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EXHIBIT 2.2
SECURITIES EXCHANGE AGREEMENT
THIS SECURITIES EXCHANGE AGREEMENT is dated as of this 22nd day of
August, 1996, by and among ATRIUM CORPORATION, a Delaware corporation
("Atrium"), FCI HOLDING CORP., a Delaware corporation ("FCI"), HERITAGE FUND I,
L.P., a Delaware limited partnership ("Heritage"), XXXXXXX XXXXXXXX, an
individual residing at 0000 Xxxxxxxxx, Xxxxxx, XX 00000, XXX XXXXXXXX, an
individual residing at 0000 Xxxxxxx Xxxxxx Xxxx, Xxxxxx, XX 00000, for himself
and as custodian for XXX XXXXXXXX XX and XXXXXXX XXXXXXX XXXXXXXX, under the
Texas Uniform Minors Act, XXXXXXX XXXXXXXX, an individual residing at 0000
Xxxxxx Xxxxxx, Xxxxxx, Xxxxx 00000, XXXXX X. XXXX, XX., an individual residing
at 0000 Xxxxxxx Xxxx Xxxxxx, Xxxxxxxxxxx, XX 00000, XXX XXXXXX, an individual
residing at 000 Xxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000, XXXXXX XXXXXXXX, an
individual with an address at X.X. Xxx 0000, Xxxxxxx, Xxxxxx 00000-0000, XXX
XXXXXX XXXXXXXX, an individual with an address at X.X. Xxx 00000, Xxxxxx, XX
00000-0000, XXXXXXX XXXXXXXX, an individual residing at 0000 Xxxxxxxxx Xxxx,
Xxxxxxxxxx, XX 00000 , (Heritage and such individuals being referred to herein
collectively as the "FCI Holders", and singly, an "FCI Holder") and XXXXXX X.
XXXXXX, an individual residing at 00 Xxxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000
("Xxxxxx"), XXXXXX XXXXXXXXX, an individual residing at 000 Xxxxxx Xxxxxx Xxxx,
Xxxxxxxxx, XX 00000 ("Xxxxxxxxx") and XXXXX XXXXXXXXXX, an individual residing
at 0 Xxxxx Xxxxxx Xxxx, Xxxxxxxxxx, XX 00000 ("Xxxxxxxxxx") (Xxxxxx and
Xxxxxxxxx together, the "VBS Stockholders"; and together with Xxxxxxxxxx,
collectively, the "Xxxxxx Holders", and singly, a "Xxxxxx Holder"). The Xxxxxx
Holders and the FCI Holders are sometimes referred to herein collectively as
the "Holders", and each individually as a "Holder".
WHEREAS, the FCI Holders are the owners of all the issued and
outstanding shares of the capital stock of FCI (the "FCI Stock").
WHEREAS, the FCI Holders desire to contribute the FCI Stock to Atrium in
exchange for certain shares of the capital stock of Atrium ("Atrium Stock"),
and Atrium desires to accept the FCI Stock from the FCI Holders and to issue
certain shares of Atrium Stock to the FCI Holders in exchange therefor, upon
the terms and subject to the conditions set forth in this Agreement;
WHEREAS, the VBS Stockholders are the owners of all of the issued and
outstanding shares of capital stock ("VBS Stock") of Vinyl Building Specialties
of Connecticut, Inc., a Connecticut corporation ("VBS");
WHEREAS, the VBS Stockholders desire to contribute certain shares of VBS
Stock (the "VBS Exchanged Shares") to Atrium in exchange for Atrium Stock, and
to sell their remaining shares of VBS Stock (the "VBS Purchased Shares") to
Xxxxxxxx Companies, Inc., a Texas corporation ("Xxxxxxxx") pursuant to a Stock
Purchase Agreement dated of even date herewith by and among Xxxxxxxx and the
Xxxxxx Holders (the "Purchase Agreement") and Atrium desires to accept the VBS
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Exchanged Shares from the VBS Stockholders and to issue Atrium Stock in
exchange therefor, upon the terms and subject to the conditions set forth in
this Agreement;
WHEREAS, Xxxxxxxxxx is the owner of 200 of the issued and outstanding
shares of capital stock (the "BNE Stock") of Xxxxxx Manufacturing Company of
New England, Inc., a Connecticut corporation ("BNE");
WHEREAS, Xxxxxxxxxx desires to contribute certain of his shares of BNE
Stock (the "BNE Exchanged Shares"; together with the VBS Exchanged Shares, the
"Xxxxxx Stock", and together with the FCI Stock, the "Stock") to Atrium in
exchange for Atrium Stock and to sell his remaining shares of BNE Stock (the
"BNE Purchased Shares") to Xxxxxxxx pursuant to the Purchase Agreement, and
Atrium desires to accept the BNE Exchanged Shares from Xxxxxxxxxx and to issue
Atrium Stock in exchange therefor, upon the terms and subject to the conditions
set forth in this Agreement;
WHEREAS, the VBS Stockholders are the owners of all of the issued and
outstanding shares of the capital stock (the "BNY Stock") of Xxxxxx
Manufacturing Co. of New York, Inc., a Connecticut corporation ("BNY"; together
with BNE, VBS and Xxxxxx Manufacturing Co., Inc. a Connecticut corporation
("BMC"), collectively, the "Xxxxxx Companies," and singly, a "Xxxxxx Company");
WHEREAS, the VBS Stockholders desire to sell their shares of BNY Stock
to Xxxxxxxx, and Xxxxxxxx desire to purchase the BNY Stock, the VBS Purchased
Shares and the BNE Purchased Shares pursuant to the Purchase Agreement, upon
the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the
Purchase Agreement that the exchanges of the FCI Stock, the VBS Exchanged
Shares and the BNE Exchanged Shares described above (collectively, the
"Exchange") shall have been completed pursuant to and in accordance with the
provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained, the parties hereto agree as follows:
1. CONTRIBUTION AND EXCHANGE. At the Closing referred to in Section
2 of this Agreement, subject to the terms and conditions set forth in this
Agreement:
(a) each of the Holders agrees to contribute to Atrium, and Atrium
agrees to accept from such Holder, all of the outstanding shares of FCI Stock,
all of the VBS Exchanged Shares and all of the BNE Exchanged Shares owned by
such Holder as set forth opposite such Holder's name on Schedule 1 hereto, in
exchange for Atrium Stock in the amounts and of the classes set forth opposite
such Holder's name on such Schedule 1 (collectively, the "Atrium Exchange
Shares"), and Atrium and each of the Holders acknowledge and agree that such
exchange of stock is intended to qualify as an
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"exchange" within the meaning of Section 351 of the Internal Revenue Code of
1986, as amended (the "Code");
(b) Heritage agrees to deliver to Atrium the original Variable Amount
Common Stock Purchase Warrant No. W-1 of FCI (the "Heritage Warrant"), and upon
completion of the Exchange described herein FCI and Heritage shall cancel the
Heritage Warrant and Atrium shall issue to Heritage a variable amount common
stock purchase warrant for shares of Atrium Stock in the form attached hereto
as Exhibit A (the "New Warrant"); and
(c) the FCI Holders (other than Heritage) shall use their best efforts
to procure the delivery to Atrium of the original Stock Option Agreements
entered into between FCI and each of the optionees listed on Schedule 2 hereto
(the "Original Options"), and upon completion of the Exchange described herein
FCI shall use its best efforts to procure the substitution of each of the
Original Options by an option identical in form to such Original Option, except
for the substitution of the right to purchase shares of Atrium Stock in the
amounts set forth opposite such optionee's name on Schedule 2 hereto for the
right to purchase shares of FCI Stock in the Original Options (such substitute
options, collectively, the "New Options").
2. CLOSING.
2.1. Time and Place. The closing of the contribution of the Stock in
exchange for the Atrium Exchange Shares (the "Closing") shall be held at the
offices of Xxxxxxx, Xxxx & Xxxxx LLP, 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx, at 10:00 A.M., on September 24, 1996, or at such other time, or
at such other place as Atrium and the Holders may agree. The date on which the
Closing is actually held hereunder is sometimes referred to herein as the
"Closing Date".
