EXHIBIT 10.95
STOCK PURCHASE AGREEMENT
among
PAGE HOLDING COMPANY (Buyer),
ARIS INDUSTRIES, INC. (Seller)
and
PERRY MANUFACTURING COMPANY
with respect to the stock of
PERRY MANUFACTURING COMPANY
As of September 19, 1996
TABLE OF CONTENTS
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1. Sale and Purchase of Shares........................................... 1
2. Closing; Closing Date................................................. 2
3. Purchase Price and Payment for Shares................................. 2
4. Delivery of Shares.................................................... 2
5. Representations and Warranties of the Seller.......................... 2
5.1 Outstanding Capital Stock.................................... 2
5.2 Options or Other Rights...................................... 3
5.3 Power and Capacity; Organizational Documents................. 3
5.4 Freedom to Contract.......................................... 4
5.5 Disclaimer of Warranties..................................... 5
5.6 Taxes........................................................ 5
5.7 Subsidiaries................................................. 6
5.8 Qualification................................................ 7
5.9 Litigation................................................... 7
5.10 Undisclosed Liabilities...................................... 7
5.11 Disclosure................................................... 7
5.12 Absence of Certain Events.................................... 7
5.13 Affiliate Transactions....................................... 8
5.14 Sale of All or Substantially All of Assets................... 8
5.15 Representations and Warranties on Closing Date............... 8
6. Representations and Warranties of the Buyer........................... 8
6.1 Due Incorporation............................................ 8
6.2 Corporate Power.............................................. 9
6.3 Freedom to Contract.......................................... 9
6.4 Litigation................................................... 10
6.5 Acquisition of Shares for Investment......................... 10
6.6 Representations and Warranties on Closing Date............... 10
7. Certain Covenants of Parties.......................................... 10
7.1 Buyer's Knowledge and Independent Investigation.............. 10
7.2 Books and Records; Post Closing Access....................... 11
7.3 Regulatory and Other Authorizations; Consents................ 11
7.4 Employees.................................................... 12
7.5 Consent to Jurisdiction and Service of Process............... 12
7.6 Expenses..................................................... 12
7.7 Indemnification for Fees of Brokers and Finders.............. 13
7.8 Company Subject to Indebtedness.............................. 13
7.9 Company Assets and Properties Subject to Liens............... 14
7.10 Intercompany Obligations..................................... 14
7.11 Section 338(h)(10) Election.................................. 14
7.12 Post-Closing Board Action.................................... 16
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8. Conditions Precedent to the Obligation of the Buyer to Close.......... 16
8.1 Representations and Warranties True as of Closing Date....... 16
8.2 Compliance with This Agreement............................... 16
8.3 Certificates................................................. 16
8.4 Corporate Authorization...................................... 16
8.5 Opinion of Counsel to the Company and the Seller............. 16
8.6 Resignations of Directors and Officers....................... 17
8.7 Good Standing................................................ 17
8.8 No Adverse Event............................................. 17
8.9 Litigation................................................... 17
8.10 Delivery of Stock Certificates............................... 17
8.11 Buyer's Financing Arrangements with ▇▇▇▇▇▇................... 17
8.12 Consents..................................................... 17
8.13 Releases..................................................... 18
8.14 Release of Liens............................................. 18
8.15 Sale of Aris Stock........................................... 18
8.16 Consent to Sale of Shares.................................... 18
8.17 Proceedings Satisfactory..................................... 18
9. Conditions Precedent to the Obligation of the Seller to Close......... 18
9.1 Representations and Warranties True as of Closing Date....... 18
9.2 Compliance with This Agreement............................... 19
9.3 Officer's Certificate........................................ 19
9.4 Corporate Authorization...................................... 19
9.5 Opinion of Counsel to the Buyer.............................. 19
9.6 Good Standing................................................ 19
9.7 Litigation................................................... 19
9.8 Payment of Purchase Price.................................... 19
9.9 Seller's Debt Restructuring Agreement........................ 20
9.10 Consents..................................................... 20
9.11 Consent to Transaction by Buyer's Affiliates................. 20
9.12 Releases..................................................... 20
9.13 Termination of Stock Options................................. 20
9.14 Sale of Aris Stock........................................... 20
9.15 Proceedings Satisfactory..................................... 21
10. Indemnification....................................................... 21
10.1 Seller's Indemnity........................................... 21
10.2 Limitations.................................................. 22
10.3 Buyer's Indemnity............................................ 22
10.4 Procedure.................................................... 23
10.5 Exclusive Remedy............................................. 25
11. Tax Matters........................................................... 25
11.1 Payment for Taxes............................................ 25
11.2 Section 338 Election Matters................................. 26
11.3 Payments..................................................... 27
11.4 Refunds...................................................... 27
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11.5 Contests..................................................... 28
11.6 Filing of Tax Returns; Change of Tax Year.................... 29
11.7 Cooperation and Exchange of Information...................... 29
11.8 Conveyance Taxes............................................. 30
11.9 Adjustment to Purchase Price................................. 30
12. Survival of Representations and Warranties............................ 30
13. Miscellaneous......................................................... 30
13.1 Knowledge.................................................... 31
13.2 Cooperation; Further Assurances.............................. 31
13.3 Entire Agreement............................................. 31
13.4 Governing Law................................................ 31
13.5 Headings..................................................... 31
13.6 Notices...................................................... 31
13.7 Separability................................................. 32
13.8 Amendment; Waiver............................................ 33
13.9 Assignment and Binding Effect................................ 33
13.10 No Benefit to Others......................................... 33
13.11 Counterparts................................................. 33
13.12 Interpretation............................................... 33
Sellers Schedules
-----------------
Schedule 5.1 -- Liens, etc. on Shares of the Company; Original
Perry Shareholders
Schedule 5.2 -- Options or Other Rights Granted by Seller on
Shares of the Company
Schedule 5.4 -- Seller's Required Consents, Conflicts with
Other Agreements of Seller, etc.
Schedule 5.7 -- Subsidiaries of the Company Authorized by Seller
Schedule 5.8 -- Company Qualifications & Good Standing
Schedule 5.10 -- Contracts and Liabilities of the Company
Created by Seller, etc.
Schedule 5.12 -- Certain Transactions Affecting the Company Due
to Action of Seller Since February 3, 1996
Schedule 5.13 -- Affiliate Transactions
Schedule 7.8 -- Indebtedness Not Accepted by Buyer
Schedule 7.9 -- Liens Not Accepted by Buyer
Schedule 7.10 -- Intercompany Items
Schedule 8.6 -- Director and Officer Resignations
Schedule 9.13 -- List of Holders of Seller's Stock Options to
be Cancelled
Buyers Schedules
----------------
Schedule 6.1 -- Shares of Capital Stock of Buyer
Schedule 6.3 -- Conflicts and Required Consents
Exhibits
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Exhibit A -- Form of Opinion of Seller's Counsel
Exhibit B -- Form of Opinion of Buyer's Counsel
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Exhibit C -- General Release by Seller and its Affiliates
Exhibit D -- Consent of Original Perry Owners
Exhibit E -- Consent of Buyer's Stockholders
Exhibit F -- General Release by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Exhibit G -- General Release by Perry Manufacturing and its Subsidiaries
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT dated as of September 19, 1996 (this "AGREEMENT"),
among PAGE HOLDING COMPANY, a Delaware corporation, with its principal executive
office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"BUYER"), ARIS INDUSTRIES, INC., a New York corporation, with its principal
executive office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"SELLER"), and PERRY MANUFACTURING COMPANY, a North Carolina corporation, with
its principal executive office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "COMPANY").
W I T N E S S E T H:
WHEREAS, the Seller is the beneficial and record owner of 1,169,870 (One
Million, One Hundred Sixty Nine Thousand, Eight Hundred Seventy) shares,
constituting all the issued and outstanding shares (the "SHARES") of common
stock, par value $.10 per share, of the Company; and
WHEREAS, Seller and ▇▇▇▇▇▇ Financial, Inc. ("▇▇▇▇▇▇") are parties to a
Senior Secured Note Agreement dated June 30, 1993, under which Seller is
indebted to ▇▇▇▇▇▇ in the principal amount of $53,370,617 (the "▇▇▇▇▇▇ NOTE");
and
WHEREAS, the Seller wishes to sell, and the Buyer wishes to purchase, the
Shares upon the terms and subject to the conditions of this Agreement, pursuant
to which Seller will receive a total consideration of $51,881,909, consisting of
(i) $40,857,500 in cash paid by Buyer as payment in full for the Shares, which
will be used by Seller to pay ▇▇▇▇▇▇ under the ▇▇▇▇▇▇ Note and (ii) the
forgiveness at the Closing (as defined herein) by ▇▇▇▇▇▇ of the remaining
balance of $11,024,409 of the ▇▇▇▇▇▇ Note.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby agree as follows:
1. Sale and Purchase of Shares.
Subject to the terms and conditions of this Agreement, at the closing
provided for in Section 2 hereof, the Seller shall sell, transfer, convey and
assign to the Buyer, and the Buyer shall purchase from Seller, all the Shares
(the aggregate of which Shares shall constitute all the issued and outstanding
capital stock of the Company on the Closing Date (as hereinafter defined)).
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2. Closing; Closing Date.
Subject to the terms and conditions of this Agreement, the closing of the
sale and purchase of the Shares contemplated hereby (the "CLOSING") shall take
place at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, LLP, ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ at 10:00 A.M. local time, on September 30, 1996 or such later date as
agreed to by the Buyer and the Seller. The time and date upon which the Closing
shall occur is herein called the "CLOSING DATE".
3. Purchase Price and Payment for Shares.
As consideration for the Shares, the Buyer shall pay to the Seller at the
Closing $40,857,500 (the "PURCHASE PRICE") in immediately available funds by
wire transfer to an account or accounts designated by the Seller. At the
Closing, upon receipt by ▇▇▇▇▇▇ of the Purchase Price, ▇▇▇▇▇▇ shall accept the
Purchase Price from Seller in full and final satisfaction of the principal
amount due under the ▇▇▇▇▇▇ Note and shall forgive the remaining principal
balance of $11,024,409 of the ▇▇▇▇▇▇ Note, pursuant to the Restructuring
Agreement referred to in Section 9.9.
