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EXHIBIT 10.3
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made and entered
into on September 24, 1999 by and between Wyle Laboratories, Inc., a Delaware
corporation with its principal executive office located at 000 Xxxxxxxx Xx., Xx
Xxxxxxx, XX 00000 (the "Company" or "Purchaser") and XXXX International Corp.,
an Ohio corporation with its principal executive office located at 000 Xxxxxx 00
Xxxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000 ("XXXX" or "Seller") with reference to
the following facts:
A. Seller owns 3,800,000 shares of the Series A-1 Preferred Stock
of the Company (the "Shares"). Seller also owns 9,640 shares of the Series B
Senior Redeemable Preferred Stock of the Company (the "Series B Shares"). Seller
also has a stock option to purchase a variable number of shares of the Common
Stock of the Company (the "XXXX Option") under that certain Stock Option
Agreement dated March 16, 1998 between the Company and Seller (the "XXXX Option
Agreement").
B. Seller has previously entered into a letter of intent dated
June 4, 1999 (the "LOI") with C.D. Yiakas on behalf of himself and a group of
key managers of the Company (the "Management Group") giving the Management Group
the exclusive right to purchase the Shares, on the terms and conditions set
forth in the LOI. This Agreement is the "Definitive Agreement" contemplated in
the LOI, and is intended to replace and supersede the LOI in its entirety.
C. The Management Group has also entered into a certain letter of
intent dated June 11, 1999 with Xxxxxxx X. Xxxxx & Sons, LLC ("WESS"),
representing WESINVEST Partners, L.P. ("Wesinvest") and Xxxxx Xxxxxxxxx
(collectively, the
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"Wesinvest Group"), under which the Management Group has the right to purchase
certain equity of the Company owned by the Wesinvest Group (the "XXXX XXX"),
subject to certain conditions as set forth in the XXXX XXX. It is contemplated
that a definitive agreement will be entered into with the Wesinvest Group
containing all the terms and conditions of, and superseding, the XXXX XXX (the
"Wesinvest Group Agreement"). The transactions contemplated by the XXXX XXX (or,
if superseded, by the Wesinvest Group Agreement) are referred to herein as the
"Wesinvest Transactions."
D. It is contemplated that the transactions contemplated by this
Agreement, and the Wesinvest Transactions, will be financed through a series of
transactions as described in the Private Placement Memorandum attached as
Exhibit A to this Agreement (the "Financing Transactions"), it being understood
and acknowledged that XXXX has not reviewed, and undertakes no obligation to
review, the factual accuracy of the Private Placement Memorandum.
E. In connection with the Financing Transactions, it is
contemplated that a new holding company will be formed (referred to herein as
"Holdings") which will, upon consummation of the transactions contemplated by
this Agreement, the Wesinvest Transactions and the Financing Transactions,
become the sole shareholder of the Company.
F. Subject to the closing and consummation of the Financing
Transactions and the Wesinvest Transactions, the Purchaser desires to purchase
and receive from Seller, and the Seller desires to sell and transfer to the
Purchaser, all of the Shares.
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Purchaser and Seller have also agreed to cancel the XXXX Option and terminate
the XXXX Option Agreement.
G. The parties desire to enter into this Agreement upon the terms
and conditions set forth below.
The parties agree as follows:
8. SALE AND TRANSFER OF SHARES; CANCELLATION OF OPTION; PURCHASE
PRICE.
8.1 SALE AND TRANSFER OF SHARES; CANCELLATION OF OPTION. Subject
to the terms, covenants and conditions set forth herein, at the Closing (as
defined below), (i) Seller shall sell, transfer, assign and deliver to
Purchaser, and Purchaser shall purchase and acquire from Seller, all of the
Shares; and (ii) Purchaser and Seller shall cancel the XXXX Option and terminate
the XXXX Option Agreement.
