STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of March 5,
1997, among Scandinavian Incentive Holding B.V., a corporation organized under
the laws of the Netherlands ("SIH"), Incentive AB, a corporation organized under
the laws of the Kingdom of Sweden and the sole stockholder of SIH ("Incentive"),
Vestar Equity Partners, L.P., a Delaware limited partnership ("Vestar"), Harvard
Private Capital Holdings, Inc., a Massachusetts corporation ("Harvard"),
American Industrial Partners Capital Fund II, L.P., a Delaware limited
partnership ("AIP"), and the employees of WABCO (as defined below) who execute
signature pages hereto and become Management Purchasers hereunder (the
"Management Purchasers") prior to the Closing (Harvard, Vestar, AIP and the
Management Purchasers being collectively referred to herein as the "Buyer").
W I T N E S S E T H :
WHEREAS, SIH is the owner, beneficially and of record, of 10,000,000
shares (the "SIH Shares") of common stock, par value $0.01 per share (the
"Common Stock"), of Westinghouse Air Brake Company, a Delaware corporation
("WABCO");
WHEREAS, each of Vestar, Harvard, AIP and the Management Investors
desires to purchase from SIH the number of SIH Shares set forth opposite its or
his name on the signature pages hereto substantially simultaneously with the
purchase by WABCO of the remaining 4,000,000 SIH Shares pursuant to the SIH
Redemption (as defined below), SIH is willing to sell such SIH Shares to Buyer
upon the terms and subject to the conditions stated herein, and, if any or all
of AIP and the Management Purchasers fails to purchase SIH Shares hereunder at
Closing, Vestar and Harvard are willing, on a pro rata basis, to purchase,
simultaneously with their respective purchases of the number of SIH Shares set
forth opposite their respective names, any and all of such SIH Shares to have
been purchased by such other party or parties (the "SIH Purchase");
WHEREAS, substantially simultaneously with, and as a condition to,
the consummation of the SIH Purchase, WABCO is willing to purchase (at a price
equal to the purchase price paid by Buyer for each SIH Share purchased by Buyer
in the SIH Purchase) from SIH 4,000,000 SIH Shares (the "SIH Redemption"; and
such SIH Shares to be so purchased by WABCO, the "SIH Shares To Be Purchased By
WABCO") pursuant to the SIH Redemption Agreement, dated as of the date hereof,
among SIH, Incentive and WABCO (the "SIH Redemption Agreement"), a copy of which
is attached as Exhibit A hereto;
WHEREAS, each of WABCO, AIP, Harvard and Vestar have entered into,
and substantially simultaneously with, and as a condition to, the consummation
of the SIH Purchase each of the Voting Trust (as defined herein), Vestar Capital
Partners, Inc., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and certain other
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parties named therein will enter into (in the case of certain parties, for
limited purposes), the Amended and Restated Stockholders Agreement, dated as of
the date hereof (the "Stockholders Agreement"), a copy of which is attached as
Exhibit B hereto;
WHEREAS, each of WABCO, AIP, Harvard and Vestar have entered into,
and substantially simultaneously with, and as a condition to, the consummation
of the SIH Purchase each of the Voting Trust, Vestar Capital Partners, Inc.
("Vestar Capital"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. as
custodian for ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇, Rayssa C. Bezos, as custodian for ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇.
Bezos, ▇▇▇▇▇ ▇. ▇▇▇▇▇, the Estate of ▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
(collectively, the "Pulse Shareholders") and certain other parties named therein
will enter into, the Common Stock Registration Rights Agreement, dated as of the
date hereof (the "Registration Rights Agreement"), a copy of which is attached
as Exhibit C hereto; and
WHEREAS, the respective Board of Directors of each of WABCO, SIH and
Incentive have approved the Transaction (as defined herein) and the execution,
delivery and performance of the Transaction Documents (as defined herein) to
which it is a party;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, SIH, Incentive and Buyer hereby agree as follows:
ARTICLE I
DEFINITIONS, ETC.
SECTION 1.1. Definitions. As used in this Agreement, terms defined
in the preamble and recitals to this Agreement shall have the meanings given to
them therein and the following capitalized terms shall have the following
respective meanings:
"Acquisition Proposal" shall have the meaning specified in Section
6.2.
"Average Share Price" shall mean $12.958.
"Business Day" shall mean any day other than a Saturday or Sunday or
a day on which banking institutions in Boston, Massachusetts, New York,
New York, Pittsburgh, Pennsylvania or Stockholm, Sweden are authorized or
required by law or executive order to remain closed.
"Closing" shall have the meaning specified in Section 3.1.
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"Closing Date" shall have the meaning specified in Section 3.1.
"Existing Stockholders Agreement" shall mean the Stockholders
Agreement, dated as of January 31, 1995, by and among SIH, the Voting
Trust and WABCO, and joined for certain limited purposes by Vestar/WABCO
Investors, L.P., Vestar Capital Partners, Inc., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and Incentive.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"Purchase Price" shall have the meaning specified in Section 2.1.
