STOCK PURCHASE AGREEMENT
This Agreement is made and entered into as of November 15, 2003, among
STEEL PARTNERS II, L.P., a Delaware limited partnership ("SELLER"), SAC HOLDING
CO., a Pennsylvania corporation ("BUYER"), and Xxxxxx Associated Companies,
Inc., a Pennsylvania corporation ("XXXXXX").
PREAMBLE
Seller is the owner of 537,771 shares (the "SHARES") of common stock,
par value $0.001 per share of Sylvan Inc., a Nevada corporation ("SYLVAN"),
which Shares are held in the names and accounts set forth on Annex A hereto.
Seller desires to sell the Shares of Common Stock to Buyer, and Buyer is willing
to purchase the Shares from Seller, at the price and on the terms and conditions
set forth herein. Therefore, with the intent to be legally bound, the parties
agree as follows:
AGREEMENT
1. Purchase and Sale of Shares. Seller does hereby sell, assign,
transfer, and convey to Buyer, and Buyer does hereby purchase from Seller, all
of Seller's rights, title and interest in and to the Shares, free and clear of
all liens and encumbrances, against payment of the Purchase Price (as defined in
Section 2 below).
2. Purchase Price. In consideration of the sale of the Shares to Buyer
as contemplated by Section 1 above, Buyer hereby agrees to pay to Seller, by
wire transfer of immediately available funds, the aggregate sum of Six Million,
Five Hundred Eighty-Seven Thousand, Six Hundred Ninety-Four Dollars and
Seventy-Five Cents ($6,587,694.75) (the "PURCHASE PRICE"), representing a
purchase price of $12.25 per Share, which Purchase Price shall be paid
concurrently with the execution and delivery of this Agreement.
3. Closing. The closing of the transactions contemplated by this
Agreement (the "CLOSING") shall be deemed to have taken place simultaneously
with the execution and delivery of this Agreement and the payment of the
Purchase Price and the Seller Reimbursement (as defined herein), and shall be
deemed to have taken place at the offices of Xxxxx & Xxxxxxx, P.C., 00 Xxxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000; provided, however, that the
Closing shall not be deemed to have occurred (and neither party shall have any
obligation under this Agreement) unless substantially contemporaneously with the
execution and delivery of this Agreement, Buyer and Sylvan enter into an
Agreement and Plan of Merger (the "MERGER AGREEMENT") pursuant to which one of
Buyer's subsidiaries is to be merged with and into Sylvan in a cash-out merger
(the "MERGER") in which Sylvan's stockholders would be entitled to receive no
less than $12.25 per share of Common Stock. This Agreement shall terminate and
be of no further effect if Merger Agreement is not signed by all parties thereto
by Tuesday, November 18, 2003 at 9:00 a.m.
4. Delivery of Certificates. Concurrently with the execution of this
Agreement, Seller shall deliver to Buyer (or Buyer's agent) (i) a letter of
instruction (the "INSTRUCTION LETTER") addressed to Seller's brokerage firm
instructing such brokerage firm to cause the electronic delivery of the Shares
held in street name and purchased from Seller pursuant hereto through the
Depository Trust Company ("DTC") to a DTC account designated in writing by Buyer
and (ii) with respect to Shares held of record and beneficially, a certificate
or certificates representing such Shares duly endorsed for transfer or
accompanied by appropriate stock powers duly executed. Notwithstanding the
foregoing, the parties acknowledge and agree that Seller shall, and shall be
entitled to, cause its counsel, Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
(the "ESCROW AGENT") to hold the Instruction Letter in escrow until such time as
Buyer has received confirmation that the Purchase Price and the Seller
Reimbursement have been remitted in full in accordance herewith, whereupon the
Seller shall cause the Escrow Agent to promptly release the Instruction Letter
to Buyer.
5. Representations and Warranties of Seller. Seller hereby represents
and warrants to Buyer as follows:
(a) Seller is a limited partnership duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite corporate power and authority to enter into
this Agreement and perform its obligations hereunder. The execution, delivery
and performance of this Agreement by Seller and the consummation of the
transactions contemplated hereby do not result in a violation of Seller's
limited partnership agreement.
