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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 20,
1994
ECHLIN INC.
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(Exact name of registrant as specified in its charter)
CONNECTICUT 1-4651 06-0330448
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
100 Double Beach Road
Branford, Connecticut 06405
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 203-481-5751
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None
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
(a) On December 20, 1994, Echlin Inc. (the "Company") acquired,
by way of a purchase of all of the outstanding capital stock
of Preferred Technical Group International, Inc. ("PTG"),
assets with a targeted net book value of $85,500,000 for a
cash consideration of $190,000,000. The consideration,
arrived at by way of arms length negotiation, is subject to
dollar-for-dollar post closing adjustment to the extent the
audited closing date net book value varies from the targeted
net book value. Neither the Company nor any of the
Company's affiliates have any material relationship with any
of the private investors, management members or lenders from
which the Company acquired PTG. The funds used in making
the purchase were borrowed from Trust Company Bank of
Georgia, First National Bank of Chicago, Shawmut Bank and
Bank of New York.
(b) The assets of the acquired company, which include machinery
and equipment, and plants in five states and Birmingham,
England are used in the manufacture of coupled hose
assemblies for motor vehicle brake, power steering, air
conditioning and heating systems, and extruded plastic for
automobile, truck and industrial applications. These
businesses with aggregate annual net sales of approximately
$250,000,000 will be continued by PTG as a subsidiary of the
Company.
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired.
(i) Audited consolidated financial statements of Preferred
Technical Group International, Inc. for the twelve
month period ended June 25, 1994.
(b) Pro forma financial information.
(i) Combining statement of income for the fiscal year ended
August 31, 1994.
(ii) Combining statement of income for the three month
period ended November 30, 1994.
(iii) Combining balance sheet as at November 30, 1994.
As it is impracticable to provide all the required
statements for the acquired business at the time this report
on Form 8-K is filed, the Company shall file the required
financial statements for the acquired business under the
cover of Form 8 as soon as practicable, but not later than
60 days after this report on Form 8-K must be filed.
(c) Exhibits.
Agreement for Sale of Capital Stock of Preferred Technical
Group International, Inc. dated December 19, 1994, between
Echlin Inc. and the stockholders of Preferred Technical
Group International, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned hereunto duly authorized.
ECHLIN INC.
Date: January 3, 1995 By: /s/ Jon P. Leckerling
Jon P. Leckerling
Vice President and
Secretary
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EXECUTION COPY
STOCK PURCHASE AND SALE AGREEMENT
THIS STOCK PURCHASE AND SALE AGREEMENT (this "Agreement"),
dated December 19, 1994, among Echlin Inc., a Connecticut
corporation ("Buyer"), each of the Persons (as hereinafter
defined) listed in Schedule A hereto (the "Bain Group"), the
members of the management of Preferred Technical Group
International, Inc., a Delaware corporation (the "Company"),
listed in Schedule B hereto (the "Management Group"), and each of
the investors listed in Schedule C hereto (the "Investor Group").
Each of the members of the Bain Group, the Management Group and
the Investor Group are sometimes collectively referred to herein
as the "Sellers".
RECITALS
A. The members of the Bain Group collectively own 767,550
shares (after redemption of the Series I Class P Stock) of the
common stock, Series I, par value $0.01 per share ("Series I
Common Stock"), of the Company and 76,755 shares of the Class P
common stock, Series I, par value $0.01 per share ("Series I
Class P Stock") of the Company (such shares of Series I Common
Stock held by the Bain Group, in each case, after redemption of
the Series I Class P Stock are herein called the "Bain Shares").
The members of the Management Group collectively own 68,850
shares (after redemption of the Series I Class P Stock) of Series
I Common Stock and 6,885 shares of Series I Class P Stock (such
shares of Series I Common Stock held by the Management Group, in
each case, after redemption of the Series I Class P Stock are
herein called "Management Shares"). The members of the Investor
Group, other than Jackson National Life Insurance Company
("JNL"), collectively own 48,360 shares (after redemption of the
Series I Class P Stock) of Series I Common Stock and 3,060 shares
of Series I Class P Stock, and JNL owns 133,000 (after redemption
of the Series II Class P Stock) shares of common stock, Series
II, par value $0.01 per share (the "Series II Common Stock") and
13,300 shares of Class P common stock, Series II, $0.01 par value
per share (the "Series II Class P Stock")(such shares of Series I
Common Stock held by the Investor Group, other than JNL, and such
shares of Series II Common Stock held by JNL, in each case, after
redemption of the Class P Stock are herein called "Investor
Shares"). The Bain Shares, the Management Shares and the
Investor Shares are herein collectively referred to as the
"Shares".
B. Certain members of the Management Group hold options
and warrants ("Management Options") to purchase an aggregate of
65,500 shares of Series I Common Stock (the "Management Option
Shares"), certain members of the Investor Group own warrants (the
"Investor Warrants") to purchase an aggregate of 162,233 shares
of Series I or Series II Common Stock, as the case may be (the
"Investor Warrant Shares"), and certain other employees of the
Company own options ("Employee Options," and together with the
Management Options and the Investor Warrants, the "Options") to
purchase an aggregate of 36,700 shares of Series I Common Stock
(the "Employee Option Shares," and together with the Management
Option Shares and the Investor Warrant Shares, the "Option
Shares"), all of which are identified on Schedule D hereto.
C. Each Seller wishes to sell its and his respective
Shares to Buyer, and Buyer wishes to buy all of the Shares, all
on the terms and conditions provided in this Agreement.
THEREFORE, Buyer and each Seller hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The terms defined in this Article I,
whenever used in this Agreement, shall have the following
meanings for all purposes of this Agreement.
"Act" is defined in Section 5.3.
"Affiliate" means a Person that directly or indirectly,
through one or more intermediaries, controls, or is controlled
by, or is under common control with, another specified Person;
provided, however, that no member of the Management Group, Bain
Group or Investor Group will be deemed an affiliate of the
others.
"Aggregate Share Purchase Price" is defined in Section 2.2.
"Aggregate Spread" is defined in Section 2.4(a).
"Audited Statements" are defined in Section 3.6.
"Bain Group" is defined in the introduction to this
Agreement.
"Bain Shares" is defined in Recital A to this Agreement.
"Bank Loans" means the loans extended in accordance with the
Credit Agreement, the Note Purchase Agreement and the
Subordinated Note Purchase Agreement.
"Banks" means the financial institutions that have extended
the Bank Loans to the Company pursuant to the Credit Agreement,
the Note Purchase Agreement and the Subordinated Note Purchase
Agreement.
"Business Day" means any day that is not a Saturday, Sunday
or other day on which banking institutions in New York, New York
are authorized or required by law or executive order to close.
"Buyer" is defined in the introduction to this Agreement.
"Buyer Indemnified Party" is defined in Section 9.2(b).
"Claim Escrow Account" is defined in Section 2.3(b) to this
Agreement.
"Claim Escrow Agent" is defined in Section 2.3(b) to this
Agreement.
"Claim Escrow Agreement" is defined in Section 2.3(b) to
this Agreement.
"Claim Escrow Amount" is defined in Section 2.3(b) to this
Agreement.
"Class P Stock" means Series I Class P Stock and Series II
Class P Stock.
"Closing" means the completion of the transactions specified
in Article II.
"Closing Date" is defined in Section 2.6.
"Common Stock" means Series I Common Stock and Series II
Common Stock.
"Common Stock Equivalent" means (i) the number of Shares,
plus (ii) the number of In-the-Money Options, at the date of
determination.
"Company" is defined in the introduction to this Agreement.
"Credit Agreement" means that certain Credit Agreement,
dated as of October 15, 1992, as amended, by and between PTG and
NBD Bank, N.A.
"Employee Option Shares" is defined in Recital B to this
Agreement.
"Employee Options" is defined in Recital B to this
Agreement.
"Environmental Condition" shall have the meaning ascribed to
such term in the UTA Indemnity.
"Financial Statements" is defined in Section 3.6 to this
Agreement.
"GAAP" means generally accepted accounting principles,
consistently applied.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations
thereunder.
"Identified Issue" shall have the meaning ascribed to such
term in the UTA Indemnity.
"In-the-Money Options" means those Option Shares which may
be purchased by an Optionholder at an Option Exercise Price at or
less than the Per Share Purchase Price.
"Indemnified Party" means the Seller Indemnified Party in
the case of an indemnity claim pursuant to Section 9.2(a) or a
Buyer Indemnified Party in the case of an indemnity claim
pursuant to Section 9.2(b).
"Indemnifying Party" means the Seller Indemnifying Party in
the case of an indemnity claim pursuant to Section 9.2(a) or the
Buyer in the case of an indemnity claim pursuant to Section
9.2(b).
"Investor Group" is defined in the introduction to this
Agreement.
"Investor Shares" is defined in Recital A to this Agreement.
"Investor Warrant Shares" is defined in Recital B to this
Agreement.
"Investor Warrants" is defined in Recital B to this
Agreement.
"JNL" is defined in Recital A to this Agreement.
"Knowledge" means, and shall include, (A) in the case of any
member of the Management Group, that which such Person knew or
should have known in the course of, or in connection with, his
employment with the Company or any Affiliate of the Company, (B)
in the case of any member of the Investor Group, actual knowledge
in the case of each individual in the Investor Group and, in the
case of JNL, the actual knowledge of Benjamin James or Bruce
Gorchow; and (C) in the case of the Bain Group, the actual
knowledge of Paul B. Edgerley, Robert C. Gay and Ronald P. Mika;
provided, however, as to each clause (B) and (C) above, Knowledge
shall not require any investigation in connection with the
transactions contemplated in this Agreement.
"Liens" means any mortgage, lien, claim, charge, encumbrance
or other security interest of any kind.
"Losses" (or, singularly, a "Loss") means any and all
losses, damages, liabilities, claims, demands, judgments,
settlements, costs and expenses of any nature whatsoever
(including costs, court costs and reasonable attorneys' fees) for
which a Seller Indemnified Party seeks or is entitled to, from
any one or more of the Sellers, indemnification for, or
reimbursement of, and which arises out of or in connection with,
(i) any provision of this Agreement or any document or instrument
referred to herein or executed in connection herewith, including
any such indemnification or reimbursement arising under Article
IX to this Agreement, but excluding any indemnification arising
under Sections 3.14 and 4.4 to this Agreement and any adjustments
to the Aggregate Share Purchase Price pursuant to Sections 2.2
and 2.3 to this Agreement, or (ii) the consummation of the
transactions contemplated by this Agreement. In determining any
Losses, Losses shall be net (i) of any recoveries from third
parties or insurance proceeds received relating to the respective
Losses, but Buyer and the Company shall not be obligated to
commence any legal action to seek any such recoveries or
insurance proceeds and (ii) net of any actual tax savings
realized by Buyer or the Company relating to the same or any tax
period and relating to the respective Losses.
"Management Group" is defined in the introduction to this
Agreement.
"Management Option Shares" is defined in Recital B to this
Agreement.
"Management Options" is defined in Recital B to this
Agreement.
"Management Shares" is defined in Recital A to this
Agreement.
"Note Purchase Agreement" means the Note Purchase Agreement,
as amended, dated October 15, 1992, by and among the Company, JNL
and PTG.
"Option Exercise Price" means the price at which an
Optionholder may exercise his Options, as set forth in Schedule
D.
"Option Shares" is defined in Recital B to this Agreement.
"Optionholders" means the Employees, members of the
Management Group and members of the Investor Group listed in
Schedule D.
"Options" is defined in Recital B to this Agreement.
"PTG" means Preferred Technical Group, Inc., a Delaware
corporation.
"Poole Note" means the promissory note in the original
aggregate principal amount of $4,000,000.00, issued by Multitec-
PTG, Inc. on October 17, 1994 in favor of H. Tate Poole, Jr.,
together with all interest, earnings or other charges thereon
through January 3, 1995.
"Per Share Purchase Price" means the quotient of (A) the
Aggregate Share Purchase Price less the sum of the amount (i) of
all Bank Loans, including any and all accrued and unpaid interest
or other charges (including prepayment penalties) through the
Closing Date, (ii) required to redeem from UTA all of the shares
of Preferred Stock, plus any and all accrued and unpaid dividends
or other distribution rights with respect thereto through the
Closing Date, (iii) required to redeem from certain stockholders
of the Company all of the issued and outstanding shares of Class
P Stock, plus any and all accrued and unpaid dividends or other
distribution rights with respect thereto through the Closing
Date, (iv) of the payment to W. McComb Dunwoody, the McKaCo
Trust, Michael L. George, Andrew M. Krauss and the George Group
Employee Partners required pursuant to Section 5 of their
respective Stock Purchase Warrants, (v) of the Poole Note, (vi)
of the payment required to satisfy the payments required by
Section 3(iii) of the Certificate of Incorporation of the
Company, and (vii) of all fees, severance payments and other
expenses incurred by the Sellers in connection with the
consummation of the transactions contemplated by this Agreement;
provided, however, such amount shall be increased by the Option
Exercise Price relating to each of the In-the-Money Options,
divided by (B) the Common Stock Equivalent.
