STOCK PURCHASE AGREEMENT
AMONG
XXXXXX COMPANIES, INC.
"PURCHASER"
AND
EACH OF THE HOLDERS OF THE CAPITAL STOCK OF
STRUCTURAL POLYMER (HOLDINGS) LIMITED
"SELLERS"
NOVEMBER 19, 1999
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made as of the 19th
day of November, 1999, by and among Xxxxxx Companies, Inc., a
corporation organized under the laws of the State of Missouri
("Purchaser"), and each of the holders of the issued and outstanding
shares of capital stock of Structural Polymer (Holdings) Limited (as
defined below) as set forth on Exhibit A hereto (each a "Seller" and
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collectively, the "Sellers").
R E C I T A L S:
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WHEREAS, on the terms and subject to the conditions of this
Agreement, and subject to the performance by the parties of their
respective obligations under this Agreement, Sellers desire to sell, and
Purchaser desires to purchase, all of the issued and outstanding share
capital of Structural Polymer (Holdings) Limited, a corporation
organized under the laws of England and Wales ("SP Systems"), owned by
the Sellers as set forth on Exhibit A hereto (the "Shares") at the
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Closing (as defined in Section 1.1(b) of this Agreement) for the
Purchase Price described in Article I of this Agreement.
NOW, THEREFORE, Purchaser and Sellers, intending to be legally
bound, agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES; MANNER OF PAYMENT
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1.1 Method of Effecting the Purchase and Sale of Shares;
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Closing. The purchase and sale of the Shares shall be effected as
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follows:
(a) At the Closing (as defined in Section 1.1(b) hereof),
the Sellers shall sell to Purchaser, and Purchaser shall purchase from
the Sellers, the Shares, being all of the share capital of SP Systems
which is issued and outstanding, in consideration of the Purchase Price
(as defined in Section 1.2 hereof).
(b) The closing (the "Closing") of the transactions
contemplated hereby shall take place at the offices of Winthrop,
Stimson, Xxxxxx & Xxxxxxx, New York, New York, commencing at 10:00 a.m.
on November 19, 1999 (the "Closing Date"), or such other date or time as
may be mutually agreed upon by the parties.
1.2 Purchase Price for the Shares. The aggregate
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consideration to be paid by Purchaser to the Sellers in connection with
the sale of the Shares (the "Purchase Price") shall consist of (i) an
amount in cash equal to Eighteen Million Four Hundred Sixty-One Thousand
Five Hundred Thirty-Eight Pounds Sterling ([Pound Sterling]18,461,538) (the
"Cash Consideration"), which amount shall be paid to the Sellers on the
Closing Date; and (ii) an aggregate of Two Million Five Hundred Thousand
(2,500,000) shares of common stock, $.01 par value (the "Common Stock"),
of Purchaser (the "Stock Consideration").
1.3 Payment of the Purchase Price. At the Closing, Purchaser
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shall pay to each of the Sellers a pro rata portion of the Purchase
Price, determined in accordance with each such Sellers' percentage
ownership of the Shares as set forth beside each Sellers' name on
Exhibit A to this Agreement, as follows:
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(a) Purchaser shall deliver to the Sellers the Cash
Consideration, by wire transfer of immediately available funds to such
account or accounts as shall be designated by the Sellers; and
(b) Purchaser shall deliver to the Sellers certificates
evidencing the Stock Consideration in such names and in such
denominations as shall be specified by the Sellers at least five
business days prior to the Closing Date. The shares of Common Stock
issued to the Sellers pursuant to this Agreement shall bear restrictive
legends and be subject to registration rights as set forth in the
Registration Rights Agreement (as defined below).
1.4 Fractional Shares. Notwithstanding any other provision of
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this Agreement, neither certificates nor scrip for fractional shares of
the Common Stock shall be issued as part of the Stock Consideration
Payment. If any Seller is otherwise entitled to a fraction of a share
of Common Stock, upon request to Purchaser, such Seller shall receive in
lieu thereof cash (without interest) in an amount determined by
multiplying the fractional interest to which such holder would otherwise
have been entitled by the closing price of the Common Stock on the
Nasdaq National Market on the fifth business day prior to the Closing
Date. The Sellers shall not be entitled to dividends, voting rights or
any other rights in respect of any fractional shares.
1.5 Closing of Stock Transfer Books. The stock transfer books
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of SP Systems shall be closed at the end of business on the business day
immediately preceding the Closing Date. In the event of a transfer of
ownership of the Shares which is not registered in the transfer records
prior to the closing of such record books, the payment of the Purchase
Price may be delivered to the transferee of the Shares if the
certificate or certificates evidencing such Shares is presented to
Purchaser at the Closing accompanied by all documents required to
evidence and effect such transfer and all applicable stock transfer
taxes have been paid.
1.6 Anti-Dilution Adjustments. If, during the period from the
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date hereof to the Closing Date, Purchaser shall declare a stock
dividend, or make a distribution in stock upon, or subdivide, split up,
reclassify or combine the Common Stock or declare a dividend or make a
distribution on the Common Stock in any security convertible into Common
Stock or otherwise issues any Common Stock (other than the exercise of
any options outstanding on the date hereof to purchase any such
securities) without consideration or for a consideration per share less
than the then reported price as reported by the Nasdaq National Market
(each, an "Extraordinary Corporate Transaction"), appropriate and
proportional adjustment or adjustments will be made to the Stock
Consideration such that such payment shall result in the issuance of
that number of shares of Common Stock as if the Extraordinary Corporate
Transaction had a record or payment date therefor immediately after the
Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SP SYSTEMS AND SELLERS
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The Sellers represent and warrant to Purchaser as of the date
hereof and as of the Closing Date as follows:
2.1 Organization And Standing; Investments. SP Systems and
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each subsidiary of SP Systems (each a "Subsidiary" and collectively with
SP Systems, the "Companies") is a corporation duly organized, and
validly existing under the laws of its jurisdiction of organization,
which jurisdictions are set forth in the Disclosure Letter. The
Disclosure Letter sets forth each subsidiary of SP Systems and describes
each business enterprise or person in which SP Systems or any of its
subsidiaries holds any equity securities of, or has any investment in or
loans or advances to (other than trade terms extended to customers in
the
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ordinary course of business or employee salary advances in the ordinary
course of business). SP Systems and each Subsidiary has full corporate
power and authority to carry on its business as and where now conducted
and to own or lease and operate its properties at and where now owned or
leased and operated by it. SP Systems and each Subsidiary is duly
qualified to do business and is duly qualified or licensed and in good
standing in every jurisdiction in which the property owned, leased or
operated by it, or the nature of the business conducted by it, makes
such qualification necessary. All jurisdictions in which SP Systems and
each Subsidiary are so qualified are set forth in the Disclosure Letter.
2.2 Capital Stock. The authorized, issued and outstanding
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share capital of SP Systems and each Subsidiary is set out in the
Disclosure Letter. All of the outstanding shares of the Companies are
duly authorized, validly issued, and fully paid, and are non-assessable
and were not issued in violation of preemptive or any other rights of
any person.
2.3 Title to Shares; Investments of SP Systems and Subsidiaries.
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(a) Each Seller owns all of the Shares set forth opposite
such Seller's name on Exhibit A, beneficially and of record free and
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clear of all liens, charges, security interests, adverse claims,
pledges, encumbrances and demands whatsoever. The Shares are sold
pursuant to this Agreement with full title guarantee within the meaning
given to that phrase by Section 3 of the Law of Property (Miscellaneous
Provisions) Act of 1994 and so that the provisions of Sections 6(2) and
6(3) of that Act will not apply to Purchaser.
(b) SP Systems owns all the share capital of each
Subsidiary beneficially and of record as set forth on Exhibit A, free
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and clear of all liens, charges, security interests, adverse claims,
pledges, encumbrances and demands whatsoever.
2.4 Outstanding Options and Warrants. There are no
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subscription rights, options, warrants, rights, puts, calls, commitments
or agreements (respecting issuance, redemption, repurchase, voting or
otherwise) relating to, nor any outstanding securities convertible into,
any shares of capital stock or other equity interest in SP Systems or
any of the Subsidiaries, or into any such convertible securities, and
neither Seller nor any of the Companies have agreed to issue, purchase,
sell or transfer any of same, except as provided in this Agreement.
2.5 Authority; Conflicts; Consents.
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(a) The execution by each Seller of this Agreement and all
other agreements to be entered into by such Seller at or prior to
Closing as contemplated by this Agreement (the "Ancillary Agreements")
shall, as applicable, have been duly authorized and approved by the
Board of Directors of such Seller, and at the Closing no further
corporate or shareholder action will be necessary to make this Agreement
or any Ancillary Agreement valid and binding on such Seller. The
execution, delivery and consummation of this Agreement and the Ancillary
Agreements by such Seller (i) does not now and will not, with the
passage of time, the giving of notice or otherwise, result in a material
violation or breach of, or constitute a material default under, any term
or provision of any indenture, mortgage, deed of trust, lease,
instrument, order, judgment, decree, rule, regulation, law, contract,
agreement or any other restriction to which such Seller or the Companies
are a party or to which any of them or any of their respective assets
are subject or bound at Closing, (ii) will not result in the creation of
any material lien or other charge upon any assets of the Companies, and
(iii) will not result in any acceleration or termination of any loan or
security interest agreement to which such Seller or the Companies are a
party or to which any of them or any of their respective assets are
subject or bound.
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(b) No material approval or consent of any person, firm or
other entity or governmental body is or was required to be obtained by
such Seller for the authorization of this Agreement or the Ancillary
Agreements or the consummation of the transactions contemplated by this
Agreement or the Ancillary Agreements. Each Seller is authorized to
consummate the transactions contemplated hereby and upon the execution
hereof, this Agreement will constitute the legal, valid and binding
obligation of such Seller enforceable against such Seller in accordance
with its terms.
(c) No material approval or consent of any person, firm or
other entity or governmental body is or was required to be obtained by
the Companies for the authorization of this Agreement or the Ancillary
Agreements or the consummation of the transactions contemplated by this
Agreement or the Ancillary Agreements. SP Systems and each Seller is
authorized to consummate the transactions contemplated hereby and upon
the execution hereof, this Agreement will constitute the legal, valid
and binding obligation of each Seller enforceable against each Seller in
accordance with its terms.
2.6 Financial Statements.
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(a) Prior to the date hereof, SP Systems has provided
Purchaser with copies of the audited consolidated balance sheets of SP
Systems as of December 31, 1998 and 1997 and the related audited
consolidated statements of income and cash flows of SP Systems for and
as of the years ended December 31, 1996, 1997 and 1998, together with
the independent auditor's reports thereon (the "Audited UK Financials"),
and the unaudited consolidated balance sheet of SP Systems as of
September 30, 1999, and the related unaudited combined statements of
income and cash flows of SP Systems for and as of the periods ended
September 30, 1998 and 1999 (the "Unaudited UK Financials;" and together
with the Audited UK Financials, the "UK GAAP Financial Statements"),
which UK GAAP Financial Statements (i) have been prepared in accordance
with United Kingdom generally accepted accounting principles
consistently applied ("UK GAAP"), except that the unaudited Financial
Statements do not contain all footnotes required by the UK GAAP;
(ii) comply with the provisions of the Companies Act 1985 (a UK statute)
and all other relevant statutes; (iii) make appropriate provision or
reserve for all actual liabilities in accordance with UK GAAP; (iv) make
appropriate provision for or specifically note, in accordance with UK
GAAP, all capital commitments and contingent liabilities in accordance
with UK GAAP; (v) make appropriate provision for all bad and doubtful
debts in accordance with UK GAAP; (vi) (A) with respect to the Audited
UK Financials show a true and fair view of the state of affairs of the
Companies as at the end of the financial year to which they relate and
of the profits or losses of SP Systems for the accounting period ended
on those dates in accordance with UK GAAP and (B) with respect to the
Unaudited UK Financials, fairly present the financial position and cash
flows at the dates and for the periods therein specified in accordance
with UK GAAP; (vii) include any notes and schedules thereto; and
(viii) comply with all Statements of Standard Accounting Practice and
All Financial Reporting Standards applicable to a UK company.
