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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): JANUARY 21, 2000
POLYVISION CORPORATION
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(Exact name of registrant as specified in its charter)
NEW YORK 1-10555 13-3482597
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
4888 SOUTH OLD PEACHTREE ROAD, NORCROSS, GEORGIA 30071
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (770) 447-5043
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CURRENT REPORT ON FORM 8-K
POLYVISION CORPORATION
January 21, 2000
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) On January 21, 2000, pursuant to an Asset Purchase Agreement, dated
January 21, 2000, PolyVision Corporation (through its wholly-owned subsidiary,
Greensteel, Inc.) purchased substantially all of the assets of American
Chalkboard Company, L.L.C., an Alabama limited liability company ("American
Chalkboard"), and assumed certain of the liabilities of American Chalkboard, for
$5.25 million. The purchase price was determined as a result of arm's-length
negotiations between the parties.
In a separate transaction, on January 21, 2000, pursuant to an
Asset Purchase Agreement, dated January 21, 2000, PolyVision (through
Greensteel) purchased substantially all of the assets of Peninsular Slate
Company, a Michigan corporation, and Peninsular Slate Company of Texas, a Texas
corporation (together, "Peninsular Slate"), and assumed certain of the
liabilities of Peninsular Slate, for $4.2 million, subject to a working capital
adjustment. The purchase price was determined as a result of arm's-length
negotiations between the parties.
Both American Chalkboard and Peninsular Slate manufacture and
install chalkboards and other visual display boards primarily for the
educational products market. American Chalkboard maintains a production facility
in Wetumpka, Alabama, and Peninsular Slate maintains a production facility in
Troy, Michigan.
The acquisitions were funded by an increase in PolyVision's
senior secured credit facility.
Neither American Chalkboard nor Peninsular Slate had any
material relationship or association with PolyVision. The acquisitions will be
accounted for under the purchase method of accounting.
(b) There are presently no significant changes anticipated in the
businesses or product lines of American Chalkboard or Peninsular Slate.
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Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
In accordance with Item 7(a), the financial
statements of American Chalkboard and Peninsular Slate shall
be provided not later than April 5, 2000.
(b) PRO FORMA FINANCIAL INFORMATION.
In accordance with Item 7(b), the pro forma financial
information shall be provided not later than April 5, 2000.
(c) EXHIBITS.
2.4 Asset Purchase Agreement, dated January 21, 2000, by
and among Greensteel, Inc., American Chalkboard
Company, LLC, Summit America, LLC and W. Daniel
Hughes, Jr.
2.5 Asset Purchase Agreement, dated January 21, 2000, by
and among Greensteel, Inc., Peninsular Slate Company,
Peninsular Slate Company of Texas and Jack E.
Tomalis.
10.48 Amendment No. 3 to Credit Agreement, dated as of
January 21, 2000, by and among PolyVision
Corporation, Greensteel, Inc. and Posterloid
Corporation, as borrowers, the financial institutions
signatory thereto and Fleet National Bank, as
administrative agent and in certain other capacities
specified therein.
10.49 Amendment No. 2 to Senior Subordinated Note and
Warrant Purchase Agreement, dated as of January 21,
2000, among PolyVision Corporation, Greensteel, Inc.
and Posterloid Corporation, and John Hancock Mutual
Life Insurance Company, John Hancock Variable Life
Insurance Company and Hancock Mezzanine Partners L.P.
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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.
POLYVISION CORPORATION
Dated: February 3, 2000 By: /s/ Gary L. Edwards
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Gary L. Edwards
Chief Financial Officer, Treasurer
and Secretary
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION PAGE
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<S> <C> <C>
2.4 Asset Purchase Agreement, dated January 21, 2000, by and
among Greensteel, Inc., American Chalkboard Company, LLC,
Summit America, LLC and W. Daniel Hughes, Jr.
2.5 Asset Purchase Agreement, dated January 21, 2000, by and
among Greensteel, Inc., Peninsular Slate Company, Peninsular
Slate Company of Texas and Jack E. Tomalis.
10.48 Amendment No. 3 to Credit Agreement, dated as of January 21,
2000, by and among PolyVision Corporation, Greensteel, Inc.
and Posterloid Corporation, as borrowers, the financial
institutions signatory thereto and Fleet National Bank, as
administrative agent and in certain other capacities
specified therein.
10.49 Amendment No. 2 to Senior Subordinated Note and Warrant
Purchase Agreement, dated as of January 21, 2000, among
PolyVision Corporation, Greensteel, Inc. and Posterloid
Corporation, and John Hancock Mutual Life Insurance Company,
John Hancock Variable Life Insurance Company and Hancock
Mezzanine Partners L.P.
</TABLE>
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EXHIBIT 2.4
===============================================================================
GREENSTEEL, INC.,
the Buyer,
and
AMERICAN CHALKBOARD COMPANY, L.L.C.,
the Seller,
and
SUMMIT AMERICA, L.L.C. and W. DANIEL HUGHES, JR.,
the Equityholders
--------------------------------
ASSET PURCHASE AGREEMENT
---------------------------------
Dated January 21, 2000
===============================================================================
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement"), dated January 21, 2000, by
and among GREENSTEEL, INC., a Delaware corporation and wholly-owned subsidiary
of PolyVision Corporation (the "Buyer"), and AMERICAN CHALKBOARD COMPANY,
L.L.C., an Alabama limited liability company (the "Seller"), and SUMMIT AMERICA,
L.L.C. and W. DANIEL HUGHES, JR. (each an "Equityholder" and together the
"Equityholders").
W I T N E S S E T H :
WHEREAS, the Seller is engaged primarily in the business of
manufacturing and constructing chalkboards and other visual display boards as a
subcontractor to firms in the building and servicing of educational and
commercial facilities (the "Business"); and
WHEREAS, in connection with and in furtherance of its business, the
Seller is the owner of certain assets and properties; and
WHEREAS, the Seller desires to sell certain of its assets and
properties to the Buyer, and the Buyer desires to purchase such assets and
properties, and the Business of the Seller as a going concern, all upon the
terms and conditions set forth in this Agreement; and
WHEREAS, Summit America, L.L.C. is the record and beneficial owner of
all issued and outstanding equity interests of the Seller, and will thus derive
benefit from the transactions contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. ACQUIRED ASSETS.
1.1 THE ASSETS. Subject to the terms and conditions of this
Agreement, on and as of the Closing Date (as such term is hereinafter defined),
the Seller shall sell, transfer and deliver to the Buyer, and the Buyer shall
purchase and receive from the Seller, all of the following assets, properties,
improvements and business of the Seller as same are constituted on the Closing
Date (collectively, the "Assets"):
(a) All laminating and other machinery, equipment, tools,
aluminum profile and other dies, workbench set-ups and jigs, and vehicles
(including trucks and trailers) owned or leased by the Seller, including but not
limited to those items listed on SCHEDULE 1.1 annexed hereto (collectively, the
"Fixed Assets");
(b) All furniture and fixtures of the Seller;
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(c) All inventory and supplies of the Seller (collectively,
the "Inventory");
(d) All down payments, if any, held by the Seller, and all
accounts receivable, contract rights and other rights of the Seller to receive
payment for products sold and/or services rendered;
(e) All of the Seller's rights and interests in and to the
real property described on EXHIBIT A attached hereto and made part hereof,
located in Wetumpka, Alabama, together with the Seller's right, title and
interest in and to (i) the building, facility and any other structure or
improvement thereon, (ii) all rights, privileges, hereditaments and
appurtenances appertaining thereto or to such building, facility or any other
structure or improvement, (iii) all rights of way, easements, water rights,
rights to any minerals, oil, gas and other hydrocarbon substances, if any, and
(iv) to the extent constituting real property under applicable law, all
fixtures, installations, machinery, equipment and other property attached
thereto or located thereon (collectively, the "Wetumpka Facility");
(f) To the extent permitted by law and any subject warranty
agreement, all manufacturers' warranties and/or vendors' warranties in effect
with respect to any of the Fixed Assets and/or the Inventory;
(g) All patents, trademarks, tradenames, service marks,
copyrights and other intellectual property, and all pending applications and
registrations therefor, and all good will related thereto, in which the Seller
has any rights (collectively, the "Intellectual Property");
(h) All rights under executory contracts and agreements
between the Seller and its customers relating to ongoing and/or future products
to be sold or services to be rendered to such customers and between the Seller
and its vendors relating to ongoing and/or future purchases of raw materials and
other supplies, in either case to be assumed by the Buyer pursuant to Section
2.1(b);
(i) Any and all down payments relating to any of the Assets
and any and all prepaid expenses and other prepayments (including, without
limitation, prepayments in respect of the Assumed Liabilities described in
Section 2.1 below) relating to any of the Assets;
(j) All customer lists, supplier lists, operating manuals,
artwork, silkscreens, trade secrets, technical information, and other such
knowledge and information constituting the "know-how" of the Seller, the name
"American Chalkboard," and the goodwill of the Seller; and
(k) All books, records, software, databases, printouts,
drawings, data, files, notes, notebooks, correspondence and memoranda relating
to the foregoing Assets.
1.2 EXCLUDED ASSETS. Anything elsewhere contained in this
Agreement to the contrary notwithstanding, the Seller will not be selling,
assigning or transferring, and the
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Buyer will not be purchasing or acquiring, any cash (other than amounts
representing down payments), deposit, checking, money market or stock accounts,
or marketable securities of the Seller, life insurance policies, prepaid
premiums for hazard, liability and life insurance or any notes receivable from
affiliates of the Seller.
2. ASSUMED LIABILITIES.
2.1 ASSUMED LIABILITIES. Subject to the terms and conditions of
this Agreement, on and as of the Closing Date, the Seller shall transfer and
assign to the Buyer, and the Buyer shall assume and thereafter pay as and when
due, the following debts, liabilities and obligations of the Seller as same are
constituted on the Closing Date (collectively, the "Assumed Liabilities"):
(a) the obligations of the Seller from and after the
Closing Date under the contracts and leases in respect of any of the Assets; and
(b) (i) all purchase orders for the purchase of raw
materials and supplies for use in the Business including, without limitation,
those set forth in Part I of SCHEDULE 4.15 (the "Purchase Orders"), and (ii) all
sales orders from customers including, without limitation, those set forth in
Part II of SCHEDULE 4.15 (the "Sales Orders"); and
(c) those liabilities reflected in the Statement of Assets,
Liabilities & Members' Equity of the Seller as of December 31, 1998, except to
the extent paid prior to the Closing, and any trade payables and normal
operating accruals and expenses incurred in the ordinary course of business
subsequent to December 31, 1998; PROVIDED that environmental matters and
warranty, guaranty or product liability claims are not deemed to be incurred in
the ordinary course of business.
2.2 DISCLAIMER OF LIABILITIES. Except for those Assumed
Liabilities described Section 2.1 above, the Buyer will not assume, and hereby
expressly disclaims any assumption of, any debts, liabilities or obligations
(absolute or contingent) of any kind of the Seller, including but not limited to
(a) indebtedness for money borrowed, (b) income taxes, sales taxes, payroll
taxes, withholding taxes, franchise taxes and other taxes, including but not
limited to any taxes which may arise out of or be assessable in respect of the
transactions contemplated by this Agreement, (c) claims, litigation, liabilities
or obligations (whether now pending or hereafter asserted) arising out of or
relating to the operations of the Seller prior to the Closing Date, (d) lease
obligations of any kind, (e) liabilities or obligations of any kind in respect
of any past or present equityholders, directors, officers, employees or
consultants of the Seller, whether under any contract or agreement, pursuant to
any pension plan or employee benefit or welfare plan, or otherwise, (f)
liabilities or obligations for accrued employee benefits and/or severance
benefits in respect of any past or present employee of the Seller, or any
ongoing obligations of the Seller under any employment, consulting or management
agreement, (g) any obligations or liabilities in respect of any unfunded pension
or retirement benefits, or in respect of any funding obligations to, or
transactions in or relating to any trust funds under, any pension, employee
benefit or retirement plans now or heretofore maintained by or on behalf of
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the Seller for the benefit of any past or present employees, (h) claims,
obligations or liabilities in respect of any environmental remediation or any
violation of any environmental laws or regulations, or any other violation or
alleged violation of applicable law by the Seller, and/or (i) liabilities or
obligations relating to recapture of any depreciation deduction or investment
tax credit of the Seller.
3. PURCHASE PRICE.
3.1 CONSIDERATION TO THE SELLER. The purchase price for the
Assets, subject to Section 3.2 below (the "Consideration"), shall be equal to
Five Million Two Hundred Fifty Thousand Dollars ($5,250,000), which shall be
payable by (a) delivering to and depositing with SunTrust Bank, as Escrow Agent
under the Escrow Agreement (as defined in Section 7.3), on behalf of the Seller,
Two Hundred Fifty Thousand Dollars ($250,000), and (b) paying to the Seller,
subject to Sections 3.2 and 3.5 below, the remaining Consideration in U.S.
dollars in cash or certified funds by wire transfer of immediately available
funds to such account or accounts as shall be designated by the Seller
reasonably in advance of the Closing Date.
3.2 NET CONSIDERATION. To the extent that the Seller has not
already paid its then existing bank and other institutional debts and
liabilities out of its cash on hand (other than trade payables and employee
accruals incurred in the ordinary course of business), the Buyer shall, on the
Closing Date, apply a portion of the Consideration payable pursuant to Section
3.1(b) above to the payment of the Seller's outstanding bank and other
institutional debts and liabilities described on SCHEDULE 3.2 annexed hereto, so
that such debts and liabilities are paid in full.
3.3 ALLOCATION OF CONSIDERATION. The Consideration specified in
Section 3.1 above shall be allocated, as among the Assets, in accordance with
SCHEDULE 3.3 annexed hereto, and the parties shall abide by such allocations in
all tax filings and other reports which the parties shall make or render.
3.4 SALES TAXES. To the extent that any sales or use taxes may
be payable in respect of the transactions pursuant to this Agreement, such sales
and use taxes shall be reported and paid by the Seller in a timely manner.
3.5 APPORTIONMENTS. To the extent such items are not covered by
Section 3.4 hereof, the following items shall be apportioned as of midnight of
the day preceding the Closing Date: (a) real estate and personal property taxes,
assessments, sewer rents and charges and other state, county and municipal taxes
and charges affecting the Wetumpka Facility or any portion thereof, including
sales and use taxes, on the basis of the tax fiscal year for which the same are
levied, imposed or assessed; (b) charges for water, electricity, gas, oil,
steam, telephone and all other utilities incurred in connection with the
Wetumpka Facility (except to the extent disposed of by final billing to the
Seller); and (c) such other items as are customarily apportioned in connection
with the sale of similar real and personal property in the location of the
Wetumpka Facility. Any net amount owing under this Section 3.5 shall be paid
together with, or offset against, as the case may be, the payment of the
Consideration pursuant to Section 3.1 hereof.
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4. REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND THE EQUITYHOLDERS.
In connection with the sale of the Assets to the Buyer, the Seller
and the Equityholders hereby jointly and severally represent and warrant to the
Buyer as follows:
4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Seller
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Alabama, with full power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby, and to own its assets and conduct its business as owned and
conducted on the date hereof. The Seller is qualified as a foreign entity under
the laws of the State of North Carolina.
4.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Seller have been duly and validly authorized by the
Manager or Board of Managers of the Seller (to the extent required or permitted
by applicable law) and by the Equityholders (as all of the equityholders of the
Seller), without dissent. No further corporate authorization is required on the
part of the Seller to consummate the transactions contemplated hereby.
4.3 VALID AND BINDING AGREEMENTS. This Agreement, and, when
executed and delivered by the Seller and the Equityholders, the Escrow
Agreement, the Bill of Sale, the Assumption Agreement, the Deed and, to the best
knowledge of the Seller and the Equityholders, the Non-Competition Agreements
(as such terms are hereinafter defined), constitute and will constitute the
legal, valid and binding obligations of the Seller and the Equityholders (to the
extent a party thereto), enforceable against the Seller and the Equityholders in
accordance with their respective terms.
4.4 NO BREACH OF STATUTE OR CONTRACT. Neither the execution and
delivery of this Agreement and/or the Escrow Agreement, the Bill of Sale, the
Assumption Agreement, the Non-Competition Agreements or the Deed by the Seller
or the Equityholders, nor compliance with the terms and provisions of this
Agreement and/or the Escrow Agreement, the Bill of Sale, the Assumption
Agreement, the Deed and, to the best knowledge of the Seller and the
Equityholders, the Non-Competition Agreements on the part of the Seller and the
Equityholders, will: (a) violate any statute or regulation of any governmental
authority, domestic or foreign, affecting the Seller or any of the
Equityholders; (b) require the issuance or grant of any authorization, license,
consent or approval of any federal or state governmental agency or any other
person; or (c) conflict with or result in a breach of any of the terms,
conditions or provisions of the Seller's limited liability company operating
agreement or any judgment, order, injunction, decree, agreement or instrument to
which the Seller or any of the Equityholders is a party, or by which the Seller
or any of the Equityholders is bound, or constitute a default thereunder.
4.5 SUBSIDIARIES AND INVESTMENTS. The Seller does not own,
directly or indirectly, any stock or other equity securities of any corporation
or entity, or have any direct or
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indirect equity or ownership interest in any person, firm, partnership,
corporation, venture or business other than the Business conducted by the
Seller.
4.6 FINANCIAL INFORMATION.
(a) Annexed hereto as SCHEDULE 4.6 are the Statements of
Assets, Liabilities & Members' Equity of the Seller as of December 31, 1998 and
1997, and the related Statements of Operations and Cash Flows for the years then
ended (collectively, the "Financial Statements"), all of which fairly reflect,
in all material respects, the financial condition and results of operations of
the Seller as of the dates thereof and for the years then ended, in accordance
with generally accepted accounting principles consistently applied; and, without
limitation of the foregoing, the Seller has no material liabilities, fixed or
contingent, except to the extent reflected in the most recent of such Financial
Statements or thereafter incurred in the normal course of the Seller's business.
(b) The Seller has not experienced any substantial
variations or inconsistencies in its accounts receivable collections or accounts
payable payments since the date of the most recent of the Financial Statements.
(c) Since the date of the most recent of the Financial
Statements, (i) the business of the Seller has been operated solely in the
normal course, (ii) there has been no material adverse change in the assets,
financial condition, operations, business or prospects of the Seller from that
reflected in such Financial Statements, (iii) the Seller has not incurred any
material obligation or liability except in the normal course of the Business,
(iv) the Seller has not paid or declared any dividend or distribution other than
in cash to the Equityholders, (v) the Seller has not granted or authorized any
increase in the rate of salary or compensation paid or payable to any employee,
consultant or any other person performing services in the Business, and (vi) the
Seller has not experienced any material adverse change in its relationships with
customers and/or suppliers, or received any written notice of any existing,
announced or anticipated changes in the policies of any material customers or
suppliers which would materially adversely affect the Business.
4.7 TAX MATTERS.
(a) Except as disclosed in SCHEDULE 4.7 annexed hereto, the
Seller has, to the date hereof, filed all tax reports and tax returns required
to be filed by the Seller, and the Seller and/or the Equityholders (as
applicable) have paid all taxes, assessments and other impositions with respect
to the Seller and its income as and to the extent required by applicable law.
All taxes and other assessments and levies which the Seller is required by law
to withhold or to collect have been duly withheld and collected, and have been
paid over to the proper governmental authorities to the extent due and payable
on or before the date hereof. There are no outstanding or pending claims,
deficiencies or assessments for taxes, interest or penalties with respect to any
taxable period of the Seller. The Seller will, from time to time from and after
the date hereof, provide to the Buyer and its representatives, upon request
therefor, copies any and all tax reports and/or tax returns heretofore filed by
the Seller.
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(b) Except as disclosed in SCHEDULE 4.7 annexed hereto,
there are no audits pending with respect to any federal, state or local tax
reports or tax returns of the Seller, and no waiver of statutes of limitations
have been given or requested with respect to any tax years or tax filings of the
Seller.
4.8 TITLE TO THE ASSETS. The Seller has and owns good and
marketable title to all of the Assets, free and clear of all liens, pledges,
claims, security interests and encumbrances of every kind and nature, other than
interests of equipment lessors pursuant to those lease agreements set forth in
SCHEDULE 4.8 annexed hereto and except for Permitted Encumbrances. Substantially
all of the Fixed Assets are listed in SCHEDULE 1.1, and the Fixed Assets are in
good operating condition and repair (reasonable wear and tear excepted), are
adequate for their use in the Business as presently conducted, and are
sufficient for the continued conduct of such Business.
4.9 INVENTORIES. All supplies and other inventories reflected
in the Financial Statements, and all inventories thereafter acquired by the
Seller prior to the Closing Date, have been valued at the lower of cost or
market (on a first-in, first-out basis), and consist of items which are of a
quality and quantity which are useable in the ordinary course of the Business.
4.10 RECEIVABLES. All of the accounts receivable included in the
Assets represent bona fide sales made or services rendered by the Seller prior
to the Closing Date. To the best of the Seller's and the Equityholders'
knowledge, (i) no offsets, deductions or claims have been asserted against or in
respect of any of such accounts receivable, and (ii) all of such accounts
receivable will be collectible by the Buyer in the ordinary course of business
(and without requirement to resort to any legal proceedings) subsequent to the
Closing Date.
4.11 WETUMPKA FACILITY.
(a) The Wetumpka Facility constitutes all of the real
property interests owned by the Seller which comprise, form a part of, or are
used in connection with the Business.
(b) On the Closing Date, the Seller will have good and
marketable title to and actual possession of the Wetumpka Facility free and
clear of any and all liens and encumbrances except the Permitted Encumbrances
(as defined in Section 8.7(a)).
(c) As of the date hereof, to the best knowledge of the
Seller and the Equityholders, the use being made of the Wetumpka Facility is in
conformity with the certificates of occupancy or other similar certificates
issued therefor; all licenses and permits required for the continued operation
of the Wetumpka Facility have been issued and are in full force and effect; and
the operation of the Wetumpka Facility complies with all federal, state and
local laws, rules and regulations applicable thereto.
(d) The Wetumpka Facility will be in the same condition on
the Closing Date as on the date hereof, subject to ordinary wear and tear.
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(e) As of December 1, 1999, all utilities serving the
Wetumpka Facility are supplied directly to the Wetumpka Facility and cost of
installation of such utilities is fully paid.
(f) The Seller has no knowledge of any federal, state or
local plans to change the highway or road system in the vicinity of the Wetumpka
Facility or to restrict or change access from any such highway or road to the
Wetumpka Facility or of any pending or threatened condemnation of any portion of
the land used in connection with the Wetumpka Facility.
(g) To the knowledge of the Seller (after reasonable
internal inquiry), except as otherwise disclosed in the Phase I nvironmental
Assessment Report prepared by Law Engineering and Environmental Services, Inc.
for the Buyer regarding the Wetumpka Facility:
(i) no Hazardous Materials (hereinafter defined) have
been present at the Wetumpka Facility;
(ii) no Release (as defined below) of any Hazardous
Materials or any petroleum product or by-product has occurred at, upon
or under the Wetumpka Facility;
(iii) the Seller does not have any current contingent
liability in connection with the Release of any Hazardous Materials
into the indoor or outdoor environment (whether on-site or off-site);
(iv) the Seller is not, nor will be, prior to the
Closing Date engaged in the generation, transportation, treatment,
storage or disposal of Hazardous Materials;
(v) the Wetumpka Facility does not now contain, nor in
the past has contained, any (A) underground or aboveground tanks for
the storage of fuel oil, gasoline and/or any other petroleum products,
(B) asbestos containing material, (C) equipment containing
polychlorinated biphenyls, or (D) by-products of Hazardous Materials;
(vi) the Seller is in compliance with all Environmental
Law (hereinafter defined) now in effect relating to Hazardous Materials
and applicable to the Wetumpka Facility;
(vii) the Seller has provided to the Buyer all
environmentally related audits, studies, reports, analyses, and results
of investigations that have been performed with respect to the Wetumpka
Facility;
(viii) the Seller has not received any notice of writs,
injunctions, decrees, orders or judgments outstanding, or suits,
claims, actions, proceedings or investigations instituted or threatened
under any Environmental Law applicable to the Wetumpka Facility;
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(ix) as used herein, the term "Environmental Law" means
any foreign, federal, state or local statue, regulation, ordinance, or
rule of common law in any way relating to the protection of human
health and safety or the environment including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C. Section 9601 ET SEQ.) ("CERCLA"); (B) the
Hazardous Materials Transportation Act (49 U.S.C. App. Section 1801 ET
SEQ.); (C) the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 ET SEQ.); (D) the Clean Water Act (33 U.S.C. Section
1251 ET SEQ.); (E) the Clean Air Act (42 U.S.C. Section 7401 ET SEQ.);
(F) the Toxic Substance Control Act (15 U.S.C. Section 2601 ET SEQ.);
(G) the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
Section 136 ET SEQ.); and (H) the Occupational Safety and Health Act
(29 U.S.C. Section 651 ET SEQ.), and the regulations promulgated
pursuant thereto;
(x) as used herein, the term "Hazardous Materials"
means any substance, material or waste which is regulated by the United
States, or any state or local governmental authority including, without
limitation, petroleum and it's by-products, asbestos, and any material
or substance which is defined as a "hazardous waste," "hazardous
substance," "hazardous material," "restricted hazardous waste,"
"industrial waste," "solid waste," "contaminant," "pollutant," "toxic
waste" or "toxic substance" under any provision of Environmental Law;
and
(xi) as used herein, the term "Release" means any
release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, or leaching into indoor or outdoor
environment, or into or out of any property.
4.12 LEGAL COMPLIANCE.
(a) The Seller is (and has been at all times in the past
three (3) years) in compliance in all material respects with all laws, statutes,
regulations, rules and ordinances applicable to the conduct of its business
(including, without limitation, all environmental laws, rules and regulations,
and all other legal requirements relating to the storage, handling, processing,
use, transport or disposal of hazardous or regulated substances), and has in
full force and effect all licenses, permits and other authorizations required
for the conduct of the Business as presently constituted; and the Seller has not
received notice of any default or violation in respect of or under any of the
foregoing. Neither the Seller nor any of the Equityholders has any knowledge of
any reason why the Buyer will not be able to renew or have reissued (to the
extent required by applicable law) any of the licenses, permits and other
authorizations required for the continued conduct of the Business from and after
the Closing Date.
(b) Neither the Seller nor any of the Equityholders has
received any written notice of default or violation by the Seller with respect
to any judgment, order, writ, injunction, decree, demand or assessment issued by
any court or any federal, state, local, municipal or other governmental agency,
board, commission, bureau, instrumentality or department, domestic or foreign,
relating to any aspect of the Business or the Assets; and neither the Seller nor
any of its officers, directors or employees has received written notice of,
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been charged with, or is under investigation with respect to, any violation of
any provision of any federal, state, local, municipal or other law or
administrative rule or regulation, domestic or foreign, relating to any aspect
of the Business or the Assets.
