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EXHIBIT 2.3
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is dated as of this 22nd day of August,
1996 by and among XXXXXXXX COMPANIES, INC., a Delaware corporation (the
"Buyer"), and XXXXXX X. XXXXXX, an individual residing at 00 Xxxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000 ("Xxxxxx"), XXXXXX XXXXXXXXX, an individual
residing at 000 Xxxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 ("Xxxxxxxxx")
and XXXXX XXXXXXXXXX, an individual residing at 0 Xxxxx Xxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 ("Xxxxxxxxxx") (Xxxxxx and Xxxxxxxxx together,
the "Parent Stockholders"; and together with Xxxxxxxxxx, collectively, the
"Sellers", and singly, a "Seller").
WHEREAS, the Parent Stockholders are the owners of all of the issued and
outstanding shares of common stock, $25.00 par value per share (the "VBS
Stock") of Vinyl Building Specialties of Connecticut, Inc., a Connecticut
corporation ("VBS");
WHEREAS, the Parent Stockholders intend to exchange certain shares of
VBS Stock (the "VBS Exchanged Shares") for shares of capital stock of Atrium
Corporation, a Delaware corporation ("Atrium"), pursuant to a Stock Exchange
Agreement dated of even date herewith by and among the Sellers, Atrium, FCI
Holding Corp. and the shareholders of FCI Holding Corp. (the "Exchange
Agreement"), and to sell their remaining shares of VBS Stock (the "VBS
Purchased Shares") to the Buyer hereunder;
WHEREAS, Xxxxxxxxxx is the owner of 200 of the issued and outstanding
shares of common stock, no par value (the "BNE Stock") of Xxxxxx Manufacturing
Company of New England, Inc., a Connecticut corporation ("BNE");
WHEREAS, Xxxxxxxxxx intends to exchange certain shares of BNE Stock (the
"BNE Exchanged Shares") for shares of capital stock of Atrium pursuant to the
Exchange Agreement, and to sell his remaining shares of BNE Stock (the "BNE
Purchased Shares") to the Buyer hereunder;
WHEREAS, the Parent Stockholders are the owners of all of the issued and
outstanding shares of the common stock, no par value (the "BNY Stock") of
Xxxxxx Manufacturing Co. of New York, Inc., a Connecticut corporation ("BNY";
together with BNE, VBS and Xxxxxx Manufacturing Co., Inc. a Connecticut
corporation ("BMC"), collectively, the "Companies," and singly, a "Company");
WHEREAS, the Parent Stockholders intend to sell their shares of BNY
Stock (together with the VBS Purchased Shares and the BNE Purchased Shares,
being referred to herein as "Stock") to the Buyer hereunder; and
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WHEREAS, the Buyer desires to purchase the Stock from the Sellers, upon
the terms and subject to the conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, the parties hereto agree as follows:
1. PURCHASE AND SALE OF STOCK.
1.1. Purchase and Sale. Subject to the terms and conditions set forth
in this Agreement, each of the Sellers agrees to sell to the Buyer, and the
Buyer agrees to purchase from such Seller, at the Closing referred to in
Section 2 of this Agreement, all of the outstanding shares of Stock owned by
such Seller as set forth opposite such Seller's name on Schedule 1 hereto, in
exchange for the payment of the aggregate Purchase Price as described below.
1.2. Delivery of Purchase Price. At the Closing (as defined in Section
2.1), the Buyer shall pay to the Sellers, as the initial aggregate purchase
price for the Stock (the "Initial Purchase Price"), the sum of (a) $10,000,000
less (b) the sum of (i) the aggregate Pay-off Amounts (as defined in Section
2.2(c)) with respect to the Discharged Indebtedness (as defined in Section 12)
of the Companies, plus (ii) all payments of principal, interest and other
amounts made with respect to Indebtedness of the Companies (other than Assumed
Indebtedness) between July 1, 1996 and the Closing, plus (c) the amount of the
Net Working Capital Adjustment, as defined in Section 3(b) below. In addition,
subject to the conditions set forth in Sections 1.3 - 1.5 below, the Sellers
will be entitled to receive as additional purchase price for the Stock (the
"Deferred Purchase Price") the amounts payable pursuant to Sections 1.3 - 1.5
below, as applicable. The sum of the Initial Purchase Price and the Deferred
Purchase Price is referred to herein as the "Purchase Price." The portion of
the Purchase Price payable to each Seller shall be based on the percentage
allocations to each Seller as set forth opposite such Seller's name on Schedule
1 (such Seller's "Pro Rata Share ").
1.3. Deferred Purchase Price.
(a) In addition to the Initial Purchase Price, the Sellers
shall be entitled to receive, as Deferred Purchase Price for the Stock, the
following payments (each referred to herein as a "Deferred Payment"): (i)
$500,000 if Consolidated EBIT (as defined in Section 12) of the Companies for
the period between July 1, 1996 and December 31, 1996 is at least $1,500,000
and (ii) $500,000 if Consolidated EBIT of the Companies for the fiscal year
ending December 31, 1997 is at least $2,500,000. The Deferred Payments shall
be calculated on the basis of the Buyer's calculations (in conformity with
generally accepted accounting principles and consistent with the principles
used in the preparation of the Year-End Balance Sheet, as defined in Section
4.8 below) of Consolidated EBIT of the Companies for the relevant fiscal year
(such calculations, the "Buyer's Proposed Calculations"), which shall be
notified to the Seller Representative (as defined in Section 15.16)
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within thirty (30) days after the completion of the Buyer's audited financial
statements for such fiscal year. If earned, each Seller's Pro Rata Share of
the Deferred Payments shall be paid to such Seller no later than April 15, 1997
or April 15, 1998, respectively (each such date, a "Deferred Payment Date"), in
each case subject to paragraphs (b) and (c) below).
(b) The Seller Representative and Xxxxxx Xxxxxxxx, L.L.P. (the
"Companies' Accountants") shall be given reasonable opportunity, at the
Sellers' expense, to review and inspect the books and records of the Companies
in order to verify the Consolidated EBIT of the Companies for the fiscal years
ending December 31, 1996 and December 31, 1997. The Seller Representative and
the Companies' Accountants shall complete such review and inspection within
forty-five (45) days after the Sellers' receipt of the Buyer's audited
financial statements for the relevant fiscal year. If the Seller
Representative and the Companies' Accountants, after such review, disagree with
the Buyer's Proposed Calculations, then the Companies' Accountants shall,
within fifteen (15) days after the rejection of the Buyer's Proposed
Calculations, notify the Buyer of their proposed alternative calculations (the
"Sellers' Proposed Calculations"). If the Buyer does not accept the Sellers'
Proposed Calculations, then the Sellers and the Buyer shall select another
nationally recognized independent accounting firm (the "Independent
Accountants"), other than the Companies' Accountants and the Buyer's
independent accountants, to resolve the disputed items (the "Disputed Items")
by conducting its own review and inspection of the books and records of the
Companies for the relevant fiscal year, and, within thirty (30) days of its
appointment, selecting either the Buyer's or the Sellers' Proposed Calculations
of the Disputed Items, or an amount in between the two. The Buyer and each of
the Sellers agrees that it shall be bound by the Independent Accountants'
determination of the Disputed Items. The fees and expenses of the Independent
Accountants shall be paid jointly by the Buyer and the Sellers, provided that
if either the Buyer's or the Sellers' Proposed Calculations of Consolidated
EBIT for any period either exceeds or is less than the amount thereof for such
period as calculated by the Independent Accountants (the "Final Consolidated
EBIT") by an amount which exceeds five percent (5%) of Final Consolidated EBIT,
then the party whose Proposed Calculations most widely diverged from Final
Consolidated EBIT shall, in addition to paying the fees and expenses of its own
accountants, pay all of the fees and expenses of the Independent Accountants
and all fees and expenses of the other party's accountants incurred in
connection with any review or inspection of, or dispute with respect to, the
Buyer's audited financial statements.
(c) If, upon determination pursuant to Section 1.3(b) of
Consolidated EBIT for any fiscal year, it is determined that a Deferred Payment
is due and owing to the Sellers, then any such payment shall be made by the
Buyer to the Sellers, in accordance with Section 1.3(a) above, in cash or same
day funds within five (5) business days after such determination. Any such
amount which is not paid when due shall accrue interest from and after the
Deferred Payment Date upon which such amount would, but for the application of
Section 1.3(b) above, have been due and payable, at a rate equal to the rate
announced by The First National Bank of Boston from time to time
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as its "Base Rate" plus two per cent (2%) per annum, until payment in full of
such amount, such interest to be payable by the Buyer upon the demand of the
Seller Representative.
1.4. Reimbursement for Tax Receivable. If the Companies receive any
benefit directly attributable to the amount identified on the June Balance
Sheet (as defined in Section 3(a)) as the "Income tax receivable" (the "Tax
Receivable"), then (a) if such benefit is received at any time between the date
hereof and the Closing Date, the amount of such benefit shall be paid to the
Sellers together with the Initial Purchase Price in accordance with Section 1.2
above, and (b) if such benefit is received at any time on or after the Closing
Date then the Buyer shall pay to the Sellers their Pro Rata Share of the amount
of such benefit within ten (10) days after the receipt thereof by the
Companies. For the avoidance of doubt, benefits directly attributable to the
Tax Receivable shall include the use by the Companies of any portion thereof to
offset any current tax liability (including, without limitation, the payment
for or reduction of quarterly estimated income tax payments), and the receipt
by the Companies of any amount in respect thereof by way of payment, repayment
or refund from the Internal Revenue Service or any state or local government
taxing authority. On or before December 31, 1996, the Buyer shall ensure
either that the Tax Receivable is applied to offset the Companies' current tax
liabilities or that all available claims for payment or repayment of the Tax
Receivable have been duly made or filed, and any amounts received by the Buyer
as a result thereof shall be paid to the Sellers within ten (10) days after the
receipt of such amounts by the Companies.
1.5. Interest. In the event that the Closing shall not have occurred
on or before September 30, 1996 solely as a result of a failure to fulfill the
conditions precedent to the effectiveness of this Agreement referred to in
Sections 7.15 and 8.7 hereof, then, without in any way limiting the parties'
respective rights and obligations under Sections 7, 8, 14 and 15.13 hereof, the
Buyer agrees to pay to the Sellers at the Closing, together with the Initial
Purchase Price and in accordance with Section 1.2 above, interest on the first
$10,000,000 of the Initial Purchase Price at a rate per annum equal to 5.5%,
such interest to accrue from day to day commencing on October 1, 1996 until and
including the Closing Date. The Buyer's obligation to pay interest pursuant to
this Section 1.5 shall terminate and be of no further force and effect
immediately upon any termination of this Agreement in accordance with the terms
hereof.
2. CLOSING.
2.1. Time and Place. The closing of the sale and purchase of the Stock
(the "Closing") shall be held at the offices of Xxxxxxx, Xxxx & Xxxxx LLP, 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, at 10:00 a.m. on September 24, 1996, or
at such other time or place as the Buyer and the Sellers may agree. The date
on which the Closing is actually held hereunder is sometimes referred to herein
as the "Closing Date".
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2.2. Transactions at Closing. At the Closing, in addition to any other
instruments or documents referred to herein:
(a) The Sellers shall deliver to the Buyer, free and clear of
any lien, claim or encumbrance, certificates representing all of the Stock,
duly endorsed in blank or with duly executed stock powers attached.
(b) The Buyer shall deliver the Initial Purchase Price to the
Sellers in the respective amounts set forth on Schedule 1 by certified or bank
check or by wire transfer.
(c) The Sellers shall deliver to the Buyer pay-off letters
stating the amounts payable on the Closing Date to discharge all of the
Discharged Indebtedness of the Companies (each such amount, a "Pay-off
Amount"), and containing agreements satisfactory to the Buyer on the part of
the relevant lender or creditor to discharge any lien on any property of any of
the Companies upon such lender's or creditor's receipt of the Pay-Off Amount
specified in the applicable pay-off letter.
(d) The Buyer and each of Xxxxxx and Xxxxxxxxxx shall execute
and deliver Employment and Non-Competition Agreements substantially in the form
of Exhibits A-1 and A-2 attached hereto, respectively (the "Employment
Agreements").
(e) The Sellers shall deliver the Sellers' Closing Certificate
referred to in Section 7.13.
(f) The "Exchange", as defined in the Exchange Agreement,
shall be completed by delivery of such certificates representing the stock of
Atrium as may be required to be exchanged pursuant to the terms thereof for the
VBS Exchanged Shares, the BNE Exchanged Shares and the FCI Stock, each as
defined in the Exchange Agreement.