"Representation Letter" shall mean the letter, dated the date
hereof, from WABCO to Harvard and AIP, a copy of which is attached as
Exhibit D hereto.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the United States Securities Act of
1933, as amended.
"SIH Shares To Be Purchased By Buyer" shall have the meaning
specified in Section 2.1.
"Transaction" shall mean the collective reference to the SIH
Purchase and the SIH Redemption.
"Transaction Documents" shall mean the collective reference to this
Agreement, the SIH Redemption Agreement, the Representation Letter, the
Stockholders Agreement and the Registration Rights Agreement.
"Voting Trust" shall mean the Voting Trust created pursuant to the
Voting Trust Agreement.
"Voting Trust Agreement" shall mean the Second Amended WABCO Voting
Trust/Disposition Agreement, dated as of December 13, 1995, by and among
the trustholders and the trustees parties thereto.
ARTICLE II
PURCHASE AND SALE
SECTION 2.1. Purchase and Sale of SIH Shares. Upon the terms and
subject to the conditions of this Agreement, SIH shall sell, transfer and
deliver to each of Vestar, Harvard, AIP and the Management Purchasers and each
of Vestar, Harvard, AIP and the Management Purchasers shall purchase from SIH,
the number
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of SIH Shares set forth opposite its name on the signature pages hereto;
provided that if any or all of AIP and the Management Purchasers fails to
purchase SIH Shares hereunder, each of Vestar and Harvard shall purchase from
SIH, and SIH shall sell, transfer and deliver to each of Vestar and Harvard, 50%
of such SIH Shares to have been purchased by such other party or parties (such
6,000,000 shares, collectively, the "SIH Shares To Be Purchased By Buyer") at a
purchase price per share equal to $11.00 (the "Purchase Price"). The Purchase
Price shall be payable on the Closing Date in accordance with Section 3.2(b).
SECTION 2.2. Post-Closing Adjustments. (a) If (x) prior to December
31, 1997, any of Vestar, Harvard, AIP or a Management Purchaser sells or agrees
to sell any shares of Common Stock at a price in excess of the Purchase Price,
which sale or agreement relates to any Acquisition Proposal (other than an
Acquisition Proposal disclosed in the letter referred to in Section 5.9) made
after October 30, 1996 and prior to March 31, 1997, and (y) Buyer shall not have
waived each of the conditions precedent to the Closing set forth in Section
7.2(f) and 7.2(g), the seller of such shares will pay to SIH promptly thereafter
(by wire transfer of immediately available funds to an account designated by SIH
in writing) an amount, for each share sold by such seller (but not, in any
event, in excess of the number of SIH Shares acquired by such seller in the SIH
Purchase) in such subsequent sale, equal to 55% of the excess of (i) the price
received by such seller for such share over (ii) the Purchase Price. If the
price received by such seller is not paid entirely in cash, the amount of such
consideration received by such seller will be determined in accordance with the
last three sentences in Section 6.4.
(b) If Section 2.2(a) is not applicable and any shares of Common
Stock are subsequently sold by any of Harvard, Vestar, AIP or a Management
Purchaser pursuant to any agreement entered into prior to December 31, 1997, the
seller of such shares will pay to SIH promptly thereafter (by wire transfer of
immediately available funds to an account designated by SIH in writing) an
amount, for each share sold by such seller (but not, in any event, in excess of
the number of SIH Shares acquired by such seller in the SIH Purchase) in such
subsequent sale, equal to 15% of the excess, if any, of (i) the price received
by such seller for such share over (ii) the Average Share Price. If the price
received by such seller is not paid entirely in cash, the amount of such
consideration received by such seller will be determined in accordance with the
last three sentences of Section 6.4.
(c) If, prior to December 31, 1997, any of Harvard, Vestar, AIP or a
Management Purchaser agrees to purchase all of the outstanding shares of Common
Stock that it does not then own, such party will pay to SIH promptly thereafter
(by wire transfer of immediately available funds to an account designated by SIH
in writing) an amount, for each SIH Share purchased by Buyer and WABCO in the
Transaction, equal to 15% of the excess, if any, of (i) the price paid by such
party in such subsequent purchase over
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(ii) the Average Share Price. If the price paid by such party is not paid
entirely in cash, the amount of such consideration paid by such party will be
determined in accordance with the last three sentences of Section 6.4.