2.2. Transactions at Closing. At the Closing, in addition to the
delivery of any other instruments or documents referred to herein:
(a) the FCI Holders shall deliver to Atrium, free and clear of any
lien, claim or encumbrance, certificates representing the FCI Stock, duly
endorsed in blank or with duly executed stock powers attached;
(b) the Xxxxxx Holders shall deliver to Atrium, free and clear of any
lien, claim or encumbrance, certificates representing the VBS Exchanged Shares
and the BNE Exchanged Shares, duly endorsed in blank or with duly executed
stock powers attached;
(c) Atrium shall deliver certificates representing all of the Atrium
Exchange Shares, other than the Escrowed Shares (as defined in Section 2.2(e)
below), to the Holders as set forth on Schedule 1 hereto;
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(d) each of Xxxxxxxx and the Xxxxxx Holders shall complete the
"Closing" under and as defined the Purchase Agreement;
(e) each of Atrium, Xxxxxxxx, the Xxxxxx Holders and Xxxxxxx, Xxxx &
Xxxxx LLP, in its capacity as Escrow Agent (the "Escrow Agent") shall execute
and deliver the Buy-Sell Agreement substantially in the form of Exhibit B
hereto (the "Buy-Sell Agreement") pursuant to which the Atrium Exchange Shares
to be issued to the Xxxxxx Holders hereunder (the "Escrowed Shares") are to be
held in escrow by the Escrow Agent to secure certain of the Xxxxxx Holders'
potential indemnification obligations to Xxxxxxxx under the Purchase Agreement;
(f) Atrium shall deliver certificates representing all of the
Escrowed Shares to the Escrow Agent pursuant to and in accordance with the Buy-
Sell Agreement, and each of the Xxxxxx Holders shall deliver stock powers, duly
executed in blank, in respect of the Escrowed Shares owned by such Xxxxxx
Holder to the Escrow Agent under and pursuant to the Buy-Sell Agreement;
(g) Atrium shall contribute the VBS Exchanged Shares and the BNE
Exchanged Shares to FCI, FCI shall contribute the VBS Exchanged Shares and the
BNE Exchanged Shares to Xxxxxxxx, Xxxxxxxx shall contribute the BNE Exchanged
Shares and the BNE Purchased Shares to VBS, and VBS shall contribute the BNE
Exchanged Shares and the BNE Purchased Shares to BMC;
(h) each of the Holders shall execute and deliver the Atrium
Corporation Stockholder Agreement in the form of Exhibit C hereto (the
"Stockholder Agreement");
(i) Atrium and each of the Holders shall execute and deliver a
Registration Rights Agreement in the form of Exhibit D hereto (the
"Registration Rights Agreement");
(j) Atrium, FCI and Heritage shall execute and deliver an Amendment
to the Securities Purchase Agreement dated as of July 3, 1995, originally
entered into between FCI and Heritage, and Atrium, FCI and each of the FCI
Holders (other than Heritage) shall execute and deliver Amendments to the Stock
Exchange Agreements dated as of July 3, 1995 originally entered into between
FCI and each of such FCI Holders, in each case substantially identical to the
originals of such agreements other than for the substitution of Atrium and
Atrium Stock in place of FCI and FCI Stock (collectively, the "FCI Equity
Amendment Documents");
(k) upon cancellation of their respective Original Stock Options,
Atrium shall execute and issue to each of the optionees set forth on Schedule 2
hereto the New Options; and
(l) Atrium shall execute and deliver to Heritage the New Warrant.
3. REPRESENTATIONS AND WARRANTIES OF EACH OF THE XXXXXX HOLDERS.
Each of the Xxxxxx Holders severally represents and warrants to Atrium, to FCI
and to the FCI Holders as follows:
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3.1. Right to Sell Xxxxxx Stock, Approvals, Binding Effect. Such
Xxxxxx Holder has all requisite power and full legal right to enter into this
Agreement and the other Transaction Documents to which such Holder is a party,
to perform all of such Holder's agreements and obligations hereunder and
thereunder, each in accordance with its respective terms, and to transfer to
Atrium all of the outstanding shares of Xxxxxx Stock owned by such Holder.
Each Transaction Document to which such Xxxxxx Holder is a party has been duly
executed and delivered by such Holder and constitutes the legal, valid and
binding obligation of such Holder, enforceable against such Holder in
accordance with its terms, except as the enforceability thereof may be limited
by any applicable bankruptcy, reorganization, insolvency or other laws
affecting creditors' rights generally or by general principles of equity.
3.2. Non-Contravention. The execution and delivery by such Xxxxxx
Holder of this Agreement and the other Transaction Documents to which such
Xxxxxx Holder is a party, and the consummation by such Xxxxxx Holder of the
transactions contemplated hereby and thereby, will not (a) violate or conflict
with any provision of the Certificates of Incorporation or By-Laws of any of
the Xxxxxx Companies, each as amended to date; or (b) constitute a violation
of, or be in conflict with, or constitute or create a default under, or result
in the creation or imposition of any encumbrance upon any property of any of
the Xxxxxx Companies pursuant to, (i) any agreement or instrument to which such
Xxxxxx Holder or any of the Xxxxxx Companies is a party or by which any of them
or any of their properties is bound or to which such Xxxxxx Holder or any of
the Xxxxxx Companies or any of such properties is subject, or (ii) to the
knowledge of the Xxxxxx Holders, any statute, judgment, decree, order,
regulation or rule of any court or governmental or regulatory authority except
where such violation, conflict, default or encumbrance could not have a
Material Adverse Effect with respect to any of the Xxxxxx Companies.
3.3. Governmental Consents. Except as set forth on Schedule 3.3, no
consent, approval or authorization of, or registration, qualification or filing
with, any governmental agency or authority is required for the execution and
delivery by such Xxxxxx Holder of the Transaction Documents to which it is a
party or for the consummation by such Xxxxxx Holder of the transactions
contemplated hereby or thereby.
3.4. Title to Xxxxxx Stock, Liens, etc. Such Xxxxxx Holder has, and as
of the consummation of the Closing Atrium will have, sole record and beneficial
ownership of all of the shares of Xxxxxx Stock set forth opposite such Holder's
name on Schedule 1 hereto and to be exchanged hereunder, free and clear of any
mortgage, lien, pledge, charge, security interest, encumbrance, title retention
agreement, option, equity or other adverse claim thereto.
3.5. Purchase Agreement Representations. Each of the representations
and warranties made by such Xxxxxx Holder as a "Seller" in the Purchase
Agreement is true and complete, and does not
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contain and will not contain any untrue statement of a material fact, or omit
or will omit to state a material fact required to be stated therein or
necessary to make the statements contained therein not false or misleading.
3.6. Investment Representations. Such Xxxxxx Holder is acquiring Atrium
Exchange Shares for the purpose of investment and not with a view to
distribution or resale thereof. The acquisition by such Xxxxxx Holder of
Atrium Exchange Shares shall constitute a confirmation of this representation.
Such Xxxxxx Holder further represents that he or she has been furnished access
to such of the business records of the Xxxxxx Companies and the Xxxxxxxx
Companies (as defined in Section 4.1 below) and to such additional information
and documents as he or she has requested, and has been afforded an opportunity
to ask questions of and receive answers from representatives of Atrium
concerning the business and prospects of Atrium and its Subsidiaries following
completion of the transactions contemplated hereby and the merits or risks of
his or her acquisition of Atrium Exchange Shares pursuant to this Agreement.
Such Xxxxxx Holder has sufficient expertise in business, financial and
investment matters to be able to evaluate the risks involved in his or her
acquisition of Atrium Exchange Shares and to make an informed investment
decision with respect to his or her acquisition of Atrium Exchange Shares.
Such Xxxxxx Holder can afford a complete loss of the value of his or her Atrium
Exchange Shares and is able to bear the economic risk of holding such shares
for an indefinite period. Such Xxxxxx Holder further represents that he or she
understands and agrees that until registered under the Securities Act of 1933,
as amended, or transferred pursuant to the provisions of Rule 144 thereunder,
or any similar provision as promulgated by the Securities and Exchange
Commission, all certificates evidencing any of Atrium Stock, whether upon
initial issuance or upon any transfer thereof, shall bear a legend, prominently
stamped or printed thereon, reading substantially as set forth on Schedule 3.6
hereto.
