EXHIBIT 10.1
Execution Copy

 

SHARE REPURCHASE AGREEMENT
 
This SHARE REPURCHASE AGREEMENT (this “Agreement”) is dated as of September 24,
2014, and is by and among Capital Southwest Corporation, a Texas corporation
(“CSW”), Capital Southwest Venture Corporation, a Nevada corporation and
wholly-owned subsidiary of CSW (“CSVC” and together with CSW, “Capital Southwest
Parties”), and Alamo Group Inc., a Delaware corporation (the “Company”).
 
BACKGROUND
 
WHEREAS the Capital Southwest Parties hold 2,832,300 shares of stock subject to
a registration statement previously filed by the Company with the Securities and
Exchange Commission and representing approximately 23% of the outstanding common
stock, par value $0.10 per share (the “Common Stock”), of the Company;
 
WHEREAS the Capital Southwest Parties have offered to sell, and the Company has
determined to repurchase, 849,690 of shares of Common Stock from CSVC (the
“Repurchased Shares”) at a price per share equal to 97.00% of the Market Price
(as defined below) (such repurchase, the “Repurchase”);
 
WHEREAS the board of directors of the Company (the “Board”) has concluded that
it is in the best interests of the Company and its stockholders (other than the
Capital Southwest Parties) to enter into the Repurchase in accordance with this
Agreement, and has approved the Repurchase and related transactions that may be
required in connection with the Repurchase;
 
NOW, THEREFORE, in consideration of the premises and the agreements set forth
below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
 
ARTICLE I
SALE AND REPURCHASE OF SHARES
 
Section 1.1 Repurchase.   Upon the terms and subject to the conditions of this
Agreement, at the Closing (as defined below), CSVC shall sell, assign, transfer,
convey and deliver to the Company, and the Company shall purchase, acquire and
accept from CSVC, the Repurchased Shares.  The purchase price for each
Repurchased Share shall be equal to ninety-seven percent (97.00%) (the “Purchase
Price”) of the Market Price.  The “Market Price” shall mean the closing sale
price per share of the Common Stock on The New York Stock Exchange on the
trading day next preceding the Closing Date (as defined below).
 
Section 1.2  Closing.   The closing of the Repurchase (the “Closing”) will take
place at the offices of Sidley Austin LLP, 787 Seventh Avenue, New York, N.Y.
10019, at 10:00 am local time on the next business day immediately following the
date of this Agreement, subject to satisfaction or waiver of all the conditions
set forth in Section 1.3 below (the date on which the Closing actually occurs
being the “Closing Date”).  At the Closing, (a) CSVC shall deliver or cause to
be delivered to the Company all of the Capital Southwest Parties’ right, title
and interest in and to the Repurchased Shares (including, if available, delivery
by electronic book-entry form through the facilities of The Depository Trust
Company), together with all documentation
 
 
 
 
 

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reasonably necessary to transfer to the Company each of the Capital Southwest
Parties’ right, title and interest in and to the Repurchased Shares and (b) the
Company shall pay to CSVC the aggregate Purchase Price in respect of the
Repurchased Shares, in cash, by wire transfer of immediately available funds in
accordance with the wire transfer instructions provided by CSVC to the Company
not later than two business days prior to the Closing Date.
 
Section 1.3 Conditions of the Repurchase.
 
(a) The obligations of the Company to consummate the Repurchase and to effect
the Closing are subject to the condition that the representations and warranties
of the Capital Southwest Parties set forth in this Agreement shall be true and
correct in all material respects on and as of the Closing Date as though made on
and as of the Closing Date.
 
(b) The obligations of the Capital Southwest Parties to consummate the
Repurchase and to effect the Closing are subject to the condition that the
representations and warranties of the Company set forth in this Agreement shall
be true and correct in all material respects on and as of the Closing Date as
though made on and as of the Closing Date.
 
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE CAPITAL SOUTHWEST
PARTIES
 
The Capital Southwest Parties hereby jointly and severally make the following
representations and warranties to the Company.
 
Section 2.1 Power; Authorization and Enforceability.
 
