, obligations or indebtedness
for borrowed money or guarantee any such liabilities, obligations or
indebtedness, other than borrowings under the Company's Credit
Facility and other than in the ordinary course of business consistent
with past practice;
(vii) cancel any material indebtedness (individually or in the
aggregate) or waive any claims or rights of substantial value other
than in the ordinary course of business;
(viii) except for dividends and distributions permitted under
clause (ii) above and except for intercompany transactions in the
ordinary course of business and payments pursuant to existing
agreements, including payments made to Bessemer, Bessemer Partners &
Co. or any of their respective affiliates pursuant to the Management
Advisory Services Agreement dated September 28, 1995, between the
Company and Bessemer Partners & Co., in consideration for services
connected with the management of certain of the Company's employee
benefit plans and for providing general corporate, financial and
administrative advice, pay, loan or advance any amount to, or sell,
transfer or lease any of its assets to, or enter into any agreement or
arrangement with, any Seller or any of its affiliates other than the
Company and the Subsidiaries;
(ix) make any change in any method of accounting or accounting
practice or policy other than those required by US GAAP;
(x) merge or consolidate with any other person, or acquire a
substantial portion of the assets of any other person or otherwise
acquire any assets, other than (A) raw materials, inventory and
supplies in the ordinary course of business consistent with past
practice and (B) capital expenditures allowed under clause (xi),
which, in any event, are material, individually or in the aggregate,
to the Company and the Subsidiaries, taken as a whole;
(xi) make or incur any capital expenditures that are not
currently approved in writing or budgeted and which exceed $750,000
individually or $1,500,000 in the aggregate, except in the ordinary
course of business;
(xii) sell, lease or otherwise dispose of any of its assets
except for (A) sales of assets in the
ordinary course of business and in a manner consistent with past
practice, (B) dispositions of obsolete or worthless assets or (C)
sales of assets (other than sales permitted pursuant to clauses (A)
and (B) above) not in excess of $1,000,000 in the aggregate;
(xiii) enter into any lease of real property, except any renewals
of existing leases in the ordinary course of business;
(xiv) offer to sell, solicit any offer to purchase or engage in
any negotiations relating to the purchase of the Company's or
Subsidiaries' shares of capital stock or assets (other than (A) the
transactions contemplated by this Agreement, (B) the sale of inventory
in the ordinary course of business, (C) any sale, transfer or other
disposition in the ordinary course of business of assets that are not
material, individually or in the aggregate, to the Company and the
Subsidiaries, taken as a whole, (D) any acquisition of securities of
Seller under any stock repurchase programs announced prior to the date
of this Agreement and (E) exercises of Options under any Option
Agreement or other options for securities of Seller under any Plan) by
any person or entity other than Buyer;
(xv) make any election regarding Taxes or compromise or settle
any material claim regarding any Tax liability; provided, however,
that Buyer shall not unreasonably withhold consent to any such
election, compromise or settlement;
(xvi) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise) in excess of $1,000,000 in the aggregate, other than the
payment, discharge or satisfaction of any such claim, liability or
obligation, in the ordinary course of business and consistent with
past practice and other than the payment, discharge or satisfaction of
any claim, liability or obligation reflected or reserved against in
the Financial Statements or incurred in the ordinary course of
business and consistent with past practice; or
(xvii) agree, whether in writing or otherwise, to do any of the
foregoing.
From June 30, 1998 to the Closing, neither the Company nor any Subsidiary
shall, without the prior written consent of
Buyer, make any principal payment in respect of any Long- Term Debt
described in clauses (A) through (C) of the definition of "Long-Term Debt",
except for (A) any mandatory repayment of any Term Loan under the Credit
Facility or (B) any repayment of any Revolving Loan or Swingline Loan under
the Credit Facility; provided that the aggregate amount of Swingline Loans
and Revolving Loans outstanding on the Closing Date shall not be less than
an amount equal to the aggregate amount of Swingline Loans and Revolving
Loans outstanding on June 30, 1998 less $2.75 million.
(c) Redemption of Preferred Stock. As of the time of the Closing,
the Company shall call for redemption all outstanding Preferred Shares and,
in accordance with its Articles of Incorporation, as amended, effect such
redemption at the liquidation preference per share specified therein (the
"Per Share Redemption Price") at the Closing.
(d) Options. The Company shall provide, and pursuant to the terms
of the applicable agreements relating to the Options between the holders of
the Options and the Company (the "Option Agreements"), shall cause such
holders to agree that:
(i) immediately prior to the Closing, each outstanding Option,
whether or not then exercisable or vested, shall become fully
exercisable and vested;
(ii) immediately prior to the Closing, each Option that is then
outstanding shall be canceled; and
(iii) in consideration of such cancelation, the Company, at the
Closing, shall pay to Bessemer, on behalf of each such holder, an
amount in respect thereof equal to:
(A) in the case of Common Stock Options, the product of (1) the
excess, if any, of the Per Share Purchase Price over the exercise
price specified in the related Option Agreement multiplied by (2) the
aggregate number of shares of the Company's Common Stock subject
thereto (the "Common Stock Option Amount"), net of applicable
withholding taxes;
(B) in the case of Preferred Share Options, the sum of (1) the
product of (a) the excess, if any, of the Per Share Redemption Price
over the exercise price specified in the related Option Agreement
multiplied by (b) the aggregate number of the Company's Preferred
Shares subject thereto, plus (2) the product of (a) the aggregate
number of additional shares of Preferred Shares that would have been
issued as dividends in respect of the shares of Preferred Shares
underlying such Option, had the holder exercised such Option as of the
grant date and held such shares of Preferred Shares received from the
grant date through the date of cancelation of such Option (the
"Additional Preferred Shares") multiplied by (b) the Per Share
Redemption Price (the "Preferred Share Option Amount"), net of
applicable withholding taxes;
(C) in the case of Common Stock Rollover Options, the product of
(1) the product of (a) the aggregate number of shares of the Company's
Common Stock subject thereto multiplied by (b) a fraction (the
numerator of which is $10 minus the per share exercise price specified
in the related Option Agreement, and the denominator of which is $10)
multiplied by (2) the Per Share Purchase Price (the "Common Stock
Rollover Option Amount"), net of applicable withholding taxes; and
(D) in the case of Preferred Share Rollover Options, the sum of
(1) the product of (a) the product of (i) the aggregate number of
shares of the Company's Preferred Shares subject thereto (excluding
any Additional Preferred Shares) multiplied by (ii) a fraction (the
numerator of which is $100 minus the per share exercise price
specified in the related Option Agreement, and the denominator of
which is $100) multiplied by (b) the Per Share Redemption Price plus
(2) the product of (a) the Additional Preferred Shares multiplied by
(b) the Per Share Redemption Price (the "Preferred Share Rollover
Option Amount"), net of applicable withholding taxes.