4. REPRESENTATIONS AND WARRANTIES OF EACH OF THE FCI HOLDERS. Each
of the FCI Holders severally represents and warrants to Atrium, to FCI and to
the Xxxxxx Holders as follows:
4.1 Rights to Sell FCI Stock, Approvals, Binding Effect. Such FCI
Holder has all requisite power and full legal right to enter into this
Agreement and the other Transaction Documents to which such Holder is a party,
to perform all of such Holder's agreements and obligations hereunder and
thereunder, each in accordance with its respective terms, and to transfer to
Atrium all of the outstanding shares of FCI Stock owned by such Holder. Each
Transaction Document to which such FCI Holder is a party has been duly executed
and delivered by such Holder and constitutes the legal, valid and binding
obligation of such Holder, enforceable against such Holder in accordance with
its terms except as the enforceability thereof may be limited by any applicable
bankruptcy, reorganization, insolvency or other laws affecting creditors'
rights generally or by general principles of equity.
4.2 Non-Contravention. The execution and delivery by such FCI Holder
of the Transaction Documents to which such FCI Holder is a party and the
consummation by such FCI Holder of the
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transactions contemplated hereby and thereby will not (a) violate or conflict
with any provision of the Certificates or Articles of Incorporation or By-Laws
of FCI, Xxxxxxxx or H-R Window Supply, Inc., a Texas corporation (collectively,
the "Xxxxxxxx Companies") each as amended to date; or (b) constitute a
violation of, or be in conflict with, or constitute or create a default under,
or result in the creation or imposition of any encumbrance upon any property of
any of the Xxxxxxxx Companies pursuant to, (i) any agreement or instrument to
which such FCI Holder or any of the Xxxxxxxx Companies is a party or by which
any of them or any of their properties is bound or to which such FCI Holder or
any of the Xxxxxxxx Companies or any of such properties is subject, or (ii) to
the knowledge of the FCI Holders, any statute, judgment, decree, order,
regulation or rule of any court or governmental or regulatory authority except
where such violation, conflict, default or encumbrance could not have a
material adverse effect on the business, operations or financial condition of
any of the Xxxxxxxx Companies.
4.3. Governmental Consents. Except as set forth on Schedule 4.3, no
consent, approval or authorization of, or registration, qualification or filing
with, any governmental agency or authority is required for the execution and
delivery by such FCI Holder of the Transaction Documents to which they are a
party or for the consummation by such FCI Holder of the transactions
contemplated hereby or thereby.
4.4. Title to FCI Stock, Liens, etc. Such FCI Holder has, and as of
the consummation of the Closing Atrium will have, sole record and beneficial
ownership of all of the FCI Stock set forth opposite such Holder's name on
Schedule 1 hereto and to be exchanged hereunder, free and clear of any
mortgage, lien, pledge, charge, security interest, encumbrance, title retention
agreement, option, equity or other adverse claim thereto.
4.5. Investment Representations. Such FCI Holder is acquiring Atrium
Exchange Shares for the purpose of investment and not with a view to
distribution or resale thereof. The acquisition by such FCI Holder of Atrium
Exchange Shares shall constitute a confirmation of this representation. Such
FCI Holder further represents that he or it has been furnished access to such
of the business records of the Xxxxxx Companies and the Xxxxxxxx Companies and
to such additional information and documents as he or it has requested, and has
been afforded an opportunity to ask questions of and receive answers from
representatives of Atrium concerning the business and prospects of Atrium and
its Subsidiaries following completion of the transactions contemplated hereby
and the merits or risks of his or its acquisition of Atrium Exchange Shares
pursuant to this Agreement. Such FCI Holder has sufficient expertise in
business, financial and investment matters to be able to evaluate the risks
involved in his or her acquisition of Atrium Exchange Shares and to make an
informed investment decision with respect to his or her acquisition of Atrium
Exchange Shares. Such FCI Holder can afford a complete loss of the value of
his or her Atrium Exchange Shares and is able to bear the economic risk of
holding such shares for an indefinite period. Such FCI Holder further
represents that he or it understands and agrees that until registered under the
Securities Act of 1933,
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as amended, or transferred pursuant to the provisions of Rule 144 thereunder,
or any similar provision as promulgated by the Securities and Exchange
Commission, all certificates evidencing any of Atrium Stock, whether upon
initial issuance or upon any transfer thereof, shall bear a legend, prominently
stamped or printed thereon, reading substantially as set forth on Schedule 3.6
hereto.
5. REPRESENTATIONS AND WARRANTIES OF ATRIUM AND FCI. Each of Atrium
and FCI jointly and severally represents and warrants to each of the Holders as
follows:
5.1. Organization; Authority. Each of Atrium and the Xxxxxxxx
Companies is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation. Each
of Atrium and the Xxxxxxxx Companies is duly qualified and in good standing as
a foreign corporation in all jurisdictions in which the character of the
properties owned or leased or the nature of the activities conducted by it
makes such qualification necessary, except where the failure to so qualify
would not have a Material Adverse Effect. Each of Atrium and the Xxxxxxxx
Companies have delivered to the Xxxxxx Holder Representative (as defined in
Section 13.15) copies of their respective Certificates or Articles of
Incorporation and By-Laws, and all amendments thereto. Each of Atrium and the
Xxxxxxxx Companies has all requisite power and authority to own or lease and
operate its properties and to carry on its business as such business is now
conducted.
5.2. Corporate Approval; Binding Effect. Each of Atrium and the
Xxxxxxxx Companies has obtained all necessary authorizations and approvals from
its Board of Directors and stockholders required for the execution and delivery
of the Transaction Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby. Each of the Transaction
Documents to which any of Atrium and the Xxxxxxxx Companies is a party has been
duly executed and delivered by Atrium or such Xxxxxxxx Company, as the case may
be, and constitutes the legal, valid and binding obligation of such Person,
enforceable against it in accordance with its terms, except as enforceability
thereof may be limited by any applicable bankruptcy, reorganization, insolvency
or other laws affecting creditors' rights generally or by general principles of
equity.
5.3. Non-Contravention. The execution and delivery by Atrium of the
Transaction Documents to which it is a party and the consummation by Atrium of
the transactions contemplated hereby and thereby will not (a) violate or
conflict with any provisions of the Certificates or Articles of Incorporation
or By-Laws of Atrium or any of the Xxxxxxxx Companies, each as amended to date;
or (b) constitute a violation of, or be in conflict with, constitute or create
a default under, or result in the creation or imposition of any lien upon any
property of Atrium or any of the Xxxxxxxx Companies pursuant to (i) any
agreement or instrument to which Atrium or any of the Xxxxxxxx Companies is a
party or by which Atrium or any of the Xxxxxxxx Companies or any of its or
their properties is bound or to which Atrium or any of the Xxxxxxxx Companies
or any of its or their properties is subject, or (ii) any statute, judgment,
decree, order, regulation or rule of any court or governmental authority to
which Atrium or any of the Xxxxxxxx Companies is subject, except where such
violation, conflict, default or lien could not have a Material Adverse Effect
on Atrium or any of the Xxxxxxxx Companies.
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5.4. Governmental Consents. Except as set forth in Schedule 5.4
hereto, no consent, approval or authorization of, or registration,
qualification or filing with, any governmental agency or authority is required
for the execution and delivery by Atrium or any of the Xxxxxxxx Companies of
the Transaction Documents to which it is a party or for the consummation by
Atrium or the Xxxxxxxx Companies of the transactions contemplated hereby or
thereby.
5.5. Issuance of the Atrium Exchange Shares. Atrium has obtained all
necessary authorizations and approvals required for the issuance and delivery
of the Atrium Exchange Shares. As of the Closing and after giving effect to
the transactions contemplated by this Agreement, the authorized, issued and
outstanding capital stock of Atrium will be as set forth on Schedule 5.5
hereto. Such shares of capital stock shall be held of record as set forth on
such Schedule 5.5. When issued in accordance with the terms of this Agreement,
the Atrium Exchange Shares will be duly authorized, validly issued, fully paid
and nonassessable. When issued in accordance with the terms of this Agreement,
the Atrium Exchange Shares issued to the Xxxxxx Holders in exchange for the FCI
Stock, the VBS Exchanged Shares and the BNE Exchanged Shares shall constitute
in the aggregate nine percent (9%) of the shares of the common stock of Atrium,
on a Fully-Diluted Basis (as defined below). As of the Closing, except for the
New Warrant, the New Options, any of the Original Options which have not yet
been replaced by New Options pursuant to Section 1(c), and as otherwise set
forth on Schedule 5.5, there will be no commitments for the purchase or sale
of, and no options, warrants or other rights to subscribe for or purchase, any
securities of Atrium or any of its Subsidiaries. As used with respect to the
capital stock of Atrium, "Fully-Diluted Basis" shall mean at any time, after
issuance of all shares of common stock of Atrium issuable upon exercise of all
warrants and options outstanding and exerciseable at such time, including,
without limitation, the New Warrants and the New Options.