"Person" means any individual, corporation, partnership,
trust, joint venture or other entity.
"Preferred Stock" means the 12-1/2% cumulative Preferred
Stock, par value $1,000 per share, issued by the Company and held
by UTA.
"Price Adjustment Escrow Account" is defined in Section
2.3(a) to this Agreement.
"Price Adjustment Escrow Agent" is defined in Sections
2.3(a) to this Agreement.
"Price Adjustment Escrow Agreement" is defined in Section
2.3(a) to this Agreement.
"Price Adjustment Escrow Amount" is defined in Section
2.3(a) to this Agreement.
"Principal Sellers" is defined in Article III to this
Agreement.
"Redemption Amount" is defined in Section 2.4(b).
"Representative" means Bain Capital, Inc., a Delaware
corporation, on behalf of all Sellers.
"Resolutions" is defined in Section 2.4(a).
"Seller Indemnified Party" is defined in Section 9.2(a).
"Seller Indemnifying Party" is defined in Section 9.2(a).
"Sellers" is defined in the introduction to this Agreement.
"Series I Class P Stock" is defined in Recital A to this
Agreement.
"Series I Common Stock" is defined in Recital A to this
Agreement.
"Series II Class P Stock" is defined in Recital A to this
Agreement.
"Series II Common Stock" is defined in Recital A to this
Agreement.
"Shares" is defined in Recital A to this Agreement.
"Spread" means with respect to each Option Share which may
be purchased upon the exercise of an Option, an amount equal to
the positive difference between (i) the Per Share Purchase Price,
less (ii) the Option Exercise Price.
"Stockholders' Agreement" refers collectively to the
Stockholders' Agreement, as amended, dated as of October 15,
1992, among the Company and its stockholders, and the
Registration Rights Agreement, as amended, dated as of October
15, 1992, among the Company and certain of its stockholders.
"Subordinated Note Purchase Agreement" means the Senior
Subordinated Note Purchase Agreement, as amended, dated October
15, 1992, by and among the Company, JNL and PTG.
"Subsidiary" or "Subsidiaries" is defined in Section 3.4 to
this Agreement.
"Unaudited Statements" are defined in Section 3.6.
"UTA" means United Technologies Automotive, Inc., a Delaware
corporation.
"UTA Indemnity" means and refers to Sections 12 and 12A of
the Asset Sale Agreement, dated as of September 30, 1992, by and
between UTA and PTG (formerly known as HFIP Acquisition Corp.).
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ARTICLE II
PURCHASE AND SALE OF SHARES; TERMINATION OF OPTIONS
2.1 PURCHASE AND SALE OF SHARES. Upon the terms and
subject to the conditions contained herein, at the Closing, each
Seller shall sell, assign, and transfer to Buyer, and Buyer shall
purchase from the Sellers, the Shares.
2.2 PURCHASE PRICE. Except as provided in Sections 2.3 and
2.4 below, in consideration for the receipt by Buyer of the
Shares at the Closing, Buyer shall pay to the Representative, on
behalf of each Seller, an aggregate purchase price of
$190,000,000 (the "Aggregate Share Purchase Price"). The
Purchase Price shall be subject to adjustment in accordance with
Exhibit 2.2 to this Agreement.
2.3 ESTABLISHMENT OF ESCROW ACCOUNTS.
(a) On the Closing Date, Buyer shall deposit
$11,400,000 of the Aggregate Share Purchase Price (the "Price
Adjustment Escrow Amount") in an account (the "Price Adjustment
Escrow Account") with an escrow agent (the "Price Adjustment
Escrow Agent"), mutually satisfactory to the Buyer and the
Sellers, pursuant to an agreement substantially in the form of
Exhibit 2.3(a) to this Agreement (the "Price Adjustment Escrow
Agreement"). The Price Adjustment Escrow Agent shall make
disbursements from the Price Adjustment Escrow Account in
accordance with the provisions set forth in Exhibit 2.2 to this
Agreement.
(b) On the Closing Date, Buyer shall deposit
$7,600,000 of the Aggregate Share Purchase Price (the "Claim
Escrow Amount") in an account (the "Claim Escrow Account") with
an escrow agent (the "Claim Escrow Agent"), mutually satisfactory
to the Buyer and the Sellers, pursuant to an agreement
substantially in the form of Exhibit 2.3(b) to this Agreement
(the "Claim Escrow Agreement"). The Claim Escrow Agent shall
make disbursements from the Claim Escrow Account in accordance
with the provisions set forth in Article IX to this Agreement.
The Claim Escrow Account is the exclusive source for the payment
by any one or more of the Sellers to the Buyer for any Losses.
2.4 TERMINATION OF OPTIONS; PAYMENT OF AGGREGATE SPREAD,
BANK LOANS, PREFERRED STOCK AND CLASS P STOCK.
(a) Attached as Exhibit 2.4 is a copy of the proposed
resolutions to be adopted by the Board of Directors of the
Company with respect to the termination of the Options, the
redemption of the Preferred Stock, the redemption of Class P
Stock and the repayment of the Bank Loans (the "Resolutions").
Each of Buyer and each Seller, on his and its own behalf,
covenants and agrees that they will take all such actions,
including the direction of any representative they may have on
the Board of Directors of the Company, as may be necessary to
cause (i) each Option to terminate as of and at the Closing, (ii)
the Company to send the letter in substantially the form attached
to the Resolutions to each of the Optionholders within two days
after the date of this Agreement, and (iii) the Company to pay
each Optionholder, on or prior to the Closing, the Spread on each
Option so terminated (the Spread on each Option being in the
aggregate referred to herein as the "Aggregate Spread").
(b) At or prior to the Closing, Buyer agrees to
provide the Company that portion (the "Redemption Amount") of the
Aggregate Share Purchase Price sufficient to enable the Company
to pay (i) the Aggregate Spread, (ii) to pay off all Bank Loans,
including any and all accrued and unpaid interest or other
charges (including prepayment penalties) through the Closing
Date, (iii) to redeem from UTA all of the shares of Preferred
Stock, plus any and all accrued and unpaid dividends or other
distribution rights with respect thereto through the Closing Date
and (iv) to redeem from certain stockholders of the Company all
of the issued and outstanding shares of Class P Stock, plus any
and all accrued and unpaid dividends or other distribution rights
with respect thereto through the Closing Date. Buyer and each
Seller covenant and agree to cause the Company to pay each of the
items referred to in the immediately preceding sentence
concurrently with the consummation of the transactions
contemplated by this Agreement and payment by Buyer of the
Redemption Amount.
(c) At or prior to January 3, 1995, Buyer agrees to
provide the Company that portion of the Aggregate Share Purchase
Price sufficient to enable the Company to pay the Poole Note.
Further, Buyer covenants and agrees that it will cause the
Company or its Subsidiaries to pay and satisfy the Poole Note and
will indemnify and hold Sellers harmless from any failure of the
Company or its Subsidiaries to so satisfy the Poole Note.
2.5 APPOINTMENT OF REPRESENTATIVE. Each of the Sellers and
Optionholders shall execute and deliver to Buyer an Irrevocable
Durable Power of Attorney substantially in the form of Exhibit
2.5 to this Agreement appointing Bain Capital, Inc., a Delaware
corporation ("Representative"), as each of their attorney-in-fact
to act on behalf of Sellers and Optionholders with respect to:
(i) receiving and distributing payments under this Agreement;
(ii) giving Buyer notice of any dispute with respect to any claim
under this Agreement; and (iii) to negotiate and settle claims on
behalf of Sellers pursuant to Article IX of this Agreement. The
Representative shall have no power to amend this Agreement on
behalf of the Sellers without their further specific written
consent.
2.6 CLOSING. The Closing shall take place at the Detroit
offices of Honigman Miller Schwartz and Cohn, 2290 First National
Building, Detroit, MI 48226 at 10:00 a.m., local time, on
December 20, 1994, to be effective as of 11:59 p.m. on December
19, 1994, or, if later, on the third Business Day after the
conditions in Article VIII and Article IX shall have been
satisfied (the "Closing Date"), or, subject to Section 10.1(c),
at such other date, place or time as the parties hereto may
agree.
2.7 DELIVERIES TO BUYER AT CLOSING. At the Closing, the
following shall be delivered to Buyer by the parties indicated:
(a) Each Seller shall deliver to Buyer stock
certificates representing the Shares, the Preferred Stock and the
Class P Stock, cancelled, duly endorsed in blank or accompanied
by stock powers duly executed in blank, in proper form for
transfer to Buyer or Buyer's nominee;
(b) The Sellers and the Price Adjustment Escrow Agent
shall have delivered to Buyer the Price Adjustment Escrow
Agreement;
(c) The Sellers and the Claim Escrow Agent shall have
delivered to Buyer the Claim Escrow Agreement;
(d) Sellers shall have delivered to Buyer evidence,
reasonably acceptable to Buyer, as to (i) the amount required to
pay the Aggregate Spread, (ii) the amount required to pay each of
the Bank Loans and the Poole Note (iii) the amount required to
redeem the Preferred Stock and the Class P Stock and (iv) the
distribution of, or an irrevocable obligation to distribute, the
Redemption Amount in accordance with Section 2.4(b) above;
(e) Sellers shall have delivered an example of the
determination of the Closing Net Book Value determined in
accordance with Exhibit 2.2; and
(f) Each Seller shall deliver to Buyer the
Certificates and other documents required to be delivered
pursuant to Article VIII hereof.
2.8 DELIVERIES BY BUYER AT CLOSING. At the Closing, Buyer
shall deliver the following:
(a) the Redemption Amount will be paid to the Company
by wire transfer of immediately available funds, which shall be
distributed in accordance with Section 2.4(b) above;
(b) the Aggregate Share Purchase Price, less the Claim
Escrow Amount, the Price Adjustment Escrow Amount, the Redemption
Amount and the amount of the Poole Note, will be paid to the
Representative, on behalf of each Seller, by wire transfer of
immediately available funds in accordance with Section 2.2 above;
(c) the Buyer and the Price Adjustment Escrow Agent
shall have delivered to Sellers the Price Adjustment Escrow
Agreement and the Buyer shall have delivered to the Price
Adjustment Escrow Agent the Price Adjustment Escrow Amount;
(d) the Buyer and the Claim Escrow Agent shall have
delivered to Sellers the Claim Escrow Agreement and the Buyer
shall have delivered to the Claim Escrow Agent the Claim Escrow
Amount; and
(e) the certificates and other documents required to
be delivered pursuant to Article VIII hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF BAIN GROUP AND MANAGEMENT GROUP
Each member of the Bain Group and each member of the
Management Group (together, the "Principal Sellers") represents
and warrants to Buyer as follows:
3.1 COMMON STOCK AND OWNERSHIP; OPTIONS.
(a) The total number of Shares owned by Sellers is as
set forth in Schedule A, B or C, as the case may be.
(b) All of the Shares owned by Sellers as listed in
Schedule A, B or C, as the case may be, have been duly and
validly issued, are fully paid and nonassessable and are owned by
it or him free and clear of any Lien and, upon payment for and
receipt of the Shares at the Closing, Buyer will acquire the
Shares free and clear of any Lien other than Liens created by
Buyer.
(c) The Shares represent all of the shares of Common
Stock outstanding on the date hereof. After the redemption of
the Preferred Stock, the redemption of the Class P Stock and the
payment of the Aggregate Spread to the Optionholders, the Company
will have no other issued and outstanding equity security, other
than the Common Stock.
(d) Upon paying for the Shares at the Closing as
contemplated herein, Buyer will own all of the shares of the
Common Stock owned by Sellers.
(e) Other than the Options, the Company has not
issued, nor does there exist, any option, warrant or other right
to acquire shares of Common Stock, Class P Stock or any other
equity security from the Company or any security convertible into
shares of Common Stock, Class P Stock or any other equity
security of the Company. Sellers do not own any Options, other
than as set forth on Schedule D hereto.
3.2 AUTHORITY.
(a) The Company and each of the Principal Sellers has
full capacity and all requisite power and authority to enter into
and perform this Agreement and to consummate the transactions
contemplated herein; and this Agreement has been duly executed
and delivered by each Principal Seller and constitutes a valid
and binding agreement of the Company and each Principal Seller,
enforceable against the Company and each Principal Seller in
accordance with its terms.
(b) Except as set forth in Schedule 3.2(b) and as has
been heretofore disclosed to Buyer by any party hereto or the
Company, no Principal Seller has Knowledge that the execution,
delivery and performance by each Principal Seller of this
Agreement and the consummation of the transactions contemplated
hereby requires any action by or in respect of, or filing with,
any governmental or quasi-governmental body, agency, official or
authority.
