STOCK PURCHASE AGREEMENT
BY AND AMONG
TRIMAS COMPANY LLC
("Buyer")
THE SHAREHOLDERS AND OPTION HOLDERS OF
HIGHLAND GROUP CORPORATION
("Sellers")
AND
FNL MANAGEMENT CORP.
("Sellers
Representative")
FEBRUARY 21, 2003
TABLE OF CONTENTS
PAGE
ARTICLE 1 Definitions......................................................................1
1.1 Definitions..................................................................1
1.2 Accounting Terms.............................................................1
ARTICLE 2 Purchase and Sale................................................................1
2.1 Purchase and Sale............................................................1
2.2 Purchase Price...............................................................1
2.3 Certain Definitions..........................................................2
2.3.1 Working Capital...................................................2
2.3.2 Closing Working Capital...........................................2
2.3.3 Working Capital Target............................................2
2.4 Payment of Purchase Price....................................................2
2.5 Post-Closing Adjustment......................................................2
2.5.1 Closing Balance Sheet Preparation.................................2
2.5.2 Closing Balance Sheet Review......................................3
2.5.3 Closing Balance Sheet Dispute Resolution..........................3
2.5.4 Pre-Closing Taxes Schedule........................................3
2.5.5 Final Balance Sheet and Adjustment................................4
2.5.6 Adjustment of Purchase Price......................................4
2.6 Allocation of Purchase Price.................................................5
ARTICLE 3 Sellers' Representations and Warranties Concerning the Transaction...............5
3.1 Authority and Capacity.......................................................5
3.2 Ownership of Securities......................................................5
3.3 Execution and Delivery; Enforceability.......................................6
3.4 Noncontravention.............................................................6
3.5 Brokerage....................................................................6
ARTICLE 4 Sellers' Representations and Warranties Concerning the Company...................6
4.1 Organization and Good Standing...............................................6
4.2 Capital Stock................................................................7
4.3 Other Ventures...............................................................7
4.4 Noncontravention.............................................................7
4.5 Financial Statements.........................................................7
4.6 Absence of Certain Changes or Events.........................................8
4.7 Taxes........................................................................9
4.8 Employees...................................................................10
4.9 Employee Benefit Plans and Other Compensation Arrangements..................10
4.10 Environmental, Health and Safety Matters...................................11
4.11 Permits; Compliance with Laws..............................................13
4.12 Real and Personal Properties...............................................14
4.13 Accounts Receivable........................................................14
4.14 Inventories................................................................15
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PAGE
4.15 Intellectual Properties....................................................15
4.16 Contracts..................................................................15
4.17 Litigation.................................................................16
4.18 Product Warranty...........................................................16
4.19 Brokerage..................................................................17
4.20 Relations with Material Suppliers and Material Customers...................17
4.21 Absence of Unlawful Payments...............................................17
4.22 Scope of Insurance Coverage, Good Standing of Policies and Absence of
Uninsured Claims.......................................................17
4.23 Indebtedness...............................................................17
4.24 Disclaimer.................................................................17
ARTICLE 5 Representations and Warranties of Buyer.........................................18
5.1 Organization; Authorization.................................................18
5.2 Execution and Delivery; Enforceability......................................18
5.3 Governmental Authorities; Consents..........................................18
5.4 Brokerage...................................................................18
5.5 Investment Intent; Restricted Securities....................................18
5.6 Financing...................................................................19
5.7 No Known Inaccuracies or Breaches...........................................19
ARTICLE 6 Closing Deliveries..............................................................19
6.1 Sellers' Closing Deliveries.................................................19
6.2 Buyer's Closing Deliveries..................................................20
ARTICLE 7 The Closing.....................................................................20
ARTICLE 8 Additional Covenants and Agreements.............................................21
8.1 Covenants...................................................................21
8.1.1 Publicity........................................................21
8.1.2 Expenses.........................................................21
8.1.3 No Assignments...................................................21
8.1.4 Access by Sellers................................................21
8.1.5 Continuation of Indemnification..................................21
8.1.6 Sellers' Representative..........................................22
8.1.7 Section 338 Election.............................................23
8.1.8 Return of Tax Benefits; Section 280G Indemnity...................23
8.1.9 Tax Matters......................................................23
8.1.10 Assistance......................................................24
8.1.11 Repayment of Cash...............................................24
ARTICLE 9 Indemnification.................................................................25
9.1 Indemnification of Buyer....................................................25
9.2 Limitations on Indemnification of Buyer Indemnitees.........................25
9.3 Indemnification of Sellers..................................................27
9.4 Limitations on Indemnification of Sellers...................................27
9.5 Procedures Relating to Indemnification......................................28
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PAGE
9.6 Limitation of Remedies......................................................30
ARTICLE 10 Certain Definitions.............................................................30
ARTICLE 11 Construction; Miscellaneous Provisions..........................................34
11.1 Notices....................................................................34
11.2 Entire Agreement...........................................................35
11.3 Modification...............................................................36
11.4 Mediation, Jurisdiction and Venue..........................................36
11.4.1 Mandatory Mediation.............................................36
11.4.2 Jurisdiction and Venue..........................................36
11.5 Binding Effect.............................................................36
11.6 Headings...................................................................36
11.7 Number and Gender; Inclusion...............................................36
11.8 Counterparts...............................................................37
11.9 Third Parties..............................................................37
11.10 Schedules and Exhibits....................................................37
11.11 Time Periods..............................................................37
11.12 Governing Law.............................................................37
Sellers' Disclosure Schedule -- Exceptions to Representations and Warranties
of Sellers Concerning the Transaction and the
Company
Exhibit A - Form of Employment Agreement between the Company and Executive
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STOCK PURCHASE AGREEMENT
------------------------
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into as of the 21st
day of February, 2003, by and among TriMas Company LLC, a Delaware limited
liability company, as purchaser ("Buyer"), each of the Persons identified on
Schedule 4.2 (each, a "Seller," and collectively, the "Sellers") and FNL
Management Corp, an Ohio corporation, as Sellers' Representative (as defined
herein) and as attorney-in-fact for the Option Holders (as defined herein).
RECITALS:
---------
A. Sellers own, in the aggregate, all of the issued and outstanding shares
of capital stock (as more particularly defined herein, the "Shares") of Highland
Group Corporation, an Ohio corporation (the "Company"), and all of the issued
and outstanding options to purchase shares of capital stock of the Company (as
more particularly defined herein, the "Stock Options");
B. Buyer desires to purchase from Sellers, and Sellers desire to sell to
Buyer, all of the Shares and Buyer and Sellers further desire that the Stock
Options be terminated, upon and subject to the terms and conditions set forth in
this Agreement.
Now, therefore, in consideration of the mutual representations, warranties,
covenants and agreements set forth in this Agreement, Buyer and Sellers hereby
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. Certain terms used in this Agreement shall have the
meanings set forth in Article 10, or elsewhere herein as indicated in Article
10.
1.2 Accounting Terms. Accounting terms used in this Agreement and not
otherwise defined herein shall have the meanings attributed to them under GAAP.
ARTICLE 2
PURCHASE AND SALE
2.1 Purchase and Sale. Subject to the terms and conditions of this
Agreement, at the Closing, each Seller shall sell, assign, transfer and deliver
to Buyer, free and clear of all Liens, and Buyer shall purchase from each
Seller, all of such Seller's right, title and interest in and to all of the
Shares owned by such Seller, as more specifically identified on Schedule 4.2 (as
to each Seller, respectively, the "Seller's Respective Securities").
2.2 Purchase Price. The aggregate purchase price for all of the Shares (the
"Purchase Price") shall be an amount equal to:
(a) Seventy Million Five Hundred Thousand and 00/100 Dollars
($70,500,000) (the "Enterprise Value"), subject to adjustment pursuant to
Section 2.5.6
for any differences between the Closing Working Capital and the Working
Capital Target;
(b) plus forty percent (40%) of the amount to be paid immediately prior
to the Closing by the Company for transaction bonuses listed on Schedule
2.2(b);
(c) plus an amount equal to forty percent (40%) of the Option Spread
(the amounts referred to Sections 2.2(b) and 2.2(c), collectively, the "Tax
Benefits");
provided, however, that the Tax Benefits may be subject to reimbursement to
Buyer as provided in Section 8.1.9.
2.3 Certain Definitions.
2.3.1 Working Capital. "Working Capital" of the Company is defined, and
shall be calculated in accordance with the formula set forth, on Schedule 2.3.1.
2.3.2 Closing Working Capital. "Closing Working Capital" means the
Working Capital of the Company as shown on the face of the Final Closing Balance
Sheet.
2.3.3 Working Capital Target. "Working Capital Target" means
$13,987,200.
2.4 Payment of Purchase Price. Subject to the terms and conditions of this
Agreement, at the Closing, Buyer shall pay and deliver the Purchase Price to
Sellers by means of a wire transfer of immediately available cash funds to an
account or accounts as directed by Sellers' Representative (the "Sellers'
Account").
2.5 Post-Closing Adjustment.
2.5.1 Closing Balance Sheet Preparation. Within forty-five (45) days
after the Closing Date, Buyer shall cause to be prepared and shall deliver to
Sellers' Representative a balance sheet of the Company (the "Preliminary Closing
Balance Sheet") and, based on the Closing Working Capital as derived therefrom,
Buyer's written calculation of any difference between the Closing Working
Capital and Working Capital Target (the "Preliminary Post-Closing Adjustment").
The Preliminary Closing Balance Sheet shall be prepared as of the close of
business of the Company on the Closing Date; provided, however, that the
preparation of the Preliminary Closing Balance Sheet shall entirely disregard
any and all effects on the assets or liabilities of the Company of any financing
or refinancing arrangements entered into by Buyer at any time at or after the
Closing Date or any other transactions entered into by Buyer in effecting the
consummation of the transactions contemplated hereby, and the Preliminary
Closing Balance Sheet shall be prepared in accordance with Schedule 2.3.1 hereto
and on a basis consistent with, and using the same accounting methods, policies,
practices and procedures as employed in the preparation of the Company's
internal monthly financial statements, except that the Closing Balance Sheet
need only reflect those assets and liabilities of the Company necessary to
calculate the Closing Working Capital in accordance with the terms of Sections
2.3.1 and 2.3.2. In preparing the Preliminary Closing Balance Sheet, (i) it
shall be assumed that the Company and each of its lines of business shall be
continued as a going concern, and (ii) there shall not be taken into account any
of the plans, transactions or changes which Buyer intends to initiate or
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make or cause to be initiated or made at or after the Closing Date with respect
to the Company or its business or assets, or any facts or circumstances that are
unique or particular to Buyer or any assets or liabilities of Buyer, or any
obligation of the Company to pay the Purchase Price hereunder.
2.5.2 Closing Balance Sheet Review. Sellers' Representative shall
review the Preliminary Closing Balance Sheet and the Preliminary Post-Closing
Adjustment and, if Sellers' Representative reasonably believes that either was
not prepared in accordance with the requirements of Sections 2.3.1 and 2.5.1,
Sellers' Representative shall so notify Buyer no later than the 30th day after
Sellers' Representative's receipt thereof, setting forth in such notice Sellers'
Representative's objection or objections to the Preliminary Closing Balance
Sheet or the Preliminary Post-Closing Adjustment with particularity and the
specific changes or adjustments which Sellers' Representative claims are
required to be made thereto in order to conform the same to the requirements of
Sections 2.3.1 and 2.5.1. Buyer shall cause the books and records of the Company
to be made available during normal business hours to Sellers' accountants,
attorneys and other representatives (including Sellers' Representative) to
facilitate such review upon reasonable prior request, and shall cause the
necessary personnel of the Company to assist such representatives in their
review of the Preliminary Closing Balance Sheet. Any notice of objection
delivered pursuant to this Section 2.5.2 shall specify in reasonable detail the
nature of any disagreement so asserted, which disagreement shall not relate to
the accounting methods, policies, practices or procedures underlying the
Preliminary Closing Balance Sheet so long as such accounting methods, policies,
practices and procedures are consistent with those used in preparing Schedule
2.3.1.