All Option Agreements shall terminate as of the Closing Date and
the provisions in any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital stock of
the Company shall be deleted as of the Closing Date.
(e) Resignations of Directors. The Company shall obtain the
resignations, effective as of the Closing, of all the directors of the
Company and each Subsidiary, except for such persons as shall have been
designated in writing at least two business days prior to the Closing by
the Buyer to the Company.
(f) Bring-Along Rights. The Company shall exercise its right
under Section 3.02 of the Stockholders
Agreement to cause each Seller to sell its Shares to Buyer on the terms and
subject to the conditions set forth in this Agreement.
7. Representations and Warranties of Buyer. Buyer hereby
represents and warrants to Sellers as follows:
(a) Authority. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of Luxembourg. Buyer has all
requisite corporate power and authority to enter into this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. All acts and other proceedings required to be taken by
Buyer to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have
been duly and properly taken. This Agreement has been duly executed and
delivered by Buyer and, assuming due authorization, execution and delivery
by the other parties hereto, constitutes a legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms.
(b) No Conflicts; Consents. (i) The execution and delivery of
this Agreement does not, and the consummation of the transactions
contemplated hereby and compliance with the terms hereof will not, conflict
with, or result in any violation of or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or to loss of a material
benefit under, or result in the creation of any lien, claim, encumbrance,
security interest, option, charge or restriction of any kind upon any of
the properties or assets of Buyer or any subsidiary of Buyer under, any
provision of (A) the Certificate of Incorporation or By-laws of Buyer or
the comparable governing instruments of any subsidiary of Buyer, (B) any
note, bond, mortgage, indenture, deed of trust, license, lease, contract,
commitment, agreement or arrangement to which Buyer or any subsidiary of
Buyer is a party or by which any of their respective properties or assets
are bound or (C) any judgment, order, or decree, or material statute, law,
ordinance, rule or regulation applicable to Buyer or any subsidiary of
Buyer or their respective properties or assets, other than, in the case of
clauses (B) and (C) above, any such items that, individually or in the
aggregate, would not have a material adverse effect on the ability of Buyer
to consummate the transactions contemplated hereby and perform all its
obligations hereunder (a "Buyer Material Adverse Effect").
(ii) No consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with
respect to Buyer or any of its subsidiaries or their respective
affiliates in connection with the execution, delivery and performance
of this Agreement or the consummation of the transactions contemplated
hereby, other than (i) compliance with and filings under the HSR Act,
if applicable, (ii) compliance with and filings and notifications
under applicable environmental laws and (iii) those that may be
required solely by reason of Sellers' (as opposed to any other third
party's) participation in the transactions contemplated hereby.
(c) Securities Act. The Shares purchased by Buyer pursuant to
this Agreement are being acquired for investment only and not with a view
to any public distribu tion thereof, and Buyer shall not offer to sell or
otherwise dispose of the Shares so acquired by it in violation of any of
the registration requirements of the Securities Act.
(d) Actions and Proceedings, etc. There are no (i) outstanding
Orders against Buyer or any of its affiliates, (ii) lawsuits, actions or
proceedings pending or, to the knowledge of Buyer, threatened against Buyer
or any of its affiliates or (iii) investigations by any Governmental Entity
which are, to the knowledge of Buyer, pending or threatened against Buyer
or any of its affiliates, and which, in the case of each of clauses (i),
(ii) and (iii), have or could have a Buyer Material Adverse Effect.
(e) Availability of Funds. Buyer will have on the Closing Date
cash available to enable it to consummate the transactions contemplated by
this Agreement.
8. Covenants of Buyer. Buyer covenants and agrees as follows:
(a) Confidentiality. Buyer acknowledges that the information
being provided to it in connection with the purchase and sale of the Shares
and the consummation of the other transactions contemplated hereby is
subject to the terms of a confidentiality agreement between Buyer and the
Company (the "Confidentiality Agreement"), the terms of which are
incorporated herein by reference. Buyer also acknowledges that the Sellers
have no obligation or liability of any kind whatsoever to Buyer or any
other person by virtue of the Confidentiality Agreement.
Effective upon, and only upon, the Closing, the Confidentiality Agreement
shall terminate with respect to information relating solely to the Company
and the Subsidiaries; provided that Buyer acknowledges that any and all
other information provided to it by the Company or Sellers, or the
Company's or Sellers' representatives concerning Sellers shall remain
subject to the terms and conditions of the Confidentiality Agreement after
the Closing Date.