(g) The Sellers, Atrium, the Buyer and the Escrow Agent (as
defined therein) shall execute and deliver a Buy-Sell Agreement substantially
in the form of Exhibit B attached hereto (the "Buy-Sell Agreement"), pursuant
to which (among other things) the shares of stock of Atrium to be exchanged for
the VBS Exchanged Shares and the BNE Exchanged Shares (sometimes referred to
herein as the "Escrowed Shares) shall be held by the Escrow Agent subject to
certain rights of the Sellers to tender such shares in payment of certain
indemnity claims under Section 13 hereof, and certain rights of the Buyer to
require the tender of such shares in payment of such claims.
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3. NET WORKING CAPITAL ADJUSTMENT TO PURCHASE PRICE.
(a) (i) Attached hereto as Schedule 3(a)(i) is an audited
consolidated balance sheet of the Companies (the "June Balance Sheet") as of
the close of business on June 30, 1996 (the "Calculation Date"), together with
the related statements of income, retained earnings and cash flow for the nine
(9) month period ended on the Calculation Date (together with the June Balance
Sheet, the "June Financial Statements"), in each case audited by the Companies'
Accountants and prepared in accordance with generally accepted accounting
principles applied on a basis consistent with the Year-End Balance Sheet (as
defined in Section 4.8). Attached hereto as Schedule 3(a)(ii) is a calculation
prepared and certified by the Companies' Accountants showing the amount of Net
Working Capital (as defined in Section 12) of the Companies as of the
Calculation Date to be $5,291,823.00 (the "Calculation Date Net Working
Capital").
(b) Because the Calculation Date Net Working Capital is
greater than $2,500,000, the Initial Purchase Price payable at the Closing
shall be increased by $2,791,823.00, being the amount equal to the amount of
such excess (the "Net Working Capital Adjustment").
4. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each of the Sellers
jointly and severally (except with respect to the representations and
warranties of each of the Sellers contained in Sections 4.2 and 4.5 hereof,
which are made severally by each of the Sellers on its own behalf and not
jointly) represents and warrants to the Buyer as follows:
4.1. Organization of the Companies; Authority. Each of the Companies
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Connecticut. Each of the Companies is duly qualified
and in good standing as a foreign corporation in all jurisdictions in which the
character of the properties owned or leased or the nature of the activities
conducted by it makes such qualification necessary. The Sellers have delivered
to the Buyer complete and correct copies of the Certificates of Incorporation
and By-Laws of each of the Companies, and all amendments thereto. Each of the
Companies has all requisite power and authority to own or lease and operate its
properties and to carry on its business as such business is now conducted.
4.2. Rights to Sell Outstanding Shares; Approvals; Binding Effect.
Each Seller has all requisite power and full legal right to enter into this
Agreement and each of the other Transaction Documents, if any, to which it is a
party, to perform all of such Seller's agreements and obligations hereunder and
thereunder, each in accordance with their respective terms, and to sell to the
Buyer all of the outstanding shares of Stock owned by such Seller. Each of
this Agreement and the other Transaction Documents, if any, to which such
Seller is a party has been duly executed and delivered by such Seller and
constitutes the legal, valid and binding obligation of such Seller enforceable
against such Seller in accordance with its terms, except as the enforceability
thereof may be limited by any applicable bankruptcy, reorganization, insolvency
or other laws affecting creditors' rights generally or by general principles of
equity.
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4.3. Subsidiaries. BNY and BNE do not have any Subsidiaries (as
defined in Section 12). BNE is the sole Subsidiary of BMC, and BMC is the sole
Subsidiary of VBS. The Companies do not own or hold of record and/or
beneficially any shares of any class in the capital of any other corporation.
The Companies do not own any legal and/or beneficial interests in any limited
liability companies, partnerships, business trusts or joint ventures or in any
other unincorporated trade or business enterprises.
4.4. Capitalization.
(a) The authorized capital of BNY consists of 5,000 shares of
common stock, no par value, of which 1,000 shares are issued and outstanding,
all of which are owned of record and beneficially by the Parent Stockholders as
set forth in Schedule 4.4(a).
(b) The authorized capital of VBS consists of 100 shares of
common stock, par value $25.00 per share, of which 100 shares are issued and
outstanding, all of which were owned of record and beneficially as set forth in
Schedule 4.4(a) immediately prior to completion of the "Exchange" under and as
defined in the Exchange Agreement (the "Exchange"), and all of which will be
owned of record and beneficially as set forth in Schedule 4.4(b) immediately
following completion of the Exchange.
(c) The authorized capital of BMC consists of 150 shares of
common stock, no par value, of which 150 shares are issued and outstanding, all
of which are owned of record and beneficially by VBS.
(d) The authorized capital of BNE consists of 5,000 shares of
common stock, no par value, of which 1,000 shares are issued and outstanding,
all of which were owned of record and beneficially as set forth in Schedule
4.4(a) immediately prior to completion of the Exchange, and all of which will
be owned of record and beneficially as set forth in Schedule 4.4(b) immediately
following completion of the Exchange.
(e) All of the capital stock of the Companies is validly
issued and outstanding, fully paid and non-assessable. There are no
commitments for the purchase or sale of, and no options, warrants or other
rights to subscribe for or purchase, any capital stock or other securities of
any of the Companies.
4.5. Title to Stock, Liens, etc. The Sellers have, and as of the
consummation of the Closing the Buyer will have, sole record and beneficial
ownership of all of the Stock, free and clear of any mortgage, lien, pledge,
charge, security interest, encumbrance, title retention agreement, option,
equity or other adverse claim thereto.
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4.6. Non-Contravention. The execution and delivery of this Agreement
and the other Transaction Documents, if any, to which each such Seller is a
party and the consummation by the Sellers of the transactions contemplated
hereby and thereby will not (a) violate or conflict with any provision of the
Certificate of Incorporation or By-Laws of any of the Companies, each as
amended to date; or (b) constitute a material violation of, or be in conflict
with, or constitute or create a default under, or result in the creation or
imposition of any encumbrance upon any property of any of the Companies
pursuant to (i) any agreement or instrument to which any of the Companies is a
party or by which any of their properties is bound, or (ii) to the knowledge of
the Sellers, any statute, judgment, decree, order, regulation or rule of any
court or governmental or regulatory authority.
4.7. Governmental Consents; Transferability of Licenses, Etc. Except
as set forth on Schedule 4.7, no consent, approval or authorization of, or
registration, qualification or filing with, any governmental agency or
authority is required for the execution and delivery by the Sellers of this
Agreement, or the other Transaction Documents, if any, to which such Seller is
a party or for the consummation by the Sellers of the transactions contemplated
hereby or thereby. Each of the Companies has and maintains, and the permits
listed on Schedule 4.7 hereto include, to the knowledge of the Sellers, all
material licenses, permits and other authorizations from all governmental
authorities (collectively, the "Permits") as are necessary for the conduct of
the Companies' business as currently operated. Except as expressly designated
on Schedule 4.7, all of the Permits are transferable to the Buyer, and true and
complete copies of such Permits have previously been delivered to the Buyer.
4.8. Financial Statements. The Sellers have delivered the following
financial statements (collectively, the "Financial Statements") to the Buyer:
(a) the audited consolidated balance sheets of the Companies as of September
30, 1994 and September 30, 1995 (such balance sheet as of September 30, 1995
being referred to herein as the "Year-End Balance Sheet"), and the related
consolidated statements of income, retained earnings and cash flows of the
Companies for each of the fiscal years then ended, which (together with the
Year-End Balance Sheet) are attached hereto as Schedule 4.8; and (b) the June
Financial Statements, as defined in Section 3(a) and attached hereto as
Schedule 3(a)(i). Each of the Financial Statements are true and correct and
have been prepared in accordance with generally accepted accounting principles;
each of the balance sheets included in the Financial Statements fairly and
accurately presents the financial condition of the Companies as of its
respective date; and each of the statements of income, retained earnings and
cash flows included in the Financial Statements fairly and accurately present
the results of operations of the Companies for the periods covered thereby.
The calculation of Calculation Date Net Working Capital by the Companies'
Accountants in the form attached hereto as Schedule 3(a)(ii) is correct.
4.9. Absence of Certain Changes. Except as set forth on Schedule 4.9
hereto, since June 30, 1996, each of the Companies has carried on its business
only in the ordinary course, and there has not been (a) any change in the
assets, liabilities, sales, income or business of any of the Companies
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or in the relationships with suppliers, customers or lessors, other than
changes which were both in the ordinary course of business and have not been,
either in any case or in the aggregate, materially adverse; (b) any acquisition
or disposition by any of the Companies of any asset or property other than in
the ordinary course of business; (c) any damage, destruction or loss, whether
or not covered by insurance, materially and adversely affecting, either in any
case or in the aggregate, the property or business of any of the Companies; (d)
any declaration, setting aside or payment of any dividend or any other
distributions in respect of any capital stock of any of the Companies; (e) any
issuance of any shares of the capital stock of any of the Companies or any
direct or indirect redemption, purchase or other acquisition of any shares of
the capital stock of any of the Companies other than pursuant to the Exchange
Agreement; (f) any increase in the compensation, pension or other benefits
payable or to become payable by any of the Companies to any of their officers
or employees, or any bonus payments or arrangements made to or with any of them
(other than pursuant to the terms of any existing written agreement or plan of
which the Buyer has been supplied complete and correct copies); (g) any
forgiveness or cancellation of any debt or claim by any of the Companies or any
waiver of any right of material value other than compromises of accounts
receivable in the ordinary course of business; (h) any entry by any of the
Companies into any transaction other than in the ordinary course of business;
(i) any incurrence by any of the Companies of any obligations or liabilities,
whether absolute, accrued, contingent or otherwise (including, without
limitation, liabilities as guarantor or otherwise with respect to obligations
of others), other than obligations and liabilities incurred in the ordinary
course of business; (j) any mortgage, pledge, lien, lease, security interest or
other charge or encumbrance on any of the assets, tangible or intangible, of
any of the Companies; or (k) any discharge or satisfaction by any of the
Companies of any lien or encumbrance or payment by any of the Companies of any
obligation or liability (fixed or contingent) other than (A) current
liabilities included in the Year-End Balance Sheet and (B) current liabilities
incurred since the date of the Year-End Balance Sheet in the ordinary course of
business.
4.10. Litigation, Etc. Except as set forth on Schedule 4.10 hereto, no
action, suit, proceeding or investigation is pending or, to the knowledge of
any of the Sellers, threatened against any of the Companies. The Companies
have and will have no liabilities or obligations in respect to any of the
action, suits, proceedings and investigations referred to in Schedule 4.10
hereto which are not fully covered by the Companies' insurance policies.
4.11. Conformity to Law. Except as set forth on Schedule 4.11 hereto
and subject to the last sentence of this Section 4.11, each of the Companies
has materially complied with, and is in material compliance with (a) all laws,
statutes, governmental regulations and all judicial or administrative tribunal
orders, judgments, writs, injunctions, or decrees applicable to any of the
Companies or any of its properties and (b) all unwaived terms and provisions of
all contracts, agreements and indentures to which any of the Companies is a
party, or by which any of the Companies or any of their properties is subject.
Except as set forth in Schedule 4.11 and subject to the last sentence of this
Section 4.11, none of the Companies has received written notification of, or,
to the knowledge
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of any of the Sellers, been under investigation with respect to, any material
violation of any provision of any federal, state or local law or administrative
regulation in respect of any of the Companies, their businesses or any of their
properties. To the extent that any health and safety, zoning or environmental
matter is covered both by the representations and warranties in this Section
4.11 and by the representations and warranties in Section 4.13 below, if such
matter does not, under the terms of Section 4.13, constitute a breach of the
representations and warranties made in Section 4.13, then such matter shall not
constitute a breach of the representations and warranties made in this Section
4.11.
4.12. Title to Property, Real Property Leases, etc. Except as set
forth on Schedule 4.12(a) hereto, each of the Companies has good and marketable
title to all of its personal properties and assets, all free and clear of all
liens, pledges, charges, security interests, encumbrances or title retention
agreements of any kind or nature ("Liens"). All such properties and assets and
all real property owned or leased by the Companies (the "Real Property") are in
good condition and repair (normal wear and tear excepted) and are adequate and
sufficient to carry on the business of the Companies as presently conducted.
Schedule 4.12(b) hereto sets forth a complete and correct list of all capital
assets of the Companies having a book or fair market value in excess of $10,000
and all Real Property. There are no material defects in any such capital
assets or Real Property, as to title or condition, not described on Schedule
4.12(b). Neither the Sellers nor any of the Companies have received any notice
that either the whole or any portion of the Real Property is to be condemned,
requisitioned or otherwise taken by any public authority. Neither the Sellers
nor the Companies have any knowledge of any public improvements that may result
in special assessments against or otherwise affect any of the Real Property.