(a) CSW is a corporation duly formed, validly existing and in good standing
under the laws of the State of Texas and has the power, authority and capacity
to execute and deliver this Agreement, to perform its obligations hereunder, and
to consummate the transactions contemplated hereby.  All consents, orders,
approvals and other authorizations, whether governmental, corporate or
otherwise, necessary for such execution, delivery and performance by it of this
Agreement and the transactions contemplated hereby have been obtained and are in
full force and effect.  CSVC is a corporation duly formed, validly existing and
in good standing under the laws of the State of Nevada and has the power,
authority and capacity to execute and deliver this Agreement, to perform its
obligations hereunder, and to consummate the transactions contemplated
hereby.  All consents, orders, approvals and other authorizations, whether
governmental, corporate or otherwise, necessary for such execution, delivery and
performance by it of this Agreement and the transactions contemplated hereby
have been obtained and are in full force and effect.
 
(b) This Agreement has been duly executed and delivered by each of the Capital
Southwest Parties and constitutes its legal, valid and binding obligation,
enforceable against each of the Capital Southwest Parties in accordance with its
terms, except as limited by applicable bankruptcy, insolvency, reorganization
and other similar laws of general applicability relating to or affecting
creditors’ rights and to general equity principles.
 
 
 
 
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Section 2.2 No Conflicts.    The execution and delivery of this Agreement by
each of the Capital Southwest Parties and the consummation by each of the
Capital Southwest Parties of the transactions contemplated hereby does not and
will not constitute or result in a breach, violation or default under, or,
except with respect to filings under Sections 13 and 16 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), require any filing by
either of the Capital Southwest Parties under: (i) any agreement or instrument,
whether written or oral, express or implied, to which either of the Capital
Southwest Parties is a party; (ii) the Articles of Incorporation, bylaws or
similar organizational documents of either of the Capital Southwest Parties as
currently in effect; or (iii) any statute, law, ordinance, decree, order,
injunction, rule, directive, judgment or regulation of any court, administrative
or regulatory body, governmental authority, arbitrator, mediator or similar body
on the part of itself, except, in each case, as would not reasonably be expected
to have a material adverse effect upon either of the Capital Southwest Parties’
ability timely to consummate the Repurchase and perform their respective
obligations under this Agreement.
 
Section 2.3 Title to Repurchased Shares.   As of the date hereof, CSVC is, and
as of the Closing CSVC will be, the legal and beneficial owner of and has, and
will have, good and valid title to the Repurchased Shares to be sold by it and
upon delivery to the Company of the Repurchased Shares to be sold by CSVC to the
Company, against payment made pursuant to this Agreement, good and valid title
to all such Repurchased Shares, free and clear of any lien, pledge, charge,
security interest, mortgage, or other encumbrance or adverse claim, will pass to
the Company.  Neither of the Capital Southwest Parties has given any person any
power of attorney or other authority of any nature with respect to the
Repurchased Shares.
 
Section 2.4 Receipt of Information; No Reliance; etc.   The Capital Southwest
Parties have received all the information they consider necessary or appropriate
for deciding whether to dispose of the Repurchased Shares.  They have had a
reasonable opportunity to ask questions of, and have received fully satisfactory
answers from, the Company regarding the terms and conditions of the Company’s
purchase of the Repurchased Shares and the business and financial condition and
prospects of the Company and to obtain additional information (to the extent the
Company possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify the accuracy of any information furnished
to them or to which they had access.  They have not received, and are not
relying on, any express or implied representations or warranties from the
Company, other than as expressly provided herein.  They have such knowledge or
experience in financial and business matters and in making investment decisions
of the type represented by the Repurchase that they are capable of evaluating
the merits and risks of making their investment decision regarding the
Repurchase on an informed basis.  They are not relying on the Company with
respect to tax and other economic considerations of the Repurchase, and they
have relied on the advice of, or have consulted with, their own advisors in
connection therewith.  Each of the Capital Southwest Parties acknowledges that
the market price of the Repurchased Shares may increase in the future, following
the Company’s next earnings release or otherwise.
 