(b) No Additional Representations. Buyer acknowledges that it and
its representatives have been permitted full and complete access to the
books and records, facilities, equipment, tax returns, contracts, insurance
policies and other properties and assets of the Company and the
Subsidiaries which it and its representatives have desired or requested to
see and/or review, and that it and its representatives have had a full
opportunity to meet with the partners, officers and employees of Sellers,
the Company and the Subsidiaries to discuss the businesses and assets of
the Company and the Subsidiaries. Buyer acknowledges that none of Sellers,
the Company, any Subsidiary or any other person has made any representation
or warranty, expressed or implied, as to the accuracy or completeness of
any information regarding the Company and the Subsidiaries furnished or
made available to Buyer and its representatives, except as expressly set
forth in this Agreement or the Disclosure Schedule and there are no other
representations or warranties made by Sellers, the Company, any Subsidiary
or any other person with respect to the transactions contemplated by this
Agreement, and none of Sellers, the Company, any Subsidiary or any other
person shall have or be subject to any liability to Buyer or any other
person resulting from the distribution to Buyer, or Buyer's use of, any
such information, including the Confidential Offering Memorandum prepared
by Xxxxxx Xxxxxxx & Co. Incorporated and Chase Securities Inc. and any
information, documents or material made available to Buyer by Sellers, the
Company, any Subsidiary or their partners, directors, officers, employees,
agents or advisors in certain "data rooms", management presentations or in
any other form in expectation of the transactions contemplated by this
Agreement.
(c) Nonobstruction. Buyer shall not take any action that would,
or that could reasonably be expected to, result in any of the conditions to
the purchase and sale of the Shares set forth in Section 3(b) not being
satisfied.
(d) Supplemental Disclosure. Buyer shall promptly notify Sellers
of, and furnish each Seller any information such Seller may reasonably
request with respect to, the occurrence to Buyer's knowledge of any event
or condition or the existence to Buyer's knowledge of any fact that would
cause any of the conditions to Sellers' obligations to consummate the
purchase and sale of the Shares not to be fulfilled.
(e) Payment of Certain Taxes. Sellers and Buyer shall share
equally all transfer, documentary, sales, use, registration and other such
taxes (including, but not limited to, all applicable real estate transfer
or gains taxes) and fees (including any penalties, interest and additions
to such taxes) incurred in connection with this Agreement and the
transactions contemplated hereby (other than stock transfer taxes), and
Sellers and Buyer shall cooperate in timely making all filings, returns,
reports and forms as may be required to comply with the provisions of such
tax laws. Sellers shall pay any stock transfer taxes due as a result of the
sale of the Shares.
(f) Redemption of Preferred Stock. In connection with the
Closing, Buyer shall provide to the Company all funds necessary to effect
the redemption of the Preferred Shares contemplated by Section 6(c)
including, without limitation, funds necessary to pay, in cash, the
liquidation preference thereof and all accrued and unpaid dividends thereon
to the Closing Date. Buyer shall cause the Company to pay to Bessemer, on
behalf of the holders of the Preferred Shares, at the Closing, the amounts
payable as a result of such redemption. The amount to be paid to Bessemer,
on behalf of such holders, pursuant to this Section 8(f) shall be paid on
the Closing Date by wire transfer to such account in immediately available
funds as provided in Section 2(a)(ii)(F).
(g) Option Payments. In connection with the Closing, Buyer shall
provide to the Company all funds necessary to effect the cancelation of the
Options contemplated by Section 6(d) including, without limitation, funds
necessary to pay the aggregate consideration to be paid to all holders of
Options pursuant to Sections 6(d)(iii)(A) through (D). Buyer shall cause
the Company to pay to Bessemer, on behalf of the holders of Options, at the
Closing, the amounts payable as provided in Section 6(d). The amount to be
paid to Bessemer, on behalf of the holders of Options, pursuant to this
Section 8(g) shall be paid on the Closing Date by wire transfer to such
account in immediately available funds as provided in Section 2(a)(ii)(D).
(h) Certain Company Indebtedness. Buyer acknowledges and agrees
that (i) unless the holders of the 12% Notes (as defined in Section
18(b)(vii) agree to waive or amend the terms of their 12% Notes prior to
the Closing Date, upon consummation of the transactions contemplated by
this Agreement, such holders will obtain the right to cause the Company to
repurchase their 12% Notes; (ii) neither the Company nor the Sellers has
sought or is required to seek such a waiver or amendment; and (iii)
accordingly, the Company may be required to repurchase all or part of the
12% Notes following the Closing pursuant to the terms thereof. Buyer also
acknowledges and agrees that (i) unless banks party to each of the Credit
Facility and the GC Spain Credit Facility agree to waive or amend the
Credit Facility and the GC Spain Credit Facility, respectively, prior to
the Closing Date, the consummation of the transactions contemplated by this
Agreement will result in (A) the Credit Facility, the GC Spain Credit
Facility or both becoming immediately due and payable and (B) breaches by
the Company of certain covenants under the Credit Facility, the GC Spain
Credit Facility or both, which, if continued unremedied for a period of at
least 30 days after notice to the Company, could result in the Credit
Facility, the GC Spain Credit Facility or both, becoming immediately due
and payable, which in turn would trigger a default under the 12% Notes,
which, if continued for 30 days after notice thereof to GCC, could trigger
an acceleration of the 12% Notes; (ii) neither the Company nor the Sellers
has sought or is required to seek such a waiver or amendment as a condition
to the Buyer's obligation to consummate the transaction contemplated
hereby; and (iii) Buyer shall either (x) provide GCC with funds necessary
for GCC to repay, and cause GCC to repay, in full the Credit Facility and
the GC Spain Credit Facility upon the consummation of the transactions
contemplated by this Agreement or (y) obtain a waiver of any breaches of
the provisions of the Credit Facility and the GC Spain Credit Facility that
occur or with the passage of time or notice or both will occur as a result
of the consummation of the transactions contemplated by this Agreement and
a waiver of the applicability of any change of control provisions of the
Credit Facility and the GC Spain Credit Facility.