5.6. Subsidiaries. H-R Supply Windows Inc. is a wholly-owned
Subsidiary of Xxxxxxxx. Xxxxxxxx is a wholly-owned Subsidiary of FCI. As of
the Closing and after giving effect to the transactions contemplated by this
Agreement and the Purchase Agreement, FCI will be a direct wholly-owned
Subsidiary of Atrium and the Xxxxxx Companies will be indirect wholly-owned
Subsidiaries of Atrium. Attached hereto as Schedule 5.6 is a complete and
correct organizational chart of FCI and Subsidiaries immediately prior to
giving effect to the Exchange. Except as stated in this Section 5.6 or as set
forth on Schedules 5.6, 5.7(a) and 5.7(b) hereto, neither Atrium nor any of the
Xxxxxxxx Companies has any Subsidiaries nor do any of them own or hold of
record and/or beneficially any shares of any class in the capital of any
corporations. Neither Atrium nor any of the Xxxxxxxx Companies owns any legal
and/or beneficial interests in any limited liability companies, partnerships,
business trusts or joint ventures or in any other unincorporated trade or
business enterprises.
5.7. Capitalization. The authorized capital of each of the Xxxxxxxx
Companies, the number of shares of each Xxxxxxxx Company issued and outstanding
and the owners of record
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and beneficially of such shares, each on the date hereof, are as set forth on
Schedule 5.7(a). As of the Closing and after giving effect to the transactions
contemplated by this Agreement, the authorized capital of each of the Xxxxxxxx
Companies, the number of shares of each Xxxxxxxx Company issued and outstanding
and the owners of record and beneficially of such shares will be as set forth
on Schedule 5.7(b).
5.8. Financial Statements. Atrium has delivered the following
financial statements (the "Financial Statements") to the Xxxxxx Holder
Representative, and there are attached as Schedule 5.8 hereto: (a) the audited
consolidated balance sheet of the Xxxxxxxx Companies as of December 31, 1995
(the "Audited Balance Sheet"), and the related audited consolidated statements
of income and retained earnings for the fiscal year then ended, and (b) the
unaudited consolidated balance sheet of the Xxxxxxxx Companies as of June 30,
1996 and the related unaudited consolidated statements of income and retained
earnings for the six-month period then ended (the "Interim Financials").
Subject to year-end audit adjustment and the absence of footnotes in the case
of the Interim Financials, each of the Financial Statements has been prepared
in accordance with generally accepted accounting principles applied on a basis
consistent with prior periods; each of such balance sheets fairly presents the
consolidated financial condition of the Xxxxxxxx Companies as of its respective
date; and each of such statements of income and retained earnings fairly
presents the results of consolidated operations of the Xxxxxxxx Companies for
the period covered thereby.
5.9. Outstanding Indebtedness. Except as set forth on Schedule 5.9
hereto, neither Atrium nor any of the Xxxxxxxx Companies has outstanding on the
date hereof, nor will any of them have outstanding as of the consummation of
the Closing, any Indebtedness, the aggregate principal amount of which exceeds
$50,000.
5.10. Absence of Certain Changes. Except as set forth on Schedule 5.10
hereto or as contemplated by this Agreement or the Purchase Agreement, since
June 30, 1996 there has not been: (a) any change in the assets, liabilities,
sales, income or business of any of the Xxxxxxxx Companies or in the
relationships of any of the Xxxxxxxx Companies with suppliers, customers or
lessors, other than changes which both arose in the ordinary course of business
and have not had a Material Adverse Effect; (b) any acquisition or disposition
by any of the Xxxxxxxx Companies of any asset or property other than in the
ordinary course of business; (c) any damage, destruction or loss, whether or
not covered by insurance, which has had, either in any case or in the
aggregate, a Material Adverse Effect; (d) any increase in the compensation,
pension or other benefits payable or to become payable by any of the Xxxxxxxx
Companies to any of its officers or employees, or any bonus payments or
arrangements made to or with any of them (other than pursuant to the terms of
any existing written agreement or plan or other than annual or periodic
increases made in the ordinary course of business consistent with the Xxxxxxxx
Companies' past practice); (e) any entry by any of the Xxxxxxxx Companies into
any transaction other than in the ordinary course of business or as
contemplated herein; (f) any incurrence by any of the Xxxxxxxx Companies of
any material obligations or material liabilities,
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whether absolute, accrued, contingent or otherwise (including, without
limitation, liabilities as guarantor or otherwise with respect to obligations
of others), other than obligations and liabilities incurred in the ordinary
course of business or as contemplated herein; or (g) any discharge or
satisfaction by any of the Xxxxxxxx Companies of any lien or encumbrance or
payment by any of the Xxxxxxxx Companies of any material obligation or material
liability (fixed or contingent) other than in the ordinary course of business
or as contemplated herein.
5.11. Litigation, etc. Except as set forth on Schedule 5.11 hereto, no
action, suit, proceeding or investigation is pending or, to the knowledge of
the Sellers, threatened, against Atrium or any of the Xxxxxxxx Companies which
either individually or in the aggregate would have a Material Adverse Effect.
5.12. Conformity to Law. To the knowledge of Atrium, each of the
Xxxxxxxx Companies has complied with, and is in compliance with, all laws,
statutes and governmental regulations and all judicial or administrative
tribunal orders, judgments, writs, injunctions or decrees applicable to its
business except where any or all failures of such compliance, either
individually or in the aggregate, would not have a Material Adverse Effect.
Except as set forth in Schedule 5.12 hereto, none of the Xxxxxxxx Companies has
been charged with any violation of any provision of any federal, state or local
law or administrative regulation in respect of its business which, either
individually or in the aggregate, would have a Material Adverse Effect.
5.13. Broker. Except as set forth on Schedule 5.13, neither Atrium nor
any of the Xxxxxxxx Companies has retained, utilized or been represented by any
broker, agent, finder or other intermediary in connection with the negotiation
or consummation of the transactions contemplated by this Agreement.
5.14. Disclosure. No representation or warranty by Atrium or any of
the Xxxxxxxx Companies in this Agreement or in any exhibit, schedule, written
statement, certificate or other document delivered or to be delivered by Atrium
or any of the Xxxxxxxx Companies pursuant hereto or in connection with the
consummation of the transactions contemplated hereby contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact required to be stated therein or necessary to make the statements
contained therein not false or misleading. To Atrium's knowledge, as of the
date hereof and the Closing Date, the representations and warranties made by
the "Principal Sellers" in Section 4 of that certain Stock Purchase Agreement
dated as of July 3, 1995 by and among Xxxxxxxx/Heritage Acquisition Company and
each of the then shareholders of Xxxxxxxx (a true and complete copy of which
has been delivered to the Xxxxxx Holders prior to the date hereof) are and
shall be true and complete, except to the extent that any inaccuracy or
incompleteness therein does not or would not have a Material Adverse Effect.
12
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ATRIUM AND FCI HOLDERS.
The obligation of Atrium and the FCI Holders to consummate the Closing shall be
subject to the satisfaction at or prior to the Closing of each of the following
conditions (to the extent noncompliance is not waived in writing by Atrium):
6.1. Representations and Warranties. The representations and
warranties made by the Xxxxxx Holders in or pursuant to this Agreement and in
any other Transaction Document shall have been correct when made and shall be
correct at and as of the Closing.
6.2. Compliance with Agreement. The Xxxxxx Holders shall have
performed and complied with all of their obligations under this Agreement and
any other Transaction Document to be performed or complied with by them prior
to the Closing Date.
6.3. Closing Certificate. The Xxxxxx Holders shall have executed and
delivered to Atrium in writing, at and as of the Closing certificates, in form
and substance satisfactory to Atrium and Atrium's counsel, certifying that the
conditions specified in each of Sections 6.1 and 6.2 have been satisfied.
6.4. Opinions of Counsel. Hunton & Xxxxxxxx, legal counsel to the
Xxxxxx Holders, shall have delivered to Atrium a written opinion addressed to
Atrium and dated the Closing Date, substantially in the form of Exhibit C to
the Purchase Agreement, and local Connecticut counsel to the Xxxxxx Holders and
the Xxxxxx Companies shall have delivered to Atrium a written opinion
reasonably acceptable to Atrium, addressed to Atrium and dated the Closing
Date, substantially in the form of Exhibit D to the Purchase Agreement.
