STOCK PURCHASE AGREEMENT
BY AND AMONG
DO GROUP HOLDING, INC.,
XXXXX XXXXXXX,
XXXX X. XXXXXXX,
XXXXXX X. XXXXXXXX,
ESTATE OF XXXXXXX X. XXXXX,
XXXXXX XXXXXXX,
XXXXXXX XXXXXXXX,
AND
MITY-LITE, INC.
March 17, 2000
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into effective
as of March 17, 2000, by and among (i) DO Group Holding, Inc., a Utah
corporation ("Holding"), (ii) Xxxxx Xxxxxxx, Xxxx X. Xxxxxxx, Xxxxxx X.
Xxxxxxxx, and the Estate of Xxxxxxx X. Xxxxx (referred to herein,
collectively, as the "Majority Shareholders" and, individually, as a "Majority
Shareholder"), (iii) Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx, and Xxxxxxx Xxxxxxxx
(referred to herein, collectively, as the "Operating Personnel"), and (iv)
Mity-Lite, Inc., a Utah corporation ("Mity-Lite"). Holding, the Majority
Shareholders, the Operating Personnel and Mity-Lite are referred to herein,
collectively, as the "Parties" and, individually, as a "Party."
RECITALS:
A. WHEREAS, by that certain Contribution Agreement dated as of March
24, 1997 (the "Contribution Agreement"), entered into by and among (i) the
Majority Shareholders, (ii) Xxxxxx Xxxxxxx and Xxxxxxx Xxxxxxxx, (iii) ChiCol
Group, Inc., an Ohio corporation ("ChiCol"), Sican II Corp., a Delaware
corporation ("Sican II"), Sican Corp., a Delaware corporation ("Sican"),
Holding, DO Group, Inc., a Delaware corporation ("DO Group"), and (iv)
Mity-Lite, the parties thereto entered into the transactions contemplated
thereby (the "1997 Transaction");
B. WHEREAS, pursuant to the Contribution Agreement and in connection
with the 1997 Transaction, among other things, the Majority Shareholders were
issued all of the authorized shares of Holding Class A Common Stock, $0.01 par
value per share (the "Class A Common Stock"), as listed next to each Majority
Shareholder's name on Exhibit "A" attached hereto;
C. WHEREAS, among other things, the Contribution Agreement provides
that the Class A Common Stock shall, upon certain conditions, be convertible
by the Majority Shareholders (the "Conversion Right") into a total of 115,000
(172,500 after adjusting for the 3-for-2 stock split effected as a dividend
declared August 25, 1999 and distributed September 23, 1999) shares of
Mity-Lite's restricted Common Stock, $0.01 par value per share (the "Mity-Lite
Common Stock");
D. WHEREAS, as contemplated by the Contribution Agreement and in
connection with the 1997 Transaction, the Majority Shareholders and Mity-Lite
entered into a Shareholders Agreement dated March 24, 1997 that governs
certain aspects of their relationship, including, but not limited to, certain
corporate governance issues affecting Holding and restrictions on the transfer
of the Class A Common Stock (the "Shareholders Agreement");
E. WHEREAS, as contemplated by the Contribution Agreement and in
connection with the 1997 Transaction, Mity-Lite and Xxxxxx Xxxxxxx, Xxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx, ChiCol, Sican II, and DO Group entered into a Put
Agreement dated March 24, 1997 (the "Put Agreement") that grants Mity-Lite the
right to require any or all of the DO Group Parties (as that term is defined
in the Put Agreement) to acquire shares of DO Group, Inc. from Mity-Lite,
which Put Agreement the Parties now desire to terminate;
F. WHEREAS, as contemplated by the Contribution Agreement and in
connection with the 1997 Transaction, Mity-Lite and the Majority Shareholders
entered into a Registration Rights Agreement dated March 24, 1997 (the
"Registration Rights Agreement") that grants the Majority Shareholders the
right to require Mity-Lite to register under the Securities Act the Mity-Lite
Common Stock issued upon the exercise by the Majority Shareholders of the
Conversion Right, which Registration Rights Agreement the Parties now desire
to terminate;
G. WHEREAS, the Majority Shareholders now desire to sell and transfer
to Mity-Lite the Class A Common Stock in exchange for the Mity-Lite Common
Stock and/or cash, as set forth herein, and, in addition and in connection
therewith, to terminate the Escrow Agreement dated March 24, 1997; and the
Shareholders Agreement;
H. WHEREAS, Mity-Lite, the Operating Personnel, DO Group, ChiCol and
Sican II desire to enter into a new put agreement dated as of the date hereof
(the "New Put Agreement");
I. WHEREAS, Mity-Lite and the Majority Shareholders desire to enter
into a new Registration Rights Agreement covering the Mity-Lite Common Stock
(the "New Registration Agreement") on terms substantially identical to the
terms of the Registration Rights Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the parties hereto agree as follows:
1. DEFINITIONS.
"Accredited Investor" has the meaning set forth in Regulation D
promulgated under the Securities Act.
"Adverse Consequences" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
reasonable amounts paid in settlement, Liability, obligations, Tax, liens,
losses, expenses, and fees, including court costs and reasonable attorneys'
fees and expenses.
"Affiliates" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934.
"Affiliated Group" means any affiliated group within the meaning of
Code Section 1504(a) or any similar group defined under a similar provision of
applicable state, local, or foreign law.
"Agreement" has the meaning set forth in the introductory paragraph
above.
"Basis" means any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.
"ChiCol" has the meaning set forth in Recital A above.
"ChiCol Common Stock" means the 300 shares of ChiCol Common Stock,
no par value per share, owned by Holding.
"Class A Common Stock" has the meaning set forth in Recital B above.
"Closing" has the meaning set forth in Section 2.3 below.
"Closing Date" has the meaning set forth in Section 2.3 below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the
businesses, assets, Intellectual Property or affairs of Holding that is not
already generally available to the public.
"Contribution Agreement" has the meaning set forth in Recital A
above.
"DO Group" has the meaning set forth in Recital A above.
"Employee Benefit Plan" means any (a) nonqualified, deferred
compensation or retirement plan or arrangement that is a Employee Pension
Benefit Plan, (b) qualified, defined contribution retirement plan or
arrangement that is an Employee Pension Benefit Plan, (c) qualified, defined
benefit retirement plan or arrangement that is an Employee Pension Benefit
Plan (including any Multiemployer Plan), or (d) Employee Welfare Benefit Plan
or fringe benefit plan or program.
"Employee Pension Benefit Plan" has the meaning set forth in ERISA
Section 3(2).
"Employee Welfare Benefit Plan" has the meaning set forth in ERISA
Section 3(1).
"Environmental, Health, and Safety Requirements" shall mean all
federal, state, local and foreign statutes, regulations, ordinances and other
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and all common law
relating to public health and safety, worker health and safety, and pollution
or protection of the environment, including without limitation all those
relating to the presence, use, production, generation, handling,
transportation, treatment, storage, disposal, distribution, labeling, testing,
processing, discharge, release, threatened release, control, or cleanup of any
hazardous materials, substances or wastes, chemical substances or mixtures,
pesticides, pollutants, contaminants, toxic chemicals, petroleum products or
byproducts, asbestos, polychlorinated biphenyls, noise or radiation, each in
effect on or prior to the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Escrow Agreement" has the meaning set forth in Section 7.1.12
below.
"Financial Statements" has the meaning set forth in Section 4.2.7
below.
"GAAP" means United States generally accepted accounting principles
as in effect from time to time.
"Holding" has the meaning set forth in the introductory paragraph
above.
"Intellectual Property" means (a) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures,
together with all reissuances, continuations, continuations-in-part,
revisions, extensions, and reexaminations thereof, (b) all trademarks, service
marks, trade dress, logos, trade names, and corporate names, together with all
translations, adaptations, derivations, and combinations thereof and including
all goodwill associated therewith, and all applications, registrations, and
renewals in connection therewith, (c) all copyrightable works, all copyrights,
and all applications, registrations, and renewals in connection therewith, (d)
all mask works and all applications, registrations, and renewals in connection
therewith, (e) all trade secrets and confidential business information
(including ideas, research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, technical data,
designs, drawings, specifications, customer and supplier lists and
information, pricing and cost information, and financial business and
marketing data plans and proposals), (f) all computer software (including data
and related documentation), (g) all other intellectual property rights, and
(h) all copies and tangible embodiments thereof (in whatever form or medium).
"Knowledge" means actual knowledge after reasonable investigation.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Majority Shareholder" and "Majority Shareholders" have the
meanings set forth in the preface above.
"Majority Shareholders' Disclosure Schedule" has the meaning set
forth in Section 4.1 below.
"Mity-Lite" has the meaning set forth in the introductory paragraph
above.
"Mity-Lite Common Stock" has the meaning set forth in Recital C
above.
"Most Recent Fiscal Year End" has the meaning set forth in Section
4.2.7 below.
"New Registration Agreement" has the meaning set forth in Recital H
above.
"Operating Personnel" has the meaning set forth in the introductory
paragraph above.
"Operating Personnel Disclosure Schedule" has the meaning set forth
in Section 4.2 below.