4. Delivery of Shares.
At the Closing, the Seller shall deliver to the Buyer stock certificates
representing all the Shares, duly endorsed in blank or accompanied by stock
powers duly executed in blank, in proper form for transfer.
5. Representations and Warranties of the Seller.
The Seller represents and warrants to the Buyer as follows:
5.1 Outstanding Capital Stock. The Company is authorized to issue
4,000,000 shares of Common Stock, par value $.10 per share, 1,169,870 of
which are issued and outstanding (excluding 59,130 treasury shares), and
200,000 shares of Preferred Stock, par value $1.00 per share, none of which
are issued and outstanding. All the Shares have been duly authorized,
validly issued and are fully paid and nonassessable and were acquired by
the Seller from the persons and entities set forth on Schedule 5.1 on
September 30, 1987 (the "ACQUISITION DATE"). Seller has not granted to any
person or entity any preemptive rights with respect to the Shares or the
capital stock of the Company. Except as set forth in Schedule 5.1, all
right, title and interest in and to the Shares is owned by Seller,
beneficially and of record, free and clear of all liens, claims, charges,
pledges, security interests or other encumbrances of any nature whatsoever,
including without limitation, any options,
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restrictions on voting rights or rights of disposition, and claims, charges
or third party rights of whatever nature ("LIENS"). Delivery of a
certificate or certificates evidencing the Shares at the Closing in the
manner provided in Section 4 will transfer to Buyer good and valid title to
the Shares, free and clear of all Liens, and without any condition or
restrictions on transferability imposed or retained by Seller except
pursuant to Section 6.5 of this Agreement.
5.2 Options or Other Rights. Except pursuant to this Agreement and
as disclosed in Schedule 5.2, (a) Seller has not granted or issued any
right, subscription, warrant, call, preemptive right, option or other right
to purchase or otherwise to receive or acquire from the Company or the
Seller at any time or upon the happening of any stated event any of the
outstanding, authorized but unissued, unauthorized or treasury shares of
the capital stock or any other security of the Company, (b) Seller has not
granted or issued any right, subscription, warrant, call, preemptive right,
option or other right to purchase or otherwise to receive or acquire from
the Company or the Seller any security of any kind convertible into such
capital stock, (c) the Seller has not entered into any trust (voting or
otherwise) or other agreement of any kind granting to any person or entity
any interest or rights with respect to any capital stock, or security of
any kind convertible into such capital stock, of the Company, and (d)
Seller has not granted any proxy to vote, or entered into any agreement,
trust or understanding with respect to the voting of, the capital stock of
the Company.
5.3 Power and Capacity; Organizational Documents.
(a) Seller. Seller is a corporation duly
organized, validly existing and in good standing under the laws of
the State of New York. The Seller has all requisite corporate
power, authority and approval required to execute, deliver and
perform this Agreement and all other documents, agreements and
instruments required to be delivered in connection with the
transactions contemplated by this Agreement (collectively,
together with this Agreement, the "OPERATIVE DOCUMENTS") to which
it is a party, to consummate the transactions contemplated hereby
and thereby and to perform fully the Seller's obligations
hereunder and thereunder. Seller is duly qualified, licensed or
admitted to do business and is in good standing in all
jurisdictions in which the ownership, use or leasing of its assets
and properties, or the conduct or nature of its business, makes
such qualification, licensing or admission necessary and in which
the failure to be so qualified, licensed or admitted and in good
standing could reasonably be expected to have an adverse
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effect on the validity or enforceability of this Agreement or any
of the Operative Agreements to which it is a party or on the
ability of Seller to perform its obligations hereunder or
thereunder. The execution, delivery and performance of the
Operative Documents by the Seller have been, or prior to the
Closing will be, duly and validly authorized by the Board of
Directors of the Seller, and no other corporate action on the part
of the Seller or its shareholders is necessary. The Operative
Documents have been duly and validly executed and delivered by the
Seller and (assuming due authorization, execution and delivery by
the Buyer) constitute the legal, valid and binding obligations of
the Seller enforceable against the Seller in accordance with their
respective terms, subject to bankruptcy, insolvency, and similar
laws affecting creditors' rights generally and to the extent that
equitable principles may limit the availability of specific
performance and other remedies.
(b) The Company. The Company is duly
organized, validly existing and in good standing under
the laws of the State of North Carolina.
(c) Organizational Documents. The Seller has
delivered to Buyer prior to the signing of this Agreement true,
correct and complete copies of (i) the Company's and Seller's
articles of incorporation or certificates of incorporation, as the
case may be, and bylaws and (ii) any other documents, agreements
or instruments relating to the organization of the Company, which
have been created after the Acquisition Date by or at the
direction of Seller in its capacity as sole stockholder of the
Company (the items in clauses (i) and (ii) being referred to
collectively herein as the "ORGANIZATIONAL DOCUMENTS"), in each
case as amended to and in force on the date hereof.
5.4 Freedom to Contract.
(a) Except as set forth on Schedule 5.4, the
execution, delivery and performance of this Agreement and the
other Operative Documents to which Seller is a party does not, and
the performance by Seller of its obligations hereunder and
thereunder and the consummation of the transactions contemplated
hereby and thereby will not (with or without notice or passage of
time or both), (i) violate or conflict with any provision of the
certificates or articles of incorporation or by-laws of the Seller
or any amendments thereto or restatements thereof, (ii) violate
any of the terms, conditions or provisions of any applicable law,
statute, rule,
Page 4
regulation, order, writ, injunction, judgment or decree of any
Governmental Authority (as defined hereinafter) binding upon the
Seller, (iii)(A) conflict with or result in a violation or breach
of, or constitute a default under, (B) give rise to any right of
termination, cancellation or acceleration under, (C) result in or
give to any person any additional rights or entitlement to
increased, additional, accelerated or guaranteed payments under or
(D) result in the creation or imposition of any Lien upon Seller
or any of its assets and properties under, any of the terms,
conditions or provisions of any material note, bond, indenture,
debenture, security agreement, trust agreement, lien, mortgage,
lease, agreement, license, franchise, permit, guaranty, joint
venture agreement, or any other agreement, arrangement, instrument
or obligation, to which the Seller is a party or by which it is
bound, or (iv) require the Seller to obtain any governmental
authorization, approval, order, license, permit, franchise or
consent, or make any registration, declaration or filing with any
federal, state or local (but not foreign) court, governmental
instrumentality, agency, department, commission, board, bureau or
authority, or other regulatory or administrative agency or
commission ("GOVERNMENTAL AUTHORITY"); provided, however, that no
representation or warranty is made by Seller in clauses (ii) or
(iv) above as to any requirement referred to therein within the
States of North Carolina and Virginia or in any jurisdiction
outside the United States.
(b) Except as set forth in the audited financial
statements of the Company for its most recent fiscal year and
except as previously disclosed in writing to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
("▇▇▇▇▇"), in the Seller's Annual Report on Form 10-K for the
fiscal year ended February 3, 1996 (the "10-K") or on Schedule
5.10, the Seller has not, on behalf of the Company or any of the
Subsidiaries (as defined below), entered into or authorized any
note, bond, indenture, debenture, security agreement, trust
agreement, lien, mortgage, lease, agreement, license, franchise,
permit, guaranty, joint venture agreement, or any other agreement,
arrangement, instrument or obligation, to which either the Company
or any Subsidiary is a party or by which either the Company or any
Subsidiary is bound.
5.5 Disclaimer of Warranties. Seller makes no warranty, express or
implied, whether of merchantability, suitability or fitness for a
particular purpose, or quality or adequacy as to the assets or properties
of the Company or the Subsidiaries or any part thereof, or as to the
condition or workmanship thereof, or the absence of any defects therein,
whether latent
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or patent, and Buyer has relied upon its own examination thereof in
deciding to purchase the Shares on the terms and subject to the conditions
of this Agreement and Buyer accepts such assets and properties "AS IS."
5.6 Taxes.
(a) Tax Returns. All U.S. federal income tax returns for
all periods from and after the Acquisition Date and ending on or
before the Closing Date that are or were required to be filed by,
or with respect to, the Company and those of its subsidiaries
incorporated within the United States (the "USA SUBSIDIARIES")
have been or shall be filed on a timely basis (taking into account
extensions of time permitted under applicable law). The Seller
shall timely file (taking into account extensions of time
permitted under applicable law) or cause to be filed all U.S.
federal income tax returns that shall be required to be filed
after the Closing Date by, or with respect to, each of the Company
and the USA Subsidiaries, for all periods ending on or before the
Closing Date, in accordance with applicable law. Such returns
shall properly reflect any election (and the effects thereof)
required under Section 7.11. All such tax returns that have been
or will be filed by the Seller were when filed, and will continue
to be after the date of this Agreement, true, correct and complete
in all material respects.
(b) Payment. Each of the Company and the USA Subsidiaries
has paid or has made provision for the payment of (including, by
accruals, charges, reserves or liabilities reflected on the
audited financial statements thereof as of February 3, 1996 (the
"REFERENCED BALANCE SHEET")), all U.S. federal income taxes that
have or may become due for all periods from and after the
Acquisition Date and ending on or before the date of the
Referenced Balance Sheet, including all such taxes reflected on
the tax returns referred to in this Section 5.6.
(c) Section 341(f)(2). No consent to the application of
Section 341(f)(2) of the Internal Revenue Code of 1986, as amended
(the "CODE"), has been filed with respect to the Company or any
USA Subsidiaries.
5.7 Subsidiaries. Except as set forth on Schedule 5.7, Seller has
not taken any action, or directed the Company to take any action, to (i)
create, invest in or make any payments to any corporation or other entity
of which the Company owns, directly or indirectly, in excess of 5% of the
outstanding capital stock or which is in any way controlled by the Company
or any of its subsidiaries (each, a "SUBSIDIARY", and collectively, the
"SUBSIDIARIES"), (ii) issue or authorize any
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capital stock, or securities convertible into or exchangeable or
exercisable for any shares of capital stock, of any Subsidiary or any
rights to subscribe for or to purchase, or any options for the purchase of,
any shares of capital stock or any securities convertible into or
exchangeable or exercisable for any shares of capital stock of any
Subsidiary or (iii) enter into any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character relating to, any shares of capital stock or any securities
convertible into or exchangeable or exercisable for any shares of capital
stock of any Subsidiary. All references in this Agreement to Subsidiaries
of the Company shall include those Subsidiaries of the Company set forth in
Schedule 5.7 but shall not include the Perry Manufacturing Company
Political Action Committee.