6.5. Purchase Agreement. Each of the Xxxxxx Holders shall have
executed and delivered the Purchase Agreement and each of the conditions
precedent to the Xxxxxx Holders' performance obligations under the Purchase
Agreement, other than the closing of the Exchange hereunder, shall have been
fulfilled.
6.6. Buy-Sell Agreement. Each of the Xxxxxx Holders and the Escrow
Agent shall have executed and delivered the Buy-Sell Agreement and shall have
delivered to Atrium stock powers, undated and duly executed in blank, with
respect to the Escrowed Shares owned by such Xxxxxx Holder.
6.7. Stockholder and Registration Rights Agreements. Each of the
Xxxxxx Holders shall have executed and delivered the Stockholder Agreement and
the Registration Rights Agreement with Atrium and its other shareholders.
6.8. Proceedings and Documents Satisfactory. All proceedings in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents and all certificates and documents delivered to Atrium in
connection with the transactions
13
contemplated by this Agreement and the other Transaction Documents shall be
satisfactory in all reasonable respects to Atrium and Atrium's counsel, and
Atrium shall have received the originals or certified or other copies of all
such records and documents as Atrium may reasonably request.
7. CONDITIONS PRECEDENT TO XXXXXX HOLDERS' OBLIGATIONS. The obligation
of the Xxxxxx Holders to consummate the Closing shall be subject to the
satisfaction at, or prior to the Closing of each of the following conditions
(to the extent noncompliance is not waived in writing by the Xxxxxx Holder
Representative):
7.1. Representations and Warranties. The representations and
warranties made by Atrium, FCI and the FCI Holders in or pursuant to this
Agreement and in any other Transaction Documents, and by Atrium, any of the
Xxxxxxxx Companies or any of the FCI Holders in any statement, certificate or
other instrument delivered to the Xxxxxx Holders pursuant hereto or pursuant to
any of the Transactions Documents, or in connection with the transactions
contemplated hereby and thereby, shall have been correct when made and shall be
correct at and as of the Closing.
7.2. Compliance with Agreement. Atrium, each of the Xxxxxxxx Companies
and each of the FCI Holders shall have performed and complied with all of its
or their obligations under this Agreement and any other Transaction Documents
to be performed or complied with by any of them prior to or at the Closing.
7.3. Closing Certificate. Atrium, FCI and each of the FCI Holders
shall have executed and delivered to the Holders at and as of the Closing a
certificate, in form and substance satisfactory to the Holders and the Holders'
counsel, to the effect that the conditions in each of Sections 7.1 and 7.2 have
been satisfied.
7.4. Opinion of Counsel. Xxxxxxx, Xxxx & Xxxxx LLP, special counsel to
Atrium, shall have delivered to the Holders a written opinion, dated the
Closing Date, addressed to the Holders and substantially in the form of Exhibit
E hereto.
7.5. Purchase Agreement. Xxxxxxxx shall have executed and delivered
the Purchase Agreement and each of the conditions precedent to Xxxxxxxx'x
performance obligations under the Purchase Agreement, other than the closing of
the Exchange hereunder, shall have been fulfilled.
7.6. Buy-Sell Agreement. Each of Atrium, Xxxxxxxx and the Escrow Agent
shall have executed and delivered the Buy-Sell Agreement.
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7.7. Proceedings and Documents Satisfactory. All proceedings in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents and all certificates and documents delivered to the
Xxxxxx Holders in connection with the transactions contemplated by this
Agreement and the other Transaction Documents shall be satisfactory in all
reasonable respects to the Xxxxxx Holders and their counsel, and the Xxxxxx
Holders shall have received the originals or certified or other copies of all
such records and documents as the Xxxxxx Holders may reasonably request.
8. CERTAIN DEFINITIONS. As used herein the following terms not
otherwise defined have the following respective meanings:
"Indebtedness": As applied to any Person (as defined in this Section
8), (a) all indebtedness of such Person for borrowed money, whether current or
funded, or secured or unsecured, (b) all indebtedness of such Person for the
deferred purchase price of property or services represented by a note or other
security, (c) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (d) all indebtedness of such Person secured by a
purchase money mortgage or other lien to secure all or part of the purchase
price of property subject to such mortgage or lien, (e) all obligations under
leases which shall have been or must be, in accordance with generally accepted
accounting principles, recorded as capital leases in respect of which such
Person is liable as lessee, (f) any liability of such Person in respect of
banker's acceptances or letters of credit, and (g) all indebtedness referred to
in clause (a), (b), (c), (d), (e) or (f) above which is directly or indirectly
guaranteed by such Person or which such Person has agreed (contingently or
otherwise) to purchase or otherwise acquire or in respect of which it has
otherwise assured a creditor against loss.
"IRS": The United States Internal Revenue Service.
"Material Adverse Effect": With respect to any Person, a material
adverse effect on the business, operations or financial condition of such
Person.
"Person": A corporation, an association, a partnership, a limited
liability company, an organization, a business, an individual, a government or
political subdivision thereof or a governmental agency.
"state": Any state or commonwealth of the United States of America; the
District of Columbia; the Commonwealth of Puerto Rico; and any other
dependency, possession or territory of the United States of America.
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"Subsidiary": With respect to any Person, any corporation a majority
(by number of votes) of the outstanding shares of any class or classes of which
shall at the time be owned by such Person or by a Subsidiary of such Person, if
the holders of the shares of such class or classes (a) are ordinarily, in the
absence of contingencies, entitled to vote for the election of a majority of
the directors (or persons performing similar functions) of the issuer thereof,
even though the right so to vote has been suspended by the happening of such a
contingency, or (b) are at the time entitled, as such holders, to vote for the
election of a majority of the directors (or persons performing similar
functions) of the issuer thereof, whether or not the right so to vote exists by
reason of the happening of a contingency.
"Transaction Documents": This Agreement, the Purchase Agreement, the
Buy-Sell Agreement, the New Options, the New Warrant, the Employment
Agreements (as defined in the Purchase Agreement), the FCI Equity Amendment
Documents, the Stockholder Agreement, the Registration Rights Agreement, any
other document or instrument which is a "Transaction Document" as defined in
the Purchase Agreement, and any other documents or instruments executed and/or
delivered in connection with the transactions described herein or therein.
9. CONFIDENTIAL INFORMATION. Any and all information disclosed by
any party as a result of the negotiations leading to the execution of this
Agreement, or in furtherance thereof, including information on the Schedules to
this Agreement, which information was not already known to the other parties
hereto, as the case may be, shall remain confidential to the first party and
their respective employees and agents until the Closing Date, except to the
extent that Atrium or any of the Xxxxxxxx Companies in its reasonable judgment
must disclose any such information to its lenders in the syndicate for which
The First National Bank of Boston acts as Agent in the process of procuring the
loan or loans of funds for the purchase contemplated by the Purchase Agreement.
If the Closing does not take place for any reason, the parties hereto agree not
to further divulge or disclose or use for their benefit or purposes any such
information at any time in the future unless it has otherwise become public.
The information intended to be protected hereby shall include, but not be
limited to, financial information, customers, suppliers, sales representatives,
and anything else having an economic or pecuniary benefit to Atrium or any of
the Holders, respectively.
10. TERMINATION. This Agreement may be terminated by either Atrium,
FCI, the FCI Holders or the Xxxxxx Holders in writing, without liability to the
terminating party on account of such termination (provided the terminating
party is not otherwise in default or in breach of this Agreement), if (a) the
Closing shall not have occurred on or before September 30, 1996, and (b) the
Purchase Agreement shall have been terminated pursuant to Section 14 thereof,
in each case other than as a consequence of (i) a failure to fulfill the
conditions precedent to the effectiveness of the Purchase Agreement referred to
in Sections 7.15 and 8.7 thereof, in which case the foregoing date shall be
extended until the next business day following
16
the expiration of any applicable waiting period under the HSR Act (as defined
in the Purchase Agreement), provided that the foregoing date shall not be
extended in any event after October 31, 1996, or (ii) intentional breach or
intentional default by the terminating party.