8.2 PURCHASE PRICE. The purchase price for the sale of the Shares
and cancellation of the XXXX Option shall be the aggregate amount of $4,125,000
(the "Purchase Price"). The Purchase Price shall be paid by cash, certified or
cashier's check, or wire transfer of immediately available funds delivered at
the Closing. Of the Purchase Price, $984,927 represents payment in satisfaction
of accrued but unpaid dividends on the Shares.
9. DELIVERIES AT THE CLOSING. At the Closing:
(a) Seller will deliver to the Company for transfer and
cancellation thereof the stock certificate(s) evidencing the Shares.
Such certificate(s) shall be accompanied by a stock assignment separate
from the certificate(s) representing the shares evidenced thereby, duly
executed by Seller;
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(b) Seller will deliver to the Company for transfer and
cancellation thereof the stock certificate(s) evidencing the Series B
Shares pursuant to the Exchange Agreement (as defined below). Such
certificate(s) shall be accompanied by a stock assignment separate from
the certificate(s) representing the shares evidenced thereby, duly
executed by Seller;
(c) Seller will execute and deliver to Purchaser an agreement
of cancellation of the XXXX Option and termination of the XXXX Option
Agreement, in the form attached as Exhibit B to this Agreement (the
"Option Cancellation Agreement");
(d) Seller will deliver to Purchaser a secretary's certificate
evidencing the due authorization of the transactions contemplated by
this Agreement and attesting to the incumbency of officers, in form and
substance reasonably satisfactory to Purchaser;
(e) Seller will deliver to Purchaser the officers certificate
referred to in Section 3.2, paragraph (a) below;
(f) Purchaser will deliver to Seller the consideration
described in Section 1.2 above;
(g) Purchaser will execute and deliver to Seller the Option
Cancellation Agreement;
(h) Purchaser will deliver to Seller a secretary's certificate
evidencing the due authorization of the transactions contemplated by
this Agreement and attesting to the incumbency of officers, in form and
substance reasonably satisfactory to Seller; and
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(i) Purchaser will deliver to Seller the officers certificate
referred to in Section 3.2, paragraph (b) below.
10. CLOSING.
10.1 PLACE AND TIME. The closing of the transactions contemplated
by this Agreement (the "Closing") will be held at the offices of the Company,
000 Xxxxxxxx Xx., Xx Xxxxxxx, XX 00000. The parties will use their best efforts
to have the Closing occur on October 14, 1999, or on such other date and at a
time agreed-upon in good faith by the parties, but in no event later than
October 29, 1999, unless extended by mutual agreement of the parties. The date
of the Closing is referred to herein as the "Closing Date."
10.2 CONDITIONS TO CLOSING. The obligations of the parties are
subject to the satisfaction or waiver, at or prior to the Closing, of each of
the following conditions:
(a) the representations and warranties of Seller in this
Agreement shall be true and correct in all respects, as of the date
hereof and as of the Closing Date as if made on the Closing Date, and
Seller shall provide an officers certificate to Purchaser, in form and
substance satisfactory to Purchaser, to that effect and that the
conditions to closing for which Seller is responsible have been
satisfied;
(b) the representations and warranties of Purchaser in this
Agreement shall be true and correct in all respects, as of the date
hereof and as of the Closing Date as if made on the Closing Date, and
Purchaser shall provide an officers certificate to Seller, in form and
substance satisfactory to Seller, to that
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effect and that the conditions to closing for which Purchaser is
responsible have been satisfied;
(c) at the option of Purchaser, which condition may be waived
in the sole discretion of the Management Group, concurrently with the
Closing, the Financing Transactions shall be in a position to be
consummated and closed, conditioned only on the satisfaction of the
conditions set forth in this Agreement;
(d) Seller shall have received a solvency opinion from a firm
mutually acceptable to the parties, dated the Closing Date, in form and
substance acceptable to Seller in its reasonable discretion (the
"Solvency Opinion"). The Solvency Opinion shall include the rendering
firm's opinion as to whether, among other things, assuming the
transactions contemplated by this Agreement, the Financing
Transactions, the Wesinvest Transactions and any other related buyout
transactions with other shareholders of the Company (collectively, the
"Buyout Transactions") have been consummated as proposed, immediately
after giving effect to such transactions: (i) the fair value and
present fair saleable value of the Company's assets would exceed the
Company's stated liabilities and identified contingent liabilities;
(ii) the Company should be able to pay its debts as they become
absolute and mature; and (iii) the capital remaining in the Company
after the transactions would not be unreasonably small for the business
in which the Company is engaged, as management has indicated it is now
conducted and is proposed to be conducted following the consummation of
the Buyout Transactions; the preparation of the Solvency Opinion will
be at the sole cost and expense of the Company;
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(e) concurrently with or prior to the Closing, the Company
shall close the Wesinvest Transactions on substantially the terms and
conditions set forth in the Wesinvest Group Agreement (Purchaser will
deliver to Seller an executed copy of the Wesinvest Group Agreement
promptly after the execution thereof, it being expressly understood and
acknowledged by Seller that Seller is not a third party beneficiary of
such agreement);
(f) at or prior to the Closing, WESINVEST Partners L.P.