Schedule 4.12(c) hereto sets forth (i) a complete and correct description of
all leases of Real Property to which any of the Companies is a party and (ii) a
complete and accurate list of the street addresses of all real property leased
by any of the Companies. Except with respect to the lease of the Real Property
located at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxx, complete and correct
copies of all such leases have been delivered to the Buyer. Each such lease is
valid and subsisting, and no action has been taken or omitted by any of the
Sellers of the Companies and, to the knowledge of the Sellers, no other event
or condition exists, which constitutes, or after notice or lapse of time or
both would constitute, a default under any such lease. The leasehold interests
of the Companies are subject to no lien or other encumbrance, and the Companies
are in quiet possession of the properties covered by such leases.
4.13. Health and Safety, Zoning and Environmental Matters.
(a) Except as set forth on Schedule 4.13 hereto or in the
environmental report prepared by Roux Associates, Inc. and dated July 24, 1996:
(i) none of the Companies nor any operator of any real
property presently owned or leased by any of the Companies nor, to the
knowledge of the Sellers, any operator of any
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real property formerly owned, leased or operated by any of the
Companies, is in material violation or is alleged (based on written
notification received by any of the Companies or any of the Sellers) to
be in material violation of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including
without limitation those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), the
Federal Water Pollution Control Act, the Solid Waste Disposal Act, as
amended, the Federal Clean Water Act, the Federal Clean Air Act, the
Toxic Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health and safety or the
environment (hereinafter "Environmental Laws") (excluding matters
arising under the Occupational Safety and Health Act of 1970, as amended
("OSHA"), or its state or local requirements);
(ii) none of the Sellers or the Companies have received written
notice from any third party, including without limitation any federal,
state or local governmental authority, (A) that any of the Companies or
any predecessor in interest has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible
party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X (1986); (B) that any
hazardous waste, as defined by 42 U.S.C. Section 6903(5), any hazardous
substance as defined by 42 U.S.C. Section 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. Section 9601(33) or any toxic
substance, oil or hazardous material or other chemical or substance
regulated by any Environmental Laws ("Hazardous Substances") which any
of the Companies or any predecessor in interest has generated,
transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted or has
ordered that any of the Companies or any predecessor in interest conduct
a remedial investigation, removal or other response action pursuant to
any Environmental Law; or (C) that any of the Companies or any
predecessor in interest is or shall be a named party to any claim,
action, cause of action, complaint or legal or administrative proceeding
arising out of any third party's incurrence of costs, expenses, losses
or damages of any kind whatsoever in connection with the release of
Hazardous Substances; and
(iii) (A) no portion of any real property presently owned,
leased or operated by any of the Companies or, to the knowledge of the
Sellers, formerly owned, leased or operated by any of the Companies has
been used by any of the Companies or, to the Sellers' knowledge, any
other Person, for the handling, manufacturing, processing, storage or
disposal of Hazardous Substances except in material compliance with
applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on
such properties; (B) in the course of any activities conducted by any of
the
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Companies or operators of any real property presently owned, leased or
operated by any of the Companies or, to the knowledge of the Sellers,
formerly owned, leased or operated by any of the Companies, no Hazardous
Substances have been generated or are being used on such properties
except in material compliance with applicable Environmental Laws; (C)
none of the real properties presently owned, leased or operated by any
of the Companies or, to the knowledge of the Sellers, formerly owned,
leased or operated by any of the Companies, contains friable asbestos,
urea formaldehyde foam insulation, transformers or other equipment
containing polychlorinated biphenyls, or any other Hazardous Substance,
except for Hazardous Substances which are present on any such property
in the ordinary course of business and in material compliance with
applicable Environmental Laws; (D) none of the Companies have released
and, to the knowledge of the Sellers, there have been no other releases
(i.e., any past or present release, spill, leak, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or
dumping) of Hazardous Substances on, upon, into or from any real
property presently or formerly owned, leased or operated by any of the
Companies except in material compliance with applicable Environmental
Laws; (E) to the knowledge of the Sellers, there have been no releases
on, upon, from or into any real property in the vicinity of any real
property presently or formerly owned, leased or operated by any of the
Companies which, through soil or groundwater contamination, may have
come to be located on such real property; and (F) to the knowledge of
the Sellers, any Hazardous Substances that have been generated on any
real property presently or formerly owned, leased or operated by any of
the Companies have been transported offsite only by carriers having
identification numbers issued by the EPA and have been treated or
disposed of only by treatment or disposal facilities maintaining valid
permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the
Sellers' knowledge, operating in material compliance with such permits
and applicable Environmental Laws.
(b) no operations on any real property presently owned, leased
or operated by any of the Companies generate sufficient quantities of
"hazardous waste", as defined in Connecticut Gen. Statutes Section 22a-134 et
seq., as revised pursuant to Public Law 95-183 (the "Connecticut Transfer
Act"), to require the notification to the Connecticut state authorities of the
transactions contemplated hereby pursuant to the aforesaid Connecticut Transfer
Act, and no real property presently owned, leased or operated by any of the
Companies is an "establishment" under and as defined in the Connecticut
Transfer Act.
(c) Attached as part of Schedule 4.13 is a list of all
reports, site assessments and memoranda in any of the Companies' or Sellers'
possession which contain any material information with respect to material
environmental liabilities associated with any real property presently or
formerly owned, leased or operated by any of the Companies and relating to
compliance with Environmental Laws or the environmental condition of such
properties and adjacent properties. The
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Sellers have furnished to the Buyer complete and accurate copies of all of the
reports, site assessments and memoranda listed on Schedule 4.13.
(d) None of the plants, offices or properties operated by any
of the Companies, nor the activities carried on therein or thereon, are in
material violation of any federal, state or local zoning, health or safety law
or regulation, including without limitation OSHA.
4.14. Insurance. Schedule 4.14 hereto lists all policies of fire,
liability, workmen's compensation, life, property and casualty and other
insurance owned or held by any of the Companies. All such policies (a) are in
full force and effect, (b) are sufficient for compliance by any of the
Companies with all requirements of law and all agreements to which any of the
Companies is a party, (c) provide that they will remain in full force and
effect through the respective dates set forth in such Schedule and (d) will not
in any way be affected by, or terminate or lapse by reason of, the transactions
contemplated by this Agreement. None of the Companies is in default with
respect to its obligations under any of such insurance policies and has not
received any notification of cancellation of any such insurance policies.
4.15. Contracts. Schedule 4.15 sets forth a complete and accurate list
of all material contracts to which any of the Companies is a party or by or to
which any of the Companies or any of their assets or properties is bound or
subject, except (i) material contracts entered into in the ordinary course of
business after the date hereof and prior to the Closing, which will be
identified to the Buyer in writing prior to the Closing, (ii) material
contracts terminable by the Company party thereto upon 30 days' notice or less
without the payment of any termination fee or penalty, (iii) material contracts
listed in other Schedules hereto and (iv) contracts under which the liability
of the Company party thereto does not exceed and shall at no time exceed
$10,000, provided that the aggregate amount of the Companies' liability under
such contracts not otherwise disclosed in Schedule 4.15 or the other Schedules
hereto does not exceed and shall at no time exceed $25,000. As used in this
Section 4.15, the word "contract" means and includes every agreement or
understanding of any kind, written or oral, which is legally enforceable by or
against any of the Companies, and specifically includes (a) contracts and other
agreements with any current or former officer, director, employee, consultant
or shareholder or any partnership, corporation, joint venture or any other
entity in which any such person has an interest; (b) agreements with any labor
union or association representing any employee; (c) contracts and other
agreements for the provision of services by any of the Companies; (d) bonds or
other security agreements provided by any party in connection with the business
of the Companies; (e) contracts and other agreements for the sale of any of the
Companies' assets or properties other than in the ordinary course of business
or for the grant to any person of any preferential rights to purchase any of
the Companies' assets or properties; (f) joint venture agreements relating to
the assets, properties or business of any of the Companies or by or to which
any of them or any of their assets or properties are bound or subject; (g)
contracts or other agreements under which any of the Companies agrees to
indemnify any party, to share tax
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liability of any party, or to refrain from competing with any party; (h) any
contracts or other agreements with regard to Indebtedness; or (i) any other
contract or other agreement whether or not made in the ordinary course of
business. The Sellers have delivered to the Buyer true, correct and complete
copies of all such contracts, together with all modifications and supplements
thereto. Each of the contracts listed on Schedule 4.15 hereto or any of the
other Schedules hereto is in full force and effect, none of the Companies is in
material breach of any of the provisions of any such contract, nor, to the
knowledge of any of the Sellers, is any other party to any such contract in
default thereunder, nor does any event or condition exist which with notice or
the passage of time or both would constitute a default thereunder. Each of the
Companies has in all material respects performed all obligations required to be
performed by it to date under each such contract. No approval or consent of
any person is needed in order that the contracts listed on Schedule 4.15 and
other Schedules hereto continue in full force and effect following the
consummation of the transactions contemplated by this Agreement, and no such
contract includes any provision the effect of which may be to enlarge or
accelerate any obligations of any of the Companies thereunder or give
additional rights to any other party thereto or will in any other way be
affected by, or terminate or lapse by reason of, the transactions contemplated
by this Agreement.
4.16. Employment of Officers, Employees. Schedule 4.16 sets forth the
name and current annual salary and other compensation payable by any of the
Companies to each exempt non-hourly employee whose current total annual
compensation or estimated compensation from any of the Companies (including but
not limited to wages, salary, commissions, normal ordinary type bonus, profit
sharing, deferred compensation and other extra compensation) is $50,000 or
more.
4.17. Employee Benefit Plans. (a) Except for the arrangements set
forth on Schedule 4.17(a), none of the Companies now maintains or contributes
to, nor in the current or preceding six (6) calendar years has maintained or
contributed to, any pension, profit-sharing, deferred compensation, bonus,
stock option, share appreciation right, severance, group or individual health,
dental, medical, life insurance, survivor benefit, or similar plan, policy or
arrangement, whether formal or informal, for the benefit of any director,
officer, consultant or employee, whether active or terminated, of any of the
Companies. Each of the arrangements set forth on Schedule 4.17(a) is
hereinafter referred to as an "Employee Benefit Plan", except that any such
arrangement which is a multi-employer plan shall be treated as an Employee
Benefit Plan only for purposes of Sections 4.17(d)(iv), (vi) and (viii) and
4.17(g) below.
(b) The Sellers have heretofore delivered to Buyer true, correct and
complete copies of each Employee Benefit Plan of any of the Companies, and with
respect to each such Plan (i) any associated trust, custodial, insurance or
service agreements, (ii) any annual report, actuarial report, or disclosure
materials (including specifically any summary plan descriptions) submitted to
any governmental agency or distributed to participants or beneficiaries
thereunder in the current or any
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of the six (6) preceding calendar years and (iii) the most recently received
IRS determination letters and any governmental advisory opinions or rulings.
(c) Each Employee Benefit Plan is and has heretofore been maintained
and operated in material compliance with the terms of such Plan and with the
requirements prescribed (whether as a matter of substantive law or as necessary
to secure favorable tax treatment) by any and all statutes, governmental or
court orders, or governmental rules or regulations in effect from time to time,
including but not limited to the Employee Retirement Income Security Act of
1974, as amended ("ERISA") and the Internal Revenue Code of 1986, as amended
(the "Code") and applicable to such Plan. Each Employee Benefit Plan which is
intended to qualify under Section 401(a) of the Code has been determined to be
so qualified by the IRS and nothing has occurred since the date of the last
such determination which has resulted or is likely to result in the revocation
of such determination.
(d) Except as set forth on Schedule 4.17(d),
(i) there is no pending or, to the knowledge of the Sellers,
threatened legal action, proceeding or investigation, other than routine
claims for benefits, concerning any Employee Benefit Plan or to the best
knowledge of the Sellers and the Companies any fiduciary or service
provider thereof and, to the best knowledge of the Sellers and the
Companies, there is no basis for any such legal action or proceeding;
(ii) no liability (contingent or otherwise) to the Pension
Benefit Guaranty Corporation ("PBGC") or any multi-employer plan has
been incurred by any of the Companies or any affiliate thereof (other
than insurance premiums satisfied in due course);
(iii) no reportable event, or event or condition which presents
a material risk of termination by the PBGC, has occurred with respect to
any Employee Benefit Plan, or any retirement plan of an affiliate of any
of the Companies, which is subject to Title IV of ERISA;
(iv) no Employee Benefit Plan nor any party in interest with
respect thereof, has engaged in a prohibited transaction which could
subject any of the Companies directly or indirectly to liability under
Section 409 or 502(i) of ERISA or Section 4975 of the Code;
(v) no communication, report or disclosure has been made which,
at the time made, did not accurately reflect the terms and operations of
any Employee Benefit Plan;
(vi) no Employee Benefit Plan provides welfare benefits
subsequent to termination of employment to employees or their
beneficiaries (except to the extent required by applicable state
insurance laws and Title I, Part 6 of ERISA);
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(vii) no benefits due under any Employee Benefit Plan have been
forfeited subject to the possibility of reinstatement (which possibility
would still exist at or after Closing); and
(viii) none of the Companies has undertaken to maintain any
Employee Benefit Plan for any period of time and each such Plan is
terminable at the sole discretion of the sponsor thereof, subject only
to such constraints as may be imposed by applicable law.