"Options" has the meaning set forth in Section 8.2 below.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency) and consistent with such actions and conduct as a reasonably
prudent person would take in connection with the administration of his or her
own business and as are customary in the industry in which the applicable
entity operates.
"Party" or "Parties" has the meaning set forth in the introductory
paragraph above.
"Person" means an individual, a partnership, a corporation, a
limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity (or
any department, agency, or political subdivision thereof).
"Put Agreement" has the meaning set forth in Recital E above.
"Registration Rights Agreement" has the meaning set forth in Recital
F above.
"Securities Act" means the Securities Act of 1933, as amended.
"Shareholders Agreement" has the meaning set forth in Recital D
above.
"Sican" has the meaning set forth in Recital A above.
"Sican II" has the meaning set forth in Recital A above.
"Sican II Common Stock" means the 400 shares of Sican II Common
Stock, no par value per share, owned by Holding.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
claim, charge, or other security interest, other than (a) mechanic's,
materialmen's, and similar liens not yet due and payable, (b) liens for Taxes
not yet due and payable, (c) purchase money liens and liens securing rental
payments under capital lease arrangements, and (d) other liens arising in the
Ordinary Course of Business and not incurred in connection with the borrowing
of money.
"Subsidiary" and "Subsidiaries" means any corporation, partnership,
joint venture, limited liability company, association, or other entity with
respect to which a specified Person (or a Subsidiary thereof) has the power to
direct or cause the direction of the affairs or management of another Person
whether through the ownership of voting securities, as trustee, by contract or
otherwise, including ownership of a majority of the common stock or the power
to vote or direct the voting of sufficient securities to elect a majority of
the directors.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or
add-on minimum, estimated, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Termination Agreement" means the Termination Agreement attached
hereto as Exhibit "D".
"Term Loan Agreement" means the Term Loan Amendment Agreement
attached hereto as Exhibit "C".
"1997 Transaction" has the meaning set forth in Recital A above.
2. AGREEMENT TO PURCHASE THE CLASS A COMMON STOCK; NET EXERCISE OF
OPTIONS.
2.1 Agreement of the Majority Shareholders. On and subject to the
terms and conditions of this Agreement, the Majority Shareholders agree to
transfer and deliver to Mity-Lite at the Closing the Class A Common Stock in
exchange for the Mity-Lite Common Stock and/or cash, which Mity-Lite Common
Stock and/or cash shall be issued to the Majority Shareholders in the amounts
and proportion to their respective holdings of Class A Common Stock, as set
forth on Exhibit "A" attached hereto.
2.2 Agreement of Mity-Lite. On and subject to the terms and
conditions of this Agreement, and in consideration for the transfer and
delivery of the Class A Common Stock to Mity-Lite by the Majority
Shareholders, at the Closing Mity-Lite agrees to issue the Mity-Lite Common
Stock or pay cash to the Majority Shareholders in the amounts and in
proportion to their respective holdings of Class A Common Stock, as set forth
on Exhibit "A" attached hereto.
2.3 The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Xxxxxx &
Xxxxxxx, L.L.P., at 000 Xxxxx Xxxx Xxxxxx, 950 Xxxxx Xxxxx Xxxxx, Xxxx Xxxx
Xxxx, Xxxx, commencing at 12:01 a.m. local time on April 1, 2000, or such
other date as the Parties may mutually determine (the "Closing Date").
2.4 Deliveries at the Closing.
2.4.1 At the Closing, the Majority Shareholders and/or the
Operating Personnel (with the joint instruction of Mity-Lite) will cause U.S.
Bank Trust Company (or its successor), as escrow agent under that certain
Escrow Agreement dated March 24, 1997 to deliver to Mity-Lite the Class A
Common Stock and the Majority Shareholders and/or the Operating Personnel
shall deliver to Mity-Lite, Inc. various certificates, instruments, and
documents referred to in Section 7.1 below.
2.4.2 At the Closing, Mity-Lite will deliver to each of the
Majority Shareholders the various certificates, instruments, documents and
payments referred to in Section 7.2 below.
2.5 Net Exercise of Options. At the Closing, the Operating
Personnel will provide Mity-Lite with a notice of exercise of the stock
options granted to them by Mity-Lite as part of the 1997 Transaction.
Mity-Lite agrees that, notwithstanding the terms of the Non-Qualified Stock
Option Agreements between Mity-Lite and the Operating Personnel, such options
will vest and become exercisable at the Closing on the Closing Date, and the
shares issued to the Operating Personnel shall be subject to an S-8
Registration Statement filed by Mity-Lite. The Operating Personnel will
exercise such options by surrendering the right to purchase that number of
shares issuable upon such exercise equal in fair market value (as determined
below) to the aggregate exercise price plus the amount of taxes attributable
to the Operating Personnel's exercise of such options. For purposes of this
Section 2.5, the fair market value per share of the shares issuable upon
exercise of the referenced options including the shares issuable upon exercise
of the options to be surrendered as described above shall be equal to the
average closing price of Mity-Lite's common stock as reported on the Nasdaq
Stock Market for the 20-trading days prior to February 16, 2000.
3. REPRESENTATIONS AND WARRANTIES OF MITY-LITE. Mity-Lite represents
and warrants to each of the Majority Shareholders and the Operating Personnel
that the statements contained in this Section 3 are correct and complete as of
the date of this Agreement and will be correct and complete as of the Closing
Date (as though made then and as though the Closing Date were substituted for
the date of this Agreement throughout this Section 3).
3.1 Organization of Mity-Lite. Mity-Lite is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Utah.
3.2 Authorization of Transaction. Mity-Lite has all necessary
power and authority (including full corporate power and authority) to execute
and deliver this Agreement and to perform its obligations hereunder and
consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by Mity-Lite, the performance by Mity-Lite of its
obligations hereunder, and the consummation by Mity-Lite of the transactions
contemplated hereby have been duly authorized by all requisite action by
Mity-Lite and its Board of Directors. This Agreement has been duly executed
and delivered by Mity-Lite and constitutes a legal, valid, and binding
obligation of Mity-Lite, enforceable in accordance with its terms. Mity-Lite
is not required to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency
in order to consummate the transactions contemplated by this Agreement other
than filings required by Regulation D promulgated under the Securities Act.
3.3 Noncontravention. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(a) violate or conflict with any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which Mity-Lite is subject or
any provision of the Articles of Incorporation or Bylaws of Mity-Lite, or (b)
conflict with, result in a breach of, constitute a default (or an event that,
with the giving of notice or the lapse of time, or both, would become a
default) under, result in the acceleration of, create in any party the right
to accelerate, terminate, modify, or cancel, require any notice or consent, or
result in the creation of any Security Interest on any of the capital stock,
assets, or properties of Mity- Lite under any agreement, contract, lease,
license, franchise, permit, indenture, mortgage, instrument, or other
arrangement to which Mity-Lite is a party or by which it is bound or to which
any of its assets are subject or affected.
3.4 Broker's Fees. Mity-Lite has no Liability or obligation to pay
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which any of the Majority
Shareholders or any of the Operating Personnel could become liable or
obligated.
3.5 Investment. Mity-Lite (a) understands that the Class A Common
Stock has not been, and will not be, registered under the Securities Act, or
under any state securities or "blue sky" laws, and is being, and will be,
offered and exchanged for the Mity-Lite Common Stock in reliance upon federal
and state exemptions for transactions not involving any public offering, (b)
is acquiring the Class A Common Stock solely for its own account for
investment purposes and not with a view to the distribution or resale thereof,
(c) is an Accredited Investor, (d) has received certain information concerning
Holding and has had the opportunity to obtain additional information as
desired in order to evaluate the merits and risks inherent in acquiring and
holding the Class A Common Stock, (e) is able to bear the economic risk and
lack of liquidity inherent in holding the Class A Common Stock, (f) has made a
thorough and complete investigation of the transactions contemplated by this
Agreement as it considered necessary or deemed appropriate in the
circumstances provided, however, Mity-Lite shall be entitled to rely on the
representations and warranties of the Majority Shareholders and the Operating
Agreement set forth herein as modified by the Operating Personnel Disclosure
Schedule and the Majority Shareholders Disclosure Schedule and except for
matters known to Mity-Lite prior to the Closing to be contrary to such
representations and warranties, (g) has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the merits
and risks of an investment in the Class A Common Stock and is capable of
bearing the economic risks of an investment in the Class A Common Stock,
including a complete loss of such investment, and (h) is incorporated in the
state indicated for notice purposes in Section 10.7 below.
3.6 Capitalization. As of the date of this Agreement, Mity-Lite's
authorized capital stock consists of (i) 10,000,000 shares of Mity-Lite Common
Stock, of which 4,823,183 shares are issued and outstanding and up to 929,612
shares are reserved for issuance pursuant to various stock option plans of
Mity-Lite, and (ii) 3,000,000 shares of Preferred Stock, $0.10 par value per
share, of which no shares are issued and outstanding. There are no statutory
or contractual preemptive rights or rights of first refusal with respect to
the issuance of the Mity-Lite Common Stock in exchange for the Class A Common
Stock as provided herein. In addition, the total number of shares of Holding
capital stock initially authorized was 115,001. The 115,000 shares of Class A
Common Stock initially issued were duly authorized and were validly issued and
fully paid. The one (1) share of Class B Common Stock initially issued and
outstanding was duly authorized and was validly issued and fully paid.