(b) Prior to the date hereof, SP Systems has provided
Purchaser with copies of the audited consolidated balance sheets of SP
Systems as of December 31, 1998 and 1997 and the related audited
consolidated statements of income and cash flows of SP Systems for and
as of the years ended December 31, 1996, 1997 and 1998, together with
the independent auditor's reports thereon (the "Audited US Financials"),
and the unaudited consolidated balance sheet of SP Systems as of
September 30, 1999, and the related unaudited combined statements of
income and cash flows of SP Systems for and as of the periods ended
September 30, 1998 and 1999 (the "Unaudited US Financials," the "Audited
US Financials and the "Unaudited US Financials" are hereinafter
collectively referred to as the "US GAAP Financials" and, together with
the UK GAAP Financial Statements, the "Financial Statements"), which US
GAAP Financial Statements (i) have been prepared in accordance with
United States generally accepted accounting principles consistently
applied ("US GAAP"), except that the unaudited Financial Statements
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do not contain all footnotes required by the US GAAP; (ii) make
appropriate provision or reserve for all actual liabilities in
accordance with US GAAP; (iii) make appropriate provision for or
specifically note, in accordance with US GAAP, all capital commitments
and contingent liabilities in accordance with US GAAP; (iv) make
appropriate provision for all bad and doubtful debts in accordance with
US GAAP; (v) (A) with respect to the Audited US Financials, show a true
and fair view of the state of affairs of the Companies as at the end of
the financial year to which they relate and of the profits or losses of
SP Systems for the accounting period ended on those dates and (B) with
respect to the Unaudited US Financials, fairly present the financial
position and cash flows at the dates and for the periods therein
specified in accordance with US GAAP; and (vi) include any notes and
schedules thereto in accordance with US GAAP.
2.7 Absence of Undisclosed Liabilities. Except to the extent
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included in the September 30, 1999 balance sheet included in the
Financial Statements, none of the Companies are obligated for, nor are
any of their respective assets or properties subject to, any material
liabilities or material adverse claims or obligations, absolute or
contingent, that would be required by UK GAAP to be reflected or
reserved against in the Financial Statements except those incurred in
the ordinary course of business since September 30, 1999, and none of
the Companies is in default with respect to any terms or conditions of
any material liability or obligation.
2.8 Absence of Certain Changes. Since September 30, 1999, the
--------------------------
businesses of the Companies have been conducted in the ordinary course.
Since such date, other than as a result of general economic or industry
conditions, there has not been any material adverse change in the
business, assets, or liabilities of SP Systems or any Subsidiary taken
in the aggregate. Except as set forth in the Disclosure Letter, since
September 30, 1999, there has not been:
(a) other than in the ordinary course of business
consistent with past practice, any increase made or promised in the
compensation or other remuneration payable (including benefits payable
to employees) or to become payable to any of the employees, agents or
partners involved with the Companies;
(b) any mortgage or pledge of, or any other lien, charge
or encumbrance of any kind created in respect of any of the assets,
tangible or intangible of the Companies other than in the ordinary
course of business;
(c) any sale or transfer of any assets, except for sales
of inventory in the ordinary course of business, or settlement,
cancellation or release of any indebtedness owing to any of the
Companies;
(d) any sale, license, assignment or transfer by SP
Systems or any Subsidiary of any patents, trademarks, trade names or
other similar intangible assets;
(e) any amendments or termination of any material
contract, agreement or license to which any of the Companies is a party
or to which any of the Companies or any of their respective assets are
subject or bound that has or is likely to have a material adverse effect
on the properties, operations, liabilities, earnings or financial
condition of the Companies, taken as a whole;
(f) any legally binding commitment made (through
negotiations or otherwise) or any liability incurred to any labor
organization by any of the Companies;
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(g) except as set forth in the Disclosure Letter, any
payment, declaration or setting aside by SP Systems of dividends or a
return of capital or any distribution by SP Systems of any cash or other
assets in redemption of or as the purchase price for any capital stock
or equity or in discharge or cancellation in whole or in part of any
indebtedness owing (whether in payment of principal, interest or
otherwise) to any affiliate of the Companies;
(h) any discharge or satisfaction by any of the Companies
of any lien, encumbrance, obligation or liability (accrued, absolute,
fixed or contingent), other than those that have been discharged or
satisfied in the ordinary course without acceleration and other than
those incurred and discharged in the ordinary course of business;
(i) except in the ordinary course of business consistent
with past practice, any institution by any of the Companies of a bonus,
stock option, profit-sharing, pension plan or similar arrangement or any
changes in any such existing plans;
(j) any incurrence by any of the Companies (whether
discharged or not) of any obligation or liability (whether accrued,
absolute, fixed or contingent) other than current liabilities incurred,
and obligations entered into, in the ordinary course of business
consistent with past practice; and
(k) so far as Seller is aware any material loss, damage or
destruction of or to the Companies' properties (whether or not covered
by insurance) or any dispute with employees.
2.9 Business Relations. Except as set forth in the Disclosure
------------------
Letter:
(a) none of the Companies is required, in the ordinary
course of business, to provide any bonding or any other financial
security arrangements in connection with any transactions with any
customers or suppliers;
(b) none of the Companies has received any notice of any
material disruption (including, without limitation, delayed deliveries
or allocations by suppliers) in the availability of any materials or
products used in the Companies' businesses and have no reason to believe
that any such disruption will occur;
(c) there are no sole source suppliers of material goods,
equipment or services used by the Companies (other than public
utilities) with respect to which practical alternative sources of supply
are unavailable; and
(d) no single customer of any of the Companies accounted
for greater than 5% of the Companies' consolidated gross revenues for
either the most recently completed fiscal year or the nine-month period
ended October 31, 1999.
2.10 Real Property.
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(a) The Disclosure Letter contains a true and complete
listing of (i) all real property owned by SP Systems or any Subsidiary,
(ii) all real property leases to which SP Systems or any Subsidiary are
parties and (iii) all options, deeds of trust, deeds of declaration,
mortgages pursuant to or in which SP Systems or any Subsidiary has any
interest (collectively, the "Real Property"). SP Systems has delivered
to Purchaser a complete and correct copy of each deed or other
instrument which provide evidence of title to or interest in each
property lease or other interest comprising the Real Property.
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(b) None of the Companies has received written notice of a
breach of any laws and ordinances, or of any covenant, condition,
easement or restriction affecting the Real Property or relating to its
use or occupancy.
(c) With respect to the leased property comprising the
Real Property including all leasehold improvements (collectively, the
"Leased Property"):
(i) all leases relating to Real Property in the
United Kingdom are in the possession and are under the control of SP
Systems and are in writing, and copies of all leases are listed in the
Disclosure Letter and have been delivered to Purchaser or its counsel;
(ii) the rental set forth in each such lease is the
actual rental being paid, and there are no separate agreements or
understandings with respect to the same and the receipt for the payment
of rental due immediately prior to the date of this Agreement is
unqualified;
(iii) none of the Companies has received written
notice that there has been a default by the Companies or any other party
which affects the Leased Property, and the consummation of the
transactions contemplated by this Agreement. Neither SP Systems nor any
Subsidiary will require the consent of any other party to any lease or
agreement relating to the Leased Property to the sale of the Shares to
Purchaser or the consummation of the transactions contemplated by this
Agreement;
(iv) there are no written or oral contracts between
any of the Companies and any third party relating to any claim by such
third party of any right to all or any part of the interest of any of
the Companies in any leasehold estate or otherwise relating to the use
and occupancy by any of the Companies of such estate; and
(v) with respect to Leased Property located in the
United Kingdom, no notices or requests have been served or received
under Section 25 or Section 26 of the Xxxxxxxx Xxxxxx Xxx 0000.
2.11 Title to and Condition of Assets Excluding the Real
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Property. The Companies own and possess all right, title and interest
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in and to all the assets excluding the Real Property used in the
respective businesses of the Companies, in each case free and clear of
all liens, charges, security interests, adverse claims, encumbrances,
encroachments, reservations, limitations, servitudes and other title
defects or restrictions of any nature except for (a) encumbrances set
forth in the Disclosure Letter, ((b) encumbrances reflected in the
Financial Statements or created in the ordinary course of business
subsequent to September 30, 1999 and which are not material,
(c) encumbrances of record or otherwise that do not materially interfere
with the present use by the Companies of the property subject thereto or
affected thereby or which otherwise have not had a material adverse
effect on the properties, operations, liabilities, earnings or financial
condition of the Companies, taken as a whole, (d) encumbrances for
taxes, assessments or governmental charges, or landlords' mechanics',
workmen's, materialmen's or similar liens, in each case that are not
delinquent or which are being contested in good faith and (e)
encumbrances incurred in the ordinary course of business. All tangible
assets of any of the Companies are in such corporation's possession or
under its control, and, in the aggregate are in operating condition at
the date hereof, subject to normal wear and tear.
2.12 Taxes.
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(a) Tax Liabilities. The Financial Statements
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adequately and accurately reflect all liabilities of SP Systems, to the
extent required to be reflected in the Financial Statements in
accordance
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with UK GAAP, in respect of any Taxes (as defined below), including
(without limitation) any liability arising from failure to timely file
any Tax return or report or to accurately and adequately report
information therein.
(b) Taxes. As used herein, the term "Taxes" means all
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income, sales, payroll, employment, excise, value-added, property,
franchise, ad valorem or other taxes or charges, including without
limitation, those arising under the Capital Allowances Act of 1990, the
Capital Gains Tax Act of 1979, the Income and Corporation Taxes Act of
1988, the Taxation of Chargeable Gains Act of 1992 and the Value Added
Tax Act of 1994.
(c) Returns, Records And Payments.
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(i) The Companies have maintained complete records
of all taxation matters where required to do so including (but not
limited to) in relation to deductions made and/or accounted for in
relation to National Insurance Graduated Pension Contributions and sums
deducted under the PAYE system.
(ii) All returns, computations and payments which
should be, or should have been, made by the Companies for any taxation
purpose have been made and are on a proper basis and neither them is the
subject of any dispute with any taxation authority.
(iii) The Companies are not and has not at any time
been liable to pay any penalty or interest charged by virtue of the
provisions of the Taxes Management Act or other taxation legislations.
(iv) The Companies are not the subject of any
investigation or discovery by any taxation authority.
(v) All payments made by the Companies to employees,
ex-employees or to any other person which ought to have been made under
deduction of taxation have been so made.
(vi) All payments made by the Companies to employees,
ex-employees or to any other person which ought to have been made under
deduction of taxation have been so made.
(vii) The Companies have duly and properly accounted
to the relevant taxation authority for all taxation deducted where
required to do so.
(viii) The Companies have duly and properly accounted
to the Inland Revenue for all taxation chargeable on benefits provided
for employees and ex-employees of the Companies.
(ix) All National Insurance, and sums payable to the
Inland Revenue under the PAYE system up to the date of this agreement
have been duly and properly paid.
2.13 Indebtedness To Officers, Directors And Shareholders.
----------------------------------------------------
None of the Companies are indebted to any of its shareholders, officers
or directors (or to members of their immediate families or entities in
which such persons have a material financial interest) in any amount
whatsoever other than for salaries payable or for expenses incurred on
behalf of such corporation in the ordinary course of business.
2.14 Organizational Documents. True, accurate and complete
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copies of the articles of incorporation, memoranda of association,
Bylaws and other organizational documents, as applicable, of
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SP Systems and each Subsidiary, together with all amendments thereto in
effect on the date hereof, have been delivered to Purchaser or its
counsel.
2.15 Statutory Books. SP Systems has furnished or made
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available to Purchaser and its counsel the statutory books of SP Systems
and each Subsidiary and the same are accurate and reflect all
resolutions adopted and all actions taken, authorized or ratified by the
shareholders and directors of SP Systems and each Subsidiary.
2.16 Brokerage and Finder's Fees. None of the Companies or any
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affiliate, officer, director or agent of SP Systems or any Subsidiary
has incurred any liability to any broker, finder or agent for any
brokerage fees, finder's fees, or commissions with respect to the
transactions contemplated by this Agreement.
2.17 Accounts Receivable. SP Systems has previously delivered
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to Purchaser an aging schedule as of September 30, 1999, which is true,
correct and complete as at the close of business on the date to which it
is drawn, of the accounts receivables, both trade and non-trade, of SP
Systems and each Subsidiary as of that date. In the opinion of the
Chief Financial Officer of SP Systems the Financial Statements contain
appropriate provisions for bad and doubtful debts in accordance with UK
GAAP.
2.18 Employment Matters.
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(a) None of the Companies is a party to, participant in,
or bound by, any recognition agreement with a trade union or any
collective bargaining agreement.
(b) The employment by any of the Companies of any person
(whether or not there is a written employment agreement) may be
terminated for any reason whatsoever not inconsistent with current law,
without penalty or liability of any kind other than accrued vacation
pay.
(c) There are no active, pending or threatened
administrative or judicial proceedings under any applicable law relating
to employment or employment discrimination and no employee of any of the
Companies has had their contract terminated in the six months preceding
the date of this Agreement in circumstances likely to lead to a claim in
relation to any of the Companies will be likely to have to make a
payment to such employee and none of the Companies has knowledge of any
such pending or threatened claim.
(d) None of the Companies is involved in any dispute with
any of their officers or employees and, to the knowledge of the
Companies, there are no circumstances which may result in any dispute
involving any of the officers or employees of the Companies nor have
there been any such disputes during the last six months.
(e) Except as set forth in the Disclosure Letter there is
not in existence any contract of employment with any director or
employee of the Companies which cannot be terminated by giving three
months' notice or less without giving rise to a claim for damages or
compensation (other than a statutory redundancy payment or statutory
compensation for unfair dismissal).