5.8 Qualification. The Company is qualified to do
business as a foreign corporation and is in good standing in
the jurisdictions specified in Schedule 5.8 hereto.
5.9 Litigation. There is no action, order, suit, inquiry,
litigation, proceeding or investigation by or before any referee, mediator
or arbitrator, or any Governmental Authority pending or, to the knowledge
of the Seller, threatened, against the Seller, which would in any way seek
to prevent, enjoin, alter or delay any transaction contemplated hereby or
by the other Operative Documents. To the knowledge of Seller, there is no
action, order, suit, inquiry, litigation, proceeding or investigation by or
before any referee, mediator or arbitrator, or any Governmental Authority
pending or threatened, against the Company or any Subsidiary, which would
in any way seek to prevent, enjoin, alter or delay any transaction
contemplated hereby.
5.10 Undisclosed Liabilities. Except as set forth in the audited
financial statements of the Company for its most recent fiscal year and
except as previously disclosed in writing to ▇▇▇▇▇, in the 10-K or on
Schedule 5.10, Seller has not, on behalf of the Company or any of the
Subsidiaries, created, assumed or incurred any liabilities or obligations,
whether accrued, absolute, contingent or otherwise.
5.11 Disclosure. None of the representations or warranties or
other provisions contained in this Agreement or any other Operative
Document delivered or to be delivered to Buyer, or any written statement,
certificate or other document furnished to Buyer in connection with this
Agreement or any other Operative Document, contains or will contain any
untrue statement of fact or omits or will omit to state a fact necessary in
order to make the statements contained therein not misleading.
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5.12 Absence of Certain Events. Except as previously disclosed in
writing to ▇▇▇▇▇, in the 10-K or on Schedule 5.12, since February 3, 1996,
the Seller has not, on behalf of the Company or any Subsidiary, taken any
action that would cause (i) the business of the Company and the
Subsidiaries to have been operated other than in the ordinary and normal
course of business or (ii):
(a) except as set forth on Schedule 5.12, any declaration
or payment of any dividend, or any other similar distribution,
directly or indirectly, with respect to the Shares or other
securities of the Company;
(b) the Company to have assumed, guaranteed, endorsed or
otherwise become responsible for the liability or obligation of
any person other than the Subsidiaries (whether absolute, accrued,
contingent or otherwise) or engaged in any other transaction which
might have an adverse effect on the business or condition
(financial or otherwise) of the Company or the Subsidiaries;
(c) any mortgage, pledge or creation of any Lien with
respect to any of the assets or properties of the Company:
(d) any transfer or grant of any right under any
contracts, patents, patent licenses, inventions, trade names,
trademarks, service marks or copyrights, or registrations or
licenses thereof or applications therefor, or with respect to any
know-how or other proprietary or trade rights; or
(e) any termination, discontinuance, closing or disposal
of any plant, facility or business operation of the Company.
5.13 Affiliate Transactions. Except as set forth on Schedule 5.13,
neither the Company nor any Subsidiary, on the one hand, is a party to any
contract for goods or services or any lease with Seller, or any officer,
director, employee or agent of Seller or any affiliate of any such person
(other than ▇▇▇▇▇ and senior executives of the Company), on the other, nor
are there any loans or advances to any such persons (other than ▇▇▇▇▇ and
senior executives of the Company) from the Company or the Subsidiaries
which are presently outstanding.
5.14 Sale of All or Substantially All of Assets. The sale of the
Shares contemplated by this Agreement does not and
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will not constitute a sale of all or substantially all of the
assets of Seller.
5.15 Representations and Warranties on Closing Date. The
representations and warranties contained herein shall be true and complete
on and as of the Closing Date with the same force and effect as though such
representations and warranties had been made on and as of the Closing Date
other than such representations and warranties as are made as of another
date.
6. Representations and Warranties of the Buyer.
The Buyer represents and warrants to the Seller as follows:
6.1 Due Incorporation. The Buyer is duly organized, validly
existing and in good standing under the laws of the State of Delaware, and
has all requisite power and lawful authority to own, lease and operate its
assets and properties and to carry on its business as and where such
business is now conducted. Except as set forth on Schedule 6.1, all the
shares of capital stock of Buyer are owned by members of the ▇▇▇▇▇ family,
senior management of the Company and/or their affiliates.
6.2 Corporate Power. The Buyer has all requisite corporate power,
authority and approval required to execute, deliver and perform this
Agreement and the other Operative Documents to which it is a party, to
consummate the transactions contemplated hereby and thereby and to perform
fully its obligations hereunder and thereunder. The execution, delivery and
performance of the Operative Documents by the Buyer have been, or prior to
the Closing will be, duly and validly authorized by the Board of Directors
of the Buyer, and no other corporate action on the part of the Buyer or its
shareholders is necessary. The Operative Documents have been duly and
validly executed and delivered by the Buyer and (assuming due
authorization, execution and delivery by the Seller) constitute the legal,
valid and binding obligations of the Buyer enforceable against the Buyer in
accordance with their respective terms, subject to bankruptcy, insolvency,
and similar laws affecting creditors' rights generally and to the extent
that equitable principles may limit the availability of specific
performance and other remedies.
6.3 Freedom to Contract. Except as set forth on Schedule 6.3, the
execution, delivery and performance of this Agreement and the other
Operative Documents to which it is a party does not, and the performance by
it of its obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby will not (with or without
notice or passage of time or both), (a) violate or conflict with any
provision of the certificate or articles of
Page 9
incorporation or by-laws of the Buyer or any amendments thereto or
restatements thereof, (b) violate any of the terms, conditions or
provisions of any applicable law, statute, rule, regulation, order, writ,
injunction, judgment or decree of any Governmental Authority binding upon
the Buyer or any of the Buyer's stockholders, (c)(i) conflict with or
result in a violation or breach of, or constitute a default under, (ii)
give rise to any right of termination, cancellation or acceleration under,
(iii) result in or give to any person any additional rights or entitlement
to increased, additional, accelerated or guaranteed payments under or (iv)
result in the creation or imposition of any Lien upon Buyer or any of its
respective assets and properties under, any of the terms, conditions or
provisions of any material note, bond, indenture, debenture, security
agreement, trust agreement, lien, mortgage, lease, agreement, license,
franchise, permit, guaranty, joint venture agreement, or any other
agreement, arrangement, instrument or obligation, to which the Buyer is a
party or by which it is bound, or (d) require the Buyer or any of the
Buyer's stockholders to obtain any authorization, approval, order, license,
permit, franchise or consent, or make any registration, declaration or
filing with any Governmental Authority.
6.4 Litigation. There is no action, order, suit, inquiry,
litigation, proceeding or investigation by or before any referee, mediator
or arbitrator, or any Governmental Authority pending or, to the knowledge
of the Buyer, threatened, against the Buyer, which would in any way seek to
prevent, enjoin, alter or delay any transaction contemplated hereby or by
the other Operative Documents to which Buyer is a party.
6.5 Acquisition of Shares for Investment. Buyer is acquiring the
Shares for investment and not with a view toward, or for sale in connection
with, any distribution thereof, nor with any present intention of
distributing or selling the Shares. Buyer agrees and understands that the
Shares have not been registered under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), and may not be sold, transferred, offered
for sale, pledged, hypothecated or otherwise disposed of (a) without
registration under the Securities Act, except pursuant to an exemption from
such registration available under the Securities Act, and (b) except in
accordance with applicable provisions of state securities laws.
6.6 Representations and Warranties on Closing Date. The
representations and warranties contained in this Section 6
shall be true and complete on and as of the Closing Date with
the same force and effect as though such representations and
warranties had been made on and as of the Closing Date other
Page 10
than such representations and warranties as are made as of
another date.
7. Certain Covenants of Parties.
7.1 Buyer's Knowledge and Independent Investigation. The Buyer
acknowledges and agrees that (a) ▇▇▇▇▇ has at all times since the
Acquisition Date been the President and Chief Executive Officer of the
Company with control over operational matters of the Company and its
Subsidiaries and has knowledge thereof, (b) the Shares of the Company were
sold to the Seller on the Acquisition Date by ▇▇▇▇▇ and his affiliates, (c)
Buyer has been furnished with or given adequate access to all information
regarding the Company, the Subsidiaries and their respective businesses
that Seller possesses and that previously has not been disclosed or
provided to ▇▇▇▇▇, (d) Buyer has made its own inquiry and investigation
into, and, based thereon, will have formed an independent judgment
concerning, the Shares, the Company, the Subsidiaries and their respective
businesses and (e) Buyer will not assert any claim against the Seller, or
any of its directors, officers, employees, agents, stockholders,
affiliates, consultants or representatives or hold any such persons liable
for any inaccuracies, misstatements or omissions with respect to
information regarding the Company or the Subsidiaries (other than, with
respect to claims against Seller, the representations and warranties of
Seller contained in this Agreement).
7.2 Books and Records; Post Closing Access.
(a) If, in order properly to prepare documents required to
be filed with Governmental Authorities or its financial
statements, it is necessary that any party hereto or any
successors be furnished with additional information relating to
Seller, Buyer, the Company and the Subsidiaries, or their
respective businesses, and such information is in the possession
of any other party hereto, such party agrees to use commercially
reasonable efforts to furnish such information to such requesting
party, at the cost and expense of the party being furnished such
information.