3.7 Validity of Mity-Lite Common Stock. The Mity-Lite Common
Stock, which will be issued in exchange for the Class A Common Stock, is duly
authorized, validly issued, nonassessable, and free and clear of all liens,
charges, claims, and encumbrances.
4. REPRESENTATIONS AND WARRANTIES OF THE MAJORITY SHAREHOLDERS AND OF
HOLDING AND THE OPERATING PERSONNEL.
4.1 Representations and Warranties of the Majority Shareholders.
Each of the Majority Shareholders severally represent and warrant to Mity-Lite
that the statements contained in this Section 4.1 are correct and complete as
of the date of this Agreement and will be correct and complete as of the
Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 4.1),
except as set forth in the Majority Shareholders' disclosure schedule
attached hereto (the "Majority Shareholders' Disclosure Schedule"). For all
purposes of this Agreement, nothing in the Majority Shareholders' Disclosure
Schedule shall be deemed adequate to disclose an exception to a representation
or warranty made in this Section 4.1 unless the Majority Shareholders'
Disclosure Schedule identifies the exception with particularity and describes
the relevant facts in detail. The Majority Shareholders' Disclosure Schedule
will be arranged in paragraphs corresponding to the numbered paragraphs
contained in this Section 4.1.
4.1.1 Authorization of Transaction. Each of the Majority
Shareholders has all necessary legal capacity, power, and authority to execute
and deliver this Agreement and all other agreements and instruments to be
executed and delivered in connection herewith and to perform his, her, or its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and all other agreements and
instruments to be executed in connection herewith by the Majority
Shareholders, the performance by the Majority Shareholders of their
obligations hereunder and thereunder, and the consummation by the Majority
Shareholders of the transactions contemplated hereby have been duly authorized
by all requisite action by the Majority Shareholders. This Agreement and all
other agreements and instruments to be executed and delivered in connection
herewith have been duly executed and delivered by the Majority Shareholders
and constitute the legal, valid, and binding obligations of the Majority
Shareholders, enforceable in accordance with their terms. None of the
Majority Shareholders are required to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any third party,
government, governmental agency, or court in order to consummate the
transactions contemplated by this Agreement and all other agreements and
instruments to be executed in connection herewith.
4.1.2 Noncontravention. Neither the execution and delivery
of this Agreement or other agreements contemplated herein, nor the
consummation of the transactions contemplated hereby, will (a) violate or
conflict with any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which any Majority Shareholder is
subject, or (b) conflict with, result in a breach of, constitute a default (or
an event that, with the giving of notice or the lapse of time, or both, would
become a default) under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, require any notice or
consent, or result in the creation of any Security Interest on any of the
capital stock (including the Class A Common Stock), assets, or properties of
any Majority Shareholder under any agreement, contract, lease, license,
franchise, permit, indenture, mortgage, instrument, or other arrangement to
which any Majority Shareholder is a party or by which he or she is bound or to
which any of their assets are subject or affected.
4.1.3 Broker's Fees. No Majority Shareholder has any
Liability or obligation to pay any fees or commissions to any broker, finder,
or agent with respect to the transactions contemplated by this Agreement for
which Mity-Lite or Holding (or any of its Subsidiaries) could become liable or
obligated.
4.1.4 Investment. Each Majority Shareholder (a)
understands that the Mity-Lite Common Stock has not been, and will not be,
registered under the Securities Act, or under any state securities or "blue
sky" laws, and is being, and will be, issued and exchanged for the Class A
Common Stock in reliance upon federal and state exemptions for transactions
not involving any public offering, (b) is acquiring the Mity-Lite Common Stock
solely for his, her, or its own account for investment purposes, and not with
a view to the distribution or resale thereof, (c) is an Accredited Investor,
(d) has received certain information concerning Mity-Lite and has had the
opportunity to obtain additional information as desired in order to evaluate
the merits and the risks inherent in acquiring and holding the Mity-Lite
Common Stock, (e) is able to bear the economic risk and lack of liquidity
inherent in holding the Mity-Lite Common Stock, (f) has made a thorough and
complete investigation of the transactions contemplated by this Agreement as
he, she, or it considered necessary or deemed appropriate in the
circumstances, (g) has sufficient knowledge and experience in financial and
business matters so as to be capable of evaluating the merits and risks of an
investment in the Mity-Lite Common Stock and is capable of bearing the
economic risks of an investment in the Mity-Lite Common Stock, including a
complete loss of such investment, and (h) is a resident of or in the case of
the Estate of Xxxxxxx X. Xxxxx, the executor or personal representative is a
resident of the state indicated for notice purposes in Section 10.7 below.
Each Majority Shareholder understands that the Mity-Lite Common Stock may not
be sold or transferred for value in the absence of an effective registration
thereof under the Securities Act and any applicable state securities laws or
receipt by Mity-Lite of an opinion of counsel or other evidence acceptable to
Mity-Lite that such registration is not required under the Securities Act or
applicable state laws and that the certificates evidencing the Mity-Lite
Common Stock will bear a legend to that effect. Each Majority Shareholder
hereby acknowledges receipt of copies of Mity-Lite's Quarterly Reports on Form
10-Q for the quarters ended June 30, 1999, September 30, 1999, and December
31, 1999, and Mity-Lite's Annual Report on Form 10-K for the fiscal year ended
March 31, 1999.
4.1.5 Class A Common Stock. Each Majority Shareholder
holds of record and owns beneficially the number of shares of Class A Common
Stock set forth next to his, her, or its name in Section 4.1.5 of the Majority
Shareholders' Disclosure Schedule, free and clear of any restrictions on
transfer (other than any restrictions under the Securities Act and state
securities or "blue sky" laws), Taxes, Security Interests, options, warrants,
purchase rights, contracts, commitments, equities, claims, puts, calls, and
demands. The Class A Common Stock constitutes all of the authorized, issued,
and outstanding shares of Holding's Class A Common Stock. No Majority
Shareholder is a party to any option, warrant, purchase right, call, put, or
other contract or commitment that could require such Majority Shareholder to
sell, buy, transfer, or otherwise dispose of any of the Class A Common Stock
(other than this Agreement and the Shareholders Agreement). No Majority
Shareholder is a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any of the Class A Common Stock
(other than the Shareholders Agreement).
4.2 Representations and Warranties of Holding and the Operating
Personnel. Holding and each of its Subsidiaries (both direct and indirect)
and each of the Operating Personnel severally represent and warrant to
Mity-Lite that the statements contained in this Section 4.2 are correct and
complete as of the date of this Agreement and will be correct and complete as
of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 4.2),
except as set forth in the disclosure schedule of Holding and the Operating
Personnel attached hereto (the "Operating Personnel Disclosure Schedule").
For all purposes of this Agreement, nothing in the Operating Personnel
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made in this Section 4.2 unless the Operating
Personnel Disclosure Schedule identifies the exception with particularity and
describes the relevant facts in detail. The Operating Personnel Disclosure
Schedule will be arranged in paragraphs corresponding to the lettered and
numbered paragraphs contained in this Section 4.2.
4.2.1 Authorization of Transaction. Each of the Operating
Personnel has all necessary legal capacity, power, and authority to execute
and deliver this Agreement and all other agreements and instruments to be
executed and delivered in connection herewith and to perform his obligations
hereunder and thereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and all other agreements
and instruments to be executed and delivered in connection herewith by the
Operating Personnel, the performance by the Operating Personnel of their
obligations hereunder and thereunder, and the consummation by the Operating
Personnel of the transactions contemplated hereby have been duly authorized by
all requisite action by the Operating Personnel. This Agreement and all other
agreements and instruments to be executed and delivered in connection herewith
have been duly executed and delivered by the Operating Personnel and
constitute the legal, valid, and binding obligations of the Operating
Personnel, enforceable in accordance with their terms. None of the Operating
Personnel are required to give any notice to, make any filing with, or obtain
any authorization, consent, or approval of any third party, government,
governmental agency, or court in order to consummate the transactions
contemplated by this Agreement.
4.2.2 Noncontravention. Neither the execution and delivery
of this Agreement, nor the consummation of the transactions contemplated
hereby, will (a) violate or conflict with any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or
other restriction of any government, governmental agency, or court to which
any of the Operating Personnel is subject, or (b) conflict with, result in a
breach of, constitute a default (or an event that, with the giving of notice
or the lapse of time, or both, would become a default) under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, require any notice or consent, or result in the creation of
any Security Interest on any of the assets or properties of Holding or any of
its Subsidiaries under any agreement, contract, lease, license, franchise,
permit, indenture, mortgage, instrument, or other arrangement to which any of
the Operating Personnel is a party or by which any of the Operating Personnel
are bound.