(c) Except as set forth in Schedule 3.2(c) and as has
been heretofore disclosed to Buyer by any party hereto or the
Company, no Principal Seller has Knowledge that the execution and
delivery of this Agreement by the Company or by each Principal
Seller or the consummation of the transactions contemplated
herein will (i) conflict with, result in a breach of, or
constitute a default under the certificate of incorporation or
by-laws of the Company or any Subsidiary; (ii) contravene or
conflict with, or result in a breach of, or constitute a default
under any court or administrative order or process or any
agreement or commitment to which each Principal Seller, the
Company or any Subsidiary is a party or by which each Principal
Seller, the Company or any Subsidiary (or any of their respective
properties or assets) is subject or bound; (iii) result in the
creation of, or give any party the right to create, any Lien or
other adverse interest upon any property or assets of each
Principal Seller, the Company or any Subsidiary; (iv) terminate
or modify, or give any third party the right to terminate or
modify, the provisions or terms of any agreement or commitment to
which the Company or any Subsidiary is a party or by which each
Principal Seller, the Company or any Subsidiary (or any of their
respective properties or assets) is subject or bound; or (v)
require each Principal Seller, the Company or any Subsidiary to
obtain any authorization, consent, approval or waiver from, or to
make any filing with, any public body or authority or any third
party, except for such events as are described above as would
not, either singly or in the aggregate, have a material adverse
effect on the business, operations, financial condition or
business prospects of the Company and its Subsidiaries, taken as
a whole.
3.3 ORGANIZATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws
of Delaware and has all requisite corporate power and authority
to own, lease and operate its properties and assets in the manner
in which such properties and assets are now owned, leased and
operated and to carry on the business in which it is now engaged.
3.4 SUBSIDIARIES OF THE COMPANY. The Company does not own
any equity interest, directly or indirectly, in any corporation,
partnership, joint venture, firm or other entity except those
entities described on Schedule 3.4 (individually, a "Subsidiary"
and collectively the "Subsidiaries"). Schedule 3.4 sets forth
the number of shares of each Subsidiary's authorized issued and
outstanding capital stock, all of which are owned either directly
or indirectly by the Company. The Subsidiaries are corporations
duly organized, validly existing and in good standing under their
respective jurisdictions of incorporation, and have all requisite
corporate power and authority to own, lease and operate their
respective properties and assets in the manner in which such
properties and assets are now owned, leased and operated and to
carry on the business in which they are now engaged.
3.5 GOOD STANDING. To the Knowledge of each Seller, each
of the Company and each Subsidiary is qualified to transact
business and is in good standing as a foreign corporation in each
of the jurisdictions specified in the attached Schedule 3.5.
3.6 FINANCIAL STATEMENTS AND REPORTS. There has been
delivered to Buyer complete copies of (1) the Company's unaudited
quarterly consolidated financial statements for the three months
ended September 24, 1994 (the "Unaudited Statements"); and (2)
its audited consolidated financial statements (the "Audited
Statements") as of June 26, 1993 and June 25, 1994, and the
related statements of operations and cash-flows for the nine-
month period ended June 26, 1993 and the 12-month period ended
June 25, 1994, together with Price Waterhouse's report thereon
(the Unaudited Statements and the Audited Statements are herein
collectively referred to as the "Financial Statements"). To the
Knowledge of each Principal Seller, each of the Financial
Statements were prepared in accordance with GAAP (except, with
respect to interim financial statements, for normal, non-material
year-end adjustments), applied on a consistent basis. To the
Knowledge of each Principal Seller, the Financial Statements are
in accordance with the books and records of the Company and its
Subsidiaries and the Audited Statements present fairly, in all
material respects, the financial position of the Company and its
Subsidiaries as of such dates and their results of operations for
the periods then ended.
3.7 ABSENCE OF ADVERSE CHANGES. Except as otherwise
disclosed in the Agreement, the Schedules or Exhibits to this
Agreement or in any documents or instrument referred to herein or
executed in connection herewith, to the Knowledge of each
Principal Seller, there has not been since June 25, 1994, any
material adverse change in the business, financial condition,
results of operation or prospects of the Company and its
Subsidiaries, taken as a whole. To the Knowledge of each
Principal Seller, since June 25, 1994, the Company and its
Subsidiaries have been operated in the ordinary course consistent
with their historical practices.
3.8 TAXES. To the Knowledge of each Principal Seller, the
Company and each Subsidiary, as the case may be, have prepared
and filed all required federal, state, local and United Kingdom
and other governmental entity tax returns required to be filed by
it, all such tax returns are true, correct and complete, and all
taxes shown thereon to be due have been either paid in full or
properly accrued for, in accordance with GAAP, on the Financial
Statements.
3.9 LITIGATION; COMPLIANCE WITH LAWS.
(a) Except as disclosed in Schedule 3.9(a) to this
Agreement and to the Knowledge of each Principal Seller, neither
the Company nor any Subsidiary is a party to any material
litigation or administrative action nor, to the Knowledge of each
Principal Seller, is any such material litigation or
administrative action threatened against the Company or any
Subsidiary.
(b) Except as disclosed in Schedule 3.9(b) to this
Agreement and to the Knowledge of each Principal Seller, neither
the Company nor any Subsidiary is in violation of any federal,
state, local or United Kingdom law, ordinance, rule or
regulation, including those relating to the environment, which
violation would result in a material adverse effect upon the
financial performance of the Company and its Subsidiaries, taken
as a whole.
(c) Without limiting the generality or effect of the
preceding paragraphs (a) and (b) or any other provision hereof,
to the Knowledge of each Principal Seller, all material claims or
allegations asserted in writing against the Company or any
Subsidiary within the past two years that any product was
defective, in any material respect, or caused any injury or harm
to any person, including, without limitation, all such claims and
allegations in writing against the Company or any Subsidiary
relating to failure to warn, breach of warranties or
merchantability or fitness for any purpose or use or similar
matters are described on Schedule 3.9(c).
3.10 OWNERSHIP OF PROPERTIES. Except as disclosed on
Schedule 3.10 to this Agreement or in the Financial Statements,
to the Knowledge of each Principal Seller, the Company and each
Subsidiary has marketable title to, or valid leasehold interests
in, as the case may be, all of their respective properties and
assets, including all intellectual property and technology used
by the Company or its Subsidiaries in the ordinary course of
their respective businesses, in each case free of all Liens.
3.11 INSURANCE. To the Knowledge of each Principal Seller,
Schedule 3.11 to this Agreement contains a complete list of all
policies of fire, liability, workers' compensation and other
forms of insurance owned or held by the Company and each
Subsidiary in connection with the operation of their respective
businesses.
3.12 CONTRACTS. To the Knowledge of each Principal Seller,
Schedule 3.12 to this Agreement contains a complete list of each
contract or agreement under which the Company or any Subsidiary
is obligated and which involves more than $100,000 or which has a
term or duration of more than one year and involves more than
$25,000.
3.13 EMPLOYEE BENEFIT PLANS. To the Knowledge of each
Principal Seller, Schedule 3.13 to this Agreement contains a
complete list of all of the bonus, deferred compensation,
pension, profit-sharing and retirement plans and arrangements and
all health, life insurance, severance and other welfare plans and
any other plan or arrangement as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended to
which the Company or any Subsidiary is bound and each such plan
or arrangement is in compliance with all laws, other than such
laws the violation of which would not result in a material
adverse effect upon the financial performance of the Company or
its Subsidiaries, taken as a whole.
3.14 BROKERS. No Principal Seller has paid or become
obligated to pay any fee or commission to any broker, finder,
investment banker or other intermediary in connection with the
transactions contemplated by this Agreement, except that the
Sellers have become obligated to pay such a fee to Donaldson,
Lufkin & Jenrette Securities Corporation. Notwithstanding
anything contained herein to the contrary, each Principal Seller
agrees to indemnify and hold Buyer harmless against any claims
made against Buyer for such fees or commissions by a broker,
finder, investment banker or other intermediary actually engaged
by any Seller in connection with the transactions contemplated by
this Agreement.
3.15 SUPPLIERS. To the Knowledge of each Principal Seller,
there has not been any material adverse change in the business
relationship between the Company or any of its Subsidiaries and
any supplier on which the Company's or any of its Subsidiaries'
businesses are dependent.
3.16 DISCLOSURE. To the Knowledge of each Principal Seller,
no statement, representation or warranty made by any Seller in
this Agreement, and none of the Schedules, attachments or
Exhibits to this Agreement, contains any untrue statement of any
material fact or omits a material fact necessary to make the
statements contained in this Agreement, or such Schedules,
attachments or Exhibits, in light of the circumstances in which
they were made, not misleading.
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF MEMBERS OF THE INVESTOR GROUP
Each member of the Investor Group, severally (and not
jointly), on its or his own behalf, represents and warrants to
Buyer as follows:
4.1 COMMON STOCK AND OWNERSHIP; OPTIONS.
(a) The total number of Investor Shares owned by such
Person is as set forth in Schedule C to this Agreement.
(b) All of the Investor Shares owned by each such
Person have been duly and validly issued, are fully paid and
nonassessable and are owned by him or it, free and clear of any
Lien and, upon payment for and receipt of the Investor Shares at
the Closing, Buyer will acquire the Investor Shares free and
clear of any Lien other than Liens created by Buyer.
(c) Such Person has no Knowledge that the Shares do
not represent all of the shares of Common Stock outstanding on
the date hereof.
(d) Upon paying for the Investor Shares at the Closing
as contemplated herein, Buyer will own all of the shares of
Common Stock owned by such Person and such Person will hold no
other Shares of Common Stock, Class P Stock, Options or other
equity security of the Company.
(e) Such Person is the owner of the Options set forth
opposite his or its name in Schedule D, and such Person has no
Knowledge that, other than for the Options, the Company has
issued, or there exists, any option, warrant or other right to
acquire shares of Common Stock, Class P Stock or any other equity
security from the Company or any security convertible into shares
of Common Stock, Class P Stock or any other equity security of
the Company.
4.2 AUTHORITY.
(a) Such Person has full capacity and all requisite
power and authority to enter into and perform this Agreement and
to consummate the transactions contemplated herein; and this
Agreement has been duly executed and delivered by such Person
pursuant to all necessary authorizations, and constitutes a valid
and binding agreement of such Person, enforceable against such
Person in accordance with its terms.
(b) Except as set forth on Schedule 3.2(b), such
Person does not have Knowledge that the execution, delivery and
performance by such Person of this Agreement and the consummation
of the transactions contemplated hereby require any action by or
in respect of, or filing with, any governmental or quasi-
governmental body, agency, official or authority.
(c) Except as set forth on Schedule 3.2(c), such
Person does not have Knowledge that the execution and delivery of
this Agreement by him or it nor the consummation of the
transactions contemplated herein will (i) conflict with, result
in a breach of, or constitute a default under the certificate of
incorporation or by-laws of the Company or any of its
Subsidiaries; (ii) contravene or conflict with, or result in a
breach of, or constitute a default under any court or
administrative order or process or any agreement or commitment to
which such Person, the Company or any of its Subsidiaries is a
party or by which such Person, the Company or any of its
Subsidiaries (or any of their respective properties or assets) is
subject or bound; (iii) result in the creation of, or give any
party the right to create, any Lien or other adverse interest
upon the property or assets of such Person, the Company or any of
its Subsidiaries; (iv) terminate or modify, or give any third
party the right to terminate or modify, any agreement or
commitment to which such Person, the Company or any of its
Subsidiaries is a party or by which such Person, the Company or
any of its Subsidiaries (or any of their respective properties or
assets) is subject or bound; or (v) require such Person, the
Company or any of its Subsidiaries to obtain any authorization,
consent, approval or waiver from, nor to make any filing with,
any public body or authority or any third party, except for such
events as are described above as would not, either singly or in
the aggregate, have a material adverse effect on the business,
operations, financial condition or business prospects of the
Company and its Subsidiaries, taken as a whole.
4.3 DISCLOSURE. To the Knowledge of such Person, no
statement, representation or warranty made by any Seller in this
Agreement, and none of the Schedules, attachments or Exhibits to
this Agreement, contains any untrue statement of any material
fact or omits a material fact necessary to make the statements
contained in this Agreement, or such Schedules, attachments or
Exhibits, in light of the circumstances in which they were made,
not misleading.
4.4 BROKERS. Such Person has not paid nor become obligated
to pay any fee or commission to any broker, finder, investment
banker or other intermediary in connection with the transactions
contemplated by this Agreement, except the Sellers have become
obligated to pay such a fee to Donaldson, Lufkin & Jenrette
Securities Corporation. Notwithstanding anything contained
herein to the contrary, each member of the Investor Group agrees
to indemnify and hold Buyer harmless against any claims made
against Buyer for such fees or commissions by a broker, finder,
investment banker or other intermediary actually engaged by any
Seller in connection with the transactions contemplated by this
Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to each Seller as follows:
5.1 ORGANIZATION. Buyer is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Connecticut.
5.2 AUTHORITY.
(a) Buyer has all requisite corporate power and
authority to enter into and perform this Agreement and to
consummate the transactions contemplated herein, and, subject to
approval by the Board of Directors of Buyer, this Agreement has
been duly executed and delivered by Buyer, pursuant to all
necessary corporate authorization, and constitutes a valid and
binding agreement of Buyer enforceable against Buyer in
accordance with its terms.