(b) In order to facilitate the resolution of any claims
made by or against or incurred by any party hereto, it is agreed
that the parties shall after the Closing, upon two (2) business
days' advance notice, (i) afford the officers, employees and
authorized agents and representatives of the parties reasonable
access, during normal business hours, to the offices, properties,
books and records of the parties and any of their respective
successors relating to the Company and the Subsidiaries
Page 11
and the transactions contemplated by this Agreement, (ii) furnish
to the officers, employees and authorized agents and
representatives of the parties such additional financial and other
information regarding the Company and the Subsidiaries, including
any successors, the assets, properties, goodwill and business of
the Company and the Subsidiaries, and any successors, and their
respective businesses and the transactions contemplated by this
Agreement as the parties may from time to time reasonably request
and (iii) make available to the parties, the employees of the
parties (and in case of the Buyer, the Company and the
Subsidiaries) whose assistance, testimony or presence is necessary
to assist the parties in evaluating any such claims and in
defending such claims, including the presence of such persons as
witnesses in hearings or trials for such purposes.
(c) The Seller and the Buyer agree, and after the Closing,
the Buyer agrees to cause the Company, to preserve and keep all
books and records of or relating to the Company and the
Subsidiaries in their possession for a period of five years from
the Closing Date.
7.3 Regulatory and Other Authorizations; Consents. Each party
hereto will use its commercially reasonable efforts to obtain all
authorizations, consents, orders and approvals of all Governmental
Authorities that may be or become necessary for its execution and delivery
of, and the performance of its obligations pursuant to, this Agreement and
will cooperate fully with the other parties hereto in promptly seeking to
obtain all such authorizations, consents, orders and approvals.
7.4 Employees. To the extent that service of an employee is
relevant for purposes of eligibility, vesting or benefit accrual under any
employee benefit plan, program or arrangement established or maintained by
the Buyer, the Company and the Subsidiaries for the benefit of all of those
persons who, at the discretion of the Buyer, become or remain employed by
the Buyer, the Company or any Subsidiary (collectively, "TRANSFERRED
EMPLOYEES"), such plan, program or arrangement shall credit such employees
for service on or prior to the Closing with the Seller, the Company, or the
Subsidiaries or any affiliate thereof, as the case may be. The Buyer, the
Company and the Subsidiaries, as the case may be, covenant and agree that
they shall be solely and exclusively responsible for any and all
termination, severance, vacation and sick pay, and other amounts payable or
benefits to be provided to the persons who were employed by the Buyer, the
Company or any Subsidiary, as the case may be, immediately prior to the
Closing, whether imposed by law or contract, resulting from, or related to,
the termination of
Page 12
employment of any of such persons or the closing or diminution of any the
Company's, or the Subsidiaries' facilities after the Closing. After the
Closing, Buyer agrees that it will not, and will not permit the Company or
any Subsidiary to, take any action with respect to any Transferred Employee
or any former employee of the Company or any of its Subsidiaries that would
result in any liability to Seller with respect to such Transferred Employee
or former employee.
7.5 Consent to Jurisdiction and Service of Process. Any legal
action, suit or proceeding arising out of or relating to this Agreement or
the transactions contemplated hereby shall be instituted in any state or
federal court located in New York, New York, and each party hereto agrees
not to assert, by way of motion, as a defense, or otherwise, in any such
action, suit or proceeding, any claim that it is not subject personally to
the jurisdiction of such court, that the action, suit or proceeding is
brought in an inconvenient forum or that the venue of the action, suit or
proceeding is improper. Each party further irrevocably submits to the
jurisdiction of any such court in any such action, suit or proceeding. Any
and all service of process and any other notice in any such action, suit or
proceeding shall be effective against any party if given personally or by
registered or certified mail, return receipt requested, or by any other
means of mail that requires a signed receipt, postage prepaid, mailed to
such party as herein provided, or by personal service on such party with a
copy of such process mailed to such party by first class mail or registered
or certified mail, return receipt requested, postage prepaid; provided,
however, that nothing herein contained shall be deemed to affect the right
of any party to serve process in any manner permitted by law.
7.6 Expenses. Except as otherwise set forth herein, Seller agrees
to pay, without right of reimbursement from Buyer, the Company or any
Subsidiary, the costs incurred by Seller, and Buyer agrees to pay, without
right of reimbursement from Seller and, prior to the Closing, the Company
or any Subsidiary, the costs incurred by Buyer, incident to the preparation
and execution of this Agreement and the other Operative Documents and the
performance of their respective obligations hereunder and thereunder,
whether or not the transactions contemplated by this Agreement shall be
consummated, including, without limitation, the fees and disbursements of
legal counsel, accountants and consultants employed by the respective
parties in connection with the transactions contemplated by this Agreement;
provided, however, Seller shall not be obligated to pay any fees relating
to any consent or otherwise under any written agreement to which the
Company or any Subsidiary is a party and the material terms and conditions
of which ▇▇▇▇▇ has knowledge; provided further, however, that in no event
shall
Page 13
Seller be obligated to pay any costs incurred by Buyer, the Company or the
Subsidiaries incident to the preparation and execution of that certain
Credit Agreement (the "Page Credit Agreement") between the Buyer and ▇▇▇▇▇▇
and the other Loan Documents (as defined in the Page Credit Agreement).
7.7 Indemnification for Fees of Brokers and Finders. The Buyer
represents and warrants to the Seller that no broker, finder, agent or
similar intermediary has acted on behalf of Buyer, the Company or any
Subsidiary in connection with this Agreement or the transactions
contemplated hereby, and that there are no brokerage commissions, finders'
fees or similar fees or commissions payable in connection therewith based
on any agreement, arrangement or understanding with the Buyer, ▇▇▇▇▇ or any
stockholder of the Buyer or any action taken by the Buyer, other than fees
payable to UBS Securities, Inc. for which the Buyer shall be solely liable.
The Seller represents and warrants to the Buyer that no broker, finder,
agent or similar intermediary has acted on behalf of the Seller or, at the
direction of the Seller, on behalf of the Company or any Subsidiary, in
connection with this Agreement or the transactions contemplated hereby, and
that there are no brokerage commissions, finders' fees or similar fees or
commissions payable in connection therewith based on any agreement,
arrangement or understanding with the Seller, or any action taken by the
Seller. The Buyer and the Seller agree to indemnify and save the other
harmless from any claim or demand for commission or other compensation by
any broker, finder, agent or similar intermediary claiming to have been
employed by or on behalf of the Buyer or the Seller in breach of their
respective representations contained in this Section, and to bear the cost
of legal expenses incurred in defending against any such claim.
7.8 Company Subject to Indebtedness. The Buyer and the Company
acknowledge and agree that the Company and the Subsidiaries shall remain
subject to and obligated on all indebtedness of the Company and the
Subsidiaries, other than indebtedness and obligations (which shall not be
assumed by Buyer and shall remain the sole responsibility of the Seller)
(a) which Seller has caused to be created, incurred or assumed by the
Company or any Subsidiary and that previously have not been disclosed in
writing to ▇▇▇▇▇ or as set forth in the audited financial statements of the
Company for its most recent fiscal year or in the 10-K or on Schedule 5.10,
(b) arising out of or in connection with any failure by the Seller to file
any U.S. federal income tax returns or pay any U.S. federal income taxes
relating to any period prior to and including the Closing Date, or (c) of
the Seller that is owed to ▇▇▇▇▇▇. With respect to the indebtedness to
which the Company and the Subsidiaries shall remain subject under this
Section 7.8, the Buyer and the Company shall have the
Page 14
exclusive responsibility for payment of all termination, replacement,
consent and prepayment fees, penalties, premiums or expenses relating to
any such indebtedness which may be incurred as a result of the transactions
contemplated hereby or actions taken by the Buyer or the Company from and
after the Closing Date, and neither Seller nor any affiliate of Seller
shall have any obligation whatsoever to terminate, assume, prepay or
guarantee any such indebtedness.
7.9 Company Assets and Properties Subject to Liens. The Buyer and
the Company acknowledge and agree (a) that notwithstanding the purchase of
the Shares by Buyer from Seller and the consummation of the transactions
contemplated hereby, the assets and properties of the Company and the
Subsidiaries shall remain subject to all Liens that existed immediately
prior to the Closing except those Liens set forth on Schedule 7.9, and (b)
neither the Seller nor any affiliate thereof shall have any obligation
whatsoever to pay off, remove or terminate any Lien described in clause (a)
above other than those Liens set forth on Schedule 7.9 or to pay any costs
or expenses relating thereto; provided, however, the parties acknowledge
and agree that the Buyer shall have no liability for, and Seller shall take
any and all steps necessary in order to hold Buyer, the Company and the
Subsidiaries harmless from and against, any and all Liens respecting any
U.S. federal income taxes that have or may become due for all periods prior
to the Closing Date, and to pay any and all damages, losses, liabilities,
taxes and deficiencies and penalties and interest thereon and costs and
expenses resulting therefrom.
7.10 Intercompany Obligations. Except to the extent set forth on
Schedule 7.10 and except for obligations set forth in this Agreement or in
any document or instrument delivered pursuant to this Agreement, all
intercompany obligations, advances, accounts and indebtedness as between
the Company and the Subsidiaries, or any of them, on the one hand, and the
Seller and its subsidiaries (including without limitation, Europe Craft
Imports, Inc.), on the other hand, shall be terminated and cancelled at
Closing.
7.11 Section 338(h)(10) Election. (a) At Buyer's option, Seller
and Buyer jointly will elect to treat Seller's sale of the Shares to Buyer
as a sale of assets as defined under Section 338(h)(10) of the Internal
Revenue Code of 1986, as amended (the "Code"). At Buyer's option, Seller
and Buyer also shall make an election under Section 338(h)(10) of the Code
for the stock of all USA Subsidiaries transferred pursuant to the sale of
the Shares. The elections in this paragraph are collectively referred to as
the "Election".
Page 15
(b) Within 60 days after the Closing Date, Buyer and Seller shall (i)
use their best efforts to agree on the Modified Adjusted Deemed Sales Price
("MADSP") (as defined under Treasury Regulations) computation and the
allocation of the MADSP among the Company's assets as of the Closing Date;
and (ii) provide such other information and otherwise cooperate with the
other party as such other party may reasonably request, in order to enable
the parties to file the Election for the Company and the USA Subsidiaries
and make any similar elections required under any state or local statute.