Section 2.5 No Brokers.   Neither of the Capital Southwest Parties nor any
person acting on either of the Capital Southwest Parties’ behalf has paid or
became obligated to pay any fee or commission to any broker, finder or
intermediary for or on account of the transactions
 
 
 
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contemplated by this Agreement other than to Evercore Partners Inc., whose fees
and expenses, to the extent payable, shall be paid by the Capital Southwest
Parties.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
The Company hereby makes the following representations and warranties to Capital
Southwest Parties.
 
Section 3.1 Power; Authorization and Enforceability.
 
(a) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the power, authority
and capacity to execute and deliver this Agreement, to perform its obligations
hereunder, and to consummate the transactions contemplated hereby.  All
consents, orders, approvals and other authorizations, whether governmental,
corporate or otherwise, necessary for such execution, delivery and performance
by the Company of this Agreement and the transactions contemplated hereby have
been obtained and are in full force and effect.
 
(b) This Agreement has been duly executed and delivered by the Company and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization and other similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles.
 
Section 3.2 No Conflicts.  The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby does not and will not constitute or result in a breach, violation or
default under, or, except with respect to filings under Section 13 of the
Exchange Act, require any filing by it under: (i) any agreement or instrument,
whether written or oral, express or implied, to which the Company is a party;
(ii) the Company’s certificate of incorporation or bylaws as currently in
effect; or (iii) any statute, law, ordinance, decree, order, injunction, rule,
directive, judgment or regulation of any court, administrative or regulatory
body, governmental authority, arbitrator, mediator or similar body on the part
of the Company, except, in each case, as would not reasonably be expected to
have a material adverse effect upon the ability of Company timely to consummate
the Repurchase and perform its obligations under this Agreement.
 
Section 3.3 No Brokers.   Neither the Company nor any person acting on its
behalf has paid or become obligated to pay any fee or commission to any broker,
finder or intermediary for or on account of the transactions contemplated by
this Agreement other than to Merrill Lynch, Pierce, Fenner & Smith Incorporated,
whose fees and expenses, to the extent payable, shall be paid by the Company.
 
ARTICLE IV
COVENANTS OF THE CAPITAL SOUTHWEST PARTIES
 
Each of the Capital Southwest Parties covenants with the Company as follows.
 
 
 
 
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Section 4.1 Standstill.   Unless specifically requested in writing in advance by
the Board, neither CSW nor CSVC or any of their respective affiliates or
representatives will, at any time during the 30-month period commencing on the
date hereof (or, at any time during such period, assist, advise, act in concert
or participate with or encourage others to), directly or indirectly:  (a)
acquire (or agree, offer, seek or propose to acquire, in each case, publicly or
privately), by purchase, tender offer, exchange offer, agreement or business
combination or in any other manner, any ownership, including, but not limited
to, beneficial ownership, as defined in Rule 13d-3 under the Exchange Act,
of  assets or businesses or securities of the Company or any direct or indirect
subsidiary thereof, or any rights or options to acquire such ownership
(including from any third party); (b) publicly or privately offer to enter into,
or publicly or privately propose, any merger, business combination,
recapitalization, restructuring or other extraordinary transaction with the
Company or any direct or indirect subsidiary thereof; (c) initiate any
stockholder proposal or the convening of a stockholders’ meeting of or involving
the Company or any direct or indirect subsidiary thereof; (d) solicit proxies
(as such terms are defined in Rule 14a-1 under the Exchange Act), whether or not
such solicitation is exempt pursuant to Rule 14a-2 under the Exchange Act, with
respect to any matter from, or otherwise seek to influence, advise or direct the
vote of, holders of any shares of capital stock of the Company or any securities
convertible into, exchangeable for or exercisable for (in each case, whether
currently or upon the occurrence of any contingency) such capital stock, or make
any communication exempted from the definition of solicitation by Rule
14a-1(l)(2)(iv) under the Exchange Act; (e) otherwise seek or propose to
influence, advise, change or control the management, board of directors,
governing instruments, affairs or policies of the Company or any direct or
indirect subsidiary thereof; (f) enter into any discussions, negotiations,
agreements, arrangements or understandings with any other person with respect to
any matter described in the foregoing clauses (a) through (e) or form, join or
participate in a “group” (within the meaning of Section 13(d)(3) of the Exchange
Act) to vote, acquire or dispose of any securities of the Company or any of its
subsidiaries; (g) request that the Company (or any of its representatives)
amend, waive, grant any consent under or otherwise not enforce any provision of
this Section 4.1, or refer to any desire or intention, but for this Section 4.1,
to do so; or (h) make any public disclosure, or take any action that could
reasonably be expected to require the Capital Southwest Parties or the Company
to make a public disclosure, with respect to any of the matters set forth in
this Agreement.  Notwithstanding anything in this Section 4.1 to the contrary,
the Capital Southwest Parties  may make requests (but only privately to the
Company and not publicly) for amendments, waivers, consents under or agreements
not to enforce this Section 4.1 and make proposals or offers (but only privately
to the Company and not publicly) regarding the transactions contemplated by
clause (a) or clause (b) of this Section 4.1, in each case, at any time after a
Fundamental Change Event (as defined below). A “Fundamental Change Event” means
the Company has entered into a definitive written agreement providing for (i)
any acquisition of a majority of the voting securities of the Company by any
person or group, (ii) any acquisition of a majority of the consolidated assets
of the Company and its subsidiaries by any person or group, or (iii) any tender
or exchange offer, merger or other business combination or any recapitalization,
restructuring, liquidation, dissolution or other extraordinary transaction
(provided that, in the case of any transaction covered by the foregoing clause
(iii), immediately following such transaction, any person (or the direct or
indirect shareholders of such person) will beneficially own a majority of the
outstanding voting power of the Company or the surviving parent entity in such
transaction).  It is understood and agreed that the Company currently has no
 