9. Mutual Covenants. Each of the parties covenants and agrees as
follows:
(a) Consents. Buyer acknowledges that certain consents and
waivers with respect to the transactions contemplated by this Agreement may
be required from parties to the Contracts listed in Schedule 4(k) of the
Disclosure Schedule and that such consents and waivers have not been
obtained. Buyer agrees that none of the Company or Sellers shall have any
liability whatsoever to Buyer arising out of or relating to the failure to
obtain any consents or waivers that may be required in connection with the
transactions contemplated by this Agreement or because of the termination
of any Contract as a result thereof. Buyer further agrees that no
representation, warranty or covenant of the Company or Sellers contained
herein shall be breached or deemed breached, and no condition shall be
deemed not satisfied, as a result of (i) the failure to obtain any such
consent or waiver, (ii) any such termination or (iii) any lawsuit, action,
proceeding or investigation commenced or threatened by or on behalf of any
person arising out of or relating to the failure to obtain any such consent
or any such termination. Prior to the Closing, the Company, the
Subsidiaries and Sellers shall use commercially reasonable efforts to
obtain any such consents and waivers; provided, however, that such efforts
shall not include any requirement of Sellers or any of their respective
affiliates (including the Company and the Subsidiaries) to expend money,
commence or participate in any litigation or offer or grant any
accommodation (financial or otherwise) to any third party.
(b) Post-Closing Access. After the Closing, upon reasonable
written notice, Buyer on the one hand, and Sellers, on the other hand,
shall furnish or cause to be furnished to each other and their employees,
counsel, auditors and representatives access, during normal business hours,
to such information and assistance relating to the Company and the
Subsidiaries as is reasonably necessary for financial reporting and
accounting matters, the preparation and filing of any tax returns, reports
or forms or the defense of any tax claim or assessment. Each party shall
reimburse any other party for reasonable out-of-pocket costs and expenses
incurred in assisting such party pursuant to this Section 9(b). No party
shall be required by this Section 9(b) to take any action that would
unreasonably interfere with the conduct of its business, or, in the case of
certain of the Sellers, their personal affairs or unreasonably disrupt the
normal operations of the Company, the Subsidiaries or Buyer.
(c) Publicity. The Company, Sellers and Buyer agree that, from
the date hereof through the Closing Date, no public release or announcement
concerning the transactions contemplated hereby shall be issued by any
party without the prior consent of the other parties (which consent shall
not be unreasonably withheld), except as such release or announcement may
be required by law or the rules or regulations of any United States or
foreign securities exchange, in which case the party required to make the
release or announcement shall allow the other parties reasonable time to
comment on such release or announcement in advance of such issuance.
(d) Reasonable Best Efforts. Subject to the terms and conditions
of this Agreement (including the provisions set forth in Section 9(a)),
each party shall use its reasonable best efforts to cause the Closing to
occur.
(e) Antitrust Notification. Bessemer and Buyer shall as promptly
as practicable, but in no event later than five business days following the
execution and delivery of this Agreement, file with the United States
Federal Trade Commission (the "FTC") and the United States Department of
Justice (the "DOJ") the notification and report form, if any, required for
the transactions contemplated hereby. Any such notification and report form
shall be in substantial compliance with the requirements of the HSR Act.
Each of Bessemer, the Company and Buyer shall furnish to the other such
necessary information and reasonable assistance as the other may request in
connection with its preparation of any filing or submission which is
necessary under the HSR Act. Bessemer and Buyer shall keep each other
apprised of the status of any communications with, and any inquiries or
requests for additional information from, the FTC and the DOJ and shall
comply promptly with any such inquiry or request. Each of Bessemer, the
Company and Buyer shall use its reasonable best efforts to obtain any
clearance required under the HSR Act for the purchase and sale of the
Shares. Buyer shall be solely responsible for any filing fees payable by
Buyer under the HSR Act.
10. Further Assurances. From time to time, as and when requested
by a party hereto of another party hereto, the other party shall execute
and deliver, or cause to be executed and delivered, all such documents and
instruments and shall take, or cause to be taken, all such further or other
actions (subject to the provisions of Section 9(a)), as such other party
may reasonably deem necessary or desirable to consummate the transactions
contemplated by this Agreement.
11. Assignment. This Agreement and the rights and obligations
hereunder shall not be assignable or trans ferable by any party hereto
(including by operation of law in connection with a merger, or sale of
substantially all the assets, of any party hereto) without the prior
written consent of the other parties hereto; provided, however, that Buyer
may assign its right to purchase the Shares hereunder to a majority owned
subsidiary of Tyco without the prior written consent of Sellers; provided
that Buyer remains the primary obligor for Buyer's obligations hereunder.
Any attempted assignment in violation of this Section 11 shall be void.
12. No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their permitted assigns and nothing
herein expressed or implied shall give or be construed to give to any
person, other than the parties hereto and such assigns, any legal or
equitable rights hereunder.
13. Termination. (a) Anything contained herein to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby aban doned at any time prior to the Closing Date:
(i) by mutual written consent of Bessemer, on behalf of the
Sellers, and Buyer;
(ii) by Bessemer, on behalf of the Sellers, if any of the
conditions set forth in Section 3(b) shall have become incapable of
fulfillment, and shall not have been waived by Sellers;
(iii) by Buyer if any of the conditions set forth in Section 3(a)
shall have become incapable of fulfillment, and shall not have been
waived by Buyer; or
(iv) by Bessemer, on behalf of the Sellers, or Buyer, if the
Closing does not occur on or prior to February 28, 1999;
provided, however, that the party seeking termination pursuant to clause
(ii), (iii) or (iv) is not in breach in any material respect of any of its
material representations, warranties, covenants or agreements contained in
this Agreement.
(b) In the event of termination by Bessemer, on behalf of the
Sellers, or Buyer pursuant to this Section 13,
written notice thereof shall forthwith be given to the other party and the
transactions contemplated by this Agreement shall be terminated, without
further action by either party. If the transactions contemplated by this
Agreement are terminated as provided herein:
(i) Buyer shall return all documents and other material
(including all copies thereof, whether maintained in hard copy, on
computer disk or on computer hard drive) received from the Company,
any Subsidiary or Sellers relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to
Bessemer;
(ii) all confidential information received by Buyer with respect
to the business of the Company and the Subsidiaries shall be treated
in accordance with the Confidentiality Agreement, which shall remain
in full force and effect notwithstanding the termination of this
Agreement.