(b) Except as set forth in Schedule 5.2(b) and as has
been heretofore disclosed to Sellers by Buyer, Buyer is not aware
that the execution, delivery and performance by Buyer of this
Agreement and the consummation of transactions contemplated
hereby require any action by or in respect of, or filing with,
any governmental or quasi-governmental body, agency, official or
authority.
(c) Buyer is not aware that the execution and delivery
of this Agreement by Buyer or the consummation of the
transactions contemplated herein will (i) conflict with, result
in a breach of, or constitute a default under the certificate of
incorporation or by-laws of Buyer; (ii) contravene or conflict
with, or result in a breach of, or constitute a default under any
material court or administrative order or process to which Buyer
is a party or by which it (or any of its properties or assets) is
subject or bound; or (iii) require Buyer to obtain any
authorization, consent, approval or waiver from, nor to make any
filing with, any public body or authority, or any third party.
5.3 INVESTMENT. Buyer acknowledges that the Shares have
not been registered under the Securities Act of 1933, as amended
(the "Act"), and that it is purchasing the Shares for its own
account and not with a view toward resale. Buyer agrees that it
will not resell any Shares except pursuant to an effective
registration statement under the Act or pursuant to an exemption
from the registration requirements of the Act. Without waiving
its rights under applicable law, Buyer is entering into this
Agreement and will consummate the transactions contemplated
hereby based on the advice of its advisors and without relying on
any expressions, representations, warranties or statements of any
one or more of any Seller, the Company or any Subsidiary, except
to the extent expressly set forth in this Agreement, the
Schedules or Exhibits attached hereto or in the Financial
Statements.
5.4 BROKERS. Buyer has not paid or become obligated to pay
any fee or commission to any broker, finder, investment banker or
other intermediary in connection with the transactions
contemplated by this Agreement. Notwithstanding anything
contained herein to the contrary, Buyer shall indemnify and hold
each Seller and each of their respective Affiliates harmless
against any claims made against any such Seller or any of their
respective Affiliates for such fees or commissions to any such
person engaged or claiming to be engaged by Buyer.
ARTICLE VI
ADDITIONAL COVENANTS
6.1 CONDUCT OF BUSINESS OF THE COMPANY. Without Buyer's
prior consent, during the period from the date of this Agreement
to the Closing Date, the Company will not, and each Seller,
severally (and not jointly) on its or his own behalf, agrees that
such Person will not, take any action to cause the Company or any
Subsidiary to conduct their respective businesses and operations
other than in the ordinary course. In addition, the Company will
not issue any additional shares of Common Stock (other than in
connection with the redemption of the Class P Stock), Class P
Stock, Preferred Stock or any other equity security and, without
Buyer's prior consent, will not issue additional options to
purchase common stock.
6.2 FILINGS AND AUTHORIZATIONS. Each party hereto will, as
promptly as practicable, file or supply, or cause to be filed or
supplied, all notifications and information required to be filed
or supplied pursuant to the HSR Act in connection with the sale
and transfer of the Shares pursuant to this Agreement. Except as
otherwise provided herein, each party hereto, as promptly as
practicable, (i) will make, or cause to be made, all such other
filings and submissions under laws, rules and regulations
applicable to it, or to its subsidiaries and Affiliates, as may
be required for it to consummate the transfer of the Shares and
the termination of the Options in accordance with the terms of
this Agreement; (ii) will use its best efforts to obtain, or
cause to be obtained, all authorizations, approvals, consents and
waivers from all persons and governmental authorities necessary
to be obtained by it, or its subsidiaries or Affiliates in order
for it to consummate such transfer; and (iii) will use its best
efforts to take, or cause to be taken, all other actions
necessary, proper or advisable in order for it to fulfill its
obligations hereunder. Each party hereto will coordinate and
cooperate with one another in exchanging such information and
supplying such assistance as may be reasonably requested by each
other in connection with the foregoing.
6.3 ACCESS AND INFORMATION. Between the date of this
Agreement and the Closing Date, the parties hereto will cause the
Company, during all business hours and other mutually agreeable
times, to (i) give Buyer and Buyer's representatives reasonable
access to all officers and employees, offices and other
facilities and properties of the Company, (ii) permit Buyer to
make such inspections thereof as Buyer may reasonably request,
and (iii) furnish Buyer with such financial and operating data
and other information with respect to the business, operations
and properties of the Company as Buyer may from time to time
reasonably request; provided, however, that any investigation by
Buyer shall be conducted in such a manner as not to interfere
unreasonably with the business operations of the Company.
6.4 FURTHER ASSURANCES. Each party hereto shall execute,
or cause to be executed, such documents and other papers, and
take, or cause to be taken, such further actions as may be
reasonably required, to carry out the provisions hereof and the
transactions contemplated hereby.
6.5 PUBLIC ANNOUNCEMENTS. Each party hereto shall consult
with each other before issuing any press release or otherwise
making any public statement with respect to this Agreement and
the transactions contemplated hereby and, except as required by
law upon advice of counsel, shall not issue any such press
release or make any such public statement prior to such
consultation and without the prior agreement of the other parties
hereto.
6.6 CERTAIN RECEIVABLES. Sellers shall cause any of the
Company's receivables from its stockholders to be paid to the
Company in full at or prior to the Closing.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement to consummate
the transactions contemplated in Article II hereof at the Closing
shall be subject to the satisfaction, at or prior to the Closing,
of all of the following conditions, any one or more of which may
be waived by Buyer:
7.1 REPRESENTATIONS AND WARRANTIES ACCURATE. All
representations and warranties contained in Article III hereof
shall be true and accurate in all material respects at and as of
the Closing Date as if such representations and warranties were
made at and as of the Closing Date.
7.2 PERFORMANCE. Each Seller shall have performed and
complied in all material respects with all agreements, covenants
and conditions required by this Agreement to be performed and
complied with by it or him prior to or on the Closing Date,
including the deliveries to be made by him or it pursuant to
Section 2.7 to this Agreement.
7.3 CERTIFICATE. Buyer shall have received a certificate,
dated as of the Closing Date, to the effect that the conditions
set forth in Sections 7.1 and 7.2 have been satisfied.
7.4 HSR ACT; AUTHORIZATIONS; LEGAL PROHIBITION.
(a) All applicable waiting periods, including any
extensions thereof, under the HSR Act, applicable to the purchase
of the Shares shall have expired or been terminated.
(b) Each party hereto shall each have obtained all
required third party authorizations, approvals, consents and
waivers required to be obtained, and made all required filings
with third parties, the lack of which, prior to the Closing,
would render legally impermissible, or would materially adversely
affect, the consummation of the transactions contemplated by this
Agreement; provided, however, that Buyer shall not be excused
from performing its obligations hereunder by virtue of Buyer's
failure to use its best efforts to obtain or make any such
authorization, approval, consent, waiver or filing.
(c) On the Closing Date, there shall exist no
injunction or other order issued by a court of competent
jurisdiction which would make unlawful the consummation of the
transactions contemplated by this Agreement, and there shall be
no suit, action, proceeding or governmental investigation pending
or, to the Knowledge of any Seller, threatened which seeks to
restrain or prohibit the consummation of the transactions
contemplated by this Agreement, or which might, directly or
indirectly, interfere with such transactions.
7.5 CUSTOMERS. The Company shall have provided the Buyer
with the opportunity to meet with representatives of Ford Motor
Company and Chrysler Corporation and the Buyer, as a result of
such meeting, shall not have discovered from Ford Motor Company
or Chrysler Corporation that any representation or warranty of
any Seller made in this Agreement is materially misleading or
otherwise discover from Ford Motor Company or Chrysler
Corporation information that would be reasonably likely to have a
material adverse effect on the Company's financial performance or
prospects. The basis for the non-fulfillment of this condition,
if any, shall be set forth in writing to the Representative on
behalf of the Sellers within three days after Buyer's meeting
with Ford Motor Company or Chrysler Corporation.
7.6 OPINION OF COUNSEL. Counsel to the Company shall have
provided Buyer with an opinion in a form reasonably acceptable to
Buyer and to counsel to the Company.
7.7 EXECUTIVE OFFICERS. The Company and each of Donald
Holton and Walter C. Jones shall have entered into (i), and
completed the transactions contemplated by, separation
agreements, including releases of the Company from liability by
each of Messrs. Holton and Jones, on terms reasonably
satisfactory to Messrs. Holton, Jones, the Company and the Buyer
(ii) personal services agreements on terms reasonably
satisfactory to Messrs. Holton and Jones and the Buyer, and (iii)
non-compete agreements for an acceptable duration and otherwise
on terms and conditions satisfactory to Messrs. Holton and Jones
and the Buyer. In addition, each of the directors of the Company
shall have resigned.
7.8 BANK LOANS. Buyer shall have received evidence
reasonably satisfactory to it that each of the Bank Loans have
been paid in full and that all Liens securing any of the Bank
Loans will be released by the Person possessing such Liens within
60 days following the Closing Date.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS
The obligations of each Seller under this Agreement to
consummate, or cause the consummation of, the transactions
contemplated in Article II hereof at the Closing shall be subject
to the fulfillment, at or prior to the Closing, of all of the
following conditions, any one or more of which may be waived by
the consent of all of the members of the Bain Group:
8.1 REPRESENTATIONS AND WARRANTIES ACCURATE. All
representations and warranties of Buyer contained in Article V
shall be true in all material respects at and as of the Closing
Date as if such representations and warranties were made at and
as of the Closing Date.
8.2 PERFORMANCE BY BUYER. Buyer shall have performed and
complied in all material respects with all agreements, covenants
and conditions required by this Agreement to be performed and
complied with by it prior to or on the Closing Date, including
the deliveries and payments to be made by it pursuant to Section
2.8 to this Agreement.
8.3 CERTIFICATE. The Representative, on behalf of each
Seller, shall have received a certificate, dated as of the
Closing Date, signed by an executive officer of Buyer, to the
effect that the conditions set forth in Sections 8.1 and 8.2 have
been satisfied.
8.4 HSR ACT; AUTHORIZATIONS; LEGAL PROHIBITION.
(a) All applicable waiting periods, including any
extensions thereof, under the HSR Act shall have expired or been
terminated.
(b) Each party hereto shall each have obtained all
required third party authorizations, approvals, consents and
waivers required to be obtained, and made all required filings
with third parties, the lack of which, prior to the Closing,
would render legally impermissible, or would materially adversely
affect, the consummation of the transactions contemplated by this
Agreement; provided, however, that Sellers shall not be excused
from performing its obligations hereunder by virtue of Seller's
failure to use its best efforts to obtain or make any such
authorizations, approval, consent, waiver or filing.
(c) On the Closing Date, there shall exist no
injunction or other order issued by a court of competent
jurisdiction which would make unlawful the consummation of the
transactions contemplated by this Agreement, and there shall be
no suit, action, proceeding or governmental investigation pending
or, to Buyer's knowledge, threatened which seeks to restrain or
prohibit the consummation of the transactions contemplated by
this Agreement, or which might, directly or indirectly,
interfere with such transactions.
8.5 POOLE NOTE. Multitec-PTG, Inc. and H. Tate Poole, Jr.
shall have executed, delivered and accepted an amended and
restated promissory note substantially in the form attached
hereto as Exhibit 8.5.
ARTICLE IX
INDEMNIFICATION AND LIMITATION OF REMEDIES
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained in this Agreement and
any Schedule or Exhibit hereto and any and all related claims for
indemnification shall survive the Closing for the period from the
Closing Date and ending on December 31, 1995 (subject to Sections
9.4 and 9.5); provided, however, that claims for indemnification
arising under Section 9.2(a)(ii) below shall survive for a period
commencing on the Closing Date and ending on June 30, 1996
(subject to Sections 9.4 and 9.5).