("Wesinvest") will deliver an acknowledgment and waiver of its right of
first refusal to purchase the Shares under that certain Amended and
Restated Stockholders Agreement dated March 16, 1998, by and among
Wyle, KRUG, Wesinvest and certain senior managers of the Company (the
"Management Stockholders"); acknowledging such rights under the
Stockholders Agreement, XXXX agrees that it will not send a "Notice of
Intention" under Section 4.3 of the Stockholders Agreement prior to the
Closing or termination of this Agreement;
(g) at or prior to the Closing, the Management Stockholders
will deliver an acknowledgment and waiver of their respective rights of
first refusal, if any, to purchase the Shares under the Stockholders
Agreement;
(h) at or prior to the Closing, Seller and Holdings shall
enter into an agreement (the "Exchange Agreement") pursuant to which
Seller will exchange the Series B Shares for an equal number of shares
of the Senior Preferred Stock of Holdings (the "Holdings Preferred
Stock") having the rights, privileges, powers, preferences and
restrictions set forth on Exhibit C hereto; and
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(i) at or prior to the Closing, the Company and XXXX will
agree to terminate that certain Amended and Restated Stockholders
Agreement dated March 16, 1998 (the "Wyle Stockholders Agreement")
among the Company, XXXX, Wesinvest Partners, L.P. and certain senior
managers of the Company; at or prior to the Closing, the Company will
also cause the other parties to the Wyle Stockholders Agreement to
terminate the Wyle Stockholders Agreement.
11. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants (which representations and warranties under this
Agreement shall survive for a period of two years after the Closing) to
Purchaser that:
(a) the Shares represent all of the voting shares of the
Company owned or controlled, directly or indirectly, by Seller and
represent Seller's entire interest in the Company other than the Series
B Shares and the XXXX Option;
(b) the Shares and the XXXX Option are each owned beneficially
and of record by Seller, free and clear of any and all liens,
encumbrances, security agreements, equities, options, claims, charges
and restrictions of any kind whatsoever;
(c) Seller has not assigned the XXXX Option or any rights
under the XXXX Option Agreement, nor has Seller attempted or purported
to exercise any option or any other of Seller's rights under the XXXX
Option Agreement;
(d) Seller has, in connection with the Company's compliance
with paragraph 5(e) hereof, received current information as to the
operations, financial condition and future prospects, including
potential strategic
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alliances, of the Company (as described in paragraph 5(e)) and has had
an opportunity to ask questions of and receive answers from the Company
in order to obtain such information as Seller believes it needs to make
its decision to sell the Shares;
(e) Seller has the full power to transfer the Shares to
Purchaser and cancel the XXXX Option and terminate the XXXX Option
Agreement as provided herein without first obtaining the consent or
approval of any person;
(f) Seller is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction under which it
was organized, with full power and authority to enter into this
Agreement and perform its obligations hereunder;
(g) the execution and delivery of this Agreement and each
document or instrument in furtherance hereof and the consummation of
the transactions contemplated by Seller has been duly authorized by all
necessary action of its Board of Directors, and no further
authorization is necessary on the part of Seller;
(h) this Agreement constitutes the legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its
terms, except as may be limited by bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting creditors' rights generally,
and the general principles of equity, regardless of whether asserted in
a proceeding in law or equity (the "Enforceability Exceptions");
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(i) neither the execution and delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will violate
any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government,
governmental agency or court to which the Seller is subject or any
provisions of the Seller's charter or bylaws or any agreement or
contract to which Seller is bound;
(j) neither the Seller nor any of its officers, employees or
agents have incurred any obligation or liability for brokerage or
finder's fees, agent's commissions or other similar payment in
connection with this Agreement or the transactions contemplated hereby;
and
(k) no representation or warranty of Seller in this Agreement
omits, and no notice given pursuant to Section 7.1 hereof will omit, to
state a material fact necessary to make the statements herein and
therein, in light of the circumstances in which they were made, not
misleading.