 
 
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intention to enter into any such definitive agreement.  For purposes of this
Section 4.1, the following will be deemed to be an acquisition of beneficial
ownership of securities:  (1) establishing or increasing a call equivalent
position, or liquidating or decreasing a put equivalent position, with respect
to such securities within the meaning of Section 16 of the Exchange Act; or (2)
entering into any swap or other arrangement that results in the acquisition of
any of the economic consequences of ownership of such securities, whether such
transaction is to be settled by delivery of such securities, in cash or
otherwise.
 
Section 4.2 Performance.  CSW shall cause CSVC to timely perform its obligations
under this Agreement.
 
ARTICLE V
MISCELLANEOUS
 
Section 5.1 Notice.    All notices, requests, certificates and other
communications to any party hereunder shall be in writing and given to each
other party hereto and shall be deemed given or made: (i) as of the date
delivered, if delivered personally; (ii) on the date the delivering party
receives confirmation, if delivered by facsimile or electronic mail; (iii) three
business days after being mailed by registered or certified mail (postage
prepaid, return receipt requested); or (iv) one business day after being sent by
reputable overnight courier (providing proof of delivery), to the parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 5.1).
 
If delivered to the Company, to:
 
Alamo Group Inc.
1627 East Walnut
Seguin, Texas 78155
Attn: Donald C. Duncan
Fax: (830) 372-9683
Email: dduncan@alamo-group.com
 
with a copy to:
 
Sidley Austin LLP
787 Seventh Avenue
New York, NY 10019
Attention: Scott M. Freeman
Fax: 212- 839-5599
Email: Sfreeman@sidley.com
 
if to the Capital Southwest Parties, to:
 
Capital Southwest Corporation
5400 Lyndon B. Johnson Freeway, Suite 1300
Dallas, Texas  75240
Attention:  Joseph B. Armes
 
 
 
 
 
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Fax: 972-233-7362
Email: jarmes@capitalsouthwest.com
 
with a copy to:
 
Jones Day
2727 North Harwood Street
Dallas, Texas 75201
Attention: R. Scott Cohen
Fax: 214-969-5100
Email: scohen@jonesday.com
 
Section 5.2 Entire Agreement.   This Agreement and the other documents and
agreements executed in connection with the Repurchase shall constitute the
entire agreement between the parties with respect to the subject matter hereof
and shall supersede all prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter of this Agreement.
 