9.2 INDEMNITY.
(a) Subject to Sections 9.4 and 9.5 below, each
Seller, jointly and severally (a "Seller Indemnifying Party"),
agrees to indemnify and hold Buyer and its officers, directors,
employees, agents, representatives and other Affiliates,
including the Company and the Subsidiaries subsequent to the
Closing Date (a "Seller Indemnified Party"), harmless to the
extent provided in this Article IX from and against any and all
losses, damages, liabilities, claims, demands, judgments,
settlements, costs and expenses of any nature whatsoever
(including reasonable attorneys' fees) resulting from or arising
out of:
(i) any breach of any representation or warranty of a
Seller Indemnifying Party contained in Article III or
Article IV hereof or the nonperformance, whether partial or
total, of any covenant or agreement of a Seller Indemnifying
Party contained in this Agreement, in either case to the
extent not waived by a Seller Indemnified Party; and
(ii) any Environmental Condition existing on the
Closing Date to the extent not subject, in whole or in part,
to the UTA Indemnity, including, without limitation, UTA's
limitation or reduction of indemnification under the UTA
Indemnity with respect to any Identified Issue, which
limitation or reduction is due to the Company's material
contribution to any Environmental Condition prior to the
Closing Date and UTA's right to so limit or reduce such
indemnity arises out of Section 12A.5 of the UTA Indemnity;
subject, however, to the following limitations (in addition
to the other limitations set forth in Sections 9.4 and 9.5
below):
A. The Sellers' obligation to indemnify the
Buyer pursuant to this Section 9.2(a)(ii) shall be
limited to the Company's material contribution to the
Environmental Condition prior to the Closing Date and
shall exclude any of the Company's contribution to such
Environmental Condition from and after the Closing
Date;
B. Buyer must make a claim for indemnification
against UTA for any Environmental Condition prior to
making a claim against Sellers under this Section
9.2(a)(ii); provided, however, that Sellers shall have
no liability to Buyer based upon any such claim against
Sellers unless and until UTA has denied Buyer's claim,
in whole or in part. In addition, the Representative,
on behalf of the Sellers, shall have the right, at its
option and expense, to participate in but not to
control any negotiation, settlement, mediation,
arbitration or litigation with or involving UTA which
could impose an indemnification obligation upon Sellers
pursuant to this Section 9.2(a)(ii), and Buyer shall
provide the Representative with notice of and
reasonable opportunity to participate in any such
negotiation, settlement, mediation, arbitration or
litigation. Buyer shall not enter into any settlement
with UTA which might impose any liability upon any
Seller without the prior written consent of the
Representative, which consent shall not be unreasonably
withheld, and no Seller shall have any obligation to
indemnify Buyer pursuant to this Section 9.2(a)(ii)
unless and until the consent of the Representative is
so obtained. If the Representative refuses to consent
to any settlement, the matter shall be immediately
submitted to binding arbitration under the auspices of
the American Arbitration Association in its Southfield,
Michigan office under its commercial arbitration rules,
with the decision of the arbitrators to be final and
binding, and judgment upon the award rendered may,
pursuant to MCLA section 600.5001, be entered in any Michigan
circuit court.
(b) Buyer agrees to indemnify and hold each Seller and
their respective partners, officers, directors, employees,
agents, representatives and other Affiliates (a "Buyer
Indemnified Party") harmless to the extent provided in this
Article IX from and against any losses, damages, liabilities,
claims, demands, judgments, settlements, costs and expenses of
any nature whatsoever (including reasonable attorneys' fees)
resulting from or arising out of any breach of any representation
or warranty of the Buyer contained in Article V hereof or the
non-performance, whether partial or total, of any covenant or
agreement of the Buyer contained in this Agreement, in either
case to the extent not waived in accordance with this Agreement.
9.3 THIRD PARTY CLAIMS. Subject to the limitations
provided in Sections 9.4 and 9.5 to this Agreement, in case any
action shall be brought against an Indemnified Party by any third
party with respect to which indemnity may be sought pursuant to
this Article IX, the parties so seeking indemnification shall
promptly notify the Indemnifying Party in writing of such action
and the Indemnifying Party shall, with counsel reasonably
satisfactory to the Indemnified Party, assume the defense
thereof, including the employment of counsel and payment of all
fees and expenses. The Indemnified Party shall have the right to
employ separate counsel in such action and to participate in the
defense thereof, but, subject to the limitations provided in
Sections 9.4 and 9.5 to this Agreement, the fees and expenses of
such counsel shall be at the expense of the Indemnified Party
unless: (i) the Indemnifying Party has failed to assume the
defense and employ counsel reasonably satisfactory to the
Indemnified Party or (ii) the Indemnified Party shall have been
advised by counsel reasonably satisfactory to the Indemnifying
Party that there may be one or more legal defenses available to
it which are different from or additional to those available to
the Indemnifying Party. The Indemnifying Party shall not be
liable for any settlement of such action effected without the
prior written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld.
9.4 EXCLUSIVE REMEDIES; LIMITATION OF REMEDIES. The
indemnities and the specific performance provided for in this
Article IX shall be Buyer's exclusive remedies for or with
respect to any Losses. Any claims by Buyer for any Losses, and
related indemnification, shall be subject to the following
additional limitations:
(a) No party hereunder shall be entitled to make any
claim for indemnification for any Losses after the date or period
set forth in Section 9.1; provided, however, that any party may
preserve its rights to seek indemnification prior to the end of
the applicable periods described above by notifying the
Indemnifying Party in writing identifying with reasonable
specificity any matter indemnified against under this Article IX
which the notifying party reasonably believes is probable of
resulting in indemnification based on any then existing set of
facts or circumstances known to such party.
(b) Buyer shall not be entitled to make any claim or
claims for any Losses in excess of the Claim Escrow Amount,
Buyer's right to indemnification or to recover against any claim
for any Losses being hereby expressly limited to the Claim Escrow
Account. Further, Buyer hereby expressly agrees that Buyer's
sole and exclusive recourse for the satisfaction of all or a
portion of such claims for any Losses is limited to the Claim
Escrow Account. In addition, except to the extent necessary for
Buyer to recover from the Claim Escrow Account, Buyer hereby
covenants that it will not commence any action or suit, in law or
in equity, against any or all Sellers on account of any action or
cause of action arising out of or in connection with any Losses.
Sellers' aggregate liability under this Section 9, including
amounts expended by Sellers as an Indemnifying Party under
Section 9.3, defending third party claims or otherwise correcting
an indemnified matter, will not exceed the Claim Escrow Amount;
any amounts so expended by Sellers as an Indemnifying Party under
Section 9.3 or to otherwise correct an indemnified matter will be
refunded to the Sellers from the Claim Escrow Account.
(c) Except for any indemnification claim arising under
Sections 3.14 and 4.4 to this Agreement, Sellers shall have no
obligation to indemnify Buyer pursuant to this Agreement, unless
and until the aggregate of such Losses exceeds $200,000, and if
the $200,000 is exceeded, then Buyer shall be entitled to
indemnification for, or reimbursement of, all Losses, including
the initial $200,000, but otherwise subject to the limitations of
this Section 9.4 and Section 9.5 below.
(d) In determining the Sellers' obligation to
indemnify Buyer pursuant to Section 9.2(a), all references in
this Agreement or in any certificates delivered in connection
herewith to the terms "material," "materiality" or variants
thereof shall be disregarded for the purpose of determining the
amount of any Loss resulting from any misrepresentation, breach
of warranty or non-fulfillment of any covenant.
9.5 ESCROW. In the event Buyer makes any claim for any
Losses, Buyer shall notify the Claim Escrow Agent and the
Representative in writing as to both the amount of the alleged
Loss and the specific facts supporting the claim for the Loss.
Thereafter, the Representative may either agree with Buyer's
claim and notify the Claim Escrow Agent in writing, whereupon the
Claim Escrow Agent shall disburse the amount of the claim to
Buyer or, alternatively, if the Representative contests the
claim, the Representative shall deliver written notice of the
contest and of the facts on which it is based to both the Claim
Escrow Agent and Buyer. In the event of such contest, the claim
shall be immediately submitted to binding arbitration under the
auspices of the American Arbitration Association in its
Southfield, Michigan office under its commercial arbitration
rules with the decision of the arbitrator(s) to be final and
binding, and judgment upon the award rendered by the
arbitrator(s) may, pursuant to MCLA section 600.5001, be entered in any
Michigan circuit court. The arbitration award shall include the
reasonable attorney fees of the prevailing party plus interest to
Buyer on any part of the Loss that is allowed at the rate of five
(5%) per cent per annum from the date the claim was originally
received by the Representative. In the event the Representative
neither approves nor contests a claim within thirty (30) days of
its submission to the Representative, such claim shall be
irrevocably deemed approved and the Claim Escrow Agent shall
disburse the amount of the claim to Buyer. On July 1, 1996, the
Escrow Agent shall disburse to the Representative, on behalf of
the Sellers, the remaining portion of the Claim Escrow Amount
from the Claim Escrow Account, together with any interest or
other earnings accrued on or with respect to the Claim Escrow
Amount; provided, however, that if, prior to July 1, 1996, the
Escrow Agent receives written notice from Buyer of a claim for
Loss, the Escrow Agent shall retain and continue to hold in the
Claim Escrow Account that amount which Buyer instructs Escrow
Agent to retain, not to exceed the amount of the claim. In the
event that Buyer instructs the Claim Escrow Agent to retain any
amount in the Claim Escrow Account pursuant to the immediately
preceding sentence, and Buyer and the Representative cannot agree
as to what amount, if any, is an amount reasonably necessary to
remain in the Claim Escrow Account to satisfy such claim
(including any reductions for the contingent nature of the
claim), then the Representative may, at any time while such
amounts remain in the Claim Escrow Account, submit to binding
arbitration either one or both of the following matters: (i) what
amount, if any, is an amount reasonably necessary to remain in
the Claim Escrow Account to satisfy such claim of Loss (including
any reductions for the contingent nature of the claim), or (ii) a
determination as to whether Buyer has or will incur a Loss,
whether Buyer is entitled to indemnification for such Loss
pursuant to this Agreement, and the amount of such Loss. The
matter shall be settled by the arbitrator(s) in Southfield,
Michigan, within 50 days of the submission and which
arbitrator(s) shall conduct the arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration
Association and judgment upon the award rendered by the
arbitrator(s) may, pursuant to MCLA section 600.5001, be entered in any
Michigan circuit court. Any amount retained by the Escrow Agent
after July 1, 1996 shall remain subject to the provisions of this
Section 9.5 and to the provisions of the Claim Escrow Agreement.
9.6 SPECIFIC PERFORMANCE. Notwithstanding anything
contained elsewhere in this Agreement to the contrary, each party
acknowledges that the other would be irreparably harmed by any
failure to perform each obligation arising under this Agreement
and that there may not be adequate remedy at law or in monetary
damages alone to compensate the damaged party for any such
failure to perform and agrees that each party shall, in addition
to any other remedy, be entitled to one or more injunctions
requiring specific performance by the nonperforming party, and
each party consents to the entry thereof.
9.7 WAIVER OF CROSS INDEMNITY AND CONTRIBUTION. Each
Seller hereby waives any right such Seller (in such capacity, a
"Claiming Seller") has or may in the future have to
indemnification or contribution, and hereby waives and releases
any such other Seller or Sellers from any claim such Claiming
Seller may now or in the future have, from or against any other
Seller or Sellers for such other Seller's or Sellers' breach of
any representation, warranty, agreement, covenant or any other
action or inaction which entitles Buyer to an indemnification
claim pursuant to this Agreement. Each Seller expressly agrees
and acknowledges that each Seller will be entitled to that
amount, if any, which is distributed from either the Price
Adjustment Escrow Account or the Claim Escrow Account only when
and if a distribution is made therefrom and then only in an
amount equal to each Seller's pro rata share as determined in
accordance with the Irrevocable Durable Power of Attorney
attached hereto as Exhibit 2.5.
ARTICLE X
TERMINATION
10.1 TERMINATION EVENTS. This Agreement may, by written
notice given at or prior to the Closing in the manner hereinafter
provided, be terminated and abandoned:
(a) by the members of the Bain Group, the Investor
Group, the Management Group or Buyer if a material default or
breach shall be made by another with respect to the due and timely
performance of any of such other party's covenants and agreements
contained herein, or with respect to the due compliance with any
such other party's representations and warranties contained in
Articles III and V hereof, as the case may be, and such default
cannot promptly be cured and has not been waived;
(b) by the mutual written consent of all of the members
of the Bain Group and Buyer; or
(c) by either any member of the Bain Group or Buyer if
the Closing shall not have occurred, other than through failure of
either party to fulfill its obligations hereunder, on or before
December 22, 1994, or such later date as may be agreed upon in
writing by the parties; provided, however, that neither Buyer nor
Seller shall have a right to terminate this Agreement before
January 31, 1995, pursuant to this Section 10.1(c), if such right
arises out of the continuation of any applicable statutory or
regulatory waiting periods, including any extensions thereof, under
the HSR Act.
10.2 EFFECT OF TERMINATION. In the event this Agreement is
terminated pursuant to Section 10.1, all further obligations of the
parties hereunder shall be terminated, except that the obligations
set forth in Section 11.1 shall survive; provided, however, that if
this Agreement is so terminated by one party because one or more of
the conditions to such party's obligations hereunder is not
satisfied as a result of the other party's failure to comply with
its obligations under any provision of this Agreement, it is
expressly agreed and understood that the terminating party's right
to pursue all legal remedies for breach of contract and damages
shall also survive such termination unimpaired; provided, further
that in the event the party failing to so comply is one of the
Sellers, the Buyer shall not pursue any legal remedies (other than
specific performance) against the Sellers (except to the extent
necessary to recover against the Company), but shall instead pursue
any such remedies against the Company, which hereby assumes and
agrees to be responsible therefor.