2.5.3 Closing Balance Sheet Dispute Resolution. If Sellers'
Representative timely notifies Buyer in accordance with Section 2.5.2 of an
objection by Sellers' Representative to the Preliminary Closing Balance Sheet or
the Preliminary Post-Closing Adjustment, and if Buyer and Sellers'
Representative are unable otherwise to resolve such dispute within fifteen (15)
days after Sellers' Representative's delivery of such notice of objection, then
the parties shall mutually engage and submit such dispute to, and the same shall
be finally resolved in accordance with the provisions of this Agreement by, the
firm of Deloitte & Touche or such other accounting firm of national reputation
as shall be mutually acceptable to Buyer and Sellers' Representative (the
"Independent Accountants"). The Independent Accountants shall determine and
report in writing to Buyer and Sellers' Representative as to the resolution of
all disputed matters submitted to the Independent Accountants and the effect of
such determinations on the Preliminary Closing Balance Sheet and the Preliminary
Post-Closing Adjustment within twenty (20) days after such submission or such
longer period as the Independent Accountants may reasonably require, and such
determinations shall be final, binding and conclusive as to Buyer, Sellers, and
their respective Affiliates. The fees and disbursements of the Independent
Accountants shall be shared equally by Buyer on the one hand, and Sellers,
collectively, on the other hand.
2.5.4 Pre-Closing Taxes Schedule. Within forty-five (45) days after the
Closing, the Sellers shall cause the Sellers' Representative to prepare and
deliver to Buyer Schedule 2.5.4 which shall set forth the amount of Taxes with
respect to income that are unpaid and payable by the Company or that are
overpaid and refundable to the Company (solely to the extent such overpayment
and refund are not attributable to the Tax Benefits), for Tax periods through
and
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including the Closing Date including (on a pro rata basis) any such periods
beginning before the Closing Date and ending after the Closing Date (the
"Pre-Closing Taxes"). The Buyer shall review Schedule 2.5.4 and, if Buyer does
not object to the calculations set forth on Schedule 2.5.4 within thirty (30)
days of its receipt thereof, the Pre-Closing Taxes shall be either paid to the
Buyer by the Sellers or paid to the Sellers' Representative for the benefit of
the Sellers, as the case may be, as set forth in Section 2.5.6(b). If the Buyer
files a timely objection to the Sellers' preparation of Schedule 2.5.4 and the
amount of the Pre-Closing Taxes, specifying the changes and adjustments which
Buyer claims are required to Schedule 2.5.4 and to the amount of the Pre-Closing
Taxes, and Buyer and Sellers' Representative are unable otherwise to resolve
such dispute within fifteen (15) days after Buyer's delivery of such notice of
objection, then any such dispute shall be resolved pursuant to the provisions of
Section 2.5.3 hereof. Buyer shall cause the books and records of the Company to
be made available during normal business hours to Sellers' Representatives and
its accountants, attorneys and other representatives to facilitate the
calculation of the Pre-Closing Taxes, and, upon reasonable prior request shall
cause the necessary personnel of the Company to assist in the calculation of the
Pre-Closing Taxes.
2.5.5 Final Balance Sheet and Adjustment The Preliminary Closing
Balance Sheet and the Preliminary Post-Closing Adjustment shall become the
"Final Closing Balance Sheet" and the "Final Post-Closing Adjustment,"
respectively, and as such shall become final, binding and conclusive upon Buyer,
Sellers and their respective Affiliates for all purposes of this Agreement, upon
the earliest to occur of the following:
(i) the mutual acceptance by Buyer and Sellers' Representative of
the Preliminary Closing Balance Sheet and the Preliminary Post-Closing
Adjustment, respectively, with such changes or adjustments thereto, if
any, as may be proposed by Sellers' Representative and consented to by
Buyer;
(ii) the expiration of thirty (30) days after Sellers'
Representative's receipt of the Preliminary Closing Balance Sheet and
the Preliminary Post-Closing Adjustment, respectively, without timely
objection thereto by Sellers' Representative in accordance with Section
2.5.2; or
(iii) the delivery to Buyer and Sellers' Representative by the
Independent Accountants of the report of their determination of all
disputed matters submitted to them pursuant to Section 2.5.3.
2.5.6 Adjustment of Purchase Price.
(a) If the Closing Working Capital, as finally determined in accordance
with this Section 2.5, is greater than the Working Capital Target, then the
Buyer shall pay the amount of such difference to Sellers' Representative
for the benefit of the Sellers by means of a wire transfer of immediately
available funds to the Sellers' Account, and if less than the Working
Capital Target, Sellers, in accordance with the allocations set forth on
Schedule 2.6, shall pay the amount of such difference to the Buyer by means
of a wire transfer of immediately available funds to an account designated
by Buyer. The Final Post-Closing Adjustment, if any, shall be due and
payable pursuant to this Section 2.5.6 no later than ten (10) days after
the Preliminary Closing Balance Sheet and the
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Preliminary Post-Closing Adjustment become the Final Closing Balance Sheet
and the Final Post-Closing Adjustment, respectively, pursuant to Section
2.5.5.
(b) If Schedule 2.5.4 as determined in accordance with the procedures
set forth in Section 2.5.4 shows that Pre-Closing Taxes are payable to the
Tax authorities, then the Sellers' Representative, on behalf of the
Sellers, shall pay such amount of Pre-Closing Taxes to Buyer by means of a
wire transfer of immediately available funds to an account designated by
Buyer. If Schedule 2.5.4 as determined in accordance with the procedures
set forth in Section 2.5.4 shows that the Company is entitled to a tax
refund in the amount of the Pre-Closing Taxes, then Buyer shall pay the
amount of such Pre-Closing Taxes to Sellers' Representative for the benefit
of the Seller by means of a wire transfer of immediately available funds to
the Sellers' Account. Pre-Closing Taxes, if any, shall be due and payable
pursuant to this Section 2.5.6(b) no later than ten (10) days after
Schedule 2.5.4 is finalized and agreed to pursuant to Section 2.5.4.
2.6 Allocation of Purchase Price. Payment by Buyer of the Purchase Price
into the Sellers' Account shall constitute payment by Buyer to each Seller and
satisfaction of Buyer's obligation to pay such amount hereunder, and Sellers'
Representative shall be solely responsible for allocating and distributing to
each Seller such Seller's respective share of the Purchase Price from the
Sellers' Account. The Purchase Price shall be allocated among the respective
Sellers in accordance with the provisions of Schedule 2.6, and any collective
obligations of Sellers, including, without limitation, payment of transaction
fees and expenses, shall be allocated among the respective Sellers in accordance
with the provisions of Schedule 2.6. The portion of the Purchase Price allocated
to each Seller shall be paid and distributed to such Seller in cash or its
equivalent by means of a wire transfer of immediately available funds to an
account designated by such Seller to Sellers' Representative prior to the
Closing. At the Closing, Sellers' Representative may withhold from the proceeds
otherwise distributable to each Seller hereunder, and pay, such Seller's
pro-rata portion of any fees or expenses incurred by or on behalf of the Sellers
in connection with the transactions contemplated hereby.
ARTICLE 3
SELLERS' REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION
Each Seller severally represents and warrants to Buyer that, except as set
forth on the Sellers' Disclosure Schedule, annexed hereto and made a part
hereof, the following statements contained in this Article 3 are true and
correct with respect to such Seller. No Seller makes any representation or
warranty as to the following matters with respect to any other Seller.
3.1 Authority and Capacity. Seller possesses all requisite legal right,
power, authority and capacity to execute, deliver and perform this Agreement and
consummate the transactions contemplated herein.
3.2 Ownership of Securities. Seller owns all of such Seller's Respective
Securities free and clear of all Liens. Seller is the record and beneficial
owner of such Seller's Respective Securities, has full power, right and
authority, and, except for the applicable requirements of the HSR Act, any
approval required by Law, to make and enter into this Agreement and to sell,
assign, transfer and deliver Seller's Respective Securities to Buyer, and has
good and valid title
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to such Seller's Respective Securities. Upon the consummation of the
transactions contemplated by this Agreement in accordance with the terms hereof,
at the Closing, Buyer will acquire good and marketable title to the Shares, free
and clear of all Liens other than those created by Buyer, if any.
3.3 Execution and Delivery; Enforceability. This Agreement has been, and
each other document, instrument or agreement to be executed and delivered by
Seller in connection herewith will upon such delivery be, duly executed and
delivered by Seller and constitutes, or will upon such delivery constitute, the
legal, valid and binding obligation of Seller, enforceable in accordance with
its terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights or by principles of equity.
3.4 Noncontravention. Other than restrictions arising under the Company's
charter documents or Shareholders' Agreement which are referred to in the last
sentence of this Section 3.4, (i) Seller is not required to submit any notice,
report or other filing with any governmental authority in connection with
Seller's execution, delivery or performance of this Agreement or any other
document, instrument or agreement to be executed and delivered by Seller in
connection herewith, and (ii) such execution, delivery and performance will not
violate any applicable Law or any provision of the organizational documents
applicable to Seller and will not result in a breach or violation of, or
constitute a default or result in the creation of a Lien on the Shares under, or
give rise to a right of any party to accelerate, any agreement, instrument or
indenture evidencing Indebtedness or similar obligations to which Seller is a
party or by which any assets of Sellers are bound, and (iii) no consent,
approval or authorization of any governmental authority or any other Person is
required to be obtained by Seller in connection with Seller's execution,
delivery and performance of this Agreement or any other document, instrument or
agreement to be executed and delivered by Seller in connection herewith. At or
prior to the date hereof, all actions necessary under the Company's charter
documents and Shareholders' Agreement, and all actions necessary for the
execution, delivery and performance of this Agreement have been taken.
3.5 Brokerage. No Person is or will become entitled, by reason of any
agreement or arrangement entered into or made by or on behalf of Seller, to
receive any commission, brokerage, finder's fee or other similar compensation in
connection with the consummation of the transactions contemplated by this
Agreement, except for McDonald Investments Inc., whose fees and expenses will be
paid by Sellers.
ARTICLE 4
SELLERS' REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY
Each Seller severally represents and warrants to Buyer that, except as set
forth on the Sellers' Disclosure Schedule, annexed hereto and made a part
hereof, the following statements contained in this Article 4 are true and
correct.
4.1 Organization and Good Standing. The Company is a corporation organized,
validly existing and in good standing under the laws of Ohio. The Company has
all requisite corporate power and authority to own and lease its assets and to
operate its business as the same
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are now being owned, leased and operated. The Company is duly qualified or
licensed to do business as a foreign corporation in, and is in good standing in,
each jurisdiction in which the nature of its business or its ownership of its
properties requires it to be so qualified or licensed, except where the failure
to be so qualified or licensed would not have a Material Adverse Effect.
Schedule 4.1 sets forth a true and complete list of (i) all jurisdictions in
which the Company is qualified or licensed to do business as a foreign
corporation, (ii) all directors and officers of the Company, (iii) all bank,
payroll and securities brokerage accounts of the Company and all authorized
signers for each such account, and (iv) all powers of attorney granted by the
Company to any third party that are currently in effect.
4.2 Capital Stock. The Company has the authority to issue a total of Two
Thousand (2,000) common shares, without par value. Of such authorized shares, a
total of One Thousand (1,000) common shares, without par value, are issued and
outstanding (each, a "Share," and collectively, the "Shares") and are owned of
record by the Sellers in the respective amounts set forth on Schedule 4.2. In
addition, prior to the transactions contemplated in Section 6.1(ii), Fifty-Three
and 24/100ths (53.24) Stock Options for common shares are owned by the Sellers
named on, and in the respective amounts set forth on, Schedule 4.2. All of the
Shares have been duly authorized and validly issued, are fully paid and
nonassessable, and have been issued in compliance with (and since issuance, have
not been transferred except in compliance with) all applicable federal and state
securities laws and any preemptive rights or rights of first refusal of any
Person. Except for the Stock Options or as set forth in the Company's charter
documents or Shareholders' Agreement, there are no voting trusts, proxies, or
other agreements or understandings with respect to the voting of any shares of
capital stock of the Company, and there does not exist nor is there outstanding
any right, security, or other agreement granted to, issued to, or entered into
with, any Person to cause the Company to issue or sell any shares of capital
stock of the Company to any Person (including any warrant, option, call,
preemptive right, convertible debt obligation, subscription for stock or
securities convertible into stock of the Company). All of the Stock Options are
fully vested. All of the Stock Options shall be settled or terminated as of the
Closing with funds available to the Sellers or to the Company, and evidence
thereof delivered to Buyer, pursuant to and in accordance with the terms of
Section 6.1(ii) hereof. The Company has not purchased any of its capital stock
within the last twelve (12) months of the date hereof.