(c) Within 45 days after Buyer and Seller have agreed upon the MADSP,
Seller shall furnish Buyer Seller's computation of the federal income taxes
to be paid solely as a result of the Election. Seller shall provide Buyer
access to all information used in making this computation and cooperate
with Buyer in determining the appropriate amount of such computation.
(d) Within 30 days after Buyer's receipt of Seller's computation of
the federal income taxes pursuant to paragraph (c) above, at Buyer's
option, Seller and Buyer will make the Election by jointly executing
duplicate originals of IRS Form 8023-A (together with all appropriate
attachments thereto) or in such other manner as may be required by IRS rule
or Treasury Regulation. Both Seller and Buyer also shall jointly execute
and make similar elections in the manner required under any state or local
statute. One original of all forms executed in connection with the Election
(and all such similar forms as may be filed under state or local law) shall
be delivered by Buyer to Seller within 135 days after the Closing Date, and
one original of all such forms shall be delivered by Seller to Buyer within
135 days after the Closing Date. Such forms shall include (i) the
computation of the MADSP and (ii) the allocation of the MADSP among the
assets as of the Closing Date. If Buyer fails to notify Seller of Buyer's
decision to make or not make the Election within the 30 day period provided
in the first sentence hereof, Buyer shall not have any right to make the
Election.
(e) Within 150 days after the Closing Date, Buyer and Seller shall
file all forms relating to the Election for the Company and the USA
Subsidiaries and all such similar forms as may be required under state or
local statute.
(f) Seller shall use such MADSP allocation in the preparation of its
federal and state tax returns and shall, at least 30 days prior to filing,
furnish to Buyer a copy of all federal and state returns which reflect the
Election. Buyer shall have the right to request any modification to such
federal returns to reflect the terms of the Election, and Seller agrees to
make any reasonable modification requested.
Page 16
7.12 Post-Closing Board Action. Immediately after the Closing, Buyer
shall cause the Board of Directors of the Company to ratify and approve
this Agreement and the obligations of the Company under this Agreement and
shall deliver to Seller a copy of the related resolutions of the Board of
Directors of the Company, certified by the Secretary of the Company.
8. Conditions Precedent to the Obligation of the Buyer to Close.
The obligation of the Buyer to consummate the transactions contemplated
hereby is subject to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived by the Buyer in its
sole discretion:
8.1 Representations and Warranties True as of Closing Date. The
representations and warranties of the Seller contained in this Agreement
shall be true on and as of the Closing Date in all material respects with
the same force and effect as though made on and as of the Closing Date
other than such representations and warranties as are made as of another
date which shall be true and correct as of such other date.
8.2 Compliance with This Agreement. The Seller shall have performed
and complied in all material respects with all covenants and agreements
required by this Agreement to be performed or complied with by the Seller
on or prior to the Closing Date.
8.3 Certificates. The Seller shall have delivered to the Buyer a
certificate, dated the Closing Date and signed by a duly authorized officer
of the Seller, certifying that the conditions specified in Sections 8.1 and
8.2 have been fulfilled.
8.4 Corporate Authorization. Buyer shall have received from Seller a
copy of the resolutions of the board of directors of Seller, certified as
of the Closing Date by the secretary or assistant secretary thereof, duly
authorizing the execution, delivery and performance by Seller of this
Agreement and each other Operative Document, together with an incumbency
certificate as to the persons authorized to execute and deliver such
documents on its behalf.
8.5 Opinion of Counsel to the Company and the Seller. The Buyer shall
have received the opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ LLP, counsel to the Seller,
dated the date of the Closing, addressed to the Buyer, substantially in the
form of Exhibit A hereto.
Page 17
8.6 Resignations of Directors and Officers. The Buyer shall have
received the resignation, dated the date of the Closing, of each officer
and director of the Company or any of its Subsidiaries set forth on
Schedule 8.6 hereto.
8.7 Good Standing. Seller shall have delivered to Buyer certificates
issued by appropriate Governmental Authorities evidencing the good standing
of the Seller, the Company and the USA Subsidiaries set forth on Schedule
5.7 as of a date not more than 10 days prior to the Closing Date as a
corporation of the respective jurisdiction in which it was organized.
8.8 No Adverse Event. The business and properties of the Company and
the Subsidiaries shall not be adversely affected or threatened to be
affected in any way as a result of fire, explosion, earthquake, disaster,
accident or other casualty, any action or threatened action by the United
States or any other Governmental Authority, flood, drought, embargo, riot,
civil disturbance, uprising, activity of armed forces, act of God or public
enemy.
8.9 Litigation. No action, order, suit or proceeding shall have been
instituted before any Governmental Authority, or instituted or threatened
by any Governmental Authority, to restrain, modify or prevent or make
illegal the carrying out of the transactions contemplated hereby or by the
Operative Documents, or to seek damages or a discovery order in connection
with such transactions.
8.10 Delivery of Stock Certificates. The Seller shall have delivered
to the Buyer at the Closing stock certificates representing all the Shares
duly endorsed in blank or accompanied by stock powers duly executed in
blank, in proper form for transfer, with requisite stock transfer tax
stamps, if any attached.
8.11 Buyer's Financing Arrangements with ▇▇▇▇▇▇. Simultaneously with
the Closing under this Agreement, the closing shall have occurred under the
Page Credit Agreement providing Buyer with financing in an amount not less
than the Purchase Price set forth in Section 3 of this Agreement.
8.12 Consents. The Seller shall have received each consent or approval
required to be given by any third party set forth on Schedule 5.4 in
connection with the consummation of the transactions contemplated hereby,
including, without limitation, required consents and approvals set forth on
Schedule 5.4 of the holders of any indebtedness of the Company and the
Subsidiaries, the lessors of any real or personal property leased by the
Company or the Subsidiaries, and any Governmental Authority.
Page 18
8.13 Releases. Seller and the other Releasing Parties (as defined in
Exhibit C hereto) shall have executed and delivered to Buyer and the
Company and the Subsidiaries a general release of Buyer, the Company, the
Subsidiaries and their respective officers, directors and stockholders and
the other Released Parties (as defined in Exhibit C hereto) in the form of
Exhibit C.
8.14 Release of Liens. Seller shall have delivered to the Buyer
instruments or agreements evidencing the release of all liens on the Shares
held by ▇▇▇▇▇▇.
8.15 Consent to Sale of Shares. Seller shall have delivered to Buyer
the consent, in form and substance satisfactory to Buyer, of Apollo Aris
Partners, L.P., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. Ramat,
▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ to the sale of the
Shares to Buyer pursuant to this Agreement.
8.16 Proceedings Satisfactory. All proceedings, corporate or other, to
be taken in connection with the transactions contemplated by this
Agreement, and all other Operative Documents, shall be satisfactory in form
and substance to Buyer.
9. Conditions Precedent to the Obligation of the Seller to Close.
The obligation of the Seller to consummate the transactions contemplated
hereby is subject to the fulfillment on or prior to the Closing Date of the
following conditions, any one or more of which may be waived by the Seller in
its sole discretion:
9.1 Representations and Warranties True as of Closing Date. The
representations and warranties of the Buyer contained in this Agreement
shall be true on and as of the Closing Date in all material respects with
the same force and effect as though made on as of the Closing Date other
than such representations and warranties as are made as of another date
which shall be true and correct as of such other date.
9.2 Compliance with This Agreement. The Buyer shall have performed and
complied in all material respects with all covenants and agreements
required by this Agreement to be performed or complied with by the Buyer on
or prior to the Closing Date.
9.3 Officer's Certificate. The Buyer shall have delivered to the
Seller a certificate, dated as of the Closing Date and signed by a duly
authorized officer of the Buyer, certifying that the conditions specified
in Sections 9.1 and 9.2 have been fulfilled.
Page 19
9.4 Corporate Authorization. Seller shall have received from Buyer a
copy of the resolutions of the board of directors of Buyer, certified as of
the Closing Date by the secretary or assistant secretary thereof, duly
authorizing the execution, delivery and performance by Buyer of this
Agreement and each other Operative Document to which Buyer is a party,
together with an incumbency certificate as to the persons authorized to
execute and deliver such documents on its behalf.
9.5 Opinion of Counsel to the Buyer. The Seller shall have received
the opinion of Fennebresque, Clark, ▇▇▇▇▇▇▇▇ & Hay, counsel to the Buyer,
dated the date of the Closing, addressed to the Seller, substantially in
the from of Exhibit B hereto.
9.6 Good Standing. Buyer shall have delivered to Seller certificates
issued by appropriate Governmental Authorities evidencing the good standing
of the Buyer as of a date not more than 10 days prior to the Closing Date
as a corporation of the jurisdiction in which it was organized.
9.7 Litigation. No action, order, suit or proceeding shall have been
instituted before any Governmental Authority, or instituted or threatened
by any Governmental Authority, to restrain, modify or prevent the carrying
out of the transactions contemplated hereby, or to seek damages or a
discovery order in connection with such transactions.
9.8 Payment of Purchase Price. The Buyer shall have paid to the Seller
the Purchase Price in immediately available funds in accordance with the
terms and provisions of Section 3 of this Agreement.
9.9 Seller's Debt Restructuring Agreement. Simultaneously with the
Closing under this Agreement, the closing shall have occurred under the
Restructuring Agreement of even date herewith between Seller and ▇▇▇▇▇▇
with respect to the ▇▇▇▇▇▇ Note.
9.10 Consents. The Buyer shall have received each consent or approval
required to be given by any third party set forth on Schedule 6.3 in
connection with the consummation of the transactions contemplated hereby,
including, without limitation, required consents and approvals set forth on
Schedule 6.3 to holders of indebtedness of the Buyer or to any Governmental
Authority.
9.11 Consent to Transaction by Buyer's Affiliates. The persons listed
on Schedule 5.1 hereto and the Buyer's stockholders shall have delivered to
Seller consents with respect to the transactions contemplated by this
Agreement in the form of Exhibit D and Exhibit E, respectively.
Page 20
9.12 Releases. ▇▇▇▇▇ shall have delivered to the Seller and its
subsidiaries and their respective officers, directors and stockholders a
general release in the form of Exhibit F hereto, and the Company and the
Subsidiaries shall have delivered to the Seller and its subsidiaries and
their respective officers, directors and stockholders a general release in
the form of Exhibit G hereto.
