Stock Purchase, Redemption and Contribution Agreement

Stock Repurchase Agreement

You are currently viewing:

This Stock Repurchase Agreement involves

COMPASS GROUP DIVERSIFIED HOLDINGS LLC | Norwest Mezzanine Partners I, LP | Crosman Acquisition Corporation | Crosman Group LLC

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: Stock Purchase, Redemption and Contribution Agreement
Governing Law: New York Date: 1/10/2007
Law Firm: Compass Group Diversified Holdings LLC; Alston & Bird LLP

Search Stock Repurchase Agreement by:

Exhibit 10.1

Stock Purchase, Redemption and Contribution Agreement

by and among

Compass Group Diversified Holdings LLC, Norwest Mezzanine Partners I, LP
and the other shareholders party hereto
(collectively, the “Sellers”);

Compass Group Diversified Holdings LLC
(the “Sellers’ Representative”);

Crosman Acquisition Corporation
(“CAC”);

and

Crosman Group LLC
(the “Buyer”)

Dated as of January 5, 2007

TABLE OF CONTENTS


	Page
1. Definitions		1

2. Sale, Redemption and Contribution of Shares; Closing		17
2.1 Contribution		17
2.2 Sale of Purchased Shares and Redemption of Redeemed Shares		17
2.3 Certain Events Prior to the Closing		17
2.4 Closing		18
2.5 Adjustment Procedure		20
2.6 Releases		22

3. Representations and Warranties of CAC		23
3.1 Organization and Good Standing		23
3.2 Authority; No Conflict		23
3.3 Capitalization		24
3.4 Financial Statements		25
3.5 Books and Records		25
3.6 Title to Properties; Encumbrances		26
3.7 Condition and Sufficiency of Assets		27
3.8 Accounts Receivable		27
3.9 Inventory		27
3.10 Taxes		28
3.11 Employee Benefits		30
3.12 Compliance with Legal Requirements; Governmental Authorizations		35
3.13 Legal Proceedings; Orders		36
3.14 Absence of Certain Changes and Events		37
3.15 Contracts; No Defaults		39
3.16 Insurance		41
3.17 Environmental Matters		42
3.18 Employees; Employee Matters		43
3.19 Intellectual Property		45
3.20 Brokers or Finders		49
3.21 Certain Payments		49
3.22 Customers and Suppliers		49
3.23 No Undisclosed Liabilities		50
3.24 No Product Liabilities; Product Warranties		50
3.25 Accuracy of Information		51

3A Representations and Warranties of Sellers		51
3A.1 Organization and Good Standing		51
3A.2 Authority		51
3A.3 Title to the Shares		51
3A.4 Relationships with Related Persons		52
3A.5 No Conflicts		52

-i-

TABLE OF CONTENTS
(continued)


	Page
3A.6 Investment Representations		52
3A.7 Legal Proceedings		53
3A.8 Brokers or Finders		53

4. Representations and Warranties of Buyer		53
4.1 Organization and Good Standing		53
4.2 Authority; No Conflict		53
4.3 Securities Act Representation		54
4.4 Certain Proceedings		55
4.5 Brokers or Finders		55

5. Covenants of CAC		55

6. Covenants of Buyer		55

7. Conditions Precedent to Buyer’s Obligation to Close		55
7.1 Accuracy of Representations		55
7.2 Required Consents		55
7.3 Diablo		55

8. Conditions Precedent to the Sellers’ Obligation to Close		56
8.1 Accuracy of Representations		56

9. Termination		56

10. Indemnification; Remedies		56
10.1 Survival		56
10.2 Indemnification and Payment of Damages by Seller		56
10.3 Indemnification and Payment of Damages by Buyer		58
10.4 Time Limitations		58
10.5 Limitations on Amount		59
10.6 Procedure for Indemnification—Third Party Claims		60
10.7 Procedure for Indemnification—Other Claims		61

11. Tax Matters		61
11.1 Tax Matters		61

12. General Provisions		64
12.1 Expenses		64
12.2 Public Announcements		64
12.3 Confidentiality		65
12.4 Termination of Certain Equity Holder Documents		65
12.5 Notices		65
12.6 Further Assurances		66
12.7 Waiver		66

-ii-

TABLE OF CONTENTS
(continued)


	Page
12.8 Entire Agreement and Modification		66
12.9 Assignments, Successors and No Third-Party Rights		67
12.10 Severability		67
12.11 Section Headings; Construction		67
12.12 Time of Essence		67
12.13 Governing Law		68
12.14 Authority of Sellers’ Representative		68
12.15 Provision Regarding Legal Representation		70
12.16 Independence of Covenants and Representations and Warranties		71
12.17 Counterparts		71

Schedule 1.1 Capital Leases
Schedule 1.2 Pro Rata Percentages
Schedule 1.3 Working Capital Methodology
Schedule 2.1 Rollover Amounts
Schedule 12.4 Agreements to be Terminated
Schedule 12.14 holdback Percentages