(c) If this Agreement is terminated and the transactions
contemplated hereby are abandoned as described in this Section 13, this
Agreement shall become void and of no further force or effect, except for
the provisions of (i) Section 8(a) relating to the obligation of Buyer to
keep confidential certain information and data obtained by it, (ii) Section
15 relating to certain expenses, (iii) Section 9(c) relating to publicity,
(iv) Section 21 relating to finder's fees and broker's fees, and (v) this
Section 13. Nothing in this Section 13 shall be deemed to release any party
from any liability for any wilful or intentional breach by such party of
the terms and provisions of this Agreement or to impair the right of any
party to compel specific performance by any other party of its obligations
under this Agreement.
14. Survival of Representations, Warranties and Covenants. The
representations and warranties in this Agreement and in any certificate
delivered pursuant hereto shall not survive the Closing, provided that the
representation and warranty set forth in Section 5(c) shall not terminate.
Following the Closing Date, the parties shall have no liability in
connection with the covenants and obligations provided in any of Section 6,
Section 9(d) or Section 9(e).
15. Expenses. (a) Whether or not the transactions contemplated
hereby are consummated, and except as otherwise specifically provided in
this Agreement, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs or
expenses. The costs and expenses incurred with respect to the Company and
its Subsidiaries, unless paid in full prior to the Closing by the Company
or any Subsidiary, shall be borne pro rata by Sellers and the holders of
the Options in accordance with (i) the number of Shares held by each
Seller, and/or the number of Shares underlying in-the-money Options held by
each Seller, as the case may be, divided by (ii) the sum of (A) the total
aggregate number of all Shares held by all Sellers plus (B) the total
aggregate number of all Shares underlying all in-the-money Options held by
all Sellers.
(b) A party in breach of this Agreement shall, on demand,
indemnify and hold harmless any other party for and against all reasonable
out-of-pocket expenses, including legal fees, incurred by such other party
by reason of the enforcement and protection of its rights under this
Agreement. The payment of such expenses is in addition to any other relief
to which such other party may be entitled.
16. Amendments. No amendment, modification or waiver in respect
of this Agreement shall be effective unless it shall be in writing and
signed by both Bessemer, on behalf of Sellers, and Buyer.
17. Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered
by hand or sent by prepaid telex, cable or telecopy or sent, postage
prepaid, by registered, certified or express mail or reputable overnight
courier service, and shall be deemed given when so delivered by hand,
telexed, cabled or telecopied, or if mailed, three
days after mailing (one business day in the case of express mail or
overnight courier service), as follows:
(i) if to Buyer,
Tyco Group S.a.r.l.
0xx Xxxxx
0, Xxxxxx Xxxxx Xxxxxx
X-0000 Xxxxxxxxxx
Attention: General Manager
with a copy to:
Tyco International (US) Inc.
Xxx Xxxx Xxxx
Xxxxxx, XX 00000
Attention: General Counsel
(ii) if to the Company,
Graphic Holdings, Inc.
000 Xxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. X'Xxxxx, Esq.
Vice President and General
Counsel
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.;
(iii) if to Bessemer,
Bessemer Holdings, L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X.X. Xxxxxxxx
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.; and
(iv) if to any other Seller to,
Bessemer Holdings, L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X.X. Xxxxxxxx
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
18. Interpretation; Exhibits and Schedules; Certain Definitions.
(a) Interpretation; Exhibits and Schedules. The headings contained in this
Agreement, in any Exhibit or Schedule hereto and in the table of contents
to this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. Any matter set
forth in any provision, subprovision, section or subsection of the
Disclosure Schedule shall be deemed set forth for all purposes of the
Disclosure Schedule to the extent relevant. All Exhibits and Schedules
annexed hereto or referred to herein are hereby incorporated in and made a
part of this Agreement as if set forth in full herein. Any capitalized
terms used in any Schedule or Exhibit but not otherwise defined therein,
shall have the meaning as defined in this Agreement.
(b) Certain Definitions.
(i) "Common Stock Option" shall mean the right, pursuant to the
Company's 1996 Stock Option Plan, to purchase one or more shares of
Common Stock of the Company.
(ii) "Common Stock Rollover Option" shall mean the right,
pursuant to the Company's 1995 Nonqualified Rollover Stock Option
Plan, to purchase one or more shares of Common Stock of the Company.
(iii) "Credit Facility" shall mean the Amended and Restated
Credit Agreement dated as of February 29, 1996 and amended as of May
29, 1997, among the Company, GCC, the lenders party thereto and The
Chase Manhattan Bank, as Agent.
(iv) "including" shall mean including, without limitation;
(v) "knowledge" of the Company shall mean the knowledge after due
inquiry of any executive officer or director of the Company;
(vi) "knowledge" of Buyer shall mean the knowledge after due
inquiry of any executive officer or director of Buyer;
(vii) "Long Term Debt" shall mean an amount equal to the
outstanding principal and accrued but unpaid interest as of the
Closing Date (including any current portion thereof) with respect to
(A) the Company's 12% Senior Subordinated Notes due 2005 (the "12%
Notes"), (B) all outstanding amounts under the Credit Facility, (C)
all outstanding amounts under the credit facility (the "GC Spain
Credit Facility") for Controles Graficos Ibericos, S.A. ("GC Spain")
and (D) any and all other consolidated obligations of the Company and
the Subsidiaries as of the Closing that would be required under U.S.
GAAP to be accounted for as indebtedness for borrowed money, other
than any such item reflected on, reserved against or referred to in
the June 30 Balance Sheet or included as an item set forth in any
Disclosure Schedule.