4.3 Other Ventures. The Company neither owns of record nor beneficially,
any equity ownership interest in any other Person, nor is it a partner or member
of any partnership, limited liability company or joint venture.
4.4 Noncontravention. The execution, delivery and performance of this
Agreement by Sellers and consummation by the Sellers and the Company of the
transactions contemplated hereby and compliance by Sellers and the Company with
any provisions hereof will not violate any applicable Law or any provision of
the Certificate of Incorporation or the Code of Regulations of the Company and
will not result in a breach or violation of, or constitute a default or result
in the creation of a Lien under, or give rise to a right of any party to
accelerate, modify or terminate, any Material Contract.
4.5 Financial Statements. Schedule 4.5 sets forth true and complete copies
of the audited and consolidated financial statements of the Company as of and
for the fiscal years
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ended December 31, 2000, December 31, 2001, and December 31, 2002 (collectively,
the "Audited Financial Statements"). The Audited Financial Statements have been
prepared in accordance with GAAP and present fairly, in all material respects,
the financial position of the Company as of the date indicated and the results
of its operations for the period then ended. The balance sheet of the Company as
of December 31, 2002, which is included in Schedule 4.5 is herein referred to as
the "Acquisition Balance Sheet."
4.6 Absence of Certain Changes or Events. Since the date of the Acquisition
Balance Sheet, the Company has been operated only in the ordinary course of
business, and:
(A) there has not occurred any event or circumstance that
constitutes, or, To Sellers' Knowledge, could reasonably be expected to
result in, a Material Adverse Effect;
(B) there has not been any material change in the accounting
policies or practices of the Company, including practices with respect
to the payment of accounts payable or the collection of accounts
receivable;
(C) the Company has not declared nor paid any dividend or made
any other distribution of any kind to its equity holders on or in
respect of, and has not repurchased, redeemed, retired or otherwise
acquired any shares of its capital stock or any options, warrants or
other rights to purchase such stock;
(D) the Company has not sold, assigned, transferred or subjected
to any Lien, nor has committed to sell, assign, transfer or subject to
any Lien, any tangible or intangible assets having a current book value
in excess of $100,000 individually or in excess of $250,000 in the
aggregate, except for sales of inventory in the ordinary course of
business and except for Permitted Liens;
(E) the Company has not purchased or leased, nor has committed to
purchase or lease, any tangible or intangible asset having a fair
market value of more than $100,000 individually or in excess of
$250,000 in the aggregate, except ordinary course purchases of
inventory and supplies;
(F) the Company has not incurred any Indebtedness other than
pursuant to the agreements, notes and instruments described on Schedule
4.23, nor assumed, guaranteed, or endorsed the Indebtedness of any
other Person, nor canceled any debt owed to it or released any claim
possessed by it other than in the ordinary course of business, except
for any Indebtedness or claims for which adequate reserves have been
established in the Audited Financial Statements;
(G) the Company has not suffered any theft, damage, destruction
or loss of or to any tangible asset or assets which loss has
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resulted in, or, To Sellers' Knowledge, could reasonably be expected to
result in, a Material Adverse Effect;
(H) the Company has not made, granted, nor committed to make or
grant any bonus or any wage, salary or compensation increase to any
director, officer, employee or consultant other than salary increases
and bonuses in the ordinary course of business, nor any increase in any
employee benefit plan or arrangement, and the Company has not amended
nor terminated any existing employee benefit plan or arrangement or
adopted any new employee benefit plan or arrangement;
(I) the Company has not made or permitted any material amendment,
termination, waiver or lapse of any right of the Company under any
material contract or Permit; and
(J) the Company has not entered into any lease (as lessee)
requiring payments in any year in excess of $25,000.
4.7 Taxes.
(a) All Tax Returns required by any governmental authority of any
jurisdiction to be filed by the Company have been timely filed, and the
returns which have been filed are accurate and complete in all material
respects. All Taxes due pursuant to the Tax Returns or otherwise owed by
the Company have been paid, other than Taxes which are not yet due or
which, if due, are not delinquent. There are no Tax claims, audits or
proceedings pending or, To Sellers' Knowledge, threatened in connection
with the properties, business, income, expenses, net worth or corporate
status of the Company. There are not currently in force any extensions of
time with respect to the date on which any Tax Return is or was due to be
filed by the Company, or any waivers or agreements binding upon the Company
for the extension of time for the assessment or payment of any Tax. The
Company has no liability for Taxes of any other Person under Treasury
Regulation Section 1.1502-6, as transferee or successor, by contract or
otherwise.
(b) During the three (3) years prior to Closing no claim has ever been
made by any governmental authority in a jurisdiction where the Company does
not file Tax Returns that it is, or may be, subject to taxation by that
authority.
(c) The Company has not been a United States real property holding
corporation within the meaning of Code Section 897(c)(2) during the
applicable period specified in Code Section 897(c)(1)(A)(ii).
(d) The Company will not be required to include any item of income in,
or exclude any item of deduction from, taxable income for any taxable
period (or portion thereof) ending after the Closing Date as a result of
any change in method of accounting for a taxable period ending on or prior
to the Closing Date under Code Section 481(c) (or any corresponding or
similar provision of state, local or foreign income Tax law).
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(e) The Company has made all payments of estimated Taxes, due pursuant
to the Tax Returns or otherwise owed, as required under Code Section 6655
and any state, local or foreign law similar to the foregoing.
4.8 Employees. The Company has withheld or collected from its employees the
amount of all Taxes required to be withheld or collected therefrom and has paid
the same when due to the proper governmental authorities. There are no pending
or, To Sellers' Knowledge, threatened controversies, grievances or claims by any
employee or former employee of the Company with respect to his or her employment
or any benefits incident thereto which would have a Material Adverse Effect. The
Company is not a party to any collective bargaining agreement or employee
grievance procedure or dispute resolution mechanism nor, To Sellers' Knowledge,
is there pending or underway any union organizational activities or proceedings
with respect to employees of the Company. Schedule 4.8 sets forth a complete
list of all employees of the Company who, as of December 31, 2002, received or
accrued total employment compensation of $100,000 or more in respect of the
12-month period then ended. There is no union campaign being conducted to
solicit cards from employees to authorize a union to request a National Labor
Relations Board certifications election with respect to the Company's employees.
There is no labor strike, slowdown or stoppage pending, or To Sellers'
Knowledge, threatened against the Company.
4.9 Employee Benefit Plans and Other Compensation Arrangements. Set forth
on Schedule 4.9(i) is a list of all employee benefit plans (as defined in
Section 3(3) of ERISA), employment agreements, other severance pay, salary
continuation, bonus, incentive, stock option, restricted stock, stock unit,
retirement, profit sharing or deferred compensation plans, contracts, programs
or arrangements with respect to which the Company currently is or, during the
three-year period preceding the date hereof has been, the sponsor, a party or
obligated to make contributions or otherwise incur liability (the "Plans"). In
addition:
(a) none of the Plans is a multiemployer plan (as defined in ERISA);
(b) all of the Plans that are intended to be tax-qualified under
Section 401(a) of the Code are so qualified in all material respects,
except that no representation is made with respect to any formal
qualification requirement with respect to which the remedial amendment
period under Section 401(b) of the Code has not yet expired;
(c) no reportable event (within the meaning of Section 4043 of ERISA)
has occurred with respect to any Plan, excluding any such events for which
the notice requirements have been waived under applicable Law;
(d) all of the Plans have been operated in substantial compliance with
their respective terms and all Laws, and all contributions from the Company
required by Law or contract to any such Plan have been made;
(e) none of the Plans provide medical benefits to Persons who are not
employees of the Company, or their dependents, except as required by
applicable Law (including Section 4980B of the Code);
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(f) the Company does not maintain any Plan under which it would be
obligated to pay benefits or under which the amount of any such payment
would be increased or the time of either the vesting of such benefit or the
payment thereof would be accelerated because of the consummation of the
transactions contemplated by this Agreement either alone or in combination
with another event;
(g) Except as set forth on Schedule 2.2.(b), which Schedule sets forth
the transaction bonuses to be paid in connection with the transactions
contemplated hereby, no employee of the Company is entitled to severance
pay, a change of control payment or any other payment as a result of the
transaction contemplated hereby;
(h) The Company has complied in all material respects with the
continuation health coverage requirements of Section (Section)4980B of the
Code and Section 601 through 608 of ERISA;
(i) The Company is not obligated, contingently or otherwise, to pay any
amount (including the payment of the transaction bonuses set forth on
Schedule 2.2(b) and the Option Spreads) which would be treated as a
"parachute payment" as defined in Code Section 280G(b) (determined without
regard to Code Section 280G(b)(2)(A)(ii));
(j) There are no actions, suits, written notice of investigations or
claims (other than routine claims for benefits) pending, or, To Sellers'
Knowledge, threatened involving any Plan or the assets thereof and the
Company has not received any written notice of any investigation by any
governmental authority with respect to any Plan or the assets thereof;
(k) With respect to each Plan, no "prohibited transaction" has occurred
with respect to the Company or any of its employees as defined in Code
Section 4975 or ERISA Section 406;
(l) There are no Plans maintained by the Company subject to the
requirements of Code Section 412 or Section 302 of ERISA;
(m) The Company has not issued any written undertaking, or otherwise
generally notified current or former employees of the Company of any intent
or commitment, to create or implement any additional Plans for the benefit
of any current or former employees of the Company or to materially amend,
modify or terminate any existing Plan.
Set forth on Schedule 4.9(ii) is a list of all other compensation
arrangements providing for annual payments in excess of, or provision of
benefits valued at more than $100,000. The Company has performed all obligations
(including payment) required to be performed by it in connection with such
arrangements except where the failure so to perform would not have a Material
Adverse Effect.
4.10 Environmental, Health and Safety Matters.
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(a) As used in this Section 4.10, the following terms shall have the
following meanings:
(i) "Hazardous Material" means any chemical, substance, waste,
material, constituents, pollutant or contaminant at levels or
concentrations which give rise to liability or is subject to regulation
under Environmental Laws.
(ii) "Environmental Laws" means any Law or other legal
requirement pertaining to the environment including, without
limitation, indoor air, surface waters, groundwater, land, soil,
subsurface strata and natural resources such as flora, fauna and
wetlands or the health or safety of the public or employees, including,
without limitation: the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C.(Sections) 9601 et seq.
("CERCLA"); RCRA; the Emergency Planning and Community Right-to-Know
Act, 42 U.S.C. (Section)11011, et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C.(Sections)1801 et seq.; the Clean Air Act,
42 U.S.C.(Sections)7401 et seq. ("CAA"); the Clean Water Act, 33
U.S.C.(Sections)1251 et seq.; the Occupational Safety and Health Act,
29 U.S.C.(Sections)651 et seq.; the Toxic Substances Control Act, 15
U.S.C.(Sections)2602 et seq.; the Rivers and Harbors Act of 1899, 33
U.S.C.(Section)401, et seq.; the Oil Pollution Act of 1990, 33
U.S.C.(Section)2701, et seq.; each as amended; any state or local law
similar to the foregoing; all regulations issued pursuant to the
foregoing; all permits issued to the Company pursuant to the foregoing;
and any other Law, past or present, pertaining to:
(A) the existence, cleanup and/or remedy of Hazardous
Material on property;
(B) the emission or Release of any Hazardous Material into
the environment, including, without limitation, into sewer
systems or within buildings;
(C) the use, generation, transport, treatment, storage,
disposal, removal or recovery of Hazardous Materials, including
building materials;
(D) the control of Hazardous Materials; or
(E) worker or community protection.
(b) During the period of the Company's ownership or occupancy of the
Real Property, and, To Sellers' Knowledge, with respect to the period prior
to the Company's ownership or occupancy of the Real Property:
(i) there has been no treatment, storage, Release or threatened
Release of any Hazardous Material at, on, under or from any of the Real
Property;
(ii) there have been no Hazardous Materials (other than those
containerized, packaged or maintained in accordance with applicable
Environmental Laws) located in, at, under or on any of the Real
Property;
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(iii) there has been no disposal of any Hazardous Materials at
any of the Real Property;
(iv) there has been no arrangement for disposal or transport for
disposal or treatment of any Hazardous Material by the Company at, on,
or to any property or facility not owned by the Company, except in
accordance with Environmental Laws;
(v) the conduct of the business of the Company has been in
substantial compliance with all Environmental Laws;
(vi) To Sellers' Knowledge, the Company has not sent Hazardous
Material to a site that, pursuant to any Environmental Law, has been
placed on the National Priorities List promulgated under CERCLA or any
similar state list;
(vii) the Company is not involved in any suit or proceeding
concerning, and has not received any written notice or request for
information from any third party with respect to, a Release or
threatened Release of any Hazardous Material or a violation or alleged
violation of any Environmental Law.