2.19 No Defaults. None of the Companies is in material default
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(nor, to the knowledge of the Companies, is any such material default
alleged to exist) under terms of any material (i) written or oral
contract, (ii) agreement, (iii) lease, (iv) license, (v) mortgage,
(vi) deed of trust, (vii) note, (viii) guaranty, (ix) instrument or
(x) understanding ((i) through (x) being collectively referred to as the
"Contracts") to which it is a party or to which any of its assets,
business or operations is subject, nor, to the knowledge of
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the Companies, is any condition or event threatened, which, after notice
or the passage of time, or both, would constitute a material default
under any Contract. To the knowledge of the Companies, no such material
default, condition or event exists or is alleged to exist with respect
to the performance of any obligation of any other party to any of such
Contracts.
2.20 Material Contracts.
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(a) The Disclosure Letter contains a copy or a written
summary of each Contract (a true and correct copy has been provided to
Purchaser) to which SP Systems or any Subsidiary is a party or by which
any of their assets, businesses or operations is bound or affected
excluding any Contract that (i) may be cancelled on 30 days' notice or
less without incurring a liability or obligation on the part of SP
Systems or any Subsidiary for such cancellation and that is not material
to the business, operations or condition (financial or otherwise) of SP
Systems or Subsidiary, or (ii) involves or is reasonably expected to
involve the payment of consideration having an aggregate value of less
than (Pound Sterling)50,000.
(b) The Disclosure Letter contains a copy or a written
summary of each Contract (a true and correct copy has been provided to
Purchaser) with a customer of SP Systems or Subsidiary that contains
provisions (i) providing for payment terms to such Corporation or
Subsidiary of 45 days or greater, (ii) permitting the customer to retain
any portion of the purchase price for the products or services to be
provided thereby as security for warranty claims or for any other
purpose, (iii) providing for liquidated or stipulated damages, or
(iv) providing bonding or similar requirements.
2.21 Purchase Orders. The Disclosure Letter contains a true
---------------
and complete list as of September 30, 1999 of all purchase orders under
which SP Systems or any Subsidiary is or will become obligated to pay
any particular vendor an aggregate sum in excess of (Pound Sterling)50,000.
2.22 Litigation. The Disclosure Letter contains details of all
----------
administrative or judicial proceedings to which any of the Companies was
a party at any time within the past two years, is a party or, to the
knowledge of the Companies, to which any of the Companies is threatened
to be made a party, which relate, directly or indirectly, to the
Companies' assets, including, without limitation, proceedings that could
affect title to or interests in the assets. There is no action, suit,
claim, demand, arbitration or other proceeding or investigation,
administrative or judicial, in respect of which written notice has been
received by the Companies or, to the knowledge of the Companies,
threatened against or affecting the Companies or any of their assets,
including, without limitation, any relating to products liability or
warranty, which, if adversely determined or resolved, would have a
material adverse effect on the business or assets of the Companies, or
any provisions of, or the validity of, or rights under, any leases or
other operating agreements, licenses, permits or grants of authority of
the Companies. None of the Companies have received notice that any is
the subject of any governmental investigation and none of the Companies
has received notice that it is subject to, nor is it or has it been in
default with respect to, any order, writ, injunction or decree of any
court, or of any federal, national, state, local or other governmental
department, commission, board, bureau, agency or instrumentality of the
United States, England or otherwise excluding matters of general
application not specific only to the Companies.
2.23 Insurance. The Disclosure Letter contains details of all
---------
the policies of insurance covering the business, properties and assets
of the Companies presently in force (including as to each (i) risk
insured against, (ii) name of carrier, (iii) policy number, (iv) amount
of coverage, (v) amount of premium, (vi) expiration date and (vii) the
property, if any, insured), indicating as to each whether it insures on
an "occurrence" or a "claims made" basis. All of the insurance policies
listed in the Disclosure Letter are in full force and effect and all
premiums, retention amounts and other related expenses due have been
paid, and none of the Companies has received any written notice of
cancellations with respect to any of the
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policies. None of the Companies has been refused any insurance by any
insurance carrier to which it has applied for insurance during the last
two years. To the knowledge of the Companies, there are no
circumstances existing that would enable any insurer to avoid liability
under policies of insurance of the Companies.
2.24 Transactions With Officers, Etc.
-------------------------------
(a) Excluding arrangements contemplated by this Agreement
and the Ancillary Agreements none of the Companies has any interest in
any entity that has any current contractual relationship, oral or
written, or other business relationship with any of the Companies.
(b) The Disclosure Letter contains a true and correct list
of all Contracts to which any of the Companies is a party and to which
any of the officers, directors or shareholders of any of the Companies,
or members of their immediate families or other corporations,
partnerships or other entities in which any of them has a material
interest, is also a party. The Disclosure Letter includes a list of
indebtedness of any such person or entity to any of the Companies.
(c) None of the Companies nor any officer, director or
shareholder of the Companies, nor members of their immediate families or
other corporations, partnerships or other entities in which any of them
has a material interest, has any direct or indirect interest in any
competitor, supplier or customer of the Companies or in any person, firm
or entity from whom or to whom any of the Companies leases any property,
or in any other person, firm or entity with whom any of the Companies
transacts business of any nature.
2.25 Employees. The Disclosure Letter contains a true and
---------
correct list of all employees of SP Systems and each Subsidiary with an
annual salary in excess of (Pound Sterling)50,000, their age, the nature of
their duties and the date and average amount of their last increase in
compensation. Full details of the terms and conditions of employment
including all entitlements to benefits and bonuses of all the officers
or employees of SP Systems and Subsidiary are set out in the Disclosure
Letter. Copies of the contracts of employment of the officers and
directors of SP Systems and each Subsidiary are included in the
Disclosure Letter. The Disclosure Letter also sets forth the names of
any persons with an annual salary in excess of (Pound Sterling)50,000 who
have or may have a right to return to employment with SP Systems or Subsidiary,
and the names of persons who have been offered employment with SP Systems or
Subsidiary.
2.26 Intellectual Property.
---------------------
(a) The Disclosure Letter lists all material trademark and
service xxxx registrations, copyright registrations, trade names and
patents and applications for any of the foregoing (i) owned by any
member of the Companies or (ii) licensed by any member of the Companies
(except for "off-the-shelf" software and similar property which is
readily available), that, in each case, are necessary to the business or
operations of such member of the Companies as currently conducted. Each
of the Companies owns or has the right to use all Intellectual Property
that is necessary to the business or operations of such member free and
clear of all liens, except permitted liens. No member of the Companies
has infringed upon or misappropriated any intellectual property rights
of third parties, and none of the Sellers or any of the Companies has
received any charge, complaint, claim, demand or notice alleging any
such interference, infringement on or conflict with any Intellectual
Property owned by any of the Companies by any other Person. The Sellers
have furnished or made available to Purchaser complete and correct
copies of all material licenses (other than licenses of standard, "off-
the-shelf" software) under which any of the Companies has Intellectual
Property licensed to it. Each license of Intellectual Property to which
any of the Companies is a party is a valid and binding agreement of such
party thereto and, to the
-11-
knowledge of the Companies, as to each other party thereto, and is in
full force and effect and the terms and enforceability thereof will be
unaffected by the consummation of the transactions contemplated hereby.
None of the Companies nor, to the knowledge of the Companies, any other
party thereto, is in breach or default under any such license (and, to
the knowledge of the Companies, no event has occurred which with notice
or lapse of time would constitute a breach or default) except for such
defaults as, individually and in the aggregate, would not reasonably be
expected to adversely affect the ability of the Companies to conduct the
business of the Companies after the Closing in all material respects as
currently conducted. None of the Companies has granted any royalty-
bearing or exclusive licenses of any Intellectual Property to any other
person. Each of the Companies have taken such actions as are
commercially reasonable to register and maintain (including ensuring
that all payments due in respect thereof are up to date) the
registration of the Intellectual Property with the United States Patent
and Trademark Office, United States Copyright Office or such other
filing offices, domestic or foreign, and each of the Companies has taken
such other actions as are commercially reasonable to ensure full
protection of such Intellectual Property, in each case to the extent
material to the Companies.
For the purposes of this Agreement, "Intellectual
Property" means in each case to the extent necessary to the conduct of
the business or operations of the Companies, (i) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof,
(ii) all trademarks, service marks, trade dress, logos, trade names,
corporate names and Internet domain names, together with all
translations, adaptations, derivations and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith, (iii) all
copyrightable works, all copyrights, and all applications, registrations
and renewals in connection therewith, (iv) all mask works and all
applications, registrations and renewals in connection therewith,
(v) all trade secrets and confidential business information (including
ideas, research and development, know-how, formulas, compositions,
manufacturing and production processes and techniques, technical data,
designs, drawings, specifications, customer and supplier lists, pricing
and cost information, and business and market plans and proposals),
(vi) all computer software (including data and related documentation),
(vii) all other similar proprietary rights, and (viii) all copies and
tangible embodiments thereof (in whatever form or medium).
(b) The Companies have conducted an inventory and
assessment of the hardware, software and embedded microcontrollers in
noncomputer equipment (collectively, the "Computer Systems") used by the
Companies in the conduct of their business in order to determine which
parts of the Computer Systems are not Y2K Compliant (as defined below)
and to estimate the cost of rendering such Computer Systems Y2K
Compliant prior to January 1, 2000 or such earlier date on which the
Computer Systems may shut down or may produce incorrect calculations or
otherwise malfunction without becoming totally inoperable. The
Disclosure Letter described all actions taken by the Companies to render
its Computer Systems Y2K Compliant (the "Company Y2K Plan"). The
Companies have taken reasonable steps to determine whether the failure
of any suppliers or customers with which any of the Companies has a
material relationship to be Y2K Compliant would adversely affect the
ability of the Companies to conduct their business as currently
conducted and, assuming the consummation of the Company Y2K Plan, the
occurrence of calendar year 2000 will not cause or will not reasonably
be expected to adversely affect the ability of the Companies to conduct
their business as currently conducted. For purposes of this Agreement:
"Y2K Compliant" means (i) with respect to Date Data (as defined below),
the such data is in proper format and accurate for all dates in the
twentieth and twenty-first centuries, and (ii) with respect to Date-
Sensitive Systems (as defined below), that each such system accurately
processes all Date Data, including for the twentieth and twenty-first
centuries, without loss or any functionality or performance, including,
without limitation, calculating, comparing, sequencing,
-12-
storing and displaying such Date Data (including all leap year
considerations), when used as a stand-alone system or in combination
with other software or hardware; "Date Data" means any data of any kind
that includes date information or which is otherwise derived from,
dependent on or related to date information; and "Date-Sensitive System"
means any software, microcode or hardware system or component, including
any electronic or electronically controlled system or component that
processes any Date Data and that is installed, in development or on
order, for internal or external use, or the provision or operation of
which provides a benefit to customers, vendors, suppliers or any other
party.
2.27 [RESERVED].
----------
2.28 Environmental Matters.
---------------------
(a) Definitions. For purposes of this Section 2.28:
-----------
(i) "Contaminant" means hazardous substances as that
term is defined in the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., as
amended ("CERCLA"), and any other individual or class of pollutants,
contaminants, toxins, chemicals, substances, wastes or materials in
their solid, liquid or gaseous phase, defined, listed, designated,
regulated, classified or identified under any Environmental Law and
includes asbestos and asbestos-containing materials, petroleum or
petroleum-based products or derivatives thereof, radioactive materials,
energy, flammable explosives and polychlorinated biphenyls all of which
are present in such quantities or forms as are likely to result in
liability under Environmental Laws.
(ii) "Environmental Laws" means all applicable
federal, national, state and local laws, rules, regulations legally
enforceable codes and ordinances, and binding determinations, orders,
permits, licenses, injunctions, writs, decrees or rulings of any
governmental or judicial authority, relating to or governing air
quality, soil quality, water quality, wetlands, solid waste, hazardous
waste, hazardous or toxic substances, pollution or the protection of
public health, human health or the environment.
(iii) "Release" means any release, spill, emission,
leaking, pumping, pouring, emptying, disposing, injection, deposit,
discharge, dispersal, leaching, or migration into any media, whether
soil, surface water, ground water, air or any combination of the
foregoing, or the movement of any Contaminant through any media, and
includes the abandonment or discarding of barrels, containers and other
receptacles containing any Contaminant.
(iv) "Remedial Action" means any action to: (i)
investigate, study, clean up, remove, treat or dispose of any
Contaminant, including, but not limited to, risk assessments and pilot
treatment or feasibility studies; (ii) prevent the Release or threatened
Release, or minimize the further Release of any Contaminant; or (iii)
bring the existing operations of the Companies in all material
compliance with Environmental Laws.