9.13 Termination of Stock Options. The persons listed on Schedule 9.13
shall have delivered to Seller consents to the termination of all options
for Seller's Common Stock held by such persons in the form of Exhibit H
hereto.
9.14 Proceedings Satisfactory. All proceedings, corporate or other, to
be taken in connection with the transactions contemplated by this
Agreement, and all other Operative Documents, shall be satisfactory in form
and substance to Seller.
10. Indemnification.
10.1 Seller's Indemnity.
(a) Subject to the provisions of this Section 10, Seller from and
after the Closing Date shall indemnify and hold Buyer and, so long as
Buyer owns the Company, the Company and the Subsidiaries, and their
respective officers, directors, shareholders, agents, employees,
representatives, successors and assigns, harmless from and against any
and all damages, losses, costs, obligations, claims, demands,
assessments, judgments or liability, including taxes, and all expenses
(including interest, penalties and attorneys' and accountants' fees
and disbursements) (collectively "Damages") incurred in connection
with or arising out of any litigation or otherwise, and any
investigation relating thereto, by any of the above-named persons,
directly or indirectly, resulting from or in connection with:
(i) breach of representation or warranty or failure to
perform any covenant or agreement made or undertaken by Seller in
this Agreement or in any other Operative Document;
(ii) all debts, obligations, expenses, liabilities and costs
incurred arising out of or in connection with any indebtedness or
obligations to which the Company and the Subsidiaries will not
remain subject under Section 7.8; and
Page 21
(iii) any action, suit, proceeding or claim incident to any
of the foregoing.
(b) Subject to the provisions of this Section 10, Seller from and
after the Closing Date shall indemnify and hold Buyer harmless from
and against any and all Damages incurred by Buyer resulting from
Seller's non-payment of or any other deficiencies, including interest
and penalties, related to any U.S. federal income taxes of the Company
or the Subsidiaries or in respect of its operations prior to the
Closing Date and after the Acquisition Date.
(c) Seller acknowledges and agrees that if Seller makes any claim
or institutes any actions, suits or proceedings with respect to the
validity or applicability of this indemnification provision and does
not prevail in a final judgment by a court of competent jurisdiction,
Seller shall pay all Damages incurred by Buyer, the Company or any
Subsidiary in connection therewith.
10.2 Limitations. Notwithstanding any provision to the contrary contained
in this Agreement, (a) Buyer shall not make any claims against Seller under this
Section 10 until the aggregate dollar amount of all such claims shall exceed
$100,000 (which aggregate amount shall include any breach of representation or
warranty or failure to perform any covenant or agreement whether or not
material), upon which point Seller shall be liable for the amount of all the
Damages in excess of $100,000; and (b) Seller's aggregate liability for any and
all liabilities under this Section 10 shall not exceed $42,000,000. For the
purposes of this Section 10.2, in computing such individual or aggregate amounts
of claims, the ultimate amount of each claim shall be an amount (x) net of any
tax benefit to Buyer, the Company or any Subsidiary, (y) net of any insurance
proceeds and any indemnity, contribution or other similar payment recovered by
Buyer, the Company or any Subsidiary from any third party with respect thereto,
and (z) net of any reserves provided for the item in question as set forth in
Schedule 10.2 or in the audited financial statements of the Company for its most
recent fiscal year; provided, however, Seller shall pay to Buyer any amount due
under this Section 10 (except for amounts reserved under clause (z) above)
promptly as required hereunder, and, provided Seller has so paid, any amounts
recovered by Buyer, the Company or the Subsidiaries under Section 10.2(x), (y)
or (z) shall be delivered to Seller promptly upon receipt. Notwithstanding any
other provision of this Agreement, Seller shall have no liability for any
Damages resulting from any event, condition, occurrence, state of facts or
circumstances or defect relating to the Company, any Subsidiary, their
respective assets or the operation of their respective
Page 22
businesses, or the Shares, occurring or existing prior to the Acquisition Date.
Without limiting the generality of the foregoing disclaimer, Seller shall have
no liability for any Lien on, or defect in, title to the Shares existing prior
to the Acquisition Date.
10.3 Buyer's and Company's Indemnities
(a) Buyer shall indemnify and hold Seller and its officers, directors,
shareholders, agents, employees, representatives, successors and assigns
harmless from and against any Damages incurred by any of the above-named persons
in connection with or arising out of (i) Buyer's breach of representation or
warranty or Buyer's or, after the Closing, the Company's failure to perform any
covenant or agreement made or undertaken by Buyer or, after the Closing, by the
Company in this Agreement or in any other Operative Document and any and all
Damages arising from or in connection with any action, suit, proceeding or claim
incident to any of the foregoing, (ii) the operations (other than with respect
to payment of U.S. federal income taxes or filing or failure to file any U.S.
federal income tax return for periods ending on or before the Closing Date or
with respect to the disallowance of any payments made by any of Seller's
subsidiaries to Seller since the Acquisition Date) of the Company and its
Subsidiaries and the Perry Manufacturing Company Political Action Committee and
any discontinued operations of the Company and its Subsidiaries, in each case
under this clause (ii) for the period after the Closing Date and (iii) any taxes
imposed on Seller pursuant to any Election made under Section 7.11. Buyer
acknowledges and agrees that if Buyer or, after the Closing, the Company or any
Subsidiary makes any claim or institutes any actions, suits or proceedings with
respect to the validity or applicability of this indemnification provision and
does not prevail in a final judgment by a court of competent jurisdiction, Buyer
shall pay all Damages incurred by Seller in connection therewith.
(b) From and after the Closing Date, the Company shall indemnify and hold
Seller and its officers, directors, shareholders, agents, employees,
representatives, successors and assigns harmless from and against any Damages
incurred by any of the above-named persons in connection with or arising out of
(i) after the Closing, the Company's failure to perform any covenant or
agreement made or undertaken, after the Closing, by the Company in this
Agreement or in any other Operative Document and any and all Damages arising
from or in connection with any action, suit, proceeding or claim incident to any
of the foregoing and (ii) the operations (other than with respect to payment of
U.S. federal income taxes or filing or failure to file any U.S. federal income
tax return for periods ending on or before the Closing Date or with respect
Page 23
to the disallowance of any payments made by any of Seller's subsidiaries to
Seller since the Acquisition Date) of the Company and its Subsidiaries and the
Perry Manufacturing Company Political Action Committee and any discontinued
operations of the Company and its Subsidiaries, in each case under this clause
(ii) for the period after the Closing Date. The Company acknowledges and agrees
that if, after the Closing, the Company or any Subsidiary makes any claim or
institutes any actions, suits or proceedings with respect to the validity or
applicability of this indemnification provision and does not prevail in a final
judgment by a court of competent jurisdiction, the Company shall pay all Damages
incurred by Seller in connection therewith.
10.4 Procedure. All claims for indemnification by a party under this
Section 10 (the party claiming indemnification and the party against whom such
claims are asserted being hereinafter called the "Indemnified Party" and the
"Indemnifying Party," respectively) shall be asserted and resolved as follows:
(a) In the event that any claim or demand for which an Indemnifying
Party would be liable to an Indemnified Party hereunder is asserted against
or sought to be collected from such Indemnified Party by a third party,
such Indemnified Party shall with reasonable promptness give notice (the
"Claim Notice") to the Indemnifying Party of such claim or demand,
specifying the nature of and specific basis for such claim or demand and
the amount or the estimated amount thereof to the extent then feasible
(which estimate shall not be conclusive of the final amount of such claim
and demand). The Indemnifying Party shall not be obligated to indemnify the
Indemnified Party under this Agreement with respect to any such claim or
demand if the Indemnified Party fails to notify the Indemnifying Party
thereof in accordance with the provisions of this Agreement, and as a
result of such failure, the Indemnifying Party's ability to defend against
the claim or demand is materially prejudiced. The Indemnifying Party shall
have ten (10) days from the delivery or mailing of the Claim Notice (the
"Notice Period") to notify the Indemnified Party (i) whether or not it
disputes the liability of the Indemnifying Party to the Indemnified Party
hereunder with respect to such claim or demand, and (ii) whether or not it
desires, at the cost and expense of the Indemnifying Party, to defend the
Indemnified Party against such claim or demand; provided, however, that any
Indemnified Party is hereby authorized,
Page 24
but is not obligated, prior to and during the Notice Period, to file any
motion, answer or other pleading that it shall deem necessary or
appropriate to protect its interests or those of the Indemnifying Party. If
the Indemnifying Party notifies the Indemnified Party within the Notice
Period that it desires to defend the Indemnified Party against such claim
or demand, the Indemnifying Party shall have the right, subject to the last
sentence of this paragraph, to direct, through counsel selected by the
Indemnifying Party and reasonably satisfactory to the Indemnified Party,
the defense or settlement of any claim or demand at its own expense. If the
Indemnifying Party fails to respond to the Indemnified Party within the
Notice Period or after electing to defend fails to so defend, then the
Indemnified Party shall have the right, but not the obligation, to
undertake or continue the defense of and to compromise or settle
(exercising reasonable business judgment) the claim or other matter, all on
behalf, for the account and at the risk of the Indemnifying Party. No claim
as to which indemnification is sought under this Agreement may be settled
without the consent of the Indemnifying Party, which consent may not be
unreasonably withheld.
(b) If requested by the Indemnifying Party, the Indemnified Party
agrees, at the Indemnifying Party's expense, to cooperate with the
Indemnifying Party and its counsel in contesting any claim or demand which
the Indemnifying Party elects to contest, or, if appropriate and related to
the claim in question, in making any counterclaim against the person
asserting the third party claim or demand, or any cross-complaint against
any person.
(c) If any Indemnified Party should have a claim against the
Indemnifying Party hereunder which does not involve a claim or demand being
asserted against or sought to be collected from it by a third party, the
Indemnified Party shall send a Claim Notice with respect to such claim to
the Indemnifying Party. If the Indemnifying Party disputes such claim, the
Indemnifying Party and the Indemnified Party shall attempt in good faith to
resolve such dispute. If the Indemnifying Party and the Indemnified Party
are unable to resolve such dispute within twenty business days after
delivery of a Claim Notice (unless such time period
Page 25
shall have been extended by mutual agreement of the Indemnifying Party and
the Indemnified Party), such dispute shall be resolved by litigation in an
appropriate court of competent jurisdiction.