(c) To Sellers' Knowledge, there are no underground storage tanks or
related piping, or surface impoundments located on, under or at any of the
Real Property and no such tank or piping has been removed from any Real
Property.
(d) The Company is not conducting any investigation or other response
or corrective action under any Environmental Law, nor is it obligated under
any order, decree or agreement with any Person to do so.
(e) The Company has not assumed, contractually or by operation of Law,
any liabilities of any third party under any Environmental Law that
constitutes, or, To Sellers' Knowledge, would reasonably be expected to
have a Material Adverse Effect.
4.11 Permits; Compliance with Laws. (a) Set forth on Schedule 4.11(a) is a
list of all of the all licenses, permits, authorizations and certificates the
Company possesses issued by any governmental authority which are required and
sufficient under any Law with respect to the operation of the Company's business
as presently conducted (collectively, "Permits"), except where the failure so to
comply or to possess such a Permit does not constitute, or, To Sellers'
Knowledge, could not reasonably be expected to have a Material Adverse Effect,
or to involve payments of sums in excess of $100,000; (b) the Company has not
received within the three-year period ending on the date of this Agreement any
written notice from any Person alleging any noncompliance by the Company with
any applicable Law which could reasonably be expected to result in a Material
Adverse Effect; (c) there are no pending or, To Sellers' Knowledge, threatened
terminations, expirations or revocations of any Permits which constitute, or, To
Sellers' Knowledge, could reasonably be expected to result in a Material Adverse
Effect; and (d) the Company is in compliance with all Laws and orders applicable
to its business or employees conducting its business except where the failure so
to comply does not constitute, or, To Sellers' Knowledge, could not reasonably
be expected to have a Material Adverse Effect.
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4.12 Real and Personal Properties.
(a) Schedule 4.12(a) identifies (i) all of the real property owned by
the Company (collectively, the "Owned Real Property"), and (ii) all of the
real property demised by leases or subleases (collectively, the "Leases")
to the Company (collectively, the "Leased Real Property," and together with
the Owned Real Property, the "Real Property"). The Real Property comprises
all material real property interests used in the conduct of the business
and operations of the Company as now conducted.
(b) The Leases are in full force and effect, and the Company holds a
valid and existing leasehold interest under each of the Leases for the
terms set forth therein, respectively. The Company is not in default under
any Lease, and, To Sellers' Knowledge, no events have occurred and no
circumstances exist which, if unremedied, and whether with or without
notice or the passage of time or both, would result in such a default,
except in each case for such defaults as would not have a Material Adverse
Effect. Sellers have made available to Buyer a complete and accurate copy
of each of the Leases, including all amendments thereto.
(c) The Company owns, with good, valid, legal and marketable title,
each parcel of Owned Real Property, and the Company owns each of the items
of tangible personal property reflected on the Acquisition Balance Sheet or
acquired thereafter (except for assets reflected thereon or acquired
thereafter that have been disposed of since the date of the Acquisition
Balance Sheet), free and clear of all Liens, except for Liens identified or
described on Schedule 4.12(c), and except for Permitted Liens.
(d) The Real Property is suitable for its present use.
(e) The Personal Property is in good operating condition normal wear
and tear excepted and, together with the intangible assets of the Company,
is sufficient for the operation of the Company's business, in all material
respects, as currently conducted by the Company.
(f) Except for the leases indicated on Schedule 4.12(f), no Person,
other than the Company, owns or primarily utilizes any material equipment
of the Company.
4.13 Accounts Receivable. The accounts receivable reflected on the
Acquisition Balance Sheet and accounts receivable arising after the date of the
Acquisition Balance Sheet and reflected on the books and records of the Company
represent valid obligations arising from sales actually made or services
actually performed. The accounts receivable reflected on the Acquisition Balance
Sheet are stated thereon in accordance with GAAP consistently applied, and which
include allowances for doubtful accounts. To Sellers' Knowledge, such accounts
receivable are subject to no valid contest, claim or right of setoff other than
returns and discounts in the ordinary course of business and all of such
accounts receivable relate solely to sales of goods and services to customers of
the Company, none of whom are Affiliates of the Company. Notwithstanding any
other provision of this Agreement, Sellers make no representation or warranty
with regard to the collectibility of any account or accounts receivable.
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4.14 Inventories. The inventories of raw materials, work-in-process and
finished goods of the Company reflected on the Acquisition Balance Sheet are
stated thereon in accordance with GAAP consistently applied, and which include
reserves for obsolete, slow-moving or below-standard-quality items.
Notwithstanding any other provision of this Agreement, Sellers make no
representation or warranty with regard to the salability of any inventory. The
inventories do not consist of any item held on consignment and the inventories
are owned free and clear of any Liens other than Permitted Liens.
4.15 Intellectual Properties. Schedule 4.15(a) sets forth a complete list
of all issued patents, registered trademarks, service marks, trade names,
copyrights and any applications for any of the foregoing that are owned by, or
are licensed to, the Company and that are used by the Company in the conduct of
its business (collectively, "Intellectual Properties"). The Company has not
received any written notice alleging that the Intellectual Properties infringe
or violate any intellectual properties of any third party. To Sellers'
Knowledge, the Company's Intellectual Property is not being infringed upon or
violated in any material respect by any third party.
4.16 Contracts. Schedule 4.16 lists all of the following written agreements
to which the Company is a party and which are currently in effect:
(i) contracts or group of related contracts, not arising in the
ordinary course of business, which involve commitments to make capital
expenditures or acquisitions or which provide for the purchase of goods
or services by the Company from any one Person under which the
undelivered balance of such goods or services has a purchase price in
excess of $50,000;
(ii) contracts or group of related contracts, not arising in the
ordinary course of business, which provide for the sale of goods or
services by the Company and under which the undelivered balance of such
goods or services has a sale price in excess of $50,000;
(iii) contracts relating to the borrowing of money by the
Company, to the granting by the Company of a Lien on any of its assets,
or any guaranty by the Company of any obligation in respect of borrowed
money or otherwise;
(iv) contracts with dealers, distributors or sales
representatives;
(v) employment, confidentiality and non-competition agreements
with any employee, officer, consultant or management advisor;
(vi) contracts limiting the freedom of the Company to engage in
any business anywhere in the world or compete with any person, or which
require the Company to maintain the confidentiality of information;
(vii) contracts pursuant to which the Company is a lessor or a
lessee of, or holds or operates any tangible personal property owned by
another Person, for which the aggregate annual rent or lease payments
exceed $25,000;
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(viii) contracts pursuant to which the Company is a licensor or
licensee of Intellectual Properties identified on Schedule 4.15(a);
(ix) stock option contracts, warrants and convertible securities
for the purchase or issuance of capital stock of the Company;
(x) contracts restricting the transfer of capital stock of the
Company, obligating the Company to issue or repurchase shares of its
capital stock, or relating to the voting of stock or the election of
directors of the Company;
(xi) contracts or commitments for the purchase or sale of capital
assets in excess of $50,000 individually; and
(xii) material contracts not otherwise described above in this
Section 4.16 with any shareholder, officer or director of the Company,
or any Affiliate of any such Person.
The Company has made available to Buyer correct and complete copies of each
contract identified on Schedule 4.16, including amendments thereto
(collectively, the "Material Contracts"). The Company has performed all
obligations (including payment) required to be performed by it pursuant to such
contracts except where the failure so to perform does not, or, To Sellers'
Knowledge, could not reasonably be expected to result in a Material Adverse
Effect. In addition, no such breach results, or, To Sellers' Knowledge, would be
reasonably be expected to result in payments to cure of $100,000 or more, and,
To Sellers' Knowledge, there is no existing or threatened default under or
violation of any of such contracts by any other party thereto. The Company has
not released any of its material rights under any Material Contracts.
4.17 Litigation. There are no actions, suits at law or in equity,
arbitrations, proceedings or investigations pending or, To Sellers' Knowledge,
threatened in writing against the Company that involve more than $10,000 in
claims or damages individually or that challenge the legality of this Agreement
or the transaction contemplated thereby.
4.18 Product Warranty.
(a) There have been no product warranty claims made against the Company
in the past three (3) years which have had a Material Adverse Effect, and there
are no pending product warranty claims which individually or in the aggregate
would, or, To Sellers' Knowledge, could reasonably be expected to have a
Material Adverse Effect. In addition, any such pending claims would not, or, To
Sellers' Knowledge, could not reasonably be expected to result in payment
involving individually or in the aggregate in excess of $100,000 nor To Sellers'
Knowledge, are any such product warranty claims threatened against the Company.
The Company has no material liability with respect to repair of products sold
prior to Closing.
(b) Except for products destroyed in the field and credits issued for
returned products as set forth in the aggregate on Schedule 4.18(b) and except
for normal replacement of products, each product the Company manufactured, sold,
leased or delivered during the past three (3) years has been in conformity in
all material respects with all applicable contractual commitments, regulatory
requirements and all express and implied warranties. No product of the
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Company manufactured, sold, leased or delivered is subject to any guaranty,
warranty or other indemnity beyond the terms and conditions of sale and lease as
established from time to time by each customer. Schedule 4.18(c) sets forth
copies of examples of typical terms and conditions of sale or lease for the
products of the Company (containing any guaranty, warranty and indemnity
provisions); however, the particular terms and conditions applicable to any one
customer vary.
4.19 Brokerage. No Person is or will become entitled, by reason of any
agreement or arrangement entered into or made by or on behalf of the Company, to
receive any commission, brokerage, finder's fee or other similar compensation in
connection with the consummation of the transactions contemplated by this
Agreement, except for McDonald Investments, Inc., whose fees and expenses will
be paid by Sellers.
4.20 Relations with Material Suppliers and Material Customers. No customer
which accounted for more than ten percent (10%) of sales, and no supplier which
accounted for more than ten percent (10%) of purchases, in the last fiscal year
has delivered to the Company any written notice of the termination of its
relationship with the Company or, To Sellers' Knowledge, indicated its intention
to terminate its relationship with the Company.
4.21 Absence of Unlawful Payments. No customer or supplier has requested
of, or received from, the Sellers or the Company, in exchange for the promise of
conducting, or continuing to conduct, business with the Company, any payment,
favor, or arrangement that violates any Law or policy of the Company or, To
Sellers' Knowledge, of such customer or supplier.
4.22 Scope of Insurance Coverage, Good Standing of Policies and Absence of
Uninsured Claims. Schedule 4.22 contains an accurate and complete list of all
insurance policies owned, held by or applicable to the Company (or its assets or
business), and Sellers have heretofore delivered to Buyer a true and complete
copy of all such policies including all occurrence-based policies applicable to
the Company (or its assets or business) for the one (1) year period prior to the
Closing Date. All such policies are in full force and effect, all premiums that
are due and payable with respect thereto covering the one (1) year period up to
and including the Closing Date have been paid, and no notice of cancellation or
termination has been received with respect to such policies.
4.23 Indebtedness. Schedule 4.23 sets forth a true, correct and complete
list of all Indebtedness outstanding with respect to the Company as of the date
of this Agreement, the amount (estimated if necessary) and the Person to whom
such Indebtedness is owed.
4.24 Disclaimer. Sellers do not make, and have not made, any
representations or warranties relating to Sellers, the Company, or the business
of the Company or otherwise in connection with the transaction contemplated
hereby other than those expressly set forth herein. It is understood that any
cost estimate, projection or other prediction, any data, any financial
information or any memoranda or offering materials or presentations, including,
without limitation, any memoranda and materials provided by any representative
of Sellers (including, without limitation, McDonald Investments, Inc.) are not
and shall not be deemed to be or to include representations or warranties of
Sellers. No Person has been authorized by Sellers to make any representation or
warranty relating to Sellers, the Company, or the business of the
-17-
Company or otherwise in connection with the transaction contemplated hereby and,
if made, such representation or warranty may not be relied upon as having been
authorized by Sellers and shall not be deemed to have been made by Sellers.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to each Seller that the following statements
contained in this Article 5 are true and correct.