12. REPRESENTATIONS AND WARRANTIES OF PURCHASER. The Company
(including the Company and its subsidiaries, and Holdings and its subsidiaries
and affiliated companies) hereby represents and warrants (which representations
and warranties under this Agreement shall survive for a period of two years
after the Closing) to Seller that:
(a) it is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, with full
power and authority to enter into this Agreement and perform its
obligations hereunder;
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(b) the execution and delivery of this Agreement and each
document or instrument in furtherance thereof and the consummation of
this transaction by the Company has been duly authorized by its Board
of Directors and/or shareholders, and no further authorization is
necessary on the part of the Company;
(c) this Agreement constitutes the legal, valid and binding
obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except as may be limited by the
Enforceability Exceptions;
(d) neither the execution and delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will violate
any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge or other restriction of any government,
governmental agency or court to which the Purchaser is subject or any
provisions of the Purchaser's charter or bylaws or any agreement or
contract to which Purchaser is bound;
(e) the Purchaser has disclosed to the Sellers all material
matters relating to the Company and its business as of the Closing
Date, including without limitation the Company's financial condition,
business, operations, and pending and prospective extraordinary
transactions (including, without limitation, investments, sales of
significant assets or similar transactions, acquisitions, significant
financing transactions, and agreements other than in the ordinary
course of business with significant vendors, suppliers or customers),
except as the disclosure of the specific details thereof to the Sellers
may be limited by agreements of confidentiality or non-disclosure, in
which case the Purchaser
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shall have disclosed the general nature of any such material matters;
the Private Placement Memorandum (referenced above) does not misstate
any material fact or omit to state any fact necessary to make the
statements made therein, in light of the circumstances in which they
were made, not misleading; other than as disclosed pursuant to this
paragraph, there have been no discussions initiated or held by or on
behalf of the Company or Holdings with any third parties contemplating
a joint venture or strategic alliance other than normal proposals and
agreements with such third parties in the ordinary course of the
Company's business, none of which is viewed by the management of the
Company or Holdings as material;
(f) on the Closing Date, after giving effect to the Closing
and the occurrence of the Buyout Transactions: (i) the fair value and
present fair saleable value of the Company's assets would exceed the
Company's stated liabilities and identified contingent liabilities;
(ii) the Company will be able to pay its debts as they become absolute
and mature; (iii) the capital remaining in the Company after the
transactions would not be unreasonably small for the business in which
the Company is engaged, as it is now conducted and is proposed to be
conducted following the consummation of the transactions contemplated
by this Agreement; (iv) this Agreement and the transactions
contemplated hereby do not and will not impair the capital of the
Company; and (v) the Company will not be "insolvent" within the meaning
Section 101(32) of the United States Bankruptcy Code;
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(g) neither the Purchaser nor any of its officers, employees
or agents have incurred any obligation or liability for brokerage or
finder's fees, agent's commissions or other similar payment in
connection with this Agreement or the transactions contemplated hereby;
and
(h) no representation or warranty of Purchaser in this
Agreement omits, and no notice given pursuant to Section 7.1 hereof
will omit, to state a material fact necessary to make the statements
herein and therein, in light of the circumstances in which they were
made, not misleading.