ARTICLE III
THE CLOSING
SECTION 3.1. Closing Date. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 8.1 hereof, the closing of the purchase and sale of the SIH
Shares To Be Purchased By Buyer (hereinafter called the "Closing") shall take
place at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 a.m. on March 31, 1997 (or as soon as practicable
following the satisfaction (or, where permissible, due waiver by the parties
entitled to the benefits thereof) of the conditions set forth in Article VII),
or on such other date and at such other time and place as may be mutually agreed
upon by SIH and Incentive, on the one hand, and Vestar and Harvard on behalf of
the Buyer, on the other hand. The date on and the time at which the Closing
actually occurs being hereinafter referred to as the "Closing Date".
SECTION 3.2. Transactions to be Effected at the Closing. At the
Closing:
(a) SIH shall deliver to Buyer certificates representing the SIH
Shares To Be Purchased By Buyer, duly endorsed in blank in proper form for
transfer, with appropriate transfer stamps, if any, affixed; and
(b) Buyer shall deliver to SIH payment of the Purchase Price in
immediately available funds to an account designated by SIH in writing at
least two Business Days prior to the Closing Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SIH AND INCENTIVE
SIH and Incentive, jointly and severally, represent and warrant to
Buyer as follows:
SECTION 4.1. Corporate Existence and Power. Each of SIH and
Incentive is duly organized and validly existing under their respective
jurisdictions of incorporation, and each of SIH and Incentive has all requisite
corporate power and authority to execute and deliver this Agreement and the SIH
Redemption Agreement and to consummate the transactions contemplated hereby and
thereby to be consummated by it.
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SECTION 4.2. Authorization. The execution and delivery of this
Agreement and the SIH Redemption Agreement by each of SIH and Incentive and the
consummation by each of them of the transactions contemplated hereby and thereby
to be consummated by each of them have been duly and validly authorized and
approved by all necessary corporate or other action required on the part of each
of SIH and Incentive. This Agreement has been, and the SIH Redemption Agreement
will be, duly executed and delivered by SIH and Incentive.
SECTION 4.3. Enforceability. This Agreement constitutes, and when
executed and delivered by SIH and Incentive, the SIH Redemption Agreement will
constitute, a legal, valid and binding obligation of each of SIH and Incentive
enforceable against each of SIH and Incentive in accordance with the respective
terms of such agreements, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
SECTION 4.4. SIH Shares. On the date hereof, SIH does, and on the
Closing Date SIH will, own the SIH Shares (including the SIH Shares To Be
Purchased By Buyer) of record and beneficially and the SIH Shares are fully paid
and nonassessable. On the date hereof, SIH has, and on the Closing Date SIH will
have, good, valid and marketable title to the SIH Shares (including the SIH
Shares To Be Purchased By Buyer), free and clear of all claims, liens,
encumbrances, restrictions (including without limitation restrictions on the
power to vote or dispose of the SIH Shares), security interests and charges of
any nature whatsoever, including without limitation any preemptive right or
right of first refusal or first offer of any party (except for those
restrictions set forth in the Existing Stockholders Agreement) or any agreement,
arrangement or understanding regarding the sale or transfer of the SIH Shares
(other than this Agreement, the SIH Redemption Agreement and the Existing
Stockholders Agreement). On the Closing Date, upon delivery by SIH to each of
Harvard, Vestar, AIP and Management Purchasers of the SIH Shares to be purchased
by it or him in exchange for the Purchase Price payable by it or him, each of
Vestar, Harvard, AIP and the Management Purchasers will receive good, valid and
marketable title to the SIH Shares to be purchased by it or him, free and clear
of all claims, liens, encumbrances, restrictions, security interests and charges
of any nature whatsoever (other than any such claims, liens, encumbrances,
restrictions, security interests and charges created by, or arising as a result
of the ownership of such SIH Shares, by Vestar, Harvard, AIP or such Management
Purchaser, as the case may be, and not created by, or arising as a result of,
any action by SIH or Incentive).
SECTION 4.5. Litigation. There is no litigation or proceeding
pending or, to the actual knowledge of SIH or Incentive, threatened or any
investigation pending or threatened
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against SIH or Incentive which would prohibit either SIH or Incentive from
consummating, or otherwise impair the ability of either SIH or Incentive to
consummate, the Transaction.
SECTION 4.6. Noncontravention. The execution, delivery and
performance by each of SIH and Incentive of this Agreement and the SIH
Redemption Agreement and the consummation by each of SIH and Incentive of the
transactions contemplated hereby or thereby will not (a) violate any
organizational document of SIH or Incentive, (b) violate any law, rule,
regulation, order, judgment, injunction, ruling or decree of any court or
governmental authority applicable to SIH or Incentive or any of their respective
assets or (c) with or without notice or lapse of time or both, require any
consent, approval or notice under, constitute a violation of or default under,
conflict with, give rise to any right of termination, cancellation or
acceleration under, or result in the creation of any lien, security interest,
encumbrance or other charge upon any of the assets of SIH or Incentive under,
any contract, agreement, note, mortgage, license, permit or instrument by which
either SIH or Incentive is bound or to which either of their respective assets
is subject, except for the waiver by WABCO of its right of first refusal under
the Existing Stockholders Agreement to purchase the SIH Shares To Be Purchased
By Buyer, which waiver has been given by WABCO in the SIH Redemption Agreement.