ARTICLE XI
MISCELLANEOUS
11.1 EXPENSES. Each party to this Agreement shall pay its own
costs and expenses (including all legal, accounting, broker, finder
and investment banker fees) relating to this Agreement, the
negotiations leading up to this Agreement and the transactions
contemplated by this Agreement.
11.2 AMENDMENT; WAIVER. Any provision of this Agreement may
be amended or waived prior to the Closing if, and only if, such
amendment or waiver is in writing and signed, in the case of an
amendment (except as provided below), by Buyer and all of the
members of the Bain Group, or in the case of a waiver or an
amendment adversely affecting the interests of any party hereto,
then by the party against whom the waiver or amendment is to be
effective.
11.3 ENTIRE AGREEMENT. This Agreement, including the
Schedules and Exhibits hereto and the agreements referred to
herein, contains all of the terms, conditions and representations
and warranties agreed upon by the parties relating to the subject
matter of this Agreement and supersedes all prior and
contemporaneous agreements, negotiation, correspondence,
undertakings and communications of the parties, oral or written,
respecting such subject matter.
11.4 HEADINGS. The headings contained in this Agreement are
intended solely for convenience of reference and shall not affect
the rights of the parties to this Agreement.
11.5 NOTICES. All notices, requests, demands and other
communications made in connection with this Agreement shall be in
writing and shall be deemed to have been duly given on the date of
delivery, if delivered by hand or by facsimile, transmission to the
persons identified below, or three days after mailing if mailed by
certified or registered mail, postage prepaid, return receipt
requested, addressed as follows:
If to Bain Group or Bain Capital
Representative: Two Copley Place
Boston, Massachusetts 02116
Facsimile No. (617) 572-3274
Attention: Robert C. Gay
Paul B. Edgerley
Ronald P. Mika
With a copy to: Honigman Miller Schwartz and
Cohn
2290 First National Building
Detroit, Michigan 48226
Facsimile No. (313) 962-0176
Attention: G. Scott Romney
Robert H. Kurnick, Jr.
If to the Management Group: Donald Holton
90 Colonel John Gardner Road
Narragansett, Rhode Island
02882
and to: Walter C. Jones
1640 Standish Court
Bloomfield Hills, MI 48302
With a copy to: Bodman, Longley & Dahling
755 W. Big Beaver, Suite 2020
Troy, Michigan 48084-4903
Attention: Terrence B. Larkin
If to the Investor Group: To the Persons and at the
addresses attached on Schedule
11.5
If to Buyer: Echlin Inc.
100 Double Beach Road
Branford, Connecticut 06405
Facsimile No. 203/481-6485
Attention: Vice President --
Corporate Development
With a copy to: Echlin Inc.
100 Double Beach Road
Branford, Connecticut 06405
Facsimile No. 203/481-6485
Attention: Secretary
Such addresses may be changed, from time to time, by means of a
notice given in the manner provided in this Section.
11.6 SEVERABILITY. If any provision of this Agreement is held
to be unenforceable for any reason, it shall be adjusted rather
than voided, if possible, in order to achieve the intent of the
parties to this Agreement to the extent possible. In any event,
all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.
11.7 BINDING EFFECT; ASSIGNMENT. This Agreement is binding
upon the parties hereto, and no party to this Agreement or any such
other Person may assign or delegate, by operation of law or
otherwise, all or any portion of its rights, obligations or
liabilities under this Agreement without the prior written consent
of the other parties to this Agreement, which it may withhold in
its absolute discretion, except that Buyer may assign its rights
and obligations hereunder to any Affiliate of Buyer.
11.8 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement
shall confer any rights upon any person or entity which is not a
party or any assignee of a party to this Agreement.
11.9 COUNTERPARTS. This Agreement may be signed in any number
of counterparts with the same effect as if the signatures to each
counterpart were upon a single instrument, and all such
counterparts together shall be deemed an original of this
Agreement.
11.10 GOVERNING LAW AND JURISDICTION. This Agreement
shall be governed by and construed in accordance with the laws of
the State of Michigan applicable to contracts made and to be wholly
performed in such state.
11.11 COST OF LITIGATION. If any legal action or other
proceeding is brought for the enforcement of this Agreement, or
because of an alleged dispute, breach, default or misrepresentation
in connection with this Agreement or the transactions contemplated
hereby, the successful or prevailing party or parties shall be
entitled to recover reasonable attorneys' fees and other reasonable
costs incurred in any such action or proceeding, in addition to any
other relief to which it or they may be entitled subject to Article
IX; provided, however, in the event the Buyer would otherwise be
entitled to recover litigation costs from one or more of the
Sellers, the Buyer agrees to recover not from the Sellers but from
the Company, which hereby assumes and agrees to be responsible
therefor (or, in the event any dispute occurs after the Closing,
then from the Claim Escrow Account, subject to Sections 9.4 and
9.5).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed on the date first above written.
ECHLIN INC.
By: /s/ Thomas P. Marchese
----------------------
Its: Asst. Vice President Corporate Development
------------------------------------------
TYLER CAPITAL FUND, L.P.
By: /s/ Paul B. Edgerley
--------------------
Its: General Partner of Bain Venture Capital
---------------------------------------
TYLER MASSACHUSETTS, L.P.
By: /s/ Paul B. Edgerley
--------------------
Its: General Partner of Bain Venture Capital
---------------------------------------
TYLER INTERNATIONAL L.P. - II
By: /s/ Paul B. Edgerley
--------------------
Its: General Partner of Bain Venture Capital
---------------------------------------
BCIP ASSOCIATES
By: /s/ Paul B. Edgerley
--------------------
Its: General Partner
---------------
BCIP TRUST ASSOCIATES, L. P.
By: /s/ Paul B. Edgerley
--------------------
Its: General Partner
---------------
(Signatures continued)
/s/ Donald Holton
-----------------
DONALD HOLTON
/s/ Walter C. Jones
-------------------
WALTER C. JONES
/s/ W. McComb Dunwoody
----------------------
W. MCCOMB DUNWOODY
/s/ Michael L. George
---------------------
MICHAEL L. GEORGE
GEORGE GROUP EMPLOYEE PARTNERS
By: /s/ Michael L. George
---------------------
Its: Managing Partner
----------------
/s/ Andrew M. Krauss
--------------------
ANDREW M. KRAUSS
JACKSON NATIONAL LIFE INSURANCE CO.
By: /s/P. B. Pheffer
------------------
Its: Senior Vice President & CFO
-----------------
By executing this Agreement in the space provided below, the
Company agrees to be bound by the terms of Section 10.2 and 11.11
of the Agreement. The Company is not otherwise a party to this
Agreement.
PREFERRED TECHNICAL GROUP
INTERNATIONAL, INC.
By: /s/ Donald Holton
-----------------
Its: President
---------
<PAGE>
<PAGE>
EXHIBIT 2.2
ADJUSTMENT TO PURCHASE PRICE
SECTION 1. As used herein, "Target Net Book Value" shall
be equal to $85,500,000.00. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings given to
them in the Purchase Agreement.
SECTION 2. As promptly as practicable, but in no event
later than ninety (90) days after the Closing Date, the Company
will prepare a balance sheet of the Company, and the Detroit
office of Price Waterhouse shall audit the balance sheet of the
Company, as of the close of business on the Closing Date (the
"Closing Balance Sheet") for the purpose of establishing Closing
Net Book Value and will deliver the Closing Balance sheet to the
Representative and to the Buyer. "Closing Net Book Value" shall
mean the Company's assets (but specifically excluding, to the
extent included in the Closing Balance Sheet, deferred
registration, debt issuance costs and any loans to officers of
the Company for the purchase of stock) minus its liabilities
(other than the amount of the Bank Loans and the Poole Note, and
any accrued and unpaid interest or other charges with respect
thereto, and specifically treating the Preferred Stock, and any
accrued and unpaid dividends thereon, as equity and not as a
liability), which will include an accrual for one-half of the
cost of the audit, in each case as reflected on the Closing
Balance Sheet. The Closing Balance Sheet shall be prepared based
on the results of the physical inventory taken by the Company on
November 28, 1994 and rolled forward to the Closing Date. The
Closing Balance Sheet and the determination of Closing Net Book
Value shall (w) reflect the assets and liabilities of the Company
as of the close of business on the Closing Date, (x) exclude the
effect of the purchase by the Buyer of the Shares, the redemption
of the Preferred Stock, the redemption of the Class P Stock and
the termination of the Options, all pursuant to the terms of the
Purchase Agreement, (y) not take into effect purchase accounting
in preparing the Closing Balance Sheet, and (z) otherwise be
prepared or made, as the case may be, in accordance with GAAP;
provided that to the extent consistent and in accordance with
GAAP, all accounting principles (including all practices and
valuation and estimation methodologies) utilized in connection
with the preparation of the Company's Balance Sheet at June 25,
1994, shall be utilized in connection with the preparation of the
Closing Balance Sheet and the determination of Closing Net Book
Value.
SECTION 3.
(a) If Closing Net Book Value equals or exceeds Target Net
Book Value, then the Purchase Price shall be adjusted upward on a
dollar-for-dollar basis equal to the amount by which the Closing
Net Book Value exceeds the Target Net Book Value. In such event,
and to the extent not disputed by the Representative or the
Buyer, Buyer and the Representative will, after the expiration of
30 days after the determination of Closing Net Book Value (or
earlier, if the parties agree as to Closing Net Book Value before
expiration of such 30 day period), instruct the Price Adjustment
Escrow Agent to disburse the entire Price Adjustment Escrow
Amount, plus any accrued interest or other earnings thereon, from
the Price Adjustment Escrow Account to the Representative, on
behalf of Sellers, in amounts and to accounts as designated by
the Representative. In addition, and to the extent not disputed
by the Representative or the Buyer, the Buyer shall within thirty
days of the determination of the Closing Net Book Value (or
earlier, if the parties agree as to Closing Net Book Value before
expiration of such 30 day period) pay to the Representative, on
behalf of the Sellers, by wire transfer of immediately available
funds, in amounts and to accounts designated by the
Representative, an amount equal to the difference between (i) the
Closing Net Book Value, minus (ii) the Target Net Book Value,
together with interest on such amount at the per annum rate of
five percent (5%); provided, however, that in no event shall the
amount paid pursuant to the immediately preceding clause exceed
an amount equal to $11,400,000.
(b) If Closing Net Book Value is less than Target Net Book
Value, then the Purchase Price shall be adjusted downward on a
dollar-for-dollar basis equal to the amount by which the Target
Net Book Value exceeds the Closing Net Book Value. To the extent
not disputed by the Representative or the Buyer, Buyer and the
Representative will, after the expiration of 30 days after the
determination of Closing Net Book Value (or earlier, if the
parties agree as to Closing Net Book Value before expiration of
such 30 day period), instruct the Price Adjustment Escrow Agent
to disburse the Price Adjustment Escrow Amount from the Price
Adjustment Escrow Account as follows: (i) if the Price
Adjustment Escrow Amount equals or is less than the amount by
which the Target Net Book Value exceeds the Closing Net Book
Value, then the Price Adjustment Escrow Agent shall disburse the
entire amount of the Price Adjustment Escrow Amount, together
with any interest or other earnings thereon to the Buyer and
Buyer shall be entitled to no further payments from any Seller,
or (ii) if the Price Adjustment Escrow Amount is more than the
amount by which the Target Net Book Value exceeds the Closing Net
Book Value, then the Price Adjustment Escrow Agent shall disburse
the amount by which the Target Net Book Value exceeds the Closing
Net Book Value, together with any interest or other earnings
attributable to such amount, from the Price Adjustment Escrow
Account to the Buyer and the remaining amount in the Price
Adjustment Escrow Account (inclusive of any interest or other
earnings attributable to such amount) shall be distributed to the
Representative, on behalf of the Sellers, in amounts and to
accounts designated by the Representative.
SECTION 4. If either the Representative or the Buyer
disagrees with any items on the Closing Balance Sheet, the
objecting party shall notify the other party in writing of such
disagreement within thirty (30) days after delivery of the
determination of Closing Net Book Value (such written notice
setting forth the basis for such disagreement in reasonable
detail). The Buyer and the Representative shall thereafter
negotiate in good faith to resolve any such disagreements. If
the Buyer and the Representative are unable to resolve any such
disagreements with thirty (30) days after delivery of such
notice, the Buyer and the Representative shall select an Auditor
to resolve the disagreements in accordance with Section 5 below.