4.2.3 Organization, Qualification, and Corporate Power.
Except as set forth in Section 4.2.3 of the Operating Personnel Disclosure
Schedule, Holding and each of its Subsidiaries is a corporation, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation. Holding and each of its Subsidiaries is duly licensed and
qualified to conduct business and is in good standing under the laws of each
jurisdiction in which the operation of its business or the ownership or
leasing of its properties makes such licensing or qualification necessary and
all such jurisdictions are listed on Section 4.2.3 of the Operating Personnel
Disclosure Schedule. Holding and each of its Subsidiaries have all necessary
corporate power and authority and all licenses, permits, and authorizations
necessary to carry on the businesses in which it is engaged and in which it
presently proposes to engage and to own and use the properties that it owns
and uses. All of the foregoing licenses, permits, and authorizations are in
full force and effect and none of the Operating Personnel have received any
notice of any event, inquiry, investigation, or proceeding that could result
in the suspension, revocation, or limitation of any such licenses, permits, or
authorizations and, to the Knowledge of the Operating Personnel, there is no
sustainable Basis for any such suspension, revocation, or limitation. Section
4.2.3 of the Operating Personnel Disclosure Schedule lists the directors and
officers of Holding and each of its Subsidiaries. The Operating Personnel
have delivered to Mity-Lite correct and complete copies of any minutes of the
Board of Directors and shareholders of Holding and its Subsidiaries in the
Operating Personnels' possession as well as any stock certificate books, and
stock record books of Holding and each of its Subsidiaries in their
possession. The Operating Personnel have not prepared or maintained any of
the corporate records, stock books or minutes of Holding. To the Knowledge of
the Operating Personnel, neither Holding nor any of its Subsidiaries is in
default under or in violation of any provision of its charter or bylaws. To
the Knowledge of the Operating Personnel, all corporate actions taken by
Holding and each of its Subsidiaries have been duly authorized or ratified.
The Majority Shareholders and the Shareholders of Holding's Subsidiaries have
taken no action to amend the bylaws or charters of Holding or the Subsidiaries
since March 24, 1997.
4.2.4 Capitalization of Holding. Holding currently has
115,001 shares of Common Stock issued and outstanding and none of said shares
are held in treasury. A total of 115,000 shares of Class A Common Stock are
issued and outstanding and a total of one (1) share of Class B Common Stock is
issued and outstanding. All 115,000 of the issued and outstanding shares of
Class A Common Stock are validly issued, fully paid, and nonassessable, and
are held of record by the Majority Shareholders as set forth in Section 4.2.4
of the Operating Personnel Disclosure Schedule. The one (1) issued and
outstanding share of Class B Common Stock is validly issued, fully paid, and
nonassessable. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights,
calls, puts, or other contracts or commitments that could require Holding to
acquire or to issue, sell, dispose of, or otherwise cause to become
outstanding, any of its capital stock, or any securities or obligations
convertible into or exchangeable for its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to Holding. There are no voting
trusts, proxies, or other agreements or understandings with respect to the
voting of the capital stock of Holding.
4.2.5 Assets of Holding. Prior to and as of the Closing,
Holding will have no assets other than the ChiCol Common Stock and the Sican
II Common Stock and the shares of capital stock of its other indirect
Subsidiaries. Holding has had no operational activities or conducted any
business since its inception and has no Liabilities or assets other than the
ChiCol Common Stock, the Sican II Common Stock, and the capital stock of its
other indirect Subsidiaries referenced in Section 4.2.6 below. Holding does
not control, directly or indirectly, or have any direct or indirect equity
ownership in any Person other than ChiCol (through the ownership of the ChiCol
Common Stock), Sican II (through the ownership of the Sican II Common Stock),
and its other indirect Subsidiaries (through the ownership of the capital
stock thereof).
4.2.6 Subsidiaries. Other than ChiCol, Sican II, and the
other indirect Subsidiaries listed on Section 4.2.6 of the Operating Personnel
Disclosure Schedule, Holding has no Subsidiaries. Section 4.2.6 of the
Operating Personnel Disclosure Schedule sets forth for each of ChiCol and
Sican II: (i) its jurisdiction of incorporation, (ii) the number of shares of
authorized capital stock and the class thereof, (iii) the number of issued and
outstanding shares of each class of capital stock, and (iv) the number of
shares of capital stock held in treasury. All of the ChiCol Common Stock and
the Sican II Common Stock have been duly authorized and are validly issued,
fully paid, and nonassessable. Holding holds of record and owns beneficially
all of the ChiCol Common Stock and the Sican II Common Stock free and clear of
any restrictions on transfer (other than restrictions under the Securities Act
and state securities or "blue sky" laws), Taxes, Security Interests, options,
warrants, purchase rights, calls, puts, contracts, commitments, equities,
claims, and demands. Except for the Put Agreement, there are no outstanding
or authorized options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights, calls, puts, or other contracts or
commitments that could require any of Holding, ChiCol, Sican II, or any of
Holding's other indirect Subsidiaries, to acquire or to issue, sell, transfer,
dispose of, or otherwise cause to become outstanding any of its own capital
stock. There are no outstanding stock appreciation, phantom stock, profit
participation, or similar rights with respect to either ChiCol or Sican II.
There are no voting trusts, proxies, or other agreements or understandings
with respect to the voting of any capital stock of ChiCol or Sican II.
4.2.7 Financial Statements. Attached hereto as Exhibit "B"
are the following financial statements (collectively, the "Financial
Statements"): (i) unaudited consolidating balance sheets and statements of
income, changes in shareholders' equity, and cash flow as of and for the nine
(9) months ended December 31, 1999 for Holding and all of its Subsidiaries,
and (ii) audited balance sheets and statements of income, changes in
shareholders' equity, and cash flow as of and for the fiscal year ended March
31, 1999 for DO Group (the "Most Recent Fiscal Year End"). Except as provided
in Schedule 4.2.7 of the Operating Personnel Disclosure Schedule, the
Financial Statements (including the notes thereto) have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, present fairly the financial condition of Holding and its
Subsidiaries or DO Group (as the case may be) as of such dates and the results
of operations of Holding and its Subsidiaries or DO Group (as the case may be)
for such periods, are correct and complete, and are consistent with the books
and records of Holding or DO Group (as the case may be), which books and
records are correct and complete. Except as noted in the Financial Statements
as applicable or listed on Section 4.2.7 of the Operating Personnel Disclosure
Schedule, Holding and each of its Subsidiaries owns or leases, and has good
and marketable title to, or a valid leasehold interest in, all buildings,
property, machinery, equipment, and other tangible assets necessary for the
conduct of its businesses as presently conducted and as presently proposed to
be conducted, located on its premises, or shown on its December 31, 1999
consolidated balance sheet, free and clear of all Security Interests except
for Security Interests reflected as Liabilities on its December 31, 1999
consolidated balance sheet. Except as set forth in Section 4.2.7 of the
Operating Personnel Disclosure Schedule, each such tangible asset has been
maintained in accordance with normal industry practice (subject to normal wear
and tear), and is suitable for the purposes for which it presently is used and
presently proposed to be used. Moreover, to the Knowledge of the Operating
Personnel, all notes and accounts receivable of Holding and each of its
Subsidiaries are reflected properly on its books and records and are valid
receivables subject to no setoffs or counterclaims.
4.2.8 Events Subsequent to Most Recent Fiscal Year End.
Except (a) for the material adverse effect on the business of Holding and its
Subsidiaries resulting from the acquisition of certain of the assets of C
Core, Inc. by Sican, and (b) as otherwise provided in Section 4.2.8 of the
Operating Personnel Disclosure Schedule, since the Most Recent Fiscal Year End
there has not been any material adverse change in the assets, Liabilities,
business, financial condition, operations, results of operations, or future
prospects of Holding or any of its Subsidiaries, and Holding and each of its
Subsidiaries has been operated in the Ordinary Course of Business.
4.2.9 Undisclosed Liabilities. To the Knowledge of the
Operating Personnel, neither Holding nor any of its Subsidiaries has any
Liability (and there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand
against Holding or any of its Subsidiaries giving rise to any Liability),
except for (a) Liabilities set forth on the face of the December 31, 1999
consolidated balance sheet of DO Group, including the notes thereto, and (b)
Liabilities that have arisen after December 31, 1999 in the Ordinary Course of
Business (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any material breach of any contract, breach of
warranty, tort, infringement, or violation of law).
4.2.10 Legal Compliance. To the Knowledge of the Operating
Personnel, Holding and each of its Subsidiaries, and each of their respective
predecessors and Affiliates, have complied in all material respects with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal,
state, local, and foreign governments (and all agencies thereof), and no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging any
failure so to comply.
4.2.11 Tax Matters. To the Knowledge of the Operating
Personnel:
4.2.11.1 Holding and each of its Subsidiaries have
filed all Tax Returns that it was required to file. All such Tax Returns were
correct and complete in all respects. All Taxes owed by Holding and each of
its Subsidiaries have been paid. Neither Holding nor any of its Subsidiaries
is currently the beneficiary of any extension of time within which to file
any Tax Return. There are no Security Interests on any of the assets of
Holding or any of its Subsidiaries that arose in connection with any failure
(or alleged failure) to pay any Tax.
4.2.11.2 Holding and each of its Subsidiaries have
withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent contractor,
creditor, shareholder, or other third party.