SECTION 4.7. Consents. No consent, approval, order or authorization
of, or exemption by, or filing or registration with, or notice to, any
governmental authority is required to be obtained or made by either SIH or
Incentive in connection with the execution, delivery and performance by each of
them of this Agreement and the SIH Redemption Agreement or the consummation by
them of the transactions contemplated hereby and thereby (other than any filings
with the SEC required to be made by Incentive or SIH after the Closing).
SECTION 4.8. Brokers and Finders. Neither SIH nor Incentive has
employed any broker, finder or agent or agreed to pay to any person any broker's
fee, finder's fee, commission or other similar form of compensation in
connection with this Agreement, the other Transaction Documents or the
transactions contemplated hereby or thereby.
SECTION 4.9. Acquisition Proposals. As of the date hereof, Incentive
is not aware of any discussions regarding any Acquisition Proposal after October
30, 1996.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF EACH BUYER
Each of Harvard, Vestar, AIP and the Management Purchasers,
severally and not jointly, hereby represents and warrants to SIH and Incentive
as follows:
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SECTION 5.1. Existence, Power and Capacity. In the case of each of
Vestar, Harvard and AIP, it is duly organized and validly existing under its
jurisdiction of organization, and it has all requisite power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby to be consummated by it. In the case of each Management
Purchaser, he has the legal capacity to execute, deliver and perform this
Agreement.
SECTION 5.2. Authorization. The execution and delivery of this
Agreement by it or him and the consummation by it or him of the transactions
contemplated hereby to be consummated by it or him have been duly and validly
authorized and approved by all necessary action required on its or his part.
This Agreement has been duly executed and delivered by it or him.
SECTION 5.3. Enforceability. This Agreement constitutes its or his
legal, valid and binding obligation enforceable against it or him in accordance
with its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
SECTION 5.4. Litigation. There is no litigation or proceeding
pending or, to its or his actual knowledge, threatened or any investigation
pending or threatened against it or him which would prohibit it from
consummating, or otherwise impair its or his ability to consummate, the SIH
Purchase.
SECTION 5.5. Noncontravention. The execution, delivery and
performance by it or him of this Agreement and the consummation by it or him of
the transactions contemplated hereby to be consummated by it or him will not (a)
in the case of Vestar, Harvard or AIP, violate any of its organizational
documents, (b) subject to the satisfaction of the condition set forth in Section
7.2(e), violate any law, rule, regulation, order, judgment, injunction, ruling
or decree of any court or governmental authority applicable to it or him or any
of its or his assets or (c) with or without notice or lapse of time or both,
require any consent, approval or notice under, constitute a violation of or
default under, conflict with, give rise to any right of termination,
cancellation or acceleration under, or result in the creation of any lien,
security interest, encumbrance or other charge upon any of its or his assets
under, any contract, agreement, note, mortgage, license, permit or instrument by
which it or he is bound or to which its or his assets is subject.
SECTION 5.6. Consents. No consent, approval, order or authorization
of, or exemption by, or filing or registration with, or notice to, any
governmental authority is required to be obtained or made by it or him in
connection with the execution,
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delivery and performance by it or him of this Agreement or the consummation by
it or him of the transactions contemplated hereby to be consummated by it or him
(other than any filings (x) with the SEC required to be made by it or him after
the Closing and (y) under the HSR Act required to be made by it or him, and
subject to the satisfaction of the condition set forth in Section 7.2(e)).
SECTION 5.7. Brokers and Finders. It or he has not employed any
broker, finder or agent or agreed to pay to any person any broker's fee,
finder's fee, commission or other similar form of compensation in connection
with this Agreement, the other Transaction Documents or the transactions
contemplated hereby or thereby.
SECTION 5.8. Investment Intent. It or he acknowledges that it or he
is aware that the sale of the SIH Shares To Be Purchased By Buyer has not been
registered under the Securities Act and that WABCO has no obligation to register
or cause the registration of the sale of such shares under the Securities Act,
except as otherwise provided in the Stockholders Agreement or the Registration
Rights Agreement. It or he is acquiring the SIH Shares to be purchased by it or
him for investment and not with a view to, or for sale in connection with, any
distribution thereof. It or he has such knowledge and experience in financial
and business matters in general and in investments in particular so as to be
capable of evaluating the merits and risks of its of his proposed investment in
the SIH Shares to be purchased by it or him.
SECTION 5.9. Acquisition Proposals. As of the date hereof, it or he
is not aware of any discussions regarding any Acquisition Proposal after October
30, 1996, except as disclosed in the letter from Vestar to Incentive of even
date herewith.