11. INDEMNIFICATION.
11.1. Indemnity by Atrium and FCI. Subject to the overall limitations,
minimum amounts and time limitations set forth in Section 11.6 below, Atrium
and FCI jointly and severally agree to indemnify and hold each of the Xxxxxx
Holders harmless from and with respect to any and all claims, liabilities,
losses, damages, costs and expenses, including without limitation the
reasonable fees and disbursements of counsel (individually, a "Loss" and
collectively, the "Losses") related to or arising, directly or indirectly, out
of any failure or any breach by Atrium and/or FCI of any representation or
warranty, covenant, obligation or understanding made by Atrium and/or FCI in
this Agreement, any Schedule or Exhibit hereto, any other Transaction Documents
or any other statement or certificate delivered pursuant hereto or thereto.
11.2. Indemnity by Xxxxxx Holders. Subject to the overall limitations,
minimum amounts and time limitations set forth in Section 11.6 below, each of
the Xxxxxx Holders severally and on its own behalf agrees to indemnify and hold
each of Atrium, FCI and the FCI Holders harmless from and with respect to any
and all Losses related to or arising, directly or indirectly, out of any
failure or any breach by such Xxxxxx Holder of any representation or warranty
in Sections 3.1 through 3.4 and Section 3.6 of this Agreement.
11.3. Indemnity by FCI Holders. Subject to the overall limitations,
minimum amounts and time limitations set forth in Section 11.6 below, each of
the FCI Holders severally and on its own behalf agrees to indemnify and hold
each of Atrium, FCI and the Xxxxxx Holders harmless from and with respect to
any and all Losses related to or arising, directly or indirectly, out of any
failure or any breach by such FCI Holder of any representation or warranty in
Section 4 of this Agreement.
11.4. Claims.
(a) Notice. Any Person seeking indemnification hereunder (the
"Indemnified Party") shall promptly notify the party from whom it is seeking
indemnification hereunder (the "Indemnifying Party") of any action, suit,
proceeding, demand or breach (a "Claim") with respect to which the Indemnified
Party claims indemnification hereunder, provided that failure of the
Indemnified Party to give such notice shall not relieve the Indemnifying Party
of its obligations under this Section 11 except to the extent, if at all, that
the Indemnifying Party shall have been prejudiced thereby.
17
(b) Third Party Claims. If such Claim relates to any action, suit,
proceeding or demand instituted against the Indemnified Party by a third party
(a "Third Party Claim"), the Indemnifying Party shall be entitled to
participate in the defense of such Third Party Claim after receipt of notice of
such claim from the Indemnified Party. Within thirty (30) days after receipt
of notice of a particular matter from the Indemnified Party, the Indemnifying
Party may assume the defense of such Third Party Claim, in which case the
Indemnifying Party shall have the authority to negotiate, compromise and settle
such Third Party Claim, if and only if the Indemnifying Party shall have
confirmed in writing that it is obligated hereunder to indemnify the
Indemnified Party with respect to such Third Party Claim. The Indemnified
Party shall retain the right to employ its own counsel and to participate in
the defense of any Third Party Claim, the defense of which has been assumed by
the Indemnifying Party pursuant hereto, but the Indemnified Party shall bear
and shall be solely responsible for its own costs and expenses in connection
with such participation.
11.5. Method and Manner of Paying Claims. In the event of any Claims
under this Section 11, the claimant shall advise the party or parties who are
required to provide indemnification therefor in writing of the amount and
circumstances surrounding such claim. With respect to liquidated Claims, if
within thirty (30) days the Indemnifying Party has not contested such Claim in
writing, then, and subject to the limitations with respect to Claims set forth
in Section 11.6 below, the Indemnifying Party will pay the full amount of such
liquidated Claim within ten (10) days after the expiration of such thirty-day
period. Any amount owed by any of the Xxxxxx Holders as an Indemnifying Party
hereunder with respect to any Claim (other than Unlimited Claims, as defined
below) shall be paid in accordance with, and subject to the recourse
limitations referred to in, Section 11.7 below. The unpaid balance of a Claim
shall bear interest at a rate per annum equal to the rate announced by The
First National Bank of Boston from time to time as its "Base Rate" plus two
percent (2%) from the date notice thereof is given by the Indemnified Party to
the Indemnifying Party.
11.6. Limitations on Indemnification.
(a) In the event that any Loss is calculated by reference to the
aggregate liabilities, losses or damages incurred or suffered by Atrium or the
Xxxxxxxx Companies, rather than by reference to the liabilities, losses or
damages incurred or suffered individually by a shareholder of Atrium, Atrium
and/or FCI shall only be required to indemnify the Xxxxxx Holders for that
portion of any such Loss which is equal to the product of (A) the aggregate
amount of such Loss multiplied by (B) a fraction, the numerator of which is the
total number of shares of common stock of Atrium on a fully-diluted basis, and
the denominator of which is the total number of shares of common stock of
Atrium then owned by the Xxxxxx Holders. For the avoidance of doubt, this
Section 11.6(a) shall not operate to reduce the amount payable to the Xxxxxx
18
Holders or any of them with respect to any Loss which has been directly
suffered or incurred by any Xxxxxx Holder.
(b) No Indemnifying Party shall be required to indemnify an
Indemnified Party hereunder except to the extent that the aggregate amount of
Losses for which the Indemnified Party is otherwise entitled to indemnification
pursuant to this Section 11 exceeds $250,000, whereupon the Indemnified Party
shall be entitled to be paid the excess of (i) the aggregate amount of all such
Losses over (ii) $250,000, subject to the overall limitation on maximum amount
of recovery set forth in Section 11.6(c) below; provided, however, that Losses
related to or arising directly or indirectly out of any inaccuracies in any
representation or warranty made by any of the Xxxxxx Holders in Section 3.4 or
by any of the FCI Holders in Section 4.4 (collectively, "Unlimited Claims")
shall be indemnified in their entirety by the applicable Xxxxxx Holder or FCI
Holder, as the case may be, and shall not be subject to the limitations as to
amount set forth in this Section 11.6(b) or the limitation on maximum amount of
recovery set forth in Section 11.6(c) below, or (in the case of an Unlimited
Claim against any Xxxxxx Holder) the limitations as to recourse referred to in
Section 11.7 below.
(c) Subject to the first sentence of Section 11.7 and notwithstanding
anything else to the contrary otherwise stated herein or in any other
Transaction Document, the aggregate amount actually payable by either (i)
Atrium and/or FCI as an Indemnifying Party on the one hand or (ii) the Sellers
as Indemnifying Parties on the other hand pursuant to this Section 11 and
Section 13 of the Purchase Agreement, with respect to all Claims against such
Indemnifying Party or Indemnifying Parties, as the case may be, other than
Unlimited Claims (as to which no such limit shall apply), shall in no event
exceed $5,000,000 (as such amount may be reduced from time to time pursuant to
Section 3(d) of the Buy-Sell Agreement).
(d) No Indemnifying Party shall be liable for any Losses pursuant to
this Section 11 unless a written claim for indemnification in accordance with
Section 11.4 is given by the Indemnified Party to such Indemnifying Party with
respect thereto within eighteen (18) months after the Closing, except that this
time limitation shall not apply to any Losses related to or arising directly or
indirectly out of any Unlimited Claims, as to which in each case the applicable
statute of limitations shall apply.
(e) No Indemnified Party may recover hereunder or under the Buy-Sell
Agreement for any Loss as to which such Indemnified Party has already received
or is simultaneously receiving indemnification pursuant to the Purchase
Agreement.
11.7. Buy-Sell Agreement; Limitation of Recourse Against Xxxxxx
Holders. The parties hereto intend and agree that, notwithstanding anything to
the contrary stated in any other paragraph of this Section 11, each Indemnified
Party's sole recourse against the Xxxxxx Holders for indemnification with
respect to any Claims, other than Unlimited Claims, shall be governed by, and
subject to the terms and provisions of, the Buy-Sell Agreement. The
19
provisions of this Section 11.7 shall not apply in any event to any Loss with
respect to an Unlimited Claim, the full amount of which shall be indemnifiable
and as to which recourse shall not be limited to the provisions of the Buy-Sell
Agreement.
12. GENERAL.
12.1. Survival of Representations and Warranties. The representations
and warranties of the parties hereto contained in this Agreement or otherwise
made in writing in connection with the transactions contemplated hereby (in
each case except as affected by the transactions contemplated by this
Agreement) shall be deemed material and, notwithstanding any investigation by
Atrium, FCI or any of the Holders, as the case may be, shall be deemed to have
been relied on by Atrium, FCI and each of the Holders, as applicable, and shall
survive the Closing, and the consummation of the transactions contemplated
hereby. Each representation and warranty made by Atrium in Section 5 of this
Agreement shall expire on the last day, if any, that Claims for breach of such
representation or warranty may be made pursuant to Section 11.6(d) hereof,
except that any such representation or warranty that has been made the subject
of a claim prior to such expiration date shall survive with respect to such
claim until the final resolution of such claim.