Section 5.3 Assignment; Binding Agreement.   Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned, in whole or in
part, by any of the parties without the prior written consent of the other
party.  Subject to the preceding sentence, this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by, the parties hereto and their
respective successors and permitted assigns.  Any purported assignment not
permitted under this Section 5.3 shall be null and void.
 
Section 5.4 Counterparts.   This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties in separate counterparts, each of which when executed and
delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.  Copies of executed counterparts
transmitted by telecopy, telefax or electronic transmission shall be considered
original executed counterparts for purposes of this Section 5.4.
 
Section 5.5 Governing Law; Waiver of Jury Trial.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF DELAWARE,
REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES
OF CONFLICTS OF LAWS.  EACH OF THE PARTIES TO THIS AGREEMENT IRREVOCABLY WAIVES
ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT.
 
Section 5.6 No Third Party Beneficiaries or Other Rights.   This Agreement is
for the sole benefit of the parties and their successors and permitted assigns
and nothing herein express or implied shall give or shall be construed to confer
any legal or equitable rights or remedies to any person other than the parties
to this Agreement and such successors and permitted assigns.
 
 
 
 
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Section 5.7 Release.   Except in respect of any claim of a breach of this
Agreement, (i) each of the Capital Southwest Parties does hereby release the
Company, its shareholders, its affiliates and successors, and all the Company’s
directors, officers, stockholders, employees and agents, and agrees to hold
them, and each of them, harmless from any and all claims or causes of action
that either of the Capital Southwest Parties now has or knows about, or
hereafter may learn about, arising out of or in any way connected with the
Repurchase and each of the Capital Southwest Parties agrees that neither of the
Capital Southwest Parties will file any claim, charge, or lawsuit for the
purpose of obtaining any monetary awards in connection with the Repurchase, and
(ii) the Company does hereby release each of the Capital Southwest Parties,
their respective shareholders, affiliates and successors, and all directors,
officers, stockholders, employees and agents of the Capital Southwest Parties,
and agrees to hold them, and each of them, harmless from any and all claims or
causes of action that the Company may now have or know about, or hereafter may
learn about, arising out of or in any way connected with the Repurchase and the
Company agrees that the Company will not file any claim, charge, or lawsuit for
the purpose of obtaining any monetary awards in connection with the
Repurchase.  The parties acknowledge that the foregoing release includes, but is
not limited to, any claim arising under any federal, state, or local law,
whether statutory or judicial, or ordinance, or any administrative regulation.
 
Section 5.8 Amendments; Waivers.  This Agreement and its terms may not be
changed, amended, waived, terminated, augmented, rescinded or discharged (other
than in accordance with its terms), in whole or in part, except by a writing
executed by the parties hereto.
 
Section 5.9 Further Assurances.   Each party hereto shall use all reasonable
efforts to do and perform or cause to be done and performed all such further
acts and things and shall execute and deliver all such other agreements,
certificates, instruments, and documents as the other party hereto reasonably
may request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.
 
Section 5.10 Severability.   In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby.  The parties shall endeavor in good faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
 
Section 5.11 Termination.   This Agreement may be terminated and Repurchase
abandoned at any time prior to the Closing Date: (a) by mutual written consent
of each party; (b) by either party if the satisfaction of all the conditions set
forth in Section 1.3 have not been completed by the Closing Date; or (c) by
either party if the Closing Date has not occurred by November 1, 2014.
 
(Signatures appear on the next page.)
 

 
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first above written.
 

  THE COMPANY:           ALAMO GROUP INC.          
 
By:
/s/ Robert H. George     Name: Robert H. George     Title: Vice-President      
   

 

 
CAPITAL SOUTHWEST:
 
CAPITAL SOUTHWEST CORPORATION
 
By: /s/ Joseph B.
Armes______________________                                                                           
Name:  Joseph B. Armes
Title:    Chairman & CEO
 

 
CAPITAL SOUTHWEST VENTURE CORPORATION
 
 
By: /s/ Joseph B. Armes______________________
Name: Joseph B. Armes
Title: Chairman & CEO
 
 
 

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