SECTION 5.10. Financing. It or he has funds available to it or him
in an amount sufficient to purchase the SIH Shares to be purchased by it or him
hereunder and, in the case of Vestar and Harvard, the other SIH Shares which it
may become obligated to purchase pursuant to the proviso to the first sentence
of Section 2.1.
ARTICLE VI
COVENANTS
SECTION 6.1. Further Assurances and Cooperation. (a) Each of the
parties hereto will use its reasonable best efforts to effect the Closing of the
SIH Purchase by March 31, 1997.
(b) Each of the parties hereto agrees to use its reasonable best
efforts to insure that the conditions set forth in Article VII are satisfied,
insofar as such matters are within the control of such party.
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(c) Each of SIH, Incentive and Vestar shall encourage the senior
management of WABCO to make "roadshow"-type presentations to the investment
community.
SECTION 6.2. Alternative Transaction Proposals. (a) Incentive and
SIH will not, directly or indirectly, through any officer, director,
representative, affiliate or agent (i) solicit, initiate, encourage or assist in
the submission of any inquiries, proposals or offers from any corporation,
partnership, person or other entity or group relating to any acquisition or
purchase of assets of WABCO, or any equity interest in WABCO (including any SIH
Shares), or any other form of recapitalization transaction involving WABCO or
any merger, consolidation, business combination, spin-off, liquidation or
similar transaction involving WABCO, other than the Transaction (each an
"Acquisition Proposal"), (ii) participate in any discussions or negotiations
regarding an Acquisition Proposal or furnish to any person or entity (other than
Buyer or WABCO) any information concerning WABCO or the proposed Transaction,
(iii) otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any other person (other than
Buyer or WABCO) to make or enter into an Acquisition Proposal or (iv) sell,
assign, convey or transfer any SIH Shares or any interest therein or grant any
right to acquire any interest therein or agree or propose to do any of the
foregoing.
(b) If either Incentive or SIH receives any inquiry, proposal or
offer to enter into any transaction of the type referred to in Section 6.2(a)
(i), (ii), (iii) or (iv) above, such party will inform Vestar and Harvard on
behalf of Buyer of the terms thereof, except to the extent prohibited by
applicable law, rule or regulation of any governmental authority or stock
exchange by which Incentive or SIH is bound.
(c) Except to the extent that outside counsel advises that
applicable law requires otherwise, neither Incentive, SIH nor any of their
respective officers, directors, representatives, affiliates or agents will
disclose to any person, without the prior written consent of Vestar and Harvard
on behalf of Buyer, the fact that Incentive and SIH have entered into this
Agreement and the SIH Redemption Agreement and are engaged in the Transaction.
SECTION 6.3. Releases and Statements. Each of the parties hereto
will consult with each other before issuing any press release or otherwise
making any public statements with respect to the Transaction and other matters
contemplated hereby and will not issue any such press release or make any other
public statement prior to such consultation, and, except to the extent that
outside counsel advises that applicable law requires otherwise, any such press
release or public statement will be approved in advance by each of the parties
hereto.
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SECTION 6.4. Topping Fee. If, prior to December 31, 1997, Incentive
or SIH or any of their affiliates sells or agrees to sell any SIH Shares at a
price in excess of the Purchase Price, which sale or agreement relates to any
Acquisition Proposal made after October 30, 1996 and prior to March 31, 1997,
Incentive and SIH will, jointly and severally, be obligated to pay to Vestar,
Harvard, and AIP on a pro rata basis (based on the percentage of the total
number of SIH Shares to be purchased by Vestar, Harvard and AIP which is to be
purchased by each such party), promptly following the consummation of such sale
and by wire transfer of immediately available funds, an amount, for each SIH
Share so sold, equal to 45% of the excess of (i) the price received by Incentive
or SIH or any of their affiliates for such SIH Share over (ii) $11.00; provided
that no amount shall be payable to Vestar, Harvard or AIP if this Agreement
shall have been terminated by Buyer pursuant to Section 8.1(a)(ii) because any
of the conditions set forth in Sections 7.2(f) and 7.2(g) shall not have been
satisfied. If all or a portion of the price received by Incentive or SIH or any
of their affiliates for SIH Shares is paid in a form other than cash, including
any right to receive a contingent payment, the amount of consideration received
by Incentive or SIH or any of their affiliates shall be deemed to be the amount
of any cash consideration and the fair market value of any non-cash
consideration on the date of consummation of the sale of the SIH Shares. Such
fair market value shall be determined (A) mutually by Incentive, Vestar and
Harvard or (B) if Vestar, Harvard, and Incentive cannot so agree within 30 days,
by a nationally recognized New York based United States investment banking firm
selected by Vestar and Harvard from a list of three such firms prepared by
Incentive. The fees and expenses of such investment banking firm shall be borne
50% by Incentive and 50% by Vestar, Harvard and AIP on a pro rata basis (based
on the percentage of the total number of SIH Shares to be purchased by Vestar,
Harvard and AIP which is to be purchased by each such party).