(e) With respect to each Employee Benefit Plan for which a separate
fund of assets is or is required to be maintained, full payment has been made
of all amounts that any of the Companies is required, under the terms of each
such Plan, to have paid as contributions to that Plan as of the end of the most
recently ended plan year of that Plan, and no accumulated funding deficiency
(as defined in Section 302 of ERISA and Section 412 of the Code), whether or
not waived, exists with respect to any such Plan. The current value of the
assets of each such Employee Benefit Plan, as of the end of the most recently
ended plan year of that Plan, exceeded the current value of all accrued
benefits under that Plan.
(f) The execution of this Agreement and the consummation of the
transactions contemplated hereby will not result in any payment (whether of
severance pay or otherwise) becoming due from any Employee Benefit Plan to any
current or former director, officer, consultant or employee of any of the
Companies or result in the vesting, acceleration of payment or increases in the
amount of any benefit payable to or in respect of any such current or former
director, officer, consultant or employee.
(g) No Employee Benefit Plan is a multi-employer plan.
(h) For purposes of this Section 4.17, "multi-employer plan", "party
in interest", "current value", "accrued benefit", "reportable event" and
"benefit liability" have the same meaning assigned such terms under Sections 3,
4043(b) or 4001(a) of ERISA, and "affiliate" means any entity which under
Section 414 of the Code is treated as a single employer with any of the
Companies.
4.18. Labor Relations. Except as set forth on Schedule 4.18, each of
the Companies is in material compliance with all federal and state laws
respecting employment and employment practices, terms and conditions of
employment, wages and hours and nondiscrimination in employment, and is not
engaged in any unfair labor practice. Except as set forth on Schedule 4.18,
there is no charge pending or, to the knowledge of any of the Sellers,
threatened against any of the Companies alleging unlawful discrimination in
employment practices before any court or agency and there is no charge of or
proceeding with regard to any unfair labor practice against any of the
Companies pending before the National Labor Relations Board. There is no labor
strike, dispute, slow-down or work stoppage actually pending or, to the
knowledge of any of the Sellers, threatened
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against or involving any of the Companies. No one has petitioned within the
last five (5) years, and no one is now petitioning, for union representation of
any of the Companies' employees. No grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is pending against
any of the Companies and no claim therefor has been asserted. None of the
employees of the Companies is covered by any collective bargaining agreement,
and no collective bargaining agreement is currently being negotiated by any of
the Companies. Except as fully described on Schedule 4.18 hereto, none of the
Companies has experienced any work stoppage during the last five years.
4.19. Potential Conflicts of Interest. Except as set forth on Schedule
4.19, no officer, director or stockholder of any of the Companies (a) owns,
directly or indirectly, any interest in (excepting not more than 1% stock
holdings for investment purposes in securities of publicly held and traded
companies) or is an officer, director, employee or consultant of any Person
which is a competitor, lessor, lessee, customer or supplier of any of the
Companies; (b) owns, directly or indirectly, in whole or in part, any tangible
or intangible property which any of the Companies is using or the use of which
is necessary for the business of any of the Companies; or (c) has any cause of
action or other claim whatsoever against, or owes any amount to, any of the
Companies, except for claims in the ordinary course of business, such as for
accrued vacation pay, accrued benefits under Employee Benefit Plans and similar
matters and agreements.
4.20. Trademarks, Patents, Etc. Schedule 4.20 hereto sets forth a
complete and accurate list of (a) all patents, trademarks, trade names and
copyrights registered in the name of any of the Companies or used or proposed
to be used by any of the Companies, all applications therefor, and all licenses
(as licensee or licensor) and other agreements relating thereto, and (b) all
written agreements relating to other technology, know-how and processes which
any of the Companies is licensed or authorized by others to use or which any of
the Companies has licensed or authorized for use by others. Except to the
extent set forth in Schedule 4.20, each of the Companies owns or has the right
to use without restrictions all patents, trademarks, trade names, copyrights,
technology, know-how and processes used in or necessary for the ordinary course
of business as presently conducted or proposed to be conducted, and the
consummation of the transactions contemplated hereby will not alter or impair
any such right. No claims have been asserted, and no claims are pending, by
any person regarding the use of any such patents, trademarks, trade names,
copyrights, technology, know-how or processes, or challenging or questioning
the validity or effectiveness of any license or agreement, and to the knowledge
of the Sellers there is no basis for such claim. To the knowledge of the
Sellers, the use by each of the Companies of such patents, trademarks, trade
names, copyrights, technology, know-how or processes in the ordinary course of
business does not infringe on the rights of any person.
4.21. Suppliers and Customers. Schedule 4.21 hereto sets forth the ten
(10) largest suppliers and ten (10) largest customers of the Companies, taken
together, for the twelve (12) month period
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ending on the last calendar month end preceding the date hereof. The
relationships of the Companies with such suppliers and customers are good
commercial working relationships and, except as set forth on Schedule 4.21, no
supplier or customer of material importance to any of the Companies has
canceled or otherwise terminated, or threatened to cancel or otherwise to
terminate, its relationship with any of the Companies or has during the last
twelve (12) months decreased materially, or threatened to decrease or limit
materially, its services, supplies or materials for use by any of the Companies
or its usage or purchase of the services or products of any of the Companies
except for normal cyclical changes related to customers' businesses. None of
the Sellers has any knowledge that any such supplier or customer intends to
cancel or otherwise substantially modify its relationship with any of the
Companies or to decrease materially or limit its services, supplies or
materials to any of the Companies, or its usage or purchase of any of the
services or products of any of the Companies, and to the knowledge of the
Sellers, the communication of the transactions contemplated hereby will not
adversely affect the relationship of the Buyer with any such supplier or
customer.
4.22. Accounts Receivable. All accounts and notes receivable reflected
on the Interim Balance Sheet, and all accounts and notes receivable arising
subsequent to the date of such Interim Balance Sheet, have arisen in the
ordinary course of business, represent valid obligations owing to the Companies
and have been collected or, to the knowledge of the Sellers, are collectible in
the aggregate recorded amounts thereof in accordance with their terms, net of
the reserve for uncollected accounts to be set forth on the June Balance Sheet.
4.23. No Undisclosed Liabilities. Except to the extent (a) reflected
or reserved against in the Interim Balance Sheet, (b) incurred in the ordinary
course of business after the date of the Interim Balance Sheet and either
discharged prior to Closing or, if incurred on or before the Calculation Date,
reflected on the June Balance Sheet, or (c) described on any Schedule hereto,
none of the Companies has any liabilities or obligations of any nature, whether
accrued, absolute, contingent or otherwise (including without limitation as
guarantor or otherwise with respect to obligations of others), other than
performance obligations with respect to the its contracts that would not be
required to be reflected or reserved against on a balance sheet prepared in
accordance with generally accepted accounting principles or in the footnotes
thereto.
4.24. Taxes. BNY is, and at all times since its incorporation on May
27, 1993 has been, qualified as a corporation for which a valid election to be
taxed under the provisions of Subchapter S, Chapter 1, Subtitle A of the Code
has been filed and is in effect under such Subchapter S, and has, and has had,
a corresponding election in effect under the laws of the State of New York for
each taxable period during the period since its incorporation. Each of the
Companies has duly filed with the appropriate government agencies all of the
income, sales, use, employment and other tax returns and reports required to be
filed by it. No waiver of any statute of limitations relating to taxes has
been executed or given by any of the Companies. All taxes, assessments, fees
and other governmental charges upon any of the Companies or upon any of their
properties, assets, revenues,
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income and franchises which are owed by any of the Companies with respect to
any periods have been paid, other than those currently payable without penalty
or interest, accruals against which will be accurately reflected on the June
Balance Sheet. Each of the Companies has withheld and paid all taxes required
to be withheld or paid in connection with amounts paid or owing to any
director, officer, employee, creditor, independent contractor or third party.
No federal tax return of any of the Companies is currently under audit by the
IRS (as defined in Section 12), and no other tax return of any of the Companies
is currently under audit by any other taxing authority. Neither the IRS nor
any other taxing authority is now asserting or, to the knowledge of the
Sellers, threatening to assert against any of the Companies any deficiency or
claim for additional taxes or interest thereon or penalties in connection
therewith or any adjustment that would have an adverse effect on any of the
Companies.
4.25. Indebtedness. Except for the Assumed Indebtedness described on
Schedule 4.25(a) hereto and the Discharged Indebtedness described on Schedule
4.25(b), none of the Companies has any Indebtedness outstanding at the date
hereof. Except as disclosed on Schedule 4.25(c) hereto, none of the Companies
is in default with respect to any outstanding Indebtedness or any instrument
relating thereto and no such Indebtedness or any instrument or agreement
relating thereto purports to limit the issuance of any securities by any of the
Companies or the operation of the business of any of the Companies. Complete
and correct copies of all instruments (including all amendments, supplements,
waivers and consents) relating to any Indebtedness of any of the Companies have
been furnished to the Buyer.
4.26. Bank Accounts, Signing Authority, Powers of Attorney. Except as
set forth on Schedule 4.26 hereto, none of the Companies has any account or
safe deposit box in any bank and no Person has any power, whether singly or
jointly, to sign any checks on behalf of any of the Companies to withdraw any
money or other property from any bank, brokerage or other account of any of the
Companies or to act under any power of attorney granted by any of the Companies
at any time for any purpose. Schedule 4.26 also sets forth the names of all
persons authorized to borrow money or sign notes on behalf of each of the
Companies.
4.27. Inventory. The inventory and supplies of the Companies are
adequate for present needs, and are in usable and salable condition in the
ordinary course of business, subject only to appropriate reserves for
obsolescence to be reflected on the June Balance Sheet.
4.28. Minute Books. Except as set forth on Schedule 4.28, the minute
books of the Companies made available to the Buyer for inspection accurately
record therein all actions taken by the Board of Directors and shareholders of
each of the Companies.
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4.29. Broker. Except as set forth on Schedule 4.29, none of the
Sellers has retained, utilized or been represented by any broker, agent, finder
or intermediary in connection with the negotiation or consummation of the
transactions contemplated by this Agreement.
4.30. Warranty Claims; Product Liability. Except as set forth on
Schedule 4.30 hereto, the Companies have no actual or alleged liability for
death or injury to person or property as a result of any actual or alleged
defect in any product sold or manufactured by any of the Companies on or prior
to the Closing Date in any amount which is not either fully reserved for on the
June Balance Sheet or fully covered by the Companies' insurance policies, and
there are no contractual product warranty claims arising out of defects in any
product shipped by any of the Companies on or prior to the Closing Date in
amounts which are not either fully reserved for on the June Balance Sheet or
fully covered by the Companies' insurance policies.
4.31. Disclosure. No representation or warranty by any of the Sellers
in this Agreement or in any exhibit, schedule, written statement, certificate
or other document delivered or to be delivered to the Buyer pursuant hereto or
in connection with the consummation of the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact required to be stated therein or necessary
to make the statements contained therein not misleading. To the knowledge of
the Sellers, there is no fact which the Sellers have not disclosed to the Buyer
in writing which materially adversely affects the business or condition
(financial or other) of any of the Companies or the ability of the Sellers to
perform this Agreement or any of the transactions contemplated hereby.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents
and warrants to each of the Sellers as follows:
5.1. Organization of Buyer; Authority. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Buyer has all requisite power and authority to execute and
deliver this Agreement, and each of the other Transaction Documents to which it
is a party and to carry out all of the actions required of it pursuant to the
terms thereof.
5.2. Corporate Approval; Binding Effect. The Buyer has obtained all
necessary authorizations and approvals from its Board of Directors and
stockholders required for the execution and delivery of this Agreement, and the
other Transaction Documents to which it is a party and the consummation of the
transactions contemplated hereby and thereby. Each of this Agreement, and the
other Transaction Documents to which it is a party has been duly executed and
delivered by the Buyer and constitutes the legal, valid and binding obligation
of the Buyer, enforceable against the Buyer in accordance with their respective
terms, except as enforceability thereof may be limited by
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any applicable bankruptcy, reorganization, insolvency or other laws affecting
creditors' rights generally or by general principles of equity.