4.13 EMPLOYEES. Except as disclosed in SCHEDULE 4.13 annexed
hereto, the Seller is not a party to or bound by any collective bargaining
agreement, employment agreement, consulting agreement, management agreement or
other commitment for the employment or retention of any person, and no union is
now certified or, to the best of the Seller's and the Equityholders' knowledge,
claims to be certified as a collective bargaining agent to represent any
employees of the Business. There are no labor disputes existing or, to the best
of the Seller's and the Equityholders' knowledge, threatened, involving any
employees of the Business, and the Seller has not had any unfair labor practice
charges or material labor difficulty in the past two (2) years.
4.14 EMPLOYEE BENEFITS. Except as disclosed in SCHEDULE 4.14
annexed hereto, the Seller does not maintain and is not required to make any
contributions to any pension, profit-sharing, retirement, deferred compensation
or other such plan or arrangement for the benefit of any employee, former
employee or other person. The Seller has, on the date hereof, made all required
payments, contributions and filings under or in respect of any such plans or
arrangements, and there has not occurred any act, omission, event or condition
such as would give rise to any liability of the Seller thereunder other than the
obligations to make normal payments and contributions thereunder.
4.15 CONTRACTS. (a) The Seller has no contracts or commitments
relating to the Assets or the Business, whether written or oral and whether or
not legally binding, other than:
(i) the contracts and commitments set forth in SCHEDULE
4.15 annexed hereto;
(ii) purchase orders, each of which, to the best
knowledge of the Seller and the Equityholders, (1) is in the ordinary
course of business, (2) involves a purchase price of less than $20,000,
and (3) is performable by the Seller within six months from the date
hereof;
(iii) sale orders, each of which, to the best knowledge
of the Seller and the Equityholders, (1) is in the ordinary course of
business, (2) involves pricing consistent with the Seller's usual
practice, (3) involves an aggregate sales price of less than $20,000,
and (4) is performable by the Seller within six months from the date
hereof; and
(iv) maintenance, service and other contracts relating
to the Assets or the Business, each of which (1) is in the ordinary
course of business, (2) involves an aggregate expenditure of less than
$10,000 after the date hereof, and (3) is terminable by the Seller
without penalty on notice of 30 days or less.
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(b) The Seller is not in default under any of the contracts
set forth in Parts I and II of SCHEDULE 4.15, and has no knowledge of any
default with respect to any such contract by the other party to any such
contract or any claim of default by any such party. Complete and correct copies
of all contracts together with all amendments thereto (or, in the case of oral
contracts and commitments, a description thereof) referred to in paragraph
(a)(i) of this Section 4.15 and listed in SCHEDULE 4.15 have been delivered to
the Buyer.
(c) All of the Purchase Orders and Sales Orders were made
by the Seller in the ordinary course of the Business. The Purchase Orders do not
include the sale of additional products or services or grant special discounts
other than as is stated in any applicable written purchase order contract.
4.16 LITIGATION. Except as disclosed in SCHEDULE 4.16 annexed
hereto, there is no pending or, to the best knowledge of the Seller and the
Equityholders, threatened litigation, arbitration, administrative proceeding or
other legal action or proceeding against the Seller or relating to its Business.
Neither the Seller nor any of the Equityholders is aware of any event, cause or
condition which might reasonably give rise to or properly form the basis of any
such suit, action, arbitration or proceeding. The Seller is not currently
engaged in any legal action to recover any sums of money due to the Seller or
damages sustained by the Seller.
4.17 INTELLECTUAL PROPERTY. The Seller has the valid right to
utilize any and all trade names and other intellectual property utilized in its
Business (including but not limited to the Intellectual Property, all of which
is disclosed in SCHEDULE 4.17 annexed hereto), and has not received notice of
any pending challenge to its rights therein or any claimed infringement of such
intellectual property with the rights or property of any other person. The
Seller has not granted any license or other right to any person to utilize any
of the Intellectual Property for any purpose.
4.18 YEAR 2000. None of the Fixed Assets or any stored
information relating to any of the Assets contains or relies upon embedded
information which will suffer any material disruption or interruption by reason
of or in respect of the entry of dates which are on or after January 1, 2000, or
the operation thereof on or after January 1, 2000.
4.19 AFFILIATE TRANSACTIONS. Except as disclosed in SCHEDULE
4.19 annexed hereto, none of the assets required for the operation of the
Business is owned by, leased from or leased to any of the Equityholders or any
of their respective affiliates.
4.20 GOING CONCERN. Neither the Seller nor any of the
Equityholders has any knowledge of any fact, event, circumstance or condition
(including but not limited to any announced or anticipated changes in the
policies of any material customer) that would materially impair the ability of
the Buyer to continue the Business heretofore conducted by the Seller in
substantially the manner heretofore conducted by the Seller (other than general,
industry-wide conditions).
4.21 ACCURACY OF INFORMATION. None of the representations and
warranties of the Seller or the Equityholders contained herein or in any
Schedule hereto contains any untrue
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statement of a material fact or omits to state a material fact necessary in
order to make the statements therein not misleading in light of the
circumstances in which made. To the best of the Seller's and the Equityholders'
knowledge, the Seller and the Equityholders have disclosed to the Buyer, as the
purchaser of the Assets and the Business, all material information relating to
the Assets and the Business.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
In connection with the Seller's sale of the Assets to the Buyer,
the Buyer hereby represents and warrants to the Seller and the Equityholders as
follows:
5.1 ORGANIZATION, GOOD STANDING AND OWNERSHIP. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with all necessary power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
5.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Buyer has been duly and validly authorized by the
Board of Directors of the Buyer. No further corporate authorization is required
on the part of the Buyer to consummate the transactions contemplated hereby.
5.3 VALID AND BINDING AGREEMENT. This Agreement, and, when
executed and delivered by the Buyer, the Escrow Agreement, the Assumption
Agreement, the Non-Competition Agreements and the Deed (as such terms are
hereinafter defined), constitute and will constitute the legal, valid and
binding obligations of the Buyer, enforceable against the Buyer in accordance
with their respective terms.
5.4 NO BREACH OF STATUTE OR CONTRACT. Neither the execution and
delivery of this Agreement and/or the Escrow Agreement, the Assumption
Agreement, the Non-Competition Agreements or the Deed by the Buyer, nor
compliance with the terms and provisions of this Agreement and/or the Escrow
Agreement, the Assumption Agreement, the Non-Competition Agreements and the Deed
on the part of the Buyer, will: (a) violate any statute or regulation of any
governmental authority, domestic or foreign, affecting the Buyer; (b) require
the issuance of any authorization, license, consent or approval of any federal
or state governmental agency; or (c) conflict with or result in a breach of any
of the terms, conditions or provisions of any judgment, order, injunction,
decree, note, indenture, loan agreement or other agreement or instrument to
which the Buyer is a party, or by which the Buyer is bound, or constitute a
default thereunder.
5.5 ACCURACY OF INFORMATION. None of the representations and
warranties of the Buyer contained herein contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein not misleading in light of the circumstances in which made.
To the best of the Buyer's knowledge, the Buyer has disclosed to the Seller, as
the seller of the Assets and the Business, all material information relating to
the Buyer's ability to perform hereunder.
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6. THE SELLER'S OBLIGATIONS BEFORE THE CLOSING DATE.
The Seller covenants and agrees that, from the date hereof until
the Closing Date:
6.1 ACCESS TO INFORMATION.
(a) The Seller shall permit the Buyer and its counsel,
accountants and other representatives, upon reasonable advance notice to the
Seller, during normal business hours and without undue disruption of the
business of the Seller, to have reasonable access to all properties, books,
accounts, records, contracts, documents and information relating to the Seller
and the Business. The Buyer and its representatives shall also be permitted to
freely consult with the Seller's counsel concerning the Seller and the Business.
(b) The Seller will make available to the Buyer and its
accountants all financial and tax records relating to the Seller and the
Business, and shall cause the Seller's accountants to cooperate with the Buyer's
accountants and make available to the Buyer's accountants all work papers and
other materials developed by or in the possession of the Seller's accountants,
for the purpose of assisting the Buyer's accountants in (i) verifying the
accuracy of the Financial Statements and the other representations and
warranties of the Seller and the Equityholders pursuant to Sections 4.6 and 4.8
above.
6.2 CONDUCT OF BUSINESS IN NORMAL COURSE. The Seller shall
carry on their business activities in substantially the same manner as
heretofore conducted, shall maintain inventories in types and amounts consistent
with historical practice, and shall not make or institute any unusual or novel
practices or methods of service, sale, purchase, lease, management, accounting
or operation that will vary materially from those methods used by the Seller as
of the date hereof, without in each instance obtaining the prior written consent
of the Buyer.
6.3 PRESERVATION OF BUSINESS AND RELATIONSHIPS. The Seller
shall, without making or incurring any unusual commitments or expenditures, use
all reasonable efforts to preserve its business organization intact, and
preserve its present relationships with referral sources, clients, customers,
suppliers and others having business relationships with the Seller.
6.4 MAINTENANCE OF INSURANCE. The Seller shall continue to
carry its existing insurance, to the extent obtainable upon reasonable terms.
6.5 CORPORATE MATTERS. The Seller shall not, without the prior
written consent of the Buyer in each instance:
(a) amend, cancel or modify any material contract or enter
into any material new agreement, commitment or transaction except, in each
instance, in the ordinary course of business;
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(b) pay, grant or authorize any material salary increases
or bonuses except in the ordinary course of business and consistent with past
practice, or enter into any employment, consulting or management agreements;
(c) modify in any material respect any material agreement
to which the Seller is a party or by which it may be bound, except in the
ordinary course of business;
(d) make any change in management personnel;
(e) except pursuant to commitments in effect on the date
hereof (to the extent disclosed in this Agreement or in any Schedule hereto),
make any capital expenditure(s) or commitment(s), whether by means of purchase,
lease or otherwise, or any operating lease commitment(s), in excess of $50,000
in the aggregate;
(f) dispose of or transfer any asset outside of the
ordinary course of the Business, or sell, assign or dispose of any capital
asset(s) with a net book value in excess of $25,000 as to any one item or
$50,000 in the aggregate as to all items;
(g) materially change its method of collection of accounts
or notes receivable, or slow in any material respect its payment of accounts
payable;
(h) make any payment or distribution of any assets or
property other than cash to the Equityholders;
(i) incur any material liability or indebtedness except, in
each instance, in the ordinary course of business;
(j) subject any of its assets or properties to any liens or
encumbrances; or
(k) agree to do, or take any action in furtherance of, any
of the foregoing.
7. ADDITIONAL AGREEMENTS OF THE PARTIES.
7.1 CONFIDENTIALITY. Notwithstanding anything to the contrary
contained in this Agreement, and subject only to any disclosure requirements
which may be imposed upon any party under applicable state or federal securities
or antitrust laws, it is expressly understood and agreed by the parties that,
except with respect to matters or information which are publicly available other
than by reason of a breach of this Section 7.1, (i) this Agreement, the
Disclosure Schedules hereto, and the conversations, negotiations and
transactions relating hereto and/or contemplated hereby, and (ii) all financial
information, business records and other non-public information concerning either
party which the other party or its representatives has received or may hereafter
receive, shall be maintained in the strictest confidence by the recipient and
its representatives, and shall not be disclosed to any person that is not
associated or affiliated with the recipient and involved in the transactions
contemplated hereby, without the prior written
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approval of the party which provided the information. The parties hereto shall
use their best efforts to avoid disclosure of any of the foregoing or undue
disruption of any of the business operations or personnel of the parties, and no
party shall issue any press release or other public announcement regarding the
transactions contemplated hereby without the prior approval of each other party
(such approval not to be unreasonably withheld or delayed). In the event that
the transactions contemplated hereby shall not be consummated for any reason,
each party covenants and agrees that neither it nor any of its representatives
shall, except to the extent required in connection with any claims arising out
of the termination of this Agreement, retain (other than information which is
publicly available other than by reason of a breach of this Section 7.1) any
documents, lists or other writings of any other party which it may have received
or obtained in connection herewith or any documents incorporating any of the
information contained in any of the same (all of which, and all copies thereof
in the possession or control of the recipient or its representatives, shall be
returned to the party which provided the information).
7.2 EXCLUSIVITY. From the date hereof through any termination
of this Agreement in accordance with Section 11 below, the Seller and the
Equityholders shall not (and shall not permit any of their directors, officers
or affiliates to) negotiate with or enter into any other commitments, agreements
or understandings with any person, firm or corporation (other than the Buyer) in
respect of any sale of equity interests in or assets of the Seller, any merger,
consolidation or corporate reorganization, or any other such transaction
relating to the Seller or the Business.
7.3 COVENANT NOT TO COMPETE. The Seller acknowledges that an
important part of the consideration which the Buyer will receive in connection
with the transactions contemplated hereby is the goodwill of the Business and
the confidential information of the Seller (including, without limitation, trade
secrets, customer lists, manufacturing processes, technology, know-how and other
proprietary information). In order that the Buyer may enjoy the benefits of such
goodwill and such confidential information, the Seller and Summit America,
L.L.C. will not in any manner compete with the Buyer or, directly or indirectly,
own, manage, operate, control, be a consultant to, participate or have any
interest in or be connected in any manner with, the ownership, management,
operation or control of any business manufacturing or selling chalkboards or
other visual display boards in the United States of America until the fifth
anniversary of the Closing.
7.4 ESCROW AGREEMENT; BILL OF SALE; TRANSFER DOCUMENTS;
ASSUMPTION AGREEMENT.
(a) On the Closing Date, (i) the Seller and the Escrow
Agent named therein shall execute and deliver to the Buyer an escrow agreement
in respect of a portion of the Consideration in substantially the form of
EXHIBIT B annexed hereto (the "Escrow Agreement"), and (ii) the Seller shall
execute and deliver to the Buyer a Bill of Sale and Assignment in respect of the
Assets in substantially the form of EXHIBIT C annexed hereto (the "Bill of
Sale"). In addition, to the extent that specific assignments may be necessary or
appropriate in respect of any of the Assets, and/or to the extent that any of
the Assets are represented by certificates of
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title or other documents, then the Seller shall, on the Closing Date, execute
and deliver to the Buyer any and all additional transfer documents, and shall
endorse to and in the name of the Buyer all certificates of title and other such
documents, as may be necessary or appropriate in order to effect the full
transfer to the Buyer of all of the Assets.
(b) On the Closing Date, the Seller and the Buyer shall
execute and deliver to one another an Instrument of Assumption in respect of the
Assumed Liabilities in substantially the form of EXHIBIT D annexed hereto (the
"Assumption Agreement"). In addition, to the extent that specific assignments
may be required in order to effect the assignment to and assumption by the Buyer
of any particular Assumed Liabilities, the Seller and the Buyer shall, on the
Closing Date, execute and deliver to one another such additional assignment and
assumption documents.
7.5 NON-COMPETITION AGREEMENTS. On the Closing Date, the Buyer
(on the one hand) and W. Daniel Hughes, Jr., Wade Fuller and Bridget Cox (on the
other hand) shall execute and deliver to one another Non-Competition and
Non-Disclosure Agreements in substantially the form of EXHIBIT E annexed hereto
(collectively, the "Non-Competition Agreements").
7.6 NAME CHANGE. On the Closing Date, the Seller and its
affiliates shall execute and deliver to the Buyer, for filing with the Secretary
of State of the State of Alabama, an Amendment of the Articles of Organization
of the Seller and an Amendment to the Articles of Incorporation of American
Chalkboard, Inc. whereby the name of the Seller and each of its affiliates will
be changed to a name that does not include "American Chalkboard" or any
confusingly similar name (the "Articles of Amendment").
7.7 CERTAIN WARRANTY CLAIMS; INDEMNITY. In the event a claim is
brought against the Seller for faulty or defective chalkboards or other visual
display boards, which were provided by the Seller prior to the Closing Date, the
Buyer shall repair or replace such faulty or defective boards, and the Seller
shall indemnify the Buyer, at Buyer's actual cost, to make such repair or
replacement. However, the Seller shall have no obligation to indemnify the Buyer
for such costs in the event the boards were faulty or defective as a result of
the porcelain enamel steel material supplied by Alliance America to the Seller,
in which case the Buyer shall be responsible for all costs and expense of repair
or replacement.
7.8 ADDITIONAL AGREEMENTS AND INSTRUMENTS. On or before the
Closing Date, the Buyer, the Seller and the Equityholders shall execute, deliver
and file all exhibits, agreements, certificates, instruments and other
documents, not inconsistent with the provisions of this Agreement, which, in the
opinion of counsel to the parties hereto, shall reasonably be required to be
executed, delivered and filed in order to consummate the transactions
contemplated by this Agreement.
7.9 NON-INTERFERENCE. None of the Buyer, the Seller or the
Equityholders shall cause to occur any act, event or condition which would cause
any of their respective representations and warranties made in this Agreement to
be or become untrue or incorrect in any material respect as of the Closing Date,
or would interfere with, frustrate or render
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unreasonably expensive the satisfaction by the other party or parties of any of
the conditions precedent set forth in Sections 8 and 9 below.
7.10 TERMINATION OF SUPPLY AGREEMENT. The Long-Term Supply
Agreement, dated as of December 2, 1999, between Alliance America, a Division of
PolyVision Corporation, and the Seller, shall automatically terminate and be of
no further force or effect on the Closing Date.
8. CONDITIONS PRECEDENT TO THE BUYER'S PERFORMANCE.
In addition to the fulfillment of the parties' agreements in
Section 7 above, the obligations of the Buyer to consummate the transactions
contemplated by this Agreement are further subject to the satisfaction, at or
before the Closing Date, of all the following conditions, any one or more of
which may be waived in writing by the Buyer:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by the Seller and/or the Equityholders in
this Agreement and in any letter, statement, certificate or other document
delivered to the Buyer pursuant to this Agreement shall be true and correct on
and as of the Closing Date as though such representations and warranties were
made on and as of that date.
8.2 PERFORMANCE. The Seller and the Equityholders shall have
performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by them
on or before the Closing Date.
8.3 CERTIFICATION. The Buyer shall have received a certificate,
dated the Closing Date, signed by the Seller and the Equityholders, certifying,
in such detail as the Buyer and its counsel may reasonably request, that the
conditions specified in Sections 8.1 and 8.2 above have been fulfilled.
8.4 RESOLUTIONS. The Buyer shall have received certified
resolutions of the Manager or Board of Managers and the Equityholders of the
Seller, in form reasonably satisfactory to counsel for the Buyer, authorizing
the Seller's execution, delivery and performance of this Agreement and all
actions to be taken by the Seller hereunder.
8.5 OPINION OF THE SELLER'S COUNSEL. The Buyer shall have
received a written opinion from Page, Scrantom, Sprouse, Tucker & Ford, P.C.,
counsel for the Seller, addressed to the Buyer and dated the Closing Date,
satisfactory to the Buyer as to form and substance, in substantially the form of
EXHIBIT G annexed hereto.
8.6 ABSENCE OF LITIGATION. No action, suit or proceeding by or
before any court or any governmental body or authority, against the Seller or
pertaining to the transactions contemplated by this Agreement or their
consummation, shall have been instituted on or before the Closing Date, which
action, suit or proceeding would, if determined adversely, have a material
adverse effect on the Business or any material portion of the Assets.
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8.7 TITLE INSURANCE; SURVEY.
(a) The Buyer shall have received a title commitment for an
owner's fee title insurance policy with respect to the Wetumpka Facility (the
"Title Commitment"), which policy shall be issued on American Land Title
Association Owner's Form B, including mechanics' lien coverage and survey
coverage, by a reputable title insurance company reasonably satisfactory to the
Buyer (the "Title Company"). The owner's title insurance policy (the "Title
Policy") shall be dated the Closing Date and be in amounts reasonably acceptable
to the Buyer based upon the Purchase Price, and insuring the Buyer's fee simple
title to the Wetumpka Facility, subject to no exceptions, whether standard,
printed or otherwise, except such standard or printed exceptions as are required
to be included by applicable law or regulations, or as are, by custom or
practice uniformly and consistently adhered to, not waived or omitted,
notwithstanding mechanics' lien and survey coverage under the policy (the
"Permitted Encumbrances").
(b) The Buyer shall have received a current, accurate
survey of the Wetumpka Facility, certified to the Buyer and the Title Company,
dated no more than thirty (30) days prior to the Closing Date and prepared and
certified by a licensed surveyor acceptable to the Title Company. Such survey
shall locate all buildings and improvements, encroachments, easements and other
encumbrances, and shall contain a certification by the surveyor stating that the
buildings and improvements comply with all zoning requirements applicable to the
Wetumpka Facility; PROVIDED, HOWEVER, that the foregoing zoning certification
shall not be required if the Title Company shall provide such certification in
the form of a zoning endorsement.
8.8 CONSENTS. All necessary disclosures to and agreements and
consents of (i) any parties to any material contracts and/or any licensing
authorities which are material to the Business, and (ii) any governmental
authorities or agencies to the extent required to be obtained prior to the
Closing in connection with the transactions contemplated by this Agreement,
shall have been obtained and true and complete copies thereof delivered to the
Buyer. Any such material consents must be obtained without imposing any
unreasonable burden or obligation on the Buyer or the Business from and after
the Closing Date.
8.9 AVAILABILITY OF FUNDS. The Buyer shall have available on
the Closing Date sufficient funds to enable it to consummate the transactions
contemplated by this Agreement.
8.10 EXECUTION AND DELIVERY OF EXHIBITS. On or before the
Closing Date, (a) the Seller shall have executed and delivered to the Buyer the
Escrow Agreement, the Bill of Sale, the Assumption Agreement and the Articles of
Amendment, (b) the Equityholders and the other parties thereto shall have
executed and delivered to the Buyer the Non-Competition Agreements, and (c) the
Escrow Agent shall have executed and delivered to the Buyer the Escrow
Agreement.
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9. CONDITIONS PRECEDENT TO THE SELLER'S AND THE EQUITYHOLDERS'
PERFORMANCE.
In addition to the fulfillment of the parties' agreements in
Section 7 above, the obligations of the Seller and the Equityholders to
consummate the transactions contemplated by this Agreement are further subject
to the satisfaction, at or before the Closing Date, of all of the following
conditions, any one or more of which may be waived in writing by the Seller and
the Equityholders:
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by the Buyer in this Agreement and in any
letter, statement, certificate or other document delivered to the Seller and/or
the Equityholders pursuant to this Agreement shall be true and correct on and as
of the Closing Date as though such representations and warranties were made on
and as of that date.
9.2 PERFORMANCE. The Buyer shall have performed, satisfied and
complied with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Buyer on or before
the Closing Date.
9.3 CERTIFICATION. The Seller and the Equityholders shall have
received a certificate, dated the Closing Date, signed by the Buyer, certifying,
in such detail as the Seller and the Equityholders and its counsel may
reasonably request, that the conditions specified in Sections 9.1 and 9.2 above
have been fulfilled.
9.4 OPINION OF THE BUYER'S COUNSEL. The Seller shall have
received a written opinion from Greenberg Traurig, counsel for the Buyer,
addressed to the Seller and dated the Closing Date, satisfactory to the Seller
as to form and substance, in substantially the form of EXHIBIT H annexed hereto.
9.5 EXECUTION AND DELIVERY OF EXHIBITS. On or before the
Closing Date, (a) the Buyer shall have executed and delivered to the Seller, the
Deed, the Escrow Agreement and the Assumption Agreement, and (b) the Buyer shall
have executed and delivered to the Equityholders and the other parties thereto
the Non-Competition Agreements.
10. CLOSING.
10.1 PLACE AND DATE OF CLOSING. Unless this Agreement shall be
terminated pursuant to Section 11 below, the consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of counsel to the Buyer, Greenberg Traurig, located at MetLife Building, 200
Park Avenue, 15th Floor, New York, New York 10166, or such other location as is
agreed to between the parties, at 10:00 a.m., local time, on January 21, 2000,
or such later date (not later than February 15, 2000) as may be reasonably
agreeable to all parties (the date of the Closing being referred to in this
Agreement as the "Closing Date").
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10.2 ACTIONS AT CLOSING. On the Closing Date, (a) the Buyer
shall pay to the Seller the portion of the Consideration provided in Section
3.1(b) above, (b) the Seller shall execute and deliver to the Buyer the Deed and
a Bill of Sale in respect of the Assets, together with such further conveyancing
documents in respect of the Assets (including but not limited to endorsements of
vehicle titles and other title documents, as appropriate) as may be necessary or
appropriate in order to effect the transfer of the Assets to the Buyer, (c) the
Buyer (on the one hand) and W. Daniel Hughes, Jr., Wade Fuller and Bridget Cox
(on the other hand) shall execute and deliver to one another Non-Competition
Agreements, and (d) the Seller shall deliver to the Buyer correct and complete
pay-off letters of the Seller's creditors as of the Closing Date (setting forth
names, addresses and amounts owed), and the Buyer shall, out of the
Consideration, remit payment to the subject creditors of the full amounts
reflected in such schedule.
10.3 TITLE TO WETUMPKA FACILITY. The Seller shall convey good
and marketable title, free and clear of all liens and encumbrances (except the
Permitted Encumbrances described in Section 8.7), to the Wetumpka Facility by
general warranty deed, in recordable form, substantially in the form set forth
in EXHIBIT F annexed hereto (the "Deed") (a) sufficient to transfer all right,
title and interest in and to the Wetumpka Facility to the Buyer on the Closing
Date, and (b) duly executed and acknowledged and with all documentary, revenue
and tax stamps in the required amounts affixed thereto by the Seller at its
expense. The Wetumpka Facility shall be accurately described in the Deed, by a
metes and bounds description or in such other manner as shall be reasonably
acceptable to the Buyer or the Title Company (as such term is defined in Section
8.7), such description to be as set forth in the title insurance policy referred
to in Section 8.7(a) hereof.
11. TERMINATION OF AGREEMENT.
11.1 GENERAL. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing: (a) by the mutual written consent of the Buyer, the Seller and the
Equityholders; (b) by the Buyer, or by the Seller and the Equityholders; if: (i)
a material breach shall exist with respect to the written representations and
warranties made by the other party or parties, as the case may be, and not cured
promptly if curable, (ii) the other party or parties, as the case may be, shall
take any action prohibited by this Agreement, if such actions shall or may have
a material adverse effect on the Business and/or the transactions contemplated
hereby, and not cured promptly if curable, (iii) the other party or parties, as
the case may be, shall not have furnished, upon reasonable notice therefor, such
certificates and documents required in connection with the transactions
contemplated hereby and matters incidental thereto as it or they shall have
agreed to furnish, and it is reasonably unlikely that the other party or parties
will be able to furnish such item(s) prior to the Outside Closing Date specified
below, or (iv) any consent of any third party to the transactions contemplated
hereby (whether or not the necessity of which is disclosed herein or in any
Disclosure Schedule hereto) is reasonably necessary to prevent a default under
any outstanding material obligation of the Buyer or the Seller, and such consent
is not obtainable without material cost or penalty (unless the party or parties
not seeking to terminate this Agreement agrees or agree to pay such cost or
penalty); or (c) by the Buyer or by the Seller and
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the Equityholders, at any time on or after February 15, 2000 (the "Outside
Closing Date"), if the transactions contemplated hereby shall not have been
consummated prior thereto, and the party directing termination shall not then be
in material breach or default of any obligations imposed upon such party by this
Agreement.