(b) The execution, delivery and performance of this Agreement
by Seller have been duly and effectively authorized by all necessary corporate
actions of Seller. This Agreement has been duly executed by Seller and
constitutes a valid, legally binding and enforceable obligation of Seller,
except as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally or by the principles governing the availability of
equitable remedies.
(c) Seller is the sole legal and beneficial owner of the
Shares and has good title to the Shares. There exist no liens, claims, pledges,
options, proxies, voting agreements, charges or encumbrances of any kind
affecting the Shares. Seller has the sole and absolute right and power to sell,
assign and transfer the Shares as provided in this Agreement. Upon the Closing,
good and indefeasible title to the Shares will be vested in Buyer, free of any
lien, pledge, claim, restriction or other encumbrance. With the exception of one
(1) share of Common Stock of Sylvan owned by the Seller, the Shares are the only
shares of capital stock of Sylvan owned beneficially or of record as of the date
hereof by Seller or any of it affiliates (excluding Sylvan), and neither Seller
nor any of its affiliates (excluding Sylvan) has any option to purchase or right
to subscribe for or otherwise acquire any securities of Sylvan and has no other
interest in or voting rights with respect to any other securities of Sylvan.
(d) There are no actions, suits, proceedings or claims
pending or, to the knowledge of Seller, threatened with respect to or in any
manner affecting the ownership by Seller of the Shares or the sale of the Shares
by Seller to Buyer.
(e) Seller hereby represents, warrants and acknowledges that
it has had access to all material information relating to the business and
operations of Sylvan, Seller has consulted with legal counsel and accounting and
financial advisors to the extent it has deemed necessary and appropriate in
connection with the transactions contemplated by this Agreement, and Seller has
had the opportunity to ask questions of, and receive answers from, Sylvan and
its officers concerning the business and finances of Sylvan sufficient and
necessary to establish its opinion concerning the value of the Shares and
otherwise to make an informed decision regarding the transactions contemplated
by this Agreement.
6. Representations and Warranties of Buyer. Buyer represents and
warrants to Seller that:
(a) Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the Commonwealth of Pennsylvania and has
all requisite corporate power and authority to enter into this Agreement and
perform its obligations hereunder.
(b) The execution, delivery and performance of this Agreement
by Buyer have been duly and effectively authorized by all necessary corporate
actions of Buyer. This Agreement has been duly executed by Buyer and constitutes
a valid, legally binding and enforceable obligation of Buyer, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally or by the principles governing the availability of equitable remedies.
(c) The execution, delivery and performance of this Agreement
by Buyer and the consummation of the transactions contemplated hereby do not
result in a violation of Buyer's Articles of Incorporation or bylaws.
(d) Buyer acknowledges that Seller may be deemed an
"affiliate" of Sylvan under the Securities Act of 1933, as amended (the
"Securities Act"), and that the resale of the Shares by Buyer may be subject to
the limitations of the Securities Act and the rules and regulations promulgated
thereunder. Buyer is acquiring the Shares for its own account as principal, not
as a nominee or agent, for investment purposes only, and not with a view to, or
for, resale, distribution or fractionalization thereof in whole or in part and
no other person or entity has a direct or indirect beneficial interest in the
Shares.
7. Indemnification.
(a) Seller shall indemnify, defend and hold harmless Buyer
from and against any and all damages, claims, losses, expenses, costs,
obligations and liabilities (including, without limitation, reasonable
attorneys' fees and expenses and court costs) suffered by Buyer and resulting
from or arising in connection with any false or incorrect representation or
warranty made by Seller herein, or the breach by Seller of any of its covenants
and agreements hereunder.
(b) Buyer shall indemnify, defend and hold harmless Seller
from and against any and all damages, claims, losses, expenses, costs,
obligations and liabilities (including, without limitation, reasonable
attorneys' fees and expenses and court costs) suffered by Seller and resulting
from or arising in connection with any false or incorrect representation or
warranty made by Buyer herein, or the breach by Buyer of any of its covenants
and agreements hereunder.
(c) The obligations of Seller and Buyer under this Section 7
shall survive any termination of this Agreement.