(b) Except as qualified in the Disclosure Letter:
(i) the Companies and the Real Property are, in
material compliance with all Environmental Laws;
-13-
(ii) none of the Companies has caused any Contaminant
to be Released in violation of Environmental Law through the
corporation's operations on or off-site of any of the Real Property or
on any real property owned, leased or otherwise used at any time by such
corporation ("Former Property");
(iii) none of the Companies has received any written
notice, order, decree or agreement, regarding any Remedial Action or the
Release, threatened Release or presence of any Contaminants, and no
payments have been made in relation to Remedial Action which include
payments to a third party, and to the knowledge of the Companies no
charge is likely to be placed upon the Real Property in connection with
such matters; and
(iv) none of the Companies nor any of the Real
Property or any Former Property are subject to any liability under
Environmental Law in connection with any Remedial Action or the Release,
threatened Release, or presence of any Contaminants.
(c) Except as qualified in Seller's Disclosure Letter:
(i) Each of the Companies has obtained all
environmental, health and safety licenses, permits, authorizations,
consents, approvals, exemptions, registrations and certificates required
under all applicable Environmental Laws ("Environmental Licenses") and
made all notifications and filings necessary for the current use of the
Real Property and for full operation of the business of such Companies;
(ii) All such Environmental Licenses are in full
force and effect, in good standing and each Companies have made all
material notifications, filings and applications for renewal of such
Environmental Licenses on a timely basis, where necessary;
(iii) Each of the Companies and the Real Property are,
in compliance in all material respects with the terms and conditions of
such Environmental Licenses; and
(iv) the Companies do not have knowledge of any fact
or facts which would render invalid or require a material alteration in
any Environmental License currently in effect with respect to any of the
Companies, or the Real Property nor do the Companies have any knowledge
of any capital costs which would need to be incurred to satisfy such a
material alteration.
(d) To the knowledge of the Companies, except as qualified
in the Disclosure Letter there is not now nor has there ever been on, in
or under the Real Property or any Former Property:
(i) any generation, processing, treatment, storage,
recycling, disposal or arrangement therefor, of any "hazardous waste" as
that term is defined under applicable Environmental Laws;
(ii) any aboveground or underground storage tanks or
surface impoundments;
(iii) any asbestos or asbestos-containing material;
(iv) any PCBs in any hydraulic oils, transformers,
capacitors or other electrical equipment; or
-14-
(v) any radioactive substances, in violation of
Environmental Law.
(e) The Disclosure Letter lists all written communications
between the Companies and any governmental authority or third party
arising within the last year under or relative to Environmental Laws,
and which remain outstanding including any orders, notices of violation,
warning letters or requests for information with respect to any of the
Companies, the Real Property or any Former Property.
(f) Except as qualified in the Disclosure Letter, to the
knowledge of the Companies, there are no past or present events,
conditions, circumstances, activities, practices, incidents, or actions
which have given to the Companies' knowledge or may to the Companies'
knowledge give rise to any liability or otherwise form the basis of any
claim, suit, action, demand, proceeding, penalty, fine, hearing, notice
of violation, directive or requirement to undertake any Remedial Action
under any Environmental Law, common law or otherwise, relating to the
Companies, or the Real Property or any Former Property.
(g) Except as qualified in the Disclosure Letter all
Contaminants removed from the Real Property or any Former Property have
been handled, transported, transferred, stored, treated, recycled,
received and disposed of in material compliance with all Environmental
Laws.
(h) The Disclosure Letter identifies all current waste
disposal, treatment and storage facilities and transporters and persons
or entities which currently arrange for the disposal of Contaminants
which are presently used by or arranged for use by any of the Companies.
(i) Except as qualified in the Disclosure Letter no
application, report, Environmental License, notification or other
document filed with or furnished to any governmental authority regarding
any of the Companies, the Real Property or any Former Property contains
any material omissions, inaccuracies or false or misleading statements.
2.29 Bank Accounts. The Disclosure Letter contains a list of
-------------
the name of each bank, savings and loan, or other financial institution
in which any of the Companies has an account or safe deposit box, the
names of all persons authorized to draw on each account or to have
access to each box, the number of signatures required to be given for a
withdrawal and a description of the type of account.
2.30 Compliance With Laws. To the knowledge of the Companies,
--------------------
each of the Companies has complied in all material respects with all
laws, regulations, rules and orders of any governmental department or
agency, including all laws and regulations of England, or any other
federal, national, state or local, or other requirements of law
affecting its business and operations, and none of the Companies has
received notice that it is in default under or in violation of any
provision of any federal, national, state or local law, regulation, rule
or order, law or regulation of England, or any appropriate foreign law
or regulation.
2.31 Powers Of Attorney. None of the Companies has given any
------------------
power of attorney (irrevocable or otherwise) that is presently in effect
to any person or entity, including Sellers, for any purpose.
2.32 Licenses And Rights. Each of the Companies possesses all
-------------------
material franchises, licenses, easements, permits and other
authorizations from governmental or regulatory authorities that are
necessary to permit it to engage in its business as presently conducted
in and at all locations and places where it is presently operating.
-15-
2.33 Products.
--------
(a) The products sold by the Companies conform to and meet
or exceed the standards required by all applicable laws, ordinances and
regulations now in effect in relation to the person to which such
products are supplied and the jurisdiction in which they are supplied.
(b) The Disclosure Letter contains details of each of the
Companies' warranties and customer service policies and a description of
any material recurring warranty problems. None of the Companies has
outstanding contracts or proposals that depart in any material respect
from the warranty and customer service policies and described in the
Disclosure Letter. No claims of customers or others based on an alleged
or admitted defect of material, workmanship or design or otherwise in or
in respect of any of such corporation's products are presently pending
or, to the knowledge of the Companies, threatened other than product
warranty claims in the aggregate not in excess of US$25,000.
2.34 Casualty Occurrences. The Disclosure Letter contains true
--------------------
and correct details of occurrences during the last five years which have
resulted or which will be likely to result in damages being incurred in
excess of US$50,000 of which any of the Companies has knowledge of
damages to persons or property involving any defects or alleged defects
in any if the Companies products or their respective designs.
2.35 Inventory. The inventory of the Companies has been
---------
recorded in the Financial Statements in accordance with UK GAAP and US
GAAP, as applicable. The value at which the inventories are carried on
such Companies' books reflects the lower of cost or estimated net
realizable market value.
2.36 Capital Expenditure Plans. The Disclosure Letter contains
-------------------------
a description of each capital expenditure program of the Companies
involving the expenditure of at least US$100,000 as to which the
expenditure of funds is incomplete, setting forth (i) the budgeted
expenditures and (ii) the actual amounts expended, if any.
2.37 Generally. No representation or warranty by the Sellers
---------
in the Agreement or in any exhibit, schedule or closing certificate
furnished or to be furnished to Purchaser pursuant to this Agreement or
in connection with the transactions contemplated by this Agreement
contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact, necessary to make the
statements herein or therein, in light of the circumstances in which
they were made, not misleading.
2.38 Knowledge. As used in this Agreement, the "Knowledge of
---------
Companies" shall be deemed to be limited to the actual knowledge after
reasonable inquiry of Xxxx Xxxxxxx, Xxxx Xxxxx, Xxxxxx Xxx or Xxxxx Xxxx
without giving effect to imputed knowledge.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Purchaser represents and warrants to Sellers as of the date hereof
and as of the Closing Date, as follows:
3.1 Organization. Purchaser and each of its subsidiaries is a
------------
corporation duly organized, validly existing and in good standing under
the laws of the respective jurisdiction of its organization and
-16-
has all requisite corporate or other power and authority and all
necessary governmental approvals to own, lease and operate its
properties and to carry on its business as now being conducted, except
where the failure to be so organized, existing and in good standing or
to have such power, authority and governmental approvals would not have
a material adverse effect on Purchaser and its subsidiaries, taken as a
whole. Purchaser and each of its subsidiaries is duly qualified or
licensed to do business and in good standing in each jurisdiction in
which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing
necessary, except where the failure to be so duly qualified or licensed
and in good standing would not have a material adverse effect on
Purchaser and its subsidiaries, taken as a whole.
3.2 Corporate Authorization; Validity Of Agreement; Necessary
----------------------------------------------------------
Action. Purchaser has full corporate power and authority to execute
------
and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by
Purchaser of this Agreement and the consummation by Purchaser of the
transactions contemplated hereby have been duly and validly authorized
by the Board of Directors of Purchaser and no other corporate action or
proceedings on the part of Purchaser are necessary to authorize the
execution and delivery by Purchaser of this Agreement and the
consummation by Purchaser of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Purchaser, and,
assuming this Agreement constitutes valid and binding obligations of
Sellers and SP Systems, constitutes valid and binding obligations of
Purchaser, enforceable against Purchaser in accordance with its terms.
3.3 Consents And Approvals; No Violations. Neither the
-------------------------------------
execution, delivery or performance of this Agreement by Purchaser nor
the consummation by Purchaser of the transactions contemplated hereby
nor compliance by Purchaser with any of the provisions hereof will
(a) conflict with or result in any breach of any provision of the
Articles of Incorporation (as amended) or By-laws (as amended) of
Purchaser, (b) require any filing with, or permit, authorization,
consent or approval of, any governmental entity (except where the
failure to obtain such permits, authorizations, consents or approvals or
to make such filings would not have a material adverse effect on
Purchaser and its subsidiaries, taken as a whole, or would not, or would
not be reasonably likely to, materially impair the ability of Purchaser
to consummate the transactions contemplated hereby), (c) result in a
violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of
termination, amendment, cancellation or acceleration) under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
guarantee, other evidence of indebtedness, lease, license, contract,
agreement or other instrument or obligation to which Purchaser or any of
its subsidiaries is a party or by which any of them or any of their
properties or assets may be bound, or (d) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Purchaser,
any of its subsidiaries or any of their properties or assets, except in
the case of clauses (c) and (d) for violations, breaches or defaults
which would not have a material adverse effect on Purchaser and its
subsidiaries, taken as a whole, or would not, or would not be reasonably
likely to, materially impair the ability of Purchaser or Purchaser to
consummate the transactions contemplated hereby.
3.4 SEC Filings Complete. As of the time such document was
--------------------
filed, Purchaser's most recent Annual Report on Form 10-K, all
intervening Form 8-Ks, if any, and Form 10-Qs and Purchaser's most
recent annual meeting proxy statement (the "Disclosure Documents"), all
as filed with the Securities and Exchange Commission ("SEC"): (i) did
not contain a misstatement of a material fact or an omission of a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and (ii) complied in all material
respects with the requirements of the Securities Exchange Act of 1934,
as amended, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such documents. Since the filing
of the most recent Form 10-K, no other document has been required to be
filed by Purchaser with the SEC which has not been filed.
-17-
3.5 Litigation. Except as disclosed in the Disclosure
----------
Documents, there is no litigation pending or, to the knowledge of
Purchaser, threatened against Purchaser or any of its subsidiaries which
would have a material adverse effect on its properties, assets or
business or which would prevent or hinder the consummation of the
transactions contemplated by this Agreement or its obligations
thereunder.
3.6 Shares Validly Issued. All of the Shares of the Common
---------------------
Stock to be issued to the Sellers pursuant to the terms of this
Agreement, when issued pursuant to the terms of this Agreement, shall be
duly and validly issued, fully paid and non-assessable, without
violation of any preemptive or dissenters' or similar rights and in full
compliance with all applicable securities laws.
3.7 Capitalization of Purchaser. The authorized, issued and
---------------------------
outstanding capital stock of Purchaser is set forth on Schedule 3.7.
------------
All of the issued and outstanding shares of capital stock of Purchaser
are duly authorized, validly issued, fully paid and non-assessable.
Except as disclosed on Schedule 3.7, there are no outstanding options,
------------
warrants or other rights of any kind to acquire any additional shares of
capital stock of Purchaser or securities convertible into or
exchangeable for, or which otherwise confer on the holder thereof any
right to acquire, any such additional shares, nor is Purchaser committed
to issue any such option, warrant, right or security.
3.8 Environmental Matters.
---------------------
(a) As of the date of this Agreement, Purchaser and its
subsidiaries have obtained or applied for all permits, licenses and
other such authorizations required to be obtained by them for the
operation of the business of Purchaser and its subsidiaries under
applicable Environmental Laws except for any permits, licenses or
authorizations which singly and in the aggregate the failure to obtain
have not had and are not likely to have a material adverse effect on the
business operations, financial condition or earnings of Purchaser;
(b) To the best knowledge of Purchaser, Purchaser and its
subsidiaries are, as of the date of this Agreement, (A) in compliance
with all material terms and conditions of the permits, licenses and
authorizations required by Environmental Laws, and (B) in compliance
with all other material limitations, restrictions, conditions,
standards, prohibitions, requirements and obligations, contained in the
Environmental Laws presently in effect or contained in any regulation,
code, plan, order, decree, judgment, injunction, notice or demand letter
issued, entered, promulgated or approved thereunder and issued by a
governmental entity except in the case of (A) and (B) for violations, if
any, which singly and in the aggregate have not had and are not likely
to have a material adverse effect on the business operations, financial
condition or earnings of Purchaser;
(c) As of the date of this Agreement, there are no civil,
criminal or administrative actions, suits, hearings, proceedings,
written notices of violation, claims or demands pending or, to the best
knowledge of Purchaser, threatened against Purchaser or any of its
subsidiaries under the Environmental Laws which if adversely determined
against the Purchaser or any subsidiary of Purchaser would be likely to
have a material adverse effect on the business operations, financial
condition or earnings of Purchaser;
(d) As of the date of this Agreement, to the best
knowledge of Purchaser (A) neither Purchaser nor any of its subsidiaries
has had any reportable discharge or release of hazardous substance and
(B) no spill, discharge or cleanup has occurred which could result in
the assertion or creation of a lien by any governmental body or agency
with respect thereto and (C) no such assertion of a lien has been made
by any governmental body or agency with respect thereto.