12.2. Expenses. Each Holder shall pay all transfer and sales taxes
payable in connection with the exchange of such Holder's Stock and the receipt
of such Holder's Atrium Exchange Shares. All expenses of the preparation,
execution and consummation of this Agreement and of the transactions
contemplated hereby, including without limitation attorneys', accountants' and
outside advisers' fees and disbursements, shall be borne by the party incurring
such expenses, provided that (a) the Xxxxxx Holders jointly and severally shall
pay the brokerage fees of any broker referred to on Schedule 4.29 of the
Purchase Agreement, (b) Xxxxxxxx shall at Closing pay to the Xxxxxx Holders
50%, up to a maximum amount payable by Xxxxxxxx under this Section 12.2 and
Section 15.3 of the Purchase Agreement of $30,000, of the fees and expenses of
the Companies' Accountants incurred in preparation of the June Balance Sheet
and any other financial statements, calculations and certifications referred to
in Section 3 of the Purchase Agreement, (c) Xxxxxxxx shall pay the fee required
to be paid in connection with the filing of any notification and report form
under the HSR Act, as referred to in Section 9 of the Purchase Agreement and
(d) the Xxxxxx Companies shall pay the Accrued Transaction Expenses, as defined
in Section 15.3 of the Purchase Agreement.
12.3. Notices. All notices, demands and other communications hereunder
shall be in writing or by written telecommunication, and shall be deemed to
have been duly given if delivered personally or if mailed by certified mail,
return receipt requested, postage prepaid, or if sent by overnight courier, or
sent by written telecommunication, as follows:
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If to the Xxxxxx Holders, to:
Xxxxxx X. Xxxxxx
Xxxxxx Manufacturing Co., Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
with a copy sent contemporaneously to:
Xxxx X. Xxxxxx, Xx., Esq.
Hunton & Xxxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
If to Atrium, to:
Xxxxxxx Xxxxxxxx
c/x Xxxxxxxx Companies, Inc.
X.X. Xxx 000000
Xxxxxx, XX 00000
Fax: 000-000-0000
with copies sent contemporaneously to Heritage as set forth below.
If to Heritage, to:
21
T. Xxxxx Xxxxxx
Heritage Partners Inc.
00 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: 000-000-0000
with a copy sent contemporaneously to:
Xxxxxx X. Xxxx, Esq.
Xxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
If to any of the FCI Holders (other than Heritage):
Xxxxxxx Xxxxxxxx
X.X. Xxx 000000
Xxxxxx, XX 00000
Fax: 000-000-0000
with a copy sent contemporaneously to:
O. Xxxxxx Xxxxxx, Jr., Esq.
Xxxxx, Xxxxxx & Xxxxxx, P.C.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: 000-000-0000
Any such notice shall be effective (a) if delivered personally, when
received, (b) if sent by overnight courier, when receipted for, (c) if mailed,
three (3) days after being mailed as described above, and (d) if sent by
written telecommunication, when dispatched.
12.5. Entire Agreement, etc. This Agreement contains the entire
understanding of the parties, supersedes all prior agreements and
understandings relating to the subject matter hereof and shall not be amended
except by a written instrument hereafter signed by all of the parties hereto.
22
12.6. Governing Law. The validity and construction of this Agreement
shall be governed by and construed and enforced in accordance with the internal
laws (and not the choice-of-law rules) of the State of New York.
12.7. Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and
the same instrument.
12.8. Section Headings. All enumerated subdivisions of this Agreement
are herein referred to as "Section" or "subsection." The headings of Sections
or subsections are for reference only and shall not limit or control the
meaning thereof.
12.9. Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
permitted assigns. Neither this Agreement nor the obligations of any party
hereunder shall be assignable or transferable by such party without the prior
written consent of the other party hereto; provided, however, that nothing
contained in this Section 12.9 shall prevent Atrium, without the consent of any
of the Holders, (a) from transferring or assigning this Agreement or its rights
or obligations hereunder to another entity controlling, under the control of,
or under common control with Atrium or (b) from assigning all or part of its
rights or obligations hereunder by way of collateral assignment to any bank or
financing institution providing financing for the acquisition contemplated
hereby, but no such transfer or assignment made pursuant to clauses (a) or (b)
shall relieve Atrium of its obligations under this Agreement.
12.10. Severability. In the event that any covenant, condition, or
other provision herein contained is held to be invalid, void, or illegal by any
court of competent jurisdiction, the same shall be deemed to be severable from
the remainder of this Agreement and shall in no way affect, impair, or
invalidate any other covenant, condition, or other provision contained herein.
12.11. Further Assurances. The parties agree to take such reasonable
steps and execute such other and further documents as may be necessary or
appropriate to cause the terms and conditions contained herein to be carried
into effect.
12.12. No Implied Rights or Remedies. Except as otherwise expressly
provided herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or to give any person, firm or corporation, other than
the Holders and Atrium, any rights or remedies under or by reason of this
Agreement.
12.13. Satisfaction of Conditions Precedent. Each of the Holders and
Atrium will use commercially reasonable efforts to cause the satisfaction of
the conditions precedent contained in this Agreement; provided, however, that
nothing contained in this Section 12.13 shall obligate either party hereto to
waive any right or condition under this Agreement.
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12.14. Public Statements or Releases. Each of the parties hereto
agrees that no party to this Agreement will make, issue or release any public
announcement, statement or acknowledgment of the existence of, or reveal the
status of, this Agreement or the transactions provided for herein, without
first obtaining the consent of the other party hereto; provided that after the
Closing, Atrium may make such disclosures as it deems necessary or appropriate
in connection with the transactions contemplated hereby or in connection with
its business or operations. Subject to the provisions of Section 9 above,
nothing contained in this Section 12.14 shall prevent either party from making
such disclosures as such party may consider necessary to satisfy such party's
legal or contractual obligations.
12.15. Xxxxxx Holder Representative. By the execution and delivery of
this Agreement, the Xxxxxx Holders hereby irrevocably constitute and appoint
Xxxxxx X. Xxxxxx as the true and lawful agent and attorney-in-fact (the "Xxxxxx
Holder Representative") of the Xxxxxx Holders with full power of substitution
to act in the name, place and stead of the Xxxxxx Holders with respect to the
transfer of the Stock owned by the Xxxxxx Holders to Atrium in accordance with
the terms and provisions of this Agreement, and to act on behalf of the Xxxxxx
Holders in any litigation or arbitration involving this Agreement, to do or
refrain from doing all such further acts and things, and to execute all such
documents as the Xxxxxx Holder Representative shall deem necessary or
appropriate in connection with the transactions contemplated by this Agreement,
including, without limitation, the power:
(i) to act for the Xxxxxx Holders with regard to matters
pertaining to indemnification referred to in this Agreement, including
the power to compromise any Claim on behalf of the Xxxxxx Holders and to
transact matters of litigation;
(ii) to execute and deliver all ancillary agreements,
certificates and documents that the Xxxxxx Holder Representative deems
necessary or appropriate in connection with the consummation of the
transactions contemplated by this Agreement;
(iii) to receive funds and give receipts for funds;
(iv) to do or refrain from doing any further act or deed on
behalf of the Xxxxxx Holders that the Xxxxxx Holder Representative deems
necessary or appropriate in his sole discretion relating to the subject
matter of this Agreement as fully and completely as the Xxxxxx Holders
could do if personally present; and
(v) to receive service of process in connection with any
claims under this Agreement.
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If Xxxxxx X. Xxxxxx dies or otherwise becomes incapacitated and unable
to serve as Xxxxxx Holder Representative, Xxxxxx Xxxxxxxxx shall serve as the
new Xxxxxx Holder Representative. The appointment of the Xxxxxx Holder
Representative shall be deemed coupled with an interest and shall be
irrevocable, and Atrium and any other Person may conclusively and absolutely
rely, without inquiry, upon any action of the Xxxxxx Holder Representative in
all matters referred to herein. All payments and notices made or delivered by
Atrium to the Xxxxxx Holder Representative for the benefit of the Xxxxxx
Holders shall discharge in full all liabilities and obligations of Atrium to
the Xxxxxx Holders with respect thereto. The Xxxxxx Holders hereby confirm
all that the Xxxxxx Holder Representative shall do or cause to be done by
virtue of his appointment as the Xxxxxx Holder Representative of the Xxxxxx
Holders. The Xxxxxx Holder Representative shall act for the Xxxxxx Holders on
all of the matters set forth in this Agreement in the manner the Xxxxxx Holder
Representative believes to be in the best interest of the Xxxxxx Holders and
consistent with the obligations under this Agreement, but the Xxxxxx Holder
Representative shall not be responsible to the Xxxxxx Holders for any loss or
damages the Xxxxxx Holders may suffer by the performance of his duties under
this Agreement, other than loss or damage arising from willful violation of the
law or gross negligence in the performance of his or her duties under this
Agreement.