5.3. Non-Contravention. The execution and delivery by the Buyer of
this Agreement, and each of the other Transaction Documents to which it is a
party and the consummation by the Buyer of the transactions contemplated hereby
and thereby will not (a) violate or conflict with any provisions of the
Certificate of Incorporation or By-Laws of the Buyer, each as amended to date;
or (b) constitute a violation of, or be in conflict with, constitute or create
a default under, or result in the creation or imposition of any lien upon any
property of the Buyer pursuant to (i) any agreement or instrument to which the
Buyer is a party or by which the Buyer or any of its properties is bound or to
which the Buyer or any of its properties is subject, or (ii) to the knowledge
of the Buyer, any statute, judgment, decree, order, regulation or rule of any
court or governmental authority to which the Buyer is subject.
5.4. Governmental Consents. Except as set forth in Schedule 5.4
hereto, no consent, approval or authorization of, or registration,
qualification or filing with, any governmental agency or authority is required
for the execution and delivery by the Buyer of this Agreement, or any of the
Transaction Documents to which it is a party or for the consummation by the
Buyer of the transactions contemplated hereby or thereby.
5.5. Broker. Except as set forth in Schedule 5.5 hereto, the Buyer has
not retained, utilized or been represented by any broker, agent, finder or
other intermediary in connection with the negotiation or consummation of the
transactions contemplated by this Agreement.
6. CONDUCT OF BUSINESS BY THE COMPANIES PENDING CLOSING. Each of the
Sellers jointly and severally covenants and agrees that, from and after the
date of this Agreement and until the Closing, except as otherwise specifically
consented to or approved by the Buyer in writing:
6.1. Full Access. The Sellers shall cause the Companies to afford to
the Buyer and its authorized representatives full access during normal business
hours to all leased or owned properties, books, records, contracts and
documents of the Companies and a full opportunity to make such reasonable
investigations as they shall desire to make of the Companies, and the Sellers
shall furnish or cause to be furnished to the Buyer and its authorized
representatives all such information with respect to the affairs and businesses
of the Companies as the Buyer may reasonably request. Without limiting the
foregoing, the Sellers shall cause the Companies to co-operate with the Buyer's
environmental consultants, Roux Associates, Inc., and to grant full access
during normal business hours to all leased or owned properties of the Companies
to Roux Associates, Inc. and its employees and consultants in connection with
their review of the environmental matters referred to in Section 7.11 below and
any further testing required to be conducted in connection with such review,
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provided that such access, review and testing does not unreasonably interfere
with the business of the Companies.
6.2. Carry on in Regular Course. The Sellers shall cause each of the
Companies to maintain its personal property in good operating condition and
repair (normal wear and tear excepted), and to make all necessary renewals,
additions and replacements thereto, and to carry on its business diligently and
substantially in the same manner as heretofore and not make or institute any
unusual or novel methods of manufacture, purchase, sale, lease, management,
accounting or operation. No payments shall be made on any Indebtedness of the
Companies, other than scheduled payments due in accordance with the terms
thereof.
6.3. No General Increases. The Sellers shall not permit any of the
Companies to grant any general or uniform increase in the rates of pay of its
employees, nor grant any general or uniform increase in the benefits under any
bonus or pension plan or other contract or commitment to, for or with any such
employees; and none of the Companies shall increase the compensation payable or
to become payable to officers, key salaried employees or agents, or increase
any bonus, insurance, pension or other benefit plan, payment or arrangement
made to, for or with any such officers, key salaried employees or agents.
Notwithstanding the foregoing, with effect from July 1, 1996, Xxxxxx shall be
compensated at a level consistent with, and shall receive no other compensation
than as provided in, his Employment Agreement referred to in Section 7.8 below.
6.4. No Dividends, Issuances, Repurchases, etc. The Sellers shall not
permit any of the Companies to declare or pay any dividends (whether in cash,
shares of stock or otherwise) on, or make any other distribution in respect of,
any shares of its capital stock, or issue, purchase, redeem or acquire for
value any shares of its capital stock.
6.5. Contracts and Commitments. The Sellers shall not permit any of
the Companies to enter into any contract or commitment or engage in any
transaction not in the usual and ordinary course of business and consistent
with the business practices of such Company.
6.6. Purchase and Sale of Capital Assets. The Sellers shall not permit
the Companies to purchase or sell or otherwise dispose of any capital asset
with a market value in excess of $5,000, or of capital assets of market value
aggregating in excess of $20,000 without the prior written consent of the
Buyer, and in no event shall the Companies purchase, sell or otherwise dispose
of any capital asset other than in the ordinary course of business.
6.7. Insurance. The Sellers shall cause each of the Companies to
maintain with reputable insurance companies, funds or underwriters, adequate
insurance (including without limitation the insurance described on Schedule
4.14) of the kinds, covering such risks and in such amounts and with such
deductibles and exclusions as are consistent with prudent business practice.
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6.8. Preservation of Organization. The Sellers shall use commercially
reasonable efforts to cause each of the Companies to preserve its business
organization intact, to keep available to the Buyer the present key officers
and employees of such Company and to preserve for the Buyer the present
relationships of such Company's suppliers and customers and others having
business relations with any of the Companies.
6.9. No Default. The Sellers shall not permit the Companies to do any
act or omit to do any act, or permit any act or omission to act, which will
cause a material breach of any contract, commitment or obligation of any of the
Companies.
6.10. Compliance with Laws. The Sellers shall cause each of the
Companies to comply in all material respects with all laws, regulations and
orders applicable with respect to its business.
6.11. Advice of Change. The Sellers will promptly advise the Buyer in
writing of any material adverse change in the business, condition, operations,
prospects or assets of any of the Companies.
6.12. No Shopping. The Sellers shall not, and shall not permit any of
the Companies to negotiate for, solicit or enter into any agreement with
respect to the sale of the Stock or any substantial portion of the assets of
any of the Companies or any merger or other business combination of any of the
Companies, to or with any Person other than the Buyer or (pursuant to the
Exchange Agreement) Atrium.
6.13. Consents of Third Parties. The Sellers will employ commercially
reasonable efforts to secure, before the Closing Date, the consent, in form and
substance satisfactory to the Buyer and the Buyer's counsel, to the
consummation of the transactions contemplated by this Agreement by each party
to any material contract, commitment or obligation of any of the Companies,
under which such transactions would constitute a default, would accelerate
obligations of any of the Companies or would permit cancellation of any such
contract.
6.14. Satisfaction of Conditions Precedent. The Sellers will use
commercially reasonable efforts to cause the satisfaction of the conditions
precedent contained herein.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS. The obligation of the
Buyer to consummate the Closing shall be subject to the satisfaction at or
prior to the Closing of each of the following conditions (to the extent
noncompliance is not waived in writing by the Buyer):
7.1. Representations and Warranties True at Closing. The
representations and warranties made by the Sellers in or pursuant to this
Agreement or the other Transaction Documents to which
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it is a party shall be true and correct at and as of the Closing Date with the
same effect as though such representations and warranties had been made or
given at and as of the Closing Date.
7.2. Compliance with Agreement. The Sellers shall have performed and
complied with all of their material obligations under this Agreement and the
other Transaction Documents to be performed or complied with by them on or
prior to the Closing Date.
7.3. No Material Change. There shall not have been, or threatened to
be, any material damage to or loss or destruction of any properties or assets
owned or leased by any of the Companies (whether or not covered by insurance)
or any material adverse change in the condition (financial or otherwise),
operations, business, prospects or assets of any of the Companies or imposition
of any laws, rules or regulations which would materially adversely affect the
condition (financial or otherwise), operations, business, prospects or assets
of the Companies.
7.4. Sellers' Certificate. The Sellers shall have delivered to the
Buyer in writing, at and as of the Closing, a certificate duly executed by each
of the Sellers, in form and substance satisfactory to the Buyer and the Buyer's
counsel, certifying that the conditions in each of Section 7.1 and 7.2 have
been satisfied.
7.5. Opinions of Counsel. Hunton & Xxxxxxxx, counsel to the Sellers
and the Companies, shall have delivered to the Buyer a written opinion,
addressed to the Buyer and dated the Closing Date, substantially in the form of
Exhibit C hereto, and local Connecticut counsel to the Sellers and the
Companies shall have delivered to the Buyer a written opinion reasonably
acceptable to the Buyer, addressed to the Buyer and dated the Closing Date,
substantially in the form of Exhibit D hereto.
7.6. Approvals. All corporate and other approvals in connection with
the transactions contemplated by this Agreement and the other Transaction
Documents and the form and substance of all certificates and other documents
delivered hereunder shall be reasonably satisfactory in form and substance to
the Buyer and its counsel.
7.7. No Litigation. No restraining order or injunction shall prevent
the transactions contemplated by this Agreement or the other Transaction
Documents and no action, suit or proceeding shall be pending or threatened
before any court or administrative body (a) in which it will be or is sought to
restrain or prohibit or obtain damages or other relief in connection with this
Agreement or the other Transaction Documents or the consummation of the
transactions contemplated hereby or thereby, or (b) in connection with any
claim for damages in excess of $5,000 against any of the Companies (except for
the matters disclosed on Schedule 4.10 hereto).
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7.8. Employment Agreements. Xxxxxx and Xxxxxxxxxx shall each have
executed and delivered to the Buyer the Employment Agreements, and each of the
Employment Agreements shall be in full force and effect.
7.9. Exchange Agreement. The Sellers, FCI Holding Corp. and each of
the shareholders of FCI Holding Corp. shall have executed and delivered to
Atrium the Exchange Agreement, and the "Exchange" as defined therein shall have
been completed.
7.10 Resignations of Directors and Officers. Except as set forth on
Schedule 7.10 hereto, all of the directors and officers of the Companies shall
have resigned their positions with the Companies on or prior to the Closing
Date, and prior thereto shall have executed such appropriate documents with
respect to the transfer or establishment of bank accounts, signing authority,
etc., as the Buyer shall have reasonably requested.
7.11. Environmental Matters. All of the underground storage tanks
located at 00 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx, shall have been abandoned
in place in accordance with all applicable Environmental Laws and with all
necessary approvals in form and substance reasonably satisfactory to the Buyer,
including the approval of the Clinton Fire Department, all at Sellers' expense.
All of the underground storage tanks located at 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxxxx (the "Bridgeport Tanks") shall have either been
removed, or, in the case of the Bridgeport Tank located under the building at
000 Xxxxxxxx Xxxxxx, shall have been abandoned in place in accordance with all
applicable Environmental Laws and with all necessary approvals in form and
substance reasonably satisfactory to the Buyer, and the Sellers shall have
completed any clean-up required pursuant to applicable Environmental Laws of
discharges (if any) from any of the Bridgeport Tanks, all at Sellers' expense,
provided, however, that if the Sellers shall have notified the Buyer in
writing prior to the Buyer's close of business on September 23, 1996 that the
Sellers' good faith estimate of the costs of removal of, and clean-up
associated with, the Bridgeport Tanks (all of such costs in the aggregate being
referred to herein as the "Bridgeport Clean-Up Costs") exceeds $200,000, then
the Sellers shall only be obligated to consummate the Closing hereunder if the
Buyer shall first have agreed to limit the aggregate liability of the Sellers
for the Bridgeport Clean-Up Costs to $200,000, which liability shall be joint
and several among the Sellers and shall be paid promptly upon demand made by
the Buyer upon the Sellers, and if not so paid shall be satisfied by the
Sellers by set-off against the Deferred Payments which may from time to time be
owed by the Buyer to the Sellers pursuant to Section 1.3 hereof (without
limiting the Buyer's recourse against the Sellers for the amounts set forth in
this Section 7.11 in the event no such Deferred Payments are owed hereunder).
7.12. Title Insurance. The Buyer shall have received a title insurance
policy on the Real Property on the Closing Date issued by a title insurer
reasonably acceptable to, and in form reasonably acceptable to, the Buyer and
naming the Companies as the insured.
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7.13. Seller's Closing Certificate; Pay-off Letters. The Sellers shall
have delivered to the Buyer (a) a certificate of the President(s) and
Treasurer(s) of the Companies dated as of the Closing Date (the "Sellers'
Closing Certificate"), certifying the amounts of all Assumed Indebtedness and
Discharged Indebtedness of the Companies outstanding as of the Closing Date,
and the Pay-Off Amounts with respect to all such Discharged Indebtedness, and
(b) each of the pay-off letters with respect to the Discharged Indebtedness
referred to in Section 2.2(d) hereof, all in form and substance satisfactory to
the Buyer.