5.1 Organization; Authorization. Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has all requisite limited liability company power and authority
to execute, deliver and perform this Agreement and each other agreement,
instrument and document to be executed and delivered by or on behalf of Buyer in
connection herewith.
5.2 Execution and Delivery; Enforceability. This Agreement has been, and
each other document, instrument or agreement to be executed and delivered by
Buyer in connection herewith will upon such delivery be, duly executed and
delivered by Buyer and constitutes, or will upon such delivery constitute, the
legal, valid and binding obligation of Buyer, enforceable in accordance with its
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights or by principles of equity.
5.3 Governmental Authorities; Consents. Except for the applicable
requirements of the HSR Act, Buyer is not required to submit any notice, report
or other filing with any governmental authority in connection with Buyer's
execution, delivery or performance of this Agreement or any other document,
instrument or agreement to be executed and delivered by Buyer in connection
herewith, and such execution, delivery and performance will not violate any Law
by which Buyer is bound. Except for the applicable provisions of the HSR Act, no
consent, approval or authorization of any governmental authority or any other
Person is required to be obtained by Buyer in connection with Buyer's execution,
delivery and performance of this Agreement or any other document, instrument or
agreement to be executed and delivered by Buyer in connection herewith.
5.4 Brokerage. Except for the fees payable to Heartland Industrial
Partners, L.P., no Person is or will become entitled, by reason of any agreement
or arrangement entered into or made by or on behalf of Buyer, to receive any
commission, brokerage, finder's fee or other similar compensation in connection
with the consummation of the transactions contemplated by this Agreement.
5.5 Investment Intent; Restricted Securities. Buyer is acquiring the Shares
solely for Buyer's own account, for investment purposes only, and not with a
view to, or with any present intention of, reselling or otherwise distributing
the Shares or dividing its participation herein with others. Buyer understands
and acknowledges that (a) none of the Shares have been registered or qualified
under the 1933 Act, or under any securities Laws of any state of the United
States or other jurisdiction, in reliance upon specific exemptions thereunder
for transactions not involving
-18-
any public offering; (b) all of the Shares constitute "restricted securities" as
defined in Rule 144 under the 1933 Act; (c) none of the Shares are traded or
tradable on any securities exchange or over-the-counter; and (d) none of the
Shares may be sold, transferred or otherwise disposed of unless a registration
statement under the 1933 Act with respect to such Shares and qualification in
accordance with any applicable state securities Laws becomes effective or unless
such registration and qualification is inapplicable, or an exemption therefrom
is available. Buyer will refrain from transferring or otherwise disposing of any
of the Shares acquired hereunder or any interest therein in any manner that may
cause any Seller to be in violation of the 1933 Act or any applicable state
securities Laws.
5.6 Financing. Buyer has sufficient available sources of funds to permit
Buyer to consummate the transactions contemplated by this Agreement.
5.7 No Known Inaccuracies or Breaches. To Buyer's Knowledge, as of the date
of this Agreement, there are no existing facts or circumstances that constitute
an inaccuracy in, or breach of, any representation and warranty of Sellers
contained in this Agreement that, based solely on the extent of Buyer's
Knowledge as of the date of this Agreement, is or would have been sufficient or
could reasonably be expected to be sufficient to serve as the basis for a valid
claim for indemnity by Buyer against Sellers pursuant to Section 9.1 of the
Agreement.
ARTICLE 6
CLOSING DELIVERIES
6.1 Sellers' Closing Deliveries. At the Closing, the Sellers or Sellers'
Representative shall deliver to Buyer, or Buyer shall have received, the
following:
(i) evidence of the termination of the Lincap Management
Agreement;
(ii) evidence that all Stock Options have been terminated, that
payments due in settlement thereof have been made out of the Purchase
Price paid at Closing, and that all Company stock option plans have
been terminated, in each case without any post-Closing cost or
liability to the Company, Buyer or its Affiliates;
(iii) all certificates for Shares, duly endorsed for transfer or
accompanied by a duly executed stock power or other appropriate
instrument of assignment and transfer reasonably satisfactory to Buyer;
(iv) written resignations, effective as of the Closing, of each
director of the Company;
(v) evidence that all transaction bonuses enumerated on Schedule
2.2(b) have been paid out of the Purchase Price paid at Closing;
(vi) evidence that the Company has redeemed, repurchased, retired
or otherwise repaid all Indebtedness outstanding as of the Closing
Date, and obtained payoff letters provided by the lenders or other
holders of Indebtedness to the Company in connection with the repayment
of all Indebtedness outstanding as
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of the Closing Date and any necessary UCC termination statements or
other releases as may be required to evidence satisfaction of the
Indebtedness.
(vii) the Certificate of Incorporation and Code of Regulations of
the Company certified as of the most recent practicable date by the
Secretary of the State of Ohio;
(viii) a certificate of the Secretary of the State of Ohio as to
the good standing of the Company as of the most recent practicable date
of the Company;
(ix) original corporate record books and stock record books of
the Company;
(x) unaudited monthly financial statements of the Company for
January, 2003;
(xi) an employment agreement substantially in the form set forth
in Exhibit A entered into between the Company and Executive; and
(xii) Buyer shall have received each other document required to
be delivered to Buyer pursuant to this Agreement.
Any agreement or document to be delivered to Buyer pursuant to this Section 6.1,
the form of which is not attached to this Agreement as an Exhibit, shall be in
form and substance reasonably satisfactory to Buyer.
6.2 Buyer's Closing Deliveries. At the Closing, the Buyer shall deliver to
the Sellers' Representative the following:
(i) The Purchase Price in accordance with Section 2.4;
(ii) a certificate of the Secretary of the State of Delaware as
to the good standing of the Buyer as of the most recent practicable
date; and
(iii) each other document required to be delivered to Sellers
pursuant to this Agreement.
ARTICLE 7
THE CLOSING
The consummation of the transactions contemplated by this Agreement (the
"Closing") shall take place simultaneously with the execution of this Agreement
(the "Closing Date") at the offices of Xxxxxx, Halter & Xxxxxxxx LLP, 1400
XxXxxxxx Investment Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000, or at
such other place as to which Buyer and Sellers' Representative may agree in
writing. The transfers and deliveries described in Article 6 shall be mutually
interdependent and shall be regarded as occurring simultaneously, and, any other
provision of this Agreement notwithstanding, no such transfer or delivery shall
become effective or shall be deemed to have occurred until all of the other
transfers and deliveries provided for in
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Article 6 shall also have occurred or been waived in writing by the party
entitled to waive the same, it being understood that Sellers' Representative
shall have the authority to waive on behalf of Sellers or any Seller any
delivery required at or before the Closing by Buyer hereunder. Such transfers
and deliveries shall be deemed to have occurred and the Closing shall be
effective as of the close of business on the Closing Date.
ARTICLE 8
ADDITIONAL COVENANTS AND AGREEMENTS
8.1 Covenants.
8.1.1 Publicity. Any disclosures or announcements relating to this
Agreement or the transactions contemplated hereby will be made only as may be
agreed upon by Sellers' Representative and Buyer, or as may be required by Law
or by any governmental authority or regulatory authority.
8.1.2 Expenses. Buyer shall pay all fees and expenses incident to the
transactions contemplated by this Agreement which are incurred by Buyer or its
representatives or are otherwise expressly allocated to Buyer hereunder, and
Sellers shall pay all fees and expenses incident to the transactions
contemplated by this Agreement which are incurred by Sellers or the Company or
their representatives or are otherwise expressly allocated to Sellers or the
Company hereunder. No such expenses shall be accrued on the books of the Company
as of the Closing.
8.1.3 No Assignments. No assignment of any part of this Agreement or any
right or obligation hereunder may be made by any party hereto without the prior
written consent of all other parties hereto, and any attempted assignment
without such consent shall be void and of no force or effect; provided, however,
that nothing shall prevent Buyer from assigning its right to purchase the Shares
to one or more of its wholly owned subsidiaries, but without relieving Buyer
from its obligations hereunder. .
8.1.4 Access by Sellers. Buyer shall, for a period of five (5) years after
the Closing Date, during normal business hours, provide Sellers' Representative
and its designees with such access to the books and records of the Company and
to the Real Property of the Company as may reasonably be requested by Sellers'
Representative, who shall be entitled, at its expense, to make inspections of
the Real Property and extracts and copies of the books and records of the
Company, to permit Sellers' Representative to take all necessary or desirable
action required (i) in connection with any matters pertaining to Taxes
(including, without limitation, the preparation and filing of any Tax Return)
with respect to Sellers and (ii) to achieve the Act 2 release. Buyer agrees that
it shall not, during such 5-year period, destroy or cause or permit to be
destroyed any material books or records pertaining to Taxes or the Act 2 release
without first obtaining the consent of Sellers' Representative (or providing to
Sellers' Representative notice of such intent and a reasonable opportunity to
copy such books or records at least thirty (30) days prior to such destruction).
8.1.5 Continuation of Indemnification. Buyer agrees that after the Closing,
Buyer shall, or shall cause the Company to continue to, indemnify and hold
harmless each of the
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Company's present and former directors, officers, employees and agents, in their
capacities as such, from and against all damages, costs and expenses actually
incurred or suffered in connection with any threatened or pending action, suit
or proceeding at law or in equity by any Person or any arbitration or
administrative or other proceeding relating to the business of the Company or
the status of such individual as a director, officer, employee or agent prior to
the Closing, to the fullest extent permitted by any applicable Law. Buyer shall
retain or include in the Articles or Certificate of Incorporation and By-Laws or
Code of Regulations of the Company any indemnification provision or provisions,
including provisions respecting the advancement of expenses, in effect on the
Closing Date for the benefit of the Company's officers, directors, employees and
agents, and shall not thereafter amend the same (except to the extent that such
amendment preserves, increases or broadens the indemnification or other rights
theretofore available to such officers, directors employees and agents) provided
that such indemnification shall be subject to any limitation imposed from time
to time under applicable Law. Buyer shall cause the persons serving as officers
and directors of the Company immediately prior to the Closing to be covered for
a period of three (3) years from the Closing Date by the directors' and
officers' liability insurance policy or extended discovery insurance maintained
by the Company (provided that Buyer or the Company may substitute therefor
policies of at least the same coverage and amounts and which contain terms and
conditions that are, when taken as a whole, not less advantageous in any
material respect to such directors and officers of the Company than the terms
and conditions of such existing policy) with respect to acts or omissions
occurring prior to the Closing Date which were committed by such officers and
directors in their capacity as such; provided, however, that the Company shall
not be obligated to make annual premium payments for such insurance to the
extent such premiums exceed 200% of the annual premiums paid as of the date
hereof by the Company for such insurance (the "Current Premium"). If such
premium for such insurance would at any time exceed 200% of the Current Premium,
then the Company shall cause to be maintained policies of insurance which, in
the Company's good faith determination, provide the maximum dollar loss coverage
available at an annual premium equal to 200% of the Current Premium. If the
Company merges into, consolidates with or transfers all or substantially all of
its assets to another Person, then and in each such case, Buyer shall make and
shall cause the Company to make proper provision so that the surviving or
resulting corporation or the transferee in such transaction shall assume the
obligations of Buyer and the Company under this Section 8.1.5. This Section
8.1.5 shall survive the Closing and continue for a period of six (6) years
(except that the foregoing provision regarding Directors and Officers Liability
Insurance shall apply for the three-year period applicable thereto) and is
intended to benefit each director, officer, agent or employee who held such
capacity immediately prior to the Closing and is either a party to an
indemnification agreement with the Company or now or hereafter is entitled to
indemnification or advancement of expenses pursuant to any provisions contained
in the Articles or Certificate of Incorporation or By-Laws or Code of
Regulations as of the date hereof.