11.2 EFFECT OF TERMINATION. In the event of termination by
either party as above provided in this Section 11, prompt written notice shall
be given to the other party. Termination of this Agreement shall not relieve any
party of any of its obligations pursuant to Section 7.1 above, and shall not
relieve any breaching party from liability for any breach of this Agreement.
12. INDEMNIFICATION.
12.1 GENERAL.
(a) Without prejudice to any rights of contribution as
between or among the Seller and the Equityholders, the Seller and the
Equityholders shall jointly and severally defend, indemnify and hold harmless
the Buyer from, against and in respect of any and all claims, losses, costs,
expenses, obligations, liabilities, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorneys' fees, that the Buyer may
incur, sustain or suffer ("Losses") as a result of (i) any breach of, or failure
by the Seller or the Equityholders to perform, any of the representations,
warranties, covenants or agreements of the Seller or the Equityholders contained
in this Agreement or in any Disclosure Schedule to this Agreement, and/or (ii)
any failure by the Seller to pay or perform when due any of its retained
liabilities.
(b) The Buyer shall defend, indemnify and hold harmless the
Seller and the Equityholders from, against and in respect of any and all claims,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorneys' fees, that
the Seller or the Equityholders may incur, sustain or suffer as a result of (i)
any breach of, or failure by the Buyer to perform, any of the representations,
warranties, covenants or agreements of the Buyer contained in this Agreement,
and/or (ii) any failure by the Buyer to pay or perform when due any of the
Assumed Liabilities.
12.2 LIMITATIONS ON CERTAIN INDEMNITY.
(a) Notwithstanding any other provision of this Agreement
to the contrary, neither the Seller nor any of the Equityholders shall be liable
to the Buyer with respect to Losses unless and until the aggregate amount of all
Losses incurred by the Buyer shall exceed the sum of $50,000 (the "Basket");
PROVIDED, HOWEVER, that the Basket shall not be available with respect to any
Losses under Section 12.1(a)(ii) above or any Losses involving proven fraud by
the Seller or any Equityholder. The Seller and the Equityholders shall
thereafter be jointly and severally liable for all Losses in excess of the
Basket, provided that the Seller's and the Equityholders' maximum aggregate
liability in respect of all Losses shall not in any event exceed the aggregate
amount of $2,625,000 (the "Limitation"); PROVIDED, HOWEVER, that the Limitation
shall not be available with respect to any Losses under Sections 4.7, 4.8,
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4.11, 4.12 and 4.14 or any Losses involving proven fraud by the Seller or the
Equityholders. The Buyer shall, in respect of any such Losses, seek recourse
first against the Escrow Fund in accordance with the procedures set forth in
this Section 12 and the Escrow Agreement.
(b) The Buyer shall be entitled to indemnification by the
Seller and the Equityholders for Losses only in respect of claims for which
notice of claim shall have been given to the Seller or the Equityholder on or
before the second anniversary of the Closing Date.
12.3 CLAIMS FOR INDEMNITY. Whenever a claim shall arise for
which any party shall be entitled to indemnification hereunder, the indemnified
party shall notify the indemnifying party in writing within sixty (60) days of
the indemnified party's first receipt of notice of, or the indemnified party's
obtaining actual knowledge of, such claim, and in any event within such shorter
period as may be necessary for the indemnifying party or parties to take
appropriate action to resist such claim. Such notice shall specify all facts
known to the indemnified party giving rise to such indemnity rights and shall
estimate (to the extent reasonably possible) the amount of potential liability
arising therefrom. If the indemnifying party shall be duly notified of such
dispute, the parties shall attempt to settle and compromise the same or may
agree to submit the same to arbitration or, if unable or unwilling to do any of
the foregoing, such dispute shall be settled by appropriate litigation, and any
rights of indemnification established by reason of such settlement, compromise,
arbitration or litigation shall promptly thereafter be paid and satisfied by
those indemnifying parties obligated to make indemnification hereunder.
12.4 RIGHT TO DEFEND. If the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or demand by any
third party against the indemnified party or any of its affiliates, the
indemnifying party or parties shall be entitled (without prejudice to the
indemnified party's right to participate at its own expense through counsel of
its own choosing), at their expense and through a single counsel of their own
choosing, to defend or prosecute such claim in the name of the indemnifying
party or parties, or any of them, or if necessary, in the name of the
indemnified party. In any event, the indemnified party shall give the
indemnifying party advance written notice of any proposed compromise or
settlement of any such claim. If the remedy sought in any such action or demand
is solely money damages, the indemnifying party shall have fifteen (15) days
after receipt of such notice of settlement to object to the proposed compromise
or settlement, and if it does so object, the indemnifying party shall be
required to undertake, conduct and control, though counsel of its own choosing
and at its sole expense, the settlement or defense thereof, and the indemnified
party shall cooperate with the indemnifying party in connection therewith.
13. POST-CLOSING EVENTS.
13.1 CORPORATE NAME. From and after the Closing Date, the Seller
and its affiliates shall cease and desist from any and all further use of the
name "American Chalkboard" or any confusingly similar name, other than for
purposes of filing routine reports, tax returns and other such items. The Seller
and its affiliates shall, upon request of the Buyer made at any time from and
after the Closing Date, execute and deliver (and permit the Buyer to
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file) an amendment of the Seller's Articles of Organization and an amendment to
the Articles of Incorporation of American Chalkboard, Inc. whereby the name of
the Seller and each of its affiliates shall be changed to a name that does not
include the name "American Chalkboard" or any confusingly similar name.
13.2 ACCOUNTS RECEIVABLE COLLECTIONS. To the extent that, at any
time from and after the Closing Date, the Seller shall receive payment of any
accounts receivable included in the Assets, the Seller shall immediately turn
same over to the Buyer in the form received (subject to any necessary
endorsement), and pending such delivery, shall hold same in trust for the
benefit of the Buyer. Each of the Buyer and the Seller shall be permitted to
pursue collection of its accounts receivable in the normal course of business
and utilizing collection methods which are customary in the historic operation
of its business.
13.3 FURTHER ASSURANCES. From time to time from and after the
Closing Date, the parties will execute and deliver to one another any and all
further agreements, instruments, certificates and other documents as may
reasonably be requested by any other party in order more fully to consummate the
transactions contemplated hereby, and to effect an orderly transition of the
business being acquired by the Buyer hereunder.
14. COSTS.
14.1 FINDER'S OR BROKER'S FEES. Each of the Buyer, the Seller
and the Equityholders represents and warrants that neither they nor any of their
respective affiliates have dealt with any broker or finder in connection with
any of the transactions contemplated by this Agreement, and no broker or other
person is entitled to any commission or finder's fee in connection with any of
these transactions.
14.2 EXPENSES. The Buyer, the Seller and the Equityholders shall
each pay all costs and expenses incurred or to be incurred by them,
respectively, in negotiating and preparing this Agreement and in closing and
carrying out the transactions contemplated by this Agreement.
15. FORM OF AGREEMENT.
15.1 EFFECT OF HEADINGS. The Section headings used in this
Agreement and the titles of the Schedules hereto are included for purposes of
convenience only, and shall not affect the construction or interpretation of any
of the provisions hereof or of the information set forth in such Schedules.
15.2 ENTIRE AGREEMENT; WAIVERS. This Agreement and the other
agreements and instruments referred to herein constitute the entire agreement
between the parties pertaining to the subject matter hereof, and supersede all
prior agreements or understandings as to such subject matter. No party hereto
has made any representation or warranty or given any covenant to the other
except as set forth in this Agreement, the Schedules hereto, and the other
agreements and instruments referred to herein. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provisions, whether or
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not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
15.3 COUNTERPARTS. This Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
16. PARTIES.
16.1 PARTIES IN INTEREST. Nothing in this Agreement, whether
expressed or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns, nor is anything in this Agreement intended to
relieve or discharge the obligations or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action over or against any party to this Agreement.
16.2 NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party to
whom notice is to be given, on the first day after delivery thereof to a
recognized overnight delivery service for next day delivery with all charges
prepaid or billed to the account of the sender, or on the third day after
mailing if mailed to the party to whom notice is to be given, by first class
mail, registered or certified, postage prepaid, and properly addressed as
follows:
(a) If to the Seller and/or the Equityholders, to:
c/o Summit America, L.L.C.
4137 Carmichael Road, Suite 330
Montgomery, Alabama 36106
Attn: Mr. W. Daniel Hughes, Jr.
with a copy to:
Page, Scrantom, Sprouse, Tucker & Ford, P.C.
1043 Third Avenue
Columbus, Georgia 31901
Attn: Allan E. Kamensky, Esq.
(b) If to the Buyer, to:
c/o PolyVision Corporation
4888 South Old Peachtree Road
Norcross, Georgia 30071
Attn: Mr. Michael H. Dunn
President and Chief Executive Officer
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with a copy to:
Greenberg Traurig
MetLife Building
200 Park Avenue, 15th Floor
New York, New York 10166
Attn: Spencer G. Feldman, Esq.
or to such other address as either party shall have specified by notice in
writing given to the other party.
17. MISCELLANEOUS.
17.1 AMENDMENTS AND MODIFICATIONS. No amendment or modification
of this Agreement or any Schedule hereto shall be valid unless made in writing
and signed by the party to be charged therewith.
17.2 NON-ASSIGNABILITY; BINDING EFFECT. Neither this Agreement,
nor any of the rights or obligations of the parties hereunder, shall be
assignable by any party hereto without the prior written consent of all other
parties hereto. Otherwise, this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
17.3 GOVERNING LAW; JURISDICTION. This Agreement shall be
construed and interpreted and the rights granted herein governed in accordance
with the laws of the State of Georgia applicable to contracts made and to be
performed wholly within such State. Except as otherwise provided in Section 12.3
above, any claim, dispute or controversy arising under or in connection with
this Agreement or any actual or alleged breach hereof shall be settled
exclusively by arbitration to be held in Atlanta, Georgia, or in any other
locale or venue as legal jurisdiction may otherwise be had over the party
against whom the proceeding is commenced, before a single arbitrator appointed
pursuant to and in accordance with the commercial arbitration rules of the
American Arbitration Association then obtaining. As part of his or her award,
the arbitrator shall make a fair allocation of the fee of the American
Arbitration Association, the cost of any transcript, and the parties' reasonable
attorneys' fees, taking into account the merits and good faith of the parties'
claims and defenses. Judgment may be entered on the award so rendered in any
court having jurisdiction. Any process or other papers hereunder may be served
by registered or certified mail, return receipt requested, or by personal
service, provided that a reasonable time for appearance or response is allowed.
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IN WITNESS WHEREOF, the parties have executed this Agreement on and as
of the date first set forth above.
GREENSTEEL, INC.
By: /s/Michael H. Dunn
--------------------------------
Name: Michael H. Dunn
Title: President
AMERICAN CHALKBOARD COMPANY, L.L.C.
By: /s/Bridget Cox
--------------------------------
Bridget Cox, Manager
SUMMIT AMERICA, L.L.C.
By: /s/Bridget Cox
--------------------------------
Bridget Cox, Manager
/s/W. Daniel Hughes, Jr.
-----------------------------------
W. Daniel Hughes, Jr.
The undersigned hereby agrees with the Seller, the Equityholders and
the Buyer to be bound by the provisions of Sections 7.7 and 7.10 of the
foregoing Agreement effective upon the Closing.
ALLIANCE AMERICA, a Division of PolyVision
Corporation
By:/s/Michael H. Dunn
--------------------------------
Name: Michael H. Dunn
Title: President
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EXHIBIT 2.5
===============================================================================
GREENSTEEL, INC.,
the Buyer,
PENINSULAR SLATE COMPANY
and
PENINSULAR SLATE COMPANY OF TEXAS,
the Sellers,
and
JACK E. TOMALIS,
the Stockholder
-------------
ASSET PURCHASE AGREEMENT
-------------
Dated January 21, 2000
===============================================================================
<PAGE>
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement"), dated January 21, 2000, by
and among GREENSTEEL, INC., a Delaware corporation and wholly-owned subsidiary
of PolyVision Corporation (the "Buyer"), and PENINSULAR SLATE COMPANY, a
Michigan corporation ("Peninsular Michigan"), and PENINSULAR SLATE COMPANY OF
TEXAS, a Texas corporation ("Peninsular Texas" and, together with Peninsular
Michigan, the "Sellers"), and JACK E. TOMALIS, an individual (the
"Stockholder").
W I T N E S S E T H:
WHEREAS, the Sellers are engaged primarily in the business of
constructing and installing chalkboards, message boards and related supplies as
a subcontractor to firms in the building and servicing of educational facilities
(the "Business");
WHEREAS, in connection with and in furtherance of its business, the
Sellers are the owner of certain assets and properties;
WHEREAS, the Sellers desire to sell certain of their assets and
properties to the Buyer, and the Buyer desires to purchase such assets and
properties, and the Business of the Sellers as a going concern, all upon the
terms and conditions set forth in this Agreement; and
WHEREAS, the Stockholder is the controlling owner of the issued and
outstanding capital stock of the Sellers, and will thus derive benefit from the
transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereby agree as follows:
1. ACQUIRED ASSETS.
1.1 THE ASSETS. Subject to the terms and conditions of this
Agreement, on and as of the Closing Date (as such term is hereinafter defined),
the Sellers shall sell, transfer and deliver to the Buyer, and the Buyer shall
purchase and receive from the Sellers, all of the following assets, properties,
improvements and business of the Sellers as same are constituted on the Closing
Date (collectively, the "Assets"):
(a) All laminating and other machinery, equipment, tools,
aluminum profile and other dies, workbench set-ups and jigs, and vehicles
(including trucks and trailers) owned or leased by the Sellers, including but
not limited to those items listed on SCHEDULE 1.1 annexed hereto (collectively,
the "Fixed Assets");
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(b) All furniture and fixtures of the Sellers;
(c) All inventory and supplies of the Sellers
(collectively, the "Inventory");
(d) All customer deposits held by the Sellers, and all
accounts receivable, notes receivable, contract rights and other rights of the
Sellers to receive payment for products sold and/or services rendered;
(e) To the extent permitted by law and any subject warranty
agreement, all manufacturers' warranties and/or vendors' warranties in effect
with respect to any of the Fixed Assets and/or the Inventory;
(f) All patents, trademarks, tradenames, service marks,
copyrights and other intellectual property, and all pending applications and
registrations therefor, and all goodwill related thereto, in which the Sellers
have any rights (collectively, the "Intellectual Property");
(g) All rights under executory contracts and agreements (i)
between the Sellers and their customers relating to ongoing and/or future
products to be sold or services to be rendered to such customers and (ii)
between the Sellers and their vendors relating to ongoing and/or future
purchases of raw materials and other supplies, in either case to be assumed by
the Buyer pursuant to Section 2.1(b);
(h) Any and all deposits relating to any of the Assets and
any and all prepaid expenses and other prepayments (including, without
limitation, security deposits under leases and prepayments in respect of the
Assumed Liabilities described in Section 2.1 below) relating to any of the
Assets;
(i) All customer lists, supplier lists, operating manuals,
artwork, silkscreens, trade secrets, technical information, and other such
knowledge and information constituting the "know-how" of the Sellers, the name
"Peninsular Slate," and the goodwill of the Sellers; and
(j) All books, records, software, databases, printouts,
drawings, data, files, notes, notebooks, correspondence and memoranda relating
to the foregoing Assets.
1.2 EXCLUDED ASSETS. Anything elsewhere contained in this
Agreement to the contrary notwithstanding, the Sellers will not be selling,
assigning or transferring, and the Buyer will not be purchasing or acquiring,
any cash (other than amounts representing customer deposits), marketable
securities, life insurance policies, or ownership rights in real estate of the
Sellers.
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2. ASSUMED LIABILITIES.
2.1 ASSUMED LIABILITIES. Subject to the terms and conditions of
this Agreement, on and as of the Closing Date, the Sellers shall transfer and
assign to the Buyer, and the Buyer shall assume and thereafter pay as and when
due, the following liabilities of the Sellers as same are constituted on the
Closing Date (collectively, the "Assumed Liabilities"):
(a) the obligations of the Sellers from and after the
Closing Date under any leases with respect to operating equipment and machinery,
real property leases with respect to the Sellers' facilities in Troy, Michigan,
Bellaire, Texas and Columbia, South Carolina, and loans with respect to
operating vehicles, in each case relating to the operations of the Business and
to the extent disclosed in SCHEDULE 4.8 annexed hereto;
(b) (i) all unfilled purchase orders for the purchase of
raw materials and supplies for use in the Business including, without
limitation, those set forth in Part I of SCHEDULE 4.15 (the "Purchase Orders"),
and (ii) all unfilled sales orders from customers including, without limitation,
those set forth in Part II of SCHEDULE 4.15 (the "Sales Orders"); PROVIDED, that
nothing in this Agreement shall be construed as an assumption of any liabilities
or obligations of the Seller under any Purchase Order or Sales Order which, as a
matter of law, is nonassignable (or which is nonassignable without the consent
of a third party which has not given such consent); and
(c) all performance bonds and other bonds of the Sellers
relating to the operations of the Business.
2.2 DISCLAIMER OF LIABILITIES. Except for those specific
Assumed Liabilities described Section 2.1 above, the Buyer will not assume, and
hereby expressly disclaims any assumption of, any debts, liabilities or
obligations (absolute or contingent) of any kind of the Sellers, including but
not limited to (a) indebtedness for money borrowed, (b) income taxes, sales
taxes, payroll taxes, withholding taxes, franchise taxes and other taxes,
including but not limited to any taxes which may arise out of or be assessable
in respect of the transactions contemplated by this Agreement, (c) claims,
litigation, liabilities or obligations (whether now pending or hereafter
asserted) arising out of or relating to the operations of the Sellers prior to
the Closing Date, (d) lease obligations of any kind, (e) liabilities or
obligations of any kind in respect of any past or present Stockholder,
directors, officers, employees or consultants of the Sellers, whether under any
contract or agreement, pursuant to any pension plan or employee benefit or
welfare plan, or otherwise, (f) liabilities or obligations for accrued employee
benefits and/or severance benefits in respect of any past or present employee of
the Sellers, or any ongoing obligations of the Sellers under any employment,
consulting or management agreement, (g) any obligations or liabilities in
respect of any unfunded pension or retirement benefits, or in respect of any
funding obligations to, or transactions in or relating to any trust funds under,
any pension, employee benefit or retirement plans now or heretofore maintained
by or on behalf of the Sellers for the benefit of any past or present employees,
(h) claims, obligations or liabilities in respect of any environmental
remediation or any violation of any environmental laws or regulations, or any
other violation or alleged violation of applicable law
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by the Sellers, (i) liabilities or obligations relating to recapture of any
depreciation deduction or investment tax credit of the Sellers, and/or (j) any
other liabilities or obligations of or relating to the Sellers in any manner
whatsoever.
3. PURCHASE PRICE.
3.1 CONSIDERATION TO THE SELLERS. The purchase price for the
Assets, subject to Section 3.2 below (the "Consideration"), shall be equal to
Four Million Two Hundred Thousand Dollars ($4,200,000), which shall be payable
by (a) delivering to and depositing with Suntrust Bank, as Escrow Agent under
the Escrow Agreement (as defined in Section 7.3), on behalf of the Sellers, Two
Hundred Thousand Dollars ($200,000), and (b) paying to the Sellers, subject to
Section 3.2 below, the remaining Consideration in cash, by wire transfer of
immediately available funds to such account or accounts as shall be designated
by the Sellers reasonably in advance of the Closing Date.
3.2 NET CONSIDERATION. To the extent that the Sellers have not
already paid their then existing bank or other secured debt out of its cash on
hand (other than trade payables and employee accruals incurred in the ordinary
course of business), the Buyer shall, on the Closing Date, apply a portion of
the Consideration payable pursuant to Section 3.1(b) above to the payment of the
Sellers' outstanding bank or other secured debt, so that such debt is paid in
full.
3.3 WORKING CAPITAL ADJUSTMENT. On the Closing Date, the
Sellers will deliver to the Buyer a schedule and aging of the then-outstanding
accounts receivable ("Closing Date Receivables"), accounts payable ("Closing
Date Payables") and accruals to the extent not prorated and adjusted at the
Closing (the "Closing Date Accruals") of the Business. On a monthly basis
subsequent to the Closing Date, the Buyer will provide a reasonably detailed
accounting of all collections of Closing Date Receivables made during the
preceding month, and all payments made in respect of Closing Date Payables and
Closing Date Accruals during such preceding month; and, from and after such time
as the aggregate collections in respect of Closing Date Receivables equals the
aggregate amount of Closing Date Payables and Closing Date Accruals, any further
collections in respect of Closing Date Receivables shall be deposited by the
Buyer into a segregated interest-bearing account, and the balance of funds in
such segregated account will be paid over to the Sellers (to an account
designated by them) reasonably promptly after each month. All payments received
by the Buyer after the Closing Date that are from a customer who also owes
accounts receivable that are part of the Closing Date Receivables and are not
disputed shall be applied (i) first to such receivables (be they Closing Date
Receivables or other receivables) and in such amounts as designated by such
customer at time of payment, (ii) if some portion of the payment is not
designated to a specific receivable, then such portion shall be applied against
the Closing Date Receivables as apply to that customer, and (iii) if the payment
has no designation to specific receivables, the entire payment shall be applied
against the Closing Date Receivables as apply to that customer until such
Closing Date Receivables as apply to that customer are collected in full. On or
about that date which is 180 days after the Closing Date, the Buyer and the
Sellers will consult with one another in good faith to determine the appropriate
treatment of any uncollected or disputed
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Closing Date Receivables (including any amounts representing contract
retainages), with a view to reaching final resolution on the aggregate
collectible amount of Closing Date Receivables and the correct aggregate amount
of Closing Date Payables and Closing Date Accruals. Any such reconciliation
and/or any payment made to the Sellers on the basis thereof shall be without
prejudice to the parties' rights in the event that actual collections or
liabilities are at variance with such reconciliation and/or payment. In the
event that the Sellers and the Buyer cannot agree on the resolution of any
disputed Closing Date Receivables prior to the end of the 180-day period
following the Closing Date, then following such 180-day period such disputed
Closing Date Receivables shall be assigned to the Sellers and the Sellers shall
thereafter be free to take whatever lawful action that may be reasonably and
commercially appropriate under the circumstances in connection with the
collection thereof of such receivables.
3.4 ALLOCATION OF CONSIDERATION. The Consideration specified in
Section 3.1 above shall be allocated, as among the Assets, in accordance with
SCHEDULE 3.4 annexed hereto, and the parties shall abide by such allocations in
all tax filings and other reports which the parties shall make or render.
3.5 SALES TAXES. To the extent that any sales or use taxes may
be payable in respect of the transactions pursuant to this Agreement, such sales
and use taxes shall be reported and paid by the Sellers in a timely manner.
4. REPRESENTATIONS AND WARRANTIES
OF THE SELLERS AND THE STOCKHOLDER.
In connection with the sale of the Assets to the Buyer, the
Sellers and the Stockholder hereby jointly and severally represent and warrant
to the Buyer as follows:
4.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the
Sellers is a corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation, with full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby, and to own its assets and conduct its business
as owned and conducted on the date hereof. The Sellers are not required to be
qualified as foreign corporations under the laws of any state, other than with
respect to Peninsular Michigan in the state of Indiana, and with respect to
Peninsular Texas in the states of Georgia and South Carolina, as to each of
which they are currently qualified as foreign corporations to do business.
4.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Sellers have been duly and validly authorized by the
Board of Directors of each of the Sellers (to the extent required or permitted
by applicable law) and the Stockholder without dissent. No further corporate
authorization is required on the part of the Sellers to consummate the
transactions contemplated hereby.
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4.3 VALID AND BINDING AGREEMENTS. This Agreement, and, when
executed and delivered by the Sellers and the Stockholder, the Escrow Agreement,
the Bill of Sale, the Assumption Agreement, the Non-Competition Agreements and
the Lease (as such terms are hereinafter defined), constitute and will
constitute the legal, valid and binding obligations of the Sellers and the
Stockholder (to the extent a party thereto), enforceable against the Sellers and
the Stockholder in accordance with their respective terms.
4.4 NO BREACH OF STATUTE OR CONTRACT. Neither the execution and
delivery of this Agreement and/or the Escrow Agreement, the Bill of Sale, the
Assumption Agreement, the Non-Competition Agreements or the Lease by the Sellers
or the Stockholder, nor compliance with the terms and provisions of this
Agreement and/or the Escrow Agreement, the Bill of Sale, the Assumption
Agreement, the Non-Competition Agreements and the Lease on the part of the
Sellers and the Stockholder, will: (a) violate any statute or regulation of any
governmental authority, domestic or foreign, affecting the Sellers or the
Stockholder; (b) require the issuance or grant of any authorization, license,
consent or approval of any federal or state governmental agency or any other
person; or (c) conflict with or result in a breach of any of the terms,
conditions or provisions of the Sellers' articles of incorporation or by-laws or
any judgment, order, injunction, decree, agreement or instrument to which the
Sellers or the Stockholder is a party, or by which the Sellers or any of the
Stockholder is bound, or constitute a default thereunder.
4.5 SUBSIDIARIES AND INVESTMENTS. The Sellers do not own,
directly or indirectly, any stock or other equity securities of any corporation
or entity, or have any direct or indirect equity or ownership interest in any
person, firm, partnership, corporation, venture or business other than the
Business conducted by the Sellers.
4.6 FINANCIAL INFORMATION.
(a) Annexed hereto as SCHEDULE 4.6 are the (i) unaudited,
compiled balance sheets of Peninsular Michigan as of December 31, 1998 and 1997,
and the related statements of income, retained earnings and cash flows for the
years then ended, and supplementary schedules of manufacturing and construction
expenses and selling and administrative expenses, and (ii) unaudited, compiled
balance sheets of Peninsular Texas as of April 30, 1999 and 1998, and the
related statements of income, stockholder's equity and cash flows for the years
then ended, and supplementary schedules of operating profit by state,
manufacturing and construction expenses and selling and administrative expenses,
(collectively, the "Financial Statements"), all of which fairly reflect, in all
material respects, the financial condition and results of operations of the
Sellers as of the dates thereof and for the years then ended, in accordance with
generally accepted accounting principles consistently applied; and, without
limitation of the foregoing, the Sellers have no material liabilities, fixed or
contingent, known or unknown, except to the extent reflected in the most recent
of such Financial Statements or thereafter incurred in the normal course of the
Sellers' business.
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(b) The Sellers have not experienced any substantial
variations or inconsistencies in its accounts receivable collections or accounts
payable payments since the date of the most recent of the Financial Statements.
(c) Since the date of the most recent of the Financial
Statements, (i) the business of the Sellers has been operated solely in the
normal course, (ii) there has been no material adverse change in the assets,
financial condition, operations, business or prospects of the Sellers from that
reflected in such Financial Statements, (iii) the Sellers have not incurred any
material obligation or liability except in the normal course of the Business,
(iv) the Sellers have not paid or declared any dividend or distribution other
than in cash to the Stockholder, (v) the Sellers have not granted or authorized
any increase in the rate of salary or compensation paid or payable to any
employee, consultant or any other person performing services in the Business
except for such increases made in the ordinary course of business and disclosed
in SCHEDULE 4.6 annexed hereto, and (vi) the Sellers have not experienced any
material adverse change in their relationships with customers and/or suppliers,
or received any written notice of any existing, announced or anticipated changes
in the policies of any material customers or suppliers which would materially
adversely affect the Business except with respect to Claridge Company.