SECTION 6.5. Expenses. Each of the parties hereto will pay its own
expenses incurred or to be incurred in connection with the Transaction. None of
the parties hereto shall engage any broker, finder or agent or agree to pay to
any person any broker's fee, finder's fee, commission or other similar form of
compensation in connection with this Agreement, the other Transaction Documents
or the transactions contemplated hereby or thereby.
ARTICLE VII
CONDITIONS TO CLOSING
SECTION 7.1. Conditions Precedent to Each Party's Obligation to
Effect the Closing. The obligation of each party hereto to consummate the
Closing hereunder shall be subject to the satisfaction (or, where permissible,
waiver by the party or
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parties, as the case may be, entitled to the benefits thereof) on the Closing
Date of each of the following conditions:
(a) no preliminary or permanent injunction or other order issued by
any United States federal or state court of competent jurisdiction or any
court of the Kingdom of Sweden of competent jurisdiction or by any United
States federal or state governmental or regulatory body or any
governmental or regulatory body of the Kingdom of Sweden nor any statute,
rule, regulation or order of any United States federal or state
governmental authority or governmental authority of the Kingdom of Sweden
shall be in effect which (i) restrains, enjoins or otherwise prohibits
SIH, Incentive, Buyer or WABCO from consummating the Transaction or (ii)
would impose any material limitations on Buyer's ability to exercise full
rights of ownership of the SIH Shares to be purchased by Buyer; and
(b) prior to or simultaneously with the Closing, the SIH Redemption
shall be consummated in accordance with the SIH Redemption Agreement and
all of the SIH Shares To Be Purchased By Buyer shall be purchased by Buyer
pursuant hereto.
SECTION 7.2. Conditions Precedent to the Obligation of Each Buyer.
The obligation of each of Vestar, Harvard, AIP and the Management Purchasers to
effect the Closing shall be subject to the satisfaction (or, where permissible,
waiver by such party) on the Closing Date of each of the following conditions:
(a) each of SIH and Incentive shall have performed and complied in
all material respects with each of its agreements and covenants contained
herein to be performed or complied with by SIH or Incentive, as the case
may be, on or prior to the Closing Date;
(b) each of the representations and warranties of SIH and Incentive
contained herein (and, in the case of each of Harvard and AIP only, each
of the representations and warranties of WABCO contained in the
Representation Letter) shall be true in all material respects on and as of
the Closing Date with the same effect as though made on and as of the
Closing Date (except to the extent such representations and warranties
speak as of an earlier date);
(c) Buyer shall have received a certificate to the effect that the
conditions set forth in the foregoing clauses (a) and (b) have been
satisfied, signed by an executive officer of each of SIH and Incentive;
(d) each of the Stockholders Agreement and the Registration Rights
Agreement shall have been executed and delivered by the parties thereto
(other than Buyer and WABCO);
13
(e) the waiting period, and any extension thereof, under the HSR Act
shall have been terminated or expired thereunder without challenge;
(f) there shall not have occurred any event that could reasonably be
expected to have a material adverse effect on the business, assets,
properties, operations, condition (financial or otherwise) or prospects of
WABCO and its subsidiaries taken as a whole; and
(g) there shall not have occurred any material disruption or any
other event that could reasonably be expected to have a material adverse
effect on the financial, banking or capital markets in the United States.
SECTION 7.3. Conditions Precedent to the Obligations of SIH and
Incentive. The obligations of SIH and Incentive to effect the Closing shall be
subject to the satisfaction (or, where permissible, waiver by SIH and Incentive)
on the Closing Date of all of the following conditions (provided that any
failure by any of AIP and the Management Purchasers to satisfy any of the
following conditions shall be deemed waived if Vestar and Harvard are purchasing
at Closing the SIH Shares to have been purchased by such defaulting party or
parties pursuant to the proviso to the first sentence of Section 2.1):
(a) each of Vestar, Harvard, AIP and the Management Purchasers shall
have performed and complied in all material respects with each of its
agreements and covenants contained herein to be performed or complied with
by it on or prior to the Closing Date;
(b) each of the representations and warranties of each of Harvard,
Vestar, AIP and the Management Purchasers contained herein shall be true
in all material respects on and as of the Closing Date with the same
effect as though made on and as of the Closing Date (except to the extent
such representations and warranties speak as of an earlier date);
(c) SIH and Incentive shall have received from each of Vestar,
Harvard, AIP and the Management Purchasers a certificate, signed by an
executive of such party, to the effect that the conditions set forth in
the foregoing clauses (a) and (b) have been satisfied with respect to it;
and
(d) SIH and Incentive shall have received a letter from WABCO
substantially in the form of Exhibit E hereto.