(viii) "Net Long Term Debt" shall mean Long Term Debt less the
amount of cash, cash equivalents and marketable securities held by the
Company and its Subsidiaries as of the Closing Date, all calculated in
the same way, using the same methods as the corresponding line items
in the June 30 Balance Sheet (as defined in Section 4(f)).
(ix) "Options" shall mean, collectively, Common Stock Options,
Common Stock Rollover Options, Preferred Share Options and Preferred
Share Rollover Options.
(x) "person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust, joint venture,
Governmental Entity or other entity.
(xi) "Preferred Share Option" shall mean the right, pursuant to
the Company's 1996 Stock Option Plan, to purchase one or more shares
of Preferred Shares of the Company.
(xii) "Preferred Share Rollover Option" shall mean the right,
pursuant to the Company's 1995 Nonqualified Rollover Stock Option
Plan, to purchase one or more shares of Preferred Shares of the
Company.
(xiii) "Revolving Loan" shall have the meaning assigned to that
term in the Credit Facility.
(xiv) "Subsidiary" shall mean each person of which a majority of
the voting power of the equity securities or equity interest is owned,
directly or indirectly, by the Company.
(xv) "Supplemental Payments" shall have the meaning assigned to
such term in Schedule 4(k)(i) of the Disclosure Schedule.
(xvi) "Swingline Loan" shall have the meaning assigned to that
term in the Credit Facility.
(xvii) "Term Loan" shall have the meaning assigned to that term
in the Credit Facility.
(xviii) "US GAAP" shall mean United States generally accepted
accounting principles.
(xviii) The following terms are defined in this Agreement in the
Sections set forth below:
Term Section
Additional Preferred Shares 6(d)(iii)(B)(2)(a)
Applicable Laws 4(p)(i)
Attorney-in-Fact 2(b)(ii)
Bessemer Preamble
Buyer Preamble
Term Section
Buyer Material Adverse Effect 7(b)(i)(C)
Closing 2(a)(i)
Closing Date 2(a)(i)
Code 4(g)(i)(C)
Common Stock Preamble
Common Stock Option 18(b)(i)
Common Stock Option Amount 6(d)(iii)(A)
Common Stock Rollover Option 18(b)(ii)
Common Stock Rollover Option Amount 6(d)(iii)(C)
Company Preamble
Company Material Adverse Effect 4(b)(i)(C)
Company Properties 4(i)(ii)
Company Property 4(i)(ii)
Confidentiality Agreement 8(a)
Contracts 4(k)
Credit Facility 18(b)
Disclosure Schedule 4(b)(i)
DOJ 9(e)
Environmental Law 4(p)(ii)(D)
Environmental Permits 4(p)(ii)(B)
ERISA 4(n)(i)
Financial Statements 4(f)
FTC 9(e)
GCC 3(b)(vii)
GC Spain 18(b)
GC Spain Credit Facility 18(b)
Governmental Entity 3(a)(ii)
Term Section
Guaranty Preamble
Hazardous Materials 4(p)(ii)(D)(II)
HSR Act 3(a)(iii)
including 18(b)
indemnified party 24(c)
Indenture 3(b)(vii)
Intellectual Property 4(j)
June 30 Balance Sheet 4(f)
knowledge (of the Buyer) 18(b)
knowledge (of the Company) 18(b)
Law 3(a)(ii)
Leased Property 4(i)
Lien 4(b)(i)
Long Term Debt 18(b)
Losses 24(a)
Net Long Term Debt 18(b)
Nonvoting Common Stock Preamble
Option Agreements 6(d)
Option Amounts 2(a)(ii)(C)
Options 18(b)
Order 3(a)(ii)
Other Sellers Preamble
Owned Property 4(i)
Per Share Purchase Price 1
Per Share Redemption Price 6(c)
Permitted Liens 4(h)(iv)
person 18(b)
Term Section
Plans 4(n)(i)
Preferred Share Option 18(b)
Preferred Share Option Amount 6(d)(iii)(B)(2)(b)
Preferred Share Redemption Amount 2(a)(ii)(E)
Preferred Share Rollover Option 18(b)
Preferred Share Rollover Option Amount 6(d)(iii)(D)(2)(b)
Preferred Shares 1(b)(ii)
Principal Seller or Principal Sellers Preamble
Purchase Price 1
Release 4(p)(ii)(D)(III)
Revolving Loan 18(b)
Seller or Sellers Preamble
Shares Preamble
Stockholders Agreement Preamble
Subsidiary 18(b)
Supplemental Payments 18(b)
Swingline Loan 18(b)
Tax or Taxes 4(g)(i)(A)
Tax Returns 4(g)(i)(B)
Term Loan 18(b)
Third Party Claim 24(c)
Title IV Plan 4(n)(ii)
Tyco Preamble
12% Notes 18(b)
US GAAP 18(b)
19. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be consid-
ered one and the same agreement, and shall become effective when one or
more such counterparts have been signed by each of the parties and
delivered to both Buyer and Bessemer, as representative for the Sellers.
20. Entire Agreement. This Agreement and the Confidentiality
Agreement contain the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersede all
prior agreements and understandings relating to such subject matter. No
party shall be liable or bound to any other party in any manner by any
representations, warranties or covenants relating to such subject matter
except as specifically set forth herein or in the Confidentiality
Agreement.
21. Brokers. Each party hereto hereby represents and warrants
that (a) the only brokers or finders that have acted for such party in
connection with this Agreement or the transactions contemplated hereby or
that may be entitled to any brokerage fee, finder's fee or commission in
respect thereof are Xxxxxx Xxxxxxx & Co. Incorporated and Chase Securities
Inc. with respect to the Company and none with respect to Buyer and (b)
each party shall pay all costs and expenses incurred by such party in
connection with this Agreement and the transactions contemplated hereby,
including all fees or commissions which may be payable to the firm or firms
named in clause (a) with respect to such party, it being understood that
the costs and expenses incurred with respect to the Company shall be borne
by the Sellers and the holders of Options that are outstanding on the
Closing Date on a pro rata basis in accordance with the number of Shares to
be sold by each Seller hereunder and the number of shares of the Company's
Common Stock subject to the Option(s) so held by each holder, as the case
may be.