(d) In connection with the matters for which indemnification is sought
hereunder, (i) Buyer agrees to give Seller and its representatives
reasonable access during regular business hours and upon five days' prior
written notice to Buyer to the books, records and employees of the Company,
the Subsidiaries and Buyer, to the extent such information is necessary to
the matters set forth in the Claim Notice, and (ii) Seller agrees to give
Buyer and its representatives reasonable access during regular business
hours and upon five days' prior written notice to Seller to the books,
records and employees of Seller relating to the Company and the
Subsidiaries or the transactions contemplated hereby, to the extent such
information is necessary to the matters set forth in the Claim Notice.
10.5 Exclusive Remedy. The remedies expressly provided for in this Section
10 shall be the parties' exclusive remedies with respect to the matters covered
by this Agreement. Anything herein to the contrary notwithstanding, no breach of
any representation, warranty, covenant or agreement contained herein shall give
rise to any right on the part of any party hereto, after the consummation of the
purchase and sale of the Shares contemplated hereby, to rescind this Agreement
or any of the transactions contemplated hereby.
11. Tax Matters.
11.1 Payment for Taxes. The Seller agrees to pay to the Buyer, without
regard to any taxes payable in respect of any amounts payable under this Section
11.1, the amount of all U.S. federal income taxes of the Company or the
Subsidiaries with respect to any period or portion thereof that commenced after
the Acquisition Date and ends on or before the Closing Date, in excess of the
amount set forth as a line item in the Referenced Balance Sheet as the "reserve
for taxes" not previously taken into account under Section 11.7.2; provided,
however, that no amount shall be paid under this Section 11.1 for any such taxes
arising in connection with any acts, omissions or elections by Buyer or the
Company on or after the Closing Date. The Buyer and, after the Closing, the
Company shall be responsible for (i) all U.S. federal income taxes of the
Company and the Subsidiaries for any taxable period or portion thereof after the
Closing Date and for any liability
Page 26
for any acts, omissions or elections by Buyer or the Company on or after the
Closing Date, (ii) payment to Seller of all U.S. federal income taxes relating
to the Election made under Section 7.11, and (iii) all foreign, federal (except
U.S. federal income tax), state, county, local and other taxes, levies,
assessments and impositions whether characterized as income, franchise, gross
receipts, sales, commercial rent, payroll, employment, real property, personal
property, value added, excise, customs, duties, import fees, license fees or
otherwise, of or imposed on or due from the Company and Subsidiaries or their
assets or properties ("OTHER TAXES"), for all taxable periods and portions
thereof (including periods before and periods after the Closing Date and
including Other Taxes relating to the Election made under Section 7.11).
Notwithstanding the foregoing, Seller agrees to pay Buyer, and Buyer shall not
be responsible for, (i) any Other Taxes that arise from numerical or calculation
errors made by Seller in the transcription of information provided by the
Company, its officers, employees or accountants, in the tax returns prepared by
the Seller and relating to such Other Taxes and (ii) any taxes relating to or
arising out of any disallowance of payments made by any of Seller's subsidiaries
to Seller since the Acquisition Date (the items referred to in the foregoing
clauses (i) and (ii), collectively, "SPECIAL TAXES"). Seller specifically
acknowledges and agrees that Seller will (i) report all items of income or loss
resulting from the sale of the Shares, including the deemed sale of assets
pursuant to the Election, as required in Section 7.11, and (ii) to the extent
that such reporting results in the utilization of or inability to utilize any of
the losses, credits or other items that would otherwise reduce Seller's tax
liability in the current or a later year (collectively, the "TAX ATTRIBUTES"),
be responsible for such loss of Tax Attributes, and will not seek any
reimbursements or indemnification from Buyer or the Company for loss of Tax
Attributes.
11.2 Section 338 Election Matters.
(a) Payment of State and Local Taxes. Buyer agrees to pay any Other
Taxes due solely as a result of the Election pursuant to Section 7.11 and
to timely file or cause to be filed all state and local tax returns
required to be filed on or after the Closing Date to properly reflect any
Election (and the effects thereof) required under Section 7.11 and to pay
all amounts due thereon and to provide copies of such tax returns to
Seller.
(b) Payment of Federal Taxes. Buyer agrees to pay any U.S. federal
income taxes of Seller due solely as a result of the Election, computed
after application of
Page 27
Seller's Tax Attributes. Buyer shall pay Seller by wire transfer or bank
cashier's check in immediately available funds on the date the Buyer
chooses to make the Election pursuant to Section 7.11(d), the amount
determined under Section 7.11(c) of this Agreement (the "BUYER PAYMENT").
Seller shall remit the Buyer Payment to the Internal Revenue Service with
Seller's request for extension of time to file its federal income tax
return. If, upon Seller's preparation of its federal income tax return for
the period which includes the Closing Date, the amount of federal income
taxes to be paid solely as a result of the Election after application of
Seller's Tax Attributes (the "BASE AMOUNT") is determined by Seller to be
(x) greater than the Buyer Payment, Buyer will pay Seller the difference
between the Base Amount and the Buyer Payment by wire transfer or bank
cashier's check in immediately available funds within three days of the
receipt by Buyer of Seller's calculation of the Base Amount or (y) less
than the Buyer Payment, Seller will request a refund from the Internal
Revenue Service of such overpayment and will pay Buyer the difference
between the Base Amount and the Buyer Payment by wire transfer or bank
cashier's check in immediately available funds within three days of the
receipt of such overpayment.
(c) Adjustments to Amounts of Taxes. In the event that any federal
taxing authority shall examine any tax returns reporting the effects of the
Election, Seller shall promptly notify Buyer of any such examination and
shall permit Buyer to participate in the resolution of any tax controversy
relating thereto. Buyer shall pay to Seller any increase in Seller's
federal income tax liability due solely as a result of the Election, which
is imposed as a result of such tax examination, prior to the time when
Seller must remit such payment of additional taxes. Buyer shall pay any
increase in Other Taxes due solely as a result of the Election which is
imposed as a result of any federal, state or local tax examination. Buyer's
indemnity pursuant to Section 10.3 shall include all Damages of Seller
arising from any claim, examination, controversy, audit or proceeding of
any taxing authority relating to any tax lability due to the Election and
any taxes due under Section 11.2(a) and (b).
11.3 Payments. Payment by the Seller of any amounts due under Section 11.1
in respect of U.S. federal income taxes shall be made (i) at least three
calendar days before the due date of the applicable estimated or final U.S.
federal income tax return required to be filed by the Company after the Closing
Date on which is required to be reported income or other amounts for a period
ending on or before the Closing
Page 28
Date for which the Seller is responsible under Section 11.1, provided that no
such payment shall be due from the Seller prior to five business days following
receipt of written notice from the Buyer, or (ii) within five business days
following the date of (x) an agreement between the Seller and the Buyer that an
amount is payable pursuant to Section 11.1, (y) an assessment of such tax by the
Internal Revenue Service ("IRS"), or (z) a "determination" as defined in Section
1313(a) of the Code.
11.4 Refunds. Any refunds of taxes received by or credited to the Buyer or
the Company, the Subsidiaries or their successors and relating to taxable
periods or portions thereof ending on or before the Closing Date shall be for
the account of the Seller, and the Buyer shall pay over to the Seller any such
refund together with interest thereon or the amount of any such benefit within
five business days of the earlier of receipt or entitlement thereto. The Buyer
shall, if the Seller so requests and at the Seller's expense, cause the relevant
entity to file for and obtain any refunds or equivalent amounts to which the
Seller is entitled under this Section 11.4. The Buyer shall permit the Seller to
control (at the Seller's expense) the prosecution of any such refund claimed,
and shall cause the relevant entity to authorize by appropriate power of
attorney such persons as the Seller shall designate to represent such entity
with respect to such refund claimed.
11.5 Contests.
11.5.1 After the Closing, the Buyer shall promptly notify the Seller
in writing of the commencement of any tax audit or administrative or
judicial proceeding or of any demand or claim on the Buyer, the Company or
the Subsidiaries which relates to any U.S. federal income taxes or Special
Taxes of the Company or the Subsidiaries for periods ending on or prior to
the Closing Date or which, if determined adversely to the taxpayer or after
the lapse of time, would be grounds for indemnification for such U.S.
federal income taxes or Special Taxes under Section 11.1. Such notice shall
contain factual information (to the extent known to the Buyer, the Company
or the Subsidiaries) describing the asserted tax liability in reasonable
detail and shall include copies of any notice or other document received
from any taxing authority in respect of any such asserted tax liability. If
the Buyer fails to give the Seller prompt notice of an asserted tax
liability as required by this Section 11.5.1, then, (i) if the Seller is
precluded by the failure to give prompt notice from contesting the asserted
tax liability in both the administrative and judicial forums, the Seller
shall not have any obligation
Page 29
to indemnify the Buyer for any loss arising out of such asserted tax
liability and (ii) Seller is not so precluded from contesting but such
failure to give prompt notice results in a detriment to the Seller, then
any amount which Seller is otherwise required to pay Buyer pursuant to
Section 11.1 with respect to such liability shall be reduced by the amount
of such detriment.
11.5.2 The Seller may elect to direct, through counsel or accountants
of its own choosing and at its own expense, any audit, assessment, claim
for refund and administrative or judicial proceeding involving any asserted
liability with respect to any U.S. federal income taxes or Special Taxes of
the Company or the Subsidiaries for periods ending on or prior to the
Closing Date or for which indemnity for U.S. federal income taxes or
Special Taxes may be sought under Section 11.1 (any such audit, claim for
refund or proceeding relating to any asserted tax liability is referred to
herein as a "CONTEST"). If the Seller elects to direct the Contest of an
asserted tax liability, it shall within 30 calendar days of receipt of the
notice of asserted tax liability notify the Buyer of its intent to do so,
and the Buyer shall cooperate and shall cause the Company, the Subsidiaries
or their successors to cooperate in each phase of such Contest. If the
Seller elects not to direct the Contest, fails to notify the Buyer of its
election as herein provided or contests its obligation to indemnify under
Section 11.1, the Buyer, the Company or the Subsidiaries may pay,
compromise or contest, at their own expense, such asserted liability.