8.1.6 Sellers' Representative. Sellers hereby designate the Sellers'
Representative to execute any and all instruments or other documents on behalf
of Sellers, and to do any and all other acts or things on behalf of Sellers,
which the Sellers' Representative may deem necessary or advisable, or which may
be required pursuant to this Agreement or otherwise, in connection with the
consummation of the transactions contemplated hereby and the performance of all
obligations hereunder at or following the Closing. Without limiting the
generality of the foregoing, Sellers' Representative shall have the full and
exclusive authority to
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(i) agree with Buyer with respect to any matter or thing required or deemed
necessary by Sellers' Representative in connection with the provisions of this
Agreement calling for the agreement of Sellers, give and receive notices on
behalf of all Sellers, and act on behalf of Sellers in connection with any
matter as to which Sellers are or may be obligated under this Agreement, all in
the absolute discretion of Sellers' Representative, (ii) in general, do all
things and perform all acts, including without limitation executing and
delivering all agreements, certificates, receipts, consents, elections,
instructions, and other instruments or documents contemplated by, or deemed by
Sellers' Representative to be necessary or advisable in connection with, this
Agreement, and (iii) take all actions necessary or desirable in connection with
the defense and/or settlement of any indemnification claims pursuant to Article
9 and performance of obligations under Article 2, including to withhold funds
for satisfaction of post-Closing liabilities. Sellers shall cooperate with
Sellers' Representative and any accountants, attorneys or other agents whom it
may retain to assist in carrying out its duties hereunder. All decisions by
Sellers' Representative shall be binding upon all Sellers, and no Seller shall
have the right to object, dissent, protest or otherwise contest the same.
Sellers' Representative may communicate with any Seller or any other Person
concerning his responsibilities hereunder, but it is not required to do so.
Sellers' Representative has a duty to serve in good faith the interests of
Sellers and to perform its designated role under this Agreement, but Sellers'
Representative shall have no financial liability whatsoever to any Person
relating to its service hereunder (including any action taken or omitted to be
taken), except that it shall be liable for harm which it directly causes by an
act of willful misconduct. Sellers shall indemnify and hold harmless Sellers'
Representative against any loss, expense (including reasonable attorney's fees)
or other liability arising out of its service as Sellers' Representative under
this Agreement, other than for harm directly caused by an act of willful
misconduct. Sellers' Representative may resign at any time by notifying in
writing Buyer and Sellers.
8.1.7 Section 338 Election. Buyer shall not, and shall not permit the
Company to make an election under Section 338 of the Code (or any corresponding
election under state or local Laws) with respect to the purchase and sale
contemplated hereunder
8.1.8 Return of Tax Benefits; Section 280G Indemnity. In the event that
payment in respect of the Option Spread or the transaction bonuses referred to
in Section 2.2(b), either alone or together with any other payment or benefit
(including, without limitation, accelerated vesting or payments of any benefits)
results in "excess parachute payments" (as defined in Section 280G of the Code),
then, to the extent thereof, (i) Buyer shall not be obligated to make any
payment in respect of the Tax Benefits, (ii) Sellers shall promptly return to
Buyer any Tax Benefit payment made to Sellers by Buyer, and (iii) Seller shall
indemnify, defend and hold harmless Buyer from any Loss resulting from or
arising out of the "excess parachute payments," including, without limitation,
any gross-up obligation.
8.1.9 Tax Matters.
(a) Except to the extent provided in Sections 2.5.4 and 2.5.6(b) each
of the Sellers agrees to indemnify the Buyer from and against Losses the
Buyer may suffer resulting from, arising out of, relating to, in the nature
of or caused by any liability of the Company for (x) Taxes of the Company,
its predecessors or former subsidiaries with respect to any Tax year or
portion thereof ending on or before the Closing Date and (y)
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the unpaid Taxes of any Person (other than the Company its predecessors or
former subsidiaries) under Treasury Reg. Section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract or otherwise. Notwithstanding anything to the contrary set forth
herein, the Sellers' obligation to indemnify Buyer from and against Losses
as set forth this Section 8.1.9(a) shall be subject to the limitations set
forth in Section 9.2 of this Agreement.
(b) Buyer, the Company and Sellers shall cooperate fully, as and to the
extent reasonably requested by the other party, in connection with the
filing of Tax Returns pursuant to this section and any audit, litigation or
other proceeding with respect to Taxes. Such cooperation shall include the
retention and (upon the other party's request) the provision of records and
information (including historical Tax Returns) which are reasonably
relevant to any such filing of Tax Returns, audit, litigation or other
proceeding and the Buyer shall cause the Company to make its employees
reasonably available to provide additional information and explanation of
any material provided hereunder. The Company and Sellers agree (A) to
retain all books and records with respect to Tax matters pertinent to the
Company relating to any taxable period beginning before the Closing Date
until the expiration of the statute of limitations (and, to the extent
notified by Buyer or Sellers, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered
into with any taxing authority, and (B) to give the other party reasonable
written notice prior to transferring, destroying or discarding any such
books and records and, if the other party so requests, the Company or
Sellers, as the case may be, shall allow the other party to take possession
of such books and records. The parties agree that the obligations of
Sellers pursuant to the preceding sentence shall not apply to each Seller's
personal Tax records. Buyer and Sellers further agree, upon request, to use
their best efforts to obtain any certificate or other document from any
governmental authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including, but not
limited to, with respect to the transactions contemplated hereby).
(c) All transfer, documentary, sales, use, stamp, registration and
other such Taxes and fees (including any penalties and interest) incurred
in connection this Agreement shall be paid by Sellers when due, and Sellers
will, at their own expense, file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use,
stamp, registration and other Taxes and fees, and , if required by
applicable law, Buyer will, and will cause its affiliates to, join in the
execution of any such Tax Returns or other documentation.
8.1.10 Assistance. Upon the reasonable request of Buyer, Sellers'
Representative shall, and shall use its reasonable efforts to cause the
Company's historical auditors to, during normal business hours, assist Buyer, at
Buyer's sole expense, in the preparation of any historical financial statements
of the Company which the Buyer may be required to file by applicable Law or as
Buyer may otherwise reasonably require.
8.1.11 Repayment of Cash. If there are any cash or cash equivalents at
the Company (or held on behalf of the Company) as of the Closing Date which have
not otherwise been transferred or credited to the Sellers, including any amounts
remaining in any lockbox
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accounts of the Company as of the Closing Date, then Buyer shall pay over such
amounts to Sellers' Account within five (5) business days of the Buyer's
discovery thereof (solely to the extent such amounts do not constitute cash
proceeds from accounts included in the current assets in the calculation of
Closing Working Capital.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification of Buyer. From and after the Closing, and subject to
Sections 9.2 and 9.5, each Seller shall, severally and not jointly, indemnify
Buyer and its Affiliates, officers, directors, employees and agents
(collectively, the "Buyer Indemnitees"), against and hold the Buyer Indemnitees
harmless from:
(a) any Losses based upon, arising out of or caused by any inaccuracy
in, or breach of, any of the representations and warranties made by such
Seller in Article 3 or by Sellers in Article 4;
(b) any Losses based upon, arising out of or caused by any breach or
nonperformance of any covenant or obligation made or incurred by Sellers or
Sellers' Representative herein; and
(c) (i) any Losses based upon, arising out of or caused by any
Indebtedness of the Company incurred prior to Closing and not paid off at
or prior to Closing, and (ii) prior to the date on which the Commonwealth
of Pennsylvania issues the Act 2 release (the "Statutory Release Date"),
any Losses based upon, arising out of or caused by the issues disclosed in
the Risk Assessment Report dated December 20, 2002 (the "Risk Assessment
Report") with respect to the Sheffield, PA facility.
Notwithstanding the foregoing, each Seller is responsible for only those Losses
under the preceding clause (a) based upon, arising out of or caused by any
inaccuracy in, or breach of, representations and warranties made by that Seller
in Article 3 and no Seller shall be obligated to indemnify Buyer Indemnitees for
Losses under the preceding clause (a) based upon, arising out of or caused by
any inaccuracy in, or breach of, any representation or warranty made by any
other Seller in Article 3. Any several indemnification responsibilities shall be
construed as being several to the extent of the relative economic ownership of
the Shares or Stock Options, as applicable, held by the relevant Seller at the
time of Closing in accordance with Schedule 2.6. Any Loss created by any act or
omission by Sellers' Representative hereunder shall be deemed to be a Loss that
is the several responsibility of the respective Sellers for purposes of this
Section 9.1. Sellers do not make and shall not be deemed to have made, nor is
Buyer relying upon, any representation, warranty or covenant other than those
representations, warranties and covenants that are expressly set forth in this
Agreement.
9.2 Limitations on Indemnification of Buyer Indemnitees. Notwithstanding
any other provisions of this Agreement, the indemnification of Buyer Indemnitees
provided for in this Agreement shall be subject to the limitations and
conditions set forth in this Section 9.2.
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(a) Except as set forth below, any claim by a Buyer Indemnitee for
indemnification pursuant to clause (a) of Section 9.1 of this Agreement
shall be required to be made by delivering notice to Sellers'
Representative no later than the expiration of eighteen (18) months after
the Closing Date. Notwithstanding the foregoing, (i) any claim for
indemnification based upon, resulting from or arising out of any inaccuracy
in or breach of any representation or warranty made by any Seller in
Article 3 or Section 4.2 [Capital Stock] or 4.4 [Noncontravention] may be
made at any time; and (ii) any claim for indemnification based upon,
resulting from or arising out of any inaccuracy in or breach of any
representation or warranty contained in Section 4.7 [Taxes] may be made
until the expiration of the applicable statute of limitations; and (iii)
any claim for indemnification based upon, resulting from or arising out of
any inaccuracy in or breach of any representation or warranty contained in
Section 4.6(H) or 4.9 [Employee Plans and Other Compensation Arrangements]
may be made for five (5) years after the Closing. In addition, any claim by
a Buyer Indemnitee for indemnification pursuant to clause (b) of Section
9.1 of this Agreement shall be required to be made by delivering notice to
Sellers' Representative no later than the expiration of eighteen (18)
months after Buyer or senior officers of the Company become aware of any
breach or nonperformance of any covenant or obligation made or incurred by
Sellers or Sellers' Representative. Notwithstanding anything in this
Section 9.2 to the contrary, the foregoing time limitations shall not
preclude a Buyer Indemnitee from providing notice of a potential claim
within the applicable time limitation before any Loss has been suffered if
the facts or circumstances giving rise to the potential Loss have been
identified with reasonable specificity in the notice and the notice shall
not be deficient by reason of the foregoing.
(b) Except for (i) claims for indemnification in respect of breaches of
representations and warranties contained in Article 3 or Section 4.2
[Capital Stock], 4.4 [Noncontravention] or 4.19 [Brokerage], or the
covenants and agreements contained in Article 2 or any other covenants or
agreements providing for the responsibility of the parties to pay any
specific amounts (except for the Sellers' obligation to indemnify Buyer for
Losses pursuant Section 8.1.9 which shall be subject to the limitations set
forth in this Section 9.2(b)); or (ii) claims for indemnification under
clause (c) of Section 9.1, Buyer Indemnitees shall not be entitled to
indemnification under clause (a) or (b) of Section 9.1 until the aggregate
amount of all of Buyer Indemnitees' claims for indemnification exceeds an
amount equal to $250,000 (the "Indemnification Threshold") and thereafter
Buyer Indemnitees shall be entitled to indemnification only for amounts in
excess of the Indemnification Threshold.
(c) Except for (i) claims for indemnification in respect of breaches of
representations and warranties contained in Article 3 or Section 4.2
[Capital Stock], 4.4 [Noncontravention] or 4.19 [Brokerage], or breaches of
the covenants and agreements contained in Article 2 or willful breaches of
any other covenants or agreements providing for the responsibility of the
parties to pay specific amounts (except for Sellers' obligation to
indemnify Buyer for Losses pursuant to Section 8.1.9 which shall be subject
to the limitations set forth in this Section 9.2(c)); or (ii) for claims
for indemnification under clause (c) of Section 9.1, the maximum
indemnification amount to which Buyer Indemnitees may be entitled under
clause (a) or (b) of Section 9.1 shall be an amount equal to five percent
(5%) of the Enterprise Value (the "Aggregate Indemnification
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Limit"); provided, however, that (i) the maximum amount which Buyer
Indemnitees may recover from any individual Seller with respect to any
particular claim shall be limited to an amount equal to such Seller's pro
rata share of such claim determined in accordance with the allocations set
forth on Schedule 2.6 hereto, and (ii) the maximum amount which Buyer may
recover from any individual Seller with respect to all claims asserted
hereunder (in the aggregate) shall be limited to Seller's pro rata share of
the Aggregate Indemnification Limit, determined in accordance with the
allocations set forth on Schedule 2.6.