7.14. Financing. The Buyer shall have obtained debt and equity
financing on terms reasonably satisfactory to it, providing the Buyer with
sufficient funds to pay the Initial Purchase Price and all fees and expenses of
the Buyer arising in connection with the transactions contemplated by this
Agreement and providing the Buyer with sufficient availability to finance its
working capital needs following the Closing, and all conditions precedent to
funding under such financing arrangements (other than the purchase and sale
contemplated hereby) shall have been satisfied or waived.
7.15. HSR Act. Any applicable waiting period under the HSR Act (as
defined in Section 9) shall have expired or been terminated.
7.16. Consents of Third Parties. The Sellers will have obtained the
consent, in form and substance satisfactory to the Buyer and the Buyer's
counsel, to the consummation of the transactions contemplated by this Agreement
and the other Transaction Documents by each party to any material contract,
commitment or other obligation of any of the Companies under which such
transactions would constitute a default, would accelerate obligations of any of
the Companies or the Buyer or would permit cancellation of any such contract.
7.17. Proceedings and Documents Satisfactory. All proceedings in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents and all certificates and documents delivered to the
Buyer in connection with the transactions contemplated by this Agreement and
the other Transaction Documents shall be satisfactory in all reasonable
respects to the Buyer and the Buyer's counsel, and the Buyer shall have
received the originals or certified or other copies of all such records and
documents as the Buyer may reasonably request.
8. CONDITIONS PRECEDENT TO THE SELLERS' OBLIGATIONS. The obligation of
the Sellers to consummate the Closing shall be subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (to the extent
noncompliance is not waived in writing by the Sellers):
8.1. Representations and Warranties True at Closing. The
representations and warranties made by the Buyer in this Agreement and the
other Transaction Documents to which it is a party
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shall be true and correct at and as of the Closing Date with the same effect as
though such representations and warranties had been made or given at and as of
the Closing Date.
8.2. Compliance with Agreement. The Buyer shall have performed and
complied with all of its obligations under this Agreement and the other
Transaction Documents that are to be performed or complied with by it at or
prior to the Closing.
8.3. Closing Certificate. The Buyer shall have delivered to each of
the Sellers in writing, at and as of the Closing, a certificate duly executed
by each of the President and Treasurer of the Buyer, in form and substance
satisfactory to the Sellers and the Seller's counsel, to the effect that the
conditions in each of Sections 8.1 and 8.2 have been satisfied.
8.4. Opinion of Counsel. Xxxxx, Xxxxxx & Xxxxxx, P.C., counsel to the
Buyer, shall have delivered to each of the Companies a written opinion, dated
the Closing Date and addressed to each of the Companies and Sellers,
substantially in the form of Exhibit E hereto.
8.5. Employment Agreements. The Buyer shall have executed and
delivered to each of Xxxxxx and Xxxxxxxxxx his respective Employment Agreement.
8.6. Exchange Agreement. FCI and each of the shareholders of FCI
Holding Corp. shall have executed and delivered to Atrium the Exchange
Agreement, and the "Exchange" as defined therein shall have been completed.
8.7. HSR Act. Any applicable waiting period under the HSR Act (as
defined in Section 9) shall have expired or been terminated.
8.8. Environmental Matters. In the event that, prior to the Buyer's
close of business on September 23, 1996, the Sellers shall have notified the
Buyer in writing that their good faith estimate of the amount of the Bridgeport
Clean-Up Costs exceeds $200,000, the Buyer shall have agreed to limit the
liability of the Sellers for such Bridgeport Clean-Up Costs to $200,000, on the
terms and conditions described in Section 7.11 above. For the avoidance of
doubt, in the event that the Sellers shall have given the notification referred
to in the preceding sentence, the Buyer's failure to agree to limit the
Sellers' liability as set forth in the preceding sentence shall not extend the
date upon which this Agreement becomes terminable under Section 14 hereof and
the Exchange Agreement becomes terminable under Section 10 thereof.
8.9. Proceedings and Documents Satisfactory. All proceedings in
connection with the transactions contemplated by this Agreement and the other
Transaction Documents and all certificates and documents delivered to the
Sellers in connection with the transactions contemplated by this Agreement and
the other Transaction Documents shall be satisfactory in all reasonable
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respects to the Sellers and their counsel, and the Sellers shall have received
the originals or certified or other copies of all such records and documents as
the Sellers may reasonably request.
9. XXXX-XXXXX-XXXXXX. Each of the Buyer and the Sellers agrees that it
will prepare and file no later than three (3) business days after the date
hereof any required notification and report form under the Xxxx-Xxxxx-Xxxxxx
Act of 1976, as amended (the "HSR Act"), in connection with the transactions
contemplated hereby.
10. CONFIDENTIAL INFORMATION. Any and all information disclosed by the
Buyer to any of the Sellers or by any of the Sellers to the Buyer as a result
of the negotiations leading to the execution of this Agreement, or in
furtherance thereof, which information was not already known to the Sellers or
to the Buyer, as the case may be, shall remain confidential to each of the
Sellers and the Buyer and their respective employees and agents until the
Closing Date, except to the extent that the Buyer, in its reasonable judgment,
must disclose any such information to its lenders in the syndicate for which
The First National Bank of Boston acts as Agent in the process of procuring the
loan or loans of funds for the purchase contemplated hereby. If the Closing
does not take place for any reason, each of the Sellers and the Buyer agrees
not to further divulge or disclose or use for its benefit or purposes any such
information at any time in the future unless it has otherwise become public.
The information intended to be protected hereby shall include, but not be
limited to, Confidential Information (as defined in Section 11.2 below) of the
Buyer or of the Companies, and anything else having an economic or pecuniary
benefit to the Buyer or the Sellers, respectively.
11. NON-COMPETITION.
11.1. Non-Competition. Each of the Sellers jointly and severally
acknowledges that the covenants and agreements in this Section 11 are a
condition precedent to the Buyer's obligations to purchase the Stock from the
Sellers under this Agreement, and that the Buyer would not purchase the Stock
but for the Sellers' agreements with the Buyer in this Section 11. Each of the
Sellers and the Buyer acknowledges that from and after the Closing Date the
Companies will sell products to customers located in markets throughout the
world and that engagement by any of the Sellers in the Designated Industry (as
hereinafter defined) otherwise than with the Buyer or any of its Affiliates (as
defined below) anywhere in the Territory (as defined below) could cause the
Buyer and its Affiliates (including the Companies) irreparable damage. For a
period of five (5) years after the Closing Date (the "Restricted Period"), the
Sellers will not (i) engage in the Designated Industry anywhere in the
Territory, alone or as a shareholder, partner, officer, director, employee or
consultant of any other business organization other than the Buyer or any of
its Affiliates, (ii) divert to any competitor of the Buyer or of the Companies
any customer of the Buyer or any of the Companies, nor (iii) solicit or
encourage any officer, employee or consultant of the Buyer or any of the
Companies to leave its employ for employment by or with any competitor of the
Buyer or any of the Companies. The foregoing restriction shall not prevent any
of the Sellers from owning five
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percent (5%) or less of the equity securities of any publicly traded company.
For purposes of this Section 11.1, the term "Designated Industry" shall mean
the business of manufacturing or distributing aluminum, wood or vinyl windows
or doors; the term "Affiliate" of any Person shall mean any other Person
controlling, controlled by or under common control with such Person; and the
term "Territory" shall mean New England, New York, New Jersey and Pennsylvania.
If at any time the provisions of this Section 11.1 shall be determined to be
invalid or unenforceable, by reason of being vague or unreasonable as to area,
duration or scope of activity, this Section 11.1 shall be considered divisible
and shall become and be immediately amended to only such area, duration and
scope of activity as shall be determined to be reasonable and enforceable by
the court or other body having jurisdiction over the matter; and each of the
Sellers agrees that this Section 11.1 as so amended shall be valid and binding
as though any invalid or unenforceable provision had not been included herein.
11.2. Continuing Confidentiality Obligations. Each of the Sellers
recognizes and acknowledges that certain of the assets of the Companies,
including without limitation, information regarding customers, sales
representatives, pricing policies, methods of operation, proprietary computer
programs, sales, products, profits, costs, markets, key personnel, formulae,
product applications, technical processes, and trade secrets (hereinafter
called "Confidential Information") are valuable, special, and unique assets of
the Companies. During the Restricted Period none of the Sellers shall, without
the prior written consent of the Buyer, disclose any or any part of the
Confidential Information to any person, firm, corporation, association, or any
other entity for any reason or purpose whatsoever, directly or indirectly,
except as required by law, unless and until such Confidential Information
becomes publicly known or available other than as a consequence of the breach
by any of the Sellers of his or her confidentiality obligations hereunder.
11.3. Remedies. Each of the Sellers acknowledges and agrees that the
Buyer's remedy at law for a breach or threatened breach of any of the
provisions of this Section 11 would be inadequate and, in recognition of this
fact, in the event of a breach or threatened breach by any of the Sellers of
any of the provisions of this Section 11 it is agreed that, in addition to its
remedies at law, the Buyer shall be entitled, without posting any bond, to
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which
may then be available. Nothing herein contained shall be construed as
prohibiting the Buyer from pursuing any other remedies available to it for such
breach or any threatened breach, including any indication, verbal or otherwise,
of any Seller's intention to breach, or of any Seller's impending breach of,
any of the provisions of this Section 11.
12. DEFINITIONS. As used herein the following terms not otherwise
defined have the following respective meanings:
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"Assumed Indebtedness": The Indebtedness of the Companies as set forth
on Schedule 4.25(a) which will not be discharged by the Buyer in connection
with the transactions described herein.
"Cash": As of any date, the aggregate amount of the Companies' cash on
hand or in bank accounts minus outstanding checks issued by the Companies,
provided, however that any amount deducted herein shall not be treated as a
liability of the Companies for purposes of determining Net Working Capital.
"Consolidated EBIT": For any period, the consolidated earnings (or
loss) from the operation of the Companies for such period, after all expenses
and other proper charges but before payment of or provision for any income
taxes or interest expense for such period, determined in accordance with
generally accepted accounting principles, but excluding all expenses incurred
by the Companies in transactions with Atrium and other Subsidiaries of Atrium,
other than expenses directly attributable to the purchase of goods or services,
other than management services, actually supplied to the Companies.
"Discharged Indebtedness": The Indebtedness of the Companies as set
forth in Schedule 4.25(b), which will be discharged by the Buyer's payment of
the Pay-Off Amounts (as defined in Section 2.2(d) hereof) in respect thereof.
"Indebtedness": As applied to any Person (as defined in this Section
12), (a) all indebtedness of such Person for borrowed money, whether current or
funded, or secured or unsecured, (b) all indebtedness of such Person for the
deferred purchase price of property or services represented by a note or other
security, (c) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (d) all indebtedness of such Person secured by a
purchase money mortgage or other lien to secure all or part of the purchase
price of property subject to such mortgage or lien, (e) all obligations under
leases which shall have been or must be, in accordance with generally accepted
accounting principles, recorded as capital leases in respect of which such
Person is liable as lessee, (f) any liability of such Person in respect of
banker's acceptances or letters of credit, and (g) all indebtedness referred to
in clause (a), (b), (c), (d), (e) or (f) above which is directly or indirectly
guaranteed by such Person or which such Person has agreed (contingently or
otherwise) to purchase or otherwise acquire or in respect of which it has
otherwise assured a creditor against loss.
"IRS": The United States Internal Revenue Service.
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"Net Working Capital": As at any date, the Cash, accounts receivable
(less allowance for doubtful accounts), inventories, prepaid costs and employee
loans included in other current assets of the Companies as of such date (but
excluding any deferred taxes and other miscellaneous accounts) minus current
liabilities (including all accrued liabilities, but excluding current
maturities of Indebtedness) of the Companies as of such date, determined in
accordance with generally accepted accounting principles.
"Person": A corporation, an association, a partnership (general or
limited), a limited liability company, an organization, a business, an
individual, a government or political subdivision thereof or a governmental
agency.
"state": Any state or commonwealth of the United States of America; the
District of Columbia; the Commonwealth of Puerto Rico; and any other
dependency, possession or territory of the United States of America.
"Subsidiary": With respect to any Person, any corporation a majority
(by number of votes) of the outstanding shares of any class or classes of which
shall at the time be owned by such Person or by a Subsidiary of such Person, if
the holders of the shares of such class or classes (a) are ordinarily, in the
absence of contingencies, entitled to vote for the election of a majority of
the directors (or persons performing similar functions) of the issuer thereof,
even though the right so to vote has been suspended by the happening of such a
contingency, or (b) are at the time entitled, as such holders, to vote for the
election of a majority of the directors (or persons performing similar
functions) of the issuer thereof, whether or not the right so to vote exists by
reason of the happening of a contingency.