SECTION 5. The "Auditor" shall be an independent
nationally-recognized certified public accounting firm mutually
selected by the Buyer and the Representative, on behalf of the
Sellers; provided, however, that if the Buyer and the
Representative, are unable to mutually agree upon an Auditor
within ten (10) days, the Buyer and the Representative shall,
within five (5) days thereafter, select one of the "big six"
accounting firms by lot (after the Buyer and the Representative
each exclude one such accounting firm) solely to resolve the
individual disputed line items. The Buyer and the Representative
shall use their best efforts to cause the Auditor to resolve all
disagreements over individual line items within thirty (30) days
after such selection. In resolving any disputed items, the
Auditor may not assign a value to such item greater than the
greatest value for such item claimed by either party or less than
the smallest value therefor claimed by either party. The
resolution of such disagreements by the Auditor shall be final
and binding on all of the parties hereto and may be specifically
enforced by legal proceedings, and, pursuant to MCLA Section
600.5001, the parties agree that a judgment of any Michigan
circuit court may be rendered upon the resolution rendered by the
Auditor pursuant to this Section. The fees and expenses of the
Auditor shall be shared equally by the Buyer and the Sellers.
<PAGE>
EXHIBIT 2.3(A)
PRICE ADJUSTMENT ESCROW AGREEMENT
THIS AGREEMENT is made as of December 16, 1994, by and among
Echlin Inc., a Connecticut Corporation ("Buyer"), _____________
(the "Escrow Agent") and Bain Capital, Inc., a __________
corporation, not individually, but as representative (the
"Representative") of holders of equity securities issued by
Preferred Technical Group International, Inc. ("PTGI").
Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Stock Purchase
Agreement, dated December __, 1994, by and between Buyer and the
Stockholders of PTGI (the "Purchase Agreement").
RECITALS
To account for any potential change to the purchase price of
the Shares, on the Closing Date Buyer shall deposit $11,400,000,
the Price Adjustment Escrow Amount, into the Price Adjustment
Escrow Account with the Escrow Agent, and such escrow shall be
held and distributed by the Escrow Agent in accordance with the
terms of this Price Adjustment Escrow Agreement (the "Escrow
Agreement").
Therefore, the parties agree as follows:
1. RECEIPT AND INVESTMENT OF ESCROW FUND.
1.1 RECEIPT OF ESCROW FUND. Simultaneously with the
execution of this Escrow Agreement Buyer has deposited with
the Escrow Agent the Price Adjustment Escrow Amount into the
Price Adjustment Escrow Account, receipt of which shall be
acknowledged in writing by the Escrow Agent to the
Representative and Buyer (this amount, together with all
interest on earnings thereon, are referred to as the "Escrow
Fund").
1.2 INVESTMENT. Insofar it is reasonably practicable,
the Escrow Agent shall invest the Price Adjustment Escrow
Amount as mutually agreed to by the Buyer and the
Representative and as directed in writing by the Buyer and
the Representative to the Escrow Agent. The Escrow Agent
will have no responsibility for (a) any diminution in the
Escrow Fund or (b) any delay in distributing all or part of
the Escrow Fund caused by or resulting from any investment
made pursuant to this Escrow Agreement.
2. DISPOSITION OF ESCROW FUND.
2.1 DISTRIBUTION OF ESCROW FUND. The Escrow Agent
shall disburse the Escrow Fund in amounts, manner and
accounts designated by the joint written instructions of the
Representative and Buyer, or, if applicable, the decision of
the Auditor pursuant to Exhibit 2.2 to the Purchase
Agreement.
2.2 ESCROW AGENT FEES. Each distribution by the
Escrow Agent hereunder shall be reduced by the amount of any
fees of the Escrow Agent for its services accrued hereunder
but unpaid through the date of such distribution with 50% of
the fee payable by the Sellers and the remaining 50% payable
by Buyer.
3. DUTIES OF THE ESCROW AGENT. The Escrow Agent will
perform only such duties as are specifically set forth in this
Escrow Agreement and may conclusively rely and will be protected
in acting or refraining from acting, upon any written notice,
certificate, instrument or signature believed by him to be duly
genuine and to have been signed or presented by the proper party
or parties duly authorized to do so. The Escrow Agent shall not
be charged with knowledge of any fact or condition, unless he has
actually received written notice thereof from one of the parties
hereto or their authorized representative clearly referring to
this Escrow Agreement. The Escrow Agent will not be liable for
(a) any action taken or omitted by it in good faith and in
accordance with advice of counsel (which counsel may be the
Escrow Agent's counsel) or (b) any mistake of facts or error of
judgment or for any acts or omissions of any kind unless caused
by his willful misconduct or gross negligence. Buyer and Sellers
will, jointly and severally, indemnify the Escrow Agent and hold
him/her harmless against any and all liabilities incurred by
him/her under this Escrow Agreement, except for liabilities
incurred by the Escrow Agent resulting from his/her own negligent
or willful action or inaction.
4. DISPUTES. In the event of any dispute with respect to
the disposition of all or part of the Escrow Fund, the Escrow
Agent shall not be obligated to disburse the disputed portion
thereof nor shall the Escrow Agent be required to commence any
action against any party hereto and the Escrow Agent may, in its
discretion, deposit all funds held by it under this Escrow
Agreement with a court of competent jurisdiction.
5. ACCOUNTING. The Escrow Agent shall under no
circumstances be compelled to furnish a formal accounting
hereunder except as requested by the Representative or Buyer.
6. EXPENSES. All reasonable expenses, disbursements and
advances incurred or made by the Escrow Agent in the performance
of his/her duties hereunder maybe subtracted from the Escrow Fund
from time to time at the Escrow Agent's discretion.
7. MODIFICATION. This Escrow Agreement may not be altered
or modified without the express written consent of Sellers, Buyer
and the Escrow Agent.
8. AUTHORITY TO DIRECT ESCROW AGENT. The following
individuals are hereby authorized to issue written directions to
the Escrow Agent with respect to the payment and distribution of
the Escrow Fund on behalf of Sellers and Buyer:
Representative: Paul B. Edgerley
Robert C. Gay
Ronald P. Mika
Buyer: Any officer of Buyer
9. LAW TO GOVERN. This Escrow Agreement will be governed
by and construed in accordance with the laws of the State of
Michigan.
<PAGE>
IN WITNESS WHEREOF, this Escrow Agreement has been executed
by the parties as of the date first above written.
ESCROW AGENT: REPRESENTATIVE:
_________________________ BAIN CAPITAL, INC.
By:______________________ By: _____________________
Its: ____________________ Its: ____________________
BUYER:
ECHLIN INC.
By: _____________________
Its: ____________________
<PAGE>
EXHIBIT 2.3(B)
CLAIM ESCROW AGREEMENT
THIS AGREEMENT is made as of December 16, 1994, by and among
Echlin Inc., a Connecticut corporation ("Buyer"), _____________
(the "Escrow Agent") and Bain Capital, Inc., a __________
corporation, not individually, but as representative (the
"Representative") of holders of equity securities issued by
Preferred Technical Group International, Inc. ("PTGI").
Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Stock Purchase
Agreement, dated December __, 1994, by and between Buyer and the
Stockholders of PTGI (the "Purchase Agreement").
RECITALS
To indemnify the Seller Indemnified Parties against possible
claims for Losses brought by Buyer, on the Closing Date, Buyer
shall deposit $7,600,000, the Claim Escrow Amount, into the Claim
Escrow Account and disbursements from the Claim Escrow Account
shall be made pursuant to this Claim Escrow Agreement ("Escrow
Agreement").
Therefore, the parties agree as follows:
1. RECEIPT AND INVESTMENT OF ESCROW FUND.
1.1 RECEIPT OF ESCROW FUND. Simultaneously with the
execution of this Escrow Agreement Buyer has deposited with
the Escrow Agent the Claim Escrow Amount, receipt of which
shall be acknowledged in writing by the Escrow Agent to the
Representative and Buyer (this amount, together with all
interest on earnings thereon, are referred to as the "Escrow
Fund").
1.2 INVESTMENT. Insofar it is reasonably practicable,
the Escrow Agent shall invest the Claim Escrow Amount as
mutually agreed to by the Buyer and the Representative and
as directed in writing by the Representative to the Escrow
Agent. The Escrow Agent will have no responsibility for (a)
any diminution in the Escrow Fund or (b) any delay in
distributing all or part of the Escrow Fund caused by or
resulting from any investment made pursuant to this Escrow
Agreement.
2. DISPOSITION OF ESCROW FUND.
2.1 ESCROW. In the event Buyer makes any claim for any
Losses, Buyer shall notify the Claim Escrow Agent and the
Representative in writing as to both the amount of the
alleged Loss and the specific facts supporting the claim for
the Loss. Thereafter, the Representative may either agree
with Buyer's claim and notify the Claim Escrow Agent in
writing, whereupon the Claim Escrow Agent shall disburse the
amount of the claim to Buyer or, alternatively, if the
Representative contests the claim, the Representative shall
deliver written notice of the contest and of the facts on
which it is based to both the Claim Escrow Agent and Buyer.
In the event of such contest, the claim shall be immediately
submitted to binding arbitration under the auspices of the
American Arbitration Association in its Southfield, Michigan
office under its commercial arbitration rules with the
decision of the arbitrator(s) to be final and binding, and
judgment upon the award rendered by the arbitrator(s) may,
pursuant to MCLA section 600.5001, be entered in any Michigan
circuit court. The arbitration award shall include the
reasonable attorney fees of the prevailing party plus
interest to Buyer on any part of the Loss that is allowed at
the rate of five (5%) per cent per annum from the date the
claim was originally received by the Representative. In the
event the Representative neither approves nor contests a
claim within thirty (30) days of its submission to the
Representative, such claim shall be irrevocably deemed
approved and the Claim Escrow Agent shall disburse the
amount of the claim to Buyer. On July 1, 1996, the Escrow
Agent shall disburse to the Representative, on behalf of the
Sellers, the remaining portion of the Claim Escrow Amount
from the Claim Escrow Account, together with any interest or
other earnings accrued on or with respect to the Claim
Escrow Amount; provided, however, that if, prior to July 1,
1996, the Escrow Agent receives written notice from Buyer of
a claim for Loss, the Escrow Agent shall retain and continue
to hold in the Claim Escrow Account that amount which Buyer
instructs Escrow Agent to retain, not to exceed the amount
of the claim. In the event that Buyer instructs the Claim
Escrow Agent to retain any amount in the Claim Escrow
Account pursuant to the immediately preceding sentence, and
Buyer and the Representative cannot agree as to what amount,
if any, is an amount reasonably necessary to remain in the
Claim Escrow Account to satisfy such claim (including any
reductions for the contingent nature of the claim), then the
Representative may, at any time while such amounts remain in
the Claim Escrow Account, submit to binding arbitration
either one or both of the following matters: (i) what
amount, if any, is an amount reasonably necessary to remain
in the Claim Escrow Account to satisfy such claim of Loss
(including any reductions for the contingent nature of the
claim), or (ii) a determination as to whether Buyer has or
will incur a Loss, whether Buyer is entitled to
indemnification for such Loss pursuant to this Agreement,
and the amount of such Loss. The matter shall be settled by
the arbitrator(s) in Southfield, Michigan, within 50 days of
the submission and which arbitrator(s) shall conduct the
arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association and judgment
upon the award rendered by the arbitrator(s) may, pursuant
to MCLA section 600.5001, be entered in any Michigan circuit court.
Any amount retained by the Escrow Agent after July 1, 1996
shall remain subject to the provisions of this Section 2.1
and to the applicable provisions of the Purchase Agreement.
2.2 ESCROW AGENT FEES. Each distribution by the
Escrow Agent hereunder shall be reduced by the amount of any
fees of the Escrow Agent for its services accrued hereunder
but unpaid through the date of such distribution with 50% of
the fee payable by the Sellers and the remaining 50% payable
by Buyer.
3. DUTIES OF THE ESCROW AGENT. The Escrow Agent will
perform only such duties as are specifically set forth in this
Escrow Agreement and may conclusively rely and will be protected
in acting or refraining from acting, upon any written notice,
certificate, instrument or signature believed by it to be duly
genuine and to have been signed or presented by the proper party
or parties duly authorized to do so. The Escrow Agent shall not
be charged with knowledge of any fact or condition, unless it has
actually received written notice thereof from one of the parties
hereto or their authorized representative clearly referring to
this Escrow Agreement. The Escrow Agent will not be liable for
(a) any action taken or omitted by it in good faith and in
accordance with advice of counsel (which counsel may be the
Escrow Agent's counsel) or (b) any mistake of facts or error of
judgment or for any acts or omissions of any kind unless caused
by its willful misconduct or gross negligence. Buyer and Sellers
will, jointly and severally, indemnify the Escrow Agent and hold
it harmless against any and all liabilities incurred by it under
this Escrow Agreement, except for liabilities incurred by the
Escrow Agent resulting from its own negligent or willful action
or inaction.