8. Survival of Representations and Warranties. All representations,
warranties, agreements, covenants and obligations made or undertaken by Seller,
Buyer or Xxxxxx, as the case may be, in this Agreement or in any document or
instrument executed and delivered pursuant hereto, are material, have been
relied upon by the parties hereto, shall survive the Closing hereunder, and
shall not merge in the performance of any obligation by either party hereto.
9. Expenses. All expenses incurred by the parties hereto in connection
with or related to the authorization, preparation and execution of this
Agreement and the Closing of the transactions contemplated hereby, including,
without limitation, all fees and expenses of agents, representatives, counsel
and accountants employed by such party, shall be borne solely and entirely by
the party which has incurred the same; provided, however, that (a) Seller shall
be responsible for (and shall hold Buyer harmless against) any documentary or
stamp tax associated with the transfer of the Shares (or the certificates
representing the Shares) to Buyer, whether or not such taxes are actually
incurred by Seller or by Buyer, and (b) Xxxxxx shall reimburse Seller's legal
fees and expenses in connection with this Agreement and related matters in the
amount of Sixty Thousand Dollars ($60,000) (the "SELLER REIMBURSEMENT") in
accordance with the procedures set forth in Section 3 herein.
10. Recoupment Right. In the event that Buyer subsequently agrees to
increase the merger consideration payable in connection with the Merger such
that Sylvan stockholders are entitled to receive in excess of $12.25 per share
of Common Stock (the amount of any such excess per share being referred to
herein as the "OVERAGE"), and such Merger is actually consummated, then Buyer
shall, within three business days following such consummation, pay to Seller an
amount equal to the product obtained by multiplying (i) the Overage, by (ii)
537,771.
11. Miscellaneous.
(a) This Agreement constitutes the entire agreement, and
supersedes all prior agreements and understandings, whether oral or written,
among the parties hereto with respect to the subject matter hereof. This
Agreement may be amended only by an instrument in writing signed by each of the
parties to this Agreement.
(b) This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns.
(c) Section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
(d) This Agreement may be executed in any number of
counterparts, each of which shall, when executed, be deemed to be an original
and all of which shall be deemed to be one and the same instrument.
(e) This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York without giving
effect to any conflict of laws rules.
(f) All notices and other communications under this Agreement
shall be made by certified mail, return receipt requested, to the party entitled
to receive the same at the addresses indicated below or at such other address as
shall be specified by written notice in accordance herewith:
If to Buyer or Xxxxxx: With a copy to:
SAC Holding Co. Xxxxx & Xxxxxxx, P.C.
c/o Snyder Associated Companies, Inc. 00 Xxxxxxx Xxxxxx, 00xx Xxxxx
0 Xxxxx Xxxx Xxxx Xxxxxxxxxx, Xxxxxxxxxxxx 00000
X.X. Xxx 0000 Attn: Xxxxxxx X. Xxxxx, Esq.
Xxxxxxxxx, XX 00000
Attn: President
If to Seller: With a copy to:
Steel Partners II, X.X. Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
000 Xxxxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000
Xxx Xxxx, XX 00000 Attn: Xxxxxx Xxxxxxx, Esq.
Attn: Xxxxxx X. Xxxxxxxxxxxx
(g) Any waiver by any party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach or provision of this Agreement.
(h) Each of the parties hereto shall, without further
consideration, execute and deliver to any other party hereto such instruments of
transfer and shall perform such other actions as such party may reasonably
request to carry out the transactions contemplated hereby.
[SIGNATURE PAGE FOLLOWS]
SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
SELLER
STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C., General Partner
By: /s/ Xxxxxx X. Xxxxxxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxxxxxx
Chief Executive Officer
BUYER
SAC HOLDING CO.
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
XXXXXX
XXXXXX ASSOCIATED COMPANIES, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name: Xxxx X. Xxxxxx
Title: Secretary
Annex A
o 1,000 of the Shares are represented by certificate or certificates in the
name of Steel Partners II, L.P.
o The remaining 536,771 of the Shares are held in street name in a DTC account
maintained by ABN AMRO for the benefit of Steel Partners II, L.P.