(d) For purposes of this Agreement, Buyer shall not be entitled to
"double recovery" with respect to any claim for indemnification. Buyer
shall make the Company's books and records relating to such claims
available to Sellers' Representative and make the Company's employees
available for interviews and similar matters to assist Sellers'
Representative with respect to such claims.
(e) All claims for indemnification shall be limited to actual and
incidental damages, liabilities, losses and expenses (including reasonable
attorneys' and accounting fees) incurred without reference to any valuation
methodology used by Buyer Indemnitees or Sellers. In the event that a Buyer
Indemnitee makes a claim for indemnification which is determined by a court
of competent jurisdiction to be without reasonable basis in law or fact,
Buyer Indemnitee shall bear all reasonable costs and expenses (including
court costs and reasonable attorneys' and accounting fees), incurred by
Sellers in investigating and defending against such claim.
(f) Notwithstanding anything herein to the contrary, Buyer Indemnitees
shall not be entitled to indemnification for any Loss relating to a breach
of Section 4.10 (other than any Loss indemnified pursuant to Section
9.1(c)(ii) hereof or a willful or intentional misrepresentation or omission
made To Sellers' Knowledge); it being understood that the Company shall
look solely to the Pollution and Remediation Legal Liability Policy
described on Schedule 4.22 for such matters.
9.3 Indemnification of Sellers. From and after the Closing Date and subject
to Sections 9.4 and 9.5, Buyer shall indemnify Sellers against and hold Sellers
harmless from:
(a) any Losses based upon, arising out of or caused by any inaccuracy
in or breach of any of the representations and warranties made by Buyer in
Article 5; and
(b) any Losses based upon, arising out of or caused by any breach or
nonperformance of any covenant or obligation made or incurred by Buyer
herein.
Buyer does not make and shall not be deemed to have made, nor is any Seller
relying upon, any representation, warranty or covenant other than those
representations, warranties and covenants which are expressly set forth in this
Agreement.
9.4 Limitations on Indemnification of Sellers. Notwithstanding any other
provisions of this Agreement, the indemnification of Sellers provided for in
this Agreement shall be subject to the limitations and conditions set forth in
this Section 9.4.
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(a) Except as set forth below, any claim by Sellers for indemnification
pursuant to this Agreement shall be required to be made by delivering
notice to Buyer no later than the expiration of eighteen (18) months after
the Closing Date. Notwithstanding the foregoing, any claim for
indemnification resulting from or arising out of any inaccuracy in or
breach of any representation or warranty made by any Buyer in Sections 5.2
[Execution and Delivery; Enforceability], 5.3 [Governmental Authorities;
Consents] or 5.5 [Investment Intent; Restricted Securities] may be made at
any time.
(b) Except for claims for indemnification in respect of breaches of
representations and warranties contained in Sections 5.2 [Execution and
Delivery; Enforceability], 5.3 [Governmental Authorities], 5.4 [Brokerage]
or 5.5 [Investment Intent; Restricted Securities], or the covenants and
agreements contained in Article 2 or otherwise to be performed hereunder,
Sellers shall be entitled to indemnification only to the extent that the
aggregate amount of all of Sellers' claims for indemnification exceeds an
amount equal to the Indemnification Threshold.
(c) Except for claims for indemnification in respect of breaches of
representations and warranties contained in Sections 5.2 [Execution and
Delivery; Enforceability], 5.3 [Governmental Authorities], 5.4 [Brokerage]
or 5.5 [Investment Intent; Restricted Securities], or the covenants and
agreements contained in Article 2 or otherwise to be performed hereunder,
the maximum indemnification amount to which Sellers may be entitled shall
be an amount equal to the Aggregate Indemnification Limit.
(d) In the event that Sellers make a claim for indemnification which is
determined by a court of competent jurisdiction to be without reasonable
basis in law or fact, Sellers shall bear all reasonable costs and expenses
(including court costs and reasonable attorneys' and accounting fees),
incurred by Buyer in investigating and defending against such claim.
9.5 Procedures Relating to Indemnification.
(a) Third-Party Claims. In order for a party (the "indemnitee") to be
entitled to any indemnification provided for under this Agreement in respect of,
arising out of, or involving a claim or demand made by any Person against the
indemnitee (a "Third-Party Claim"), such indemnitee must notify the party from
whom indemnification hereunder is sought (the "indemnitor") in writing of the
Third-Party Claim, within thirty (30) days after such claim or demand is first
asserted or the indemnitee receives notice that such claim or demand is
reasonably likely to be asserted. Such notice shall state in reasonable detail
(to the extent known) the stated amount or stated estimated amount of such
claim, and shall identify the specific basis (or bases) for such claim,
including the representations, warranties or covenants alleged to have been
breached. Failure to give such notification shall not affect the indemnification
provided hereunder except to the extent the indemnitor shall have been actually
prejudiced as a result of such failure (except that the indemnitor shall not be
liable for any expenses incurred during the period in which the indemnitee
failed to give such notice on a timely basis). Thereafter, the indemnitee shall
deliver to the indemnitor without undue delay copies of all notices and
documents (including court papers received by the indemnitee) relating to the
Third-Party Claim.
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If a Third-Party Claim is made against an indemnitee, the indemnitor
shall be entitled to participate, at its expense, in the defense thereof.
Notwithstanding the foregoing, if the indemnitor irrevocably and unconditionally
admits to the indemnitee in writing its obligation to indemnify the indemnitee
therefor, the indemnitor may elect to assume and control the defense thereof
with counsel selected by the indemnitor and reasonably satisfactory to the
indemnitee. If the indemnitor assumes such defense, the indemnitee shall have
the right to participate in the defense thereof and to employ counsel, at its
own expense, separate from the counsel employed by the indemnitor, it being
understood that the indemnitor shall control such defense.
If the indemnitor so assumes the defense of any Third-Party Claim, all
of the indemnified parties shall cooperate with the indemnitor in the defense or
prosecution thereof. Such cooperation shall include, at the expense of the
indemnitor, the retention and (upon the indemnitor's request) the provision to
the indemnitor of records and information which are reasonably relevant to such
Third-Party Claim, and making employees available on a mutually convenient basis
to provide additional information and explanation of any material provided
hereunder. If the indemnitor shall have assumed the defense of a Third-Party
Claim, the indemnitee shall not admit any liability with respect to, or settle,
compromise or discharge, such Third-Party Claim without the indemnitor's prior
written consent (which consent shall not be unreasonably withheld). If the
indemnitor shall have assumed the defense of a Third-Party Claim, (i) the
indemnitee shall agree to any settlement, compromise or discharge of a
Third-Party Claim which the indemnitor may recommend and which by its terms
obligates the indemnitor to pay the full amount of the liability in connection
with such Third-Party Claim, and releases the indemnitee completely from any
liability in connection with such Third-Party Claim, provided there is no direct
financial impact on the indemnitee or its affiliates therefrom following such
agreement and (ii) the indemnitor shall not, without the written consent of the
indemnitee, enter into any settlement, compromise or discharge or consent to the
entry of any judgment which imposes any obligation or restriction upon the
indemnitee of an injunctive or other equitable nature.
(b) Other Claims. In the event any indemnitee should have a claim
against any indemnitor under this Article 9 that does not involve a Third-Party
Claim, the indemnitee shall deliver notice of such claim to the indemnitor
reasonably promptly following discovery of any indemnifiable liability, loss,
damage or expense, or of facts or circumstances reasonably likely to result in
any such indemnifiable item, but in any event not later than the last date set
forth in Section 9.2 or 9.4, as the case may be, for making such claim, but
subject to the terms of such Sections. Such notice shall state in reasonable
detail (to the extent known) the amount or an estimated amount of such claim,
and shall specify the material facts and circumstances which form the basis (or
bases) for such claim, and shall further specify the representations, warranties
or covenants alleged to have been breached. The absence of all facts and
additional potential bases for a claim at the time notice is given shall not
preclude pursuit of a claim on such additional bases. Upon receipt of any such
notice, the indemnitor shall notify the indemnitee as to whether the indemnitor
accepts liability for any such liability, loss, damage or expense. If the
indemnitor disputes its liability with respect to such claim, as provided above,
the indemnitor and the indemnitee shall attempt to resolve such dispute in
accordance with the terms and provisions of Section 11.4.
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9.6 Limitation of Remedies. Each party acknowledges and agrees that, should
the Closing occur, the sole and exclusive remedy with respect to any and all
claims relating to this Agreement or the transactions contemplated hereby (other
than claims of, or causes of action arising from, fraud) shall be pursuant to
the indemnification provisions set forth in this Article 9. In furtherance of
the foregoing, Buyer and each Seller hereby waives on behalf of himself and all
other Persons who might claim by, through or under him, from and after the
Closing, any and all rights, claims and causes of action (other than claims of,
or causes of action arising from, fraud) which he or any such other Person may
have against Sellers, a Seller, or Buyer, as the case may be, arising under or
based upon any federal, state, local or foreign statute, law, ordinance, rule or
regulation or otherwise (except pursuant to the indemnification provisions set
forth in this Article 9).
ARTICLE 10
CERTAIN DEFINITIONS
When used in this Agreement, the following terms in all of their tenses,
cases and correlative forms shall have the meanings assigned to them in this
Article 10, or elsewhere in this Agreement as indicated in this Article 10:
"1933 Act" means the Securities Act of 1933, as amended, and the
regulations thereunder.
"Acquisition Balance Sheet" is defined in Section 4.5.
An "Affiliate" of a specified Person means any other Person which, directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with such specified Person. For purposes of this
definition, "control" of any Person means possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting capital stock, by contract,
or otherwise.
"Aggregate Indemnification Limit" is defined in Section 9.2(c).
"Agreement" means this Stock Purchase Agreement.
"Audited Financial Statements" is defined in Section 4.5.
"Buyer" means TriMas Company LLC, a Delaware limited liability company.
"Closing" and "Closing Date" is defined in Article 7.
"Closing Working Capital" is defined in Section 2.3.2.
"Code" means the United States Internal Revenue Code of 1986, as amended,
and the regulations thereunder.
"Company" means Highland Group Corporation, an Ohio corporation.
"Current Premium" is defined in Section 8.1.5.
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"Enterprise Value" is defined in Section 2.2(a).
"Environmental Laws" is defined in Section 4.10(a).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations thereunder.
"Executive" means Xxxxx Xxxxxxx.
"Final Closing Balance Sheet" is defined in Section 2.5.4.
"Final Post-Closing Adjustment" is defined in Section 2.5.4.
"GAAP" means generally accepted accounting principles, as in effect in the
United States either from time to time as applied to pre-Closing periods or as
applied on the Closing Date, as appropriate, under the circumstances, and in
either case, applied on a basis consistent with the Company's past practices.
"Hazardous Material" is defined in Section 4.10(a).
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the regulations thereunder.
"Indebtedness" of any Person means, without duplication (a) all obligations
of such Person for borrowed money or with respect to advances of any kind, (b)
all obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest charges are
customarily paid, (d) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g)
all guarantees by such Person of Indebtedness of others, (h) all capital lease
obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty, and (j) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances.
"Indemnification Threshold" is defined in Section 9.2(b).
"indemnitee" and "indemnitor" are defined in Section 9.5(a).
"Independent Accountants" is defined in Section 2.5.3.
"Intellectual Properties" is defined in Section 4.15.
"Law" means any common law and any federal, state, regional, local or
foreign law, statute, ordinance, code, rule, regulation or order.
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"Leased Real Property" is defined in Section 4.12(a).
"Leases" is defined in Section 4.12(a).
"Lien" means any lien, charge, mortgage, pledge, easement, encumbrance,
security interest, adverse claim, or any other title defect or restriction of
any kind.
"Lincap Management Agreement" means that certain Management Agreement,
dated January 9, 1998, by and between Highland Group Corporation and Xxxxxxxxx
Capital Partners Fund II, L.P.
"Loss" or "Losses" means any and all losses, liabilities, damages, costs,
penalties, actions, notices of violation, and notices of liability and against
any claims in respect thereof (including, without limitation, amounts paid in
settlement and reasonable costs of investigation and legal expenses) net of any
insurance proceeds and tax benefits in respect thereof.