12.16. FCI Holder Representative. By the execution and delivery of
this Agreement, the FCI Holders other than Heritage (collectively, the
"Individual FCI Holders") hereby irrevocably constitute and appoint Xxxxxxx
Xxxxxxxx as the true and lawful agent and attorney-in-fact (the "FCI Holder
Representative") of the Individual FCI Holders with full power of substitution
to act in the name, place and stead of the Individual FCI Holders with respect
to the transfer of the Stock owned by the Individual FCI Holders to Atrium in
accordance with the terms and provisions of this Agreement, and to act on
behalf of the Individual FCI Holders in any litigation or arbitration involving
this Agreement, to do or refrain from doing all such further acts and things,
and to execute all such documents as the Individual FCI Holder Representative
shall deem necessary or appropriate in connection with the transactions
contemplated by this Agreement, including, without limitation, the power:
(i) to act for the Individual FCI Holders with regard to
matters pertaining to indemnification referred to in this Agreement,
including the power to compromise any Claim (as defined in the Purchase
Agreement) on behalf of the Individual FCI Holders and to transact
matters of litigation;
(ii) to execute and deliver all ancillary agreements,
certificates and documents that the FCI Holder Representative deems
necessary or appropriate in connection with the consummation of the
transactions contemplated by this Agreement;
(iii) to receive funds and give receipts for funds;
25
(iv) to do or refrain from doing any further act or deed on
behalf of the Individual FCI Holders that the FCI Holder Representative
deems necessary or appropriate in his sole discretion relating to the
subject matter of this Agreement as fully and completely as the
Individual FCI Holders could do if personally present; and
(v) to receive service of process in connection with any
claims under this Agreement.
If Xxxxxxx Xxxxxxxx dies or otherwise becomes incapacitated and unable
to serve as FCI Holder Representative, Xxx Xxxxxxxx shall serve as the new FCI
Holder Representative. The appointment of the FCI Holder Representative shall
be deemed coupled with an interest and shall be irrevocable, and Atrium and any
other Person may conclusively and absolutely rely, without inquiry, upon any
action of the FCI Holder Representative in all matters referred to herein. All
payments and notices made or delivered by Atrium to the FCI Holder
Representative for the benefit of the Individual FCI Holders shall discharge in
full all liabilities and obligations of Atrium to the Individual FCI Holders
with respect thereto. The Individual FCI Holders hereby confirm all that the
FCI Holder Representative shall do or cause to be done by virtue of his
appointment as the FCI Holder Representative of the Individual FCI Holders.
The FCI Holder Representative shall act for the Individual FCI Holders on all
of the matters set forth in this Agreement in the manner the FCI Holder
Representative believes to be in the best interest of the Individual FCI
Holders and consistent with the obligations under this Agreement, but the FCI
Holder Representative shall not be responsible to the Individual FCI Holders
for any loss or damages the Individual FCI Holders may suffer by the
performance of his duties under this Agreement, other than loss or damage
arising from willful violation of the law or gross negligence in the
performance of his or her duties under this Agreement.
12.17 Knowledge of Holders. Whenever the phrase "to the knowledge of
the Holders" or another similar qualification is used herein (other than with
respect to Heritage), the relevant knowledge is limited solely to the actual
knowledge of each such Holder, without imputing to such Holder any knowledge of
any other Person. Whenever the phrase "to the knowledge of the Holders" or
another similar qualification is used herein with respect to Heritage, the
relevant knowledge is limited solely to the actual knowledge of Xxxxxx Xxxxxxxx
and T. Xxxxx Xxxxxx, without imputing to either of such Persons or to Heritage
any knowledge of any other Person.
12.18. Knowledge of Atrium. Whenever the phrase "to the knowledge of
Atrium" or another similar qualification is used herein, the relevant knowledge
is limited solely to the actual knowledge of Xxxxxxx Xxxxxxxx, Xxx Xxxxxx, Xxxx
Xxxxxxxxx, Xxxxx X. Xxxx, Xx., and the Persons charged with knowledge with
respect to Heritage pursuant to Section 12.17 above, without imputing to any of
such Persons or to Atrium any knowledge of any other Person.
26
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as an instrument under seal as of the day and year first above written.
ATRIUM and FCI:
ATRIUM CORPORATION
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------
Title: Secretary
FCI HOLDING CORP.
By: /s/ XXXXXXX X. XXXXXXXX
------------------------------
Title: Secretary
FCI HOLDERS:
HERITAGE FUND I, L.P.
By: HF Partners I, L.P.
By: /s/
------------------------------
Title:
/s/ XXXXXXX XXXXXXXX
---------------------------------
Xxxxxxx Xxxxxxxx
/s/ XXX XXXXXXXX
---------------------------------
Xxx Xxxxxxxx, for himself and as
custodian for Xxx Xxxxxxxx XX and
Xxxxxxx Xxxxxxx Xxxxxxxx
/s/ XXXXXXX XXXXXXXX
---------------------------------
Xxxxxxx Xxxxxxxx
27
/s/ XXX XXXXXX
---------------------------------
Xxx Xxxxxx
/s/ XXXXX X. XXXX, XX.
---------------------------------
Xxxxx X. Xxxx, Xx.
/s/ XXXXXX XXXXXXXX
---------------------------------
Xxxxxx Xxxxxxxx
/s/ XXX XXXXXX XXXXXXXX
---------------------------------
Xxx Xxxxxx Xxxxxxxx
/s/ XXXXXXX XXXXXXXX
---------------------------------
Xxxxxxx Xxxxxxxx
XXXXXX HOLDERS:
/s/ XXXXXX X. XXXXXX
---------------------------------
Xxxxxx X. Xxxxxx
/s/ XXXXXX XXXXXXXXX
---------------------------------
Xxxxxx Xxxxxxxxx
/s/ XXXXX XXXXXXXXXX
---------------------------------
Xxxxx Xxxxxxxxxx
28
August 22, 1996
VIA FAX AND FEDEX
Xxxxxxxx Companies, Inc.
Atrium Corporation
c/o Heritage Partners, Inc.
00 Xxxxx Xxxxx - Xxxxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: T. Xxxxx Xxxxxx
Re: Xxxxxx - Xxxxxxxx Transaction
Gentlemen:
Reference is made to the Stock Purchase Agreement, and the Securities
Exchange Agreement, each in respect to the above-entitled transaction.
Capitalized terms not defined herein are as used in the Stock Purchase
Agreement.
By executing this letter in the space provided below, Buyer and Atrium
acknowledge and agree that Sellers will be removing from the Companies the
vehicles described on Exhibit A hereto, with title to each of the vehicles
transferred to the name of each person noted on Exhibit A.
Atrium and Buyer also acknowledge and agree that these vehicles were
included as assets on the June 30, 1996 financial statements of the Companies
and have been paid out of the Companies with the consent of Atrium and Buyer.
Sincerely,
Xxxx X. Xxxxxx, Xx.
Acknowledged and Agreed to
this ___ day of August, 1996
XXXXXXXX COMPANIES, INC.
By:
---------------------------------------
Name:
------------------------------
Title:
-----------------------------
ATRIUM CORPORATION
By:
---------------------------------------
Name:
------------------------------
Title:
-----------------------------
29
EXHIBIT A
VEHICLE VEHICLE IDENTIFICATION NUMBER NEW OWNER
------- ----------------------------- ---------
1995 Porsche WPOCA2990SS342918 Xxxxxx Xxxxxxxxx
1996 Jeep Cherokee 0X0XX00X0XX000000 Xxxxxx Xxxxxxxxx
1995 BMW 840 XXXXX000XXXX00000 Xxxxxx X. Xxxxxx
1993 Volvo 945 Wagon XX0XX0000X0000000 Xxxxx Xxxxxxxxxx