4.7 TAX MATTERS.
(a) The Sellers have, to the date hereof, filed all tax
reports and tax returns required to be filed by the Sellers, and the Sellers
and/or the Stockholder (as applicable) have paid all taxes, assessments and
other impositions with respect to the Sellers and their income as and to the
extent required by applicable law. All taxes and other assessments and levies
which the Sellers are required by law to withhold or to collect have been duly
withheld and collected, and have been paid over to the proper governmental
authorities to the extent due and payable on or before the date hereof. There
are no outstanding or pending claims, deficiencies or assessments for taxes,
interest or penalties with respect to any taxable period of the Sellers. The
Sellers will, from time to time from and after the date hereof, provide to the
Buyer and its representatives, upon request therefor, copies any and all tax
reports and/or tax returns heretofore filed by the Sellers.
(b) There are no audits pending with respect to any
federal, state or local tax reports or tax returns of the Sellers, and no waiver
of statutes of limitations have been given or requested with respect to any tax
years or tax filings of the Sellers.
4.8 TITLE TO THE ASSETS. The Sellers have and own good and
marketable title to all of the Assets, free and clear of all liens, pledges,
claims, security interests and encumbrances of every kind and nature, other than
(a) the security interests securing the promissory notes issued to NBD Bank, and
(b) interests of equipment lessors pursuant to those lease agreements set forth
in SCHEDULE 4.8 annexed hereto. Substantially all of the Fixed Assets are listed
in SCHEDULE 1.1, and the Fixed Assets, in the aggregate, are in good operating
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condition and repair (reasonable wear and tear excepted), are adequate for their
use in the Business as presently conducted, and are sufficient for the continued
conduct of such Business. The trucks included in the Assets are current in their
required inspections, and the Sellers hold all licenses and permits required for
the operation thereof in the Business.
4.9 INVENTORIES. All supplies and other inventories reflected
in the Financial Statements, and all inventories thereafter acquired by the
Sellers prior to the Closing Date, have been valued at the lower of cost or
market (on a first-in, first-out basis), and consist of items which are of a
quality and quantity which are useable in the ordinary course of the Business.
4.10 RECEIVABLES. All of the accounts receivable included in the
Assets represent bona fide sales made or services rendered by the Sellers prior
to the Closing Date. To the best of the Sellers' and the Stockholder' knowledge,
(i) no offsets, deductions or claims have been asserted against or in respect of
any of such accounts receivable, and (ii) all of such accounts receivable will
be collectible by the Buyer in the ordinary course of business (and without
requirement to resort to any legal proceedings) subsequent to the Closing Date,
except for the receivable from Christel.
4.11 REAL PROPERTY. The Sellers do not own real estate or any
interest therein, and have heretofore occupied their business premises on a
rental basis, other than the Lapeer, Michigan plant, which is not included in
the Assets.
4.12 LEGAL COMPLIANCE.
(a) The Sellers are (and have been at all times in the past
three (3) years) in compliance in all material respects with all laws, statutes,
regulations, rules and ordinances applicable to the conduct of its business
(including, without limitation, all environmental laws, rules and regulations,
and all other legal requirements relating to the storage, handling, processing,
use, transport or disposal of hazardous or regulated substances), and have in
full force and effect all licenses, permits and other authorizations required
for the conduct of the Business as presently constituted; and the Sellers have
not received notice of any default or violation in respect of or under any of
the foregoing. Neither the Sellers nor the Stockholder has any knowledge of any
reason why the Buyer will not be able to renew or have reissued (to the extent
required by applicable law) any of the licenses, permits and other
authorizations required for the continued conduct of the Business from and after
the Closing Date.
(b) Neither the Sellers nor the Stockholder has received
any written notice of default or violation by the Sellers with respect to any
judgment, order, writ, injunction, decree, demand or assessment issued by any
court or any federal, state, local, municipal or other governmental agency,
board, commission, bureau, instrumentality or department, domestic or foreign,
relating to any aspect of the Business or the Assets; and neither the Sellers
nor any of its officers, directors or employees has received written notice of,
been charged with, or is under investigation with respect to, any violation of
any provision of
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any federal, state, local, municipal or other law or administrative rule or
regulation, domestic or foreign, relating to any aspect of the Business or the
Assets.
4.13 EMPLOYEES. Except as disclosed in SCHEDULE 4.13 annexed
hereto, the Sellers are not a party to or bound by any collective bargaining
agreement, employment agreement, consulting agreement, management agreement or
other commitment for the employment or retention of any person, and no union is
now certified or, to the best of the Sellers' and the Stockholder's knowledge,
claims to be certified as a collective bargaining agent to represent any
employees of the Business. There are no labor disputes existing or, to the best
of the Sellers' and the Stockholder's knowledge, threatened, involving any
employees of the Business, and the Sellers have not had any unfair labor
practice charges or material labor difficulty in the past two (2) years.
4.14 EMPLOYEE BENEFITS. Except as disclosed in SCHEDULE 4.14
annexed hereto, the Sellers do not maintain and are not required to make any
contributions to any pension, profit-sharing, retirement, deferred compensation
or other such plan or arrangement for the benefit of any employee, former
employee or other person. The Sellers have, through the date hereof, made all
required payments, contributions and filings under or in respect of any such
plans or arrangements, and there has not occurred any act, omission, event or
condition such as would give rise to any liability of the Sellers thereunder
other than the obligations to make normal payments and contributions thereunder.
4.15 CONTRACTS. (a) The Sellers have no contracts or commitments
relating to the Assets or the Business, whether written or oral and whether or
not legally binding, other than:
(i) the contracts and commitments set forth in SCHEDULE
4.15 annexed hereto;
(ii) purchase orders, each of which (1) is in the
ordinary course of business, (2) involves a purchase price of less than
$10,000, and (3) is performable by the Sellers within six months from
the date hereof;
(iii) sales orders, each of which (1) is in the
ordinary course of business, (2) involves pricing consistent with the
Sellers' usual practice, (3) involves an aggregate sales price of less
than $10,000, and (4) is performable by the Sellers within six months
from the date hereof; and
(iv) maintenance, service and other contracts relating
to the Assets or the Business, each of which (1) is in the ordinary
course of business, (2) involves an aggregate expenditure of less than
$10,000 after the date hereof, and (3) is terminable by the Sellers
without penalty on notice of 30 days or less.
(b) The Sellers are not in default under any of the
contracts set forth in Parts I and II of SCHEDULE 4.15, and have no knowledge of
any default with respect to any such
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contract by the other party to any such contract or any claim of default by any
such party. Complete and correct copies of all contracts together with all
amendments thereto (or, in the case of oral contracts and commitments, a
description thereof) referred to in paragraph (a)(i) of this Section 4.15 and
listed in SCHEDULE 4.15 have been delivered to the Buyer.
(c) All of the Purchase Orders and Sales Orders were made
by the Sellers in the ordinary course of the Business. The Purchase Orders do
not include the sale of additional products or services or grant special
discounts other than as is stated in any applicable written purchase order
contract.
4.16 LITIGATION. Except as disclosed in SCHEDULE 4.16 annexed
hereto, there is no pending or, to the best knowledge of the Sellers and the
Stockholder, threatened litigation, arbitration, administrative proceeding or
other legal action or proceeding against the Sellers or relating to its
Business. Neither the Sellers nor any of the Stockholder is aware of any event,
cause or condition which might reasonably give rise to or properly form the
basis of any such suit, action, arbitration or proceeding. The Sellers are not
currently engaged in any legal action to recover any sums of money due to the
Sellers or damages sustained by the Sellers.
4.17 INTELLECTUAL PROPERTY. The Sellers have the valid right to
utilize any and all trade names and other intellectual property utilized in its
Business (including but not limited to the Intellectual Property, all of which
is disclosed in SCHEDULE 4.17 annexed hereto), and have not received notice of
any pending challenge to its rights therein or any claimed infringement of such
intellectual property with the rights or property of any other person. The
Sellers have not granted any license or other right to any person to utilize any
of the Intellectual Property for any purpose.
4.18 YEAR 2000. None of the Fixed Assets or any stored
information relating to any of the Assets contains or relies upon embedded
information which will suffer any material disruption or interruption by reason
of or in respect of the entry of dates which are on or after January 1, 2000, or
the operation thereof on or after January 1, 2000.
4.19 AFFILIATE TRANSACTIONS. Except as disclosed in SCHEDULE
4.19 annexed hereto, none of the assets required for the operation of the
Business is owned by, leased from or leased to the Stockholder or any of their
respective affiliates.
4.20 GOING CONCERN. Neither the Sellers nor the Stockholder has
any knowledge of any fact, event, circumstance or condition (including but not
limited to any announced or anticipated changes in the policies of any material
customer) that would materially impair the ability of the Buyer to continue the
Business heretofore conducted by the Sellers in substantially the manner
heretofore conducted by the Sellers (other than general, industry-wide
conditions).
4.21 ACCURACY OF INFORMATION. None of the representations and
warranties of the Sellers or the Stockholder contained herein or in any Schedule
hereto contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the
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statements therein not misleading in light of the circumstances in which made.
To the best of the Sellers' and the Stockholder's knowledge, the Sellers and the
Stockholder have disclosed to the Buyer, as the purchaser of the Assets and the
Business, all material information relating to the Assets and the Business.
5. REPRESENTATIONS AND WARRANTIES OF THE BUYER.
In connection with the Sellers' sale of the Assets to the Buyer,
the Buyer hereby represents and warrants to the Sellers and the Stockholder as
follows:
5.1 ORGANIZATION, GOOD STANDING AND OWNERSHIP. The Buyer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, with all necessary power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
5.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby by the Buyer has been duly and validly authorized by the
Board of Directors of the Buyer. No further corporate authorization is required
on the part of the Buyer to consummate the transactions contemplated hereby.
5.3 VALID AND BINDING AGREEMENT. This Agreement, and, when
executed and delivered by the Buyer, the Escrow Agreement, the Assumption
Agreement, the Non-Competition Agreements and the Lease (as such terms are
hereinafter defined), constitute and will constitute the legal, valid and
binding obligations of the Buyer, enforceable against the Buyer in accordance
with their respective terms.
5.4 NO BREACH OF STATUTE OR CONTRACT. Neither the execution and
delivery of this Agreement and/or the Escrow Agreement, the Assumption
Agreement, the Non-Competition Agreements or the Lease by the Buyer, nor
compliance with the terms and provisions of this Agreement and/or the Escrow
Agreement, the Assumption Agreement, the Non-Competition Agreements and the
Lease on the part of the Buyer, will: (a) violate any statute or regulation of
any governmental authority, domestic or foreign, affecting the Buyer; (b)
require the issuance of any authorization, license, consent or approval of any
federal or state governmental agency; or (c) conflict with or result in a breach
of any of the terms, conditions or provisions of any judgment, order,
injunction, decree, note, indenture, loan agreement or other agreement or
instrument to which the Buyer is a party, or by which the Buyer is bound, or
constitute a default thereunder.
5.5 ACCURACY OF INFORMATION. None of the representations and
warranties of the Buyer contained herein contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein not misleading in light of the circumstances in which made.
To the best of the Buyer's knowledge, the Buyer has disclosed to the Sellers, as
the sellers of the Assets and the Business, all material information relating to
the Buyer's ability to perform hereunder.
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6. THE SELLERS' OBLIGATIONS BEFORE THE CLOSING DATE.
The Sellers covenant and agree that, from the date hereof until
the Closing Date:
6.1 ACCESS TO INFORMATION.
(a) The Sellers shall permit the Buyer and its counsel,
accountants and other representatives, upon reasonable advance notice to the
Sellers, during normal business hours and without undue disruption of the
business of the Sellers, to have reasonable access to all properties, books,
accounts, records, contracts, documents and information relating to the Sellers
and the Business. The Buyer and its representatives shall also be permitted to
freely consult with the Sellers' counsel concerning the Sellers and the
Business.
(b) The Sellers will make available to the Buyer and its
accountants all financial and tax records relating to the Sellers and the
Business, and shall cause the Sellers' accountants to cooperate with the Buyer's
accountants and make available to the Buyer's accountants all work papers and
other materials developed by or in the possession of the Sellers' accountants,
for the purpose of assisting the Buyer's accountants in (i) verifying the
accuracy of the Financial Statements and the other representations and
warranties of the Sellers and the Stockholder pursuant to Sections 4.6 and 4.8
above.
6.2 CONDUCT OF BUSINESS IN NORMAL COURSE. The Sellers shall
carry on their business activities in substantially the same manner as
heretofore conducted, shall maintain inventories in types and amounts consistent
with historical practice, and shall not make or institute any unusual or novel
practices or methods of service, sale, purchase, lease, management, accounting
or operation that will vary materially from those methods used by the Sellers as
of the date hereof, without in each instance obtaining the prior written consent
of the Buyer.
6.3 PRESERVATION OF BUSINESS AND RELATIONSHIPS. The Sellers
shall, without making or incurring any unusual commitments or expenditures, use
all reasonable efforts to preserve their business organizations intact, and
preserve their present relationships with referral sources, clients, customers,
suppliers and others having business relationships with the Sellers.
6.4 MAINTENANCE OF INSURANCE. The Sellers shall continue to
carry their existing insurance, to the extent obtainable upon reasonable terms.
6.5 CORPORATE MATTERS. Neither of the Sellers shall, without
the prior written consent of the Buyer in each instance:
(a) amend, cancel or modify any material contract or enter
into any material new agreement, commitment or transaction except, in each
instance, in the ordinary course of business;
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(b) pay, grant or authorize any material salary increases
or bonuses except in the ordinary course of business and consistent with past
practice, or enter into any employment, consulting or management agreements;
(c) modify in any material respect any material agreement
to which the Sellers is a party or by which it may be bound, except in the
ordinary course of business;
(d) make any change in management personnel;
(e) except pursuant to commitments in effect on the date
hereof (to the extent disclosed in this Agreement or in any Schedule hereto),
make any capital expenditure(s) or commitment(s), whether by means of purchase,
lease or otherwise, or any operating lease commitment(s), in excess of $25,000
in the aggregate;
(f) dispose of or transfer any asset outside of the
ordinary course of the Business, or sell, assign or dispose of any capital
asset(s) with a net book value in excess of $5,000 as to any one item or $25,000
in the aggregate as to all items;
(g) materially change its method of collection of accounts
or notes receivable, or slow in any material respect its payment of accounts
payable;
(h) make any payment or distribution of any assets or
property other than cash to the Stockholder;
(i) incur any material liability or indebtedness except, in
each instance, in the ordinary course of business;
(j) subject any of its assets or properties to any liens or
encumbrances; or
(k) agree to do, or take any action in furtherance of, any
of the foregoing.
7. ADDITIONAL AGREEMENTS OF THE PARTIES.
7.1 CONFIDENTIALITY. Notwithstanding anything to the contrary
contained in this Agreement, and subject only to any disclosure requirements
which may be imposed upon any party under applicable state or federal securities
or antitrust laws, it is expressly understood and agreed by the parties that,
except with respect to matters or information which are publicly available other
than by reason of a breach of this Section 7.1, (i) this Agreement, the
Schedules hereto, and the conversations, negotiations and transactions relating
hereto and/or contemplated hereby, and (ii) all financial information, business
records and other non-public information concerning either party which the other
party or its representatives has received or may hereafter receive, shall be
maintained in the strictest confidence by the recipient and its
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representatives, and shall not be disclosed to any person that is not associated
or affiliated with the recipient and involved in the transactions contemplated
hereby, without the prior written approval of the party which provided the
information. The parties hereto shall use their best efforts to avoid disclosure
of any of the foregoing or undue disruption of any of the business operations or
personnel of the parties, and no party shall issue any press release or other
public announcement regarding the transactions contemplated hereby without the
prior approval of each other party (such approval not to be unreasonably
withheld or delayed) unless compelled to do so upon advice of counsel and there
is insufficient time to practicably obtain approval hereunder. In the event that
the transactions contemplated hereby shall not be consummated for any reason,
each party covenants and agrees that neither it nor any of its representatives
shall, except to the extent required in connection with any claims arising out
of the termination of this Agreement, retain (other than information which is
publicly available other than by reason of a breach of this Section 7.1) any
documents, lists or other writings of any other party which it may have received
or obtained in connection herewith or any documents incorporating any of the
information contained in any of the same (all of which, and all copies thereof
in the possession or control of the recipient or its representatives, shall be
returned to the party which provided the information).
7.2 EXCLUSIVITY. From the date hereof through any termination
of this Agreement in accordance with Section 11 below, the Sellers and the
Stockholder shall not (and shall not permit any of their directors, officers or
affiliates to) negotiate with or enter into any other commitments, agreements or
understandings with any person, firm or corporation (other than the Buyer) in
respect of any sale of capital stock or assets of the Sellers, any merger,
consolidation or corporate reorganization, or any other such transaction
relating to the Sellers or the Business.
7.3 COVENANT NOT TO COMPETE. The Sellers acknowledge that an
important part of the consideration which the Buyer will receive in connection
with the transactions contemplated hereby is the goodwill of the Business and
the confidential information of the Sellers (including, without limitation,
trade secrets, customer lists, manufacturing processes, technology, know-how and
other proprietary information). In order that the Buyer may enjoy the benefits
of such goodwill and such confidential information, the Sellers will not in any
manner compete with the Buyer or, directly or indirectly, own, manage, operate,
control, be a consultant to, participate or have any interest in or be connected
in any manner with, the ownership, management, operation or control of any
business manufacturing or selling chalkboards or other visual display boards in
the United States of America until the fifth anniversary of the Closing.
7.4 ESCROW AGREEMENT; BILL OF SALE; TRANSFER DOCUMENTS;
ASSUMPTION AGREEMENT.
(a) On the Closing Date, (i) the Sellers and the Escrow
Agent named therein shall execute and deliver to the Buyer an escrow agreement
in respect of a portion of the Consideration in substantially the form of
EXHIBIT A annexed hereto (the "Escrow Agreement"), and (ii) the Sellers shall
execute and deliver to the Buyer a Bill of Sale and Assignment in
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respect of the Assets in substantially the form of EXHIBIT B annexed hereto (the
"Bill of Sale"). In addition, to the extent that specific assignments may be
necessary or appropriate in respect of any of the Assets, and/or to the extent
that any of the Assets are represented by certificates of title or other
documents, then the Sellers shall, on the Closing Date, execute and deliver to
the Buyer any and all additional transfer documents, and shall endorse to and in
the name of the Buyer all certificates of title and other such documents, as may
be necessary or appropriate in order to effect the full transfer to the Buyer of
all of the Assets.
(b) On the Closing Date, the Sellers and the Buyer shall
execute and deliver to one another an Instrument of Assumption in respect of the
Assumed Liabilities in substantially the form of EXHIBIT C annexed hereto (the
"Assumption Agreement"). In addition, to the extent that specific assignments
may be required in order to effect the assignment to and assumption by the Buyer
of any particular Assumed Liabilities, the Sellers and the Buyer shall, on the
Closing Date, execute and deliver to one another such additional assignment and
assumption documents.
7.5 NON-COMPETITION AGREEMENTS. On the Closing Date, the Buyer
(on the one hand) and each of the Sellers, Jack E. Tomalis and Ceil A. Tomalis
(on the other hand) shall execute and deliver to one another Non-Competition and
Non-Disclosure Agreements in substantially the form of EXHIBIT D annexed hereto
(the "Non-Competition Agreements").
7.6 EMPLOYMENT AGREEMENT. On the Closing Date, the Buyer and
Ceil A. Tomalis shall execute and deliver to one another an Employment Agreement
in substantially the form of EXHIBIT E annexed hereto (the "Employment
Agreement").
7.7 RENTAL AGREEMENT. On the Closing Date, Peninsular Michigan
and the Buyer shall enter into a Rental Agreement providing for space in the
Lapeer, Michigan building owned by Peninsular Michigan at the rent and for the
term specified therein, in substantially the form of EXHIBIT F annexed hereto
(the "Lease").
7.8 PERFORMANCE BONDS. The Buyer shall use its commercially
reasonable efforts to assume or, if the assumption of such bonds is not
permissible, replace the Sellers under, the performance bonds listed in SCHEDULE
7.8 annexed hereto, to be effective on the Closing Date.
7.9 NAME CHANGES. On the Closing Date, the Sellers shall
execute and deliver to the Buyer, for filing with the Secretary of State of the
States of Michigan and Texas, articles of amendment of the articles of
incorporation of each of the Sellers whereby the corporate name of the Sellers
will be changed to a name that does not include "Peninsular Slate" or any
confusingly similar name (the "Articles of Amendment").
7.10 ADDITIONAL AGREEMENTS AND INSTRUMENTS. On or before the
Closing Date, the Buyer, the Sellers and the Stockholder shall execute, deliver
and file all exhibits, agreements, certificates, instruments and other
documents, not inconsistent with the provisions of this Agreement, which, in the
opinion of counsel to the parties hereto, shall reasonably be
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required to be executed, delivered and filed in order to consummate the
transactions contemplated by this Agreement.
7.11 NON-INTERFERENCE. None of the Buyer, the Sellers or the
Stockholder shall cause to occur any act, event or condition which would cause
any of their respective representations and warranties made in this Agreement to
be or become untrue or incorrect in any material respect as of the Closing Date,
or would interfere with, frustrate or render unreasonably expensive the
satisfaction by the other party or parties of any of the conditions precedent
set forth in Sections 8 and 9 below.
8. CONDITIONS PRECEDENT TO THE BUYER'S PERFORMANCE.
In addition to the fulfillment of the parties' agreements in
Section 7 above, the obligations of the Buyer to consummate the transactions
contemplated by this Agreement are further subject to the satisfaction, at or
before the Closing Date, of all the following conditions, any one or more of
which may be waived in writing by the Buyer:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by the Sellers and/or the Stockholder in
this Agreement and in any letter, written statement, certificate or other
document delivered to the Buyer pursuant to this Agreement shall be true and
correct on and as of the Closing Date as though such representations and
warranties were made on and as of that date.
8.2 PERFORMANCE. The Sellers and the Stockholder shall have
performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by them
on or before the Closing Date.
8.3 CERTIFICATION. The Buyer shall have received a certificate,
dated the Closing Date, signed by the Sellers and the Stockholder, certifying,
in such detail as the Buyer and its counsel may reasonably request, that the
conditions specified in Sections 8.1 and 8.2 above have been fulfilled.
8.4 RESOLUTIONS. The Buyer shall have received certified
resolutions of the Board of Directors and the Stockholders of each of the
Sellers, in form reasonably satisfactory to counsel for the Buyer, authorizing
the Sellers' execution, delivery and performance of this Agreement and all
actions to be taken by the Sellers hereunder.
8.5 OPINION OF THE SELLERS' COUNSEL. The Buyer shall have
received a written opinion from Weisman Trogen Young & Schloss, P.C., counsel
for the Sellers, addressed to the Buyer and dated the Closing Date, satisfactory
to the Buyer as to form and substance, in substantially the form of EXHIBIT G
annexed hereto.
8.6 ABSENCE OF LITIGATION. No action, suit or proceeding by or
before any court or any governmental body or authority, against the Sellers or
pertaining to the transactions contemplated by this Agreement or their
consummation, shall have been instituted
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on or before the Closing Date, which action, suit or proceeding would, if
determined adversely, have a material adverse effect on the Business or any
material portion of the Assets.
8.7 CONSENTS. All necessary disclosures to and agreements and
consents of (i) any parties to any material contracts and/or any licensing
authorities which are material to the Business, and (ii) any governmental
authorities or agencies to the extent required to be obtained prior to the
Closing in connection with the transactions contemplated by this Agreement,
shall have been obtained and true and complete copies thereof delivered to the
Buyer. Any such consents must be obtained without imposing any unreasonable
burden or obligation on the Buyer or the Business from and after the Closing
Date.
8.8 AVAILABILITY OF FUNDS. The Buyer shall have available on
the Closing Date sufficient funds to enable it to consummate the transactions
contemplated by this Agreement.
8.9 EXECUTION AND DELIVERY OF EXHIBITS. On or before the
Closing Date, (a) the Sellers shall have executed and delivered to the Buyer the
Escrow Agreement, the Bill of Sale, the Lease, the Assumption Agreement and the
Articles of Amendment, (b) the Stockholder and the other parties thereto shall
have executed and delivered to the Buyer the Non-Competition Agreements, and (c)
the Escrow Agent shall have executed and delivered to the Buyer the Escrow
Agreement.
9. CONDITIONS PRECEDENT TO THE SELLERS'
AND THE STOCKHOLDER'S PERFORMANCE.
In addition to the fulfillment of the parties' agreements in
Section 7 above, the obligations of the Sellers and the Stockholder to
consummate the transactions contemplated by this Agreement are further subject
to the satisfaction, at or before the Closing Date, of all of the following
conditions, any one or more of which may be waived in writing by the Sellers and
the Stockholder:
9.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made by the Buyer in this Agreement and in any
letter, written statement, certificate or other document delivered to the
Sellers and/or the Stockholder pursuant to this Agreement shall be true and
correct on and as of the Closing Date as though such representations and
warranties were made on and as of that date.
9.2 PERFORMANCE. The Buyer shall have performed, satisfied and
complied with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Buyer on or before
the Closing Date.
9.3 CERTIFICATION. The Sellers and the Stockholder shall have
received a certificate, dated the Closing Date, signed by the Buyer, certifying,
in such detail as the Sellers and the Stockholder and its counsel may reasonably
request, that the conditions specified in Sections 9.1 and 9.2 above have been
fulfilled.
18
<PAGE>
9.4 OPINION OF THE BUYER'S COUNSEL. The Sellers shall have
received a written opinion from Greenberg Traurig, counsel for the Buyer,
addressed to the Sellers and dated the Closing Date, satisfactory to the Sellers
as to form and substance, in substantially the form of EXHIBIT H annexed hereto.
9.5 EXECUTION AND DELIVERY OF EXHIBITS. On or before the
Closing Date, (a) the Buyer shall have executed and delivered to the Sellers the
Lease, the Escrow Agreement and the Assumption Agreement, and (b) the Buyer
shall have executed and delivered to the Stockholder and the other parties
thereto the Non-Competition Agreements.
10. CLOSING.
10.1 PLACE AND DATE OF CLOSING. Unless this Agreement shall be
terminated pursuant to Section 11 below, the consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the location
as is agreed to between the parties, at 10:00 a.m., local time, on January 21,
2000, or such later date (not later than February 15, 2000) as may be reasonably
agreeable to all parties (the date of the Closing being referred to in this
Agreement as the "Closing Date").