"Material Adverse Effect" means a material adverse effect on the business,
condition, financial (or otherwise), assets, liabilities, or results of
operations of the Company, but does not include any effect attributable to the
economy generally or matters affecting the Company's industry as a whole.
"Material Contracts" is defined in Section 4.16.
"Option Holders" means the Sellers identified as such on Schedule 4.2.
"Option Spread" means the amount by which (i) the aggregate value of all
Shares issued or issuable upon the exercise in full of all of the Stock Options
(as determined on the basis of the value of Share of the Company pursuant to
this Agreement), exceeds (ii) the aggregate exercise price payable to the
Company upon the exercise in full of all of the Stock Options, as calculated as
of the Closing on Schedule 2.6 hereof.
"Owned Real Property" is defined in Section 4.12(a).
"Permits" is defined in Section 4.11.
"Permitted Liens" means (i) mechanics', carriers', workmen's, repairmen's
or other like Liens arising or incurred in the ordinary course of business, (ii)
Liens arising under original purchase price conditional sales contracts and
equipment leases with third parties entered into in the ordinary course of
business and under which the Company is not in default, (iii) Liens for current
Taxes not yet due and payable, (iv) imperfections of title or encumbrances, if
any, that do not, individually or in the aggregate, To Sellers' Knowledge,
currently or may reasonably be expected to, materially impair the continued use
and operation of any asset to which they relate in the conduct of the business
of the Company as presently conducted, (v) leases, subleases and similar
agreements set forth on Schedule 4.12(a) or Schedule 4.16, (vi) easements,
covenants, rights-of-way and other similar restrictions of record, (vii) any
conditions that may be shown by a current, accurate survey or physical
inspection of any Real Property made prior to Closing, and (viii) (A) zoning,
building and other similar restrictions imposed by applicable Laws, (B) Liens
that have been placed by any developer, landlord or other third party on
property over which the
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Company has easement rights or, on any Leased Real Property, under any lease of
which the Company is in default, and subordination or similar agreements
relating thereto, and (C) unrecorded easements, covenants, rights-of-way and
other similar restrictions on the Real Property none of which, individually or
in the aggregate, To Sellers' Knowledge, currently or may reasonably be expected
to, materially impair the continued use and operation of such Real Property.
"Person" means an individual, a corporation, a limited liability company, a
partnership, a trust, an unincorporated association, a government or any agency,
instrumentality or political subdivision of a government, or any other entity or
organization.
"Plans" is defined in Section 4.9.
"Pre-Closing Taxes" is defined in Section 2.5.4.
"Preliminary Closing Balance Sheet" is defined in Section 2.5.1.
"Preliminary Post-Closing Adjustment" is defined in Section 2.5.1.
"Purchase Price" is defined in Section 2.2.
"Real Property" is defined in Section 4.12(a).
"Release" shall have the meaning assigned to such term at 42 U.S.C. Section
9601(22) without giving effect to exception (A) therein. .
"Risk Assessment Report" is defined in Section 9.1(c).
"Sellers' Disclosure Schedule" means the disclosure schedules annexed
hereto and made a part hereof.
"Seller's Respective Securities" is defined in Section 2.1.
"Seller" means each Person identified on Schedule 4.2(a) as an owner of
Shares. "Sellers" means all of such Persons.
"Sellers' Account" is defined in Section 2.4.
"Sellers' Representative" means FNL Management Corp., an Ohio corporation.
"Shares" means any and all of the issued and outstanding common stock of
the Company, without par value.
"Shareholders' Agreement" means that certain agreement among the Company
and its Shareholders, dated as of December 31, 1997.
"Statutory Release Date" is defined in Section 9.1(c).
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"Stock Options" means each of the Stock Option Agreements identified on
Schedule 4.2, and all rights of the respective optionees thereunder.
"Taxes" means (a) any federal, state, local or foreign income, alternative
or add-on minimum tax, gross income, gross receipts (including any single
business tax), sales, use, ad valorem, value added, transfer, franchise,
profits, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, capital stock, social security (or similar), unemployment,
disability, real property, personal property, registration, estimated,
environmental, windfall profit tax, custom, duty or other tax, governmental fee
or other assessment or charge of any kind whatsoever, together with any
interest, penalties, additional to tax or additional amounts, whether disputed
or not, imposed by any governmental authority responsible for the imposition of
any Tax, (b) any liability for the payment of any amounts of any of the
foregoing types as a result of being a member of an affiliated, consolidated,
combined or unitary group, or being a party to any agreement or arrangement
whereby liability for the payment of such amounts was determined or taken into
account with reference to the liability of any other entity, and (c) any
liability for the payment of any amounts as a result of being a party to any Tax
sharing agreements or arrangements (whether written or otherwise) or with
respect to the payment of any amounts of any of the foregoing types as a result
of any express or implied obligation to indemnify any other Person.
"Tax Return" means any return, declaration, report, claim for refund or
information return or statement relating to Taxes filed with the Internal
Revenue Service or any other governmental authority, including any schedule or
attachment thereto, and including any amendment thereof.
"Third-Party Claim" is defined in Section 9.5.
"To Buyer's Knowledge" means within the actual knowledge of Xxxxx Xxxxx and
Xxxx Xxxxxx after a reasonable review of the due diligence reports provided by
Buyer's counsel or accountants.
"To Sellers' Knowledge" means within the actual knowledge of Xxxxx Xxxxxxx,
Xxxxxx Xxxxxxx, Xxxxx Xxxxx and Xxxxxx Xxxxxxx after a reasonable review of the
books and records of the Company.
"Working Capital" is defined in Section 2.3.1.
"Working Capital Target" is defined in Section 2.3.3.
ARTICLE 11
CONSTRUCTION; MISCELLANEOUS PROVISIONS
11.1 Notices. Any notice to be given or delivered pursuant to this
Agreement shall be ineffective unless given or delivered in writing, and shall
be given or delivered in writing as follows:
(a) If to Buyer, to:
TriMas Company, LLC
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00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxx
Telecopy Number: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxxx, Esq. and Xxxx Xxxxxxxx, Esq.
Telecopy Number: (000) 000-0000
(b) If to Sellers or to any Seller, to Sellers or such Seller in care
of:
FNL Management Corp.
Landerbrook Corporate Center One
Suite 280
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxx 00000
Telecopy Number: (000) 000-0000
With a copy to:
Xxxxxx, Halter & Xxxxxxxx L.L.P.
0000 XxXxxxxx Xxxxxxxxxx Xxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopy Number: (000) 000-0000
or in any case, to such other address for a party as to which notice shall have
been given to Buyer and Sellers' Representative in accordance with this Section.
Notices so addressed shall be deemed to have been duly given (i) on the third
business day after the day of registration, if sent by registered or certified
mail, postage prepaid, (ii) on the next business day following the documented
acceptance thereof for next-day delivery by a national overnight air courier
service, if so sent or (iii) sent by facsimile transmission (electronically
confirmed). Otherwise, notices shall be deemed to have been given when actually
received at such address.
11.2 Entire Agreement. This Agreement and the schedules and exhibits hereto
constitute the exclusive statement of the agreement among Buyer and each Seller
concerning the subject matter hereof, and supersedes all other prior agreements,
oral or written, among or between any of the parties hereto concerning such
subject matter. All negotiations among or between any of the parties hereto are
superseded by this Agreement, and there are no representations, warranties,
promises, understandings or agreements, oral or written, in relation to the
subject matter hereof among or between any of the parties hereto other than
those expressly set forth or expressly incorporated herein.
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11.3 Modification. No amendment, modification, or waiver of this Agreement
or any provision hereof, including the provisions of this sentence, shall be
effective or enforceable as against a party hereto unless made in a written
instrument that specifically references this Agreement and that is signed by the
party waiving compliance.
11.4 Mediation, Jurisdiction and Venue.
11.4.1 Mandatory Mediation. Unless and except to the extent otherwise
expressly agreed in writing by Sellers' Representative and Buyer, in the event
of any dispute arising out of or related to this Agreement or any of the
transactions contemplated hereby, the parties shall be required to enter into
mediation of such dispute or disagreement for a minimum of five (5) hours prior
to the initiation of any action or proceeding against the other. Upon notice by
either party to the other of the initiating party's desire to mediate, the
parties shall endeavor to settle the dispute by mediation under the then current
Center for Public Resources ("CPR") Model procedure for mediation of business
disputes. The location for the mediation shall be in Cuyahoga County, Ohio, and
the neutral third party will be selected from the CPR Panel of Neutrals
applicable to such geographical area. If the parties encounter difficulty in
agreeing on a Neutral, they will seek the assistance of CPR in the selection
process. A mediation proceeding shall thereafter be scheduled at a time mutually
convenient to the parties involved. The mediation shall be held within thirty
(30) days following the notification by a party of a desire for mediation. If
the parties cannot agree on a date for mediation, then the CPR shall select a
date it believes is reasonable for the parties, given all of the alleged
conflicts in dates. The parties shall equally share the cost of the mediator.
11.4.2 Jurisdiction and Venue. The parties agree that no action, suit
or proceeding at law, in equity or otherwise which in any way arises out of or
relates to this Agreement or the transactions contemplated hereby shall be
brought prior to the parties' compliance with Section 11.4.1, and after such
compliance, no such action, suit or proceeding shall be brought in any court
other than a state or federal court of competent jurisdiction located in
Cuyahoga County, Ohio, and all objections to personal jurisdiction and venue in
any action, suit or proceeding so commenced are hereby expressly waived by all
parties hereto.
11.5 Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of Buyer, each Seller, and the respective successors and
permitted assigns of Buyer and of each Seller.
11.6 Headings. The article and section headings used in this Agreement are
intended solely for convenience of reference, do not themselves form a part of
this Agreement, and may not be given effect in the interpretation or
construction of this Agreement.
11.7 Number and Gender; Inclusion. Whenever the context requires in this
Agreement, the masculine gender includes the feminine or neuter, the neuter
gender includes the masculine or feminine, the singular number includes the
plural, and the plural number includes the singular. In every place where it is
used in this Agreement, the word "including" is intended and shall be construed
to mean "including, without limitation".
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11.8 Counterparts. This Agreement may be executed and delivered in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
11.9 Third Parties. Except as may otherwise be expressly stated herein, no
provision of this Agreement is intended or shall be construed to confer on any
Person, other than the parties hereto, any rights hereunder.
11.10 Schedules and Exhibits. The schedules and exhibits referenced in this
Agreement constitute an integral part of this Agreement as if fully rewritten
herein. Notwithstanding anything to the contrary contained in this Agreement or
in any of the Schedules, any information disclosed in one Schedule shall be
deemed to be disclosed in all pertinent Schedules. Disclosure of any fact or
item in any Schedule shall not be deemed to constitute an admission that such
item or fact is material for the purposes of this Agreement. All references in
this document to "this Agreement" and the terms "herein," "hereof," "hereunder"
and the like shall be deemed to include all of such schedules and exhibits.
11.11 Time Periods. Any action required hereunder to be taken within a
certain number of days shall, except as may otherwise be expressly provided
herein, be taken within that number of calendar days; provided, however, that if
the last day for taking such action falls on a Saturday, a Sunday, or a legal
holiday, the period during which such action may be taken shall automatically be
extended to the next business day.
11.12 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without regard to the
choice-of-laws or conflicts-of-laws provisions thereof.
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IN WITNESS WHEREOF, Buyer and Sellers have executed and delivered this
Stock Purchase Agreement, or have caused this Stock Purchase Agreement to be
executed and delivered by their duly authorized representatives, as of the date
first written above.
BUYER:
TRIMAS COMPANY LLC
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Xxxx X. Xxxxxx
Its: Executive Vice President and CFO
SELLERS:
XXXXXXXXX CAPITAL PARTNERS FUND II, L.P.
By: Catawba Partners, L.P., as general partner
By: FNL Management Corp., as general partner
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Its: Vice President
CARRERA PARTNERS, INC.
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------------
Its: President
XXXXX INVESTMENTS LIMITED PARTNERSHIP
By: Palm Springs, Inc., as general partner
By: /s/ Illegible
-----------------------------------------
Its: President
/s/ Xxxxx Xxxxxxx
---------------------------------------------
Xxxxx Xxxxxxx
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and
SELLERS' REPRESENTATIVE:
FNL Management Corp., as Sellers'
Representative and as Attorney-in-Fact for the
Sellers who are Option Holders
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Its: Vice President
-------------------------------------------
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