4.2.11.3 Neither Holding or any of its Subsidiaries,
nor any of their respective directors or officers (or any employees
responsible for Tax matters) of Holding or any of its Subsidiaries expects
that any authority will assess any additional Taxes for any period for which
Tax Returns have been filed. There is no dispute or claim concerning any Tax
Liability of Holding or any of its Subsidiaries either (a) claimed or raised
by any authority in writing or (b) as to which Holding or any of its
Subsidiaries, or any of their respective directors or officers (or any
employees responsible for Tax matters) of Holding or any of its Subsidiaries
has Knowledge based upon personal contact with any agent of such authority.
Holding and each of its Subsidiaries have delivered to Mity-Lite correct and
complete copies of all federal income Tax Returns, examination reports, and
statements of deficiencies assessed against or agreed to by Holding or any of
its Subsidiaries since December 31, 1995.
4.2.11.4 Neither Holding nor any of its Subsidiaries
have waived any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency.
4.2.11.5 Neither Holding nor any of its Subsidiaries
have filed a consent under Code Section 341(f) concerning collapsible
corporations. Neither Holding nor any of its Subsidiaries have made any
payments or are obligated to make any payments, nor are any of them a party to
any agreement that, under certain circumstances, could obligate it to make any
payments that will not be deductible under Code Section 280G. Neither Holding
nor any of its Subsidiaries have 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). Holding and each of its
Subsidiaries have disclosed on its federal income Tax Returns all positions
taken therein that could give rise to a substantial understatement of federal
income Tax within the meaning of Code Section 6662. Neither Holding nor any
of its Subsidiaries is or has been a party to any Tax allocation or sharing
agreement. Neither Holding nor any of its Subsidiaries have (a) been a member
of an Affiliated Group filing a consolidated federal income Tax Return (other
than a group the common parent of which was either Holding or DO Group (b) any
Liability for the Taxes of any other Person.
4.2.11.6 The reserve for Tax Liability (rather than
any reserve for deferred Taxes established to reflect timing differences
between book and Tax income) set forth on the DO Group consolidated balance
sheet dated December 31, 1999 (including any notes thereto) reasonably
reflects the unpaid and deferred Tax Liability of Holding.
4.2.12 Real Property. To the Knowledge of the Operating
Personnel, except as provided in Schedule 4.2.12 of the Operating Personnel
Disclosure Schedule, since March 24, 1997, there has not been any material
adverse change in any of Holding's or any of its Subsidiaries' real property
or the facts represented to Mity-Lite in Section 4.16 of Contribution
Agreement.
4.2.13 Intellectual Property. To the Knowledge of the
Operating Personnel, since March 24, 1997 there has not been any material
adverse change in any of Holding's or any of its Subsidiaries' Intellectual
Property or the facts represented to Mity-Lite in Section 4.17 of the
Contribution Agreement.
4.2.14 Contracts. Section 4.2.14 of the Operating Personnel
Disclosure Schedule lists all contracts and other agreements, whether written
or oral, to which Holding or any of its Subsidiaries is a party involving
payments in excess of $50,000, including, but not limited to, the following:
4.2.14.1 Any agreement (or group of related
agreements) for the lease of personal property to or from any Person;
4.2.14.2 Any agreement (or group of related
agreements) the performance of which involves consideration in excess of
$50,000 or which was not entered into in the Ordinary Course of Business, or
for the furnishing or receipt of services, the performance of which will
extend over a period of more than one (1) year or result in a material loss to
Holding or any of its Subsidiaries;
4.2.14.3 Any agreement concerning a partnership or
joint venture;
4.2.14.4 Any agreement (or group of related
agreements) under which it has created, incurred, assumed, or guaranteed (or
may create, incur, assume, or guarantee) any indebtedness for borrowed money
or any capitalized lease obligation or under which it has imposed a Security
Interest on any of its assets, tangible or intangible;
4.2.14.5 Any agreement concerning confidentiality or
noncompetition;
4.2.14.6 Any profit sharing, stock option, stock
purchase, stock appreciation, deferred compensation, severance, or other plan
or arrangement for the benefit of its current or former directors, officers,
or employees;
4.2.14.7 Any collective bargaining agreement;
4.2.14.8 Any written agreement for the employment of
any individual on a full-time, part-time, consulting, or other basis or
providing any severance benefits;
4.2.14.9 Any agreement under which it has advanced
or loaned any amount to any of its directors, officers, or employees; or
4.2.14.10 Any sole source supplier contract or
agreement the termination of which would cause a material adverse change in
the business, financial condition, operations, results of operations, or
future prospects of Holding or any of its Subsidiaries.
Holding has delivered to Mity-Lite a correct and complete copy of each written
agreement listed in Section 4.2.14 of the Operating Personnel Disclosure
Schedule (as each such agreement has been amended to date), along with a
written summary setting forth the terms and conditions of each oral agreement
referred to in Section 4.2.14 of the Operating Personnel Disclosure Schedule.
Each such agreement is legal, valid, binding, enforceable, and in full force
and effect, and will be legal, valid, binding, enforceable, and in full force
and effect on identical terms as of the Closing with respect to all parties
thereto. No major customer of Holding or any of its Subsidiaries has
indicated within the past year that it will stop, or decrease the rate of,
buying materials, products, or services from Holding or any of its
Subsidiaries (as the case may be).
4.2.15 Powers of Attorney. There are no outstanding powers
of attorney executed by or on behalf of Holding or any of its Subsidiaries.
4.2.16 Insurance. Holding has previously made available to
Mity-Lite copies of all policies of, and binders evidencing, life, fire,
workmen's compensation, product liability, general liability, and other forms
of insurance owned or maintained by Holding or any of its Subsidiaries. Such
policies are in full force and effect and neither Holding nor any of its
Subsidiaries is in default under any of such policies to such an extent that
any such default would have a material adverse effect on the financial
condition of Holding or any of its Subsidiaries. Such policies provide
insurance coverage (i) adequate to comply with all requirements of applicable
law and (ii) in an amount that Holding deems adequate and sufficient for its
purposes.
4.2.17 Litigation. Section 4.2.17 of the Operating
Personnel Disclosure Schedule sets forth each instance in which Holding or any
of its Subsidiaries (i) is subject to any outstanding injunction, judgment,
order, decree, ruling, or charge, or (ii) is a party or, to the Knowledge of
the Operating Personnel, Holding or any of its Subsidiaries or any of the
directors or officers thereof has been threatened to be made a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator in each case which could
result in any material adverse change in the business, financial condition,
operations, results of operations, or future prospects of Holding or any of
its Subsidiaries. To the Knowledge of the Operating Personnel, neither
Holding or any of its Subsidiaries, nor any of the directors or officers (and
employees with responsibility for litigation matters) of Holding or any of its
Subsidiaries, has any Basis to believe that any such action, suit, proceeding,
hearing, or investigation may be brought or threatened against Holding or any
of its Subsidiaries.
4.2.18 Product Warranty. Section 4.2.18 of the Operating
Personnel Disclosure Schedule includes copies of the standard terms and
conditions of sale or lease for Holding and each of its Subsidiaries,
including the terms and conditions of all product warranties offered. The
product warranties set forth in Section 4.2.18 of the Operating Personnel
Disclosure Schedule accurately reflect all warranties that to the Knowledge of
the Operating Personnel have ever been, or that are currently being, offered
by Holding or any of its Subsidiaries, and none of such warranties have been
modified, altered, or changed from what is set forth in Section 4.2.18 of the
Operating Personnel Disclosure Schedule. To the Knowledge of the Operating
Personnel, each product manufactured, sold, leased, or delivered by Holding
and each of its Subsidiaries has been in conformity with all applicable
contractual commitments and all express and implied warranties. No product
manufactured, sold, leased, or delivered by Holding or any of its Subsidiaries
is subject to any guaranty, warranty, or other indemnity beyond the applicable
standard terms and conditions of sale or lease as set forth in Section 4.2.18
of the Operating Personnel Disclosure Schedule.
4.2.19 Product Liability. To the Knowledge of the Operating
Personnel, except as set forth in Section 4.2.19 of the Operating Personnel
Disclosure Schedule, neither Holding nor any of its Subsidiaries has any
Liability arising out of any injury to persons or property as a result of the
ownership, possession, or use of any product manufactured, sold, leased, or
delivered by Holding or any of its Subsidiaries.
4.2.20 Employees. To the Knowledge of the Operating
Personnel, no executive, key employee, or group of employees has any plans to
terminate employment with Holding or any of its Subsidiaries. Neither
Holding nor any of its Subsidiaries has experienced any material strikes,
grievances, claims of unfair labor practices, or other collective bargaining
disputes. To the Knowledge of the Operating Personnel, neither Holding nor any
of its Subsidiaries has committed any unfair labor practice. Section 4.2.20
of the Operating Personnel Disclosure Schedule sets forth each presently
pending or threatened organizatonal effort by or on behalf of any labor union
with respect to employees of Holding or any of its Subsidiaries of which
Holding or any of its Subsidiaries or any of the Operating Personnel have any
Knowledge.