-18-
3.9 Generally. No representation or warranty by Purchaser in
---------
the Agreement or in any exhibit, schedule or closing certificate
furnished or to be furnished to the Sellers pursuant to this Agreement
or in connection with the transactions contemplated by this Agreement
contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact, necessarily to make the
statements herein or therein, in light of the circumstances in which
they were made, not misleading.
ARTICLE IV
TAX MATTERS
-----------
4.1 Cooperation In Tax Matters. Purchaser, Sellers and each
--------------------------
of the Companies shall cooperate fully as and to the extent reasonably
requested by any of the other above-named parties, in connection with
the filing of Tax Returns pursuant to this Article IV and any audit,
litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon request of any of the above-named
parties) the provision of copies of records and information which are
reasonably relevant to any such Tax Return, audit, litigation or other
proceeding and making employees available on a mutually convenient basis
to provide additional information and explanation of any material
provided hereunder. Sellers agree to, and Purchaser agrees to cause
each of the Companies to retain all books and records with respect to
Tax matters pertinent to each of the Companies relating to any taxable
period beginning before the Closing Date until the expiration of the
statute of limitations (including any extensions thereof) of the
respective taxable periods, and to abide by all record retention
agreements entered into with any taxing authority. So long as taxable
periods of, or related to any of the Companies ending on or before the
Closing Date remain open, Purchaser will, and will cause any of the
Companies, as the case may be, to promptly notify Sellers in writing of
any pending or threatened Tax audits or assessments for which Sellers
have or may have liability. Sellers will promptly notify Purchaser and
any affected Companies, as the case may be, in writing of any written or
other notification received by Seller from the Internal Revenue Service
or any other taxing authority of any proposed adjustment raised in
connection with a Tax audit, examination, proceeding or determination of
a taxable period of any of the Companies, as the case may be, ending on
or before the Closing Date.
4.2 Tax Periods Ending On Or Before The Closing Date. Sellers
------------------------------------------------
and Purchaser shall jointly prepare or cause to be prepared, and file or
cause to be filed, and negotiate and agreed or caused to be negotiated
and agree all Tax Returns for each of the Companies for all periods
ending on or prior to the Closing Date which Tax Returns shall be
prepared in accordance with the past practice and customs of the
Companies unless such past practice and customers are clearly erroneous.
Purchaser shall cause each of the Companies to sign any claim or
election relating to any such Tax Return as jointly agreed by Purchaser
and Seller. The Seller and Purchaser shall use all reasonable endeavors
to agree on the form of the Tax Returns to be submitted to the relevant
tax authority and both parties agree that such agreement or consent
shall not be unreasonably withheld or delayed. If the Seller and
Purchaser are unable to agree to the form of a Tax Return within 30 days
of it being prepared, the dispute in question shall be referred to an
independent firm of Accountants, jointly selected, by the parties or in
the absence of such agreement by the President of the Institute of
Chartered Accountants of England and Wales in the case of the Companies
which are resident in the United Kingdom for tax purposes. Such person
shall act as an expert and save in the case of manifest error his
determination shall be binding on both parties. In the event that any
dispute arises between Seller and Purchaser regarding the negotiation
and/or agreement of any Tax Return, such dispute shall be settled in the
same manner as that set out in this clause. Seller shall pay to
Purchaser all Taxes shown to be due on such Tax Returns within 15 days
after receipt of a xxxx from Purchaser for such Taxes to the extent such
Taxes are not reflected in the reserve for Tax Liability shown on the
Balance Sheet of the Companies at and for the fiscal year ended
December 31, 1998 as adjusted for
-19-
operations and transactions in the ordinary course of business through
the Closing Date in accordance with the past practice and custom of the
Companies.
ARTICLE V
COVENANTS OF THE SELLERS
------------------------
5.1 Conduct of Business. From the date hereof to the Closing
-------------------
Date, except for transactions which are contemplated by this Agreement
or expressly approved in writing by Purchaser, which Purchaser agrees
will not be unreasonably withheld, each of the Sellers shall use his or
her reasonable best efforts to ensure that the Companies refrain from:
(a) subjecting any of the Companies' assets and
properties, tangible or intangible, to any lien, encumbrance or other
claim of any kind, exclusive of existing liens disclosed to Purchaser as
to which there is no known default;
(b) except for sales of inventory in the ordinary course
of business, selling, assigning, transferring or otherwise disposing of
any of the Companies' assets or properties;
(c) other than in the ordinary course of business,
modifying, amending, altering or terminating (whether by written or oral
agreement, or any manner of action or inaction) any of the debt
instruments, Leases, Intellectual Property Licenses, Contracts or
Insurance Policies;
(d) declaring, setting aside or paying any dividends or
other distributions, directly or indirectly, to the Sellers with respect
to the Shares;
(e) increasing in any amount the benefits or compensation
of the Sellers or paying or agreeing to pay any bonus or commission to
the Sellers; and
(f) taking or permitting any other action that, if taken
or permitted immediately prior to the execution of this Agreement, would
constitute a breach of or an exception to the representations and
warranties in Section 2.8(d) hereof.
5.2 Affirmative Covenants Relating to the Companies and the
--------------------------------------------------------
Sellers. From the date hereof to the Closing Date, each of the Sellers
-------
shall use its, her or his respective reasonable best efforts to assure
that the Companies shall:
(a) maintain the Companies' property and casualty and
other insurance coverage in amounts and with coverage at least as great
as the amounts and coverage in effect on the date of this Agreement;
(b) maintain, consistent with past practice, the
Companies' properties in good repair, order and condition, reasonable
wear and tear excepted, and preserve the Companies' possession and
control of all of its assets and properties;
(c) keep in the Companies' employ the present officers and
key employees, including the professional staff, of the Companies
necessary to preserve the goodwill of those having business relations
with the Companies;
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(d) maintain the books, accounts and records of the
Companies in a manner consistent with past practice;
(e) allow, upon prior notice to the Companies, Purchaser
and Purchaser's employees, attorneys, auditors, accountants and other
authorized representatives, free and full access during the Companies'
normal business hours to the facilities, plants, properties, books,
records, documents and correspondence of the Companies, including, but
not limited to, historical financial information with respect to the
Companies' major contracts, in order that Purchaser may have full
opportunity to make such investigation as Purchaser may desire of the
business of the Companies; provided, however, that such access shall not
unreasonably interfere with the operations of the Companies, and any
contractual confidentiality requirements between Purchaser and the
Companies or the Sellers existing prior to this Agreement shall remain
in full force and effect, as supplemented hereby, except as otherwise
required by law (including any required disclosure of the execution of
this Agreement);
(f) (A) materially comply with all applicable law relating
to the Companies, or to the conduct of its respective business, and
(B) conduct such business in such a manner so that on the Closing Date
the representations and warranties contained in this Agreement shall be
materially true as though such representations and warranties were made
on and as of such date, except for changes permitted or contemplated by
the terms of this Agreement;
(g) provide Purchaser with prompt written notice of any
material adverse change in the assets, operations, liabilities,
earnings, business or condition (financial or otherwise) of the
Companies, taken as a whole, or any change in information set forth in
the Disclosure Letter;
(h) maintain in inventory quantities of goods, supplies
and materials sufficient to allow the Companies to continue to operate
after the Closing Date free of any shortage of such items; and
(i) operate its business only in the ordinary course with
the objective of preserving the Companies' business organizations
intact, including using its reasonable best efforts to retain the
services of the Companies' present officers and the goodwill of its
suppliers, customers and others having business relations with the
Companies.
5.3 Consents and Closing Conditions. Each of the Sellers
-------------------------------
shall use its, her or his respective reasonable best efforts (a) to
obtain such third party and governmental consents, authorizations,
approvals, releases and terminations as may be required hereunder, and
to take other actions as may be appropriate in order to fulfill the
closing conditions contained in this Agreement and (b) to cause the
representations and warranties of the Sellers to be true and correct on
and as of the Closing Date.
5.4 Cooperation; Communication. Each of the Companies and the
--------------------------
Sellers shall furnish to Purchaser such information regarding the
Companies and the Sellers as Purchaser may reasonably request. In
addition, each of the Companies and the Sellers shall promptly inform
Purchaser of any material communication from any governmental entity
regarding any of the transactions contemplated hereby. If any of the
Companies, the Sellers or any affiliate thereof receives a request for
additional information or documentary material from any governmental
entity with respect to the transactions contemplated hereby, then each
of the Companies and the Sellers shall endeavor in good faith to make,
or cause to be made, as soon as reasonably practicable and after
consultation with Purchaser, an appropriate response in compliance with
such request.
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5.5 Sellers' Non-Competition Agreements.
-----------------------------------
(a) Each of the Sellers except Hallkvist Trading ApS
undertakes (individually and not jointly) with the Purchaser (for itself
and as trustees for each of the Companies) that, except with the consent
in writing of the Purchaser he will not, for a period of two years from
the Closing Date:
(i) either on his own account or for or on behalf of
or through or in conjunction, association or by arrangement with any
person whether for his own benefit or that of others, directly or
indirectly, carry on or be engaged, concerned or interested in or in the
carrying on of any business which is a Restricted Business anywhere in
the world, but this sub clause will not prevent him from holding for
investment up to 3% of any class of securities of a company which are
dealt with on a recognized stock exchange;
(ii) either on his own account or for or on behalf of
or through or in conjunction, association or by arrangement with any
person whether for his own benefit or that of others, directly or
indirectly in relation to the Restricted Business solicit, canvass or
approach any person, who, at any time during the 12 months prior to the
Relevant Date:
(x) was provided with goods or services by any
of the Companies from time to time;
(y) had negotiations with any of the Companies
from time to time relating to the provision of such goods or
services; or
(z) otherwise dealt with any of the Companies
from time to time;
for the purpose of offering to that person goods or services similar to
those provided by any of the Companies or otherwise to entice away the
custom or business of that person from any of the Companies;
(iii) either on his own account or for or on behalf of
or through or in conjunction, association or by arrangement with any
person, whether for his own benefit or that of others, directly or
indirectly supply to any person specified in the preceding sub-clause
goods or services similar to those with which such person was so
provided by the Restricted Business at any time during the 12 months
prior to the Closing Date or enter into any transaction with such person
in relation to such goods or services so provided by the Restricted
Business;
(iv) either on his own account or for or on behalf of
or through or in conjunction, association or by arrangement with any
person, whether for his own benefit or that of others, directly or
indirectly, solicit or entice away or endeavor to entice away from any
of the Companies or offer to employ or offer to conclude any contract
for services with any director, manager, consultant or employee who
worked for any of the Companies at any time during the 12 months prior
to the Closing Date (whether or not such persons would commit any breach
of contract by reason of his leaving service);
(v) either on his own account or for or on behalf of
or through or in conjunction, association or by arrangement with any
person whether for his own benefit of that of others, directly or
indirectly, employ or conclude any contract for services with any
director, manager, consultant or employee who worked for any of the
Companies at any time during the 12 months preceding the Closing Date.
-22-
(b) Each of the Sellers except Hallkvist Trading ApS
undertakes with the Purchaser (for itself and as trustee for each of the
Companies) that, except with the prior consent in writing of the
Purchaser:
(i) he will not use to the detriment of any of the
Companies or of any customer of any of the Companies or disclose divulge
or communicate directly or indirectly to any person any secret or
confidential knowledge or information relating to the business,
transactions, products or affairs of any of the Companies or of any
customer of any of the Companies (including but not limited to
operations, processes, plans, inventions, product information, know-how,
design rights, trade secrets, software, market opportunities, customers
and business affairs) or supply or disclose to any person the names or
addresses of any customers of any of the Companies or details of any
contracts or negotiations to which any of the Companies is a party or of
any tenders offers or proposals submitted or to be submitted by any of
the Companies in connection with its business except as authorized in
writing by the board of directors of SP Systems or a court of competent
jurisdiction;
(ii) he will not at any time hereafter in relation to
any trade, business, firm, company or organization use a name (whether
registered or not) or any trade xxxx or design the same as or
confusingly similar to any name or trade xxxx of any of the Companies
and shall use his best endeavors to produce that no such name or trade
xxxx shall be used by any other person, firm, company or organization
with which he is concerned.