10.2 ACTIONS AT CLOSING. On the Closing Date, (a) the Buyer
shall pay to the Seller the portion of the Consideration provided in Section
3.1(b) above, (b) the Seller shall execute and deliver to the Buyer the Lease
and a Bill of Sale in respect of the Assets, together with such further
conveyancing documents in respect of the Assets (including but not limited to
endorsements of vehicle titles and other title documents, as appropriate) as may
be necessary or appropriate in order to effect the transfer of the Assets to the
Buyer, (c) the Buyer and Jack E. Tomalis and Ceil A. Tomalis shall execute and
deliver to one another Non-Competition Agreements, (d) the Buyer and Ceil A.
Tomalis shall execute and deliver to one another the Employment Agreement and
(e) the Sellers shall deliver to the Buyer correct and complete pay-off letters
of the Sellers' bank or other secured creditors as of the Closing Date (setting
forth names, addresses and amounts owed), and the Buyer shall, out of the
Consideration, remit payment to the subject creditors of the full amounts
reflected in such schedule.
11. TERMINATION OF AGREEMENT.
11.1 GENERAL. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing: (a) by the mutual written consent of the Buyer, the Sellers and the
Stockholder; (b) by the Buyer, or by the Sellers and the Stockholder; if: (i) a
material breach shall exist with respect to the written representations and
warranties made by the other party or parties, as the case may be, (ii) the
other party or parties, as the case may be, shall take any action prohibited by
this Agreement, if such actions shall or may have a material adverse effect on
the Business and/or the transactions contemplated hereby, (iii) the other party
or parties, as the case may be, shall not have furnished, upon reasonable notice
therefor, such certificates and documents required in connection with the
transactions contemplated hereby and matters incidental thereto as it or
19
<PAGE>
they shall have agreed to furnish, and it is reasonably unlikely that the other
party or parties will be able to furnish such item(s) prior to the Outside
Closing Date specified below, or (iv) any consent of any third party to the
transactions contemplated hereby (whether or not the necessity of which is
disclosed herein or in any Schedule hereto) is reasonably necessary to prevent a
default under any outstanding material obligation of the Buyer or the Sellers,
and such consent is not obtainable without material cost or penalty (unless the
party or parties not seeking to terminate this Agreement agrees or agree to pay
such cost or penalty); or (c) by the Buyer or by the Sellers and the
Stockholder, at any time on or after February 15, 2000 (the "Outside Closing
Date"), if the transactions contemplated hereby shall not have been consummated
prior thereto, and the party directing termination shall not then be in breach
or default of any obligations imposed upon such party by this Agreement.
11.2 EFFECT OF TERMINATION. In the event of termination by
either party as above provided in this Section 11, prompt written notice shall
be given to the other party. Termination of this Agreement shall not relieve any
party of any of its obligations pursuant to Section 7.1 above, and shall not
relieve any breaching party from liability for any breach of this Agreement.
12. INDEMNIFICATION.
12.1 GENERAL.
(a) Without prejudice to any rights of contribution as
between or among the Sellers and the Stockholder, the Sellers and the
Stockholder shall jointly and severally defend, indemnify and hold harmless the
Buyer from, against and in respect of any and all claims, losses, costs,
expenses, obligations, liabilities, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorneys' fees, that the Buyer may
incur, sustain or suffer ("Losses") as a result of (i) any breach of, or failure
by the Sellers or the Stockholder to perform, any of the representations,
warranties, covenants or agreements of the Sellers or the Stockholder contained
in this Agreement or in any Schedule to this Agreement, and/or (ii) any failure
by the Sellers to pay or perform when due any of its retained liabilities.
(b) The Buyer shall defend, indemnify and hold harmless the
Sellers and the Stockholder from, against and in respect of any and all claims,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorneys' fees, that
the Sellers or the Stockholder may incur, sustain or suffer as a result of (i)
any breach of, or failure by the Buyer to perform, any of the representations,
warranties, covenants or agreements of the Buyer contained in this Agreement,
and/or (ii) any failure by the Buyer to pay or perform when due any of the
Assumed Liabilities.
12.2 LIMITATIONS ON CERTAIN INDEMNITY.
(a) Notwithstanding any other provision of this Agreement
to the contrary, neither the Sellers nor the Stockholder shall be liable to the
Buyer with respect to Losses unless and until the aggregate amount of all Losses
incurred by the Buyer shall exceed
20
<PAGE>
the sum of $10,000 (the "Basket"); PROVIDED, HOWEVER, that the Basket shall not
be available with respect to any Losses under Section 12.1(a)(ii) above or any
Losses involving proven fraud by the Sellers or the Stockholder. The Sellers and
the Stockholder shall thereafter be jointly and severally liable for all Losses
in excess of the Basket, provided that the Sellers' and the Stockholder's
maximum aggregate liability in respect of all Losses shall not in any event
exceed the aggregate amount of $1,000,000 (the "Limitation"); PROVIDED, HOWEVER,
that the Limitation shall not be available with respect to any Losses under
Sections 4.7, 4.8, 4.12 and 4.14 or any Losses involving proven fraud by the
Sellers or the Stockholder. The Buyer shall, in respect of any such Losses, seek
recourse first against the Escrow Fund in accordance with the procedures set
forth in this Section 12 and the Escrow Agreement.
(b) The Buyer shall be entitled to indemnification by the
Sellers and the Stockholder for Losses only in respect of claims for which
notice of claim shall have been given to the Sellers or the Stockholder on or
before the second anniversary of the Closing Date.
12.3 CLAIMS FOR INDEMNITY. Whenever a claim shall arise for
which any party shall be entitled to indemnification hereunder, the indemnified
party shall notify the indemnifying party in writing within sixty (60) days of
the indemnified party's first receipt of notice of, or the indemnified party's
obtaining actual knowledge of, such claim, and in any event within such shorter
period as may be necessary for the indemnifying party or parties to take
appropriate action to resist such claim. Such notice shall specify all facts
known to the indemnified party giving rise to such indemnity rights and shall
estimate (to the extent reasonably possible) the amount of potential liability
arising therefrom. If the indemnifying party shall be duly notified of such
dispute, the parties to this Agreement shall attempt to settle and compromise
the same or may agree to submit the same to arbitration or, if unable or
unwilling to do any of the foregoing, such dispute shall be settled by
appropriate litigation, and any rights of indemnification established by reason
of such settlement, compromise, arbitration or litigation shall promptly
thereafter be paid and satisfied by those indemnifying parties obligated to make
indemnification hereunder.
12.4 RIGHT TO DEFEND. If the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or demand by any
third party against the indemnified party or any of its affiliates, the
indemnifying party or parties shall be entitled (without prejudice to the
indemnified party's right to participate at its own expense through counsel of
its own choosing), at their expense and through a single counsel of their own
choosing, to defend or prosecute such claim in the name of the indemnifying
party or parties, or any of them, or if necessary, in the name of the
indemnified party. In any event, the indemnified party shall give the
indemnifying party advance written notice of any proposed compromise or
settlement of any such claim. If the remedy sought in any such action or demand
is solely money damages, the indemnifying party shall have fifteen (15) days
after receipt of such notice of settlement to object to the proposed compromise
or settlement, and if it does so object, the indemnifying party shall be
required to undertake, conduct and control, though counsel of its own choosing
and at its sole expense, the settlement or defense thereof, and the indemnified
party shall cooperate with the indemnifying party in connection therewith.
21
<PAGE>
13. POST-CLOSING EVENTS.
13.1 CONTINUING SELLERS' LIABILITIES. From and after the Closing
Date, the Sellers shall timely pay and perform their retained liabilities,
including but not limited to all liabilities of the type described in Section
2.2 above.
13.2 CORPORATE NAME. From and after the Closing Date, the
Sellers shall cease and desist from any and all further use of the name
"Peninsular Slate" or any confusingly similar name, other than for purposes of
filing routine corporate reports, tax returns and other such items. The Sellers
shall, upon request of the Buyer made at any time from and after the Closing
Date, execute and deliver (and permit the Buyer to file) an amendment of the
Sellers' Articles of Incorporation whereby the corporate name of the Sellers
shall be changed to a name that does not include the name "Peninsular Slate" or
any confusingly similar name.
13.3 ACCOUNTS RECEIVABLE COLLECTIONS. Subject to the provisions
set forth in Section 3.3, To the extent that, at any time from and after the
Closing Date, the Sellers shall receive payment of any accounts receivable
included in the Assets, the Sellers shall immediately turn same over to the
Buyer in the form received (subject to any necessary endorsement), and pending
such delivery, shall hold same in trust for the benefit of the Buyer. Each of
the Buyer and the Sellers shall be permitted to pursue collection of its
accounts receivable in the normal course of business and utilizing collection
methods which are customary in the historic operation of its business.
13.4 FURTHER ASSURANCES. From time to time from and after the
Closing Date, the parties will execute and deliver to one another any and all
further agreements, instruments, certificates and other documents as may
reasonably be requested by any other party in order more fully to consummate the
transactions contemplated hereby, and to effect an orderly transition of the
business being acquired by the Buyer hereunder.
14. COSTS.
14.1 FINDER'S OR BROKER'S FEES. Each of the Buyer, the Sellers
and the Stockholder represents and warrants that neither they nor any of their
respective affiliates have dealt with any broker or finder in connection with
any of the transactions contemplated by this Agreement, and no broker or other
person is entitled to any commission or finder's fee in connection with any of
these transactions.
14.2 EXPENSES. The Buyer, the Sellers and the Stockholder shall
each pay all costs and expenses incurred or to be incurred by them,
respectively, in negotiating and preparing this Agreement and in closing and
carrying out the transactions contemplated by this Agreement.
22
<PAGE>
15. FORM OF AGREEMENT.
15.1 EFFECT OF HEADINGS. The Section headings used in this
Agreement and the titles of the Schedules hereto are included for purposes of
convenience only, and shall not affect the construction or interpretation of any
of the provisions hereof or of the information set forth in such Schedules.
15.2 ENTIRE AGREEMENT; WAIVERS. This Agreement and the other
agreements and instruments referred to herein constitute the entire agreement
between the parties pertaining to the subject matter hereof, and supersede all
prior agreements or understandings as to such subject matter. No party hereto
has made any representation or warranty or given any covenant to the other
except as set forth in this Agreement, the Schedules hereto, and the other
agreements and instruments referred to herein. No waiver of any of the
provisions of this Agreement shall be deemed, or shall constitute, a waiver of
any other provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.
15.3 COUNTERPARTS. This Agreement may be executed simultaneously
in any number of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
16. PARTIES.
16.1 PARTIES IN INTEREST. Nothing in this Agreement, whether
expressed or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective heirs, executors, administrators, personal representatives,
successors and permitted assigns, nor is anything in this Agreement intended to
relieve or discharge the obligations or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action over or against any party to this Agreement.
16.2 NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party to
whom notice is to be given, on the first day after delivery thereof to a
recognized overnight delivery service for next day delivery with all charges
prepaid or billed to the account of the sender, or on the third day after
mailing if mailed to the party to whom notice is to be given, by first class
mail, registered or certified, postage prepaid, and properly addressed as
follows:
(a) If to the Sellers and/or the Stockholder, to:
Mr. Jack E. Tomalis
1166 East Big Beaver Road
Troy, Michigan 48083
23
<PAGE>
with a copy to:
Weisman Trogan Young & Schloss, P.C.
30100 Telegraph Road, Suite 428
Bingham Farms, Michigan 48025-4518
Attn: Howard B. Young, Esq.
(b) If to the Buyer, to:
Greensteel, Inc.
c/o PolyVision Corporation
4888 South Old Peachtree Road
Norcross, Georgia 30071
Attn: Mr. Michael H. Dunn
President and Chief Executive Officer
with a copy to:
Greenberg Traurig
MetLife Building
200 Park Avenue, 15th Floor
New York, New York 10166
Attention: Spencer G. Feldman, Esq.
or to such other address as either party shall have specified by notice in
writing given to the other party.
17. MISCELLANEOUS.
17.1 AMENDMENTS AND MODIFICATIONS. No amendment or modification
of this Agreement or any Schedule hereto shall be valid unless made in writing
and signed by the party to be charged therewith.
17.2 NON-ASSIGNABILITY; BINDING EFFECT. Neither this Agreement,
nor any of the rights or obligations of the parties hereunder, shall be
assignable by any party hereto without the prior written consent of all other
parties hereto. Otherwise, this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
17.3 GOVERNING LAW; JURISDICTION. This Agreement shall be
construed and interpreted and the rights granted herein governed in accordance
with the laws of the State of Georgia applicable to contracts made and to be
performed wholly within such State. Except as otherwise provided in Section 12.3
above, any claim, dispute or controversy arising under or in connection with
this Agreement or any actual or alleged breach hereof shall be settled
exclusively by arbitration to be held before a single arbitrator in New York,
New York, or in
24
<PAGE>
any other locale or venue as legal jurisdiction may otherwise be had over the
party against whom the proceeding is commenced, in accordance with the
commercial arbitration rules of the American Arbitration Association then
obtaining. As part of his or her award, the arbitrator shall make a fair
allocation of the fee of the American Arbitration Association, the cost of any
transcript, and the parties' reasonable attorneys' fees, taking into account the
merits and good faith of the parties' claims and defenses. Judgment may be
entered on the award so rendered in any court having jurisdiction. Any process
or other papers hereunder may be served by
25
<PAGE>
registered or certified mail, return receipt requested, or by personal service,
provided that a reasonable time for appearance or response is allowed.
IN WITNESS WHEREOF, the parties have executed this Agreement on and as
of the date first set forth above.
GREENSTEEL, INC.
By:/s/Michael H. Dunn
-----------------------------------------
Michael H. Dunn, President
PENINSULAR SLATE COMPANY
By:/s/Jack E. Tomalis
-----------------------------------------
Jack E. Tomalis
PENINSULAR SLATE COMPANY
OF TEXAS
By:/s/Jack E. Tomalis
-----------------------------------------
Jack E. Tomalis
/s/Jack E. Tomalis
--------------------------------------------
Jack E. Tomalis
The undersigned, being the sole stockholder of Greensteel, Inc., the
Buyer named in and party to the foregoing Agreement, hereby unconditionally
guarantees the timely performance by such Buyer of its obligations under Section
3.3 of the foregoing Agreement, and agrees that such guarantee shall not in any
manner be affected or impaired by (a) any amendment or modification of the
Agreement or any other agreements executed and delivered in connection therewith
(collectively, the "Transaction Documents"), (b) any waiver or indulgence
granted or permitted under any of the Transaction Documents, (c) any bankruptcy,
insolvency, reorganization or other such proceeding at any time against the
Buyer, or (d) any other fact,
26
<PAGE>
event, circumstance or condition which might constitute a legal or equitable
defense to the obligations of a guarantor.
POLYVISION CORPORATION
By: /s/Michael H. Dunn
-----------------------------------------
Name: Michael H. Dunn
Title: President and Chief Executive Officer
27
<PAGE>
EXHIBIT 10.48
AMENDMENT AND SUPPLEMENT NO. 3
TO
CREDIT AGREEMENT
AGREEMENT, made as of this 21st day of January, 2000, by and
among:
POLYVISION CORPORATION, a New York corporation ("POLYVISION"),
POSTERLOID CORPORATION, a Delaware corporation ("POSTERLOID"), GREENSTEEL, INC.,
a Delaware corporation ("GREENSTEEL") (each of PolyVision, Posterloid and
Greensteel, a "BORROWER" and collectively, the "BORROWERS");
The financial institutions which have executed the signature
pages annexed hereto (individually, a "LENDER PARTY" and collectively, the
"LENDER PARTIES");
FLEET NATIONAL BANK, as European Letter of Credit Bank,
Initial Issuing Bank, Swing Line Bank and Administrative Agent (in its capacity
as Administrative Agent, together with its successors in such capacity, the
"ADMINISTRATIVE AGENT");
WHEREAS:
(A) The Borrowers are indebted to the Lender Parties pursuant
to a Credit Agreement dated as of November 20, 1998 (as amended by Amendment No.
1 to Credit Agreement dated as of December 30, 1998, as further amended by
Amendment No. 2 to Credit Agreement dated as of August 19, 1999, and as it is
hereby and as it may hereafter from time to time be further amended, modified or
supplemented, the "CREDIT AGREEMENT");
(B) The Borrowers have requested and the Lender Parties and
the Administrative Agent have agreed, upon the terms and conditions set forth
herein, (i) to permit the acquisition by Greensteel of substantially all of the
assets of American Chalkboard Company, L.L.C., an Alabama limited liability
company ("AMERICAN CHALKBOARD"), pursuant to the terms of the Asset Purchase
Agreement dated JANUARY 21, 2000 for an aggregate cash purchase price not to
exceed Five Million, Two Hundred and Fifty Thousand Dollars ($5,250,000) before
assumed liabilities, fees and expenses, (ii) to permit the acquisition by
Greensteel of substantially all of the assets of Peninsular Slate Company and
Peninsular Slate Company of Texas (hereinafter referred to collectively, as
"PENINSULAR SLATE"), pursuant to the terms of the Asset Purchase Agreement dated
JANUARY 21, 2000 for an aggregate cash purchase price not to exceed Four
Million, Two Hundred Thousand Dollars ($4,200,000) before fees and expenses,
<PAGE>
(iii) to increase the Term A Facility by an aggregate principal amount of Ten
Million ($10,000,000) Dollars, which amount shall be used to finance, in part,
the Amendment No. 3 Acquisitions (as hereinafter defined), (iv) to amend and
restate Section 2.4(a) of the Credit Agreement relating to the repayment of the
Term A Advances, (v) to add a new Lender; and (vi) to revise certain other
provisions of the Credit Agreement; and
(C) All capitalized terms that are used herein without
definition and which are defined in the Credit Agreement shall have the
respective meanings ascribed thereto therein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I.
AMENDMENTS TO CREDIT AGREEMENT
This Amendment and Supplement No. 3 to Credit Agreement shall
be deemed to be an amendment and supplement to the Credit Agreement, and shall
not be construed in any way as a replacement therefor. All of the terms and
provisions of this Amendment and Supplement No. 3 are hereby incorporated by
reference into the Credit Agreement as if such terms and provisions were set
forth in full therein. The Credit Agreement is hereby amended, effective upon
the satisfaction of the conditions precedent set forth in Article V hereof, in
the following respects:
1.1 Article 1, "DEFINITIONS", is amended to insert the
following new definitions where alphabetically appropriate:
"AMENDMENT NO. 3" means the Amendment and Supplement No. 3 to
Credit Agreement dated as of January 21, 2000 among the Borrowers, the Lender
Parties signatory thereto and the Administrative Agent.
"AMENDMENT NO. 3 ACQUISITIONS" means the acquisitions by
Greensteel of all or substantially all of the assets of American Chalkboard and
Peninsular Slate, pursuant to the terms of the Amendment No. 3 Acquisition
Documents.
"AMENDMENT NO. 3 ACQUISITION DOCUMENTS" means the American
Chalkboard Asset Purchase Agreement and the Peninsular Slate Asset Purchase
Agreement and each of the other agreements, instruments and documents executed
or delivered by any of the parties thereto or their respective Subsidiaries
pursuant thereto or in connection herewith, and all schedules and exhibits
related to such agreements; including, without limitation, any escrow agreements
relating thereto.
"AMENDMENT NO. 3 EFFECTIVE DATE" means the date set forth in
Amendment No. 3 as the "Amendment No. 3 Effective Date".
<PAGE>
"AMENDMENT NO. 3 TRANSACTIONS" means the transactions
contemplated by the Amendment No. 3 Acquisition Documents and by Amendment No.
3.
"AMERICAN CHALKBOARD" means American Chalkboard Company,
L.L.C., an Alabama limited liability company.
"AMERICAN CHALKBOARD ACQUISITION" means the acquisition by
Greensteel of substantially all of the assets of American Chalkboard, pursuant
to the terms of the American Chalkboard Asset Purchase Agreement.
"AMERICAN CHALKBOARD ASSET PURCHASE AGREEMENT" means the Asset
Purchase Agreement dated as of JANUARY 21, 2000 (as it may from time to time be
amended, supplemented, restated or otherwise modified to the extent not
prohibited under this Agreement), between Greensteel and American Chalkboard,
together with all schedules, exhibits and annexes thereto or delivered as a part
thereof.
"PENINSULAR SLATE" means, collectively, Peninsular Slate
Company and Peninsular Slate Company of Texas.
"PENINSULAR SLATE COMPANY" means Peninsular Slate Company, a
Michigan corporation.
"PENINSULAR SLATE COMPANY OF TEXAS" means Peninsular Slate
Company of Texas, a Texas corporation.
"PENINSULAR SLATE ACQUISITION" means the acquisition by
Greensteel of all or substantially all of the assets of Peninsular Slate,
pursuant to the terms of the Peninsular Slate Asset Purchase Agreement.
"PENINSULAR SLATE ASSET PURCHASE AGREEMENT" means the Asset
Purchase Agreement dated as of JANUARY 21, 2000 (as it may from time to time be
further amended, supplemented, restated or otherwise modified to the extent not
prohibited under this Agreement), between Greensteel and Peninsular Slate,
together with all schedules, exhibits and annexes thereto or delivered as a part
thereof.
1.2 The definition of "Material Adverse Effect" is amended to
add immediately following the words "on the Closing Date and after giving effect
to the consummation of the Nelson Adams Acquisition on the Amendment No. 2
Effective Date" the words "and after giving effect to the consummation of the
Amendment No. 3 Acquisitions on the Amendment No. 3 Effective Date".
1.3 The definition of "Existing Debt" is amended to insert
immediately following the words "the Nelson Adams Transaction" the words "and
(as of the date of Amendment No. 3) the Amendment No. 3 Transactions".
<PAGE>
1.4 Section 2.1(a), "THE TERM A ADVANCES", is amended and
restated to read as follows:
(a) THE TERM A ADVANCES. The Borrowers acknowledge that each
of the Term A Lenders (other than Bankers Trust Company, which
became a Lender pursuant to Amendment No. 3) has made a Term A
Advance to the Borrowers either on the Closing Date or on the
Amendment No. 2 Effective Date (or assumed a portion thereof
by assignment after the Closing Date) in an amount equal to
such Term A Lender's Term A Commitment as in effect on such
date (or as assumed by such Lender after the Closing Date by
assignment). Bankers Trust Company agrees, on the terms and
conditions hereinafter set forth, to make a Term A Advance to
the Borrowers on the Amendment No. 3 Effective Date in an
amount not to exceed Bankers Trust Company's Term A Commitment
on such date. Except for the Term A Advance made by Bankers
Trust Company to the Borrowers on the Amendment No. 3
Effective Date, each Term A Borrowing shall consist of Term A
Advances made simultaneously by the Term A Lenders ratably
according to their Term A Commitments as in effect on the date
of the relevant Term A Borrowing. Amounts borrowed under this
Section 2.1(a) and repaid or prepaid may not be reborrowed.
1.5 (a) The grid set forth in Section 2.4(a) relating to
repayment of Term A Advances, is amended and restated to read as follows:
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
January 31, 2000 $649,887.84
Each of April 30, July 31 and October 31, 2000 $1,098,293.92
Each of January 31, April 30, July 31 and
October 31, 2001 $1,308,742.52
Each of January 31, April 30, July 31 and
October 31, 2002 $1,462,362.98
Each of January 31, April 30, July 31 and
October 31, 2003 $2,048,525.52
Each of January 31, April 30, July 31 and
October 31, 2004 $ 479,970.48
</TABLE>
1.7 Section 2.14, "USE OF PROCEEDS" is amended and restated to
read as follows:
SECTION 2.14 USE OF PROCEEDS. (a) The proceeds of the Advances
and issuances of Letters of Credit (other than the Advances
made on the Amendment No. 2 Effective Date and the Amendment
No. 3 Effective Date) shall be available, and the Borrowers
shall use such proceeds and
<PAGE>
Letters of Credit solely (i) to finance in part the AIG
Acquisition, (ii) to pay fees and expenses incurred in
connection with the AIG Acquisition and the Transaction, and
(iii) to finance working capital and capital expenditures of
the Borrowers, but not in any event to finance the Nelson
Adams Acquisition nor the Amendment No. 3 Acquisitions, nor
shall any Revolving Credit Advances be borrowed in
anticipation of the Amendment No. 3 Acquisitions, and (b) the
proceeds of the Term A Advance made on the Amendment No. 3
Effective Date shall be used to finance, in part, the
Amendment No. 3 Acquisitions, with the remainder of such
proceeds to be used to pay fees and expenses related to the
Amendment No. 3 Acquisitions and for working capital and
capital expenditures of the Borrowers.
1.8 Sections 4.27 and 11.4(b) are amended to insert a comma
immediately following the words "Transaction" or "Transactions", to delete the
word "or" before the words "the Nelson Adams Transaction", and to add,
immediately following the words "the Nelson Adams Transaction" the words "or the
Amendment No. 3 Transactions."
1.9 Section 5.15, "PERFORMANCE OF AIG ACQUISITION DOCUMENTS",
is amended to add immediately following the words "Nelson Adams Acquisition
Documents"(but before the end of the parenthetical), the phrase "and Permitted
Acquisition Documents".
1.10 Section 6.12, "AMENDMENT, ETC. OF AIG ACQUISITION
DOCUMENTS", is amended to add immediately following the words "Nelson Adams
Acquisition Documents" (but before the end of the parenthetical), the phrase
"and Permitted Acquisition Documents."
1.11 Section 8.1, "CONSOLIDATED DEBT TO EBITDA RATIO" is
amended to change both the proviso and the chart following such proviso to read
as follows (leaving the chart that appears prior to such proviso unaltered):
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for
the most recently completed four fiscal quarters of the Borrowers ending on each
of the following dates, there shall be added to such EBITDA the amounts set
forth next to such dates (representing in each case estimated cost savings
resulting from the AIG Acquisition, the Nelson Adams Acquisition and the
Amendment No. 3 Acquisitions):
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
September 30, 1999 $3,300,000
December 31, 1999 $2,300,000
March 31, 2000 $1,350,000
June 30, 2000 $ 900,000
September 30, 2000 $ 450,000
</TABLE>
<PAGE>
1.12 Section 8.2, "INTEREST COVERAGE RATIO" is amended to
change both the proviso and the chart following such proviso to read as follows
(leaving the chart that appears prior to such proviso unaltered):
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for
the most recently completed four fiscal quarters of the Borrowers ending on each
of the following dates, there shall be added to such EBITDA the amounts set
forth next to such dates (representing in each case estimated cost savings
resulting from the AIG Acquisition, the Nelson Adams Acquisition and the
Amendment No. 3 Acquisitions):
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
September 30, 1999 $3,300,000
December 31, 1999 $2,300,000
March 31, 2000 $1,350,000
June 30, 2000 $ 900,000
September 30, 2000 $ 450,000
</TABLE>
1.13 Section 8.3, "FIXED CHARGE COVERAGE RATIO" is amended to
change both the proviso and the chart following such proviso to read as follows
(leaving the chart that appears prior to such proviso unaltered):
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for
the most recently completed four fiscal quarters of the Borrowers ending on each
of the following dates, there shall be added to such EBITDA the amounts set
forth next to such dates (representing in each case estimated cost savings
resulting from the AIG Acquisition, the Nelson Adams Acquisition and the
Amendment No. 3 Acquisitions):
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
September 30, 1999 $3,300,000
December 31, 1999 $2,300,000
March 31, 2000 $1,350,000
June 30, 2000 $ 900,000
September 30, 2000 $ 450,000
</TABLE>
1.14 Section 11.4(b) is amended to add immediately following
the words "Nelson Adams Acquisition" the words "and/or Permitted Acquisitions."