14
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1. Termination. (a) This Agreement may be terminated and
the Transaction abandoned at any time prior to the Closing:
(i) by the mutual written consent of Incentive and SIH, on the one
hand, and Vestar and Harvard on behalf of Buyer, on the other hand; or
(ii) by either Incentive and SIH, on the one hand, or Vestar or
Harvard on behalf of Buyer, on the other hand, if the Closing shall not
have occurred on or prior to March 31, 1997, provided that the right to
terminate this Agreement pursuant to this Section 8.1(a)(ii) shall not be
available to any party whose failure to fulfill any of its obligations
under this Agreement, or whose breach of any representation or warranty by
it set forth herein, has been the cause of, or resulted in, the failure of
the Closing to have occurred on or before such date.
(b) In the event of termination of this Agreement by any party
pursuant to this Section 8.1, written notice thereof shall forthwith be given to
the other parties hereto and this Agreement shall forthwith become of no further
force and effect, except for the provisions of this Article VIII and Sections
6.3, 6.4 and 6.5 and Article IX, each of which shall continue in full force and
effect. The foregoing provisions shall not limit or restrict the availability of
specific performance or other injunctive relief to the extent that specific
performance or other injunctive relief would otherwise be available to a party
hereunder. Nothing in this Section 8.1 shall be deemed to relieve any party from
any liability for any breach by such party of its representations, warranties,
covenants or agreements set forth in this Agreement.
SECTION 8.2. Amendments and Waivers. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto. Incentive and SIH, on the one hand, and Vestar and Harvard on
behalf of Buyer, on the other hand, may, by an instrument in writing signed on
behalf of such party, waive compliance by the other party with any term or
provision of this Agreement that such other party was or is obligated to comply
with or perform. In particular it is acknowledged and agreed that Buyer may not
waive the conditions set forth in Section 7.1(b) as conditions to the
obligations of SIH and Incentive to effect the Closing.
15
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Non-Survival of Representations and Warranties. None of
the representations and warranties contained in this Agreement or in the
Representation Letter shall survive the Closing, except for the representations
and warranties made by each of Incentive and SIH in Section 4.4.
SECTION 9.2. Notices. Any notice, request, demand, waiver or other
communication required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given (i) when delivered by hand, (ii)
five Business Days after it is mailed, certified or registered mail, return
receipt requested with postage prepaid, (iii) when answered back if sent by
telecopy (with receipt confirmed) or (iv) three Business Days after it is sent
by express delivery service, as follows:
(a) if to SIH, to:
Scandinavian Incentive Holding B.V.
c/o Incentive AB
▇▇▇▇▇▇▇▇▇ ▇
▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇-▇-▇▇▇-▇▇-▇▇
Telecopier No.: (▇▇▇) ▇▇-▇-▇▇▇-▇▇-▇▇
with a copy to:
Advokatfirman ▇▇▇▇▇ KB
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇
▇-▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇-▇-▇▇▇-▇▇-▇▇
Telecopier No.: (▇▇▇) ▇▇-▇-▇▇▇-▇▇-▇▇
(b) if to Incentive, to:
Incentive AB
▇▇▇▇▇▇▇▇▇ ▇
▇-▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇-▇-▇▇▇-▇▇-▇▇
Telecopier No.: (▇▇▇) ▇▇-▇-▇▇▇-▇▇-▇▇
16
with a copy to:
Advokatfirman ▇▇▇▇▇ KB
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇
▇-▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇-▇-▇▇▇-▇▇-▇▇
Telecopier No.: (▇▇▇) ▇▇-▇-▇▇▇-▇▇-▇▇
(c) if to Vestar, to:
Vestar Equity Partners, L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(d) if to Harvard, to:
c/o Harvard Private Capital Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(e) if to AIP, to
American Industrial Partners
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
17
with a copies to:
American Industrial Partners
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(f) if to any Management Purchaser, to him
c/o Westinghouse Air Brake Company
1000 Air Brake Avenue
Wilmerding, Pennsylvania 15148
Attention: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 9.3. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.
SECTION 9.4. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
shall, taken together, be considered one and the same agreement.
SECTION 9.5. Interpretation. The section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement.
SECTION 9.6. Entire Agreement. This Agreement, including the
exhibits hereto, constitutes the entire agreement
18
among the parties hereto and supersedes any prior agreements and understandings,
oral and written, among the parties hereto with respect to the subject matter
hereof.
SECTION 9.7. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CONFLICTS OF LAW PRINCIPLES THEREOF.
SECTION 9.8. Successors and Assigns. This Agreement shall not be
assignable by either SIH or Incentive without the prior written consent of
Vestar and Harvard on behalf of Buyer or by Buyer without the prior written
consent of SIH and Incentive. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns. Nothing in this Agreement, express or implied, is intended to confer on
any person, other than the parties hereto and their respective successors and
permitted assigns, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
SECTION 9.9. Conciliation and Arbitration. (a) If any dispute, claim
or difference arises out of or relates to this Agreement (a "Dispute"), the
parties hereto shall use their reasonable best efforts to resolve the Dispute
and, if they so desire, consult outside experts for assistance in arriving at
such a resolution.