Notwithstanding the foregoing the parties understand and agree that the
restrictions set forth in this Section 5.5(b) shall not apply with
respect to information which is public or, other than as a result of an
action of a Seller, becomes public.
(c) Each of the covenants contained in Sections 5.5(a) and
5.5(c) shall be deemed to be separate covenants and independent of each
other.
(d) While the parties hereto consider that the covenants
contained in Sections 5.5(a) and 5.5(c) are reasonable as between
themselves their respective interests and the public interests in all
the circumstances in which this Agreement will operate in order to
protect the interests of the Purchaser, it is agreed by and between the
parties that if any such restrictions shall be adjudged by a court of
competent jurisdiction to be void or unenforceable but would be valid
and enforceable if deleted in part or reduced in scope, extent, period
or application, such restrictions shall apply with such deletion or
modification as may be necessary to make it valid and enforceable.
(e) For the purposes of this Section 5.5 the term
"Restricted Business" means the business of the manufacture, production,
sale, marketing, and distribution of epoxy and vinyl esters and
associated materials for use in the wind energy, automotive and marine
industries whether as raw materials or as finished products and the
activities associated therewith.
5.6 Confidentiality of Information. Prior to the Closing Date
------------------------------
(and if the Closing does not occur, indefinitely), the Sellers, the
Companies and their respective employees, agents, auditors, attorneys
and other authorized representatives shall not, without Purchaser's
prior written consent, communicate or divulge to any person or entity or
use for their benefit any information, other than information which is
otherwise available to the Sellers or the Companies or which becomes
public other than as a result of their action, concerning Purchaser's
financial condition or business, or concerning any marketing
information, equipment, methods, research, clients, contracts,
suppliers, customers, contracts or other data of or related to Purchaser
or other confidential matters possessed, owned or used by Purchaser that
may be communicated to, acquired by or learned by them. All
correspondence, records, files, tax returns,
-23-
financial statements and other data relating to Purchaser which shall
come into the possession of Sellers or their respective employees,
agents, auditors, attorneys and other authorized representatives shall
remain and be deemed to be the sole property of Purchaser. If the
transactions contemplated hereby are not consummated for any reason,
then Sellers or their respective employees, agents, auditors, attorneys
and other authorized representatives shall return any and all of the
foregoing material to Purchaser, together with any and all copies
thereof made. The confidentiality provisions of this Agreement shall
supplement, and not supersede, any contractual confidentiality
requirements between Purchaser, the Companies or any of the Sellers and
such existing contractual confidentiality requirements shall remain in
full force and effect, as supplemented hereby, except as otherwise
required by law (including any required disclosure of the execution of
this Agreement).
ARTICLE VI
COVENANTS OF PURCHASER
----------------------
6.1 Confidentiality of Information. Prior to the Closing Date
------------------------------
(and if the Closing does not occur, indefinitely), Purchaser and its
employees, agents, auditors, attorneys and other authorized
representatives shall not, without the Sellers' prior written consent,
communicate or divulge to any person or entity or use for their benefit
any information, other than information which is otherwise available to
Purchaser or which becomes public other than as a result of its action,
concerning the Companies' financial conditions or business, or
concerning any marketing information, equipment, methods, research,
clients, contracts, suppliers, customers, contracts or other data of or
related to the Companies or other confidential matters possessed, owned
or used by the Companies that may be communicated to, acquired by or
learned by them. All correspondence, records, files, tax returns,
financial statements and other data relating to the Companies which
shall come into the possession of Purchaser or its employees, agents,
auditors, attorneys and other authorized representatives shall remain
and be deemed to be the sole property of the Companies, until
consummation of the transactions contemplated hereby. If the
transactions contemplated hereby are not consummated for any reason,
then Purchaser or its employees, agents, auditors, attorneys and other
authorized representatives shall return any and all of the foregoing
material to the Companies, together with any and all copies thereof
made. The confidentiality provisions of this Agreement shall
supplement, and not supersede, any contractual confidentiality
requirements between Purchaser, the Companies or any of the Sellers and
such existing contractual confidentiality requirements shall remain in
full force and effect, as supplemented hereby, except as otherwise
required by law (including any required disclosure of the execution of
this Agreement).
6.2 Receipt of Consents and Satisfaction of Closing
------------------------------------------------
Conditions. Purchaser shall use its best efforts (a) to obtain such
----------
consents from third parties and to take other actions as may be required
in order to fulfill the closing condition contained in this Agreement
hereof and (b) to cause the representations and warranties of Purchaser
in Article III to be true and correct on and as of the Closing Date.
6.3 Communication. Purchaser shall promptly inform the
-------------
Companies and the Representative of any material communication from any
governmental entity regarding any of the transactions contemplated
hereby. If Purchaser or any of its affiliates receives a request for
additional information or documentary material from any governmental
entity with respect to the transactions contemplated hereby, then
Purchaser shall endeavor in good faith to make, or cause to be made, as
soon as reasonably practicable after consultation with the
Representative, an appropriate response in compliance with such request.
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ARTICLE VII
PURCHASER'S CONDITIONS TO CLOSING
---------------------------------
The obligations of Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment to
Purchaser's reasonable satisfaction of each of the following conditions
on or prior to the Closing Date:
7.1 Continued Truth of Warranties. The representations and
-----------------------------
warranties of each of SP Systems and the Sellers contained herein shall
be true in all material respects on and as of the Closing Date with the
same force and effect as though made as of such date, except for any
variations permitted by this Agreement.
7.2 Performance of Covenants. Each of the Sellers shall have
------------------------
performed in all material respects all covenants and obligations and
complied in all material respects with all conditions required by this
Agreement to be performed or complied with by it on or prior to the
Closing Date.
7.3 No Material Adverse Change. There shall have been no
--------------------------
material adverse change to the properties, operations, liabilities,
earnings, business condition (financial or otherwise) of the Companies
taken as a whole since September 30, 1999 other than changes as the
result of general economic or industry conditions.
7.4 Permits and Consents. The parties hereto shall have
--------------------
secured the orders, consents, approvals and clearances set forth in
Section 7.4 of the Disclosure Letter, in form and substance satisfactory
to Purchaser, by and from all third parties reasonably requested by
Purchaser.
7.5 Closing Documents. Each of the Companies and the Sellers
-----------------
shall have delivered all documents required to be delivered by it, her
or him at the Closing as set forth below, in each case in form and
substance satisfactory to Purchaser:
(a) A certificate of incumbency and copies of the
resolutions adopted by the Board of Directors and shareholders of SP
Systems, authorizing the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby, duly certified
as of the Closing Date by the Secretary or an Assistant Secretary of SP
Systems;
(b) To the extent documented in writing, copies of all
orders, consents, approvals and clearances identified pursuant to
Section 7.4;
(c) An opinion of Winthrop, Stimson, Xxxxxx & Xxxxxxx,
special New York counsel for the Sellers and the Companies, as to the
matters set forth in Exhibit B-1, which opinion shall contain a
-----------
statement of reliance in favor of Purchaser's lenders, and an opinion of
Bond Xxxxxx, counsel for the Sellers and the Companies, as to the
matters set forth in Exhibit B-2;
-----------
(d) The original corporate minute books, stock transfer
books and corporate seals of the Companies;
(e) Stock certificate(s) representing the Shares with duly
executed and valid stock powers or such other evidence of ownership or
instruments of transfer as are customary and sufficient to convey
ownership of the Shares, attached in form for transfer to Purchaser and
otherwise acceptable in form and substance to Purchaser;
-25-
(f) Such other documents and instruments as Purchaser may
reasonably request in connection with the consummation of the
transactions contemplated by this Agreement.
ARTICLE VIII
THE SELLERS' CONDITIONS TO CLOSING
----------------------------------
The obligation of the Sellers to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment to
the Sellers' reasonable satisfaction of the following conditions on or
prior to the Closing Date:
8.1 Continued Truth of Warranties. The representations and
-----------------------------
warranties of Purchaser herein contained shall be true in all material
respects on and as of the Closing Date with the same force and effect as
though made as of such date, except for any variations permitted by this
Agreement.
8.2 Performance of Covenants. Purchaser shall have performed
------------------------
in all material respects all covenants and obligations and complied in
all material respects with all conditions required by this Agreement to
be performed or complied with by it on or prior to the Closing Date.
8.3 Permits and Consents. The parties hereto shall have
--------------------
secured all appropriate orders, consents, approvals and clearances set
forth in Section 7.4 of the Disclosure Letter in form and substance
reasonably satisfactory to Purchaser.
8.4 No Material Adverse Change. There shall have been no
--------------------------
material adverse change to Purchaser since September 30, 1999 other than
changes as the result of general economic or industry conditions.
8.5 Closing Documents. Purchaser shall have delivered the
-----------------
Purchase Price and all documents required to be delivered by it at the
Closing as set forth below, in form and substance satisfactory to each
of the Companies and the Sellers:
(a) A certificate of incumbency and copies of the
resolutions adopted by the Board of Directors of Purchaser, authorizing
the execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby, duly certified as of the Closing Date
by the Secretary or an Assistant Secretary of Purchaser;
(b) To the extent documented in writing, copies of all
orders, consents, approvals and clearances to be obtained by Purchaser
identified in the Disclosure Letter pursuant to Section 7.4
(c) An opinion of Xxxxxxxx Xxxxxx LLP, counsel for
Purchaser, as to the matters set forth in Exhibit C;
---------
(d) A Registration Rights Agreement in favor of each of
the Sellers substantially in the form of Exhibit D attached hereto and
---------
made a part hereof (the "Registration Rights Agreement"); and
(e) A certified copy of the Purchaser's Stock Option Plan
in the form attached hereto as Exhibit E.
---------
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ARTICLE IX
INDEMNIFICATION
---------------
9.1 Indemnification of Purchaser. Subject to the provisions
----------------------------
of this Article IX, by execution of this Agreement, the Sellers hereby
acknowledge that Purchaser shall, subject to Section 9.1(c), be entitled
to full indemnification by the Sellers of the following:
(a) any and all loss, liability or damage (including
judgments and settlement payments) (a "Loss") incurred by the Companies
or Purchaser incident to, arising in connection with or resulting from
any misrepresentation, breach, nonperformance or inaccuracy of any
representation, warranty or covenant set forth in this Agreement by the
Sellers made or contained in this Agreement or in any exhibit, schedule,
certificate or other document executed and delivered to Purchaser by the
Sellers or by or on behalf of the Companies under or pursuant to this
Agreement or the transactions contemplated herein;
(b) any and all reasonable costs and expenses and all
other Losses incurred in claiming, contesting or remedying any breach,
misrepresentation, nonperformance or inaccuracy described in this
Section 9.1, or in enforcing their rights to indemnification hereunder,
including, by way of illustration and not limitation, all reasonable
legal and accounting fees, other reasonable professional expenses and
all filing fees and reasonable collection costs incident thereto and all
such reasonable fees, costs and expenses incurred in defending claims
which, if successfully prosecuted, would have resulted in a Loss; and
(c) (i) The remedy of Purchaser for any indemnification
of Losses under Section 9.1 arising out of a breach of any
representation, warranty or covenant other than any representation or
warranty set forth in Section 2.3(a), 2.5(a) or 2.5(b) may be satisfied
by proceeding against one or more of the Sellers individually for each
such Seller's pro rata portion of such Loss determined according to the
ownership percentage set forth opposite such Seller's name on
Exhibit A.
---------
(ii) The remedy of Purchaser for any indemnification
of Losses under Section 9.1 arising out of a breach of any
representation or warranty set forth in Section 2.3(a), 2.5(a) or 2.5(b)
may be satisfied by proceeding against any such Seller allegedly liable
for Losses arising out of such breach individually for the full amount
of Loss alleged to arise out of such breach.
9.2 Indemnification of the Sellers. By execution of this
------------------------------
Agreement, Purchaser hereby acknowledge that the Sellers shall be
entitled to full indemnification by Purchaser of the following:
(a) any and all Losses incurred by the Sellers incident
to, arising in connection with or resulting from any misrepresentation,
breach, nonperformance or inaccuracy of any representation, warranty or
covenant by Purchaser made or contained in this Agreement or in any
exhibit, schedule, certificate or other document executed and delivered
to the Sellers by Purchaser; and
(b) any and all Losses incurred in claiming, contesting or
remedying any breach, misrepresentation, nonperformance or inaccuracy
described above, or in enforcing its rights to indemnification
hereunder, including, by way of illustration and not limitation, all
reasonable legal and accounting fees, other reasonable professional
expenses and all filing fees and reasonable collection costs incident
thereto and all such reasonable fees, costs and expenses incurred in
defending claims which, if successfully prosecuted, would have resulted
in a Loss.