4.2.21 Employee Benefits. To the Knowledge of the Operating
Personnel, since March 24, 1997, there has not been any material adverse
change in any of Holding's or any of its Subsidiaries' Employee Benefit Plans,
Employee Pension Benefit Plans or Employee Welfare Benefit Plans or the facts
represented to Mity-Lite in Section 4.28 of the Contribution Agreement, except
as otherwise provided in Section 4.2.21 of the Operating Personnel Disclosure
Schedule.
4.2.22 Guaranties. Except as set forth on Section 4.2.22 of
the Operating Personnel Disclosure Schedule, neither Holding nor any of its
Subsidiaries is a guarantor or otherwise liable for any Liability or
obligation (including indebtedness) of any other Person.
4.2.23 Environmental, Health, and Safety Matters.
4.2.23.1 To the Knowledge of the Operating
Personnel, Holding and each of its Subsidiaries and each of their respective
Affiliates have complied with and are in compliance in all material respects
with all Environmental, Health, and Safety Requirements. Without limiting the
foregoing, to the Knowledge of the Operating Personnel, neither Holding nor
any of its Subsidiaries has any Liability (and there is no Basis related to
the past or present operations, properties, or facilities of Holding or any of
its Subsidiaries or any of their respective Affiliates for any present or
future charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand against Holding or any of its Subsidiaries giving rise to any
Liability) under any Environmental, Health, and Safety Requirements, including
the Comprehensive Environmental Response Compensation and Liability Act of
1980, the Resource Conservation and Recovery Act of 1976, the Federal Water
Pollution Control Act of 1972, the Clean Air Act of 1970, the Safe Drinking
Water Act of 1974, the Toxic Substances Control Act of 1976, the Refuse Act of
1989, the Emergency Planning and Community Right-to-Know Act of 1986, the
Solid Waste Disposal Act, or the Occupational Safety and Health Act (each as
amended to date).
4.2.23.2 To the Knowledge of the Operating
Personnel, neither Holding nor any of its Subsidiaries has any Liability (and
neither Holding nor any of its Subsidiaries or Affiliates have handled,
treated, stored, released, or disposed of any substance or arranged for the
disposal of any substance regulated by any such Environmental, Health, and
Safety Requirements, or owned or operated any property or facility in any
manner that could form the basis for any present or future charge, complaint,
action, suit, proceeding, hearing, investigation, claim, or demand (under the
common law or pursuant to any existing statute) against Holding or any of its
Subsidiaries giving rise to any Liability) for response costs, corrective
action costs, natural resources damage, damage to any site, location, or body
of water (whether surface or subsurface), or for illness or personal injury.
4.2.23.3 To the Knowledge of the Operating
Personnel, there has been no material adverse change in the environmental
condition of any property owned or operated by the Company or in the facts
represented to Mity-Lite regarding Environmental, Health and Safety Matters in
the Contribution Agreement. A Phase I Report regarding the environmental
condition of Sican II's real property dated December 12, 1994 has been
included in Section 4.2.23 of the Operating Personnel Disclosure Schedule.
4.2.23.4 To the Knowledge of the Operating
Personnel, no facts, events, or conditions relating to the past or present
facilities, properties, or operations of Holding or any of its Subsidiaries or
Affiliates will prevent, hinder, or limit continued compliance with
Environmental, Health, and Safety Requirements, give rise to any
investigatory, remedial, or corrective obligations pursuant to Environmental,
Health, and Safety Requirements, or give rise to any other Liabilities
pursuant to Environmental, Health, and Safety Requirements.
5. PRE-CLOSING COVENANTS. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing:
5.1 General. Each of the Parties will use its best efforts to take
all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth
in Section 7 below).
5.2 Notices and Consents. The Operating Personnel and Holding will
cause Holding to give any notices to third parties, and will cause Holding to
use its best efforts to obtain any third party consents, that Mity-Lite may
request in connection with the matters referred to in Section 4 above. The
Operating Personnel and Holding will give any notices to, make any filings
with, and use its best efforts to obtain any authorizations, consents, and
approvals of governments and governmental agencies in connection with the
matters referred to in Section 4 above.
5.3 Operation of Business. The Operating Personnel will not cause
or permit Holding to engage in any practice, take any action, or enter into
any transaction outside the Ordinary Course of Business. Without limiting the
generality of the foregoing, none of the Majority Shareholders, the Operating
Personnel, or Holding will cause or permit Holding to declare, set aside, or
pay any dividend or make any distribution with respect to its capital stock or
redeem, purchase, or otherwise acquire any of its capital stock.
5.4 Preservation of Business. The Majority Shareholders, the
Operating Personnel, and Holding will use their best efforts, consistent with
past practices, to cause Holding to keep its business and properties
substantially intact, including its present operations, physical facilities,
working conditions, and relationships with lessors, licensors, suppliers,
customers, and employees.
5.5 Full Access. Each of the Majority Shareholders, the Operating
Personnel, and Holding will permit, and will cause Holding to permit,
representatives of Mity-Lite to have full access to all premises, properties,
personnel, books, records (including, but not limited to, Tax records),
contracts, and documents of or pertaining to Holding.
5.6 Notice of Developments. Each of (a) Mity-Lite and (b) the
Majority Shareholders and the Operating Personnel will give prompt written
notice to the other of any development causing a breach of any of such
person's or entity's representations and warranties made in Sections 3 or 4
above, as the case may be. No disclosure by any party hereto pursuant to this
Section 5.6, however, shall be deemed to amend or supplement either the
Majority Shareholders' Disclosure Schedule or the Operating Personnel
Disclosure Schedule or to prevent or cure any misrepresentation, breach of
warranty, or breach of covenant.
6. POST-CLOSING COVENANTS. The Parties agree as follows with respect
to the period following the Closing:
6.1 General. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties, as appropriate, will take such further action (including,
but not limited to, the execution and delivery of such further instruments and
documents) as any other party hereto may reasonably request, all at the sole
cost and expense of the requesting party.
6.2 Litigation Support. In the event and for so long as any Party
hereto is actively contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand in
connection with (i) any transaction contemplated under this Agreement or (ii)
any fact, situation, circumstance, status, condition, activity, practice,
plan, occurrence, event, incident, action, failure to act, or transaction on
or prior to the Closing Date involving Holding, each of the other Parties will
cooperate with it and its counsel in the contest or defense, make available
their personnel, and provide such testimony and access to their books and
records as shall be necessary in connection with such contest or defense, all
at the sole cost and expense of the contesting or defending party.
6.3 Transition. None of the Majority Shareholders, the Operating
Personnel, or Holding will take any action that is designed or intended to
have the effect of discouraging any lessor, licensor, customer, supplier,
employee, or other business associate of Holding or its Subsidiaries from
maintaining the same business relationships with Holding or its Subsidiaries
after the Closing as it maintained with Holding or its Subsidiaries prior to
the Closing.
6.4 Confidentiality. Each of the Majority Shareholders, the
Operating Personnel, and Holding will treat and hold as such all of the
Confidential Information, refrain from using any of the Confidential
Information except in connection with this Agreement, and deliver promptly to
Mity-Lite or destroy, at the request and option of Mity-Lite, all tangible
embodiments (and all copies) of the Confidential Information that are in its
possession. In the event that any Majority Shareholder is requested or
required (by oral question or request for information or documents in any
legal proceeding, interrogatory, subpoena, civil investigative demand, or
similar process) to disclose any Confidential Information, such Majority
Shareholder will promptly notify Mity-Lite in writing of the request or
requirement so that Mity-Lite may seek an appropriate protective order or
waive compliance with the provisions of this Section 6.4. If, in the absence
of a protective order or the receipt of a waiver hereunder, such Majority
Shareholder is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for contempt,
that Majority Shareholder may disclose the Confidential Information to the
tribunal; provided, however, that the disclosing Majority Shareholder shall
use his, her, or its best efforts to obtain, at the request of Mity-Lite, an
order or other assurance that confidential treatment will be accorded to such
portion of the Confidential Information required to be disclosed as Mity-Lite
shall designate. The foregoing provisions shall not apply to any Confidential
Information that is generally available to the public immediately prior to
the time of disclosure.
6.5 Covenant Not to Compete. Except for ownership of Mity-Lite
Common Stock, for a period of two (2) years from and after the Closing Date,
none of Xxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx or the Operating Personnel will
engage (as an owner, partner, member, affiliate, or otherwise) directly or
indirectly in any businesses that Holding conducts as of the Closing Date in
any geographic area in which Holding conducts that business; provided,
however, that an ownership of less than one percent (1%) of the outstanding
stock of any publicly-traded corporation shall not be deemed to engage in any
of its businesses solely by reason thereof. If the final judgment of a court
of competent jurisdiction declares that any term or provision of this Section
6.5 is invalid or unenforceable, the Parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope, duration, or area of the term or provision, to delete specific
words or phrases, or to replace any invalid or unenforceable term or provision
hereof with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified after the
expiration of the time within which the judgment may be appealed.