1.15 Schedule I to the Credit Agreement is replaced by
Schedule I annexed hereto as EXHIBIT A.
<PAGE>
1.16 The Schedules annexed hereto as part of SCHEDULE 1 shall
be deemed respectively to replace the Schedules of the respective corresponding
number presently attached to the Credit Agreement.
ARTICLE II.
ADDITION OF NEW LENDER; CHANGES IN COMMITMENTS
2.1 (a) The parties hereto hereby acknowledge and confirm that
immediately upon the Amendment No. 3 Effective Date (as defined in Article V
below), Bankers Trust Company shall become a party to the Credit Agreement
(including any amendments thereto) and shall have the rights and obligations of
a Lender thereunder.
(b) Bankers Trust Company (i) confirms that it has received a
copy of the Credit Agreement and all amendments thereto, together with copies of
such financial statements and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to become a
Lender under the Credit Agreement, (ii) agrees that it will independently and
without reliance upon the Administrative Agent or any Lender other than itself,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement, (iii) acknowledges that neither the Administrative
Agent nor any Lender makes any representation or warranty nor does the
Administrative Agent or any Lender assume any responsibility with respect to (a)
any statements, warranties or representations made in or in connection with the
Credit Agreement or any other instrument or document furnished pursuant thereto
or (b) the financial condition of the Borrowers or any other Loan Party, or the
performance or observance by the Borrowers or any other Loan Party of any of
their Obligations under the Credit Agreement or any other instrument or document
furnished pursuant thereto, (iv) appoints and authorizes the Administrative
Agent to take such action as its agent on its behalf and to exercise such powers
under the Credit Agreement as are delegated to the Administrative Agent by the
terms thereof, together with such powers as are reasonably incidental thereto,
and (v) agrees that it will perform in accordance with their terms all of the
obligations which, by the terms of the Credit Agreement, are required to be
performed by it as a Lender.
2.2 Commencing as of the Amendment No. 3 Effective Date,
Schedule I to the Credit Agreement shall be deemed amended and restated in the
form annexed hereto as EXHIBIT A to reflect the addition of Bankers Trust
Company as a Term A Lender and its Term A Commitment as of the Amendment No. 3
Effective Date.
2.3 The Borrowers shall, simultaneously with the execution and
delivery of this Amendment No. 3, execute and deliver in favor of Bankers Trust
Company, a Term A Note, substantially in the form of Exhibit D to the Credit
Agreement, in principal amount equal to the Term A Commitment of Bankers Trust
Company as shown on EXHIBIT A annexed hereto (the "NEW TERM A NOTE").
<PAGE>
2.4 All references in the Credit Agreement, Loan Documents and
all other instruments, documents and agreements executed and delivered pursuant
to any of the foregoing, to "the ratable benefit of the Lender Parties", "pro
rata", or terms of similar effect shall be deemed to refer to the ratable
interests of the Lender Parties, as their respective ratable interests shall be
adjusted to reflect the changes in the Term A Commitment as set forth on EXHIBIT
A annexed hereto.
ARTICLE III.
CONSENT AND WAIVER
3.1 Notwithstanding any provisions of the Credit Agreement to
the contrary, on the terms and conditions of this Amendment No. 3, the Lender
Parties and the Administrative Agent hereby consent to the acquisition by
Greensteel of substantially all of the assets of American Chalkboard and the
acquisition by Greensteel of all or substantially all of the assets of
Peninsular Slate (hereinafter collectively referred to as the "ACQUIRED ASSETS")
(as defined in Section 1.1 hereof and hereafter, the "AMENDMENT NO. 3
ACQUISITIONS"), upon the terms and conditions set forth in the Amendment No. 3
Acquisition Documents (as defined in Section 1.1 hereof and hereafter, the
"AMENDMENT NO. 3 ACQUISITION DOCUMENTS"), and SUBJECT, FURTHER, to the
fulfillment, to the satisfaction of the Lender Parties and the Administrative
Agent, of the conditions precedent set forth in Article V hereof. The Amendment
No. 3 Acquisitions shall be deemed to be Permitted Acquisitions, as such term is
defined in the Credit Agreement and all references in the Credit Agreement and
this Amendment No. 3 to Permitted Acquisitions shall be deemed to include the
Amendment No. 3 Acquisitions.
3.2 The Administrative Agent and the Lender Parties
acknowledge that simultaneously with the execution and delivery of this
Amendment No. 3, each of the Borrowers and each Domestic Subsidiary has executed
and delivered to the Administrative Agent appropriate amendments to the Initial
Security Agreement and the Intellectual Property Security Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
The Borrowers jointly and severally represent and warrant to
the Administrative Agent and the Lender Parties that:
4.1 There exists no Default or Event of Default under the
Credit Agreement, as amended hereby, as of the date hereof.
4.2 Each and every one of the representations and warranties
set forth in Article 4 (before and after giving effect to the amendments thereto
effected by this Amendment No. 3) of the Credit Agreement is true in all
respects as if made on the date hereof, except (a) for changes in the ordinary
course of business not prohibited by the Credit Agreement, none of which, either
singly or in the aggregate, have had a Material
<PAGE>
Adverse Effect on the Borrowers and their Subsidiaries taken as a whole; and (b)
that certain amended Schedules to the Credit Agreement are attached hereto as
SCHEDULE 1 to this Amendment No. 3; such Schedules having been amended to
reflect, in all applicable respects, Greensteel's acquisition of the Acquired
Assets.
4.3 Each Loan Party (a) to the extent it is a party thereto,
has all requisite corporate power and authority to execute and deliver this
Amendment No. 3, the New Term A Note, amendments to the Initial Security
Agreement and the Intellectual Property Security Agreement, and each other
agreement, instrument or document contemplated to be executed or delivered by
the Borrowers or any other Loan Party pursuant to this Amendment No. 3 (all such
agreements, instruments and documents contemplated to be executed or delivered
in connection herewith by any Loan Party are sometimes hereinafter referred to
collectively, together with this Amendment No. 3, as the "NEW DOCUMENTS") and to
consummate the transactions contemplated hereby and thereby and (b) has taken
all action, corporate or otherwise, necessary to authorize the execution and
delivery of the New Documents and the consummation of the transactions
contemplated hereby and thereby (including by the Credit Agreement as amended
hereby).
4.4 Neither execution and delivery of the New Documents by any
Loan Party nor the consummation by it of the transactions contemplated hereby
and thereby (including by the Credit Agreement as amended hereby) (a) conflict
with, or result in any breach or violation of any provision of, the certificate
of incorporation or by-laws of any Loan Party, (b) conflict with or result in
any breach or violation of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in the
creation of a Lien upon any of the properties or assets of any Loan Party or any
of its Subsidiaries (other than Liens granted or permitted by the Collateral
Documents or the Credit Agreement, as amended and supplemented to date) under
any of the terms, conditions or provisions of any loan agreement, indenture,
mortgage, deed of trust, lease or other material contract, instrument or
agreement binding on or affecting any Loan Party, any of its Subsidiaries or any
of their respective properties, or (c) violate any law (including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, and the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970), rule, regulation
(including, without limitation, Regulation T, U or X of the Board of Governors
of the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award.
4.5 No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body or any
other third party is or will be required for (a) the due execution, delivery,
recordation, filing or performance by any Loan Party of the New Documents to
which it is or is to be a party, or for the consummation of the Amendment No. 3
Acquisitions, (b) the grant by any Loan Party of the Liens granted by it
pursuant to the Collateral Documents, (c) the perfection or
<PAGE>
maintenance of the Liens created by the Collateral Documents (including the
first and only priority nature thereof, subject to Permitted Liens) or (d) the
exercise by the Administrative Agent or any Lender Party of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the authorizations, approvals, actions, notices
and filings listed on SCHEDULE 4.4 to the Credit Agreement, as amended hereby,
all of which have been duly obtained, taken, given or made and are in full force
and effect, and except for filing UCC financing statements in additional
jurisdictions as occasioned by the Amendment No. 3 Acquisitions. All applicable
waiting periods in connection with the Amendment No. 3 Acquisitions have expired
without any action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the Amendment No. 3
Acquisitions or the rights of the Loan Parties or their Subsidiaries freely to
transfer or otherwise dispose of, or to create any Lien on, any properties now
owned or hereafter acquired by any of them.
4.6 This Amendment No. 3, the New Term A Note and the other
New Documents have each been duly executed and delivered by each Loan Party that
is a party thereto and each of them and the Credit Agreement, as amended hereby,
constitutes the legal, valid and binding obligation of each Loan Party thereto,
enforceable against such Loan Party in accordance with its terms.
4.7 The Liens and security interests granted pursuant to the
Collateral Documents secure, without limitation, the indebtedness, liabilities
and obligations of the Borrowers to the Administrative Agent and the Lender
Parties under the Credit Agreement, as amended hereby, whether or not expressly
so stated in the Collateral Documents, and the terms "Obligations", "Debt" and
"Indebtedness" as used in such Collateral Documents (or any other term used
therein to describe or refer to the indebtedness, liabilities and obligations of
the Borrowers to the Administrative Agent and the Lender Parties) includes,
without limitation, the indebtedness, liabilities and obligations of the
Borrowers under the New Term A Note and the Credit Agreement as amended hereby.
Except for the filing of UCC financing statements in additional jurisdictions as
occasioned by the Amendment No. 3 Acquisitions, no new filings or recordings are
required in order to maintain the existing perfection or priority of the Liens
in favor of the Administrative Agent purportedly granted by the Collateral
Documents, or to secure the portion of the Term A Advance that is being made
pursuant to this Amendment No. 3.
4.8 (a) The Borrowers and each other Loan Party thereto has
the corporate power to execute and deliver each of the Amendment No. 3
Acquisition Documents to which it is or will be a party and to perform such
Amendment No. 3 Acquisition Documents.
(b) Each Amendment No. 3 Acquisition Document to which
any Loan Party or any of its respective Subsidiaries is a party has been duly
executed and delivered by such Loan Party or such Subsidiary, as the case may
be, and, to the best
<PAGE>
knowledge of the Borrowers, each Amendment No. 3 Acquisition Document has been
duly executed and delivered by the parties thereto other than the Borrowers and
their Subsidiaries, and is in full force and effect. The representations and
warranties of any Loan Party and each of its respective Subsidiaries contained
in each Amendment No. 3 Acquisition Document to which such Loan Party or such
Subsidiary, as the case may be, is a party are true and correct in all material
respects on the date hereof and will be true and correct in all material
respects on the Amendment No. 3 Effective Date and the date of consummation of
the Amendment No. 3 Acquisitions, as if made on each of such dates, and the
Administrative Agent and each Lender Party shall be entitled to rely upon such
representations and warranties with the same force and effect as if they were
incorporated in this Agreement and made to the Administrative Agent and each
Lender Party directly as of the date hereof, the Amendment No. 3 Effective Date,
and the date of consummation of the Amendment No. 3 Acquisitions.
(c) The execution and delivery by any Loan Party of each
of the Amendment No. 3 Acquisition Documents to which it is or will be a party
and the performance by each such Loan Party under each of the Amendment No. 3
Acquisition Documents to which it is or will be a party does not (i) violate any
law, rule or regulation (including, without limitation, the Williams Act,
Sections 13 and 14 of the Securities Exchange Act of 1934, and the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, and Regulations T, U, and
X of the Board of Governors of the Federal Reserve System and the rules and
regulations promulgated thereunder) or (ii) conflict with or result in a breach
of any order, writ, injunction, ordinance, resolution, decree, or other similar
document or instrument of any governmental entity, or any certificate of
incorporation or by-laws of or applicable to any Loan Party or create (with or
without the giving of notice or lapse of time, or both) a default under or
breach of or conflict with any agreement, instrument, ordinance, resolution,
decree, determination, award, bond, note, indenture, mortgage, deed of trust,
lease, writ, order or judgment to which it is a party or by which it is bound,
or any other agreement or instrument by which any of the properties or assets
owned by it or used in the conduct of its business is affected (other than any
agreement or other instrument of any kind the assets, revenues or liabilities in
respect of which do not exceed $100,000 individually or $250,000 in the
aggregate with respect to all of the foregoing and the breach thereof or
conflict therewith could not have a Material Adverse Effect on the Borrowers and
their Subsidiaries taken as a whole), or result in the imposition of any Lien of
any nature whatsoever upon any of the properties or assets owned by or used in
connection with the business of any Loan Party or any of its Subsidiaries,
except for the Liens created and granted or permitted under the Collateral
Documents or Credit Agreement, as amended and supplemented to date.
(d) Upon consummation of each of the Amendment No. 3
Acquisitions, each such Amendment No. 3 Acquisition shall have been consummated
pursuant to the terms and conditions of the applicable Amendment No. 3
Acquisition Documents and in compliance with all applicable laws, and ownership
of all of the Acquired Assets shall have vested in Greensteel free and clear of
all Liens, other than those created or permitted by the Collateral Documents or
the Credit Agreement, each as
<PAGE>
amended and supplemented to date. None of PolyVision or any of its Subsidiaries
which are parties to any of the Amendment No. 3 Acquisition Documents has waived
compliance by any of the other parties thereto with any term, covenant or
condition thereof, and no party thereto has breached any covenant set forth
therein or failed to perform any of its obligations thereunder which waiver,
breach or failure to perform is of a material term or condition or could
reasonably be expected to materially and adversely affect the Acquired Assets or
otherwise have a Material Adverse Effect.
(e) Each Amendment No. 3 Acquisition Document to which any
Loan Party or any of its respective Subsidiaries is or is to be a party has been
duly executed and delivered by such Loan Party or such Subsidiary, as the case
may be, and, to the best knowledge of the Borrowers, each Amendment No. 3
Acquisition Document has been duly executed and delivered by the parties thereto
other than the Borrowers and their Subsidiaries, and is in full force and
effect. The representations and warranties of any Loan Party and each of its
respective Subsidiaries contained in each Amendment No. 3 Acquisition Document
to which such Loan Party or such Subsidiary, as the case may be, is or is to be
a party are true and correct in all material respects on the date hereof, and
the Administrative Agent and each Lender Party shall be entitled to rely upon
such representations and warranties with the same force and effect as if they
were incorporated in this Agreement and made to the Administrative Agent and
each Lender Party directly as of the date hereof.
(f) True, correct and complete copies of each of the
Amendment No. 3 Acquisition Documents have been delivered to the Administrative
Agent, and as of the Amendment No. 3 Effective Date, each of the Amendment No. 3
Acquisitions shall have been consummated in accordance therewith, and no party
thereto shall have waived any material term or condition contained therein.
(g) Each Amendment No. 3 Acquisition Document to which any
Loan Party or American Chalkboard or Peninsular Slate is a party, when duly
executed and delivered by such Loan Party, American Chalkboard or Peninsular
Slate, as applicable, constitutes the valid and legally binding obligation of
each such Loan Party or (to the best knowledge of the Borrowers) American
Chalkboard and Peninsular Slate, as the case may be, enforceable in accordance
with its terms.
(h) No Borrower and none of Borrower's Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the making of any Advances,
nor the issuance of any Letters of Credit, nor the application of the proceeds
or repayment thereof by the Borrowers, nor the consummation of any of the
transactions contemplated by this Amendment No. 3 or any Amendment No. 3
Acquisition Document will violate any provision of such Act or any rule,
regulation or order of the Securities and Exchange Commission thereunder or any
takeover, disclosure or other federal, state or foreign securities law or
Regulations T, U or X of the Federal Reserve Board. No Borrower is
<PAGE>
subject to regulation under any federal, state or foreign statute or regulation
which limits its ability to incur Debt.
4.9 FINANCIAL STATEMENTS. (a) The Consolidated balance sheets
of American Chalkboard as at the fiscal years ended December 31, 1996, December
31, 1997 and December 31, 1998 and the related Consolidated statements of income
and statements of cash flows of American Chalkboard for the fiscal years ended
1996, 1997 and 1998, accompanied by an opinion of Aldridge, Borden & Company,
P.C., and the unaudited Consolidated balance sheet of American Chalkboard as
applicable at September 30, 1999, and the related unaudited Consolidated
statement of income and Consolidated statement of cash flows of American
Chalkboard for the nine months ended September 30, 1999 duly certified by the
chief financial officer of American Chalkboard, copies of which have been
furnished to each Lender Party, fairly present, or when delivered, shall fairly
present, subject, in the case of said interim balance sheet, statements of
income and cash flows, to normal year-end audit adjustments, the Consolidated
financial condition of American Chalkboard as at such dates and the Consolidated
results of the operations of American Chalkboard for the period ended on such
date, all in accordance with GAAP applied on a consistent basis, and, since
December 31, 1998 there has been no change which could reasonably be expected to
result in a Material Adverse Effect.
(b) The Consolidated balance sheets of Peninsular Slate
Company as at the fiscal years ended December 31, 1996, December 31, 1997 and
December 31, 1998 and the related Consolidated statements of income and
statements of cash flows of Peninsular Slate Company for the fiscal years ended
1996, 1997 and 1998, compiled by Moore & Moore, P.C. and the unaudited
Consolidated balance sheet of Peninsular Slate Company as applicable at
September 30, 1999, and the related unaudited Consolidated statement of income
and Consolidated statement of cash flows of Peninsular Slate Company for the
nine months ended September 30, 1999 duly certified by the chief financial
officer of Peninsular Slate Company, copies of which have been furnished to each
Lender Party, fairly present, or when delivered, shall fairly present, subject,
in the case of said interim balance sheet, statements of income and cash flows,
to normal year-end audit adjustments, the Consolidated financial condition of
Peninsular Slate Company as at such dates and the Consolidated results of the
operations of Peninsular Slate Company for the period ended on such date, all in
accordance with GAAP applied on a consistent basis, and, since December 31, 1998
there has been no change which could reasonably be expected to result in a
Material Adverse Effect.
(c) The Consolidated balance sheets of Peninsular Slate
Company of Texas as at the fiscal years ended April 30, 1998 and April 30, 1999
and the related Consolidated statements of income and statements of cash flows
of Peninsular Slate Company of Texas for the fiscal years ended 1997, 1998 and
1999, compiled by of Moore & Moore, P.C. and the unaudited Consolidated balance
sheet of Peninsular Slate Company of Texas as applicable at September 30, 1999,
and the related unaudited Consolidated statement of income and Consolidated
statement of cash flows of
<PAGE>
Peninsular Slate Company of Texas for the five months ended September 30, 1999
duly certified by the chief financial officer of Peninsular Slate Company of
Texas, copies of which have been furnished to each Lender Party, fairly present,
or when delivered, shall fairly present, subject, in the case of said interim
balance sheet, statements of income and cash flows, to normal year-end
adjustments, the Consolidated financial condition of Peninsular Slate Company of
Texas as at such dates and the Consolidated results of the operations of
Peninsular Slate Company of Texas for the period ended on such date, all in
accordance with GAAP applied on a consistent basis, and, since April 30, 1999
there has been no change which could reasonably be expected to result in a
Material Adverse Effect.
4.10 PRO FORMA FINANCIAL STATEMENTS; PROJECTIONS. (a) The
Consolidated pro forma balance sheet of the Borrowers and their Subsidiaries as
at September 30, 1999 and the related Consolidated pro forma statement of income
and cash flows of the Borrowers and their Subsidiaries for the twelve month
period then ended, certified by the chief executive officer or chief financial
officer of each Borrower, copies of which have been furnished to each Lender
Party, fairly present the Consolidated pro forma financial condition of the
Borrowers and their Subsidiaries as at such date and the Consolidated pro forma
results of operations of the Borrowers and their Subsidiaries for the period
ended on such date, in each case after giving effect to the Amendment No. 3
Acquisitions, all in accordance with GAAP (to the extent that pro forma
information can comply with GAAP) and subject to the assumptions stated therein
(the aforementioned financial statements are hereinafter referred to
collectively as the "AMENDMENT NO. 3 PRO FORMA FINANCIALS").
(b) The projections delivered on the Amendment No. 3 Effective
Date have been prepared on the basis of the assumptions accompanying them and
reflect as of the date thereof the Borrowers' good faith projections, after
reasonable analysis, of the matters set forth therein, based on such assumptions
(it being understood that projected financial information is not to be viewed as
facts and that the actual results during the period or periods covered thereby
may differ from the projected results and that the differences may be material).
4.11 ACCURATE INFORMATION. None of the information, exhibits
or reports furnished by any Loan Party or any of the European Borrowers to the
Administrative Agent or any Lender Party in connection with this Amendment No. 3
contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements made therein not misleading.
ARTICLE V.
CONDITIONS
The effectiveness of this Amendment No. 3 shall be subject to
the fulfillment by the Borrowers, in a manner satisfactory to the Administrative
Agent and the Lender Parties, of all of the conditions precedent set forth in
this Article V, and the date on which all such conditions shall have been
fulfilled to the satisfaction of the
<PAGE>
Administrative Agent and the Lender Parties, and this Amendment No. 3 shall have
become effective, shall be herein called the "AMENDMENT NO. 3 EFFECTIVE DATE":
5.1 Each of the parties hereto shall have executed this
Amendment No. 3 and delivered its signature hereon to the Administrative Agent.
5.2 (a) The representations and warranties contained herein
and each other agreement, instrument, certificate or other writing delivered to
the Administrative Agent or any Lender Party pursuant hereto or to the Credit
Agreement shall be correct on and as of the date hereof after giving effect to
this Amendment No. 3 as though made on and as of such date except to the extent
modified hereby and subject to permitted changes in accordance with Section 4.2
hereof and (b) no Default or Event of Default shall have occurred and be
continuing on the Amendment No. 3 Effective Date or would result from the taking
effect of this Amendment No. 3, or the transactions contemplated hereby,
including the Amendment No. 3 Acquisitions.
5.3 The Borrowers shall have:
(a) executed and delivered to Bankers Trust Company its
New Term A Note, in form and substance satisfactory to the Administrative Agent
and the Lender Parties;
(b) paid to each Lender who was a party to the Credit
Agreement with outstanding Advances immediately prior to the Amendment No. 3
Effective Date (or to the Administrative Agent for distribution to such
Lenders), $10,000;
(c) paid to the Administrative Agent any and all fees
payable to the Administrative Agent pursuant to the terms of any separate letter
agreement with any Borrowers;
(d) paid all reasonable legal (U.S. and foreign) and
other out-of-pocket expenses incurred by the Administrative Agent in connection
with the transactions contemplated by or referred to in this Amendment No. 3,
including, without limitation, out-of-pocket due diligence, syndication
(including printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, audit, consultant, search, filing and recording fees, as
well as reasonable out-of-pocket expenses theretofore incurred by the
Administrative Agent in connection with the administration of the loan
documentation;
(e) otherwise complied in all respects with the terms
hereof and of any other agreement, document, instrument or other writing to be
delivered by the Borrowers in connection herewith.
<PAGE>
5.4 The Administrative Agent shall have received, on or before
the date hereof, the following, each in form and substance satisfactory to the
Administrative Agent:
(a) copies of the resolutions of the Board of Directors
of the Borrowers and APV, certified by a Responsible Officer thereof,
authorizing (i) the execution, delivery and performance by the Borrowers and APV
of this Amendment No. 3 and the other New Documents; and (ii) the Amendment No.
3 Acquisitions and the execution, delivery and consummation of the Amendment No.
3 Acquisition Documents to which any of the Borrowers or APV is or is to be a
party;
(b) good standing certificates of recent date for each of
the Borrowers from the Secretary of State of its state of incorporation and the
state in which its chief executive office is located;
(c) a certificate signed on behalf of each of the
Borrowers and APV by a Responsible Officer, stating that there have been no
amendments to such Borrower's, or APV's, charter since the Closing Date, or, in
the case of PolyVision, since the Amendment No. 2 Effective Date; and
(d) a certificate signed on behalf of each of the
Borrowers and APV by a Responsible Officer and the Secretary or an Assistant
Secretary of each of the Borrowers and APV, certifying the names and true
signatures of the officers of such Borrower or APV authorized to sign the New
Documents, together with evidence of the incumbency of such authorized officers;
a compliance certificate executed by a Responsible Officer of each of the
Borrowers and APV dated the Amendment No. 3 Effective Date certifying that the
conditions set forth in Section 5.2 and otherwise in this Article V (as they
pertain to such Borrower or APV) have been satisfied.
5.5 With respect to the Acquired Assets, the Administrative
Agent shall have received each of the following duly executed by each applicable
Loan Party, and otherwise in form and substance satisfactory to the
Administrative Agent:
(a) an amendment to the Initial Security Agreement
granting to the Administrative Agent, for the ratable benefit of the Secured
Parties, a first and only (subject to Permitted Liens) priority security
interest in Acquired Assets of the type of Collateral described in the Initial
Security Agreement, together with:
(i) proper, duly executed financing
statements under the Uniform Commercial Code of all jurisdictions that the
Administrative Agent may deem necessary or desirable in order to perfect and
protect the first and only (subject to Permitted Liens) priority Liens and
security interests created under the Initial Security Agreement, covering the
Collateral described in the Initial Security Agreement;
(ii) to the extent required by the
Administrative Agent, completed requests for information, dated on or before the
Amendment No. 3 Effective
<PAGE>
Date, listing all effective financing statements filed that name either American
Chalkboard or Peninsular Slate as debtor, together with copies of such financing
statements;
(iii) evidence of the completion of all
other recordings and filings of or with respect to the Initial Security
Agreement that the Administrative Agent may deem necessary or desirable in order
to perfect and protect the Liens created thereby;
(iv) evidence of the insurance required by
the terms of the Initial Security Agreement;
(v) copies of the Assigned Agreements, if
any, referred to in the Initial Security Agreement, together with a consent (to
the extent required by the Administrative Agent) to such assignments, if any, in
substantially the form of Exhibit B to the Initial Security Agreement, duly
executed by each party to such Assigned Agreements other than American
Chalkboard and Peninsular Slate; and
(vi) evidence that all other action that the
Administrative Agent may reasonably deem necessary or desirable in order to
perfect and protect the first and only (subject to Permitted Liens) priority
liens and security interests created under the Initial Security Agreement has
been taken, INCLUDING, without limitation payment of all necessary or
appropriate filing and recording fees and taxes;
(b) an amendment to the Intellectual Property Security
Agreement granting to the Administrative Agent for the ratable benefit of the
Secured Parties a first and only priority security interest in all of the
Acquired Assets of the type of Collateral described in the Intellectual Property
Security Agreement, together with evidence that all action that the
Administrative Agent may deem necessary or desirable in order to perfect and
protect the first and only priority Liens and security interests created under
the Intellectual Property Security Agreement has been taken;
(c) (1) mortgages and leasehold mortgages (as
applicable) on such owned and leased real property as the
Administrative Agent may reasonably require sufficient for recording in
all places to the extent necessary or desirable, in the reasonable
judgment of the Administrative Agent, to create a valid and enforceable
first priority lien on each Mortgaged Property listed on Schedule 4.21
to the Credit Agreement (as amended hereby) (subject only to Permitted
Real Property Encumbrances) in favor of the Administrative Agent (or a
trustee therefor) for the benefit of the Secured Parties; together with
such title insurance, reports, surveys and consents as the
Administrative Agent may require in connection therewith, together with
evidence that all action that the Administrative Agent may deem
necessary or desirable in order to perfect and protect the first and
only priority Liens and security interests created under such mortgages
has been taken;
<PAGE>
(2) If required by the Administrative Agent,
mortgagee title insurance policies (or binding commitments to issue
such title insurance policies) which shall (1) be issued to the
Administrative Agent for the benefit of the Secured Parties by title
insurance companies reasonably satisfactory to the Administrative Agent
(the "MORTGAGE POLICIES") in amounts reasonably satisfactory to the
Administrative Agent insuring that the Mortgages are valid and
enforceable first priority mortgage liens on the respective Mortgaged
Properties, free and clear of all defects, encumbrances and other Liens
except Permitted Real Property Encumbrances, (2) be in form and
substance reasonably satisfactory to the Administrative Agent, (3)
include, as appropriate, an endorsement for future advances under this
Agreement, the Notes and the Mortgages and such other endorsements that
the Administrative Agent in its discretion may reasonably request, (4)
not include an exception for mechanics' liens, and (5) provide for
affirmative insurance and such reinsurance (including direct access
agreements) as the Administrative Agent in its discretion may
reasonably request; and
(3) If required by the Administrative Agent,
surveys, in form and substance satisfactory to the Administrative
Agent, of each Mortgaged Property listed on Schedule 4.21 to the Credit
Agreement (as amended hereby), dated a recent date reasonably
acceptable to the Administrative Agent, certified by a licensed
professional surveyor in a manner satisfactory to the Administrative
Agent for the benefit of the Secured Parties; and
(d) evidence that each Borrower is duly qualified and in
good standing or existence as a foreign corporation in each State in which
applicable law requires such Borrower to be so qualified, after giving effect to
the acquisition of the Acquired Assets.