-27-
9.3 Notice of and Procedures for Collecting Indemnification.
-------------------------------------------------------
(a) Initial Claim Notice. When either Purchaser, on the
--------------------
one hand, or the Sellers, on the other hand, becomes aware of a
situation which may result in damages for which it or they would be
entitled to be indemnified hereunder, Purchaser, on the one hand, or the
Representative (on behalf of the Sellers), on the other (the
"Indemnitee") shall submit promptly a written notice (the "Initial Claim
Notice") to the other party from which indemnification may be
forthcoming pursuant to Section 9.1 or 9.2 (the "Indemnitor") to such
effect after it first becomes aware of such matter and shall furnish the
Indemnitor with such information as it has available demonstrating its
right or possible right to receive indemnity. If the potential claim is
predicated on, or later results in, the filing by a third party of any
action at law or in equity (a "Third Party Claim"), the Indemnitee shall
provide promptly to the Indemnitor a supplemental Initial Claim Notice
not later than 20 calendar days prior to the date on which a responsive
pleading must be filed, and shall also furnish a copy of such claim (if
made in writing) and of all documents received from the third party in
support of such claim. In addition, each Initial Claim Notice shall
name, when known, the person or persons making the assertions which are
the basis for such claim. Failure by the Indemnitee to deliver an
Initial Claim Notice or an update thereof in a timely manner shall not
relieve the Indemnitor of any of its obligations under this Agreement
except to the extent that actual and material prejudice to the
Indemnitor.
(b) Rights of Indemnitor. If, prior to the expiration
--------------------
of 30 calendar days from the mailing of an Initial Claim Notice (the
"Claim Answer Period"), the Indemnitor shall request in writing that
such claim not be paid, the same shall not be paid, and the Indemnitor
shall settle, compromise or litigate in good faith such claim, and
employ attorneys of its choice to do so; provided, however, that
Indemnitee shall not be required to refrain from paying any claim which
has matured by court judgment or decree, unless appeal is taken
therefrom and proper appeal bond posted by the Indemnitor, nor shall it
be required to refrain from paying any claim where such action would
result in the foreclosure of a lien upon any of its assets or a default
in a lease or other contract except a lease or other contract which is
the subject of the dispute. The Indemnitee shall cooperate fully to make
available to the Indemnitor and its attorneys, representatives and
agents, all pertinent information under its control. The Indemnitee
shall have the right to elect to settle or compromise all other
contested claims with respect to which the Indemnitor has not, within
the Claim Answer Period, acknowledged in writing (i) liability therefor,
and (ii) its election to assume full responsibility for the settlement,
compromise, litigation and payment of such claim.
(c) Final Claims Statement. At such time as damages for
----------------------
which the Indemnitor is liable hereunder are incurred by Indemnitee by
actual payment thereof or by entry of a final judgment, the Indemnitee
shall forward a Final Claims Statement to the Indemnitor setting forth
the amount of such damages in reasonable detail on an itemized basis.
The Indemnitee shall supplement the Final Claims Statement with such
supporting proof of loss (e.g. vouchers, canceled checks, accounting
summaries, judgments, settlement agreement, etc.) as the Indemnitor may
reasonably request in writing within 30 calendar days after receipt by
Indemnitor of a Final Claims Statement. All amounts reflected on Final
Claims Statements shall be paid promptly by the Indemnitor to the
Indemnitee and the Indemnitee shall have the right to immediate payment
of proceeds from insurance policies paid to Indemnitor in connection
with the claim for which the indemnification right arose.
9.4 Payment of Claims for Indemnification. Any amounts
-------------------------------------
payable to Purchaser pursuant to the provisions of Section 9.1 shall be
the responsibility of a Seller or the Sellers as provided in
Section 9.1. Any amounts shall be paid promptly upon notice of Purchaser
to the Representative of incurrence of such loss, liability, cost,
expense or damage and an explanation of the losses for Purchaser's
demand for indemnification under Article IX of this Agreement. Any
amounts payable to the Sellers
-28-
pursuant to the provisions of Section 9.2 of this Agreement shall be the
responsibility of Purchaser and shall be paid promptly upon notice of
the Representative to Purchaser of incurrence of such loss, liability,
cost, expense or damage and an explanation of the losses for the
Sellers' demand for indemnification under Section 9.2 of this Agreement.
9.5 Survival of Indemnification. Any other provision hereof
---------------------------
to the contrary notwithstanding, the parties agree that the
representations and warranties of the parties contained in this
Agreement and any certificates delivered pursuant to this Agreement
shall survive for a period of 15 months after the Closing Date for
purposes of this Article IX, regardless of any investigation made by
either party prior to the date hereof or prior to the Closing Date.
Purchaser, on the one hand, and the Sellers, on the other hand, shall
only be entitled to indemnification under this Article IX for breaches
of representations and warranties if a written notice describing the
claim for which indemnification is sought is signed by an executive
officer of Purchaser or by the Representative, as the case may be, and
is submitted to Purchaser or the Representative, not later than 15
months following the Closing Date in accordance with Section 9.3 hereof.
Any claim for indemnification pursuant to this Article IX not made prior
to the expiration of such 15-month period shall be extinguished, and all
representations and warranties with respect to which no claim is made
prior to the expiration of such 15-month period shall expire and be of
no further force and effect. Notwithstanding any provision of this
Section 9.5 to the contrary, the time limitations set forth in this
Section 9.5 shall not apply to the survival of any claim by either party
for actual fraud or intentional misrepresentation.
9.6 Certain Limitations on Indemnification. Sellers'
--------------------------------------
obligation to indemnify Purchaser for Losses under Section 9.1(a) shall
accrue only if the aggregate of all such Losses exceeds US$500,000, and
then Sellers shall be liable for all such Losses in excess of such
initial US$500,000. Each Seller's obligation to indemnify Purchaser for
Losses other than Losses indemnified under Section 9.1(b) shall be
limited to such Seller's pro rata portion of US$10,000,000. Purchaser's
obligation to indemnify Sellers for Losses shall be limited to
US$10,000,000.
9.7 Calculation of Losses. Any calculation of Loss for
---------------------
purposes of this Article IX shall be (i) net of any insurance recovery
made by the Indemnitee (whether paid directly to such Indemnitee or
assigned by the Indemnitor to such Indemnitee) and (ii) reduced to take
account of any net Tax benefit realized by the Indemnitee arising from
the deductibility of any such Loss or Tax. Any indemnification payment
hereunder shall initially be made without regard to this paragraph and
shall be reduced to reflect any such net Tax benefit only after the
Indemnitee has actually realized such benefit. For purposes of this
Agreement, an Indemnitee shall be deemed to have "actually realized" a
net Tax benefit to the extent that, and at such time as, the amount of
Taxes payable by such Indemnitee is reduced below the amount of Taxes
that such Indemnitee would have been required to pay but for
deductibility of such Losses. The amount of any reduction hereunder
shall be adjusted to reflect any final determination (which shall
include the execution of Form 870-AD or successor form) with respect to
the Indemnitee's liability for Taxes and, if necessary, either Sellers
or Purchaser, as the case may be, shall make payments to the other to
reflect such adjustment.
9.8 Exclusive Remedy. The sole and exclusive remedy of both
----------------
the Purchaser and the Sellers hereunder or otherwise in connection with
the transactions contemplated hereby shall be restricted to the
indemnification rights set forth in this Article 9.
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ARTICLE X
FEDERAL AND OTHER SECURITIES LAWS
---------------------------------
10.1 Investment Representations.
--------------------------
(a) This Agreement is made with the Sellers in reliance
upon each such Seller's representations to Purchaser, which by his or
her execution hereof such Seller hereby confirms, that the Common Stock
issued as the Stock Consideration (referred to herein as the
"Securities" for purposes of this Article X) to be received by him or
her will be acquired for investment for his or her own account, not as a
nominee or agent, and not with a view to the sale or distribution of any
part thereof, and that he or she has no present intention of selling,
granting participation in, or otherwise distributing the same. By
executing this Agreement, each Seller further represents that he or she
does not have any contract, undertaking, agreement or arrangement with
any person to sell, transfer, or grant participations to such person or
to any third person, with respect to any of the Securities.
(b) Each of the Sellers understands that the Securities
are not registered under the 1933 Act on the ground that the sale
provided for in this Agreement and the issuance of Securities hereunder
should be exempt from registration under the 1933 Act and that
Purchaser's reliance on such exemption is predicated on each Seller's
representations set forth herein. Each Seller realizes that the basis
for the exemption may not be present if, notwithstanding such
representations, the Seller has in mind merely acquiring the Securities
for a fixed or determinable period in the future, or for a market rise
or for sale if the market does not rise. Each Seller confirms that he
or she has no such intention.
(c) Each Seller represents that he or she is an
"accredited investor" within the meaning of Rule 501 under the 1933 Act
and that he or she is experienced in evaluating and investing in
companies such as Purchaser, is able to fend for himself or herself in
the transactions contemplated by this Agreement, has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of his investment and has the ability to
bear the economic risks of his investment. Each Seller further
represents that he or she has had access, during the course of the
transaction and prior to his or her purchase of the Securities, to the
information filed by Purchaser with the Securities and Exchange
Commission and that he or she has had, during the course of the
transaction and prior to his or her execution hereof, the opportunity to
ask questions of, and to receive answers from, Purchaser concerning the
terms and conditions of the offering of the Securities and to obtain
additional information necessary to verify the accuracy of any
information furnished to him or her or to which he has had access. Each
Seller is aware that a significant portion of any future revenues of
Purchaser may be adversely affected by market and regulatory forces.
Each Seller acknowledges that he or she has had the opportunity to
obtain additional information as desired in order to evaluate the merits
and risks inherent in purchasing and holding the Securities.
(d) Each Seller understands that the Securities may not be
sold, transferred or otherwise disposed of without registration under
the 1933 Act or an exemption therefrom, and that in the absence of an
effective registration statement covering the Securities or an available
exemption from registration under the 1933 Act, the Securities must be
held indefinitely. In particular, each Seller is aware that the
Securities may not be sold pursuant to Rule 144 promulgated under the
1933 Act unless all of the conditions of that Rule are met. Each Seller
represents that, in the absence of an effective registration statement
covering the Securities, he or she will sell, transfer or otherwise
dispose of the Securities only in a manner consistent with their
representations set forth herein and then only in accordance with the
provisions of Section 10.1(e) hereof.
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(e) Each Seller agrees that in no event will he or she
make a transfer or disposition of any of the Securities (other than in
accordance with the terms of the Registration Rights Agreement or
pursuant to an effective registration statement under the 1933 Act),
unless and until (i) the Seller shall have notified Purchaser of the
proposed disposition and shall have furnished Purchaser with a statement
of the circumstances surrounding the disposition and assurance that the
proposed disposition is in compliance with all applicable laws and
(ii) if reasonably requested by Purchaser, at the expense of such Seller
or the transferee, he or she shall have furnished to Purchaser an
opinion of counsel, reasonably satisfactory to Purchaser, to the effect
that such transfer may be made without registration under the 1933 Act.
10.2 Legends; Stop Transfer.
----------------------
(a) All certificates for the Securities may bear the
following or a substantially similar legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE
MAY NOT BE SOLD, TRANSFERRED, HYPOTHECATED OR
OTHERWISE ASSIGNED EXCEPT PURSUANT TO (i) A
REGISTRATION STATEMENT RELATING TO THE SECURITIES
WHICH IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933,
(ii) RULE 144 UNDER SUCH ACT, OR (iii) AN OPINION OF
COUNSEL OR OTHER EVIDENCE SATISFACTORY TO XXXXXX
COMPANIES, INC., THAT ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE.
(b) The certificates for the Securities may also bear any
legend required by any applicable state securities or other law.
(c) In addition, Purchaser shall cause its transfer agent
to make a notation regarding the restrictions on transfer of the
Securities in their respective records and the Securities shall be
transferred on the books of Purchaser only if transferred or sold
pursuant to an effective registration statement under the 1933 Act
covering such shares or pursuant to and in compliance with the
provisions of the Registration Rights Agreements and Section 10.1(e)
hereof.
ARTICLE XI
MISCELLANEOUS
-------------
11.1 Appointment of Representative.
-----------------------------
(a) Powers of Attorney. Each Seller irrevocably
------------------
constitutes and appoints Xxxx Xxxxxxx (the "Representative") as such
Seller's true and lawful agent, proxy and attorney-in-fact and agent and
authorizes the Representative acting for such Seller and in such
Seller's name, place and stead, in any and all capacities to do and
perform every act and thing required or permitted to be done in
connection with the transactions contemplated by this Agreement, as
fully to all intents and purposes as such person might or could do in
person, including, without limitation:
(i) deliver all notices required to be delivered by
such Sellers under this Agreement in connection with the foregoing;
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(ii) receive all notices required to be delivered to
such Sellers under this Agreement in connection with the foregoing;
(iii) take any and all action on behalf of such Seller
from time to time, as the Representative may deem necessary or desirable
to defend, pursue, resolve and/or settle claims under this Agreement in
connection with the foregoing; and
(iv) engage and employ agents and representatives for
such Sellers (including accountants, legal counsel and other
professionals) and to incur such other expenses as he deems necessary or
prudent in connection with the administration of the foregoing.