(b) Any Dispute shall be finally settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA") effective as of the commencement of the arbitration (the
"Rules"), except as such Rules may be modified as provided herein. The
arbitration shall be held in New York, New York, unless the parties mutually
agree to have the arbitration held elsewhere, and judgment upon the award made
therein may be entered by any court having jurisdiction thereof, provided,
however, that nothing contained in this Section 9.9 shall be construed to
preclude a party from bringing any action in any court of competent jurisdiction
for injunctive or other provisional relief to compel another party to comply
with its obligations under this Agreement during the pendency of the arbitration
proceedings. The arbitral tribunal shall be composed of three arbitrators, who
shall be experienced commercial litigators admitted to practice law in the State
of New York. Incentive and SIH shall appoint one arbitrator and Vestar and
Harvard on behalf of Buyer shall appoint one arbitrator. If such parties fail to
nominate an arbitrator in accordance with the preceding sentence within thirty
days from the date when the notice of intention to arbitrate referred to in Rule
6 of the Rules (the "Commencement Notice") has been received by the Respondent
(as defined in the Rules) such appointment shall, upon written request by either
party to the AAA, be made in accordance with Rule 14 of the Rules. The two
arbitrators thus appointed shall attempt to agree upon the third arbitrator to
act as chairperson of the arbitration tribunal. If said two
19
arbitrators fail to appoint the chairperson within thirty days from the date of
appointment of the second arbitrator, upon written request of either party to
the AAA, such appointment shall be made in accordance with Rule 15 of the Rules.
The arbitrators shall have no power to waive, alter, amend, revoke or suspend
any of the provisions of this Agreement, provided, however, that the arbitrators
shall have the power to decide all questions with respect to the interpretation
and validity of this Section 9.9. The arbitration shall be conducted, and the
award shall be rendered, in the English language. An arbitrator may not act as
an advocate for the party nominating him, and all three arbitrators shall be
impartial and unbiased. A majority vote by the three arbitrators shall be
required on any decision made by them; provided, however, that lacking such a
majority in the case of question of amounts of dollar or other quantities, the
vote for the greatest amount or quantity shall be deemed to be a vote for the
amount or quantity next in magnitude in order to form a majority for such vote.
The arbitrators shall permit such discovery as they shall determine is
appropriate in the circumstances, taking into account the needs of the parties
and the desirability of making discovery expeditious and cost-effective. Any
such discovery shall be limited to information directly relevant to the
controversy or claim in arbitration and shall be concluded within thirty days
after the appointment of the arbitration panel. This agreement to arbitrate
shall be binding upon the heirs, successors and assigns and any trustee,
receiver or executor of any party hereto. Except to the extent required by law
or court or administrative order, no party, arbitrator, representative, counsel
or witness shall disclose or confirm to any person not present at the
arbitration hearings any information about the arbitration proceeding or
hearings, including the names of the parties and arbitrators, the nature and
amount of the claims, the financial condition of any party, the expected date of
hearing or the award made.
(c) Subject to and not in any way limiting the preceding Section
9.9(b), each of the parties hereto irrevocably consents and submits to the
jurisdiction in any action brought in connection with this Agreement in the
United States District Court for the Southern District of New York or any New
York court of competent jurisdiction, including, but not limited to, any action
to enforce an award rendered pursuant to the preceding Section 9.9(b). Incentive
and SIH hereby appoint CT Corporation System as their agent for service of
process in New York. The submission of the parties to jurisdiction as set forth
in this Section 9.9(c) does not constitute and shall not be deemed a consent to
jurisdiction for any purpose other than those expressly set forth in this
Agreement.
20
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the day and year first above written.
INCENTIVE AB
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO & Executive Vice President
SCANDINAVIAN INCENTIVE HOLDINGS,
B.V.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director & Director
Number of SIH
Shares to be Purchased VESTAR EQUITY PARTNERS, L.P.
By: VESTAR ASSOCIATES, L.P.
Its: General Partner
By: VESTAR ASSOCIATES CORPORATION
Its: General Partner
2,400,000 SIH Shares By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
HARVARD PRIVATE CAPITAL HOLDINGS,
INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory
2,400,000 SIH Shares By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
21
AMERICAN INDUSTRIAL PARTNERS
CAPITAL FUND II, L.P.
By: AMERICAN INDUSTRIAL
PARTNERS II, L.P.
Its: General Partner
By: AMERICAN INDUSTRIAL PARTNERS
CORPORATION
Its: General Partner
900,000 SIH Shares By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman
22
THE MANAGEMENT PURCHASERS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
300,000 SIH Shares