However, in such case, neither the Buyer, the Company nor the Subsidiaries
may settle or compromise any asserted liability over the objection of the
Seller; provided, however, that consent to settlement or compromise shall
not be unreasonably withheld. In any event, each of the Buyer (or the
Company or the Subsidiaries) and the Seller may participate, at its own
expense, in the Contest. If the Seller chooses to direct the Contest, the
Buyer shall promptly empower and shall cause the Company and the
Subsidiaries and their successors promptly to empower (by power of attorney
and such other documentation as may be appropriate) such representatives of
the Seller as the Seller may designate to represent the Buyer, the Company,
the Subsidiaries or their successors in the Contest insofar as the Contest
involves an asserted tax liability for which the Seller would be liable
under Section 11.1.
11.6 Filing of Tax Returns; Change of Tax Year. The parties hereto
covenant and agree that: (i) the Seller shall prepare and file with the
applicable governmental authorities all U.S. federal income tax returns
relating to the Company
Page 30
and the Subsidiaries with respect to any period or portion thereof that
ends on or before the Closing Date and (ii) the Buyer and the Company shall
prepare and file with the applicable governmental authorities all U.S.
federal income tax returns relating to the Company and the Subsidiaries
with respect to any period ending after the Closing Date and all tax
returns for Other Taxes relating to the Company and the Subsidiaries for
all periods, whether ending before or after the Closing Date. The parties
hereto acknowledge and agree that for purposes of filing all U.S. federal
income tax returns, the taxable year of the Company and the Subsidiaries
shall end as of the Closing Date and that a new taxable year shall commence
as of the day following the Closing Date and shall end on the same day as
the Company's fiscal year for filing its federal income tax return.
11.7 Cooperation and Exchange of Information. The Seller and the Buyer
will provide each other with such cooperation and information as either of
them reasonably may request of the other in filing any tax return, amended
return or claim for refund, determining a liability for taxes or a right to
a refund of taxes or participating in or conducting any audit or other
proceeding in respect of taxes. Such cooperation and information shall
include providing copies of relevant tax returns or portions thereof,
together with accompanying schedules and related work papers and documents
relating to rulings or other determinations by taxing authorities. Each
party shall make its employees available on a mutually convenient basis to
provide explanations of any documents or information provided hereunder.
Each party will retain all returns, schedules and work papers and all
material records or other documents relating to tax matters of the Company
for its taxable period first ending after the Closing Date and for all
prior taxable periods under the later of (i) the expiration of the statute
of limitations of the taxable periods to which such returns and other
documents relate, without regard to extensions except to the extent
notified by the other party in writing of such extensions for the
respective tax periods, or (ii) seven years following the due date (without
extension) for such returns. Any information obtained under this Section
11.7 shall be kept confidential, except as otherwise may be necessary in
connection with the filing of returns or clams for refund or in conducting
an audit or other proceeding.
11.8 Conveyance Taxes. The Seller agrees to assume liability for and to pay
all sales, transfer, stamp, recording, filing, real property transfer or gains
and similar taxes (collectively, the "TRANSFER TAXES") incurred as a result of
the sale of the Shares contemplated hereby; provided, however, that Buyer will
pay all taxes under Section 11.2(a) and (b), and the Transfer Taxes, if any,
imposed by the State of North Carolina and the Commonwealth of Virginia.
Page 31
11.9 Adjustment to Purchase Price. The parties agree to treat all payments
made under Section 10 and 11 of this Agreement as adjustments to the Purchase
Price for tax purposes.
12. Survival of Representations and Warranties. The representations and
warranties of Seller and Buyer contained in this Agreement will survive the
Closing (notwithstanding any investigation heretofore or hereafter made by any
of them or on behalf of any of them and shall not be deemed merged into any
instruments or agreements delivered at Closing) (a) indefinitely with respect to
the representations and warranties contained in Sections 5.1, 5.3, 5.6 (but
shall only survive until such time as the applicable tax statute of limitation
ends), 5.7 (but only insofar as it relates to the capital stock of the
Subsidiary), 6.1 and 6.2, and (b) until the completion of the next annual audit
of the Company in the case of each other representation and warranty, except
that any representation or warranty that would otherwise terminate in accordance
with this clause will continue to survive if a Claim Notice shall have been
timely given in good faith based on facts reasonably expected to establish a
valid claim under Section 10 on or prior to such termination date, until the
related claim for indemnification has been satisfied or otherwise resolved as
provided in Section 10.
13. Miscellaneous.
13.1 Knowledge. As used in this Agreement, the term "KNOWLEDGE," with
respect to the (a) Seller, for purposes of Section 5.9 only, shall
encompass all facts and information which are either within the actual
knowledge of any of the officers, directors, employees, agents or other
persons acting on behalf of Seller (including, without limitation, any such
person acting in his capacity as a member of the Board of Directors of the
Company or any of the Subsidiaries) ("SELLER'S AGENTS") or that should have
been known to any Seller's Agents in the exercise of reasonable care and
after due inquiry, and (b) with respect to the Buyer shall encompass all
facts and information which are either within the actual knowledge of any
of the officers, directors, employees or agents of Buyer (including,
without limitation, ▇▇▇▇▇) or that should have been known to such persons
in the exercise of reasonable care and after due inquiry.
13.2 Cooperation; Further Assurances. From and after the Closing, the
Seller, on the one hand, and the Buyer, the Company and the Subsidiaries,
on the other hand, agree to execute and deliver such further documents and
instruments and to do such other acts and things any of them, as the case
may be, may reasonably request in order to effectuate the transactions
contemplated by this Agreement.
Page 32
13.3 Entire Agreement. This Agreement (together with the Schedules and
Exhibits hereto) contains, and is intended as, a complete statement of all
the terms of the arrangements between the parties with respect to the
matters provided for, and supersedes any previous agreements and
understandings between the parties with respect to those matters. No
representations or warranties are made by any party hereto except as
expressly set forth in this Agreement.
13.4 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with the laws of the State of New York, without
regard to its principles of conflicts of law.
13.5 Headings. The section headings of this Agreement are for
reference purposes only and are to be given no effect in the construction
or interpretation of this Agreement.
13.6 Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed given when delivered
personally, mailed by registered mail, return receipt requested, sent by
recognized overnight delivery service or, to the extent receipt is
confirmed, by telecopy, telefax, or other electronic transmission service
to the parties at the following addresses (or to such other address as a
party may have specified by notice given to the other party pursuant to
this provision):
If to the Buyer or the Company
to:
Page Holding Company
c/o Perry Manufacturing Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., President
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Fennebresque, Clark, ▇▇▇▇▇▇▇▇ & Hay
NationsBank Corporate Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇,▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Page 33
If to the Seller to:
Aris Industries, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Ramat, President
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
13.7 Separability. If at any time any of the covenants or the
provisions contained herein shall be deemed invalid or unenforceable by the
laws of the jurisdiction wherein it is to be enforced, by reason of being
vague or unreasonable as to duration, geographic scope, scope of activities
restricted or for any other reason, such covenants or provisions shall be
considered divisible as to such portion and such covenants or provisions
shall become and be immediately amended and reformed to include only such
covenants or provisions as are enforceable by the court or other body
having jurisdiction of this Agreement; and the parties agree that such
covenants or provisions, as so amended and reformed, shall be valid and
binding as though the invalid or unenforceable portion had not been
included herein.
13.8 Amendment; Waiver. No provision of this Agreement may be amended
or modified except by an instrument or instruments in writing signed by the
parties hereto. Any party may waive compliance by another with any of the
provisions of this Agreement. No waiver of any provision hereof shall be
construed as a waiver of any other provision. Any waiver must be in
writing.
13.9 Assignment and Binding Effect. None of the parties hereto may
assign any of its rights or delegate any of its duties under this Agreement
without the prior written consent of the others. All the terms and
provisions of this Agreement shall be binding on, and shall inure to the
benefit of, the respective successors and permitted assigns of the parties.
13.10 No Benefit to Others. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and their respective successors and assigns and they shall
not be construed as conferring and are not intended to confer any rights on
any other persons.
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13.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and each party
thereto may become a party hereto by executing a counterpart hereof. This
Agreement and any counterpart so executed shall be deemed to be one and the
same instrument.
13.12 Interpretation. Headings to sections and any table of contents
are inserted for convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation hereof. The Schedules
and Exhibits referred to herein shall be construed with and as an integral
part of this Agreement to the same extent as if they were set forth
verbatim herein. The specification of any dollar amount in the
representations and warranties contained in this Agreement or the inclusion
of any specific item in any Schedule hereto is not intended to imply that
such amounts or higher or lower amounts, or the items so included or other
items, are or are not material, and no party hereto shall use the fact of
the setting of such amounts or the inclusion of any such item in any
dispute or controversy between the parties as to whether any obligation,
item or matter not described herein or included in a Schedule is or is not
material for purposes hereof. As used herein, "include", "includes" and
"including" are deemed to be followed by "without limitation" whether or
not they are in fact followed by such words or words of like import;
"writing", "written" and comparable terms refer to printing, typing,
lithography and other means of reproducing words in a visible form;
references to a person are also to its successors and assigns; except as
the context may otherwise require, "hereof", "herein", "hereunder" and
comparable terms refer to the entirety hereof and not to any particular
section or other subdivision hereof or attachment hereto; references to any
gender include the other; except as the context may otherwise require, the
singular includes the plural and vice versa; references to any agreement or
other document are to such agreement or document as amended and
supplemented from time to time; references to "Section" or another
subdivision or to an "Exhibit" or "Schedule" are to a section or
subdivision hereof or an "Exhibit" or "Schedule" hereto; and references to
"generally accepted accounting principles" shall mean generally accepted
accounting principles in the United States as in effect on the date of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.
PAGE HOLDING COMPANY
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
ARIS INDUSTRIES, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. RAMAT
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Ramat
Title: President
PERRY MANUFACTURING COMPANY
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
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