Each Seller grants unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing necessary or
desirable to be done in connection with the transactions contemplated by
this Agreement, as fully to all intents and purposes as the undersigned
might or could do in person, hereby ratifying and confirming all that
the Representative may lawfully do or cause to be done by virtue hereof.
Each Seller will, by executing this Agreement, agree that such agency,
proxy and power of attorney are coupled with an interest, and are
therefore irrevocable without the consent of the Representative and
shall survive the death, incapacity, or bankruptcy of such Seller. Each
Seller acknowledges and agrees that upon execution of this Agreement,
any delivery by the Representative of any waiver, amendment, agreement,
opinion, certificate or other documents executed by the Representative
or any decisions made by the Representative pursuant to this
Section 11.1, such Seller shall be bound by such documents or decisions
as fully as if such Seller had executed and delivered such documents or
made such decisions.
(b) The Representative shall not have by reason of this
Agreement a fiduciary relationship in respect of any Seller, except in
respect of amounts received on behalf of such Seller. The
Representative shall not be liable to any Seller for any action taken or
omitted by him or any agent employed by him hereunder or under any other
related document referred to herein, or in connection therewith, except
that the Representative shall not be relieved of any liability imposed
by law for gross negligence or willful misconduct. The Representative
shall not be liable to Sellers for any apportionment or distribution of
payments made by him in good faith, and if any such apportionment or
distribution is subsequently determined to have been made in error, the
sole recourse of any Seller to whom payment was due, but not made, shall
be to recover from other Sellers any payment in excess of the amount to
which they are determined to have been entitled. The Representative
shall not be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions
of this Agreement.
(c) Replacement of the Representative. Upon the death,
---------------------------------
disability, incapacity or resignation of the initial Representative
appointed pursuant to Section 11.1(a) above, each Seller acknowledges
and agrees that the remaining Sellers shall elect within 30 days one of
the remaining Sellers to serve as the Representative pursuant to this
Section 11.1. Any substituted representative shall be deemed the
Representative of all purposes of this Agreement.
(d) Actions of the Representative; Liability of the
------------------------------------------------
Representative. Each Seller agrees that Purchaser shall be entitled to
--------------
rely on any action taken by the Representative, on behalf of the
Sellers, pursuant to Section 11.1(a) above (each, an "Authorized
Action"), and that each Authorized Action shall be binding on each
Seller as fully as if such Seller had taken such Authorized Action.
Purchaser agrees that the Representative shall have no liability to
Purchaser for any Authorized Action, except to the extent that such
Authorized Action is found by a final order of a court of competent
jurisdiction to have constituted fraud or willful misconduct. The
Sellers jointly and severally agree to pay, and to indemnify
-32-
and hold harmless Purchaser from and against any losses which it may
suffer, sustain, or become subject to, as the result of any claim by any
person that an Authorized Action is not binding on, or enforceable
against, the Sellers. In addition, the Sellers hereby release and
discharge Purchaser from and against any liability arising out of or in
connection with the Representative's failure to distribute any amounts
received by the Representative on the Sellers' behalf to the Sellers.
(e) Allocation of Payments. Whenever the Sellers are
----------------------
entitled to receive any payments hereunder or are obligated to make any
payments hereunder (including those specified in Section 11.1(a)(i),
each Seller shall be entitled to receive from Purchaser or shall be
obligated to pay to Purchaser such a pro rata portion of any payment
determined in accordance with each such Seller's percentage ownership of
the Shares as set forth beside each such Seller's name on Exhibit A to
---------
this Agreement.
11.2 Termination. This Agreement, other than the obligations
-----------
contained in Section 5.5(b), 5.6 and 11.10 which shall survive any
termination of this Agreement, may be terminated by the parties hereto,
prior to Closing as follows:
(a) by mutual written consent of Purchaser and the
Representative and the transactions contemplated herein abandoned;
(b) upon written notice from Purchaser to the
Representative if any of the conditions precedent to Purchaser's
obligations hereunder shall have become incapable of fulfillment through
no fault of Purchaser;
(c) upon written notice from the Representative to
Purchaser if any of the conditions precedent to the Sellers' obligations
hereunder shall have become incapable of fulfillment through no fault of
the Sellers;
(d) by Purchaser, on the one hand, or the Representative,
on the other hand, in the event of a breach by the other party to this
Agreement of any representation, warranty or agreement contained herein,
which breach is not cured within 30 days after written notice thereof is
given to the breaching party by the non-breaching party or is not waived
by the non-breaching party during such period;
(e) by Purchaser in accordance with the provisions of
Section 5.5; or
(f) at the election of Purchaser or the Sellers if the
Closing has not occurred on or prior to March 31, 2000.
Termination of this Agreement as provided in this Agreement shall not
affect any other rights or remedies any party may have at law, in equity
or otherwise for breach of this Agreement or otherwise.
11.3 Counterparts. This Agreement may be executed in one or
------------
more counterparts, each of which will be deemed to be an original but
all of which together will constitute one and the same document.
11.4 Right Of Inspection. From and after the date of this
-------------------
Agreement to the Closing Date, Sellers will give to Purchaser and its
counsel, accountants and other representatives, full access during
normal business hours to the offices, properties, agreements, records
and affairs of the Companies, and will furnish copies of all Contracts
and other instruments as Purchaser or its counsel may reasonably
-33-
request. Such investigation will not affect the warranties of Seller
under this Agreement. All such information will be treated
confidentially and will be used only for the purposes intended. If the
transactions contemplated under this Agreement do not take place, all
documents and other property of the Companies or Sellers will be
returned and all disclosures and information given to Purchaser as
contemplated under this Agreement will be treated as confidential and
not disclosed to others unless disclosed publicly by Seller or other
third parties without fault on the part of Purchaser, or unless
otherwise required by law.
11.5 Entire Agreement. This Agreement, including any
----------------
certificate, schedule, exhibit or other document delivered pursuant to
its terms, constitutes the entire agreement between the parties. There
are no verbal agreements, representations, warranties, undertakings or
agreements between the parties, and this Agreement may not be amended or
modified in any respect, except by a written instrument signed by the
parties to this Agreement.
11.6 Governing Law; Consent to Jurisdiction. This Agreement
--------------------------------------
shall be construed, performed and enforced in accordance with the laws
of the State of New York.
11.7 Press Releases. Prior to the Closing, neither party, will
--------------
issue or cause the publication of any press release or other public
announcement with respect to this Agreement or the transactions
contemplated under this Agreement without the prior consent of the other
party first obtained; provided, however, that nothing in this Agreement
will prohibit either party from issuing or causing publication of any
press release or public announcement to the extent that such action is
required by law or any regulatory authority, in which case the party
making such determination will, if practicable under the circumstances,
use reasonable efforts to allow the other party reasonable time to
comment on such release or announcement in advance of its issuance.
11.8 Currency. Any references in this Agreement to "dollars"
--------
shall mean U.S. Dollars.
11.9 Assignment, Third Parties, Binding Effect. The rights
-----------------------------------------
under this Agreement are not assignable nor are the duties delegable by
a party without the written consent of the other party first having been
obtained, and any attempted assignment or delegation without such
consent will be null and void; provided, however, that (i) Purchaser may
assign its rights or delegate its duties hereunder to any subsidiary of
Purchaser and (ii) Purchaser's rights to indemnification hereunder shall
be assignable to its senior lender, subject to any defenses and rights
of set-off that Sellers may have hereunder. Nothing contained in this
Agreement is intended to convey upon any person or entity, other than
the parties hereto and their successors in interest and permitted
assigns, any rights or remedies under or by reason of this Agreement
unless expressly stated. All covenants, agreements, representations and
warranties of the parties contained in this Agreement are binding on and
will inure to the benefit of Purchaser, on the one hand, and Sellers, on
the other, and their respective successors and permitted assigns.
11.10 Expenses. Except as specifically provided for in this
--------
Agreement, Purchaser will bear their own respective expenses, including,
without limitation, counsel and accountants, fees, and Purchaser will
bear Seller's reasonable expenses, including, without limitations, fees
of counsel and accountants to SP Systems and Sellers (but excluding
personal counsel to Sellers other than Winthrop, Stimson, Xxxxxx &
Xxxxxxx and Bond Xxxxxx), in connection with the preparation and
negotiation of, and transactions contemplated under, this Agreement.
11.11 Waivers. Any failure by any of the parties to comply with
-------
any of the obligations, agreements or conditions set forth in this
Agreement may be waived by the other party or parties, but any
-34-
such waiver will not be deemed a waiver of any other obligation,
agreement or condition contained herein.
11.12 Captions And Section Headings. Captions and section
-----------------------------
headings are for convenience only, are not a part of this Agreement and
may not be used in construing it.
11.13 Notices. All notices, requests, demands and other
-------
communications under this Agreement must be in writing and will be
deemed duly given, unless otherwise expressly indicated to the contrary
in this Agreement, (i) when personally delivered, (ii) if sent by
reputable overnight air courier (such as DHL or Federal Express) two
days after having been posted, (iii) if sent by registered or certified
mail in the United States, return receipt requested, upon receipt,
(iv) if sent by facsimile transmission, with a copy of same mailed in
the manner provided above, when transmitted and receipt is confirmed by
telephone. Such delivery shall be addressed to the parties at the
following addresses (or at such other address or number as is given in
writing by either party to the other) as follows:
To Purchaser: Xxxxxx Companies, Inc.
0000 XxXxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: 000-000-0000
Attention: Mr. Xxxx Xxxx
With a copy to: Xxxxxxxx Xxxxxx LLP
Xxx Xxxxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000-0000
Facsimile No.: 000-000-0000
Attention: Xx. Xxxxxx X. Xxxx
Xxxxx Xxxxxxxx
New Court 1, Xxxxxx Xxxxxx Road, Segensworth
Fareham PO15 5 UA
Facsimile No.: (0)0000 000000
Attention: Mr. Xxxx Xxxxxxxx
To SP Systems Structural Polymer (Holdings) Limited
(prior to the St. Cross Business Park, Newport
Closing Date): Xxxx xx Xxxxx, XX0X 0XX
Facsimile No.: (0)0000 000000
Attention: Mr. Xxxx Xxxxx
With a copy to: Xxxxxxxx Xxxxxx, Xxxxxx and Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile No.: 000-000-0000
Attention: Xx. Xxxxxxx X. Xxxxxxxxx
-00-
Xxxx Xxxxxx
Xxxx Xxxx House, 0 Xxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx X000 0XX
Facsimile No.: (0)0000 000000
Attention: Mr. Moray MacPherson
To Sellers: Xxxxxxxx Xxxxxxx, Xxxxxx and Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile No.: 000-000-0000
Attention: Xx. Xxxxxxx X. Xxxxxxxxx
With a copy to: Bond Xxxxxx
Town Quay House, 0 Xxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx X000 0XX
Facsimile No.: (0)0000 000000
Attention: Mr. Moray MacPherson
[the remainder of this page is intentionally left blank]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement
on the date first above written.
PURCHASER:
XXXXXX COMPANIES, INC.
By:
----------------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
SP SYSTEMS:
STRUCTURAL POLYMER (HOLDINGS) LIMITED
By:
----------------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
SELLERS:
-------------------------------------------------
Xxxx Xxxxxxx
-------------------------------------------------
Xxxx Xxx
-------------------------------------------------
Xxxxxxxx Xxxxxxxx
-------------------------------------------------
Xxxxx Xxxx
-------------------------------------------------
Xxxx Xxxxx
-------------------------------------------------
Xxxxx Xxxxxx
-------------------------------------------------
Xxxxxx Xxxxxxxx
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-------------------------------------------------
Xxxxxx Xxxxxx
-------------------------------------------------
Xxxxx Xxxxxxx
-------------------------------------------------
Xxxxxxx Xxxxxx
-------------------------------------------------
Xxxxxxxx Xxxxxxxxxx
-------------------------------------------------
Xxxx Xxxx
-------------------------------------------------
Xxxxxxx Xxxxxxxxxx
-------------------------------------------------
Lars Hallkvist
-------------------------------------------------
Xxxxx Xxxxxx
-------------------------------------------------
Xxxxxxxxx Xxxxxxxx
-------------------------------------------------
Xxxxxxxx Xxxxxxx
-------------------------------------------------
Xxxxxx Xxxx
-------------------------------------------------
Xxxxxx Xxx
-38-
EXHIBIT A
---------
STRUCTURAL POLYMER (HOLDINGS) LIMITED
EXHIBIT B-1
-----------
Opinion letter of Winthrop, Stimson, Xxxxxx & Xxxxxxx, special New York
counsel for Sellers and the Companies
EXHIBIT B-2
-----------
Opinion letter of Bond Xxxxxx, counsel for Sellers and the Companies
EXHIBIT C
---------
Opinion Letter of Xxxxxxxx Xxxxxx LLP, counsel for Purchaser
EXHIBIT D
---------
Registration Rights Agreement
EXHIBIT E
---------
Stock Option Plan