22. Severability. If any provision of this Agreement (or any
portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other
provision hereof (or the remaining portion thereof) or the application of
such provision to any other persons or circumstances.
23. Consent to Jurisdiction. Each of the parties hereto
irrevocably submits to the exclusive jurisdiction of (a) the Supreme Court
of the State of New York, New York County, and (b) the United States
District Court for the Southern District of New York, for the purposes of
any suit,
action or other proceeding arising out of this Agreement or any transaction
contemplated hereby. Each of the parties hereto agrees to commence any
action, suit or proceeding relating hereto either in the United States
District Court for the Southern District of New York or if such suit,
action or other proceeding may not be brought in such court for
jurisdictional reasons, in the Supreme Court of the State of New York, New
York County. Each of the parties hereto further agrees that service of any
process, summons, notice or document by U.S. registered mail to such
party's respective address set forth above shall be effective service of
process for any action, suit or proceeding in New York with respect to any
matters to which it has submitted to jurisdiction in this Section 23. Each
of the parties hereto irrevocably and unconditionally waives any objection
to the laying of venue of any action, suit or proceeding arising out of
this Agreement or the transactions contemplated hereby in (i) the Supreme
Court of the State of New York, New York County, or (ii) the United States
District Court for the Southern District of New York, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in
any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
24. Indemnification. (a) Each Seller severally shall indemnify
Buyer, its affiliates (including the Company and the Subsidiaries) and each
of their respective officers, directors, employees, stockholders, agents
and representatives against and hold them harmless from any loss,
liability, claim, damage or expense (including reasonable legal fees and
expenses) ("Losses") suffered or incurred by any such indemnified party to
the extent arising from any breach of representations or warranties
applicable to such Seller set forth in Section 5(c).
(b) Exclusive Remedy. Buyer acknowledges and agrees that, should
the Closing occur, its sole and exclusive remedy with respect to any and
all claims relating to this Agreement shall be pursuant to the
indemnification provisions set forth in this Section 24.
(c) Procedures Relating to Indemnification. In order for a party
(the "indemnified party") to be entitled to any indemnification provided
for under Section 24(a) in respect of, arising out of or involving a claim
or demand made by any person against the indemnified party (a "Third Party
Claim"), such indemnified party must notify the indemnifying party in
writing, and in reasonable detail, of the Third Party Claim within 10
business days after receipt
by such indemnified party of written notice of the Third Party Claim;
provided, however, that failure to give such notification shall not affect
the indemnification provided hereunder except to the extent the
indemnifying party shall have been actually prejudiced as a result of such
failure (except that the indemnifying party shall not be liable for any
expenses incurred during the period in which the indemnified party failed
to give such notice). Thereafter, the indemnified party shall deliver to
the indemnifying party, within 5 business days after the indemnified
party's receipt thereof, copies of all notices and documents (including
court papers) received by the indemnified party relating to the Third Party
Claim.
If a Third Party Claim is made against an indemnified party, the
indemnifying party shall be entitled to participate in the defense thereof
and, if it so chooses and acknowledges its obligation to indemnify the
indemnified party therefor, to assume the defense thereof with counsel
selected by the indemnifying party; provided that such counsel is
reasonably acceptable to the indemnified party. Should the indemnifying
party so elect to assume the defense of a Third Party Claim, the
indemnifying party shall not be liable to the indemnified party for legal
expenses subsequently incurred by the indemnified party in connection with
the defense thereof, except to the extent required in connection with the
cooperation by indemnified parties pursuant to the succeeding paragraph. If
the indemnifying party assumes such defense, the indemnified party shall
have the right to participate in the defense thereof and to employ counsel
(reasonably acceptable to the indemnifying party), at its own expense,
separate from the counsel employed by the indemnifying party, it being
understood that the indemnifying party shall control such defense. The
indemnifying party shall be liable for the fees and expenses of counsel
employed by the indemnified party for any period during which the
indemnifying party has failed to assume the defense thereof (other than
during the period prior to the time the indemnified party shall have given
notice of the Third Party Claim as provided above).
If the indemnifying party so elects to assume the defense of any
Third Party Claim, all of the indemnified parties shall cooperate with the
indemnifying party in the defense or prosecution thereof. Such cooperation
shall include the retention and (upon the indemnifying party's request) the
provision to the indemnifying party of records and information which are
reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information
and
explanation of any material provided hereunder. Whether or not the
indemnifying party shall have assumed the defense of a Third Party Claim,
the indemnified party shall not admit any liability with respect to, or
settle, compromise or discharge, such Third Party Claim without the
indemnified party's prior written consent (which consent shall not be
unreasonably withheld). If the indemnifying party shall have assumed the
defense of a Third Party Claim, the indemnified party shall agree to any
settlement, compromise or discharge of a Third Party Claim that the
indemnifying party may recommend and that by its terms obligates the
indemnifying party to pay the full amount of the liability in connection
with such Third Party Claim and which releases the indemnifying party
completely in connection with such Third Party Claim.
(d) Other Claims. In the event any indemnified party should have
a claim against any indemnifying party under this Section 24 that does not
involve a Third Party Claim being asserted against or sought to be
collected from such indemnified party, the indemnified party shall deliver
notice of such claim with reasonable promptness to the indemnifying party.