Exhibit A Wire Transfer Instruction Form
Exhibit B Amended and Restated LLC Agreement
Exhibit C Amendment to Employment Agreement
Exhibit D Indemnification Agreement

-iii-

STOCK PURCHASE, REDEMPTION AND CONTRIBUTION AGREEMENT

This Stock Purchase, Redemption and Contribution Agreement (this “ Agreement ”) is made as of January 5, 2007 by and among COMPASS GROUP DIVERSIFIED HOLDINGS LLC , a Delaware limited liability company (“ CODI ”), NORWEST MEZZANINE PARTNERS I, LP , a Minnesota limited partnership (“ Norwest ”), KENNETH R. D’ARCY (“ D’Arcy ”), ROBERT BECKWITH (“ Beckwith ”), STEVE UPHAM (“ Upham ”), DAN SCHULTZ (“ Schultz ”), ROBERT HAMPTON (“ Hampton ”) (CODI, Norwest, D’Arcy, Beckwith, Upham, Schultz, Hampton and the other individual shareholders party hereto, collectively referred to herein as the “ Sellers ”), CROSMAN ACQUISITION CORPORATION , a Delaware corporation (“ CAC ”), COMPASS GROUP DIVERSIFIED HOLDINGS LLC , as representative of the Sellers (in such capacity, the “ Sellers’ Representative ”), and CROSMAN GROUP LLC , a Delaware limited liability company (the “ Buyer ”).

RECITALS

A. This Agreement provides for (a) the contribution of the Rollover Shares by the Rollover Shareholders to Buyer in exchange for $2,316,500 ( the “ Rollover Amount ”) worth of equity interests of Buyer in a transaction intended to qualify as a tax-free contribution pursuant to IRC §721, (b) the contribution of up to $35,683,500 to Buyer (the “ Equity Financing ”) by Wachovia Capital Partners 2006, LLC (“ WCP ”) and certain other Persons in exchange for equity interests of Buyer, (c) the acquisition by Buyer of the Purchased Shares with the proceeds of the Equity Financing, and (d) the redemption by CAC of the Redeemed Shares with a portion of proceeds of Debt Financing Proceeds.

B. The Rollover Shares, Purchased Shares and Redeemed Shares constitute all of the issued and outstanding shares of capital stock (the “ Shares ”) of CAC.

C. CAC is the sole shareholder of Crosman Corporation, a Delaware corporation (the “ Company ”).

AGREEMENT

The parties, intending to be legally bound, agree as follows:

1. Definitions

For purposes of this Agreement, the following terms have the meanings specified or referred to in this Section 1:

“Accounts Receivable” shall have the meaning set forth in Section 3.8.

“Adjusted Current Assets” means the aggregate amount of the current consolidated assets of the Companies shown on the Working Capital Closing Statement

as such current assets are calculated as of the close of business on the business day immediately preceding the Closing Date in accordance with the Working Capital Methodology, but including Cash and excluding, to the extent included in such current consolidated assets, (a) any deferred or current income tax assets, (b) any 2007 Tax Refund amount, (c) any interest accrued on or principal of the Promissory Notes, (d) any pre-paid fees or expenses in connection with the Management Services Agreement, and (e) any sums due to any of the Companies from any of the other Companies that appear as “current assets” on the Working Capital Closing Statement. For purposes of determining the Adjusted Current Assets, the assets of Diablo shall be excluded for all purposes, including any asset reflected on the books and records of any of the other Companies related to an investment in Diablo; provided, that, the Diablo Receivable shall be included in the Adjusted Current Assets. For this purpose the “Diablo Receivable” shall mean the amount payable as of the close of business on the business day immediately preceding the Closing Date by Diablo to the Company pursuant to the Diablo Membership Agreement with respect to the 5% commission payable to the Company for the provision of management and administrative services to Diablo.

“Adjusted Current Liabilities” means the aggregate amount of the current consolidated liabilities of the Companies shown on the Working Capital Closing Statement as such current liabilities are calculated as of the close of business on the business day immediately preceding the Closing Date in accordance with the Working Capital Methodology, but excluding, to the extent included in such current consolidated liabilities, (a) any Indebtedness of the Companies, (b) any sums owed by any of the Companies to any of the other Companies that appear as “current liabilities” on the Working Capital Closing Statement, (c) any deferred or current income tax liabilities, (d) any 2007 Tax Obligation amount, (e) any of the Company Transaction Expenses and (f) any D’Arcy Interest Bonus. For purposes of determining the Adjusted Current Liabilities, the Liabilities of Diablo shall be excluded for all purposes. For the avoidance of doubt, the Adjusted Current Liabilities shall include, to the extent accrued in accordance with the Working Capital Methodology but not paid as of the Closing, (i) the 2007 Year End Bonuses and (ii) all employer paid payroll Taxes due or payable with respect to compensation payable on or prior to the Closing Date, including with respect to the D’Arcy Interest Bonus.

“ Adjusted Equity Value ” means $140,000,000 increased or decreased, as the case may be, by the Adjustment Amount.

“Adjusted Net Working Capital” means the amount (which amount may be positive or negative) equal to Adjusted Current A