13. MISCELLANEOUS.
13.1 NOTICES. All notices, requests or demands required or
permitted to be given under this Agreement shall be in writing, and shall be
deemed to have been duly given on the date of service if served personally on
the party to whom notice is to be given, or three days after the date of mailing
if mailed by first class mail, postage prepaid, registered or certified, return
receipt requested, and properly addressed to the party to whom notice is to be
given at the address for such party set forth herein. Any party may change its
address to which notices are to be sent by written notification of such change
of address in accordance with the provisions hereof.
13.2 BEST EFFORTS; COOPERATION IN GOOD FAITH. Between the date of
this Agreement and the Closing, each of the parties will use its best efforts to
cause responsibilities and the conditions of this Agreement for which it is
responsible to be satisfied. The parties shall also cooperate in good faith in
the preparation and execution of the Exchange Agreement.
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13.3 SUBJECT HEADINGS. The subject headings of the Sections and
paragraphs of this Agreement are included for purposes of convenience only, and
shall not affect the construction or interpretation of any of its provisions.
13.4 ENTIRE AGREEMENT; AMENDMENTS; WAIVERS. This Agreement,
together with the exhibits and waiver and assignment of rights attached hereto,
constitutes the entire agreement among the parties pertaining to the subject
matter contained in it and supersedes all prior and contemporaneous agreements,
representations and understandings of the parties, including the LOI. No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by each of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.
13.5 BINDING EFFECT. This Agreement shall be binding on, and shall
inure to the benefit of, the parties hereto and their respective successors and
assigns.
13.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California without regard
to its principles of conflicts or choice of laws.
13.7 DISPUTES. If either party hereto brings an action pertaining
to or arising out of this Agreement, the prevailing party shall be entitled to
recover from the losing party all reasonable costs and expenses of litigation,
including reasonable attorneys fees and court costs, in such amounts as may be
determined in the discretion of the
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court having jurisdiction of such action in addition to any other legal or
equitable relief to which such party may be entitled.
13.8 MULTIPLE COUNTERPARTS. This Agreement may be executed in one
or more counterparts, any of which may be executed and transmitted by facsimile,
and each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
13.9 FURTHER ACTIONS. The parties shall execute any and all
additional documents and take all other such actions as may be convenient or
necessary to carry out the terms of this Agreement.
13.10 ONGOING INFORMATION. So long as Seller holds any capital stock
of Holdings, Holdings or the Company shall provide Seller, in addition to the
information Seller may be entitled to by law as, and as if Seller were, a
stockholder of Holdings, with audited consolidated financial statements of
Holdings prepared in conformity with generally accepted accounting principles
consistently applied for each year after the date hereof, and quarterly
unaudited consolidated financial statements of Holdings, certified by the chief
financial officer of Holdings.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first written above.
PURCHASER: SELLER:
WYLE LABORATORIES, INC. XXXX INTERNATIONAL CORP.
By: /s/ C.D. Yiakas By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-------------------------- ----------------------------
C.D. Yiakas, President Xxxxxx X. Xxxxxxxx, Xx.
Chief Executive Officer
By: /s/ L. Xxxxx Xxxxx
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L. Xxxxx Xxxxx, Secretary
WAIVER AND ASSIGNMENT OF RIGHTS
On behalf of himself and the Management Group, the undersigned waives and
relinquishes all rights under that certain letter dated June 4, 1999 between the
Management Group and XXXX International Corp., and transfers and assigns all
such rights to Wyle Laboratories, Inc. as set forth in the foregoing Agreement.
Wyle Laboratories, Inc. hereby accepts such transfer and assignment and agrees
to assume the obligations and liabilities of the Management Group arising out of
such letter.
Dated: September 24, 1999
/s/ C.D. (Xxx) Yiakas
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C.D. (Xxx) Yiakas on behalf of himself
and the Management Group
WYLE LABORATORIES, INC.
By: /s/ C.D. Yiakas
-----------------------------------
C.D. Yiakas, President
