Securities Purchase Agreement (2007)Full Document 

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EXECUTION COPY

 

SECURITIES PURCHASE AGREEMENT

 

AMONG

 

PATRICK INDUSTRIES, INC.

 

(“Buyer”)

 

AND

 

FNL MANAGEMENT CORP.

 

(“Sellers’ Representative”)

 

AND

 

ADORN HOLDINGS, INC.

 

(the “Company”)

 

AND

 

THE STOCKHOLDERS,

WARRANT HOLDERS,

AND

OPTION HOLDERS

 

OF

 

THE COMPANY

 

 

 

April 10, 2007

 

 


TABLE OF CONTENTS

Page

 

 


ARTICLE 1

Definitions

1

 

1.1

Definitions.

1

ARTICLE 2

Purchase and Sale

1

 

2.1

Purchase and Sale.

1

 

3.1

Authority; Capacity and Representation.

5

 

4.1

Organization and Good Standing.

7

 

4.7 Taxes.

11

 

5.1

Organization; Authorization.

20

 

-ii-

 


ARTICLE 6

Conditions Precedent

21

 

6.1

Conditions to Buyers’ Obligations.

21

ARTICLE 7

The Closing

24

 

8.1

Pre-Closing Covenants and Agreements.

24

ARTICLE 9

Indemnification

34

 

9.1

Indemnification of Buyer.

34

ARTICLE 10

Certain Definitions

38

 

11.1

Notices.

47

 

 

-iii-

 


SECURITIES PURCHASE AGREEMENT

THIS SECURITIES PURCHASE AGREEMENT (“Agreement”) is entered into as of the 10th day of April, 2007, among Patrick Industries, Inc., an Indiana corporation (“Buyer”), each of the Persons identified in Section 4.2.1 of the Disclosure Letter (each, a “Seller,” and collectively, “Sellers”), Adorn Holdings, Inc., a Delaware corporation (the “Company”), and on its own behalf, and on behalf of each Seller, FNL Management Corp., an Ohio corporation (“Sellers’ Representative”).

RECITALS:

A.           Sellers, in the aggregate, own: (i) all of the issued and outstanding shares of capital stock (as more particularly defined in Section 4.2.1, the “Shares”) of the Company; (ii) all of the issued and outstanding options to purchase shares of capital stock of the Company (as more particularly defined in Section 4.2.1, the “Stock Options”); and (iii) all of the issued and outstanding warrants to purchase shares of capital stock of the Company (as more particularly defined in Section 4.2.1, the “Warrants” and, together with the Shares and the Stock Options, collectively referred to herein as the “Securities”).

B.           The Company owns all of the issued and outstanding percentage interests of Adorn, LLC, a Delaware limited liability company (the “Subsidiary” and together with the Company, the “Acquired Companies”).

C.           Buyer shall purchase from Sellers, and Sellers shall sell to Buyer, the Securities upon and subject to the terms and conditions set forth in this Agreement (the “Securities Purchase”).

Now, therefore, in consideration of the mutual representations, warranties, covenants and agreements set forth in this Agreement, Buyer, the Company, Sellers, and Sellers’ Representative hereby agree as follows:

ARTICLE 1

Definitions

1.1          Definitions. Certain terms used in this Agreement shall have the meanings set forth in Article 10, or elsewhere herein as indicated in Article 10.

1.2          Accounting Terms. Accounting terms used in this Agreement and not otherwise defined herein shall have the meanings attributed to them under GAAP.

ARTICLE 2

Purchase and Sale

2.1          Purchase and Sale. Subject to the terms and conditions of this Agreement, at the Closing each Seller shall sell, assign, transfer and deliver to Buyer, free and clear of all Liens, and Buyer shall purchase from each Seller, all of such Seller’s right, title and interest in and to all of the

 

 

 


Securities owned by such Seller, as more specifically identified in Section 4.2.1 of the Disclosure Letter (as to each Seller, respectively, the “Seller’s Respective Securities”).

2.2          Purchase Price. The aggregate purchase price for all of the Securities (the “Purchase Price”) shall be an amount equal to:

 

(a)

Seventy-Five Million Dollars ($75,000,000);

 

(b)

plus an amount equal to the Closing Cash;

 

(c)

minus an amount equal to the Closing Indebtedness; and

(d)          plus the amount, if any, by which the Closing Working Capital exceeds the Working Capital Target, or minus the amount, if any, by which the Working Capital Target exceeds the Closing Working Capital.

2.3          Estimated Purchase Price; Payment of Indebtedness. On the second (2nd) Business Day before the Closing Date, the Company shall estimate in good faith the amount of the Closing Cash, the Closing Indebtedness and the Closing Working Capital, respectively, as of 11:59 p.m. on the Closing Date and deliver to Buyer a certificate setting forth such estimates (the “Closing Certificate”). The Closing Certificate shall be prepared in accordance with Section 2.4.1 with the understanding that such certificate represents good faith estimates of such amounts. As used herein, “Estimated Closing Cash,” “Estimated Closing Indebtedness” and “Estimated Closing Working Capital” mean the estimates of the Closing Cash, the Closing Indebtedness and the Closing Working Capital, respectively, set forth in the Closing Certificate and “Estimated Purchase Price” means an amount equal to the Purchase Price calculated as set forth in Section 2.2, assuming for purposes of such calculation that the Closing Cash is equal to the Estimated Closing Cash, that the Closing Indebtedness is equal to the Estimated Closing Indebtedness and that the Closing Working Capital is equal to the Estimated Closing Working Capital. Subject to the terms and conditions of this Agreement, at the Closing, Buyer shall (a) pay and deliver the Estimated Purchase Price (as calculated based upon the Closing Certificate) (the “Closing Date Payment”) to Sellers by means of a wire transfer of immediately available cash funds to an account as directed by Sellers’ Representative prior to the Closing (the “Sellers’ Account”) (and the Sellers’ Representative shall be solely responsible for payment therefrom to each Seller for his, her or its Seller’s Respective Securities), and (b) pay the Indebtedness of the Acquired Companies identified in Section 2.3 of the Disclosure Letter pursuant to the payoff letters delivered pursuant to Section 6.1(d)(iv) (collectively, the “Repaid Closing Indebtedness”). For the avoidance of doubt, the Closing Date Payment shall be inclusive of any required Tax withholding from amounts payable to Sellers.

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