5.6 (a) The Administrative Agent shall have received copies of
the Amendment No. 3 Acquisition Documents which shall be certified as true,
correct and complete by a Responsible Officer of Greensteel, and shall be
satisfactory to the Administrative Agent and the Lender Parties in all respects;
(b) The American Chalkboard Acquisition (as defined in
Section 1.1 hereof and hereafter the "AMERICAN CHALKBOARD ACQUISITION") shall
have been consummated (prior to or simultaneously with the Amendment No. 3
Effective Date) pursuant to the terms and conditions of the American Chalkboard
Asset Purchase Agreement (as defined in Section 1.1 hereof) for an aggregate
cash amount at the Amendment No. 3 Effective Date not exceeding Five Million Two
Hundred and Fifty Thousand ($5,250,000) Dollars (before assumed liabilities,
fees and expenses);
(c) The Peninsular Slate Acquisition (as defined in
Section 1.1 hereof and hereafter the "PENINSULAR SLATE ACQUISITION") shall have
been consummated (prior to or simultaneously with the Amendment No. 3 Effective
Date) pursuant to the terms and conditions of the Peninsular Slate Asset
Purchase Agreement (as defined in
<PAGE>
Section 1.1 hereof) for an aggregate cash amount at the Amendment No. 3
Effective Date not exceeding Four Million Two Hundred Thousand ($4,200,000)
Dollars (before assumed liabilities, fees and expenses);
(d) Upon the Administrative Agent's request, the
Borrowers shall have delivered to the Administrative Agent the original of all
instruments, documents and chattel paper, and all other Collateral of which the
Administrative Agent determines it should have physical possession in order to
perfect its security interest therein, duly pledged, endorsed or assigned to the
Administrative Agent without restriction; and
(e) The Borrowers shall have (i) obtained and delivered
to the Administrative Agent landlord waivers, in form and substance reasonably
satisfactory to the Administrative Agent, with respect to any Inventory or other
tangible Collateral located at a location that is not owned by the Borrowers or
their Subsidiaries (except in respect of immaterial amounts as described by the
Borrowers to the Administrative Agent in writing prior to the Amendment No.3
Effective Date); (ii) delivered to the Administrative Agent warehouse receipts
covering any portion of the Inventory or other Collateral located in warehouses
and for which warehouse receipts are issued (except in respect of immaterial
amounts as described by the Borrowers to the Administrative Agent in writing
prior to the Amendment No. 3 Effective Date); and (iii) taken all such other
actions and obtained all such other agreements as the Administrative Agent may
reasonably deem necessary or desirable in respect of any Collateral, and
otherwise complied with the provisions of Section 5.13 of the Credit Agreement.
5.7 The Lender Parties shall have received the following, all
of which shall be satisfactory in form and substance to the Lender Parties,
together with a compliance certificate executed by the Chief Financial Officer
of each of the Borrowers certifying compliance with financial covenants set
forth in the Credit Agreement:
(a) the Amendment No. 3 Pro Forma Financials;
(b) projections for the Borrowers and their Subsidiaries
commencing with Fiscal Year ended December 31, 2000 through Fiscal Year ended
December 31, 2006;
(c) A computation in detail of consolidated pro forma
trailing twelve-month EBITDA of Polyvision and its Subsidiaries (as of September
30, 1999) which shall not be less than $24,500,000 (provided, however, there
shall be added to such EBITDA the amount of $3,300,000 (representing estimated
cost savings resulting from the AIG Acquisition, the Nelson Adams Acquisition
and the Amendment No. 3 Acquisitions)) and determined in accordance with the
Amendment No. 3 Pro Forma Financials;
(d) A computation of the Consolidated Debt to EBITDA
Ratio, including in Consolidated Debt the debt evidenced by the Junior
Subordinated Note,
<PAGE>
demonstrating that such Ratio is not greater than 4.5:1 on the Amendment No. 3
Effective Date and a computation of the Consolidated Debt to EBITDA Ratio,
excluding the Junior Subordinated Note, demonstrating that such Ratio is not
greater than 4.2:1 on the Amendment No. 3 Effective Date (and in each case such
Ratio shall be calculated in the same manner as is set forth in Section 8.1 of
the Credit Agreement as amended by this Amendment No. 3);
(e) Audited financial statements for American
Chalkboard's fiscal years ended December 31, 1996, December 31, 1997 and
December 31, 1998 prepared by Aldridge, Borden & Company, P.C., in form and
substance (excluding in immaterial respects) satisfactory to the Required
Lenders;
(f) Compiled financial statements for Peninsular Slate
Company's fiscal years ended December 31, 1996, December 31, 1997 and December
31, 1998 prepared by Moore & Moore, P.C., in form and substance (excluding in
immaterial respects) satisfactory to the Required Lenders; and
(g) Compiled financial statements for Peninsular Slate
Company of Texas' fiscal years ended April 30, 1997, April 30, 1998 and April
30, 1999 prepared by Moore & Moore, P.C., in form and substance (excluding in
immaterial respects) satisfactory to the Required Lenders.
5.8 All governmental and third party consents and approvals
necessary in connection with each aspect of the Amendment No. 3 Acquisitions and
the Facilities shall have been obtained, including, without limitation, the
consent of holders of the Senior Subordinated Notes (without the imposition of
any conditions that are not acceptable to the Lender Parties), and shall remain
in effect; all applicable waiting periods shall have expired without any adverse
action being taken by any competent authority; and no law or regulation shall be
applicable in the judgment of the Lender Parties that restrains, prevents or
imposes materially adverse conditions upon any aspect of the Amendment No. 3
Acquisitions or the Facilities.
5.9 There shall exist no action, suit, investigation,
litigation or proceeding pending or threatened in any court or before any
arbitrator or governmental or regulatory agency or authority that purports to
adversely affect any aspect of the Amendment No. 3 Acquisitions or the
Facilities.
5.10 The Lender Parties shall have received all additional
financial, business and other information regarding the Borrowers and their
respective properties and assets (including, without limitation, the Acquired
Assets) as they shall have reasonably requested, and environmental surveys and
reports and assessments prepared by third parties acceptable to the
Administrative Agent and the Lender Parties, and all of the foregoing shall be
acceptable to the Lender Parties.
<PAGE>
5.11 The Borrowers shall have delivered a certificate, in form
and substance reasonably satisfactory to the Administrative Agent and the Lender
Parties, attesting to the Solvency of the Borrowers immediately before and
immediately after giving effect to the Amendment No. 3 Acquisitions, from the
chief financial officer of each of the Borrowers.
5.12 The Administrative Agent shall have received a favorable
written opinion of Greenberg Traurig, counsel to the Borrowers and APV, and of
such other counsel to the Borrowers (including foreign counsel) as the
Administrative Agent may reasonably require, as to such matters relating to the
transactions contemplated by this Amendment No. 3 (including the Amendment No. 3
Acquisitions (and absence of any required governmental consents in connection
therewith)) and the Collateral Documents executed in connection therewith in
form and substance as the Lender Parties may reasonably request.
5.13 All proceedings in connection with the transactions
contemplated by this Amendment No. 3 including each of the Amendment No. 3
Acquisitions, and all documents incidental thereto shall be reasonably
satisfactory to the Administrative Agent and the Lenders, and each such Person
shall have received all such information and such counterpart originals or
certified copies of documents as may have been reasonably requested.
5.14 In order to reflect the addition of Bankers Trust Company
as a Lender under the Credit Agreement and to reflect the Term A Advance being
made pursuant to the terms of this Amendment No. 3, the Administrative Agent
shall have received amendments to all Mortgages previously delivered in
connection with the Credit Agreement, duly executed by the applicable Loan
Party.
5.15 In order to reflect the addition of Bankers Trust Company
as a Lender under the Credit Agreement and to reflect the Term A Advance being
made by Bankers Trust Company pursuant to the terms of this Amendment No. 3, the
Administrative Agent shall have received an amendment to the Pledge Agreement
relating to shares in PolyVision France duly executed by PolyVision France.
ARTICLE VI.
ACKNOWLEDGEMENTS, CONFIRMATIONS AND GENERAL AMENDMENTS
6.1 APV hereby (i) acknowledges and consents to this Amendment
No. 3 (whether or not its consent is required); (ii) confirms and agrees that
the Subsidiary Guaranty to which it is a party is, and shall continue to be, in
full force and effect and is hereby ratified and confirmed in all respects, and
all references in any such Subsidiary Guaranty to "the Credit Agreement,"
"thereof," "thereunder" or words of like import referring to the Credit
Agreement shall mean the Credit Agreement as amended by this Amendment No. 3;
(iii) confirms and agrees that the "Guaranteed Obligations" as defined in such
Subsidiary Guaranty include the Obligations of the Borrowers to the Lender
<PAGE>
Parties under the Credit Agreement as amended by this Amendment No. 3, and under
the New Term A Note; and (iv) confirms and agrees that the Liens and security
interests granted by it pursuant to the Collateral Documents secure, without
limitation, the indebtedness, liabilities and obligations of APV to the Lender
Parties and the Administrative Agent under the Subsidiary Guaranty, including
without limitation, the Guaranteed Obligations which obligations include the
obligations of the Borrowers under the New Term A Note and the Credit Agreement
as amended hereby.
6.2 All references in the Credit Agreement and every other
agreement, instrument and document executed and delivered by each of the Loan
Parties in connection therewith, including, without limitation, any of the
Collateral Documents, to "Credit Agreement" and "Agreement", as applicable, and
also, in the case of the Credit Agreement to "this Agreement", shall be deemed
to refer to the Credit Agreement as amended and supplemented hereby.
6.3 All references in the Credit Agreement, the Collateral
Documents or any other agreement, instrument and document executed and delivered
in connection therewith to "Notes" shall be deemed to include, without
limitation, the New Term A Note.
6.4 All references in the Credit Agreement, the Collateral
Documents or any other agreement, instrument or document executed and delivered
in connection therewith to the "Term A Advances" or "Advances" (or any other
term or terms used in any of such documents to describe or refer to Advances
made by the Lender Parties to the Borrowers under the Credit Agreement) shall be
deemed to refer to Advances made by the Lender Parties to the Borrowers pursuant
to the Credit Agreement as amended and supplemented hereby.
6.5 The Credit Agreement, the Collateral Documents and all
agreements, instruments and documents executed and delivered in connection with
any of the foregoing, shall each be deemed amended hereby to the extent
necessary, if any, to give effect to the provisions of this Amendment No. 3.
ARTICLE VII.
CONTINUED EFFECTIVENESS OF CREDIT AGREEMENT
The Credit Agreement and the other agreements to which the
Borrowers are parties delivered in connection herewith or with the Credit
Agreement are, and shall continue to be, in full force and effect, and are
hereby ratified and confirmed in all respects except that on and after the date
hereof (a) all references in the Credit Agreement to "this Agreement", "hereto",
"hereof", "hereunder" or words of like import referring to the Credit Agreement
shall mean the Credit Agreement as amended and supplemented by this Amendment
No. 3 and (b) all references in the Credit Agreement and such other agreements
to which the Borrowers are parties to the "Credit Agreement", "thereto",
<PAGE>
"thereof", "thereunder" or words of like import referring to the Credit
Agreement shall mean the Credit Agreement as amended and supplemented by this
Amendment No. 3.
ARTICLE VIII.
MISCELLANEOUS
8.1 Except as specifically amended herein, the Credit
Agreement shall remain in full force and effect in accordance with its terms.
8.2 This Amendment No. 3 shall be governed by and construed in
accordance with the laws of the State of New York.
8.3 No modification or waiver of or with respect to any
provisions of this Amendment No. 3 and all other agreements, instruments and
documents delivered pursuant hereto or thereto, nor consent to any departure by
the Administrative Agent or the Lender Parties from any of the terms or
conditions thereof, shall in any event be effective unless it shall be in
writing and executed in accordance with the provisions of the Credit Agreement,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No consent to or demand on the Borrowers in
any case shall, of itself, entitle them to any other or further notice or demand
in similar or other circumstances. This Amendment No. 3, together with the
Credit Agreement, as amended, embodies the entire agreement and understanding
among the Borrowers, the Administrative Agent and the Lender Parties, and
supersedes all prior agreements and understandings, relating to the subject
matter hereof.
8.4 The provisions of this Amendment No. 3 are severable, and
if any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision in this Amendment No. 3 in any jurisdiction.
8.5 This Amendment No. 3 may be signed in any number of
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument. Signatures may be delivered by fax with the same
binding effect as original ink signatures.
8.6 This Amendment No. 3 shall be binding upon and inure to
the benefit of the Borrowers and their respective successors and the
Administrative Agent and the Lender Parties and their respective successors and
assigns. The rights and obligations of the Borrowers under this Amendment No. 3
shall not be assigned or delegated without the prior written consent of the
Lender Parties, and any purported assignment or delegation without such consent
shall be void.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 3 to be duly executed on the date first above written.
POLYVISION CORPORATION
By /s/ Gary L. Edwards
----------------------------------------
Name: Gary L. Edwards
Title: Chief Financial Officer, Treasurer
and Secretary
POSTERLOID CORPORATION
By /s/ Gary L. Edwards
----------------------------------------
Name: Gary L. Edwards
Title: Chief Financial Officer, Treasurer
and Secretary
GREENSTEEL, INC.
By /s/ Gary L. Edwards
----------------------------------------
Name: Gary L. Edwards
Title: Chief Financial Officer, Treasurer
and Secretary
FLEET NATIONAL BANK,
as Administrative Agent, as European Letter
of Credit Bank, as Initial Issuing Bank, as Swing
Line Bank, and as a Lender
By /s/ Howard J. Diamond
----------------------------------------
Name: Howard J. Diamond
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Hagop V. Jazmadarian
----------------------------------------
Name: Hagop V. Jazmadarian
Title: Vice President
KBC BANK N.V.,
as a Lender under the Credit Agreement and each of
the KBC Loan Agreements
<PAGE>
By /s/ Robert M. Surdan, Jr.
----------------------------------------
Name: Robert M. Surdan, Jr.
Title: Vice President
By /s/ Robert Snauffer
----------------------------------------
Name: Robert Snauffer
Title: First Vice President
SOVEREIGN BANK
By: /s/ Joseph Baker
----------------------------------------
Name: Joseph Baker
Title: Vice President
GREATER BAY CORPORATE FINANCE,
A DIVISION OF CUPERTINO
NATIONAL BANK
By: /s/ Mark McElwain
----------------------------------------
Name: Mark McElwain
Title: Vice President
SUNTRUST BANK, ATLANTA
By: /s/ Daniel J. Bromstad
----------------------------------------
Name: Daniel J. Bromstad
Title: Vice President
BANKERS TRUST COMPANY
By: /s/ David Bell
----------------------------------------
Name: David Bell
Title: Principal
THE UNDERSIGNED, WHETHER OR NOT CONSENT IS REQUIRED IN RESPECT OF ANY OF THE
FOREGOING, HEREBY CONFIRMS, AGREES TO AND ACCEPTS THE TERMS OF THIS AMENDMENT
NO. 3 AND CONFIRMS THE TRUTH AND ACCURACY OF THE REPRESENTATIONS AND WARRANTIES
RELATING TO THE UNDERSIGNED.
<PAGE>
APV, INC.
By /s/ GARY L. EDWARDS
----------------------------------------
Name: Gary L. Edwards
Title: Chief Financial Officer, Treasurer
and Secretary
<PAGE>
EXHIBIT A TO AMENDMENT AND
SUPPLEMENT NO. 2 TO THE CREDIT AGREEMENT
SCHEDULE I
TO CREDIT AGREEMENT
COMMITMENTS AND APPLICABLE LENDING OFFICES
<TABLE>
<CAPTION>
REVOLVING
CREDIT
COMMITMENT EUROPEAN
(LETTERS OF TERM A TERM B LETTER OF CREDIT
NAME OF LENDER CREDIT ARE A COMMITMENT COMMITMENT COMMITMENT
SUBLIMIT OF THE
REVOLVING
CREDIT
(COMMITMENTS)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fleet National Bank $2,311,358.43 $3,684,348.04 $7,514,956.15 BEF
80,813,700.50
(LC = 24.3% x
$5,000,000.00 =
$1,215,000.00)
- -------------------------------------------------------------------------------------------
KBC Bank N.V. $1,273,331.46 $2,029,713.87 $4,140,002.67 BEF
0
(LC = 13.4% x
- -------------------------------------------------------------------------------------------
<CAPTION>
SWINGLINE
COMMITMENT DOMESTIC EURODOLLAR
(A SUBLIMIT OF LENDING LENDING
NAME OF LENDER THE REVOLVING OFFICE OFFICE
CREDIT
COMMITMENT)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fleet National Bank $3,000,000 One Federal Street One Federal Street
Boston, Boston,
Massachusetts 02110 Massachusetts 02110
Fax: (617) Fax: (617)
346-4375 346-4375
Phone: (617) Phone: (617)
346-4388 346-4388
- -------------------------------------------------------------------------------------
KBC Bank N.V. $0 125 West 55th Street 125 West 55th Street
10th Floor 10th Floor
New York, New York New York, New York
- -------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
$5,000,000.00 =
$670,000.00)
- ---------------------------------------------------------------------------------------------------
Sovereign Bank $1,720,044.00 $2,741,781.93 $5,592,406.23 BEF
162,007,863.42
(LC = 18.1% x
$5,000,000.00 =
$905,000.00)
- ---------------------------------------------------------------------------------------------------
Greater Bay Corporate $1,078,782.72 $1,719,599.58 $3,507,463.27 BEF
Finance, a division of 101,608,611.39
Cupertino National Bank (LC = 11.4% x
$5,000,000.00 =
$570,000.00)
- ---------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C>
New York, New York New York, New York
10019 10019
Fax: (212) 541-0793 Fax: (212) 541-0793
Phone: (212) 541-0704 Phone: (212) 541-0704
- -------------------------------------------------------------------------------
Sovereign Bank $0 50 Rowes Wharf 50 Rowes Wharf
Suite 430 Suite 430
Boston, MA 02110 Boston, MA 02110
Fax: (617) Fax: (617)
Phone: (617) Phone: (617)
- -------------------------------------------------------------------------------
Greater Bay Corporate $0 1255 Treat Boulevard 1255 Treat Boulevard
Finance, a division of Suite 160 Suite 160
Cupertino National Bank Walnut Creek, CA 94596 Walnut Creek, CA 94596
Fax: (925)-944-7035 Fax: (925)-944-7035
Phone: (925)-979-7255 Phone: (925)-979-7255
- -------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Union Bank of $1,558,241.70 $2,483,866.06 $5,066,335.84 BEF
California, N.A. 146,767,994.23
(LC = 16.4% x
$5,000,000.00 =
$820,000.00)
- ----------------------------------------------------------------------------------------------------
SunTrust Bank, Atlanta $1,558,241.70 $2,483,866.06 $5,066,335.94 BEF
146,767,994.23
(LC = 16.4% x
$5,000,000.00 =
$820,000.00)
- ----------------------------------------------------------------------------------------------------
Bankers Trust Company $0 $10,000,000.00 $0 BEF
0
- ----------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C>
Union Bank of $0 445 South Figueroa 445 South Figueroa
California, N.A. Street Street
18th Floor 18th Floor
Los Angeles, CA 90071 Los Angeles, CA 90071
Fax: (213)-236-7636 Fax: (213)-236-7636
Phone: (213) 236-5562 Phone: (213) 236-5562
- -----------------------------------------------------------------------------------
SunTrust Bank, Atlanta $0 25 Park Place 25 Park Place
26th Floor 26th Floor
Atlanta, GA 30303 Atlanta, GA 30303
Fax: (404) 575-2693 Fax: (404) 575-2693
Phone: (404) 724-3446 Phone: (404) 724-3446
- -----------------------------------------------------------------------------------
Bankers Trust Company $0 130 Liberty Street 130 Liberty Street
29th Floor 29th Floor
MS 2291 MS 2291
New York, NY 10006 New York, NY 10006
Fax: (212) 669-1532 Fax: (212) 669-1532
Phone: (212) 250-8302 Phone: (212) 250-8302
- -----------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT 10.49
AMENDMENT NO. 2
TO
SENIOR SUBORDINATED NOTE AND WARRANT PURCHASE AGREEMENT
This AMENDMENT NO. 2 (this "AMENDMENT NO. 2") is made as of
this 21st day of January, 2000, by and among POLYVISION CORPORATION, a New York
corporation (the "COMPANY"), POSTERLOID CORPORATION, a Delaware corporation
("POSTERLOID"), GREENSTEEL, INC., a Delaware corporation ("GREENSTEEL") (each of
Posterloid and Greensteel, a "GUARANTOR" and collectively, the "GUARANTORS") and
John Hancock Mutual Life Insurance Company, John Hancock Variable Life Insurance
Company and Hancock Mezzanine Partners L.P. (collectively, the "PURCHASERS").
WHEREAS:
(A) The Purchasers are collectively the holders of $25,000,000
in aggregate principal amount of the Company's 12.5% Senior Subordinated Notes
due December 30, 2006 (the "NOTES") issued by the Company under a Senior
Subordinated Note and Warrant Purchase Agreement dated as of December 30, 1998
and previously amended by an Amendment No. 1 dated as of August 19, 1999 (the
"NOTE AGREEMENT"). Under the Note Agreement, the Guarantors have guaranteed the
obligations of the Company under the Note Agreement and the Notes. Certain
defined terms used in this Amendment No. 2 have the meanings given in Section
1.1 hereof. Capitalized terms not otherwise defined in this Amendment No. 2 have
the meanings given therefor in the Note Agreement, as amended.
(B) The Company has requested and the Purchasers have agreed,
upon and subject to the terms and conditions set forth herein, (i) to consent to
the acquisition by Greensteel of substantially all of the assets of American
Chalkboard Company, L.L.C., an Alabama limited liability company ("AMERICAN
CHALKBOARD"), pursuant to the terms of the Asset Purchase Agreement dated
JANUARY 21, 2000 for an aggregate cash purchase price not to exceed Five
Million, Two Hundred and Fifty Thousand Dollars ($5,250,000) before fees and
expenses, (ii) to permit the acquisition by Greensteel of substantially all of
the assets of Peninsular Slate Company and Peninsular Slate Company of Texas
(hereinafter referred to collectively, as "PENINSULAR SLATE"), pursuant to the
terms of the Asset Purchase Agreement dated JANUARY 21, 2000 for an aggregate
cash purchase price not to exceed Four Million, Two Hundred Thousand Dollars
($4,200,000) before fees and expenses, and (iii) to amend the definition of
Senior Credit Agreement under the Note Agreement to reflect the Amendment and
Supplement No. 3 to the Credit Agreement of even date and certain other
provisions.
NOW, THEREFORE, the parties agree:
ARTICLE I
<PAGE>
AMENDMENTS TO NOTE AGREEMENT
The Note Agreement is hereby amended, effective upon the
satisfaction of the conditions precedent set forth in Article IV hereof, as
follows:
I.1 Section 10.1, "TERMS DEFINED", is amended:
(a) To insert the following new definitions in alphabetical order:
"AMENDMENT NO. 2" means the Amendment No. 2 to this Agreement dated as
of January 21, 2000 among the Company, the Guarantors and the Purchasers.
"AMENDMENT NO. 2 ACQUISITIONS" means the acquisitions by Greensteel of
all or substantially all of the assets of American Chalkboard and Peninsular
Slate, pursuant to the terms of the Amendment No. 2 Acquisition Documents.
"AMENDMENT NO. 2 ACQUISITION DOCUMENTS" means the American Chalkboard
Asset Purchase Agreement and the Peninsular Slate Asset Purchase Agreement and
each of the other agreements, instruments and documents executed or delivered by
any of the parties thereto or their respective Subsidiaries pursuant thereto or
in connection herewith, and all schedules and exhibits related to such
agreements; including, without limitation, any escrow agreements relating
thereto.
"AMENDMENT NO. 2 EFFECTIVE DATE" means the date set forth in Amendment
No. 2 as the "Amendment No. 2 Effective Date".
"AMERICAN CHALKBOARD" means American Chalkboard Company, L.L.C., an
Alabama limited liability company.
"AMERICAN CHALKBOARD ACQUISITION" means the acquisition by Greensteel
of substantially all of the assets of American Chalkboard, pursuant to the terms
of the American Chalkboard Asset Purchase Agreement.
"AMERICAN CHALKBOARD ASSET PURCHASE AGREEMENT" means the Asset Purchase
Agreement dated JANUARY 21, 2000, between Greensteel and American Chalkboard,
together with all schedules, exhibits and annexes thereto or delivered as a part
thereof.
"PENINSULAR SLATE" means, collectively, Peninsular Slate Company and
Peninsular Slate Company of Texas.
"PENINSULAR SLATE COMPANY" means Peninsular Slate Company, a Michigan
corporation.
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"PENINSULAR SLATE COMPANY OF TEXAS" means Peninsular Slate Company of
Texas, a Texas corporation.
"PENINSULAR SLATE ACQUISITION" means the acquisition by Greensteel of
all or substantially all of the assets of Peninsular Slate, pursuant to the
terms of the Peninsular Slate Asset Purchase Agreement.
"PENINSULAR SLATE ASSET PURCHASE AGREEMENT" means the Asset Purchase
Agreement dated JANUARY 21, 2000, between Greensteel and Peninsular Slate,
together with all schedules, exhibits and annexes thereto or delivered as a part
thereof.