4. DISPUTES. In the event of any dispute with respect to
the disposition of all or part of the Escrow Fund, the Escrow
Agent shall not be obligated to disburse the disputed portion
thereof nor shall the Escrow Agent be required to commence any
action against any party hereto and the Escrow Agent may, in its
discretion, deposit all funds held by it under this Escrow
Agreement with a court of competent jurisdiction.
5. ACCOUNTING. The Escrow Agent shall under no
circumstances be compelled to furnish a formal accounting
hereunder except as requested by the Representative or Buyer.
6. EXPENSES. All reasonable expenses, disbursements and
advances incurred or made by the Escrow Agent in the performance
of its duties hereunder maybe subtracted from the Escrow Fund
from time to time at the Escrow Agent's discretion.
7. MODIFICATION. This Escrow Agreement may not be altered
or modified without the express written consent of the
Representative, Buyer and the Escrow Agent.
8. AUTHORITY TO DIRECT ESCROW AGENT. The following
individuals are hereby authorized to issue written directions to
the Escrow Agent with respect to the payment and distribution of
the Escrow Fund on behalf of the Sellers and Buyer:
Representative: Paul B. Edgerley
Robert C. Gay
Ronald P. Mika
Buyer: Any officer of Buyer
9. LAW TO GOVERN. This Escrow Agreement will be governed
by and construed in accordance with the laws of the State of
Michigan.
<PAGE>
IN WITNESS WHEREOF, this Escrow Agreement has been executed
by the parties as of the date first above written.
ESCROW AGENT: REPRESENTATIVE:
_________________________ BAIN CAPITAL, INC.
By: _____________________ By: _____________________
Its: ____________________ Its: ____________________
BUYER:
ECHLIN INC.
By: _____________________
Its: ____________________
<PAGE>
EXHIBIT 2.4
FORM OF RESOLUTIONS RE: OPTIONS,
PREFERRED STOCK, CLASS P STOCK AND BANK LOANS
<PAGE>
EXHIBIT 2.5
IRREVOCABLE DURABLE POWER OF ATTORNEY
The undersigned hereby appoint Bain Capital, Inc., a
Delaware corporation, as their attorney-in-fact ("Agent") and
vest Agent with such powers as are specifically set forth herein.
Agent shall have no powers, duties or responsibilities except
those expressly set forth herein.
A. Agent's Powers. The undersigned grant to Agent the
following powers to be exercised in their names and for their
benefits:
1. General Grant of Power. To exercise or perform
any act, power, duty, right or obligation whatsoever that the
undersigned now have or may hereafter acquire, relating to any
person, matter, transaction or property, real or personal,
tangible or intangible, now owned or hereafter acquired by the
undersigned in connection with the performance of the terms and
conditions of the Stock Purchase and Sale Agreement, dated
December __, 1994, among Echlin Inc. and certain of the
undersigned (the "Stock Purchase Agreement"), as specified in
Section 2.5 of the Stock Purchase Agreement, which is
incorporated herein (collectively, "Performance of Stock
Purchase Agreement"). The undersigned grant to Agent full power
and authority to do everything necessary in exercising any of the
powers herein granted as fully as the undersigned might or could
do if personally present, with full power of substitution or
revocation, hereby ratifying and confirming all that Agent shall
lawfully do or cause to be done by virtue of this power of
attorney and the powers herein granted. Notwithstanding anything
herein to the contrary, the Agent shall have no power to amend or
modify the terms of the Stock Purchase Agreement or any other
agreement executed and delivered in connection therewith without
the prior written consent of each person or entity which or who
is a party to such other agreement or agreements.
2. Collection Powers.
(a) In connection with the Performance of the
Stock Purchase Agreement, to forgive, request, demand, sue for,
recover, collect, receive, hold all such sums of money, debts,
dues, commercial paper, checks, drafts, accounts, stock
certificates, and proceeds, all documents of title, all property,
real or personal, intangible or tangible property and property
rights, and demands whatsoever, liquidated or unliquidated, now
or hereafter owned by, or due, owing, payable or belonging to,
the undersigned or in which the undersigned have or may hereafter
acquire an interest including any disbursements from the Price
Adjustment Escrow Account and the Claim Escrow Account (as each
term is defined in Section 2.4 of the Stock Purchase Agreement);
to have, use and take all lawful means and equitable and legal
remedies and proceedings in their name for the collection and
recovery thereof; and to adjust, sell, compromise and agree for
the same, and to execute and deliver for the undersigned, on
their behalf, and in their name, all endorsements, releases,
receipts or other sufficient discharges for the same.
(b) In connection with the performance of its
duties hereunder, Agent shall promptly distribute all sums
received by it in connection with the Stock Purchase Agreement
and the consummation of the transactions contemplated therein to
the persons or entities listed on Exhibit A attached hereto, in
the percentages specified in such Exhibit.
3. Settlement Powers. In connection with the
Performance of the Stock Purchase Agreement, to adjust, settle,
compromise or submit to arbitration any accounts, debts, claims,
demands, disputes or matters which are now subsisting or may
hereafter arise between the undersigned and any other person or
persons, or in which any property, right, title, interest or
estate belonging to or claims by the undersigned may be
concerned.
B. Liability of Agent. Neither Agent nor any of its
partners, managers, employees, officers, directors, agents,
attorneys or affiliates shall be liable for any action taken or
omitted by any of them on behalf of the undersigned, hereunder or
under the Stock Purchase Agreement, except for its, his or her
own gross negligence or willful misconduct, or be responsible for
the validity of this power of attorney.
C. Interpretation and Governing Laws. The provisions of
Section 11.10 of the Stock Purchase Agreement are incorporated
herein.
D. Disability of Principal. This power of attorney shall
not be affected by any of the undersigned's disability. The
authority of the undersigned's Agent shall be exercisable
notwithstanding the undersigned's later disability or incapacity
or later uncertainty as to whether any of the undersigned is
alive. Any act done by Agent during any period of any of the
undersigned's disability or incompetency or during any period of
uncertainty as to whether any of the undersigned is alive shall
have the same effect as though the undersigned were alive,
competent and not disabled, and shall inure to the benefit of and
bind the undersigned, or their respective heirs, devisees and
personal representatives.
E. Termination. This power of attorney shall terminate
upon the payment of all amounts due to the undersigned, and the
performance of all obligations by all of the respective parties,
under the Stock Purchase Agreement.
F. Waiver of Cross Indemnity and Contribution. The
undersigned each hereby waives any right such person (in such
capacity, a "Claimant") has or may in the future have to
indemnification or contribution, and hereby waives and releases
the Agent and each other of the undersigned (in such capacity,
the "Defending Seller") from any claim such Claimant may now or
in the future have, from or against the Defending Seller for the
Defending Seller's breach of any representation, warranty,
agreement, covenant or any other action or inaction which
entitles Echlin Inc. to an indemnification claim pursuant to the
Stock Purchase Agreement. Each of the undersigned expressly
agrees and acknowledges that each of the undersigned will be
entitled to that amount, if any, which is distributed from either
the Price Adjustment Escrow Account or the Claim Escrow Account
(as each such term is defined in the Stock Purchase Agreement)
only when and if a distribution is made therefrom and then only
in an amount of such of the undersigned's pro rata share as
determined in accordance with Section 2(b) above.
G. Counterparts. This Agreement may be signed in any
number of counterparts with the same effect as if the signatures
to each counterpart were upon a single instrument, and all such
counterparts together shall be deemed an original of this
Agreement.
H. Amendment and Revocation. This power of attorney may
not be amended, modified or revoked by any of the undersigned at
any time.
<PAGE>
The undersigned has signed and delivered this Irrevocable
Durable Power of Attorney this day of December, 1994.
-------------------------
Tyler Capital Fund, L.P.
-------------------------
Tyler Massachusetts, L.P.
-------------------------
Tyler International L.P. - II
-------------------------
BCIP Associates
-------------------------
BCIP Trust Associates, L.P.
-------------------------
Donald Holton
-------------------------
Walter C. Jones
-------------------------
W. McComb Dunwoody
-------------------------
Michael L. George
-------------------------
George Group Employee Partners
-------------------------
Andrew M. Krauss
-------------------------
Jackson National Life Insurance
Company
-------------------------
McKaCo Trust
-------------------------
Peter Pappas
-------------------------
James Canfield
-------------------------
Dennis Agusti
-------------------------
Richard Wood
-------------------------
Alan Berecky
-------------------------
Noreta Davis
-------------------------
Michael Holton
-------------------------
William Augustine
-------------------------
Jack Dawson
-------------------------
Mike Meyer
-------------------------
Dave Shannon
-------------------------
Stephen Wittig
-------------------------
Keith Allman
-------------------------
Tim Maag
-------------------------
Tim Fleming
-------------------------
Art Espey
-------------------------
Mitch Aiello
-------------------------
Ken Lloyd
-------------------------
Andy Bacon
-------------------------
Brian Quinn
-------------------------
Dave Peterson
-------------------------
Pete Smith
-------------------------
Sandy Galloway
-------------------------
Al Bostain
-------------------------
Ron Kott
-------------------------
Jeffrey Hunter
-------------------------
Todd Peters
-------------------------
Grant Beard
<PAGE>
EXHIBIT 8.5
POOLE NOTE
This instrument is subject to the Subsidiary
Intercreditor Agreement dated as of May 7, 1993, as
amended on October 17, 1994, among Multitec-PTG, Inc.,
Preferred Technical Group, Inc., H. Tate Poole, Jr.,
MEI, Inc., Jackson National Life Insurance Company, and
NBD Bank, N.A., which, among other things, contains
provisions subordinating the obligations of the maker
hereof to holder hereof to the maker's obligations to
the holders of the Lender Obligations (as defined in
said Agreement), to which provisions the holder of this
instrument, by acceptance hereof, agrees.
FIRST AMENDED AND RESTATED PROMISSORY NOTE
$4,000,000.00 Brandon, Mississippi
Maturity Date: January 3, 1995 October 17, 1994
FOR VALUE RECEIVED, the undersigned promises to pay to the
order of H. TATE POOLE, JR. ("Lender"), at 103 Rosewood, Brandon,
Mississippi 39042, or at such other place as the holder of this
Note may from time to time designate in writing, the principal
sum of FOUR MILLION DOLLARS ($4,000,000.00), together with
interest on the unpaid principal balance of this Note until final
payment in full of this Note, on the basis of a year of 360 days
for the actual number of days elapsed, at the LIBOR Rate of
interest (as defined below) plus 2.5 percent (the "Applicable
Rate"). Payment of principal along with accrued and unpaid
interest under this Note will be due and payable on January 3,
1995.
In lieu of the statutory late fee, the undersigned agrees
that if the principal and interest due under this Note are not
paid when due and remain unpaid for a period of fifteen (15)
consecutive calendar days, then the Applicable Rate shall
automatically, without notice to the undersigned, be the LIBOR
Rate plus 4.5 percent during the period in which the undersigned
is in default of its obligations under this Note.
As used herein, the term "LIBOR Rate" shall mean, at any
date of calculation, the "Eurodollar Rate" as calculated pursuant
to the Credit Agreement, dated as of October 15, 1992, as amended
and as may be amended from time to time, by and between Preferred
Technical Group, Inc., and NBD Bank, N.A., even if such Credit
Agreement is terminated.
Principal of and interest on this Note will be payable in
lawful money of the United States of America. The undersigned
will pay all costs of collection and enforcement of this Note
including reasonable attorneys fees and court costs. This Note
shall not be prepaid prior to the Maturity Date.
This Note is issued in connection with the Settlement
Agreement (the "Settlement Agreement"), of even date herewith,
among Lender, MEI, Inc. and the undersigned and certain other
entities, and is subject to the terms and conditions contained
therein.
Any notice to the undersigned provided for in this Note
shall be given by mailing such notice by certified mail addressed
to the undersigned at the address stated below, or to such other
address as the undersigned may designate by notice to the holder
hereof. Any notice to the holder hereof shall be given by
mailing such notice by certified mail, return receipt requested,
to the holder hereof at the address stated in the first paragraph
of this Note, or at such other address as may have been
designated by notice to the undersigned.
The undersigned, and all endorsers and guarantors, hereby
severally waive valuation and appraisement, presentment, protest
and demand, notice of protest, demand and dishonor and
non-payment of this Note, and expressly agrees that the maturity
of this Note, or any payment hereunder, may be extended from time
to time without in any way affecting the liability of the
undersigned or said endorsers or guarantors.
This Note is issued in exchange and substitution for the
Note payable by the Company to the Lender in the amount of
$4,000,000.00 and evidences the same liabilities and obligations
under such Note plus additional liabilities and obligations.
This Note, made in the State of Mississippi, shall be
governed and construed according to the internal laws of
Mississippi.
MULTITEC-PTG, INC.,
a Delaware corporation
By: _____________________
Its: ____________________
Address for Notice:
2044 Austin
Rochester Hills, Michigan 48309
Attn: Chief Financial Officer