The failure by any indemnified party so to notify the indemnifying party
shall not relieve the indemnifying party from any liability that it may
have to such indemnified party under this Section 24, except to the extent
that the indemnifying party demonstrates that it has been actually
prejudiced by such failure. If the indemnifying party does not notify the
indemnified party within 10 calendar days following its receipt of such
notice that the indemnifying party disputes its liability to the
indemnified party under this Section 24, such claim specified by the
indemnified party in such notice shall be conclusively deemed a liability
of the indemnifying party under this Section 24 and the indemnifying party
shall pay the amount of such liability to the indemnified party on demand
or, in the case of any notice in which the amount of the claim (or any
portion thereof) is estimated, on such later date when the amount of such
claim (or such portion thereof) becomes finally determined, in each case in
accordance with, and subject to, the provisions of this Section 24. If the
indemnifying party has timely disputed its liability with respect to such
claim, as provided above, the indemnifying party and the indemnified party
shall proceed in good faith to negotiate a resolution of such dispute and,
if not resolved through negotiations, such dispute shall be resolved by
litigation in an appropriate court of competent jurisdiction.
25. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
26. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first written above.
TYCO GROUP S.A.R.L.,
by /s/ Xxxxx Xxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxx
Title: General Manager
GRAPHIC HOLDINGS, INC.,
by /s/ Xxxxx X. Xxxxxx
----------------------------
Name: Xxxxx X. Xxxxxx
Title: President
BESSEMER HOLDINGS, L.P.,
by KYLIX HOLDINGS L.L.C.
its general partner,
by NORTH HAILEY CORPORATION,
a principal manager,
by /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: President
BESSEC HOLDINGS, L.P.,
by KYLIX HOLDINGS L.L.C.
its general partner,
by NORTH HAILEY CORPORATION,
a principal manager,
by /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: President
BH PARTNERS, L.P.,
by KYLIX HOLDINGS L.L.C.
its general partner,
by NORTH HAILEY CORPORATION,
a principal manager,
by /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: President
BESSEMER HOLDINGS SPECIAL SITUATIONS,
L.P.,
by KYLIX HOLDINGS L.L.C.
its general partner,
by NORTH HAILEY CORPORATION,
a principal manager,
by /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: President
BTG-P PARTNERS, L.P.,
by KYLIX HOLDINGS L.L.C.
its general partner,
by NORTH HAILEY CORPORATION,
a principal manager,
by /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: President
BNG PARTNERS, L.P.,
by KYLIX HOLDINGS L.L.C.
its general partner,
by NORTH HAILEY CORPORATION,
a principal manager,
by /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: President
BCG PARTNERS, L.P.,
by KYLIX HOLDINGS L.L.C.
its general partner,
by NORTH HAILEY CORPORATION,
a principal manager,
by /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: President
BGG PARTNERS, L.P.,
by KYLIX HOLDINGS L.L.C.
its general partner,
by NORTH HAILEY CORPORATION,
a principal manager,
by /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: President
BTG-C PARTNERS, L.P.
by /s/ Xxxxxx Xxxxx
----------------------------
Name: Xxxxxx Xxxxx
Title: Authorized Signatory
Exhibit A
Form of Opinion of
Cravath, Swaine & Xxxxx
[Closing Date]
Graphic Holdings, Inc.
Stock Purchase Agreement dated as of September 15, 1998
Ladies and Gentlemen::
We have acted as New York counsel to Graphic
Holdings, Inc., a Delaware corporation (the "Company"), in
connection with the Stock Purchase Agreement dated as of
September 15, 1998 (the "Stock Purchase Agreement"), among
Bessemer Holdings, L.P., a Delaware limited partnership, the
other stockholders listed on the signature pages thereto, the
Company and Tyco Group S.a.r.l., a Luxembourg corporation.
This opinion is being delivered to you pursuant to Section
3(a)(viii) of the Stock Purchase Agreement. Capitalized terms
used but not defined herein have the meanings assigned to
them in the Stock Purchase Agreement.
In that connection, we have examined originals, or
copies certified or otherwise identified to our satisfaction,
of such documents, corporate records and other instruments as
we have deemed necessary or appropriate for purposes of this
opinion, including (i) the Stock Purchase Agreement, (ii) the
Articles of Incorporation of the Company, (iii) the By-laws
of the Company and (iv) the stock records of the Company. We
have also relied, with respect to certain factual matters, on
certificates of officers of the Company.
Based on the foregoing and subject to the
qualifications hereinafter set forth, we are of opinion as
follows:
The authorized capital stock of the Company
consists of (i) 6,000,000 shares of 15% Cumulative Redeemable
Preferred Stock, $.01 par value, of which, as of the date
hereof, (A) [ ] shares are issued and outstanding, and have
2
accrued paid-in-kind dividends of [ ] shares as of the date
hereof, (B) [ ] shares are issuable pursuant to the Preferred
Share Options and (C) [ ] shares are issuable pursuant to the
Preferred Share Rollover Options; (ii) 4,000,000 shares of
Common Stock, $.01 par value, of which, as of the date
hereof, (A) [ ] shares are issued and outstanding, (B) [ ]
shares are issuable pursuant to the Common Stock Options and
(C) [ ] shares are issuable pursuant to the Common Stock
Rollover Options; and (iii) 1,000,000 shares of Nonvoting
Common Stock, $.01 par value, of which, as of the date
hereof, [ ] are issued and outstanding. Except as set forth
above, to our knowledge, there are no shares of capital stock
or other equity securities of the Company outstanding. To our
knowledge, there are not any equity securities of the Company
reserved for issuance for any purpose.
We are admitted to practice only in the State of
New York, and we express no opinion as to matters governed by
any laws other than the laws of the State of New York and the
Federal law of the United States of America.
This opinion is rendered only to the Buyer under
the Stock Purchase Agreement and is solely for Buyer's
benefit in connection with the above transactions. This
opinion may not be relied upon by any other person or for any
other purpose or used, circulated, quoted or otherwise
referred to for any other purpose.
Very truly yours,
Tyco Group S.a.r.l.
0xx Xxxxx
0, Xxxxxx Xxxxx Xxxxxx
X-0000 Xxxxxxxxxx
XXXXXXX
Attention: Chief Financial Officer