"Transaction Documents": This Agreement, the Employment Agreements, the
Buy-Sell Agreement, the Exchange Agreement, each of the "Transaction
Documents", as defined in the Exchange Agreement, and any other documents
executed and/or delivered in connection with the transactions described herein
and therein.
13. INDEMNIFICATION.
13.1. Indemnity by the Sellers. Subject to the overall limitations,
minimum amounts and time limitations set forth in Section 13.5 below and
excluding liabilities in respect of the Bridgeport Clean-Up Costs (as defined
in Section 7.11 above), as to which liabilities the terms and provisions of
Sections 7.11 and 8.8 shall control, the Sellers jointly and severally agree to
indemnify and hold the Buyer and each of the Companies (and their respective
directors, officers, employees and affiliates) harmless from and with respect
to any and all claims, liabilities, losses, damages, costs and expenses,
including without limitation the reasonable fees and disbursements of counsel
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(individually a "Loss", and collectively, the "Losses") related to or arising,
directly or indirectly, out of:
(i) any failure or any breach by the Sellers of any
representation or warranty, covenant, obligation or undertaking made by
any of the Sellers in this Agreement, any Schedule or Exhibit hereto,
any other Transaction Document, or any other statement or certificate
delivered pursuant hereto or thereto;
(ii) any actual or alleged income, sales, use, employment, or
other tax liability of the Companies in respect of any period through
the Closing Date to the extent such liability is not adequately
reflected or reserved against on the June Balance Sheet; and
(iii) any matters arising out of (A) any of the exceptions to
title insurance listed on Schedule 13.1(A) hereto with respect to the
Real Property located at 00 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx or on
Schedule 13.1(B) hereto with respect to the Real Property located at
000-000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxx, (X) any other
exceptions reasonably acceptable to the Buyer and the Sellers which may
be added to any commitment for title insurance with respect to such
properties issued on or prior to the Closing Date, and (C) any
exceptions taken under any policy for title insurance issued pursuant to
any such commitment after the Closing Date, except (in each case) for
any Liens securing or arising from any of the Assumed Indebtedness or
from any liability for taxes which has either been paid in full prior to
the Closing Date or accrued for on the June Balance Sheet.
13.2. Indemnity by the Buyer. The Buyer agrees to indemnify and hold
the Sellers (and their respective directors, officers, employees and
affiliates) harmless from and with respect to any and all Losses related to or
arising from, directly or indirectly, any failure or any breach by the Buyer of
any representation or warranty, covenant, obligation or undertaking made by the
Buyer in this Agreement, any Schedule or Exhibit hereto, any other Transaction
Documents or any other statement or certificate delivered pursuant hereto or
thereto.
13.3. Claims.
(a) Notice. Any party seeking indemnification hereunder (the
"Indemnified Party") shall promptly notify the other party hereto (the
"Indemnifying Party") of any action, suit, proceeding, demand or breach (a
"Claim") with respect to which the Indemnified Party claims indemnification
hereunder, provided that failure of the Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations under this Section
13 except to the extent, if at all, that such Indemnifying Party shall have
been prejudiced thereby.
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(b) Third Party Claims. If such Claim relates to any action, suit,
proceeding or demand instituted against the Indemnified Party by a third party
(a "Third Party Claim"), other than any such Claim asserting any Losses related
to or arising directly or indirectly out of any inaccuracies in any
representation or warranty made by the Sellers in Section 4.24 or payable with
respect to claims for indemnification made with respect to Section 13.1(ii)
(collectively, "Tax Claims"), to the extent to which paragraph (c) below shall
apply to such Tax Claims, the Indemnifying Party shall be entitled to
participate in the defense of such Third Party Claim after receipt of notice of
such claim from the Indemnified Party. Within thirty (30) days after receipt
of notice of a particular matter from the Indemnified Party, the Indemnifying
Party may assume the defense of such Third Party Claim, in which case the
Indemnifying Party shall have the authority to negotiate, compromise and settle
such Third Party Claim, if and only if the Indemnifying Party shall have
confirmed in writing that it is obligated hereunder to indemnify the
Indemnified Party with respect to such Third Party Claim. The Indemnified
Party shall retain the right to employ its own counsel and to participate in
the defense of any Third Party Claim, the defense of which has been assumed by
the Indemnifying Party pursuant hereto, but the Indemnified Party shall bear
and shall be solely responsible for its own costs and expenses in connection
with such participation.
(c) Tax Claims. If such Claim is a Tax Claim, the Indemnified Party
shall have the authority to negotiate, compromise or settle such Tax Claim
without the prior consent of the Indemnifying Party, provided that (i) all
settlements made pursuant to this paragraph (c) do not exceed in the aggregate
$500,000 and (ii) the Indemnifying Party shall have the right to participate in
the defense of any such Tax Claim, at its own expense, and to receive prior
notice of any such settlement. For the avoidance of doubt, the prior consent
of the Indemnifying Party shall not be required for settlements by the
Indemnified Party of Tax Claims so long as the aggregate amount payable by the
Indemnifying Party pursuant to such settlements does not exceed $500,000, but
if any such settlement results in the total amount payable by the Indemnifying
Party pursuant to all settlements of Tax Claims exceeding $500,000 in the
aggregate, then such settlement shall require the consent of the Indemnifying
Party.
13.4. Method and Manner of Paying Claims. In the event of any Claims
under this Section 13, the claimant shall advise the party or parties who are
required to provide indemnification therefor in writing of the amount and
circumstances surrounding such claim. With respect to liquidated Claims, if
within thirty (30) days the other party has not contested such Claim in
writing, then, and subject to the limitations with respect to Claims set forth
in Section 13.5 below, the other party will pay the full amount of such
liquidated Claim within ten (10) days after the expiration of such thirty-day
period. Any amount owed by any of the Sellers as an Indemnifying Party
hereunder with respect to any Claim (other than Unlimited Claims and Cash Tax
Claims, each as defined below) shall be paid in accordance with, and subject to
the recourse limitations referred to in, Section 13.6 below. The unpaid
balance of a Claim shall bear interest at a rate per annum equal to the rate
announced by The First National Bank of Boston from time to time as its "Base
Rate" plus two
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percent (2%) from the date notice thereof is given by the Indemnified Party to
the Indemnifying Party.
13.5. Limitations on Indemnification.
(a) No Indemnifying Party shall be required to indemnify an
Indemnified Party hereunder except to the extent that the aggregate amount of
Losses for which the Indemnified Party is otherwise entitled to indemnification
pursuant to this Section 13 exceeds $250,000, whereupon the Indemnified Party
shall be entitled to be paid the excess of (i) the aggregate amount of all such
Losses over (ii) $250,000, subject to the limitations on recovery and recourse
set forth in Sections 13.5(b) and 13.6 below; provided, however, that (A) Cash
Tax Claims (as defined in Section 13.6 below) shall not be subject to either
the $250,000 deductible described above or to the limitations as to recovery
and recourse referred to below, and (B) Losses related to or arising directly
or indirectly out of any inaccuracies in any representation or warranty made by
any of the Sellers in Section 4.5 or Section 4.29 (collectively, "Unlimited
Claims") shall be indemnified in their entirety by such Seller or the Sellers,
as applicable, and shall not be subject to either the $250,000 deductible
described above or to the limitations as to recovery and recourse referred to
below.
(b) Subject to the first sentence of Section 13.6 and notwithstanding
anything else to the contrary otherwise stated herein or in any other
Transaction Document, the aggregate amount actually payable by either (i) the
Buyer as an Indemnifying Party on the one hand or (ii) the Sellers as
Indemnifying Parties on the other hand pursuant to this Section 13 and Section
11 of the Exchange Agreement, with respect to all Claims against such
Indemnifying Party or Indemnifying Parties, as the case may be, other than
Unlimited Claims (as to which no such limit shall apply), shall in no event
exceed $5,000,000 (as such amount may be reduced from time to time pursuant to
Section 3(d) of the Buy-Sell Agreement).
(c) No Indemnifying Party shall be liable for any Losses pursuant to
this Section 13 unless a written claim for indemnification in accordance with
Section 13.4 is given by the Indemnified Party to the Indemnifying Party with
respect thereto within eighteen (18) months after the Closing, except that this
time limitation shall not apply to any Losses related to or arising directly or
indirectly out of any Tax Claims or Unlimited Claims, as to which in each case
the applicable statute of limitations shall apply.
(d) No Indemnified Party may recover hereunder or under the Buy-Sell
Agreement for any Loss as to which such Indemnified Party has already received
or is simultaneously receiving indemnification pursuant to the Exchange
Agreement.
13.6. Buy-Sell Agreement; Limitation of Recourse Against Sellers. The
parties hereto intend and agree that, notwithstanding anything to the contrary
stated in any other paragraph of this Section
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13, the Buyer's and the Companies' sole recourse against the Sellers for
indemnification with respect to any Claims, other than Unlimited Claims and
Cash Tax Claims (as defined below), shall be governed by, and subject to the
terms and provisions of, the Buy-Sell Agreement. The provisions of this
Section 13.6 shall not apply in any event to (a) any Loss with respect to an
Unlimited Claim, the full amount of which shall be indemnifiable and as to
which recourse shall not be limited to the provisions of the Buy-Sell
Agreement, and (b) Losses with respect to Tax Claims, to the extent (but only
to the extent) that all such Losses aggregate $750,000 or less ("Cash Tax
Claims"), all of which shall be fully indemnifiable without recourse being
limited to the Buy-Sell Agreement.
14. TERMINATION. This Agreement may be terminated by either the
Buyer or the Sellers in writing, without liability to the terminating party on
account of such termination (provided the terminating party is not otherwise in
default or in breach of this Agreement), if the Closing shall not have occurred
on or before September 30, 1996, other than as a consequence of (a) a failure
to fulfill the conditions precedent to the effectiveness of this Agreement
referred to in Sections 7.15 and 8.7 hereof, in which case the foregoing date
shall be extended until the next business day following the expiration of any
applicable waiting period under the HSR Act, provided that the foregoing date
shall not be extended in any event after October 31, 1996, or (b) intentional
breach or intentional default by the terminating party.
15. GENERAL.
15.1. Survival of Representations and Warranties. The representations
and warranties of the parties hereto contained in this Agreement or otherwise
made in writing in connection with the transactions contemplated hereby (in
each case except as affected by the transactions contemplated by this
Agreement) shall be deemed material and, notwithstanding any investigation by
the Buyer, shall be deemed to have been relied on by the Buyer and shall
survive the Closing, and the consummation of the transactions contemplated
hereby. Each representation and warranty made by any of the Sellers or the
Buyer in this Agreement shall expire on the last day, if any, that Claims for
breaches of such representation or warranty may be made pursuant to Section
13.5 hereof, except that any such representation or warranty that has been made
the subject of a Claim prior to such expiration date shall survive with respect
to such Claim until the final resolution of such Claim pursuant to Section 13.
15.2. Section 338(h)(10) Election. The Buyer and the Parent
Stockholders hereby agree that the Buyer and BNY will join in making an
election under Section 338(h)(10) of the Code (a "Section 338(h)(10) Election")
with respect to the purchase and sale of the BNY Stock. The Buyer will be
responsible for preparing and filing all documents and materials necessary in
connection with making the Section 338(h)(10) Election, and each of the Parent
Stockholders agrees to cooperate with the Buyer in connection therewith
(including, without limitation, signing and returning to the Buyer any
documents sent to such Parent Stockholder for his or her signature in
connection therewith
36
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within ten (10) business days of his or her receipt of such documents). The
parties agree that, for purposes of the Section 338(h)(10) Election, the fair
market value of the assets of the Companies shall be as set forth in Schedule
15.2 hereto. The Buyer and the Parent Stockholders will file all tax returns
on a basis consistent with the Section 338(h)(10) Election and the valuation of
assets set forth in Schedule 15.2, and all taxes imposed on the deemed sale of
assets resulting from the Section 338(h)(10) Election will be included in the
tax returns of the Parent Stockholders, as applicable, and will be paid by the
Parent Stockholders.
15.3. Expenses. The Sellers shall pay all transfer and sales taxes
payable in connection with the sale of the Stock. All expenses of the
preparation, execution and consummation of this Agreement and of the
transactions contemplated hereby, including without limitation attorneys',
accountants' and outside advisers' fees and disbursements, shall be borne by
the party incurring such expenses, provided that (a) the Sellers jointly and
severally shall pay the brokerage fees of any broker referred to on Schedule
4.29 hereto, (b) the Buyer shall at Closing pay to the Sellers 50%, up to a
maximum amount payable by the Buyer under this Section 15.3 and Section 12.2 of
the Exchange Agreement of $30,000, of the fees and expenses of the Companies'
Accountants incurred in preparation of the June Balance Sheet and any other
financial statements, calculations and certifications referred to in Section 3
hereof, (c) the Buyer shall pay the fee required to be paid in connection with
the filing of any notification and report form under the HSR Act, as referred
to in Section 9 hereof and (d) the Companies shall pay professional fees and
expenses, including without limitation attorneys', accountants' and outside
advisers' fees and disbursements, incurred in connection with the transactions
contemplated hereby and accrued as liabilities of the Companies on the June
Balance Sheet, up to a maximum amount of such fees and expenses of $150,000.00
(collectively, the "Accrued Transaction Expenses").