7. CONDITIONS TO OBLIGATION TO CLOSE.
7.1 Conditions to Obligation of Mity-Lite. The obligation of
Mity-Lite to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment, at or prior to Closing, of each of the
following conditions, any of which may be waived by Mity-Lite if so done in
writing:
7.1.1 The representations and warranties of the Majority
Shareholders, the Operating Personnel, and Holding contained in this
Agreement shall have been true and correct as of the date as of which they
were deemed to have been made and shall be true and correct in all material
respects at and as of the Closing Date;
7.1.2 The Majority Shareholders, the Operating Personnel, and
Holding shall have performed and complied with all of their covenants
hereunder in all material respects through the Closing Date;
7.1.3 The Majority Shareholders, the Operating Personnel, and
Holding shall have procured all of the third party consents specified in
Section 5.2 above;
7.1.4 No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or charge
would (a) prevent the consummation of any of the transactions contemplated by
this Agreement, (b) cause any of the transactions contemplated by this
Agreement to be rescinded following consummation, (c) adversely affect the
right of Mity- Lite to own the Class A Common Stock, or (d) adversely affect
the right of Holding to own its assets and to operate its businesses (and no
such injunction, judgment, order, decree, ruling, or charge shall be in
effect);
7.1.5 Each of the Majority Shareholders, the Operating
Personnel, and Holding shall have delivered to Mity-Lite a certificate to the
effect that each of the conditions specified in Sections 7.1.1 through 7.1.4
above are satisfied in all respects;
7.1.6 The Parties and the Operating Personnel shall have
received all other authorizations, consents, and approvals of governments and
governmental agencies referred to in Sections 3 and 4 above;
7.1.7 Mity-Lite shall have received the resignations, effective
as of the Closing, of each director and officer of Holding identified by
Mity-Lite in writing at the Closing;
7.1.8 All actions to be taken by Holding in connection with the
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory and in form and substance acceptable
to Mity-Lite;
7.1.9 In the course of its due diligence investigation of
Holding and its Subsidiaries following the date of this Agreement and prior to
the Closing, Mity-Lite shall not have become aware of facts or matters which
(i) are adverse to Holding or its Subsidiaries, (ii) do not constitute
breaches of any of Holding's, the Majority Shareholders' or the Operating
Personnels' representations and warranties as set forth in this Agreement, and
(iii) have an aggregate value or cost to Holding or its Subsidiaries in excess
of One Hundred Thousand Dollars ($100,000);
7.1.10 The Majority Shareholders shall have delivered to
Mity-Lite the certificates evidencing the Class A Common Stock, free and clear
of all Security Interests or restrictions other than restrictions under state
and federal securities or "blue sky" laws, endorsed in blank or accompanied by
duly executed stock powers;
7.1.11 The DO Group Parties (as that term is defined in the
Escrow Agreement dated March 24, 1997, the "Escrow Agreement") shall have
taken all actions necessary to cause the Escrow Agent (as such term is defined
in the Escrow Agreement) to disburse the Escrow Shares (as such term is
defined in the Escrow Agreement) to Mity-Lite; and
7.1.12 The Majority Shareholders, the Operating Personnel and
Holding and its Subsidiaries, as appropriate shall have entered into the
Termination Agreement substantially in the form attached hereto as Exhibit "D"
terminating the Parties' rights and obligations under the Contribution
Agreement and further terminating the Shareholders Agreement, the Registration
Rights Agreement, the Escrow Agreement, and other agreements referenced in or
attached to the Contribution Agreement and waiving and releasing each of the
Parties from any and all claims any of the Parties may have against the other
Parties under each such agreement.
7.2 Conditions to Obligation of the Majority Shareholders, the
Operating Personnel, and Holding. The obligation of the Majority
Shareholders, the Operating Personnel, and Holding to consummate the
transactions contemplated by this Agreement shall be subject to the
fulfillment, at or prior to Closing, of each of the following conditions, any
of which may be waived by the Majority Shareholders, the Operating Personnel,
and Holding, as applicable:
7.2.1 The representations and warranties of Mity-Lite contained
in this Agreement shall have been true and correct as of the date as of which
they were deemed to have been made and shall be true and correct in all
material respects at and as of the Closing Date;
7.2.2 Mity-Lite shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing Date;
7.2.3 No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator
wherein an unfavorable injunction, judgment, order, decree, ruling, or charge
would (a) prevent consummation of any of the transactions contemplated by this
Agreement, (b) cause any of the transactions contemplated by this Agreement to
be rescinded following consummation, (c) adversely affect the right of the
Majority Shareholders to own the Mity- Lite Common Stock (and no such
injunction, judgment, order, decree, ruling, or charge shall be in effect) or
(d) adversely affect the right of Mity-Lite to own its assets and to operate
its business (and no such injunction, judgment, order, decree, ruling or
change shall be in effect).
7.2.4 Mity-Lite shall have delivered to the Majority
Shareholders and Holding a certificate to the effect that each of the
conditions specified above in Sections 7.2.1 through 7.2.3 above is satisfied
in all respects;
7.2.5 The Parties shall have received all other authorizations,
consents, and approvals of governments and governmental agencies referred to
in Sections 3 and 4 above;
7.2.6 Mity-Lite shall have entered into the Termination
Agreement substantially in the form attached hereto as Exhibit "D" terminating
the Parties' rights and obligations under the Contribution Agreement and
further terminating the Shareholders Agreement, the Registration Rights
Agreement, the Escrow Agreement and other agreements referenced in or attached
to the Contribution Agreement and waiving and releasing each of the Parties
from any and all claims any of the Parties may have against other Parties
under each such agreement;
7.2.7 Mity-Lite (with the cooperation of the Operating
Personnel) shall have caused any personal guarantees provided by the Operating
Personnel in favor of LaSalle National Bank, Holding or any of the
Subsidiaries or securing the Put Agreement, or the loan described in the Term
Loan Amendment Agreement, to be released;
7.2.8 Mity-Lite shall have delivered to the Majority
Shareholders an executed copy of the New Registration Agreement substantially
in the form of Exhibit "E" attached hereto; and
7.2.9 Mity-Lite shall have delivered to the Majority
Shareholders stock certificates representing the Mity-Lite Common Stock and
any cash to be paid to any of the Majority Shareholders as provided in Exhibit
"A" attached hereto; and
7.2.10 Mity-Lite (as that term is defined in the Escrow
Agreement dated March 24, 1997, the "Escrow Agreement") shall have taken all
actions necessary to cause the Escrow Agent (as such term is defined in the
Escrow Agreement) to disburse the Escrow Shares (as such term is defined in
the Escrow Agreement) to the DO Group Parties.
8. REMEDIES FOR BREACHES OF THIS AGREEMENT.
8.1 Survival of Representations and Warranties. The
representations and warranties of Mity-Lite contained in Section 3 above and
the representations and warranties of the Majority Shareholders, Holding, and
the Operating Personnel contained in Section 4 above shall survive the Closing
for one (1) year. All covenants of the Parties in this Agreement shall survive
indefinitely after the Closing Date except as otherwise set forth herein.
Notwithstanding any other provision of this Agreement to the contrary, from
and after the Closing Date, the Majority Shareholders and the Operating
Personnel hereby waive any and all claims and causes of action against Holding
or its Subsidiaries arising before or after the date of this Agreement but
prior to the Closing (including, but not limited to, claims for breach of this
Agreement) other than claims as a holder of the Class A Common Stock or claims
for workmen's compensation, if any, and other similar claims covered by
insurance.
8.2 Indemnification Provisions for Benefit of Majority Shareholders
and Operating Personnel. In the event Mity-Lite breaches any of its
representations and warranties contained in Section 3 above or any of its
covenants set forth in Sections 5 and 6 above, provided that the Majority
Shareholders or the Operating Personnel make a written claim for
indemnification against Mity-Lite within the applicable survival period set
forth in Section 8.1 above, Mity-Lite agrees to indemnify each of the Majority
Shareholders from and against the entirety of any Adverse Consequences they
may suffer through and after the date of the claim for indemnification
(including any Adverse Consequences that any Majority Shareholder may suffer
after the end of such survival period) resulting from, arising out of,
relating to, in the nature of, or caused by such breach; provided, however,
that Mity-Lite shall not have any obligation to indemnify the Majority
Shareholders or the Operating Personnel from and against any Adverse
Consequences resulting from, arising out of, relating to, in the nature of, or
caused by (i) such breaches of which the Majority Shareholders and the
Operating Personnel had knowledge at or prior to the Closing (the "Known Mity-
Lite Breaches"), and (ii) such breaches until the Majority Shareholders and
the Operating Personnel have suffered Adverse Consequences by reason of all
such breaches (other than the Known Mity-Lite Breaches) in excess of Two
Hundred Thousand Dollars ($200,000) in the aggregate, after which point
Mity-Lite will be obligated to indemnify the Majority Shareholders and the
Operating Personnel, as the case may be, for all Adverse Consequences incurred
by the Majority Shareholders or the Operating Personnel, as the case may be in
excess of an aggregate of One Hundred Fifty Thousand Dollars ($150,000) of
Adverse Consequences up to, but not in excess of, the Ceiling Amount (as
defined below). For purposes of this Section 8.2 and Section 8.3 below, the
"Ceiling Amount" shall be equal to the sum of (i) the product of the average
closing price of Mity-Lite's common stock as traded on the Nasdaq Stock Market
for the 20 trading days prior to February 16, 2000 (the "Closing Price") and
the number of shares of Mity-Lite Common Stock, and (ii) the remainder of the
Closing Price multiplied by the shares of Mity-Lite common stock issuable upon
exercise of the options to purchase Mity-Lite common stock granted to the
Operating Personnel in 1997 (the "Stock Options") minus the aggregate exercise
price of the Stock Options.