(b) To amend the definition of "SENIOR CREDIT AGREEMENT" as follows:
"SENIOR CREDIT AGREEMENT - means the Credit Agreement, dated
November 20, 1998, among the Company, the banks, financial institutions
and other institutional lenders named therein, and Fleet National Bank,
as Administrative Agent, as Initial Issuing Bank and as Swing Line
Bank, as amended by an Amendment No. 1 dated as of December 30, 1998
and an Amendment and Supplement No. 2 dated as of August 19, 1999 and
an Amendment and Supplement No. 3 dated as of January 21, 2000 and as
thereafter amended in compliance with the provisions of Section 7.16."
I.2 Section 4.5 "Incurrence of Debt and Issuance of Preferred Stock"
is amended as follows:
(a) The reference to the amount "67.0 million" in clause (i) of Section
4.5 is replaced with the amount "$77.0 million".
I.3 Section 4.12 "FINANCIAL COVENANTS", is amended as follows:
(a) Subparagraph a of Section 4.12, "CONSOLIDATED DEBT TO EBITDA
RATIO", is amended to change both the proviso and the chart following such
proviso to read as follows (leaving the chart that appears prior to such proviso
unaltered):
PROVIDED, HOWEVER, that for purposes of calculating EBITDA for
the most recently completed four fiscal quarters of the Company and its
Subsidiaries ending on each of the following dates, there shall be
added to such EBITDA the amounts set forth next to such dates
(representing in each case estimated cost savings resulting from the
AIG Acquisition and the Nelson Adams Acquisition and the Amendment No.
2 Acquisitions):
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
September 30, 1999 $3,300,000
December 31, 1999 $2,300,000
March 31, 2000 $1,350,000
June 30, 2000 $ 900,000
September 30, 2000 $ 450,000
</TABLE>
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<PAGE>
(b) Clause (2) of subparagraph b of Section 4.12, "INTEREST COVERAGE
RATIO", is amended to read as follows:
(2) for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of the Company and its Subsidiaries
ending on each of the following dates, there shall be added to such
EBITDA the amounts set forth next to such dates (representing in each
case estimated cost savings resulting from the AIG Acquisition and the
Nelson Adams Acquisition and the Amendment No. 2 Acquisitions):
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
September 30, 1999 $3,300,000
December 31, 1999 $2,300,000
March 31, 2000 $1,350,000
June 30, 2000 $ 900,000
September 30, 2000 $ 450,000
</TABLE>
(c) Clause (2) of subparagraph c of Section 4.12 "FIXED CHARGE COVERAGE
RATIO", is amended to read as follows:
(2) for purposes of calculating EBITDA for the most recently
completed four fiscal quarters of the Company and its Subsidiaries
ending on each of the following dates, there shall be added to such
EBITDA the amounts set forth next to such dates (representing in each
case estimated cost savings resulting from the AIG Acquisition and the
Nelson Adams Acquisition and the Amendment No. 2 Acquisitions):
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
September 30, 1999 $3,300,000
December 31, 1999 $2,300,000
March 31, 2000 $1,350,000
June 30, 2000 $ 900,000
September 30, 2000 $ 450,000
</TABLE>
I.4 Section 12.6(d) is amended to add the words "and the Amendment No.
2 Acquisitions" at the end of clause (i) thereof.
ARTICLE II
CONSENT TO AMENDMENT NO. 2 ACQUISITIONS
II.1 Solely for the purposes of Section 4.4 "CAPITAL EXPENDITURES", of
the Note Agreement, the Purchasers hereby consent to the treatment of the
Amendment No. 2
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<PAGE>
Acquisitions as a "permitted acquisition" under such Section 4.4. Such consent
shall not constitute a waiver of any Default or Event of Default under the Note
Agreement arising as a result of, or in connection with, the Amendment No. 2
Acquisitions or a waiver of any other term or condition of the Note Agreement
(as amended hereby) required to be complied with in connection with the
Amendment No. 2 Acquisitions.
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<PAGE>
ARTICLE III
REPRESENTATIONS AND WARRANTIES; ADDITIONAL COVENANTS
The Company and the Guarantors jointly and severally represent, warrant
to and covenant and agree with the Purchasers that (with any such representation
or warranty applying to Greensteel being deemed to apply to Greensteel both
before and after giving effect to the Amendment No. 2 Acquisitions):
III.1 No Default or Event of Default exists under the Note Agreement
as of the date hereof or will exist after giving effect to the Amendment No.
2 Acquisitions.
III.2 Each of the representations and warranties set forth in
Section 8 of the Note Agreement is true in all respects as if made on the
date hereof and will be true as of the Amendment No. 2 Effective Date, except
(a) for changes in the ordinary course of business not prohibited by the Note
Agreement, none of which, either singly or in the aggregate, have had a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole;
and (b) as set forth the amended Schedules to the Note Agreement attached
hereto as Schedule 1 to this Amendment No. 2 (provided no such disclosure
shall constitute a waiver of any breach of any such representation or
warranty existing as of the Closing Date).
III.3 Each Loan Party (a) to the extent it is a party thereto, has
all requisite corporate power and authority to execute and deliver this
Amendment No. 2, and each other agreement, instrument or document
contemplated to be executed or delivered by any Loan Party pursuant to this
Amendment No. 2 (collectively, together with this Amendment No. 2, the
"AMENDMENT NO. 2 DOCUMENTS") and to consummate the transactions contemplated
hereby and thereby and (b) has taken all action, corporate or otherwise,
necessary to authorize the execution and delivery of the Amendment No. 2
Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby.
III.4 Neither the execution and delivery of the Amendment No. 2
Documents by any Loan Party nor the consummation by it of the transactions
contemplated hereby and thereby (a) conflict with, or result in any breach or
violation of any provision of, the charter or by-laws of any Loan Party, (b)
conflict with or result in any breach or violation of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate
the performance required by, or result in the creation of a Lien upon any of
the properties or assets of any Loan Party or any of its Subsidiaries (other
than Liens permitted by the Note Agreement) under any of the terms,
conditions or provisions of any loan agreement, indenture, mortgage, deed of
trust, lease or other material contract, instrument or agreement binding on
or affecting any Loan Party, any of its Subsidiaries or any of their
respective properties, or (c) violate any law (including, without limitation,
the Securities Act, the Exchange Act, and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970),
rule, regulation (including, without limitation, Regulation T, U or X of the
Board of Governors of the Federal Reserve System), order, writ,
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<PAGE>
judgment, injunction, decree, determination or award applicable to such Loan
Party or any of its Subsidiaries.
III.5 No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any other
third party is or will be required for (a) the due execution, delivery,
recordation, filing or performance by any Loan Party of any Amendment No. 2
Document to which it is a party, or (b) the exercise by the Purchasers of
their rights under the Transaction Documents.
III.6 Each Amendment No. 2 Document has been duly executed and
delivered by each Loan Party that is a party thereto and each of them, and
the Note Agreement as amended hereby constitutes the legal, valid and binding
obligation of each Loan Party thereto, enforceable against each such Loan
Party in accordance with its terms.
III.7 (a) Each party thereto has all necessary power and authority
to execute, deliver and perform each of the Amendment No. 2 Acquisition
Documents.
(b) Each Amendment No. 2 Acquisition Document has been duly executed
and delivered by each party thereto, is in full force and effect and enforceable
against the parties thereto in accordance with its terms. The representations
and warranties of each party thereto contained in each Amendment No. 2
Acquisition Document are true and correct in all material respects on the date
hereof and will be true and correct in all material respects on the closing of
the Amendment No. 2 Acquisitions, as if made on such date, and each Purchaser
shall be entitled to rely upon such representations and warranties with the same
force and effect as if they were incorporated in this Amendment No. 2 directly.
(c) The execution, delivery and performance of each of the Amendment
No. 2 Acquisition Documents by the parties thereto does not (i) violate any law,
rule or regulation (including, without limitation, the Williams Act, Sections 13
and 14 of the Exchange Act, and the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, and Regulations T, U, and X of the Board of Governors of the Federal
Reserve System and the rules and regulations promulgated thereunder) or (ii)
conflict with or result in a breach of any order, writ, injunction, ordinance,
resolution, decree, or other similar document or instrument of any governmental
entity, or any certificate of incorporation or by-laws of or applicable to any
such party or create (with or without the giving of notice or lapse of time, or
both) a default under or breach of or conflict with any agreement, instrument,
ordinance, resolution, decree, determination, award, bond, note, indenture,
mortgage, deed of trust, lease, writ, order or judgment to which any Loan Party
is a party or is bound, or any other agreement or instrument by which any of the
properties or assets owned by any Loan Party or used in the conduct of its
business is affected (other than any agreement or other instrument of any kind
the assets, revenues or liabilities in respect of which do not exceed $100,000
individually or $250,000 in the aggregate and the breach thereof or conflict
therewith does not have and could not reasonably be expected to have a Material
Adverse Effect) or result in the imposition of any Lien of any nature whatsoever
upon any of the properties or assets owned by or used in connection with the
business of any Loan Party or any of its Subsidiaries, except for the Liens
permitted under the Note Agreement.
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<PAGE>
(d) True, complete and correct executed copies of the Amendment No. 2
Acquisition Documents have been delivered to the Purchasers. The Amendment No. 2
Acquisitions shall be consummated pursuant to the terms and conditions of the
Amendment No. 2 Acquisition Documents in the form previously delivered to the
Purchasers. No Loan Party or any of their Subsidiaries has waived compliance by
any of the other parties to the Amendment No. 2 Acquisition Documents with any
term, covenant or condition thereof, and no party thereto has breached any
covenant set forth therein or failed to perform any of its obligations
thereunder which breach or failure to perform is of a material term or condition
thereof or could reasonably be expected to have a Material Adverse Effect.
(e) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other third
party is or will be required for the due execution, delivery, recordation,
filing or performance by any party thereto of any Amendment No. 2 Acquisition
Documents.
(f) True, complete, and correct executed copies of the Amendment and
Supplement No. 3 to the Senior Credit Agreement dated as of January 21, 2000
and all other documents, instruments or agreement executed in connection
therewith (the "SENIOR CREDIT DOCUMENTS") have been delivered to the
Purchasers. The transactions contemplated by the Senior Credit Documents
shall be consummated solely pursuant to the terms and conditions of such
Senior Credit Documents and the proceeds thereof shall be used solely to
finance the Amendment No. 2 Acquisitions, for working capital and otherwise
permitted capital expenditures. None of the parties to the Senior Credit
Documents have waived compliance by any of the other parties thereto with any
term, covenant or condition thereof, and no party thereto has breached any
covenant set forth therein or failed to perform any of its obligations
thereunder..
(g) No Loan Party nor any Loan Party's Subsidiaries is an "investment
company," or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended. No Loan Party is subject to regulation under
any federal, state or foreign statute or regulation which limits its ability to
incur Debt.
III.8 The Amendment No. 2 Acquisitions, on a pro forma basis
(calculated as if the Amendment No. 2 Acquisitions had occurred at the
beginning of the applicable four-quarter reference period) results in (i) the
ratio of Consolidated Debt to EBITDA as at December 31, 1999 being lower and
(ii) the Fixed Charge Coverage Ratio as at December 31, 1999 being higher,
than if the Amendment No. 2 Acquisitions are not consummated. No Acquired
Debt is being incurred in connection with the consummation of the Amendment
No. 2 Acquisitions.
III.9 FINANCIAL STATEMENTS. The Consolidated balance sheets of
American Chalkboard as at the fiscal years ended December 31, 1996, December
31, 1997 and December 31, 1998 and the related Consolidated statements of
income and statements of cash flows of American Chalkboard for the fiscal
years ended 1996, 1997 and 1998, accompanied by an opinion of Aldridge,
Borden & Company, P.C., and the unaudited Consolidated balance sheet of
American
-8-
<PAGE>
Chalkboard as applicable at September 30, 1999, and the related unaudited
Consolidated statement of income and Consolidated statement of cash flows of
American Chalkboard for the nine months ended September 30, 1999 duly certified
by the chief financial officer of American Chalkboard, copies of which have been
furnished to each Purchaser by the Company, fairly present, or when delivered,
shall fairly present, subject, in the case of said interim balance sheet,
statements of income and cash flows, to normal year-end audit adjustments, the
Consolidated financial condition of American Chalkboard as at such dates and the
Consolidated results of the operations of American Chalkboard for the periods
ended on such dates, all in accordance with GAAP applied on a consistent basis,
and, since December 31, 1998 there has been no change which could reasonably be
expected to result in a Material Adverse Effect.
(a) The Consolidated balance sheets of Peninsular Slate Company as at
the fiscal years ended December 31, 1996, December 31, 1997 and December 31,
1998 and the related Consolidated statements of income and statements of cash
flows of Peninsular Slate Company for the fiscal years ended 1996, 1997 and
1998, compiled by Moore & Moore, P.C. and the unaudited Consolidated balance
sheet of Peninsular Slate Company as applicable at September 30, 1999, and the
related unaudited Consolidated statement of income and Consolidated statement of
cash flows of Peninsular Slate Company for the nine months ended September 30,
1999 duly certified by the chief financial officer of Peninsular Slate Company,
copies of which have been furnished to each Purchaser by the Company, fairly
present, or when delivered, shall fairly present, subject, in the case of said
interim balance sheet, statements of income and cash flows, to normal year-end
audit adjustments, the Consolidated financial condition of Peninsular Slate
Company as at such dates and the Consolidated results of the operations of
Peninsular Slate Company for the periods ended on such dates, all in accordance
with GAAP applied on a consistent basis, and, since December 31, 1998 there has
been no change which could reasonably be expected to result in a Material
Adverse Effect.
(b) The Consolidated balance sheets of Peninsular Slate Company of
Texas as at the fiscal years ended April 30, 1998 and April 30, 1999 and the
related Consolidated statements of income and statements of cash flows of
Peninsular Slate Company of Texas for the fiscal years ended 1997, 1998 and
1999, compiled by of Moore & Moore, P.C. and the unaudited Consolidated balance
sheet of Peninsular Slate Company of Texas as applicable at September 30, 1999,
and the related unaudited Consolidated statement of income and Consolidated
statement of cash flows of Peninsular Slate Company of Texas for the five months
ended September 30, 1999 duly certified by the chief financial officer of
Peninsular Slate Company of Texas, copies of which have been furnished to each
Purchaser by the Company, fairly present, or when delivered, shall fairly
present, subject, in the case of said interim balance sheet, statements of
income and cash flows, to normal year-end adjustments, the Consolidated
financial condition of Peninsular Slate Company of Texas as at such dates and
the Consolidated results of the operations of Peninsular Slate Company of Texas
for the periods ended on such dates, all in accordance with GAAP applied on a
consistent basis, and, since April 30, 1999 there has been no change which could
reasonably be expected to result in a Material Adverse Effect.
III.10 PRO FORMA FINANCIAL STATEMENTS; PROJECTIONS. The Consolidated
pro forma balance sheet of the Company and its Subsidiaries as at September
30, 1999 and the related
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<PAGE>
Consolidated pro forma statement of income and cash flows of the Company and its
Subsidiaries for the twelve month period then ended, certified by the chief
executive officer or chief financial officer of the Company, copies of which
have been furnished to each Purchaser by the Company, fairly present the
Consolidated pro forma financial condition of the Company and its Subsidiaries
as at such date and the Consolidated pro forma results of operations of the
Company and its Subsidiaries for the period ended on such date, in each case
after giving effect to the Amendment No. 2 Acquisitions, all in accordance with
GAAP (to the extent that pro forma information can comply with GAAP) and subject
to the assumptions stated therein (the aforementioned financial statements are
hereinafter referred to collectively as the "AMENDMENT NO. 2 PRO FORMA
FINANCIALS").
(a) The projections delivered on the Amendment No. 2 Effective Date
have been prepared on the basis of the assumptions accompanying them and reflect
as of the date thereof the Company's good faith projections, after reasonable
analysis, of the matters set forth therein, based on such assumptions (it being
understood that projected financial information is not to be viewed as facts and
that the actual results during the period or periods covered thereby may differ
from the projected results and that the differences may be material).
III.11 ACCURATE INFORMATION. None of the information, exhibits or
reports furnished by any Loan Party to any Purchaser in connection with this
Amendment No. 2 contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements made therein not
misleading.
ARTICLE IV
CONDITIONS
The effectiveness of this Amendment No. 2 shall be subject to the
fulfillment of each of the conditions set forth in this Article IV. The date on
which all such conditions shall have been fulfilled and this Amendment No. 2
shall have become effective, is the "Amendment No. 2 Effective Date":
IV.1 Each of the parties hereto shall have executed and delivered this
Amendment No. 2.
IV.2 The representations and warranties contained herein and each other
agreement, instrument, certificate or other writing delivered to the Purchasers
pursuant hereto shall be correct on and as of the date hereof and the Amendment
No. 2 Effective Date after giving effect to this Amendment No. 2 as though made
on and as of such dates except to the extent modified hereby. No Default or
Event of Default shall have occurred and be continuing on the Amendment No. 2
Effective Date.
IV.3 The Company shall have paid all reasonable legal (U.S. and
foreign) and other out-of-pocket expenses incurred by the Purchasers in
connection with the transactions
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<PAGE>
contemplated by or referred to in this Amendment No. 2, including, without
limitation, out-of-pocket due diligence, transportation, computer, duplication,
appraisal, audit and consultant fees.
IV.4 The Loan Parties shall have otherwise complied in all respects
with the terms hereof and of any other agreement, document, instrument or other
writing to be delivered by any Loan Party in connection herewith.
IV.5 The Purchasers shall have received the following, each in form and
substance satisfactory to them:
(a) copies of the resolutions of the Board of Directors of each Loan
Party, certified by a Senior Officer thereof, authorizing, to the extent a party
thereto, the execution, delivery and performance by such Loan Party of this
Amendment No. 2 and the other Amendment No. 2 Documents;
(b) long-form good standing certificates of recent date for each Loan
Party from the Secretary of State of its state of incorporation and the state in
which its chief executive office is located;
(c) a certificate signed on behalf of each Loan Party by a Senior
Officer and the Secretary or an Assistant Secretary of each Loan Party,
certifying the names and true signatures of the officers of such Loan Party
authorized to sign the Amendment No. 2 Documents, together with evidence of the
incumbency of such authorized officers; and certifying that the other conditions
set forth in this Article IV have been satisfied.
IV.6 The Amendment No. 2 Acquisitions shall have been consummated
pursuant to the terms and conditions of the Amendment No. 2 Acquisition
Documents for an aggregate cash amount not exceeding $9,450,000 (before fees and
expenses).
IV.7 The Amendment No. 2 Acquisition Documents and the Senior Credit
Documents shall be satisfactory in form and substance to the Purchasers in their
sole discretion.
IV.8 The Purchasers shall have received the following all of which
shall be satisfactory in form and substance to the Purchasers, certified by the
chief financial officer of the Company:
(a) the Amendment No. 2 Pro Forma Financials;
(b) projections for the Company and its Subsidiaries commencing with
the Fiscal Year ending 12/31/00 through Fiscal Year ending 12/31/06;
(c) A computation in detail of consolidated pro forma trailing
twelve-month EBITDA for the Company and its Subsidiaries for the period ended
September 30, 1999 which shall not be less than $24,500,000 (provided, however,
there shall be added to such EBITDA the amount of $3,300,000 (representing
estimated cost savings resulting from the AIG Acquisition, the Nelson Adams
Acquisition and the Amendment No. 2 Acquisitions)) and determined in accordance
with the Amendment No. 2 Pro Forma Financials; and
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<PAGE>
(d) A computation of the Consolidated Debt to EBITDA Ratio, including
in Consolidated Debt the Debt evidenced by the Notes, demonstrating that such
ratio is not greater than 4.5:1 on the Amendment No. 2 Effective Date and a
computation of the Consolidated Debt to EBITDA Ratio, excluding the Debt
evidenced by the Notes, demonstrating that such ratio is not greater than 4.2:1
on the Amendment No. 1 Effective Date (and in each case such ratio shall be
calculated in the same manner as is set forth in Section 4.12(a) of the Note
Agreement as amended by this Amendment No. 2).
(e) Audited financial statements for American Chalkboard's fiscal years
ended December 31, 1996, December 31, 1997 and December 31, 1998 prepared by
Aldridge, Borden & Company, P.C., in form and substance (excluding in immaterial
respects) satisfactory to the Required Holders;
(f) Compiled financial statements for Peninsular Slate Company's fiscal
years ended December 31, 1996, December 31, 1997 and December 31, 1998 prepared
by Moore & Moore, P.C., in form and substance (excluding in immaterial respects)
satisfactory to the Required Holders; and
(g) Compiled financial statements for Peninsular Slate Company of
Texas' fiscal years ended April 30, 1997, April 30, 1998 and April 30, 1999
prepared by Moore & Moore, P.C., in form and substance (excluding in immaterial
respects) satisfactory to the Required Holders.
IV.9 All governmental and third party consents and approvals necessary
in connection with the Amendment No. 2 Acquisitions shall have been obtained,
including, without limitation, the consent of holders of the Senior Debt
(without the imposition of any conditions that are not acceptable to the
Required Holders) and shall remain in effect; all applicable waiting periods
shall have expired without any adverse action being taken by any competent
authority; and no law or regulation shall be applicable in the judgment of the
Required Holders that restrains, prevents or imposes materially adverse
conditions upon any of the Amendment No. 2 Acquisitions or the Note Agreement.
IV.10 There shall exist no action, suit, investigation, litigation or
proceeding pending or threatened in any court or before any arbitrator or
governmental or regulatory agency or authority that purports to adversely affect
any aspect of the Amendment No. 2 Acquisitions or the Note Agreement.
IV.11 The Purchasers shall have received all financial, business and
other information regarding the Company and its Subsidiaries and its properties
and assets as they shall have reasonably requested, and all of the foregoing
shall be acceptable to the Purchasers in their sole discretion.
IV.12 The Company shall have delivered a certificate, in form and
substance reasonably satisfactory to the Purchasers, attesting to the Solvency
of the Company and its Subsidiaries, individually and on a consolidated basis
immediately before and immediately after giving effect to the Amendment No. 2
Acquisitions, from the chief financial officer of the Company.
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<PAGE>
IV.13 The Purchaser shall have received a favorable written opinion of
Greenberg Traurig LLP, counsel to the Company, as to such matters as the
Purchasers may reasonably require relating to the Amendment No. 2 Acquisitions
(including the absence of any required governmental consents in connection
therewith) and the Amendment No. 2 Documents in form and substance as the
Purchasers may reasonably request.
IV.14 All proceedings in connection with the transactions contemplated
by this Amendment No. 2 and the Amendment No. 2 Acquisitions, and all documents
incidental thereto shall be reasonably satisfactory to the Purchasers, and each
Purchaser shall have received all such information and such counterpart
originals or certified copies of documents as may have been reasonably
requested.
ARTICLE V
CONFIRMATION OF GUARANTY
V.1 Each Guarantor hereby (i) acknowledges and consents to this
Amendment No. 2 (whether or not its consent is required); (ii) confirms and
agrees that its guaranty as set forth in Section 11 of the Note Agreement is,
and shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects, and all references in the Note Agreement shall mean
the Note Agreement as amended by this Amendment No. 2; and (iii) confirm and
agree that the obligations guaranteed by such Guarantor in such Section 11
include the obligations of the Company to the Holders under the Note Agreement
and the Notes as amended by this Amendment No. 2.
ARTICLE VI
CONTINUED EFFECTIVENESS OF NOTE AGREEMENT
Except as specifically amended herein, the Note Agreement and the other
Transaction Documents are, and shall remain, in full force and effect, and are
hereby ratified and confirmed in all respects except that on and after the
Amendment No. 2 Effective Date all references to the Note Agreement shall mean
the Note Agreement as amended and supplemented by this Amendment No. 2.
ARTICLE VII
MISCELLANEOUS
VII.1 This Amendment No. 2 shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York, without
regard to any conflicts of law rules which would require the application of
the laws of any other jurisdiction.
VII.2 No modification or waiver of or with respect to any provisions
of this Amendment No. 2 or any other agreements, instruments and documents
delivered pursuant hereto nor consent by the Purchasers to any departure by
the Company or either Guarantor from any of the terms or
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<PAGE>
conditions thereof, shall in any event be effective unless it shall be in
writing and executed in accordance with the provisions of the Note Agreement,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No consent to or demand on the Company or
either Guarantor in any case shall, of itself, entitle them to any other or
further notice or demand in similar or other circumstances. This Amendment No.
2, together with the Note Agreement, as so amended, and the other Transaction
Documents embodies the entire agreement and understanding among the Loan Parties
and the Purchasers, and supersedes all prior agreements and understandings,
relating to the subject matter hereof.
VII.3 The provisions of this Amendment No. 2 are severable, and if
any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such jurisdiction
and shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision in this Amendment No. 2 in any
jurisdiction.
VII.4 This Amendment No. 2 may be signed in any number of
counterparts with the same effect as if the signatures thereto and hereto
were upon the same instrument.
VII.5 This Amendment No. 2 shall be binding upon and inure to the
benefit of the Loan Parties and their respective successors and to the
benefit of the Purchasers, any Holder and their respective successors and
assigns. The rights and obligations of the Loan Parties under this Amendment
No. 2 shall not be assigned or delegated without the prior written consent of
the Required Holders, and any purported assignment or delegation without such
consent shall be void.
-14-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be
duly executed on the date first above written.
LOAN PARTIES: POLYVISION CORPORATION
By /s/ Gary L. Edwards
------------------------------------
Name: Gary L. Edwards
Title: Chief Financial Officer, Treasurer
and Secretary
POSTERLOID CORPORATION
By /s/ Gary L. Edwards
------------------------------------
Name: Gary L. Edwards
Title: Chief Financial Officer, Treasurer
and Secretary
GREENSTEEL, INC.
By /s/ Gary L. Edwards
------------------------------------
Name: Gary L. Edwards
Title: Chief Financial Officer, Treasurer
and Secretary
PURCHASERS: JOHN HANCOCK MUTUAL LIFE
INSURANCE COMPANY
By /s/ Stacy Agretzlis
------------------------------------
Name: Stacy Agretzlis
Title: Assistant Investment Officer
SIGNATURE PAGE TO AMENDMENT NO. 2
<PAGE>
JOHN HANCOCK VARIABLE LIFE
INSURANCE COMPANY
By /s/ Anthony C. Urick
------------------------------------
Name: Anthony C. Urick
Title: Vice President Investments
HANCOCK MEZZANINE PARTNERS L.P.
BY: HANCOCK MEZZANINE
INVESTMENTS LLC, its General Partner
BY: John Hancock Mutual Life Insurance
Company, as Investment Manager
By /s/ Anthony C. Urick
------------------------------------
Name: Anthony C. Urick
Title: Second Vice President
Consented to:
FLEET NATIONAL BANK,
as Administrative Agent under the Senior Credit
Agreement referenced herein on behalf of the
Lenders
By /s/ Howard J. Diamond
- -------------------------------------
Name: Howard J. Diamond
Title: Vice President
SIGNATURE PAGE TO AMENDMENT NO. 2