15.4. Notices. All notices, demands and other communications hereunder
shall be in writing or by written telecommunication, and shall be deemed to
have been duly given if delivered personally or if mailed by certified mail,
return receipt requested, postage prepaid, or if sent by overnight courier, or
sent by written telecommunication, as follows:
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If to the Sellers, to:
Xx. Xxxxxx X. Xxxxxx
Xxxxxx Manufacturing Co., Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Fax: 000-000-0000
with a copy sent contemporaneously to:
Xxxx X. Xxxxxx, Xx., Esq.
Hunton & Xxxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: 000-000-0000
If to the Buyer, to:
Xxxxxxx Xxxxxxxx
Xxxxxxxx Companies, Inc.
X.X. Xxx 000000
Xxxxxx, XX 00000
Fax: 000-000-0000
with copies sent contemporaneously to:
T. Xxxxx Xxxxxx
Heritage Partners Inc.
00 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: 000-000-0000
and to:
Xxxxxx X. Xxxx, Esq.
Xxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: 000-000-0000
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Any such notice shall be effective (a) if delivered personally, when
received, (b) if sent by overnight courier, when receipted for, (c) if mailed,
three (3) days after being mailed as described above, and (d) if sent by
written telecommunication, when dispatched.
15.5. Entire Agreement. This Agreement contains the entire
understanding of the parties, supersedes all prior agreements and
understandings relating to the subject matter hereof and shall not be amended
except by a written instrument hereafter signed by all of the parties hereto.
15.6. Governing Law. The validity and construction of this Agreement
shall be governed and construed and enforced in accordance with the internal
laws (and not the choice-of-law rules) of the State of New York.
15.7. Sections and Section Headings. The headings of sections and
subsections are for reference only and shall not limit or control the meaning
thereof.
15.8. Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
permitted assigns. Neither this Agreement nor the obligations of any party
hereunder shall be assignable or transferable by such party without the prior
written consent of the other party hereto; provided, however, that nothing
contained in this Section 15.8 shall prevent the Buyer (a) from transferring or
assigning this Agreement or its rights or obligations hereunder, with the prior
written consent of the Sellers, which may be withheld for any reason, to
another entity controlling, under the control of, or under common control with
the Buyer, or (b) from assigning all or part of its rights or obligations
hereunder, without the consent of the Sellers, by way of collateral assignment
to any bank or financing institution providing financing for the acquisition
contemplated hereby, but no such transfer or assignment made pursuant to
clauses (a) or (b) shall relieve the Buyer of its obligation under this
Agreement.
15.9. Severability. In the event that any covenant, condition, or
other provision herein contained is held to be invalid, void, or illegal by any
court of competent jurisdiction, the same shall be deemed to be severable from
the remainder of this Agreement and shall in no way affect, impair, or
invalidate any other covenant, condition, or other provision contained herein.
15.10. Further Assurances. The parties agree to take such reasonable
steps and execute such other and further documents as may be necessary or
appropriate to cause the terms and conditions contained herein to be carried
into effect.
15.11. No Implied Rights or Remedies. Except as otherwise expressly
provided herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or to give any person, firm or corporation, other than
the Sellers and the Buyer and their respective shareholders, if any, any rights
or remedies under or by reason of this Agreement.
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15.12. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15.13. Satisfaction of Conditions Precedent. Each of the Sellers and
the Buyer will use its best efforts to cause the satisfaction of the conditions
precedent contained in this Agreement; provided, however, that nothing
contained in this Section 15.13 shall obligate either party hereto to waive any
right or condition under this Agreement.
15.14. Public Statements or Releases. Each of the parties hereto
agrees that prior to the consummation of the Closing no party to this Agreement
will make, issue or release any public announcement, statement or
acknowledgment of the existence of, or reveal the status of, this Agreement or
the transactions provided for herein, without first obtaining the consent of
the other party hereto. Nothing contained in this Section 15.14 shall prevent
either party from making such disclosures as such party may consider necessary
to satisfy such party's legal or contractual obligations.
15.15. Knowledge. Whenever the phrase "to the knowledge of the
Sellers" or another similar qualification is used herein, the relevant
knowledge shall refer to the actual knowledge of any of the Sellers.
15.16. Seller Representative. By the execution and delivery of this
Agreement, the Sellers hereby irrevocably constitute and appoint Xxxxxx X.
Xxxxxx as the true and lawful agent and attorney-in-fact (the "Seller
Representative") of the Sellers with full power of substitution to act in the
name, place and stead of the Sellers with respect to the transfer of the Stock
owned by the Sellers to the Buyer in accordance with the terms and provisions
of this Agreement, and to act on behalf of the Sellers in any litigation or
arbitration involving this Agreement, do or refrain from doing all such further
acts and things, and execute all such documents as the Seller Representative
shall deem necessary or appropriate in connection with the transactions
contemplated by this Agreement, including, without limitation, the power:
(i) to act for the Sellers with regard to matters pertaining
to indemnification referred to in this Agreement, including the power to
compromise any Claim on behalf of the Sellers and to transact matters of
litigation;
(ii) to execute and deliver all ancillary agreements,
certificates and documents that the Seller Representative deems
necessary or appropriate in connection with the consummation of the
transactions contemplated by this Agreement;
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(iii) to receive funds and give receipts for funds, including in
respect of any adjustments to the Purchase Price;
(iv) to do or refrain from doing any further act or deed on
behalf of the Sellers that the Seller Representative deems necessary or
appropriate in his sole discretion relating to the subject matter of
this Agreement as fully and completely as the Sellers could do if
personally present; and
(v) to receive service of process in connection with any
Claims under this Agreement.
If Xxxxxx X. Xxxxxx dies or otherwise becomes incapacitated and unable
to serve as Seller Representative, Xxxxxx Xxxxxxxxx shall serve as the new
Seller Representative. The appointment of the Seller Representative shall be
deemed coupled with an interest and shall be irrevocable, and the Buyer and
any other Person may conclusively and absolutely rely, without inquiry, upon
any action of the Seller Representative in all matters referred to herein. All
payments and notices made or delivered by the Buyer to the Seller
Representative for the benefit of the Sellers shall discharge in full all
liabilities and obligations of the Buyer to the Sellers with respect thereto.
The Sellers hereby confirm all that the Seller Representative shall do or cause
to be done by virtue of his appointment as the Seller Representative. The
Seller Representative shall act for the Sellers on all of the matters set forth
in this Agreement in the manner the Seller Representative believes to be in the
best interest of the Sellers and consistent with the obligations under this
Agreement, but the Seller Representative shall not be responsible to the
Sellers for any loss or damages the Sellers may suffer by the performance of
his duties under this Agreement, other than loss or damage arising from willful
violation of the law or gross negligence in the performance of his or her
duties under this Agreement.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have caused this Agreement to be duly executed and delivered as
a sealed instrument as of the date and year first above written.
BUYER:
XXXXXXXX COMPANIES, INC.
By: /s/ XXXXXXX X. XXXXXXXX
--------------------------------
Title:
SELLERS:
/s/ XXXXXX X. XXXXXX
-----------------------------------
Xxxxxx X. Xxxxxx
/s/ XXXXXX XXXXXXXXX
-----------------------------------
Xxxxxx Xxxxxxxxx
/s/ XXXXX XXXXXXXXXX
-----------------------------------
Xxxxx Xxxxxxxxxx
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INDEX OF EXHIBITS AND SCHEDULES
Exhibits
--------
Exhibit A-1 - Form of Employment Agreement with Xxxxxx X. Xxxxxx
Exhibit A-2 - Form of Employment Agreement with Xxxxx Xxxxxxxxxx
Exhibit B - Form of Buy-Sell Agreement
Exhibit C - Form of Legal Opinion of Hunton & Xxxxxxxx
Exhibit D - Form of Legal Opinion of Sellers' Connecticut Counsel
Exhibit E - Form of Legal Opinion of Xxxxx, Xxxxxx & Xxxxxx, P.C.
Schedules
---------
1. Sellers and Stock
3(a)(i) June Financial Statements
3(a)(ii) Calculation Date Net Working Capital
4.4 Capitalization
4.7 Governmental Consents (Sellers); Permits and Licenses
4.8 Year-End Financial Statements
4.9 Certain Changes
4.10 Litigation, Etc.
4.11 Conformity to Law
4.12(a) Liens
4.12(b) Capital Assets; Real Property
4.12(c) Lease Descriptions; Addresses of Leased Property
4.13 Environmental Matters
4.14 Insurance
4.15 Contracts
4.16 Payroll Information
4.17 Employee Benefit Plans
4.18 Labor Relations
4.19 Potential Conflicts of Interest
4.20 Trademarks, Patents, etc.
4.21 Suppliers and Customers
4.25(a) Assumed Indebtedness
4.25(b) Discharged Indebtedness
4.25(c) Defaults, etc.
4.26 Bank Accounts, etc.
4.29 Seller's Broker
4.30 Warranty Claims; Product Liability
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5.4 Governmental Consents (Buyer)
5.5 Buyer's Broker
13.1(A) Title Exceptions (Clinton, MA)
13.1(B) Title Exceptions (Bridgeport, CT)
15.2 Allocation of Asset Values pursuant to Section 338(h)(10)
Election
44
August 22, 1996
VIA FAX AND FEDEX
Xxxxxxxx Companies, Inc.
Atrium Corporation
c/o Heritage Partners, Inc.
00 Xxxxx Xxxxx - Xxxxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: T. Xxxxx Xxxxxx
Re: Xxxxxx - Xxxxxxxx Transaction
Gentlemen:
Reference is made to the Stock Purchase Agreement, and the Securities
Exchange Agreement, each in respect to the above-entitled transaction.
Capitalized terms not defined herein are as used in the Stock Purchase
Agreement.
By executing this letter in the space provided below, Buyer and Atrium
acknowledge and agree that Sellers will be removing from the Companies the
vehicles described on Exhibit A hereto, with title to each of the vehicles
transferred to the name of each person noted on Exhibit A.
Atrium and Buyer also acknowledge and agree that these vehicles were
included as assets on the June 30, 1996 financial statements of the Companies
and have been paid out of the Companies with the consent of Atrium and Buyer.
Sincerely,
Xxxx X. Xxxxxx, Xx.
Acknowledged and Agreed to
this ___ day of August, 1996
XXXXXXXX COMPANIES, INC.
By:
---------------------------------------
Name:
------------------------------
Title:
-----------------------------
ATRIUM CORPORATION
By:
---------------------------------------
Name:
------------------------------
Title:
-----------------------------
45
EXHIBIT A
VEHICLE VEHICLE IDENTIFICATION NUMBER NEW OWNER
------- ----------------------------- ---------
1995 Porsche WPOCA2990SS342918 Xxxxxx Xxxxxxxxx
1996 Jeep Cherokee 0X0XX00X0XX000000 Xxxxxx Xxxxxxxxx
1995 BMW 840 XXXXX000XXXX00000 Xxxxxx X. Xxxxxx
1993 Volvo 945 Wagon XX0XX0000X0000000 Xxxxx Xxxxxxxxxx
46
September 9, 1996
VIA FAX AND FEDEX
Xxxxxxxx Companies, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Re: Xxxxxx - Xxxxxxxx Transaction
Gentlemen:
Reference is made to the Stock Purchase Agreement, dated as of August
22, 1996, by and among Buyer and Sellers, in respect to the above-entitled
transaction. Capitalized terms not defined herein are as used in the Stock
Purchase Agreement.
By executing this letter in the space provided below, Buyer accepts and
agrees with Sellers that for the purposes of Section 13.3(c) of the Stock
Purchase Agreement, the term Tax Claim shall mean and be limited only to
executive compensation matters.
Please indicate your acceptance and agreement to the matters addressed
in this letter by executing both originals of this letter and returning a
signed original to the undersigned.
Sincerely,
Xxxx X. Xxxxxx, Xx.
Accepted and Agreed to
this 9th day of September, 1996
XXXXXXXX COMPANIES, INC.
By:
---------------------------
Name: Xxxxxxx X. Xxxxxxxx
---------------------------
Title: President
---------------------------