8.3 Indemnification Provisions for Benefit of Mity-Lite. In the
event (a) any of the Majority Shareholders breaches any of their
representations or warranties contained in Section 4.1 above or any of their
covenants contained in Sections 5 and 6 above, or (b) any of the Operating
Personnel breaches any of their representations or warranties contained in
Section 4.2 above or any of their covenants contained in Sections 5 and 6
above, provided that Mity-Lite makes a written claim for indemnification
against the Majority Shareholders or the Operating Personnel, as the case may
be, within the applicable survival period set forth in Section 8.1 above, the
Majority Shareholders and the Operating Personnel, as appropriate, agree to
indemnify Mity-Lite from and against the entirety of any Adverse Consequences
it may suffer through and after the date of the claim for indemnification
(including any Adverse Consequences Mity-Lite may suffer after the end of such
survival period) resulting from, arising out of, relating to, in the nature
of, or caused by such breach; provided, however, that the Majority
Shareholders and the Operating Personnel shall not have any obligation to
indemnify Mity-Lite from and against any Adverse Consequences resulting from,
arising out of, relating to, in the nature of, or caused by (i) such breaches
of which Mity-Lite had knowledge at or prior to the Closing (the "Known
Majority Shareholder/Operating Personnel Breaches") and (ii) such breaches
until Mity-Lite has suffered Adverse Consequences by reason of all such
breaches (other than the Majority Shareholder/Operating Personnel Breaches) in
excess of Two Hundred Thousand Dollars ($200,000) in the aggregate, after
which point the Majority Shareholders and the Operating Personnel will be
obligated to indemnify Mity-Lite for all Adverse Consequences incurred by
Mity-Lite in excess of One Hundred Fifty Thousand ($150,000) of Adverse
Consequences up to (but not exceeding) the Ceiling Amount.
9. TERMINATION.
9.1 Termination of Agreement. Certain of the Parties may terminate
this Agreement as provided below:
9.1.1 Mity-Lite and the Majority Shareholders may terminate
this Agreement by mutual written consent at any time prior to the Closing;
9.1.2 Mity-Lite may terminate this Agreement by giving written
notice to the Majority Shareholders at any time prior to the Closing (a) in
the event either Holding or any of the Majority Shareholders or Operating
Personnel have breached any representation, warranty, or covenant contained in
this Agreement in any material respect, or (b) if the Closing shall not have
occurred on or before April 1, 2000 because of the failure of any condition
precedent under Section 7.1 above (unless the failure results primarily from
Mity-Lite breaching any representation, warranty, or covenant contained in
this Agreement); and
9.1.3 The Majority Shareholders may terminate this Agreement by
giving written notice to Mity-Lite at any time prior to the Closing (a) in the
event Mity-Lite has breached any representation, warranty, or covenant
contained in this Agreement in any material respect, or (b) if the Closing
shall not have occurred on or before April 1, 2000 because of the failure of
any condition precedent under Section 7.2 above (unless the failure results
primarily from any of the Majority Shareholders breaching any representation,
warranty, or covenant contained in this Agreement).
9.2 Effect of Termination. If any Party terminates this Agreement
pursuant to Section 9.1 above, all rights and obligations of the Parties
hereunder shall terminate without any Liability of any Party to any other
Party except as provided in the Put Agreement.
10. MISCELLANEOUS.
10.1 Press Releases and Public Announcements. No Party shall issue
any press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior written
approval of Mity-Lite and the Majority Shareholders; provided, however, that
any Party may make any public disclosure it believes in good faith is required
by applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use its
reasonable best efforts to advise the other Parties prior to making such
disclosure).
10.2 No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
10.3 Entire Agreement. This Agreement constitutes the entire
agreement between and among the Parties and supersedes any prior
understandings, agreements, or representations by, between, or among the
Parties written or oral, to the extent they related in any way to the subject
matter hereof.
10.4 Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors
and permitted assigns. No party hereto may assign either this Agreement or
any of his, her, or its rights, interests, or obligations hereunder without
the prior written approval of Mity-Lite and the Majority Shareholders;
provided, however, that Mity-Lite may (i) assign any or all of its rights and
interests hereunder to one or more of its Affiliates and (ii) designate one or
more of its Affiliates to perform its obligations hereunder (in any or all of
which cases Mity-Lite nonetheless shall remain liable and responsible for the
performance of all of its obligations hereunder).
10.5 Counterparts. This Agreement may be executed by facsimile and
in one or more counterparts, each of which shall be deemed an original, but
all of which together will constitute one and the same instrument.
10.6 Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.
10.7 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given two (2)
days after being sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set
forth below:
If to Holding:
DO Group Holding, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx & Xxxxxx
Three First Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Majority Shareholders:
Xxxxx Xxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxx and Xxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxxx and Xxxxxx X. Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Estate of Xxxxxxx X. Xxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Mity-Lite:
Mity-Lite, Inc.
0000 Xxxx 000 Xxxxx
Xxxx, Xxxx 00000
Attention: Xxxxxxx X Xxxxxxx
Telephone: (000) 000-0000 or (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxxx, LLP
Xxxxx Fargo Plaza
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Operating Personnel:
Xxxxx Xxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxx Xxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any party hereto may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth
above using any other means (including, but not limited to, personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the intended recipient. Any party hereto may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other parties
hereto notice in the manner herein set forth.
10.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Utah without
giving effect to any choice or conflict of law provision or rule (whether of
the State of Utah or of any other state or jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Utah.
10.9 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by all
of the parties hereto. No waiver by any party hereto of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
10.10 Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any state or jurisdiction
shall not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other state or jurisdiction.
10.11 Expenses. Each of the parties hereto will bear his, her, or
its own costs and expenses (including, but not limited to, legal fees and
expenses) incurred in connection with this Agreement and the transactions
contemplated hereby.
10.12 Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity
or question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party hereto by virtue
of the authorship of any of the provisions of this Agreement. Any reference
to any federal, state, local, or foreign statute or law shall be deemed also
to refer to all rules and regulations promulgated thereunder, unless the
context requires otherwise. The word "including" shall mean including without
limitation. The parties hereto intend that each representation, warranty, and
covenant contained herein shall have independent significance. If any party
hereto has breached any representation, warranty, or covenant contained herein
in any respect, the fact that there exists another representation, warranty,
or covenant relating to the same subject matter (regardless of the relative
levels of specificity) that the party has not breached shall not detract from
or mitigate the fact that the party is in breach of the first representation,
warranty, or covenant.
10.13 Incorporation of Recitals, Exhibits, and Disclosure
Schedules. The above Recitals, all attached Exhibits, the Majority
Shareholders' Disclosure Schedule, and the Operating Personnel Disclosure
Schedule are deemed to be incorporated herein by reference and made a part
hereof.
10.14 Specific Performance. Each of the parties hereto acknowledge
and agree that the other parties would be damaged irreparably in the event any
of the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the parties
hereto agrees that the other parties shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state thereof
having jurisdiction over the parties hereto and the matter (subject to the
provisions set forth in Section 10.15 below), in addition to any other remedy
to which they may be entitled, at law or in equity.
10.15 Submission to Jurisdiction. Each of the parties hereto
submits to the exclusive jurisdiction of any state or federal court sitting
in Salt Lake City, Salt Lake County, Utah, in any action or proceeding arising
out of or relating to this Agreement and agrees that all claims in respect of
the action or proceeding may be heard and determined in any such court. Each
party hereto also agrees not to bring any action or proceeding arising out of
or relating to this Agreement in any other court. Each of the parties hereto
waives any defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety, or other security that
might be required of any other party with respect thereto. Any party hereto
may make service on any other party by sending or delivering a copy of the
process to the party to be served at the address and in the manner provided
for the giving of notices in Section 10.7 above. Each party hereto agrees
that a final judgment in any action or proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner
provided by law or at equity.
10.16 Attorneys' Fees. If any party to this Agreement brings an
action to enforce its rights under this Agreement, the prevailing party shall
be entitled to recover its costs and expenses, including, without limitation,
reasonable attorneys' fees, incurred in connection with such action, including
any appeal of such action.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase
Agreement as of the date first above written.
HOLDING:
DO GROUP HOLDING, INC., a Utah corporation
By: /s/ Xxxxxxx Xxxxxxxx
Its: Vice Chairman
MAJORITY SHAREHOLDERS:
/s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
/s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
ESTATE OF XXXXXXX X. XXXXX
By: /s/ Xxxx X. Xxxxx
Its: Authorized Representative
MITY-LITE
MITY-LITE, INC., a Utah corporation
By: /s/ Xxxxxxx X.Xxxxxx
Xxxxxxx X. Xxxxxx
Its: President
OPERATING PERSONNEL:
/s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx Xxxxxxx
/s/ Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx
