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Exhibit 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
NFC CASTINGS, INC.,
NC MERGER COMPANY
AND
NEENAH CORPORATION
NOVEMBER 20, 1996
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AGREEMENT AND PLAN OF REORGANIZATION
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS................................................................ 1
1.1. Defined Terms............................................ 1
ARTICLE II
THE MERGER................................................................. 9
2.1. The Merger............................................... 9
2.2. The Closing.............................................. 10
2.3. Actions at Closing....................................... 10
2.4. Effect of Merger......................................... 10
2.5. Procedure for Payment.................................... 11
2.6. Post-Closing Adjustment.................................. 12
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY.................................. 14
3.1. Organization and Authority............................... 15
3.2. Authority; Validity...................................... 16
3.3. No Violation............................................. 16
3.4. Third Party Consents..................................... 17
3.5. Financial Statements..................................... 17
3.6. Tax Matters.............................................. 17
3.7. Absence of Certain Changes............................... 19
3.8. Assets................................................... 21
3.9. Bank Accounts............................................ 24
3.10. Litigation............................................... 24
3.11. Compliance With Laws..................................... 24
3.12. Insurance................................................ 25
3.13. Material Contracts and Commitments....................... 25
3.14. Labor Matters............................................ 26
3.15. Employee Benefit Plans................................... 27
3.16. Environmental Matters.................................... 28
3.17. Proprietary Rights....................................... 29
3.18. Accounts Receivable...................................... 30
3.19. Product Warranty......................................... 30
3.20. Sufficiency of Assets.................................... 30
3.21. Accuracy of Representations.............................. 30
3.22. Opinion of Financial Advisor............................. 30
3.23. Transactions with Affiliates............................. 30
3.24. Funded Debt.............................................. 31
3.25. Closing Date............................................. 31
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND NEWCO......................... 31
4.1. Organization............................................. 31
4.2. No Violation............................................. 31
4.3. Authority................................................ 31
4.4. Third Party Consents..................................... 32
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4.5. Investment/Operational Intent............................. 32
4.6. Closing Date.............................................. 33
ARTICLE V
COVENANTS.................................................................. 33
5.1. Access to Information and Records........................ 33
5.2. Conduct of Business Pending the Closing.................. 33
5.3. HSR Act Filings........................................... 35
5.4. Consents................................................. 36
5.5. Publicity................................................ 36
5.6. Merger Payment Statements................................ 36
5.7. Disclosure Schedule...................................... 36
5.8. Company Shareholders Approval............................ 37
5.9. Newco Shareholder Approval............................... 37
5.10. Indemnification of Directors and Officers................ 37
5.11. Company Representative................................... 38
5.12. Third Party Proposals.................................... 38
5.13. Non-Competition; Non-Interference; Non-
Solicitation................................................... 38
ARTICLE VI
CONDITIONS PRECEDENT TO PARENT'S AND NEWCO'S OBLIGATIONS................... 40
6.1. Representations and Warranties True on the Closing
Date........................................................... 40
6.2. Compliance With Agreement................................ 40
6.3. Absence of Litigation.................................... 40
6.4. Consents and Approvals................................... 40
6.5. HSR Act Waiting Period................................... 41
6.6. No Material Adverse Effect............................... 41
6.7. Shareholders Approval.................................... 41
6.8. Articles of Merger....................................... 41
6.9. Documents to be Delivered by Company..................... 41
6.10. Merger Payment Statements................................ 42
6.11. Amendment of Restated Articles........................... 42
6.12. Termination of Restrictive Stock Transfer
Agreement...................................................... 42
6.13. Note Repayment and Release of Stock Pledge............... 42
6.14. Real Property............................................ 43
6.15. Financing................................................ 43
6.16. Due Diligence............................................ 43
6.17. Minimum Cash on Hand..................................... 43
ARTICLE VII
CONDITIONS PRECEDENT TO COMPANY'S OBLIGATIONS.............................. 43
7.1. Representations and Warranties True on the Closing
Date........................................................... 44
7.2. Compliance With Agreement................................ 44
7.3. Absence of Litigation.................................... 44
7.4. HSR Act Waiting Period................................... 44
7.5. Documents to be Delivered by Parent and Newco............ 44
7.6. Articles of Merger....................................... 45
7.7. Shareholders Approval.................................... 45
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7.8. Merger Price............................................. 45
7.9. Reliance Letter.......................................... 45
ARTICLE VIII
SURVIVAL; INDEMNIFICATION.................................................. 45
8.1. Survival; Remedies for Breach............................ 45
8.2. Indemnification on Behalf of Company Shareholders;
Escrow of Funds................................................ 47
8.3. Indemnification by Parent................................ 50
8.4. Procedures for Indemnification........................... 50
8.5. Procedures for Third-Party Claims........................ 51
ARTICLE IX
TERMINATION OF AGREEMENT................................................... 52
9.1. Causes................................................... 52
9.2. Effect of Termination..................................... 53
9.3. Right to Proceed......................................... 53
ARTICLE X
DISPUTE RESOLUTION......................................................... 53
10.1. Dispute.................................................. 53
10.2. Process.................................................. 54
10.3. Negotiations............................................. 54
10.4. Mediation................................................ 54
10.5. Submission to Adjudication............................... 55
10.6. General.................................................. 55
ARTICLE XI
MISCELLANEOUS.............................................................. 56
11.1. Further Assurance........................................ 56
11.2. Assignment............................................... 56
11.3. Law Governing Agreement.................................. 56
11.4. Amendment and Modification............................... 57
11.5. Notice................................................... 57
11.6. Expenses................................................. 58
11.7. Entire Agreement; Binding Effect......................... 58
11.8. Counterparts............................................. 59
11.9. Headings................................................. 59
11.10. Construction............................................ 59
11.11. Specific Performance.................................... 59
11.12. Waiver of Jury Trial.................................... 59
11.13. No Strict Construction.................................. 59
11.14. Time of the Essence; Computation of Time................ 59
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Schedules
Disclosure Schedule
Schedule 9.1(c)(iv) Termination Events
Exhibits
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Exhibit A Articles of Merger
Exhibit B Merger Agreement
Exhibit C Escrow Agreement
Exhibit D Merger Payment Statement
Exhibit E Opinion of Company's Counsel
Exhibit F Opinion of Parent's and Newco's Counsel
Exhibit G Paying Agent Agreement
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION is made as of November 20,
1996, by and among NFC CASTINGS, INC., a Delaware corporation ("Parent"), NC
MERGER COMPANY, a Wisconsin corporation ("Newco") and NEENAH CORPORATION, a
Wisconsin corporation (the "Company"). The Company and Newco sometimes are
referred to collectively herein as the "Constituent Corporations".
RECITALS
A. The Company and the Subsidiaries are engaged in the businesses of
(i) manufacturing and selling gray iron and ductile iron castings to the
transportation and construction industries; (ii) manufacturing and selling
customized machinery and control systems for the foundry industry and (iii)
operating a common and contract carrier (collectively, the "Business").
B. Newco is a wholly owned subsidiary of Parent.
C. Parent desires to acquire the Company.
D. This Agreement contemplates a transaction in which Parent will
acquire the Company for cash in an aggregate amount equal to the Merger Price,
plus the Positive Closing Date Adjustment Amount or minus the Negative Closing
Date Adjustment Amount, as the case may be, through a reverse subsidiary merger
of Newco with and into the Company, whereby all of the outstanding shares of
capital stock of the Company will be converted into the right to receive cash on
the terms and conditions specified herein.
NOW, THEREFORE, in consideration of the Recitals and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound hereby, do hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1. Defined Terms. As used in this Agreement, the terms
below shall have the following meanings. Any of such terms, unless
the context otherwise requires, may be used in the singular or
plural, depending on the reference.
"Accounting Principles" shall mean the following: (i)
each accounting term used herein shall have the meaning that is
applied thereto in accordance with generally accepted accounting
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principles unless a different meaning is set forth herein for such term, and
each account included in the Closing Date Balance Sheet shall be calculated in
accordance with generally accepted accounting principles and shall be consistent
with the books and records of the Company, provided that all known arithmetic
errors shall be corrected in the calculation of each account set forth above,
regardless of materiality; (ii) with respect to the calculation of the levels of
the accounts set forth above, no change in accounting principles shall be made
from those utilized in preparing the Financial Statements, including, without
limitation, with respect to the nature or classification of accounts, closing
proceedings, levels of reserves or levels of accruals other than as a result of
objective changes in the underlying business; and (iii) for purposes of the
preceding clauses, "changes in accounting principles" includes all changes in
accounting principles, policies, practices, procedures or methodologies with
respect to financial statements, their classification or their display, as well
as all changes in practices, methods, conventions or assumptions utilized in
making accounting estimates.
"Acquisition Proposal" shall have the meaning specified in Section
5.12 of this Agreement.
"Adjusted Final Closing Date Net Worth" shall mean the amount
determined by adding (i) the Final Closing Date Net Worth plus (ii) the Base
Date Vehicle Value plus (iii) the Base Date Cash Surrender Value.
"Agreement" shall mean this Agreement and Plan of Reorganization,
together with the exhibits and schedules attached hereto, as the same may be
amended from time to time in accordance with the terms hereof.
"Arbitrating Accountant" shall have the meaning specified in Section
2.6(b) of this Agreement.
"Articles of Merger" shall mean the Articles of Merger in the form
attached hereto as Exhibit A.
"Base Date Cash Surrender Value" shall mean the aggregate cash
surrender value as of the date of the Most Recent Balance Sheet of the life
insurance policies owned by the Company and/or Subsidiaries on the lives of E.W.
Aylward, Andrew A. Aylward, Richard J. Aylward and Thomas R. Franklin and listed
in Section 3.12 of the Disclosure Schedule. (For illustrative purposes only, the
cash surrender value of these policies as of March 31, 1996 was $594,800.)
"Base Date Vehicle Value" shall mean the aggregate net book value as
of the date of the Most Recent Balance Sheet of the four vehicles listed as
items 1, 2, 3 and 4 on the list of
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"Excluded Assets" set forth in Section 3.8(e) of the Disclosure Schedule (or, in
the case of a vehicle so listed that was acquired as a replacement after the
date of the Most Recent Balance Sheet, the predecessor of such vehicle), as
determined from the books and records of the Company and/or the Subsidiaries.
"Base Net Worth" shall mean the amount of $62,675,790.00, which is
the consolidated net worth (total stockholders' equity) of the Company and the
Subsidiaries shown on the Most Recent Balance Sheet.
"Business" shall have the meaning specified in the Recitals of this
Agreement.
"Buying Group" shall mean, collectively, Parent and Newco and their
respective permitted successors and permitted assigns.
"CERCLA" shall mean the federal Comprehensive Environmental
Response, Compensation, and Liability Act.
"Class A Common Stock" shall mean the 1,000 authorized shares of the
Company's Class A Common Stock, $100 par value.
"Class B Common Stock" shall mean the 10,000 authorized shares of
the Company's Class B Common Stock, $100 par value.
"Closing" shall mean the conference to be held at 10:00 A.M. Central
Time, on the Closing Date at the offices of Cravath, Swaine & Moore, 825 Eighth
Avenue, New York, New York, 10019, counsel for Parent's Lenders, or such other
time and place as the parties may mutually agree to in writing, at which the
transactions contemplated by this Agreement shall be consummated.
"Closing Date" shall have the meaning specified in Section 2.2 of
this Agreement.
"Closing Date Balance Sheet" shall have the meaning specified in
Section 2.6(a) of this Agreement.
"Closing Date Net Worth" shall have the meaning specified in Section
2.6(a) of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall mean Neenah Corporation, a Wisconsin corporation.
"Company Capital Stock" shall mean, collectively, the
Class A Common Stock, the Class B Common Stock and the Preferred
Stock.
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"Company Common Stock" shall mean, collectively, the Class A Common
Stock and the Class B Common Stock.
"Company Employees" shall mean any persons employed by Company or
any Subsidiary.
"Company Representative" shall mean the person appointed to that
position as provided in Section 5.11 of this Agreement.
"Company Shareholder" shall mean any Person who holds any Company
Capital Stock.
"Constituent Corporations" shall have the meaning specified in the
preamble of this Agreement.
"Covered Activities" shall have the meaning specified in Section
5.13(a) of this Agreement.
"Covered Individuals" shall mean E.W. Aylward and Andrew A. Aylward.
"CPR" shall have the meaning specified in Section 10.4 of this
Agreement.
"Cut-off Date" shall have the meaning specified in Section 8.1(a) of
this Agreement.
"De Minimis Claim" shall mean any individual claim for
indemnification if the amount of the Loss attributable to such claim does not
exceed $10,000.00.
"Disclosure Schedule" shall mean the Disclosure Schedule, dated the
date of this Agreement, delivered by the Company to the Parent and Newco
contemporaneously with the execution and delivery of this Agreement and as the
same may be updated from time to time after the date of this Agreement and prior
to the Closing Date in accordance with the terms of this Agreement.
"Dispute" shall have the meaning specified in Section
10.1 of this Agreement.
"Dissenting Share" shall mean a share of Company Capital Stock that
any Company Shareholder who has exercised his or its dissenters' rights under
the Wisconsin Business Corporation Law holds of record.
"Effective Time" shall mean the time and date when the Company and
Newco file the Articles of Merger with the Wisconsin Department of Financial
Institutions.
"Employee Benefit Plan" shall have the meaning specified in Section
3.15(a) of this Agreement.
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"Environmental Laws" shall mean all Laws relating to pollution or
protection of the environment, including, without limitation, Laws relating to
emissions, discharges, treatment, disposal, handling, generation, storage,
Release or threatened Release of Hazardous Substances into the environment,
including, without limitation, the Clean Water Act, the Clean Air Act, RCRA, the
Toxic Substances Control Act and CERCLA, all as in force and effect as of the
Closing.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Agent" shall mean Bank One, Milwaukee, N.A.
"Escrow Agreement" shall mean the Escrow Agreement in the form of
Exhibit C attached to this Agreement.
"Escrow Deposit" shall have the meaning specified in Section 2.5(a)
of this Agreement.
"Excluded Assets" shall have the meaning specified in Section 3.8(e)
of this Agreement.
"Final Closing Date Balance Sheet" shall have the meaning specified
in Section 2.6(b) of this Agreement.
"Final Closing Date Net Worth" shall have the meaning specified in
Section 2.6(b) of this Agreement.
"Financial Statements" shall mean the consolidated financial
statements of the Company and its Subsidiaries consisting of (i) the
consolidated balance sheets of the Company as of March 31, 1996, 1995 and 1994,
and the related consolidated statements of income, retained earnings and cash
flows for the years then ended, together with the auditor's report thereon, and
(ii) an unaudited consolidated balance sheet of the Company and its Subsidiaries
as of September 30, 1996 and the related unaudited statements of income for the
interim period then ended and the corresponding period of the preceding year.
"Funded Debt", of the Company or any Subsidiary, shall mean, without
duplication: all obligations under indebtedness for borrowed money (including,
without limitation, principal, interest, overdrafts, penalties, premiums, fees,
expenses, indemnities and breakage costs), all obligations under capital leases,
notes payable, guaranties and drafts accepted representing extensions of credit.
"Hazardous Substance" shall mean any substance that is a "hazardous
substance" under CERCLA, any substance that is a "hazardous waste" under RCRA,
or any pesticide, pollutant,
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contaminant, toxic chemical, petroleum product or byproduct, asbestos or
polychlorinated biphenyl.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnified Party" shall mean any Party seeking indemnification
under Article VIII of this Agreement.
"Indemnifying Party" shall mean the Party from whom the
indemnification is sought under Article VIII of this Agreement.
"Knowledge of Company" or "Company's Knowledge" shall mean the
actual knowledge of the individuals listed below:
E.W. Aylward Charles M. Kurtii
Andrew A. Aylward William J. Martin
Thomas R. Franklin John Z. Rader
Gary W. LaChey James P. Keating, Jr.
"Law" shall mean any federal, state, local or other governmental
law, rule or regulation of any kind, and the rules and regulations promulgated
thereunder.
"Leased Real Property" shall mean, collectively, all of the parcels
of real estate leased by the Company or any Subsidiary pursuant to the Leases.
"Leases" shall mean the real estate lease, sublease and other
occupancy agreements to which the Company or any Subsidiary is a party listed in
Section 3.8(f) of the Disclosure Schedule.
"Losses" shall mean damages, liabilities, deficiencies, claims,
actions, charges, demands, judgments, interest, losses, or costs or expenses of
whatever kind (including, without limitation, reasonable attorneys' fees but
exclusive of loss of profits or consequential damages).
"Material Adverse Effect" shall mean a material adverse effect on
the Business, assets, condition (financial or otherwise), results of operations
or prospects of the Company and its Subsidiaries taken as a whole.
"Material Contracts" shall have the meaning specified in Section
3.13 of this Agreement.
"Merger" shall mean the merger of Newco with and into the Company
described in Article II of this Agreement.
"Merger Agreement" shall mean the Merger Agreement in the form
attached hereto as Exhibit B.
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"Merger Payee" shall mean a Company Shareholder who has not
exercised dissenters' rights under the Wisconsin Business Corporation Law with
respect to the Merger.
"Merger Payment Statement" shall mean a Merger Payment Statement in
the form of Exhibit D attached to this Agreement
"Merger Price" shall mean the sum of $240,000,000.00, to be
delivered by Newco pursuant to Article II of this Agreement, subject to later
adjustment as provided in Section 2.6(e) of this Agreement.
"Merger Price Per Share" shall mean the quotient determined by
dividing the Merger Price of $240,000,000 to be delivered by Newco at Closing by
the total number of shares of the Company Common Stock issued and outstanding
immediately prior to the Effective Time. (For illustration purposes only, based
on the total issued and outstanding shares of Company Common Stock set forth in
Section 3.1(c) of this Agreement, the Merger Price Per Share would equal
$54,060.14.)
"Most Recent Balance Sheet" shall mean the unaudited consolidated
balance sheet of the Company and its Subsidiaries as of September 30, 1996.
"Negative Closing Date Adjustment Amount" shall have the meaning
specified in Section 2.6(e) of this Agreement.
"Newco" shall mean NC Merger Company, a Wisconsin corporation.
"Newco Capital Stock" shall mean the 1,000 authorized shares of
Newco's Common Stock, without par value.
"Non-Competition Period" shall have the meaning specified in Section
5.13(a) of this Agreement.
"Ordinary Course" shall mean the ordinary course of business of the
Company and its Subsidiaries, consistent with their custom and practice as in
effect as of September 30, 1996 and the date of this Agreement.
"Parent" shall mean NFC Castings, Inc., a Delaware
corporation.
"Parent's Lenders" shall mean The Chase Manhattan Bank and Chase
Securities Inc., or such other lenders providing the financing to Parent
necessary to effect the Merger and provide Newco with funds sufficient to
deliver the Merger Price and provide for the ongoing working capital needs of
the Company during the term of the senior bank financing.
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"Parties" shall mean, collectively, the Company, Parent and Newco.
"Paying Agent" shall mean Bank One, Milwaukee, N.A.
"Paying Agent Agreement" shall mean the Paying Agent Agreement in
the form of Exhibit G attached to this Agreement.
"Person" shall mean a natural person, corporation, limited liability
company, trust, partnership, government entity, agency or branch or department
thereof, or any other legal entity.
"Positive Closing Date Adjustment Amount" shall have the meaning
specified in Section 2.6(e) of this Agreement.
"Preferred Stock" shall mean the 3,000 authorized shares of
Preferred Stock of the Company, $100 par value.
"Proprietary Rights" shall mean all of the following items owned,
used or held for use by the Company or any Subsidiary: (i) all patents, patent
applications, inventions, trade names and corporate names, trademarks, service
marks, trademark registrations, service mark registrations, trade mark
applications, service mark applications, registered copyrights, copyright
applications, together with all goodwill associated therewith; and (ii) trade
secrets and confidential information.
"Pro Rata Percentage" shall mean, as to each Company Shareholder,
the ownership percentage set forth opposite such Person's name under the heading
"Pro Rata Ownership Percentage" in the applicable portion of Section 3.1(c) of
the Disclosure Schedule.
"Pro Rata Portion" of an obligation or benefit shall mean, as to any
Company Shareholder, the product of (i) the total amount of the obligation or
benefit, times (ii) the Pro Rata Percentage of such Company Shareholder.
"RCRA" shall mean the federal Resource Conservation and Recovery
Act.
"Real Property" shall mean all real property owned in whole or in
part by the Company or any Subsidiary.
"Release" shall have the meaning set forth in CERCLA.
"Replacement" shall have the meaning specified in Section 10.6(g) of
this Agreement.
"Request" shall have the meaning specified in Section 10.4 of this
Agreement.
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"Subsidiaries" shall mean Neenah Foundry Company, a Wisconsin
corporation, Neenah Transport, Inc., a Wisconsin corporation, and Hartley
Controls Corporation, a Wisconsin corporation, all of which are wholly owned by
the Company.
"Surviving Corporation" shall mean the Company as the survivor of
the Merger.
"Taxes" shall mean any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not.
"Tax Returns" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Third Party Acquisition" shall have the meaning specified in
Section 5.12 of this Agreement.
"Third-Party Claim" shall mean a legal proceeding, action, claim or
demand instituted by any third person or governmental entity.
"Title Company" shall have the meaning specified in Section 6.14(a)
of this Agreement.
ARTICLE II
THE MERGER
2.1. The Merger. This Agreement provides for the merger of Newco with and
into the Company, whereby it is contemplated that each outstanding share of the
Newco Capital Stock will be converted into one share of the Class A Common
Stock, and each outstanding share of the Company Capital Stock will be converted
into cash as provided in this Agreement. On and subject to the terms and
conditions of this Agreement, as of the Effective Time, Newco will be merged
with and into the Company, which shall continue to be governed by the Laws of
the State of Wisconsin, and the separate existence of Newco shall thereupon
cease. The Merger shall be pursuant to the provisions of, and shall be with the
effect provided in, the Wisconsin Business Corporation Law.
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2.2. The Closing. The Closing shall take place on the third business day
following the satisfaction or waiver of all conditions to the obligations of the
Parties to consummate the transactions contemplated hereby (other than
conditions with respect to actions the Parties will take at the Closing itself)
but in no event later than January 31, 1997, or such other time and date as the
Parties may mutually determine (the "Closing Date").
2.3. Actions at Closing. At the Closing, (i) the Company will deliver to
Parent and Newco the various certificates, instruments and documents referred to
in Article VI of this Agreement, (ii) Parent and Newco will deliver to the
Company the various certificates, instruments and documents referred to in
Article VII of this Agreement, (iii) the Merger Agreement and the Articles of
Merger shall be executed and acknowledged by each of Newco and the Company and
filed with the Wisconsin Department of Financial Institutions, and (iv) Parent
will cause Newco to deliver the Merger Price to the Paying Agent by wire
transfer of immediately available funds to an account designated by the Paying
Agent in writing not less than three days prior to the Closing Date.
2.4. Effect of Merger.
(a) General. The Merger shall become effective at the Effective
Time. The Merger shall have the effect set forth in the Wisconsin Business
Corporation Law. At the Effective Time, the identity, existence, rights,
privileges, powers, franchises, properties and assets of the Company shall
continue unaffected and unimpaired by the Merger. The separate corporate
existence of Newco shall cease and the Surviving Corporation shall become the
owner, without transfer, of all rights and property of the Constituent
Corporations (except the Excluded Assets), and the Surviving Corporation shall
be subject to all of the debts and liabilities of the Constituent Corporations
as if the Surviving Corporation had itself incurred them. The Surviving
Corporation may, at any time after the Effective Time, take any action
(including executing and delivering any document) in the name and on behalf of
either the Company or Newco in order to carry out and effectuate the
transactions contemplated by this Agreement.
(b) Articles of Incorporation; Bylaws. The Restated Articles of
Incorporation as amended as contemplated by Section 6.11 of this Agreement and
the Bylaws of the Company as in effect immediately prior to the Effective Time
shall be the Restated Articles of Incorporation and the Bylaws of the Surviving
Corporation until amended in accordance with their respective terms and as
provided by applicable law.
(c) Directors and Officers. The directors and officers of Newco
shall become the directors and officers of the Surviving Corporation at and as
of the Effective Time (retaining their respective positions and terms of
office).
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(d) Conversion of Company Capital Stock. At and as of the Effective
Time, subject to Section 2.5 of this Agreement and subject to later adjustment
as provided in Section 2.6(e) of this Agreement, (i) each outstanding share of
Company Capital Stock that is Class A Common Stock (other than a Dissenting
Share or shares held by Newco or Parent) shall be converted into the right to
receive an amount in cash equal to the Merger Price Per Share, (ii) each
outstanding share of Company Capital Stock that is Class B Common Stock (other
than a Dissenting Share or shares held by Newco or Parent) shall be converted
into the right to receive an amount in cash equal to the Merger Price Per Share,
and (iii) each Dissenting Share, if any, shall be converted into the right to
receive payment from the Surviving Corporation with respect thereto in
accordance with the provisions of the Wisconsin Business Corporation Law. As
provided in Section 2.5 of this Agreement, the amount to be received by each
Merger Payee immediately after the Effective Time shall be reduced by that
Merger Payee's Pro Rata Portion of the Escrow Deposit and by that Merger Payee's
Pro Rata Portion of brokerage fees and expenses and professional fees and
expenses incurred on behalf of the Company Shareholders, as indicated on the
Merger Payment Statement for that Merger Payee.
(e) Conversion of Newco Capital Stock. At and as of the Effective
Time, each share of Newco Capital Stock shall be converted into one share of
Class A Common Stock of the Surviving Corporation.
2.5. Procedure for Payment.
(a) Immediately after the Effective Time, the Paying Agent shall
deposit or shall cause to be deposited with the Escrow Agent by wire transfer of
immediately available funds, $12,000,000.00 of the Merger Price (the "Escrow
Deposit"), to be held by the Escrow Agent in accordance with Section 8.2 of this
Agreement and in accordance with the Escrow Agreement.
(b) Immediately after the Effective Time, the Paying Agent shall pay
or cause to be paid (i) to each Merger Payee for whom the Paying Agent has
received a Merger Payment Statement duly signed by that Merger Payee, an amount
equal to the "Net Merger Payment" shown on that Merger Payment Statement less
such Merger Payee's proportionate share of professional fees and expenses as set
forth in a schedule to be delivered by Company Representative to the Paying
Agent, and (ii) such professional fees and expenses as directed by Company
Representative in such schedule. Each such payment to a Merger Payee shall be by
wire transfer of immediately available funds or otherwise as instructed on the
Merger Payment Statement by the Merger Payee receiving payment.
(c) Parent may cause the Paying Agent to pay over to the Surviving
Corporation any portion of the Merger Price (including any earnings thereon)
remaining unpaid by the Paying Agent in
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accordance with paragraphs (a) and (b) above (through no fault of the Paying
Agent) 180 days after the Effective Time, and thereafter all former Company
Shareholders shall be entitled to look to the Surviving Corporation as general
creditors thereof with respect to the cash payable upon surrender of their
certificates.
(d) Parent shall cause the Surviving Corporation to pay all charges
and expenses of the Paying Agent.
(e) After the Effective Time, no Person who was a Company
Shareholder immediately prior to the Effective Time shall transfer any shares of
Company Capital Stock other than to the Surviving Corporation as contemplated by
Section 2.5(c) of this Agreement.
2.6. Post-Closing Adjustment.
(a) As promptly as practicable after the Closing Date (but in no
event later than 60 days after the Closing Date), the Company Representative
will cause the accounting firm of Schenck & Associates SC to prepare and deliver
concurrently to Parent and the Company Representative an audited consolidated
balance sheet of the Company and its Subsidiaries (the "Closing Date Balance
Sheet"), setting forth the consolidated net worth of the Company and the
Subsidiaries immediately prior to the Effective Time on the Closing Date (the
"Closing Date Net Worth"). The Closing Date Balance Sheet shall be prepared in
accordance with generally accepted accounting principles (including the
Accounting Principles) on a basis consistent with the Company's past practices
and with the preparation of the Most Recent Balance Sheet, subject, however, to
the following requirements, which requirements shall be adhered to irrespective
of whether such requirements are in accordance with generally accepted
accounting principles (including the Accounting Principles):
(i) no reserves for product warranty claims or product liability
claims shall be established with respect to the Company or any
Subsidiary or the products sold by them, and the Closing Date
Balance Sheet and the Final Closing Date Balance Sheet shall
contain no such reserves; and
(ii) the amount of the reserve for worker's compensation claims
contained in the Closing Date Balance Sheet and the Final
Closing Date Balance Sheet shall not exceed the amount of the
reserve for worker's compensation claims contained in the Most
Recent Balance Sheet.
One-half (1/2) of the fees and expenses of Schenck & Associates SC will be paid
or accrued by the Company prior to Closing, and the balance shall be paid by the
Parent or the Company after Closing
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and not accrued by the Company at or prior to Closing. The lesser of $50,000.00
or one-half (1/2) of the total fees and expenses charged by the title insurance
company and the surveying company or companies to obtain the title insurance and
surveys described in Section 6.14 of this Agreement will be paid or accrued by
the Company prior to Closing, and the balance shall be paid by the Parent or the
Company after Closing and not accrued by the Company at or prior to Closing.
(b) If either Parent or the Company Representative claims that the
Closing Date Balance Sheet has not been prepared in accordance with the
requirements of Section 2.6(a), it will deliver to the other party a detailed
statement describing the basis for any such claim within 15 days after receiving
the Closing Date Balance Sheet. Parent and the Company Representative will use
reasonable efforts to resolve any such claims themselves. If they do not obtain
a final resolution within 90 days after the Closing Date, however, Parent and
the Company Representative will select another accounting firm from among the
"Big Six" accounting firms mutually acceptable to them to resolve any remaining
such claims. If Parent and the Company Representative are unable to agree on the
choice of an accounting firm, they will select a nationally-recognized
accounting firm by lot (after excluding any such firm affiliated with Parent or
the Company Shareholders) (the "Arbitrating Accountant"). Upon submission to the
Arbitrating Accountant for resolution, Parent shall indicate in writing its
position on each disputed matter and the Company Representative shall do
likewise. The Arbitrating Accountant shall choose one of the two positions on
each disputed matter no later than 120 days after the Closing Date and such
position will be conclusive and binding upon Parent and the Company
Representative with respect to that disputed matter if delivered in writing. The
proposed Closing Date Balance Sheet will be revised as appropriate to reflect
the resolution of any such claims pursuant to this Section 2.6(b). The term
"Final Closing Date Balance Sheet" means the Closing Date Balance Sheet,
together with any revisions thereto pursuant to this Section 2.6(b), and the
term "Final Closing Date Net Worth" means the consolidated net worth of the
Company and the Subsidiaries immediately prior to the Effective Time on the
Closing Date as set forth on the Final Closing Date Balance Sheet. The Surviving
Corporation and the Company Representative (on behalf of the Company
Shareholders) each shall be responsible for and shall pay one-half (1/2) of the
fees and expenses of the Arbitrating Accountant.
(c) The Company Representative will make the work papers and back-up
materials used in preparing the Closing Date Balance Sheet, and any books,
records and financial staff of the Company Shareholders, and representatives of
Schenck & Associates SC, available to Parent and its accountants and other
representatives and to the Arbitrating Accountant resolving any claim concerning
the Closing Date Balance Sheet at reasonable times and upon
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reasonable notice at any time during (a) the preparation of the Closing Date
Balance Sheet, (b) the review by Parent and the Company Representative of the
Closing Date Balance Sheet, and (c) the resolution by Parent and the Company
Representative of any objections thereto.
(d) Parent will make the work papers and back-up materials used in
(or necessary for) the Closing Date Balance Sheet, and any books, records and
financial staff of Parent and the Company and their accountants and other
representatives, available to the Company Representative and its accountants and
other representatives and to the Arbitrating Accountant resolving any claim
concerning the Closing Date Balance Sheet at reasonable times and upon
reasonable notice at any time during (a) the preparation of the Closing Date
Balance Sheet, (b) the review by Parent and the Company Representative of the
Closing Date Balance Sheet, and (c) the resolution by Parent and the Company
Representative of any objections thereto.
(e) The Merger Price will be adjusted if the Adjusted Final Closing
Date Net Worth is greater or less than the Base Net Worth. If the Adjusted Final
Closing Date Net Worth is greater than the Base Net Worth, then the Merger Price
will be increased on a dollar-for-dollar basis by the amount of such excess (the
"Positive Closing Date Adjustment Amount"). In such event, each Merger Payee's
Pro Rata Portion of the Positive Closing Date Adjustment Amount will be paid by
Parent to the Company Representative on behalf of such Merger Payee, by wire
transfer of immediately available funds to an account or accounts designated by
the Company Representative in writing, no later than three business days after
the completion of the Final Closing Date Balance Sheet, and the Company
Representative shall distribute that amount to such Merger Payee. If the
Adjusted Final Closing Date Net Worth is less than the Base Net Worth, then the
Merger Price will be decreased on a dollar-for-dollar basis by the amount of
such deficiency (the "Negative Closing Date Adjustment Amount"). In such event,
the Company Representative will cause each of the Merger Payees to pay its Pro
Rata Portion of the Negative Closing Date Adjustment Amount to Parent by wire
transfer of immediately available funds to an account or accounts designated by
Parent in writing, no later than three business days after the completion of the
Final Closing Date Balance Sheet.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY
All representations and warranties of the Company are made subject to the
exceptions which are set forth in the Disclosure Schedule and in any other
schedules attached to this Agreement, as supplemented from time to time by the
Company hereafter and prior to the Closing Date in accordance with the terms
hereof to the
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extent specifically referenced therein. Except as specifically set forth in this
Agreement, the Company makes no representations or warranties to Parent or Newco
of any kind whatsoever, express or implied. Subject to the foregoing, the
Company hereby represents and warrants to Parent and Newco as follows:
3.1. Organization and Authority.
(a) Company is a corporation duly organized, validly existing and is
of active status under the Laws of the State of Wisconsin. Except as set forth
in Section 3.1(a) of the Disclosure Schedule, Company is duly qualified to
conduct business as a foreign corporation in each jurisdiction wherein the
character of the properties owned or leased by it, or the nature of its
business, makes such licensing or qualification necessary except where the
failure to do so would not have a Material Adverse Effect. Any states in which
Company is licensed or qualified to do business are listed in Section 3.1(a) of
the Disclosure Schedule.
(b) Company has all requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as and where such
is now being conducted.
(c) The authorized capital stock of the Company consists of the
Class A Common Stock, of which 619.5 shares are issued and outstanding, the
Class B Common Stock, of which 3,820 shares are issued and outstanding and the
Preferred Stock, none of which shares are issued and outstanding. Section 3.1(c)
of the Disclosure Schedule sets forth the names and number of shares of the
Company Capital Stock owned by each of the Company Shareholders. All of the
outstanding shares of the Company Capital Stock have been duly authorized and
validly issued, are fully paid and nonassessable, except as set forth in Section
180.0622(2)(b) of the Wisconsin Statutes, as judicially interpreted, and are
owned by the Company Shareholders free and clear of all liens, claims,
encumbrances and restrictions whatsoever except as set forth in Section 3.1(c)
of the Disclosure Schedule. No shares of Company Capital Stock or other
ownership interest in the Company are reserved for issuance or are held as
treasury shares, and, except for this Agreement, there are no outstanding
options, convertible securities, warrants, rights, subscriptions, claims of any
character, agreements or understandings relating to the Company Capital Stock
pursuant to which the Company is or may become obligated to issue or redeem or
exchange any shares of Company Capital Stock.
(d) Section 3.1(d) of the Disclosure Schedule sets forth the
jurisdiction of incorporation, capitalization and ownership of each of the
Subsidiaries. Each of the Subsidiaries is a corporation duly organized, validly
existing and of active status under the Laws of the State of Wisconsin. Except
as set forth in Section 3.1(d) of the Disclosure Schedule, each of the
Subsidiaries
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has all respective corporate power and authority to carry on its respective
business as presently conducted and each Subsidiary is duly qualified to conduct
business as a foreign corporation in each jurisdiction wherein the character of
the properties owned or leased by it, or the nature of its business, makes such
licensing or qualification necessary except where the failure to do so would not
have a Material Adverse Effect. Except for the Subsidiaries, Neenah Enterprises,
Inc., an inactive Wisconsin corporation, and Neenah Foundry Export, Inc., an
inactive Wisconsin corporation, and except as set forth in Section 3.1(d) of the
Disclosure Schedule the Company does not own, directly or indirectly, any
capital stock or other equity securities of any other corporation or have any
direct or indirect equity or other ownership interest in any entity or business.
(e) The officers and directors of the Company and each of the
Subsidiaries are set forth in Section 3.1(e) of the Disclosure Schedule.
(f) True and complete copies of the Restated Articles of
Incorporation and Bylaws of the Company and each of the Subsidiaries have been
delivered to Parent. The minute books of the Company and the Subsidiaries which
have been provided to Parent for examination contain complete and accurate
records of all material corporate action taken by the boards of directors and
stockholders of the Company and the Subsidiaries.
3.2. Authority; Validity. The execution and delivery of this Agreement and
the other documents and instruments to be executed and delivered by Company
pursuant hereto and the consummation by Company of the transactions contemplated
hereby and thereby have been duly authorized by the board of directors of the
Company. Except for obtaining requisite stockholder approval, no corporate act
or proceeding on the part of Company is necessary to authorize this Agreement or
the other documents and instruments to be executed and delivered by Company
pursuant hereto or the consummation by Company of the transactions contemplated
hereby and thereby. This Agreement constitutes, and when executed and delivered,
the other documents and instruments to be executed and delivered by Company
pursuant hereto will constitute, valid and binding agreements of Company,
enforceable against Company in accordance with their respective terms, except as
such may be limited by bankruptcy, insolvency, reorganization or other Laws
affecting creditors' rights generally, and by general equitable principles.
3.3. No Violation. Except as set forth in Section 3.3 of the Disclosure
Schedule, the execution and delivery of this Agreement and the consummation by
Company of the transactions contemplated hereby will not cause a breach or
violation of or default under any provision of (a) the articles of incorporation
or bylaws of the Company or any of the Subsidiaries; (b) any Material Contract
to
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which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or its assets may be bound; or (c) any statute, law, rule,
regulation, judgment, decree, order, injunction or other decision of any court,
arbitrator or governmental authority to which the Company or any Subsidiary may
be subject.
3.4. Third Party Consents. Except for the filing of appropriate notices
under the HSR Act and for the third party consents listed in Section 3.4 of the
Disclosure Schedule, no approval, authorization, notice, consent or other action
by or filing with any Person is required for the Company's execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby.
3.5. Financial Statements. Section 3.5 of the Disclosure Schedule contains
complete and accurate copies of the Financial Statements. Except as set forth in
Section 3.5 of the Disclosure Schedule, all of such Financial Statements (a)
have been prepared in accordance with the books and records regularly maintained
by the Company, (b) fairly present the assets, liabilities, financial condition
and results of operations of the Company and the Subsidiaries and (c) were
prepared in accordance with generally accepted accounting principles
consistently applied throughout all periods, subject, in the case of the interim
statements, to normal year-end and audit adjustments and any other adjustments
described in such statements and subject to the absence of footnotes thereto.
3.6. Tax Matters.
(a) Except as set forth in Section 3.6(a) of the Disclosure
Schedule, the Company and the Subsidiaries have filed all Tax Returns required
to be filed. The Company and the Subsidiaries have paid all Taxes that are due
(whether or not shown on such returns) and have made adequate provisions on
their books and records for all Taxes payable by the Company and the
Subsidiaries that have accrued but are not yet due.
(b) None of the Company and the Subsidiaries (i) has been a member
of an affiliated group (within the meaning of Section 1504(a) of the Code or any
similar group defined under a similar provision of applicable state, local or
foreign Law) filing a consolidated, combined or unitary income Tax Return,
except for a group the common parent of which is the Company or (ii) has any
liability for the Taxes of any Person (other than the Company and the
Subsidiaries) under Treas. Reg. section 1.1502-6 (or any similar provision of
state, local or foreign Law) as a transferee or successor, by contract or
otherwise.
(c) Except as set forth in Section 3.6(c) of the Disclosure
Schedule, none of the Company and the Subsidiaries is a party to any Tax
allocation or Tax sharing agreement.
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(d) The federal and state income Tax Returns of Company have been
audited by the Internal Revenue Service and appropriate state taxing authorities
for the periods and to the extent set forth in Section 3.6(d) of the Disclosure
Schedule, and except as set forth in Section 3.6(d) of the Disclosure Schedule
Company has not received from the Internal Revenue Service or from the tax
authorities of any state, county, local or other jurisdiction any notice of
underpayment of Taxes or other deficiency which has not been paid nor any
objection to any return or report filed by Company. There are outstanding no
agreements or waivers extending the statutory period of limitations applicable
to any Tax Return.
(e) All Tax Returns filed by the Company and the Subsidiaries were
correct and complete in all material respects.
(f) Except as set forth in Section 3.6(f) of the Disclosure
Schedule, no dispute or claim concerning any Tax liability of any of the Company
and the Subsidiaries has been proposed, asserted or assessed (and is currently
pending).
(g) None of the Company or the Subsidiaries will be required as a
result of (i) a change in accounting method for a Tax period beginning on or
before the Closing, to include any adjustment under Code section 481(c) of the
Code (or any similar provision of state, local or foreign Law) in taxable income
for any Tax period beginning on or after the Closing Date or (ii) any "closing
agreement" as described in Code section 7121 (or any similar provision of state,
local or foreign Law), to include any item of income in or exclude any item of
deduction from any Tax period beginning on or after the Closing.
(h) There are no liens on any of the assets of any of the Company
and the Subsidiaries that arose in connection with any failure (or alleged
failure) to pay any Tax.
(i) Each of the Company and the Subsidiaries has withheld and paid
all Taxes required to have been withheld and paid in connection with any amount
paid or owing to any employee, independent contractor, creditor, stockholder or
other third party.
(j) None of the Company and the Subsidiaries has filed a consent
under Code section 341(f) concerning collapsible corporations.
(k) None of the Company and the Subsidiaries has made any payments,
is obligated to make any payments, or is a party to any agreement that under
certain circumstances could obligate it to make any payments that will not be
deductible under Code section 280G.
(l) None of the Company Shareholders is a foreign person subject to
withholding under Code section 1445.
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(m) Except as set forth in Section 3.6(m) of the Disclosure
Schedule, the unpaid Taxes of the Company and the Subsidiaries (i) did not, as
of September 30, 1996, exceed the reserve for Tax liability (rather than any
reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth in the Most Recent Balance Sheet and (ii) do not
exceed that reserve as adjusted for the passage of time through the Closing Date
in accordance with the past custom and practice of the Company and the
Subsidiaries in filing their Tax Returns.
(n) Except as set forth in Section 3.6(n) of the Disclosure
Schedule, none of the property owned or used by any of the Company and the
Subsidiaries is subject to a tax benefit transfer lease executed in accordance
with section 168(f)(8) of the Internal Revenue Code of 1954, as amended by the
Economic Recovery Tax Act of 1981.
(o) None of the property owned by any of the Company and the
Subsidiaries is "tax-exempt use property" within the meaning of Code section
168(h).
(p) Section 3.6(p) of the Disclosure Schedule lists all federal,
state, local and foreign income Tax Returns filed with respect to any of the
Company and the Subsidiaries for taxable periods ending on or after March 31,
1992, indicates those Tax Returns that have been audited and indicates those Tax
Returns that currently are the subject of an audit or examination.
(q) The Company has made available to Parent correct and complete
copies of all federal income Tax Returns, examination reports and statements of
deficiencies assessed against or agreed to by any of the Company and the
Subsidiaries since March 31, 1992.
(r) Each of the Company and the Subsidiaries has disclosed on its
federal income Tax Returns all positions taken therein that could give rise to a
substantial understatement of federal income Tax within the meaning of Code
section 6662.
3.7. Absence of Certain Changes. Since the date of the Most Recent Balance
Sheet and except as disclosed in Section 3.7 of the Disclosure Schedule, the
Company and the Subsidiaries have been operated in the Ordinary Course. Without
limiting the generality of the foregoing, since the date of the Most Recent
Balance Sheet and except as disclosed in Section 3.7 of the Disclosure Schedule,
neither the Company nor any of its Subsidiaries has:
(ia) experienced any change in its business, condition (financial or
otherwise) or results of operations that would constitute, or insofar as
reasonably can be foreseen, result in a Material Adverse Effect;
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(ib) declared, set aside, or paid any dividend or made any distribution in
respect of the capital stock of the Company or any Subsidiary or redeemed,
purchased or otherwise acquired any such stock;
(i) experienced any adverse change in any relationship with its suppliers,
customers, distributors, brokers, lessors or others, other than changes in the
Ordinary Course;
(ii) sold, leased, transferred, or assigned any of assets, tangible or
intangible (including, without limitation, the Proprietary Rights) other than
for consideration in the Ordinary Course;
(iii) entered into any agreement, contract, lease, or license (or series
of related agreements, contracts, leases or licenses) involving receipt or
expenditure of more than $100,000 individually or modified the terms of any such
existing contract or agreement, other than in the Ordinary Course;
(iv) engaged in any activity which has resulted in any acceleration or
delay of the collection of its accounts or notes receivables or any delay in the
payment of its accounts payables, in each case other than in the Ordinary
Course;
(v) (nor has any other party) accelerated, terminated, modified or
canceled any permit or agreement, contract, lease or license involving receipt
or expenditure of more than $100,000 individually to which it is a party or by
which it is bound, other than in the Ordinary Course;
(vi) suffered any damage, destruction or loss, whether or not covered by
insurance, affecting any material property or assets owned or used by it;
(vii) adopted, modified, amended or terminated any bonus, profit-sharing,
incentive, severance, or other similar plan (including any Employee Benefit
Plan), contract, or commitment for the benefit of any of its directors,
officers, or employees, or otherwise made any change in the employment terms
(including any increase in the base compensation) for any of its officers and
employees whose annual base compensation is in excess of $50,000, other than in
the Ordinary Course;
(viii) made any capital expenditure or any other investment (or series of
related investments) in excess of $100,000 other than in the Ordinary Course;
(ix) issued any note, bond, or other debt security or created, incurred,
assumed, or guaranteed any indebtedness involving receipt or expenditure of more
than $50,000 individually, other than in the Ordinary Course;
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(x) canceled, compromised, waived, or released any right or claim (or
series of related rights and claims) involving receipt or expenditure of more
than $50,000 outside the Ordinary Course;
(xi) made or authorized any change in its articles of incorporation or
bylaws except as contemplated by Section 6.11 of this Agreement;
(xii) issued, sold, or otherwise disposed of any of its capital stock, or
granted, modified or amended any options, warrants, stock appreciation rights,
or other rights to purchase or obtain (including upon conversion, exchange, or
exercise) any of its capital stock or participate in any change in the value
thereof;
(xiii) made or been subject to change in its accounting practices,
procedures or methods or in its cash management practices;
(xiv) entered into or become party to any agreement, arrangement or
transaction with any of its respective directors, officers, employees,
stockholders or their relatives (other than in the Ordinary Course and other
than as contemplated by Sections 6.12 and 6.13 of this Agreement), including,
without limitation, any (i) loan or advance of funds, or made any other
payments, to any of its directors, officers, employees or stockholders, or (ii)
creation or discharge of any intercompany account, other than in the Ordinary
Course;
(xv) granted any license or sublicense of any rights under, allowed to
lapse, disposed of, or otherwise experienced any adverse changes with respect to
the Proprietary Rights, other than in the ordinary course of business consistent
with past custom and practice;
(xvi) experienced any material changes in the amount or scope of coverage
of insurance now carried by them; or
(xvii) committed to do any of the foregoing.
3.8. Assets.
(a) Company and each Subsidiary have good and marketable title to
all of its respective assets and properties free and clear of all mortgages,
liens, claims, encumbrances and restrictions except (i) those listed in Section
3.8(a) of the Disclosure Schedule, and (ii) in the case of real property, liens
for taxes not yet due or which are being contested in good faith by appropriate
proceedings (and which have been sufficiently accrued or reserved against in the
Most Recent Balance Sheet), municipal and zoning ordinances and easements for
public utilities, none of which interfere with the use of the property as
currently utilized.
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(b) Except as set forth in Section 3.8(b) of the Disclosure
Schedule, all of the property and assets currently being used in the operation
of the Company and the Subsidiaries are in all material respects in good
operating condition and repair, subject to normal wear and tear, and are free
from material structural or mechanical defects or deficiencies.
(c) The inventories of the Company reflected on the Most Recent
Balance Sheet valued in accordance with lower of cost (determined on a LIFO or
FIFO basis as described in the notes to the Financial Statements) or market are
usable and merchantable, on an aggregate basis, in the ordinary course of
business such that no additional reserves are required under generally accepted
accounting principles.
(d) Section 3.8(d) of the Disclosure Schedule contains a complete
and accurate list of all the Real Property including a legal description
thereof. All of the Real Property has rights of access to public roads. Except
as set forth in Section 3.8(d) of the Disclosure Schedule, there is not (i) any
claim of adverse possession or prescriptive rights involving any of the Real
Property, (ii) any structure located on any Real Property which encroaches on or
over the boundaries of neighboring or adjacent properties or (iii) any structure
of any other party which encroaches on or over the boundaries of any of such
Real Property. Except as set forth in Section 3.8(d) of the Disclosure Schedule,
none of the Real Property is located in a flood plain, flood hazard area,
wetland or lakeshore erosion area within the meaning of any Law. No public
improvements have been commenced and to Company's Knowledge none are planned
which in either case may result in special assessments against or otherwise
materially adversely affect any Real Property. The Company does not have any
notice or Knowledge of any (i) planned or proposed increase in assessed
valuations of any Real Property, (ii) order requiring repair, alteration, or
correction of any existing condition affecting any Real Property or the systems
or improvements thereat, or (iii) any structural, mechanical, or other defects
of material significance affecting any Real Property or the systems or
improvements thereat (including, but not limited to, inadequacy for normal use
of mechanical systems or disposal or water systems at or serving the Real
Property).
(e) Section 3.8(e) of the Disclosure Schedule contains (i) a list of
certain assets currently owned by the Company or the Subsidiaries that will be
transferred to one or more of the Company Shareholders or executives of the
Company at or prior to the Closing without additional consideration and (ii) a
list of certain assets currently being used by the Company that are owned and
will be retained by one or more of the Company Shareholders (collectively, the
"Excluded Assets").
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(f) Section 3.8(f) of the Disclosure Schedule contains a complete
and accurate list of all real estate lease, sublease and other occupancy
agreements, including all amendments, extensions and other modifications
thereto, to which the Company or any Subsidiary is a party. The Company or its
applicable Subsidiary has a good and valid leasehold interest in and to all of
the Leased Real Property. Each Lease is in full force and effect and is
enforceable in accordance with its terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other Laws affecting creditors' rights
generally, and by general equitable principles. There exists no default by the
Company or any Subsidiary or condition which, with the giving of notice, the
passage of time or both, could become a default by the Company or any Subsidiary
under any Lease. To the Knowledge of the Company, no party to a Lease other than
the Company or any Subsidiary is in default thereunder nor does any condition
exist which, with the giving of notice, the passage of time or both, could
become a default by any party to a Lease other than the Company or any
Subsidiary. The Company has previously made available to Parent true and
complete copies of all the Leases. Except as described in Section 3.8(f) of the
Disclosure Schedule, no consent, waiver, approval or authorization is required
from the landlord under any Lease as a result of the execution of this Agreement
or the consummation of the transactions contemplated hereby.
(g) The Real Property and the Leased Real Property constitute all of
the real property owned, leased, occupied or otherwise utilized in connection
with the business of the Company and its Subsidiaries. Except as set forth in
Section 3.8(g) of the Disclosure Schedule, other than the Company and the
Subsidiaries, there are no parties in possession or parties having any current
or future right to occupy any of the Real Property. Except as set forth in
Section 3.8(g) of the Disclosure Schedule, the Real Property is in good
condition and repair and is sufficient and appropriate for the conduct of the
Company's business. Except as set forth in Section 3.8(g) of the Disclosure
Schedule, the Real Property and all plants, buildings and improvements located
thereon conform in all material respects to all applicable building, zoning and
other Laws. Except as set forth in Section 3.8(g) of the Disclosure Schedule,
all permits, licenses and other approvals necessary to the current occupancy and
use of the Real Property have been obtained, are in full force and effect and
have not been violated. Except as set forth in Section 3.8(g) of the Disclosure
Schedule, there exists no violation of any covenant, condition, restriction,
easement, agreement or order affecting any portion of the Real Property. There
is no pending or, to the Knowledge of the Company, any threatened condemnation
proceeding affecting any portion of the Real Property. No Lease requires rental
payments by the Company or any Subsidiary in excess of $45,000 per year. In the
event it became necessary for the Company or any Subsidiary to obtain a
functionally equivalent replacement parcel of real property for any parcel of
Leased Real Property in the same
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geographic area, such replacement could be obtained within thirty (30) days of
the date of the event requiring such replacement (without regard to whether the
Lease covering the parcel of Leased Real Property being replaced had expired or
been terminated).
3.9. Bank Accounts. Section 3.9 of the Disclosure Schedule sets forth the
names and locations of all banks, trust companies, savings and loan associations
and other financial institutions at which the Company or any Subsidiary
maintains a safe deposit box, lock box or checking, savings, custodial or other
account of any nature, and the type and number of each such account, and the
name of the Company's primary contact person at such institution.
3.10. Litigation. Except as set forth in Section 3.10 of the Disclosure
Schedule, there is no action, suit, arbitration, proceeding, investigation,
claim or inquiry, whether civil, criminal or administrative, pending or, to the
Company's Knowledge, threatened against the Company or any Subsidiary which,
insofar as reasonably can be foreseen, would have or result in a Material
Adverse Effect.
3.11. Compliance With Laws.
(a) Compliance. Except as set forth in Section 3.11(a) of the
Disclosure Schedule, the Company and the Subsidiaries are in compliance with all
applicable Laws (except where non-compliance, insofar as reasonably can be
foreseen, would not have or result in a Material Adverse Effect), including,
without limitation, those applicable to occupational safety and health, trade
practices, competition and pricing, product warranties, zoning, building and
sanitation, retirement and product advertising. Except as set forth in Section
3.11(a) of the Disclosure Schedule, Company has not received notice of any
violation or alleged violation of, any Laws.
(b) Licenses and Permits. The Company and the Subsidiaries have all
governmental licenses, permits, approvals, authorizations and consents and all
certifications required for the conduct of the Business (as presently conducted)
and operation of the facilities used in the Business (other than licenses,
permits, approvals, authorizations, consents or certifications which if not
obtained, insofar as reasonably can be foreseen, would not have a Material
Adverse Effect). All such licenses, permits, approvals, authorizations, consents
and certifications are described in Section 3.11(b) of the Disclosure Schedule
and are in full force and effect. Except as set forth in Section 3.11(b) of the
Disclosure Schedule, the Company (including its operations, properties and
assets) are and have been in material compliance with all such permits,
licenses, approvals, authorizations, consents and certifications.
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3.12. Insurance. Section 3.12 of the Disclosure Schedule contains a
complete list and description of all insurance policies owned or maintained by
the Company and the Subsidiaries. Such insurance policies are in full force and
effect and Company and the Subsidiaries have not received any notice of any
cancellation of such insurance. All premiums with respect to such policies
covering all periods up to and including the Effective Time will have been paid.
Such policies will not be materially affected by, or terminate or lapse by
reason of, the transactions contemplated by this Agreement. All of such policies
have been issued by insurance companies actively engaged in the insurance
business. Except as set forth in Section 3.12 of the Disclosure Schedule, all
known claims, if any, made against the Company or any of the Subsidiaries that
are covered by insurance have been disclosed to and accepted by the appropriate
insurance companies and are being defended by such appropriate insurance
companies and no such claims have been denied coverage during the last three
years.
3.13. Material Contracts and Commitments.
(a) Section 3.13(a) of the Disclosure Schedule sets forth a complete
list of each executory contract and lease to which the Company or a Subsidiary
is a party (the "Material Contracts") which constitutes:
(i) a lease of real or personal property involving
consideration or other expenditure or revenue in excess of $100,000 in the
aggregate or involving performance over a period of more than 12 months;
(ii) an agreement involving payment or receipt or other
obligations of more than $100,000 in the aggregate;
(iii) a labor union contract;
(iv) a loan agreement, promissory note, letter of credit, or
other evidence of indebtedness as a signatory, guarantor or otherwise;
(v) an agreement not to compete in any business or geographic
area;
(vi) an agreement involving payment or other obligations of
more than $25,000 in the aggregate and that is not cancelable on less than
twelve month's notice; or
(vii) a material agreement with a shareholder, officer,
director or employee of the Company or any Subsidiary.
(b) Company has made available to Parent true, correct and complete
copies of the Material Contracts.
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(c) Except as disclosed in Section 3.13(c) of the Disclosure
Schedule, neither the Company nor any Subsidiary, nor to the Company's
Knowledge, any other party, is in material breach or material violation of, or
default under, any provision of any Material Contract, and to the Company's
Knowledge there exist no facts that, with notice or lapse of time, or both,
would constitute a default (or give rise to a termination right) on the part of
any party in the performance of any obligation to be performed under any of the
Material Contracts.
(d) None of the other parties to any Material Contract has given
written notice to the Company or a Subsidiary that it intends to terminate or
materially alter the provisions of such Material Contract either as a result of
transactions contemplated by this Agreement or otherwise, and neither the
Company nor any Subsidiary has given notice to any other party to any such
Material Contract that it intends to terminate or materially alter the
provisions of any such Material Contract.
(e) Except as set forth in Section 3.13(e) of the Disclosure
Schedule, neither the Company nor any Subsidiary is a party to any contract,
agreement or understanding which contains a "change in control," "potential
change in control" or similar provision which could be triggered by the
transactions contemplated by this Agreement.
3.14. Labor Matters. Except as set forth in Section 3.14 of the Disclosure
Schedule, the Company and the Subsidiaries are not a party to any written labor
agreement with respect to their respective employees with any labor union.
Except as set forth in Section 3.14 of the Disclosure Schedule, in the last five
years, the Company and the Subsidiaries have not experienced any labor disputes
or any work stoppage due to labor disagreements in connection with the Business.
Except to the extent set forth in Section 3.14 of the Disclosure Schedule, (a)
Company is in compliance in all material respects with all applicable Laws
respecting employment practices, terms and conditions of employment and wages
and hours, and is not engaged in any unfair labor practice; (b) there is no
unfair labor practice charge or complaint against Company pending before the
National Labor Relations Board or any similar state agency; and (c) there are no
administrative charges or court complaints against Company concerning alleged
employment discrimination or other employment related matters pending or
threatened before the U.S. Equal Employment Opportunity Commission or any other
government entity. To the Company's Knowledge, no union organization campaign is
in progress with respect to any of the Company's or any Subsidiary's employees
who are not presently members of a union. Except as set forth in Section 3.14 of
the Disclosure Schedule, since April 1, 1992, neither the Company nor any
Subsidiary has engaged in any plant closing or employee layoff activities that
would violate, or require notification pursuant to, the Worker Adjustment
Retraining
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and Notification Act of 1988, as amended, or any similar state or local plant
closing or mass layoff statute, rule or regulation.
3.15. Employee Benefit Plans.
(a) Section 3.15(a) of the Disclosure Schedule sets forth all
pension, medical, dental, life, accident insurance, employee welfare,
disability, group insurance, and other similar fringe or employee benefit plans,
programs and arrangements, and any severance or employment agreements or plans,
sick leave plans, programs, arrangements and policies, including, without
limitation, all "employee benefit plans" (as defined in Section 3(3) of ERISA),
which are provided to, for the benefit of, or relate to, any current or former
Company Employees. The items described in the foregoing sentence are hereinafter
sometimes referred to collectively as "Employee Benefit Plans," and each
individually as an "Employee Benefit Plan." True and correct copies of all the
Employee Benefit Plans, including all amendments thereto, have heretofore been
made available to Parent. Each of the Employee Benefit Plans is identified in
Section 3.15(a) of the Disclosure Schedule, to the extent applicable, as one or
more of the following: an "employee pension benefit plan" (as defined in Section
3(2) of ERISA), an "employee welfare benefit plan" (as defined in Section 3(1)
of ERISA), and/or as a plan intended to be qualified under Section 401 of the
Code. Except as set forth in Section 3.15(a) of the Disclosure Schedule, no
Employee Benefit Plan is a "multiemployer plan" (as defined in Section 4001 of
ERISA) or a defined benefit plan as defined in Section 414 of the Code, and
neither the Company nor any Subsidiary has ever contributed or been obligated to
contribute to any multiemployer plan or defined benefit plan.
(b) There have been no "prohibited transactions" within the meaning
of Section 406 or 407 of ERISA or Section 4975 of the Code for which a statutory
or administrative exemption does not exist with respect to any Employee Benefit
Plan. No event or omission has occurred in connection with which the Company or
any Subsidiary or any of their respective assets or any Employee Benefit Plan,
directly or indirectly, could be subject to any liability under ERISA, the Code
or any other Law applicable to any Employee Benefit Plan, or under any
agreement, instrument or Law pursuant to or under which Company or any
Subsidiary has agreed to indemnify or is required to indemnify any person
against liability incurred under any such Law.
(c) With respect to each Employee Benefit Plan, (i) all payments due
from Company or any Subsidiary to date have been made and all amounts properly
accrued to date as liabilities of Company and any Subsidiary which have not been
paid have been properly recorded on the books of Company or any Subsidiary and
are reflected in the Financial Statements; (ii) Company and each Subsidiary has
complied with, and each such Employee Benefit Plan
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complies in form and has been administered in accordance with all applicable
Laws and regulations, including but not limited to ERISA and the Code, except
where failure to do so, insofar as reasonably can be foreseen, would not result
in a Material Adverse Effect; (iii) each such Employee Benefit Plan which is
intended to qualify under Section 401 of the Code has received a favorable
determination letter from the Internal Revenue Service with respect to such
qualification, its related trust has been determined to be exempt from taxation
under Section 501(a) of the Code, and nothing has occurred since the date of
such letter that has or is likely to adversely affect such qualification or
exemption; (iv) there are no actions, suits or claims pending (other than
routine claims for benefits) or threatened with respect to such Employee Benefit
Plan or against the assets of such Employee Benefit Plan; and (v) no accumulated
funding deficiency, as defined in ERISA or the Code, or reportable event, as
defined in ERISA, has occurred.
(d) Except as set forth in Section 3.15(d) of the Disclosure
Schedule, no Employee Benefit Plan provides benefits, including, without
limitation, death or medical benefits (whether or not insured) with respect to
current or former Company Employees beyond their retirement or other termination
of service other than (i) coverage mandated by applicable law, (ii) death or
retirement benefits under any Employee Benefit Plan that is an employee pension
benefit plan, (iii) deferred compensation benefits accrued as liabilities on the
books of Company, (iv) disability benefits under any Employee Benefit Plan that
is an employee welfare benefit plan and which have been fully provided for by
insurance or otherwise or (v) benefits in the nature of severance pay.
(e) Except as set forth in Section 3.15(e) of the Disclosure
Schedule, the consummation of the transactions contemplated by this Agreement
will not (i) entitle any current or former Company Employee to severance pay,
unemployment compensation or any other payment, except as expressly provided in
this Agreement, (ii) accelerate the time of payment or vesting, or increase the
amount of compensation due to any such employee or former employee or (iii)
result in any prohibited transaction described in Section 406 of ERISA or
Section 4975 of the Code for which an exemption is not available.
3.16. Environmental Matters.
(a) The Company is in compliance with applicable Environmental Laws,
except as set forth in Section 3.16(a) of the Disclosure Schedule. Without
limiting the generality of the foregoing, the Company has obtained and is in
compliance with, all permits, licenses and other authorizations that are
required pursuant to Environmental Laws for the occupation of its facilities and
the operation of its business; a list of all such permits, licenses and other
authorizations is set forth in Section 3.16(a) of the Disclosure Schedule.
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(b) Except as set forth in Section 3.16(b) of the Disclosure
Schedule, there is no litigation nor any demand, claim, hearing or notice of
violation pending or to the best of the Company's Knowledge threatened against
the Company relating in any way to the Environmental Laws.
(c) Except as set forth in Section 3.16(c) of the Disclosure
Schedule, there has been no release, spill or discharge of Hazardous Substance
on, in, under or from the Real Property in an amount or condition which would
require investigative or remedial action under Environmental Laws.
(d) The Company has not received notice from any governmental agency
of any claim that it is or may be liable for the Release of a Hazardous
Substance under CERCLA or any similar state law in relation to any site or
facility.
3.17. Proprietary Rights. Section 3.17 of the Disclosure Schedule lists
all patents, patent applications, trade names, trademarks, service marks,
trademarks registrations, service mark registrations, trade mark applications,
service mark applications, registered copyrights, and copyright applications
included among the Proprietary Rights. There is no pending claim against the
Company or any Subsidiary alleging that the Company or any Subsidiary infringes
on or misappropriates the intellectual property rights of others. Except as set
forth in Section 3.17 of the Disclosure Schedule, the Company and the
Subsidiaries own and possess all right, title and interest in, free and clear of
all Liens or have a valid, enforceable and effective written license to use, all
Proprietary Rights. Section 3.17 of the Disclosure Schedule also lists all
computer software (other than mass-marketed software having a license fee of
less than $1,000.00) owned or used by the Company or any Subsidiary and all
written licenses or other agreements to or from third parties regarding any of
the Proprietary Rights. Except as set forth in Section 3.17 of the Disclosure
Schedule there is not pending, or to the Company's Knowledge threatened, against
the Company or any Subsidiary any claim by any third party contesting the
validity, enforceability, use or ownership of any Proprietary Right, and, to the
Knowledge of the Company, there are no grounds for any such claim. The Company
and Subsidiaries have not infringed, misappropriated or otherwise conflicted
with any proprietary rights of any Person, nor to the Company's Knowledge, as
far as reasonably can be foreseen, will any such infringement, misappropriation
or conflict occur as a result of continued operation of the business of the
Company and the Subsidiaries as currently conducted (including, without
limitation, the "modernized casting designs" program of the Company and the
Subsidiaries involving the reduction of weight of certain of the products of the
Company and the Subsidiaries). All Proprietary Rights owned or used by the
Company and the Subsidiaries prior to the Closing Date will be owned or
available for use on identical terms and conditions immediately after the
Closing Date.
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3.18. Accounts Receivable. All accounts and notes receivable of the
Company and the Subsidiaries reflected on the Most Recent Balance Sheet (other
than those described in Section 6.13 of this Agreement), and all accounts and
notes receivable arising subsequent to the date of the Most Recent Balance
Sheet, in each case, have arisen in the ordinary course of business, consistent
with past custom and practice, and will be collected in accordance with their
terms at their recorded amounts, subject only to the reserves for doubtful
accounts set forth on the Most Recent Balance Sheet which have been established
in accordance with past custom and practice and are substantially adequate in
light of the previous collectibility experience with respect to accounts
receivables generated by the Company and the Subsidiaries.
3.19. Product Warranty. All of the products manufactured, sold, leased,
and delivered by the Company and the Subsidiaries have conformed in all material
respects with all applicable contractual commitments and all express and implied
warranties, and none of the Company and the Subsidiaries has any material
liability (whether known or unknown, absolute, accrued, contingent or otherwise,
or whether due or to become due) for replacement or repair thereof or other
damages in connection therewith.
3.20. Sufficiency of Assets. The assets currently owned by the Company or
any Subsidiary, or leased by the Company or any Subsidiary pursuant to any lease
agreement entered into in the ordinary course of business or otherwise disclosed
to Parent, constitute all of the assets necessary to conduct the businesses of
the Company and the Subsidiaries in accordance with past practices as of March
31, 1996 and as of the date hereof.
3.21. Accuracy of Representations. To the Company's Knowledge, no
representation or warranty made by the Company in this Agreement contains or, as
of the Closing Date, will contain, any untrue statement of a material fact or
omits or, as of the Closing Date will omit, to state a material fact necessary
to make the statements contained herein not misleading, subject in each case to
any exception to such representations and warranties set forth in the Disclosure
Schedule, as the same may be updated from time to time prior to and as of the
Closing Date by delivery to Parent and Newco in accordance with the terms of
this Agreement.
3.22. Opinion of Financial Advisor. As of the date of this Agreement, the
Company has received the opinion of Brown, Gibbons, Lang & Company, L.P. to the
effect that the consideration to be received in the Merger by the Company
Shareholders is fair to such shareholders from a financial point of view, a
signed copy of which opinion has been delivered to Parent.
3.23. Transactions with Affiliates. Except as set forth in
Section 3.23 of the Disclosure Schedule and except in their
capacities as officers, directors and/or employees of the Company
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and the Subsidiaries, none of the Company Shareholders nor their relatives is
involved in any business arrangement or relationship with Company or the
Subsidiaries (whether written or oral), and none of the Company Shareholders nor
their relatives owns any property or right, tangible or intangible, which is
used by the Company or the Subsidiaries.
3.24. Funded Debt. Except as set forth in Section 3.24 of the Disclosure
Schedule, neither the Company or any Subsidiary has outstanding any Funded Debt.
3.25. Closing Date. All of the representations and warranties of the
Company contained in this Article III are restated on and as of the Closing Date
and shall be true and correct in all respects with the same effect as though
made as of the Closing Date, subject in each case to any exception to such
representations and warranties set forth in the Disclosure Schedule, as the same
may be updated from time to time prior to and as of the Closing Date by delivery
to Parent and Newco in accordance with the terms of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND NEWCO
Parent and Newco each represent and warrant to the Company and the Company
Shareholders as follows:
4.1. Organization. Parent is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware. Parent
has all requisite corporate power to enter into this Agreement and the other
documents and instruments to be executed and delivered by Parent and to carry
out the transactions contemplated hereby and thereby. Newco is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of Wisconsin. Newco has all requisite corporate power to enter into this
Agreement and the other documents and instruments to be executed and delivered
by Newco and to carry out the transactions contemplated hereby and thereby.
4.2. No Violation. The execution and delivery of this Agreement and the
consummation by Parent and Newco of the transactions contemplated hereby will
not cause a breach or violation of or default under any provision of (a) the
articles of incorporation or bylaws of Parent or Newco; (b) any contract to
which Parent or Newco is a party or by which Parent or Newco may be bound; or
(c) any decree, order, injunction or other decision of any court, arbitrator or
governmental authority to which Parent or Newco may be subject.
4.3. Authority; Validity. The execution and delivery of this Agreement and
the other documents and instruments to be executed
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and delivered by Parent and Newco pursuant hereto and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by the
boards of directors of Parent and Newco. Except for obtaining any requisite
stockholder approval, no other corporate act or proceeding on the part of Parent
or Newco is necessary to authorize this Agreement or the other documents and
instruments to be executed and delivered by Parent or Newco pursuant hereto or
the consummation by Parent or Newco of the transactions contemplated hereby and
thereby. This Agreement constitutes, and when executed and delivered, the other
documents and instruments to be executed and delivered by Parent and Newco
pursuant hereto will constitute, valid and binding agreements of Parent or
Newco, enforceable against Parent and Newco in accordance with their respective
terms.
4.4. Third Party Consents. Except for the filing of appropriate notices
under the HSR Act, no approval, authorization, notice, consent or other action
by or filing with any Person is required for Parent's or Newco's execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby.
4.5. Investment/Operational Intent.
(a) Parent and Newco each has sufficient knowledge and experience in
financial and business matters to enable it to evaluate the merits and risks of
the transactions contemplated by this Agreement.
(b) Parent and Newco have been given access to information requested
regarding the Company and the Subsidiaries, including the opportunity to ask
questions of and receive answers from the officers of the Company and the
Subsidiaries concerning the present and proposed activities of the Company and
the Subsidiaries and to obtain the information which Parent or Newco deems
necessary or advisable in order to evaluate the merits and risks of the
transactions contemplated by this Agreement, and Parent and Newco have made
their own independent investigation of the Company and the Subsidiaries and the
merits and risks of the transactions contemplated by this Agreement.
Notwithstanding the foregoing sentence, no such investigation shall limit the
rights of Parent and Newco under Article VI hereof and, subject to Section 5.7
hereof and except to the extent the matters subject to such investigation have
been disclosed in this Agreement or in the Disclosure Schedule, Article VIII
hereof.
(c) Parent is acquiring the Company for its own account, for
investment/operational purposes, and not with a present view to resale or for
distribution of all or any portion of the Company Capital Stock.
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4.6. Closing Date. All of the representations and warranties of Parent and
Newco contained in this Article IV are restated on and as of the Closing Date
and shall be true and correct in all respects with the same effect as though
made as of the Closing Date.
ARTICLE V
COVENANTS
From and after the date of this Agreement, the parties shall comply with
the following covenants:
5.1. Access to Information and Records. The Company shall give Parent,
Newco, their counsel, accountants and other representatives and the Parent's
Lenders (i) reasonable access during normal business hours to all of the
properties, books, records, contracts and documents of Company and the
Subsidiaries for the purpose of such inspection, investigation and testing as
Parent or Newco deems appropriate (and Company shall furnish or cause to be
furnished to Parent, Newco and their representatives all information with
respect to the business and affairs of Company and the Subsidiaries as Parent or
Newco may reasonably request), provided, however, that neither Parent nor Newco,
nor their counsel, accountants or other representatives, shall have any
environmental test or assessment performed on or in connection with any of the
Real Property or Leased Real Property prior to the Effective Time other than a
routine "Phase I" assessment or report, without the prior written consent of the
Company Representative; (ii) with the prior consent of the Company
Representative in each instance, access to employees, agents and representatives
for the purposes of such meetings and communications as Parent or Newco
reasonably desires; and (iii) with the prior consent of Company Representative
in each instance, access to vendors, customers and others having business
dealings with Company.
5.2. Conduct of Business Pending the Closing. From the date hereof until
the Closing, except as otherwise approved in writing by Parent (which approval
shall not be unreasonably withheld), the Company shall comply with the following
covenants:
(a) No Material Changes. Company will carry on the Business
diligently and in substantially the same manner as heretofore and will not make
or institute any material changes in its methods of purchase, sale, management,
accounting or operation.
(b) Maintain Organization. Company will take such action as may be
commercially reasonable to maintain, preserve, renew and keep in favor and
effect the existence, rights and franchises of Company and the Subsidiaries and
will use commercially reasonable efforts to preserve the business organization
of Company and the Subsidiaries intact, to keep
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available to Company the present employees of the Company and the Subsidiaries,
and to preserve for Company and the Subsidiaries its present relationships with
suppliers and customers and others having business relationships with Company
and the Subsidiaries.
(c) No Corporate Changes. Company shall not amend its Restated
Articles of Incorporation or Bylaws or make any changes in authorized or issued
capital stock, except as contemplated by Section 6.11 of this Agreement.
(d) Maintenance of Insurance. Company shall maintain
all of the insurance in effect as of the date hereof.
(e) Maintain Assets. The Company will maintain the Proprietary
Rights so as not to affect adversely any registration or application for
registration thereof or the validity or enforcement thereof, and maintain its
other assets in customary repair, order and condition; and in the event of any
casualty, loss or damage to any of such assets repair or replace such assets
with assets of comparable quality and value in accordance with past custom and
practice.
(f) Perform Obligations. The Company will and will cause the
Subsidiaries to perform in all material respects all of its obligations under
all notes, bonds, mortgages, indentures, licenses, contracts, agreements or
other instruments or obligations to which the Company or any Subsidiary is a
party or by which any of them or any of their respective properties or assets
may be bound and not enter into, assume or amend any such contract or commitment
other than in the ordinary course of business in accordance with past custom and
practice.
(g) Taxes. The Company will pay all Taxes and estimated Taxes and
prepare and file all Tax Returns and other Tax reports, filings and amendments
thereto required to be filed by it, on a timely basis.
(h) Notice of Breach. The Company will promptly inform Parent in
writing of any material breach of or change in the representations and
warranties contained in Article III hereof.
(i) Representations and Warranties. Neither the Company nor any
Subsidiary shall enter into any contract, agreement or commitment or take any
other action (other than in the ordinary course of business) which, if entered
into or taken prior to the date of this Agreement, would cause any
representation or warranty of the Company to be untrue in any material respect
or be required to be disclosed on the Disclosure Schedule (including, without
limitation, with respect to Section 3.7 hereof).
(j) Affiliate Transactions. Except as contemplated by
Section 6.12 and 6.13 of this Agreement and except as set forth in
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Section 5.2(j) of the Disclosure Schedule, neither the Company nor any
Subsidiary will enter into or become party to any agreement, arrangement or
transaction with any of its respective directors, officers, employees,
stockholders or their relatives except in the Ordinary Course, including,
without limitation, any (i) loan or advance of funds, or make any other payments
except in the Ordinary Course, to any of its directors, officers, employees or
stockholders, (ii) creation or discharge of any intercompany account, other than
in the Ordinary Course, or (iii) payment or declaration of any dividend,
redemption or other distribution with respect to their respective capital stock.
(k) No Indebtedness. Neither the Company nor any Subsidiary will
incur any Funded Debt.
(l) Capital Expenditures. Except as set forth in Section 5.2(l) of
the Disclosure Schedule, neither the Company nor any Subsidiary will make any
capital expenditure or any other investment (or series of related investments)
in excess of $100,000, except in the Ordinary Course.
(m) Employees. Except as set forth in Section 5.2(m) of the
Disclosure Schedule, neither the Company nor any Subsidiary will adopt, modify,
amend or terminate any bonus, profit-sharing, incentive, severance, or other
similar plan (including any Employee Benefit Plan), contract, or commitment for
the benefit of any of its directors, officers, or employees, or otherwise make
any change in the employment terms (including any increase in the base
compensation) for any of its officers and employees whose annual base
compensation is in excess of $50,000, except in the Ordinary Course.
(n) No Stock Issuances. Neither the Company nor any Subsidiary will
issue, sell or otherwise dispose of any of its capital stock, or grant, modify
or amend any options, warrants, stock appreciation rights, or other rights to
purchase or obtain (including upon conversion, exchange or exercise) any of its
capital stock.
(o) Working Capital. The Company and the Subsidiaries
will maintain a level of working capital in the Ordinary Course.
(p) Material Adverse Effect. The Company will not take or omit to be
taken any action, or permit its Subsidiaries to take or to omit to take any
action, which would result in a Material Adverse Effect.
5.3. HSR Act Filings. Each Party shall, in cooperation with the other
Parties, file or cause to be filed any reports or notifications that may be
required to be filed by it under the HSR Act, with the Federal Trade Commission
and the Antitrust Division of the Department of Justice, and shall furnish to
the others all
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such information in its possession as may be necessary for the completion of the
reports or notifications to be filed by the others. Prior to making any
communication, written or oral, with the Federal Trade Commission, the Antitrust
Division of the federal Department of Justice or any other governmental agency
or authority or members of their respective staffs with respect to this
Agreement or the transactions contemplated hereby, each Party shall consult with
the other Parties with respect thereto.
5.4. Consents. The Company will use reasonable best efforts prior to
Closing to obtain all governmental and third party consents necessary for the
consummation by the Company of the transactions contemplated hereby.
5.5. Publicity. All general notices, releases, statements and
communications to employees, suppliers, customers and the general public and the
press relating to the transactions contemplated by or consummated pursuant to
this Agreement shall be made only at such times and in such manner as may be
mutually agreed upon by the Company Representative and the Parent; provided,
however, that any party may make a public announcement of the proposed
transaction, if, in the opinion of counsel, such announcement is required to
comply with any Law or any rule or regulation of any securities exchange or
securities quotation system and such party shall, to the extent practicable,
consult with the other party with respect to such announcements and give
reasonable prior written notice of its intent to issue such announcement.
5.6. Merger Payment Statements. Copies of Merger Payment Statements for
each Company Shareholder shall be delivered by the Company to Parent prior to
the mailing of the proxy statement or information statement used by Company in
connection with its special shareholder's meeting relating to the Merger. The
Company shall deliver the Merger Payment Statements to the Company Shareholders
with the proxy statement or information statement, together with directions to
all Company Shareholders to sign their Merger Payment Statement confirming their
agreement to the amounts stated therein and return the Merger Payment Statement
to the Company on or prior to five (5) business days prior to the Closing Date.
5.7. Disclosure Schedule.
(a) Disclosure Schedule. Contemporaneously with the execution and
delivery of this Agreement, the Company is delivering to Parent the Disclosure
Schedule, which is accompanied by a certificate signed by the chief executive
officer of the Company stating that the Disclosure Schedule is being delivered
pursuant to this Agreement and is the Disclosure Schedule referred to in this
Agreement. The Disclosure Schedule is deemed to constitute an integral part of
this Agreement and to modify the representations, warranties, covenants or
agreements of the Company contained in
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this Agreement to the extent specified therein by reference to corresponding
sections of this Agreement. Subject to the next sentence, the inclusion of any
item in the Disclosure Schedule shall constitute disclosure solely for purposes
of the section hereof specifically referenced therein, but shall not be
construed as an indication of the materiality or lack of materiality of such
item. The Company shall use its best efforts to number all exceptions noted in
the Disclosure Schedule to correspond to the applicable section of this
Agreement to which such exception refers, but it is understood that the failure
to do so shall not constitute a breach of any representation or warranty made in
this Agreement so long as such exception is disclosed with reasonable
specificity elsewhere in the Disclosure Schedule or elsewhere in this Agreement
and the Company Representative can establish that Parent reasonably should have
known that an exception noted in the Disclosure Schedule or elsewhere in this
Agreement as corresponding to a particular section or sections of this Agreement
also would correspond to another section or sections of this Agreement.
(b) Updates. Subject to Section 6.1, prior to the Closing Date, the
Company may update and supplement the Disclosure Schedule from time to time by
written notice to Parent. If requested by Parent, the Company shall meet and
discuss with Parent any change in the Disclosure Schedule made by the Company.
5.8. Company Shareholders Approval. The Company agrees, as soon as
reasonably practicable after the date of this Agreement, to take all steps
necessary to duly call, give notice of, convene and hold a special meeting of
the Company Shareholders no later than thirty (30) calendar days after the date
of this Agreement, as provided by Law and its bylaws, for the purpose of
securing their approval of this Agreement and the Merger Agreement or otherwise
to obtain such approval by written consent of the Company Shareholders dated no
later than thirty (30) days after the date of this Agreement. The Board of
Directors of the Company has recommended and will recommend that the Company
Shareholders vote to adopt and approve the Merger.
5.9. Newco Shareholder Approval. Parent's execution of this Agreement
evidences Parent's consent to and approval of the Merger as sole shareholder of
Newco and, if separately required to further evidence such consent and approval,
Parent agrees to cause the shares of Newco owned by it to be voted in favor of
the Merger subject to the terms and conditions of this Agreement.
5.10. Indemnification of Directors and Officers. Until the fifth
anniversary of the Closing Date, Parent shall not take, nor permit the Company
or Newco to take, any action so as to amend the provisions of the Restated
Articles of Incorporation or Bylaws of Company or any of the Subsidiaries with
respect to the indemnification of directors and officers, if such amendment
would adversely affect the rights of any person who shall have served as
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a director or officer of Company or any of the Subsidiaries prior to the
Closing. This covenant of Parent may be enforced after the Closing Date by the
Company Representative on behalf of any then current or former officer or
director whose rights are adversely affected by any such amendment.
5.11. Company Representative. By approving this Agreement, the Company
Shareholders hereby irrevocably make, constitute and appoint E.W. Aylward as
their true and lawful attorney-in-fact to take all actions required under this
Agreement on behalf of the Company Shareholders (including, without limitation,
the resolution or dispute of any claims) in their name and stead and further
ratify and approve all such actions as their own. In the event of the death,
inability to act or declination to act of E.W. Aylward, then a successor Company
Representative shall be selected by a majority vote of the Company Shareholders.
5.12. Third Party Proposals. From the date hereof until the earlier of the
Effective Time or the termination of this Agreement by the Company in accordance
with Article IX of this Agreement, neither the Company, any Subsidiary or any
Company Shareholder shall initiate, solicit, negotiate, accept or encourage,
directly or indirectly, inquiries or proposals (each, an "Acquisition Proposal")
with respect to, or furnish any information relating to, or enter into any
agreement with respect to, any acquisition or purchase of all or a substantial
portion of the assets (other than inventory and equipment in the Ordinary
Course) of, or the capital stock of, the Company or any Subsidiary or any
business combination with the Company other than as contemplated by this
Agreement (a "Third Party Acquisition"), or authorize or permit any of its
officers, directors or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by it to take any such
action. The Company shall notify Parent promptly if any Acquisition Proposal is
received by, any such information is requested from, or any such negotiations or
discussions are sought to be initiated with, the Company, any Subsidiary or, to
the Knowledge of the Company, any Company Shareholder, or any of their
respective officers, directors, stockholders, employees, agents or
representatives. The Company shall immediately cease and cause to be terminated
any existing discussions or negotiations with any parties conducted prior to the
date hereof with respect to any Acquisition Proposal. The Company represents
that neither it nor any Subsidiary or their respective stockholders is party to
or bound by any agreement with respect to an Acquisition Proposal other than
under this Agreement. The Company shall cause its Subsidiaries, officers,
directors, stockholders, agents and advisors to comply with the provisions of
this Section 5.12.
5.13. Non-Competition; Non-Interference; Non-Solicitation. As a
significant inducement to Parent to enter into and perform its obligations under
this Agreement, on the Closing Date the Company
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shall cause the Covered Individuals to enter into restrictive covenant
agreements with the Parent, dated the Closing Date and in form and substance
reasonably satisfactory to Parent and such Covered Individuals, providing
substantially as follows:
(a) For a period of three (3) years after the Closing Date
("Non-Competition Period"), they shall not, directly or indirectly, own,
operate, lease, manage, control, engage in, invest in, permit their names to be
used by, act as consultants or advisors to, render services for (alone or in
association with any person, firm, corporate or other business organization) or
otherwise assist in any manner any person or entity that manufactures any
products or provides any services that may be used as substitutes for or are
otherwise in competition with any products or services in the business of the
Company anywhere in the United States as it exists or is proposed as of the
Closing Date or the date of this Agreement ("Covered Activities"). Nothing
herein shall prohibit any Covered Individual from being a passive owner of not
more than four percent (4%) of the outstanding stock of any class of securities
of a publicly traded corporation engaged in Covered Activities, so long as such
Covered Individual does not actively participate in the management of such
corporation;
(b) During the Non-Competition Period, they shall not, (i) induce or
attempt to induce any employee of the Company or any of its Subsidiaries to
leave its employ, or (ii) induce or attempt to induce any supplier, licensee,
franchisee, customer or other business relation of the Company to cease doing
business with it;
(c) That (i) the covenants set forth in Sections 5.13(a) and (b) are
reasonable in geographical and temporal scope and in all other respects, (ii)
Parent would not have entered into this Agreement but for the covenants of the
Covered Individuals contained therein, and (iii) the covenants contained therein
have been made in order to induce Parent to enter into this Agreement; and
(d) That if, at the time of enforcement of the covenants contained
in Sections 5.13(a) and (b), a court shall hold that the duration, scope, or
area restrictions stated therein are unreasonable under circumstances then
existing, the parties agree that the maximum duration, scope, or area reasonable
under such circumstances shall be substituted for the stated duration, scope or
area.
(e) That the Covered Individuals recognize and affirm that in the
event of their breach of any of the foregoing restrictive covenants, money
damages would be inadequate and the damaged party would have no adequate remedy
at law. Accordingly, each Covered Individual agrees that Parent and Newco shall
have the right, in addition to any other rights and remedies existing in its
favor, to enforce its rights and the Covered Individuals'
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obligations therein not only by an action or actions for damages, but also by an
action or actions for specific performance, injunction and/or other equitable
relief in order to enforce or prevent any violations (whether anticipatory,
continuing or future) of the provisions thereof (including, without limitation
but without duplication, the extension of the Non-Competition Period by a period
equal to (i) the length of the violation of any of the provisions thereof plus
(ii) the length of any court proceedings necessary to stop such violation). In
the event of a breach or violation of any of the provisions thereof, the running
of the Non-Competition Period (but not of the Covered Individuals' obligations
thereunder) shall be tolled during the continuance of any actual breach or
violation.
ARTICLE VI
CONDITIONS PRECEDENT TO PARENT'S AND NEWCO'S OBLIGATIONS
Each and every obligation of Parent and Newco to be performed on the
Closing Date shall be subject to the satisfaction prior to or at the Closing of
each of the following conditions:
6.1. Representations and Warranties True on the Closing Date. Each of the
representations and warranties made by Company in this Agreement shall be true
and correct in all material respects (i) when made and (ii) at and as of the
Closing Date as though such representations and warranties were made or given on
and as of the Closing Date; provided, however, that for purposes of this Section
6.1 only, any updates and supplements to the Disclosure Schedule delivered by
the Company to Parent after the date of this Agreement and prior to the Closing
shall not be taken into account, except in each of cases (i) and (ii) for any
changes consented to in writing by Parent or Newco; and for purposes of this
Section 6.1 only no effect shall be given to any materiality qualifier contained
in any such representation or warranty.
6.2. Compliance With Agreement. The Company shall have in all material
respects performed and complied with all of its agreements and obligations under
this Agreement which are to be performed or complied with by it prior to or on
the Closing Date.
6.3. Absence of Litigation. No action, suit, investigation or proceeding
shall have been commenced or threatened by a governmental agency or third party
against Parent, Newco, Company, Subsidiaries, or any of the affiliates, officers
or directors of any of them, with respect to the transactions contemplated
hereby, challenging the rights of the parties hereto to consummate such
transactions or which reasonably could be expected to have a Material Adverse
Effect.
6.4. Consents and Approvals. All material approvals, consents and waivers
that are necessary for the Company to effect the
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transactions contemplated hereby shall have been received, and executed
counterparts thereof shall have been delivered to Parent or Newco at or prior to
the Closing.
6.5. HSR Act Waiting Period. All applicable waiting periods related to the
HSR Act shall have expired.
6.6. No Material Adverse Effect. During the period from the date hereof to
the Closing Date, no event which has had or could reasonably be expected to have
a Material Adverse Effect shall have occurred.
6.7. Shareholders Approval. This Agreement, including specifically the
Merger Agreement, the Merger and the transactions contemplated thereby shall
have been approved by at least a majority of all the votes entitled to be cast
with respect thereto by the holders of the outstanding Class A Common Stock and
the holders of the outstanding Class B Common Stock, voting as separate voting
groups; and dissenters' rights shall not have been asserted with respect to more
than 1% of the number of issued and outstanding shares of Class A Common Stock
and Class B Common Stock, taken together as a single class for this purpose.
6.8. Articles of Merger. The Articles of Merger shall have been filed with
the Wisconsin Department of Financial Institutions.
6.9. Documents to be Delivered by Company. At the Closing, Company shall
have delivered to Parent and Newco the following documents, in each case duly
executed or otherwise in proper form:
(a) Stock Certificate(s). Stock certificates representing all of the
outstanding shares of the Class A Common Stock and Class B Common Stock, except
for stock certificates held by a Company Shareholder who has asserted
dissenters' rights.
(b) Compliance Certificate. A certificate signed by the chief
executive officer of the Company that each of the representations and warranties
made by the Company in this Agreement is true and correct in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of the Closing
Date (except for any changes permitted by the terms of this Agreement or
consented to in writing by Parent), and that the Company has performed and
complied in all material respects with all of its obligations under this
Agreement which are to be performed or complied with on or prior to the Closing
Date.
(c) Opinion of Counsel. A written opinion of Quarles & Brady,
counsel to Company, dated as of the Closing Date, addressed to Parent and Newco,
substantially in the form of Exhibit E hereto.
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(d) Certified Resolutions. Certified copies of the resolutions of
the Board of Directors and the shareholders of Company, authorizing and
approving this Agreement and the consummation of the transactions contemplated
by this Agreement.
(e) Escrow Agreement and Paying Agent Agreement. The Escrow
Agreement and Paying Agent Agreement.
(f) Articles; Bylaws. A copy of the articles of incorporation of
Company and each Subsidiary certified as of a recent date by the Wisconsin
Department of Financial Institutions and a copy of the bylaws of Company and
each Subsidiary certified by the secretary of Company and each Subsidiary,
respectively.
(g) Incumbency Certificate. Incumbency certificates relating to each
person executing (as a corporate officer or otherwise on behalf of another
person) any document executed and delivered to Parent or Newco pursuant to the
terms hereof.
(h) Non-Competition, Non-Interference, Non-Solicitation Agreement.
Parent shall have received the non-competition, noninterference and
non-solicitation agreement referred to in Section 5.13 of this Agreement
executed by each Covered Individual.
(i) Other Documents. All other documents, instruments or writings
required to be delivered to Parent or Newco at or prior to the Closing pursuant
to this Agreement and such other certificates of authority and documents as
Parent or Newco may reasonably request.
6.10. Merger Payment Statements. Parent shall have received signed copies
of Merger Payment Statements from all of the Company Shareholders except any
Company Shareholder who has asserted dissenters' rights.
6.11. Amendment of Restated Articles. The Company shall have amended its
Restated Articles of Incorporation to remove therefrom any restrictions on the
transfer of Company Capital Stock.
6.12. Termination of Restrictive Stock Transfer Agreement. The Company and
the Company Shareholders party thereto shall have terminated that certain
Restrictive Stock Transfer Agreement dated July 14, 1995.
6.13. Note Repayment and Release of Stock Pledge. The three (3) promissory
notes dated March 24, 1994 issued to the Company by E.W. Aylward, Andrew A.
Aylward and Richard J. Aylward, respectively, each in the original principal
amount of $974,000, shall have been repaid to the Company, and the shares of
Class B Common Stock pledged to the Company to secure payment of such loans
shall have been released by the Company from such pledges.
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6.14. Real Property.
(a) A title insurance company selected by Parent (the "Title
Company") shall be willing to insure at standard rates the Company's or the
applicable Subsidiary's marketable title in and to the Real Property in fee
simple and the mortgage lien on the Real Property of Parent's Lenders, free and
clear of all liens, defects, claims, leases, rights of possession or other
encumbrances (other than the matters disclosed in Section 3.8(d) of the
Disclosure Schedule) including such endorsements and affirmative coverages as
Parent and Parent's Lenders shall reasonably require including without
limitation non-imputation endorsements. Company shall provide all such
affidavits as the Title Company reasonably shall require in order to afford such
coverages.
(b) Parent shall have received a survey of each Real Property
conforming to the Minimum Standard Detail Requirements jointly established and
approved in 1992 by ALTA and ACSM certified to the Company, Parent's Lenders and
the Title Company and showing no encroachments or encumbrances other than the
matters disclosed in Section 3.8(d) of the Disclosure Schedule.
(c) Parent shall have received from the Company and each Subsidiary
that owns any of the Real Property an affidavit stating that such Person is not
a "foreign person", as defined in Section 1445(f)(3) of the Code.
6.15. Financing. Parent shall have received the cash proceeds of
financings from the Parent's Lenders in an amount necessary to consummate the
Merger and the other transactions contemplated hereby and to pay all fees and
expenses in connection therewith and to provide for the ongoing working capital
needs of the Company for the term of the senior financing provided by Parent's
Lenders, all on terms and conditions satisfactory to Parent.
6.16. Due Diligence. Parent shall have completed its due diligence review
of the Company and the Subsidiaries, and Parent shall, in good faith, be
satisfied with the results of such due diligence review.
6.17. Minimum Cash on Hand. The Company and its Subsidiaries on a
consolidated basis shall have at least $18,000,000 cash and cash equivalents on
hand at Closing (net of checks issued but not yet presented).
ARTICLE VII
CONDITIONS PRECEDENT TO COMPANY'S OBLIGATIONS
Each and every obligation of Company to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the following
conditions:
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7.1. Representations and Warranties True on the Closing Date. Each of the
representations and warranties made by Parent and Newco in this Agreement shall
be true and correct in all material respects when made and shall be true and
correct in all material respects at and as of the Closing Date as though such
representations and warranties were made or given on and as of the Closing Date.
7.2. Compliance With Agreement. Parent and Newco shall have in all
material respects performed and complied with all of their agreements and
obligations under this Agreement which are to be performed or complied with by
them prior to or on the Closing Date.
7.3. Absence of Litigation. No litigation shall have been commenced or
threatened against Parent, Newco, Company, Subsidiaries or any of the
affiliates, officers or directors of any of them, with respect to the
transactions contemplated hereby which would prevent the Closing.
7.4. HSR Act Waiting Period. All applicable waiting periods related to the
HSR Act shall have expired.
7.5. Documents to be Delivered by Parent and Newco. At the Closing, Parent
and Newco shall deliver to Company the following documents, in each case duly
executed or otherwise in proper form:
(a) Compliance Certificates. A certificate signed by the chief
executive officer of Parent and a certificate signed by the chief executive
officer of Newco that each of the representations and warranties made by Parent
and Newco in this Agreement are true and correct in all material respects on and
as of the Closing Date with the same effect as though such representations and
warranties had been made or given on and as of the Closing Date (except for any
changes permitted by the terms of this Agreement or consented to in writing by
Company), and that Parent and Newco have each performed and complied with all of
their obligations under this Agreement which are to be performed or complied
with on or prior to the Closing Date.
(b) Opinion of Counsel. A written opinion of Kirkland & Ellis,
counsel to Parent and Newco, and, if determined necessary by Parent, of local
counsel as to applicable laws other than federal, New York and Delaware laws,
dated as of the Closing Date, addressed to Company and the Company
Representative, in substantially the form of Exhibit F hereto.
(c) Certified Resolutions. A certified copy of the resolutions of
the boards of directors of Parent and Newco, and of the sole shareholder of
Newco, authorizing and approving this Agreement and the consummation of the
transactions contemplated by this Agreement.
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(d) Incumbency Certificates. Incumbency certificates relating to
each person executing any document executed and delivered to Company by Parent
or Newco pursuant to the terms hereof.
(e) Escrow Agreement and Paying Agent Agreement. The Escrow
Agreement and Paying Agent Agreement.
(f) Other Documents. All other documents, instruments or writings
required to be delivered to Company at or prior to the Closing pursuant to this
Agreement and such other certificates of authority and documents as Company may
reasonably request.
7.6. Articles of Merger. The Articles of Merger shall have been filed with
the Wisconsin Department of Financial Institutions.
7.7. Shareholders Approval. This Agreement, including specifically the
Merger Agreement, the Merger and the transactions contemplated thereby shall
have been approved by at least a majority of all the votes entitled to be cast
with respect thereto by the holders of the outstanding Class A Common Stock and
the holders of the outstanding Class B Common Stock, voting as separate voting
groups.
7.8. Merger Price. Parent or Newco shall have paid the Merger Price in
accordance with the provisions of Article II of this Agreement and of the Merger
Agreement.
7.9. Reliance Letter. The Company Representative shall have received a
letter dated as of the Closing Date, addressed to the Board of Directors of the
Company and the Company Shareholders and in form and substance reasonably
satisfactory to the Company Representative, from the independent evaluation firm
that is providing a solvency letter to Parent's Lenders as to the solvency of
Parent and its subsidiaries on a consolidated basis after giving effect to the
transactions contemplated by this Agreement and the related agreements between
Parent and Parent's Lenders, stating that the Board of Directors of the Company
and the Company Shareholders may rely on such solvency letter with the same
effect as if such solvency letter had been issued to the Board of Directors of
the Company and the Company Shareholders directly.
ARTICLE VIII
SURVIVAL; INDEMNIFICATION
8.1. Survival; Remedies for Breach.
(a) Each and every representation, warranty, agreement and covenant
made by Company, Parent or Newco in this Agreement or in any exhibits,
schedules, instruments of transfer or other documents delivered pursuant thereto
or in connection therewith
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shall be effective regardless of any investigation that may have been or may be
made at any time by or on behalf of the party to whom such representation,
warranty, agreement or covenant is made and shall survive the Closing, but
except as otherwise provided in this subsection 8.1, shall terminate on the date
that is eighteen (18) months after the Closing Date and thereafter be of no
further force or effect (the date on which any covenant, agreement,
representation or warranty terminates in accordance with this Article VIII being
referred to herein as the "Cut-off Date" for such covenant, agreement,
representation or warranty).
(b) Any covenant, agreement, representation or warranty of the
Company relating to Taxes or Tax Returns contained in Sections 3.6 or 5.2(g) of
this Agreement shall extend for a period of thirty-six (36) months after the
Closing Date.
(c) Any covenant, agreement, representation or warranty of the
Company relating to Environmental Laws or Hazardous Substances contained in
Sections 3.11 or 3.16 of this Agreement shall extend for a period of forty-eight
(48) months after the Closing Date.
(d) Any covenant or agreement contained herein that by its terms is
to be performed after the Closing Date shall survive for (i) a period of
eighteen (18) months from the last date on which performance is due under such
covenant or agreement, or (ii) in the absence of a specified due date for
performance, a period of two (2) years after the Closing Date.
(e) Any covenant, agreement, representation or warranty that would
otherwise terminate at the Cut-off Date with respect thereto shall survive as to
a claim for indemnification if the notice referred to in Section 8.2(b)(vi) or
Section 8.3(b), as the case may be, of the breach, inaccuracy or nonperformance
thereof shall have been given on or prior to the Cut-off Date with respect
thereto to the party against whom indemnification may be sought.
(f) The covenants and agreements contained in this Article VIII
shall survive until such time as any claim for indemnification is finally
settled in accordance with the terms hereof.
(g) After the Closing, the indemnities set forth in this Article
VIII shall be the exclusive remedies of the Company, Parent and Newco for the
breach of any covenant, agreement, representation or warranty in this Agreement
by the Company, Parent and Newco, as the case may be, and the parties shall not
be entitled to a rescission of this Agreement or to any further indemnification
rights or claims of any nature whatsoever in respect thereof, all of which the
Parties waive; provided, however, that any Dispute related to the post-closing
adjustment described in Section 2.6 of
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this Agreement shall be resolved pursuant to the procedures set forth in that
Section 2.6.
8.2. Indemnification on Behalf of Company Shareholders; Escrow of Funds.
(a) General. To induce Parent and Newco to enter into this Agreement
and to consummate the Merger, the Company has agreed, and by approving this
Agreement the Company Shareholders shall have agreed, that, subject to the
provisions of this Section and the other Sections of this Article VIII, the
Escrow Deposit shall be withheld and placed in escrow at Closing for the purpose
of indemnifying the Buying Group and their respective directors, officers,
employees and Shareholders and holding them harmless from and against, and as
the Buying Group's sole source of indemnification for, any and all Losses
incurred or sustained or suffered by, or imposed upon, Parent or Newco and their
respective directors, officers, employees and Shareholders, with respect to or
by reason of any failure, breach, default, inaccuracy or lack of performance on
the part of the Company of any of its representations, warranties, agreements or
covenants under this Agreement or contained in any certificate, document or
instrument delivered by the Company hereunder. The Escrow Deposit shall be
withheld and placed in escrow at the Closing with the Escrow Agent who shall
hold and administer the Escrow Deposit in accordance with the terms of the
Escrow Agreement. ALL INDEMNITY PAYMENTS TO THE BUYING GROUP UNDER THIS
AGREEMENT SHALL BE PAID FROM AND LIMITED TO, AND SHALL IN NO CIRCUMSTANCES
EXCEED, THE PRINCIPAL OF THE ESCROW DEPOSIT. SUCH INDEMNITY PAYMENTS FROM THE
ESCROW DEPOSIT SHALL BE THE SOLE SOURCE OF PAYMENT FROM, AND THE SOLE REMEDY
AGAINST, THE COMPANY AND THE COMPANY SHAREHOLDERS SHALL HAVE NO RESPONSIBILITY
FOR AMOUNTS THAT MAY BECOME PAYABLE HEREUNDER, OR OTHERWISE, EXCEPT TO THE
EXTENT OF THEIR PRO RATA PORTION OF THE PRINCIPAL OF THE ESCROW DEPOSIT.
(b) Notwithstanding anything to the contrary in this Agreement, the
Buying Group shall not be entitled to indemnification under Section 8.2(a):
(i) with respect to a claim for indemnification hereunder
related to the title of any real estate with respect to which there is a title
insurance policy in effect, except to the extent that the Buying Group has first
unsuccessfully attempted to recover upon such title insurance, provided that the
Cut-off Date with respect to any such claim shall be tolled for any period
during which the Company or any Subsidiary is in good faith trying to recover
under such title insurance if the Company Representative has been given written
notice of such claim by Parent prior to the applicable Cut-off Date in the
manner required hereunder; and
(ii) in connection with any claim for indemnification
hereunder with respect to which the Company or any
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Subsidiary has an enforceable contractual right of indemnification or right of
set-off against any third party, except to the extent that the Company or such
Subsidiary has first unsuccessfully attempted to recover upon such contractual
right of indemnification or set-off or unless the Company or such Subsidiary is
enjoined by a court of competent jurisdiction or otherwise legally prevented
from receiving the benefit of any such contractual right of indemnification or
set-off, provided that the Cut-off Date with respect to any such claim shall be
tolled for any period during which the Company or any Subsidiary is in good
faith trying to recover from any such third party if the Company Representative
has been given written notice of such claim by Parent prior to the applicable
Cut-off Date in the manner required hereunder; and
(iii) with respect to any Loss resulting from a breach of a
representation, warranty, covenant or agreement that is disclosed in a written
notice, setting forth in reasonable detail the specific facts and circumstances
pertaining thereto, delivered by the Company to Parent after the date of this
Agreement and not less than ten (10) days prior to the Closing if the Buying
Group nevertheless elects to close (regardless of whether the Buying Group
waives such breach in writing or otherwise); and
(iv) in connection with any claim for indemnification based
upon a claim, assessment or deficiency for any Tax which arises from adjustments
having the effect only of shifting income, credits and/or deductions from one
fiscal period to another to the extent of any offsetting reduction in Tax for
another period; and
(v) to the extent of the value of any net Tax benefit realized
(by reason of a Tax deduction, basis reductions, shifting of income, credits
and/or deductions or otherwise) by the Buying Group or the Company in connection
with the Loss that forms the basis of the Buying Group's claim for
indemnification hereunder net of any Tax due from the Buying Group with respect
to the indemnification payment itself; and
(vi) with respect to any claim for indemnification hereunder,
unless Parent has given the Company Representative written notice of such claim,
setting forth what Parent in good faith reasonably believes is sufficient detail
as to the facts and circumstances pertaining thereto to inform the Company
Representative of the nature of the claim, prior to the applicable Cut-off Date;
and
(vii) to the extent of any insurance proceeds actually
received by the Buying Group in connection with the facts giving rise to such
indemnification, net of any Tax due with respect to the receipt of such
insurance proceeds and net of the present value of any future insurance premium
increases directly
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attributable to the insurance claim filed by the Buying Group that gave rise to
the insurance proceeds received; and
(viii) for any De Minimis Claim, it also being understood and
agreed by the parties to this Agreement that for purposes of clauses (ix), (x),
(xi) and (xii) of this Section 8.2(b), the amount of the Buying Group's Losses
shall not include the amount of any De Minimis Claim; and
(ix) for the first $500,000.00 of Losses as to which the
Buying Group otherwise may be entitled to indemnity hereunder (without giving
effect to this clause (ix) or clauses (x), (xi) or (xii) of this Section
8.2(b)), all of such $500,000.00 of Losses being the responsibility of the
Buying Group, it being understood and agreed, however, by the parties to this
Agreement that the limitations on indemnification set forth in this clause (ix)
and in clauses (x), (xi) and (xii) of this Section 8.2(b) shall not apply with
respect to Losses of the Buying Group arising from (i) failure of the Company or
the Company Representative to perform their respective obligations under
Sections 2.3, 2.6, 5.2(j), 5.2(k), 5.2(m), 5.2(n) and 10.6(f) of this Agreement
and this Article VIII or (ii) any breach by the Company of its representations
and warranties contained in Sections 3.1(c), 3.2, 3.23, 3.24 and 11.6(a) of this
Agreement; and
(x) for two-thirds of each dollar of Losses of the second
$500,000.00 of Losses (over and above the $500,000.00 of Losses specified in
clause (ix) of this Section 8.2(b)) as to which the Buying Group otherwise may
be entitled to indemnity hereunder (without giving effect to this clause (x) or
clauses (ix), (xi) or (xii) of this Section 8.2(b)), all of such two-thirds of
each dollar of Losses of the second $500,000.00 of Losses being the
responsibility of the Buying Group; and
(xi) for one-half of each dollar of Losses of the third
$500,000.00 of Losses (over and above the $500,000.00 of Losses specified in
clauses (ix) and (x) of this Section 8.2(b)) as to which the Buying Group
otherwise may be entitled to indemnity hereunder (without giving effect to this
clause (xi) or clauses (ix), (x) or (xii) of this Section 8.2(b)), all of such
one-half of each dollar of Losses of the third $500,000.00 of Losses being the
responsibility of the Buying Group; and
(xii) for one-third of each dollar of Losses of the fourth
$500,000.00 of Losses (over and above the $500,000.00 of Losses specified in
clauses (ix), (x) and (xi) of this Section 8.2(b)) as to which the Buying Group
otherwise may be entitled to indemnity hereunder (without giving effect to this
clause (xii) or clauses (ix), (x) or (xi) of this Section 8.2(b)), all of such
one-third of each dollar of Losses of the fourth $500,000.00 of Losses being the
responsibility of the Buying Group; and
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(xiii) for any Losses in excess of the amount in the Escrow
Deposit, all of such Losses in excess of the Escrow Deposit being the
responsibility of the Buying Group.
The following examples are for illustration purposes only with
respect to clauses (ix), (x), (xi) and (xii) of this Section 8.2(b): Example A:
in the event that Losses in aggregate total $750,000, Buying Group shall not be
entitled to any indemnification with respect to the first $500,000 thereof, but
shall be entitled to indemnification for one-third of every dollar of Losses in
excess of $500,000 (i.e. 1/3 x $250,000 = $83,333.33); Example B: if Losses in
aggregate total $1,250,000, Buying Group shall be entitled to one-third of every
dollar of Losses in excess of $500,000 up to $1,000,000 and one-half of every
dollar of Losses in excess of $1,000,000 (i.e. (1/3 x $500,000) + (1/2 x
$250,000) = $291,666.67).
8.3. Indemnification by Parent.
(a) Subject to the provisions of this Section and the other Sections
of this Article VIII, Parent agrees to indemnify the Company and hold it
harmless (and agrees to indemnify and hold harmless any persons adversely
affected by Parent's failure to comply with Section 5.10 of this Agreement) from
and against any and all Losses incurred or sustained by or imposed upon the
Company (or such persons) with respect to or by reason of any failure, breach,
default, inaccuracy or lack of performance on the part of Parent or Newco of any
of their respective representations, warranties, agreements or covenants under
this Agreement or contained in any certificate, document or instrument delivered
by Parent or Newco hereunder.
(b) Notwithstanding anything to the contrary in this Agreement, the
Company (and such persons) shall not be entitled to indemnification under
Section 8.3(a) with respect to any claim for indemnification hereunder unless
the Company Representative has given Parent written notice of such claim,
setting forth what the Company Representative in good faith reasonably believes
is sufficient detail as to the facts and circumstances pertaining thereto to
inform the Parent of the nature of the claim prior to the applicable Cut-off
Date.
8.4. Procedures for Indemnification.
(a) If an Indemnified Party shall claim to have suffered a Loss for
which indemnification is available under Section 8.2 or 8.3, as the case may be
(for purposes of this Section 8.4, regardless of whether such Indemnified Party
is entitled to receive a payment in respect of such claim by virtue of
paragraphs (b)(ix), (x), (xi) or (xii) of Section 8.2), the Indemnified Party
shall notify the Indemnifying Party in writing of such claim within the time
periods provided in paragraph (b)(vi) of Section 8.2 or
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paragraph (b) of Section 8.3, as the case may be. Such written notice shall
describe what the Indemnified Party in good faith reasonably believes to be the
nature of such claim, the facts and circumstances that give rise to such claim
and the amount of such claim if reasonably ascertainable at the time such claim
is made (or if not then reasonably ascertainable, the maximum amount of such
claim reasonably estimated by the Indemnified Party). In the case of a claim by
the Buying Group, a copy of such written notice shall also be provided by the
Indemnified Party to the Escrow Agent. In the event that within forty-five (45)
days after the receipt by the Indemnifying Party of such a written notice from
the Indemnified Party, the Indemnified Party shall not have received from the
Indemnifying Party a written objection to such claim, such claim shall be
conclusively presumed and considered to have been assented to and approved by
the Indemnifying Party.
(b) If within the forty-five (45) day period described in paragraph
(a) above the Indemnified Party (and, in the case of claim by the Buying Group,
the Escrow Agent) shall have received from the Indemnifying Party a notice
setting forth the Indemnifying Party's objections to such claim and the
Indemnifying Party's reasons for such objection, then the Parties shall follow
the procedures set forth in Article X below with respect to the resolution of
such matter.
8.5. Procedures for Third-Party Claims.
(a) Any Indemnified Party seeking indemnification pursuant to this
Article VIII in respect of any Third-Party Claim shall give the Indemnifying
Party from whom indemnification with respect to such claim is sought (i) prompt
written notice (but in no event more than twenty (20) days after the Indemnified
Party acquires knowledge thereof) of such Third-Party Claim and (ii) copies of
all documents and information relating to any such Third-Party Claim within
twenty (20) days of their being obtained by the Indemnified Party; provided,
that the failure by the Indemnified Party to so notify or provide copies to the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
to the Indemnified Party for any liability hereunder except to the extent that
such failure shall have materially prejudiced the defense of such Third-Party
Claim.
(b) The Indemnifying Party shall have the right, at its option, and
expense, to defend against, negotiate, settle or otherwise deal with any
Third-Party Claim with respect to which it is the Indemnifying Party and to be
represented by counsel of its own choice, and the Indemnified Party will not
admit any liability with respect thereto or settle, compromise, pay or discharge
the same without the consent of the Indemnifying Party, which consent shall not
be unreasonably withheld, so long as such claim is primarily for money damages
and the Indemnifying Party is contesting or defending the same with reasonable
diligence and in
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good faith; provided, that the Indemnified Party may participate in any
proceeding with counsel of its choice and at its expense and shall be entitled
to control any such proceeding as to which the counsel for the Indemnifying
Party has an ethical conflict of interest in representing both the Indemnifying
Party and the Indemnified Party which conflict the Indemnified Party is not
willing to waive; provided further, that the Indemnifying Party may not enter
into a settlement of any such Third-Party Claim without the consent of the
Indemnified Party, which consent shall be not unreasonably withheld, unless such
settlement requires no more than a monetary payment for which the Indemnified
Party is fully indemnified by the Indemnifying Party or involves other matters
not binding upon the Indemnified Party and as to which the Indemnified Party has
been fully released; and provided further that, in the event the Indemnifying
Party does not, within fifteen (15) days after it receives written notice of the
Third-Party Claim from the Indemnified Party, agree in writing to accept the
defense of, and assume all responsibility for, such Third-Party Claim as
provided above in this Section 8.5(b), then the Indemnified Party shall have the
right to defend against, negotiate, settle or otherwise deal with the
Third-Party Claim in such manner as the Indemnified Party deems appropriate, in
its sole discretion, and the Indemnified Party shall be entitled to
indemnification therefor from the Indemnifying Party to the extent provided
under this Article VIII.
ARTICLE IX
TERMINATION OF AGREEMENT
9.1. Causes. This Agreement and the transactions contemplated hereby may
be terminated at any time prior to the completion of the Closing as follows, and
in no other manner:
(a) By mutual consent of the Parties;
(b) By written notice from Parent to the Company if:
(i) there have been material misrepresentations or breaches by
the Company in the representations, warranties, agreements or covenants of the
Company set forth herein which misrepresentations or breaches, individually or
in the aggregate, would or would be reasonably likely to result in a Material
Adverse Effect, and such misrepresentations or breaches have not been cured
within a reasonable time after notice thereof to the Company from Parent; or
(ii) any of the conditions provided for in Article VI of this
Agreement have not been satisfied, or waived by Parent or Newco in writing, and
the Closing has not occurred by January 31, 1997 or the date of such notice,
whichever is later; or
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(iii) the Closing has not occurred by February 15, 1997, for
reasons other than the failure of the Parent or Newco to perform their
respective obligations hereunder; or
(c) By written notice from the Company to Parent and Newco if:
(i) there has been a material misrepresentation or breach by
Parent or Newco in the respective representations, warranties, agreements or
covenants of Parent and Newco set forth herein and such misrepresentation or
breach has not been cured within a reasonable time after notice thereof to
Parent and Newco from the Company; or
(ii) any of the conditions provided for in Article VII of this
Agreement have not been satisfied, or waived by the Company in writing, and the
Closing has not occurred by January 31, 1997 or the date of such notice,
whichever is later; or
(iii) the Closing has not occurred by February 15, 1997, for
reasons other than the failure of the Company to perform its obligations
hereunder; or
(iv) any of the events identified as "termination events" on
Schedule 9.1(c)(iv) attached to this Agreement has not occurred, or been waived
by the Company in writing, by the date indicated for such event.
9.2. Effect of Termination. In the event of a termination of this
Agreement by Parent or the Company under subparagraphs 9.1(b)(i) or 9.1(c)(i),
the terminating party shall have such rights and remedies in law or in equity as
the law may provide.
9.3. Right to Proceed. If any of the conditions specified in Article VI
hereof have not been satisfied, Parent and Newco, in lieu of any other rights
that may be available to them, may waive their rights to have such conditions
satisfied prior to Closing and may proceed with the transactions contemplated
hereby, and if any of the conditions specified in Article VII hereof have not
been satisfied prior to Closing, the Company, in lieu of any other rights that
may be available to it, may waive its rights to have such conditions satisfied
and may proceed with the transactions contemplated hereby.
ARTICLE X
DISPUTE RESOLUTION
10.1. Dispute. As used in this Agreement, "Dispute" shall mean any dispute
or disagreement between Parent (for itself or on behalf of Newco) and Company or
the Company Representative concerning the interpretation of this Agreement, the
validity of
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this Agreement, any breach or alleged breach by any party under this Agreement
or any other matter relating in any way to this Agreement.
10.2. Process. Other than with respect to claims or disputes arising in
connection with a breach or asserted breach of Section 5.12 of this Agreement or
the wrongful failure by the Company or Parent to consummate the Merger, if a
Dispute arises, the parties to the Dispute shall follow the procedures specified
in Sections 10.3, 10.4 and 10.5 of this Agreement; provided, however, that any
Dispute related to the post-closing adjustment described in Section 2.6 of this
Agreement shall be resolved pursuant to the procedures set forth in that Section
2.6.
10.3. Negotiations. The parties shall promptly attempt to resolve any
Dispute by negotiations between the Parent and the Company Representative.
Either the Parent or Company Representative may give the other party written
notice of any Dispute not resolved in the normal course of business. The Parent
and the Company Representative shall meet at a mutually acceptable time and
place within ten (10) calendar days after delivery of such notice, and
thereafter as often as they reasonably deem necessary, to exchange relevant
information and to attempt to resolve the Dispute. If the Dispute has not been
resolved by these Persons within thirty (30) calendar days of the disputing
party's notice, or if the parties fail to meet within such ten (10) calendar
days, either the Parent or the Company Representative may initiate mediation as
provided in Section 10.4 of this Agreement. If a negotiator intends to be
accompanied at a meeting by legal counsel, the other negotiator shall be given
at least three (3) business days' notice of such intention and may also be
accompanied by legal counsel.
10.4. Mediation. If the Dispute is not resolved by negotiations pursuant
to Section 10.3 of this Agreement, the Parent and the Company Representative
shall attempt in good faith to resolve any such Dispute by mediation. Either the
Parent or the Company Representative may initiate a mediation proceeding by a
request in writing to the other party (the "Request"), and both parties will
then be obligated to engage in a mediation. The proceeding will be conducted in
accordance with the then current Center for Public Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the following exceptions:
(a) if the parties have not agreed within thirty (30) calendar days
of the Request on the selection of a mediator willing to serve, CPR, upon the
request of either the Parent or the Company Representative, shall appoint a
member of the CPR Panels of Neutrals as the mediator; and
(b) efforts to reach a settlement will continue until the conclusion
of the proceedings, which shall be deemed to occur
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upon the earliest of the date that: (i) a written settlement is reached; or (ii)
the mediator concludes and informs the parties in writing that further efforts
would not be useful; or (iii) the Parent and the Company Representative agree in
writing that an impasse has been reached; or (iv) is sixty (60) calendar days
after the Request and none of the events specified in Sections 10.4(b)(i), (ii)
or (iii) have occurred. No party may withdraw before the conclusion of the
proceeding.
10.5. Submission to Adjudication. If a Dispute is not resolved by
negotiation pursuant to Section 10.3 of this Agreement or by mediation pursuant
to Section 10.4 of this Agreement within 100 calendar days after initiation of
the negotiation process pursuant to Section 10.3 of this Agreement, such Dispute
and any other claims arising out of or relating to this Agreement may be heard,
adjudicated and determined in an action or proceeding filed in any state or
federal court sitting in Milwaukee County, Wisconsin.
10.6. General.
(a) Provisional Remedies. At any time during the procedures
specified in Sections 10.3 and 10.4 of this Agreement, a party may seek a
preliminary injunction or other provisional judicial relief if in its judgment
such action is necessary to avoid irreparable damage or to preserve the status
quo. Despite such action, the parties will continue to participate in good faith
in the procedures specified in this Article X of this Agreement.
(b) Tolling Statue of Limitations. All applicable statutes of
limitation and defenses based upon the passage of time shall be tolled while the
procedures specified in this Article X of this Agreement are pending. The
parties will take such action, if any, as is required to effectuate such
tolling.
(c) Performance to Continue. Each party is required to continue to
perform its obligations under this Agreement pending final resolution of any
Dispute.
(d) Extension of Deadlines. All deadlines specified in this Article
X of this Agreement may be extended by mutual agreement between the Parent and
the Company Representative.
(e) Enforcement. The parties regard the obligations in this Article
X of this Agreement to constitute an essential provision of this Agreement and
one that is legally binding on them. In case of a violation of the obligations
in this Article X of this Agreement by either the Parent or the Company
Representative, the other party may bring an action to seek enforcement of such
obligations in any court of Law having jurisdiction thereof.
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(f) Costs. The parties to the dispute shall pay: (i) their own
costs, fees, and expenses incurred in connection with the application of the
provisions of this Article X of this Agreement; and (ii) fifty percent (50%) of
the fees and expenses of CPR and the mediator in connection with the application
of the provisions of Section 10.4 of this Agreement; provided that, prior to the
Closing, the Company Representative's costs, fees and expenses shall be paid by
the Company, and after the Closing, the Company Representative's costs, fees and
expenses shall be paid pro rata by the Company Shareholders.
(g) Replacement. If CPR is no longer in business or is unable or
refuses or declines to act or to continue to act under this Article X of this
Agreement for any reason, then the functions specified in this Article X of this
Agreement to be performed by CPR shall be performed by another Person engaged in
a business equivalent to that conducted by CPR as is agreed to by the Parent and
the Company Representative (the "Replacement"). If the Parent and the Company
Representative cannot agree on the identity of the Replacement within ten (10)
calendar days after a Request, the Replacement shall be selected by the Chief
Judge of the United States District Court for the Eastern District of Wisconsin
upon application by any party hereto. If a Replacement is selected by either
means, this Article X shall be deemed appropriately amended to refer to such
Replacement.
ARTICLE XI
MISCELLANEOUS
11.1. Further Assurance. From time to time, at a Party's request and
without further consideration, the other Parties will execute and deliver to the
requesting Party such documents and take such other action as the requesting
Party may reasonably request in order to consummate more effectively the
transactions contemplated hereby.
11.2. Assignment. The rights and obligations of a Party hereunder may not
be assigned, transferred or encumbered without the prior written consent of the
other parties. Notwithstanding the foregoing, Parent may, without such written
consent assign, directly or indirectly, any or all of its rights and obligations
hereunder to any of its corporate affiliates under common ownership with Parent,
or for collateral purposes to any of Parent's Lenders or successor lenders
providing refinancing of the financing provided by Parent's Lenders.
11.3. Law Governing Agreement. This Agreement shall be
construed and interpreted according to the internal Laws of the
State of Wisconsin, excluding any choice of law rules that may
direct the application of the Laws of another jurisdiction.
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11.4. Amendment and Modification. Parent, Newco and Company may amend,
modify and supplement this Agreement, and any of the terms, covenants,
representations, warranties or conditions hereof may be waived, only by a
written instrument executed on behalf of all of the Parties hereto or, in the
case of a waiver, by the Party waiving compliance.
11.5. Notice. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally delivered; (b)
sent by telecopier, facsimile transmission or other electronic means of
transmitting written documents; or (c) sent to the parties at their respective
addresses indicated herein by registered or certified U.S. mail, return receipt
requested and postage prepaid, or by private overnight mail courier service. The
respective addresses to be used for all such notices, demands or requests are as
follows:
(a) If to Parent or Newco, to:
NFC Castings, Inc.
c/o Citicorp Venture Capital, Ltd.
399 Park Avenue, 14th Floor, Zone 4
New York, New York 10043
Attention: David F. Thomas
Facsimile: (212) 888-2940
(with a copy to)
Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York NY 10022-4675
Attention: Kirk A. Radke
Facsimile: (212) 446-4900
(b) If to Company:
Neenah Corporation
2121 Brooks Avenue
P.O. Box 729
Neenah, WI 54956
Attention: E.W. Aylward
Facsimile: (414) 729-3633
(with a copy to)
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Bruce C. Davidson
Facsimile: (414) 271-3552
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(c) If to Company Representative:
E.W. Aylward
241 Lake Road
Menasha, WI 54952
(with a copy to)
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Bruce C. Davidson
Facsimile: (414) 271-3552
If personally delivered, such communication shall be deemed delivered upon
actual receipt; if electronically transmitted pursuant to this paragraph, such
communication shall be deemed delivered the next business day after transmission
(and sender shall bear the burden of proof of delivery); if sent by overnight
courier pursuant to this paragraph, such communication shall be deemed delivered
upon receipt; and if sent by U.S. mail pursuant to this paragraph, such
communication shall be deemed delivered as of the date of delivery indicated on
the receipt issued by the relevant postal service, or, if the addressee fails or
refuses to accept delivery, as of the date of such failure or refusal. Delivery
to the Company Representative shall constitute delivery to all Company
Shareholders. Any Person may change its address for the purposes of this
Agreement by giving notice thereof in accordance with this Section.
11.6. Expenses. Regardless of whether or not the transactions contemplated
hereby are consummated:
(a) Brokerage. Except as to Brown, Gibbons, Lang & Company, L.P.,
who shall be compensated by the Company Shareholders, Company, Newco and Parent
each represent and warrant to each other that there is no broker involved or in
any way connected with the transfer provided for herein on their behalf
respectively and each agrees to hold the other harmless from and against all
other claims for brokerage commissions or finder's fees in connection with the
execution of this Agreement or the transactions provided for herein.
(b) Other. Except as otherwise provided herein, each of the Parties
shall bear its own expenses and the expenses of its counsel and other agents in
connection with the transactions contemplated hereby.
11.7. Entire Agreement; Binding Effect. This Agreement embodies the entire
agreement between the Parties hereto with respect to the transactions
contemplated herein, and there have been and are no agreements, representations
or warranties between
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the parties other than those set forth or provided for herein or executed
contemporaneously or in connection herewith. This Agreement shall be binding
upon and shall inure to the benefit of the Parties hereto and their respective
legal representatives, successors and permitted assigns.
11.8. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.9. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.
11.10. Construction. Where any group or category of items or matters is
defined collectively in the plural number, any item or matter within such
definition may be referred to using such defined term in the singular number.
11.11. Specific Performance. Each of Company and Parent acknowledges that
the rights of each party to consummate the transactions contemplated hereby are
unique and recognizes and affirms that in the event of a breach of this
Agreement by any party, money damages may be inadequate and the non-breaching
party may have no adequate remedy at law. Accordingly, the parties agree that
such non-breaching party shall have the right, in addition to any other rights
and remedies existing in their favor at law or in equity, to enforce their
rights and the other party's obligations hereunder not only by an action or
actions for damages but also by an action or actions for specific performance,
injunctive and/or other equitable relief (without posting of bond or other
security).
11.12. Waiver of Jury Trial. Each of the parties hereto waives any right
it may have to trial by jury in respect of any litigation based on, or arising
out of, under or in connection with this Agreement or any course of conduct,
course of dealing, verbal or written statement or action of any party hereto.
11.13. No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any person.
11.14. Time of the Essence; Computation of Time. Time is of the essence
for each and every provision of this Agreement. Whenever the last day for the
exercise of any privilege or the discharge of any duty hereunder shall fall upon
any day which is not a business day, the party having such privilege or duty may
exercise such privilege or discharge such duty on the next succeeding business
day.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
NFC CASTINGS, INC.
/s/ John Weber
-----------------------------------
By: John Weber
--------------------------------
Title: Vice President
----------------------------
NC MERGER COMPANY
/s/ John Weber
-----------------------------------
By: John Weber
--------------------------------
Title: Vice President
----------------------------
NEENAH CORPORATION
By: /s/ E. W. Aylward
---------------------------------
Title: Chairman, President, & CEO
------------------------------
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EXHIBIT A
ARTICLES OF MERGER
OF
NC MERGER COMPANY
INTO
NEENAH CORPORATION
The undersigned, NC MERGER COMPANY, a Wisconsin corporation, and NEENAH
CORPORATION, a Wisconsin Corporation, each desire to give notice of corporate
action effecting the merger of NC MERGER COMPANY into NEENAH CORPORATION, and
acting by their respective officers and pursuant to Section 180.1105 of the
Wisconsin Business Corporation Law, hereby certify, each with respect to the
facts and acts relating to it, the following:
1. Plan of Merger.
(a) The surviving corporation shall be NEENAH CORPORATION and it shall
be governed by the laws of the State of Wisconsin.
(b) The terms and conditions of the merger, the manner and basis of
exchanging shares of each corporation into shares and cash, and other provisions
relating to the merger are set forth in the Merger Agreement which is attached
as Addendum A hereto and which is incorporated herein by reference.
2. Approval of Merger Agreement. The Merger Agreement has been adopted
and approved by the respective boards of directors and approved by the
respective shareholders of NC MERGER COMPANY and NEENAH CORPORATION in
accordance with Section 180.1103 of the Wisconsin Business Corporation Law.
3. Effective Time. The merger shall be effective upon the filing of
these Articles of Merger with the State of Wisconsin Department of Financial
Institutions.
67
IN WITNESS WHEREOF, each of the parties hereto has caused these
Articles of Merger to be executed on its behalf by its respective duly
authorized officers, this _____ day of ____________, 1997.
NC MERGER COMPANY
By: ___________________________
_____________, President
Attest:
By: _____________________________
__________________, Secretary
NEENAH CORPORATION
By: ___________________________
E. W. Aylward, Chairman of
the Board, President and Chief
Executive Officer
Attest:
By: ___________________________
___________________, Secretary
This document was drafted by:
Patrick J. Goebel
Quarles & Brady
411 E. Wisconsin Avenue
Milwaukee, WI 53202
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EXHIBIT B
MERGER AGREEMENT
THIS MERGER AGREEMENT (this "Merger Agreement") is made as of
_____________ __, 1997, by and between NC MERGER COMPANY, a Wisconsin
corporation ("Newco"), and NEENAH CORPORATION, a Wisconsin corporation
("Company").
RECITALS
A. Newco, the Company, and NFC Castings, Inc., a Delaware corporation
("Parent"), are parties to an Agreement and Plan of Reorganization, dated as of
____________, 1996 (the "Reorganization Agreement"), providing for, among other
things, the merger of Newco with and into the Company (the "Merger").
B. The respective boards of directors of Newco and the Company have
determined that the Merger is advisable and generally to the advantage and
welfare of Newco and the Company and the respective shareholders of Newco and
the Company, and, by resolutions duly adopted, have approved the Merger, the
Reorganization Agreement, including this Merger Agreement, and the transactions
contemplated thereby.
C. The respective shareholders of Newco and the Company, by resolutions
duly adopted, have approved the Merger, the Reorganization Agreement, including
this Merger Agreement, and the transactions contemplated thereby.
NOW THEREFORE, in consideration of the Recitals and of the
mutual provisions, agreements and covenants herein contained, Newco and Neenah
hereby agree as follows:
1. The Merger. At the Effective Time, Newco shall be merged with and
into the Company which shall be the surviving corporation pursuant to the
provisions of the Wisconsin Business Corporation Law (the "Surviving
Corporation").
2. Effective Time. Upon the filing of the Articles of Merger with the
Wisconsin Department of Financial Institutions, the Merger shall be effective
and the date and time of the filing of the Articles of Merger shall be the
"Effective Time" as that term is used herein.
3. Effect of Merger. At the Effective Time, the corporate identity,
existence, purposes, powers, franchises, rights and immunities of the Company
shall continue in the Surviving Corporation unaffected and unimpaired by the
Merger and the corporate identity, existence, purposes, powers, franchises,
rights and immunities of Newco shall be merged into the Surviving
69
Corporation and the Surviving Corporation shall be fully vested therewith. The
separate existence of Newco, except insofar as otherwise specifically provided
by law, shall cease at the Effective Time whereupon Newco and the Surviving
Corporation shall be and become one single corporation.
4. Directors and Officers. The officers and directors of Newco in
office immediately prior to the Effective Time shall be the officers and
directors of the Surviving Corporation and shall hold their respective positions
from and after the Effective Time until their successors have been appointed or
elected and qualified.
5. Articles of Incorporation; Bylaws. The Restated Articles of
Incorporation and Bylaws of the Company in effect immediately prior to the
Effective Time shall be the Restated Articles of Incorporation and Bylaws of the
Surviving Corporation. After the Effective Time, the Restated Articles of
Incorporation and Bylaws of the Surviving Corporation may be amended in
accordance with their terms and as provided by applicable law.
6. Effect on Shares. The manner of exchanging shares of capital stock
of the Company issued and outstanding immediately prior to the Effective Time
for cash to be distributed to the holders of capital stock of the Company and
converting shares of common stock of Newco issued and outstanding immediately
prior to the Effective Time into shares of common stock of the Company shall be
as follows:
(a) As of the Effective Time, by virtue of the Merger and
without any action of either Newco or the Company or any of the shareholders
thereof, each outstanding share of Common Stock of Newco, without par value,
shall be converted into one share of Class A Common Stock, $100 par value, of
the Surviving Corporation.
(b) As of the Effective Time, by virtue of the Merger and
without any action of either Newco or the Company or any of the shareholders
thereof:
(i) each share of Class A Common Stock of the
Company, $100 par value, issued and outstanding immediately prior to the
Effective Time (other than shares as to which dissenter's rights are perfected
under the Wisconsin Business Corporation Law and other than shares held by Newco
or Parent) shall be converted into the right to receive an amount in cash equal
to the Merger Price Per Share, subject to later adjustment as provided in
Section 2.6(e) of the Reorganization Agreement; and
(ii) each share of Class B Common Stock of the
Company, $100 par value, issued and outstanding immediately prior to the
Effective Time (other than shares as to which dissenter's rights are perfected
under the Wisconsin Business Corporation Law
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and other than shares held by Newco or Parent) shall be converted into the right
to receive an amount in cash equal to the Merger Price Per Share, subject to
later adjustment as provided in Section 2.6(e) of the Reorganization Agreement.
For purposes hereof, "Merger Price Per Share" shall mean the quotient determined
by dividing the Merger Price of $240,000,000 by the total number of shares of
Class A Common Stock and Class B Common Stock of the Company issued and
outstanding immediately prior to the Effective Time.
(c) There are no shares of the authorized Preferred Stock,
$100 par value, of the Company issued and outstanding and there will be no
shares of Preferred Stock of the Company issued and outstanding as of the
Effective Time.
7. Abandonment. The Merger may be abandoned as provided in Article IX
of the Reorganization Agreement at any time prior to the Effective Time in which
case this Merger Agreement shall be void and of no further force and effect.
8. Miscellaneous. This Merger Agreement shall be governed by and
construed in accordance with the internal laws of the State of Wisconsin. This
Merger Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which counterparts together
constitute a single instrument.
IN WITNESS WHEREOF, this Merger Agreement has been executed by duly
authorized officers of the parties hereto on the date first above written.
NC MERGER COMPANY
By:________________________________
Title:_____________________________
Attest:____________________________
Title:_____________________________
NEENAH CORPORATION
By:________________________________
Title:_____________________________
Attest:____________________________
Title:_____________________________
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This document was drafted by:
Patrick J. Goebel
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, WI 53202-4497
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EXHIBIT C
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement") is made as of
______________, 1996, by and among NC Merger Company, a Wisconsin corporation
("Newco"), Neenah Corporation, a Wisconsin corporation (the "Company"), NFC
Castings, Inc., a Delaware corporation ("Parent"), E. W. Aylward, on behalf of
the Company Shareholders ("Company Representative") and Bank One, Milwaukee,
N.A. (herein sometimes referred to as the "Escrow Agent").
RECITALS
Parent, Newco and the Company have made, executed and delivered a
certain Agreement and Plan of Reorganization among them dated as of
_____________ ___, 1996 (the "Agreement"), a copy of which has been delivered to
the Escrow Agent for reference purposes. (Any word, term or phrase which is
defined in the Agreement and not otherwise defined herein shall, when used in
this Escrow Agreement, have the same meaning which each respectively has when
used in the Agreement.) The terms of the Agreement provide that on the Closing
Date, among other things, Paying Agent shall deliver to the Escrow Agent the sum
of $12,000,000.00, subject to the terms and provisions of this Escrow Agreement
and the Agreement, representing a portion of the Merger Price. This Escrow
Agreement is made, executed and delivered by the Company and Company
Representative to provide the Escrow Fund (as hereinafter defined in this Escrow
Agreement) from which the Company Shareholders may be paid or Parent or Newco
may be repaid as provided in this Escrow Agreement and in Section 8.2 of the
Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein and in the Agreement, the parties hereto agree as
follows:
1. Appointment of the Escrow Agent. Parent, Newco, the Company and
Company Representative hereby constitute and appoint the Escrow Agent as, and
the Escrow Agent hereby agrees to assume and perform the duties of, the Escrow
Agent under and pursuant to this Escrow Agreement. The Escrow Agent also
acknowledges receipt of an executed copy of the Agreement.
2. Establishment of Escrow Fund. The parties acknowledge that Paying
Agent has delivered to the Escrow Agent the amount of $12,000,000.00 as the
Escrow Deposit to establish the Escrow Fund in accordance with Sections 2.5(a)
and 8.2 of the Agreement. From and after the date hereof, the term "Escrow Fund"
means the amount delivered to the Escrow Agent pursuant to this Section 2, less
distributions therefrom in accordance with this Escrow Agreement, but shall not
include interest or other income received from the investment or reinvestment
thereof.
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3. Disposition of Escrow Fund. Parent, Newco, the Company and Company
Representative hereby instruct the Escrow Agent and the Escrow Agent hereby
agrees to hold, invest and dispose of the Escrow Fund in accordance with and
subject to the terms, conditions, limitations and restrictions contained in this
Escrow Agreement.
4. Receipt, Segregation and Release of Income. The Escrow Agent shall
receive and collect any and all interest and other income of a kindred nature
arising with respect to the Escrow Fund, and shall set aside such interest and
other income, and all interest and other income earned on such interest and
other income, in a separate account maintained for the benefit of the Company
Shareholders (the "Interest Account"). Any taxes payable with respect to
interest and other income accruing on the Escrow Fund or the Interest Account
shall be the responsibility of the Company Shareholders to whom such interest or
other income is distributed hereunder. All amounts held in the Interest Account
shall be the property of the Company Shareholders to the extent of their
respective Pro Rata Portions thereof, and shall be distributed from time to time
by the Escrow Agent to the Company Shareholders as directed by the Company
Representative. No amount held in the Interest Account shall be subject to any
claim by Newco, Parent or the Company.
5. Investment. (a) The Escrow Agent shall invest and reinvest all cash
funds from time to time comprising part of the Escrow Fund in (i) bonds or other
obligations of the government of the United States of America and not having
maturities of greater than thirty (30) days; or (ii) demand or time deposits in,
certificates of deposit of, or money market accounts/funds of a depository
institution or trust company incorporated under the laws of the United States of
America, any state thereof or the District of Columbia if the commercial paper,
if any, and the long-term unsecured debt obligations (other than such
obligations whose rating is based on the credit of a person or entity other than
such institution or trust company) of such depository institution or trust
company, at the time of the Escrow Agent's investment therein or contractual
commitment providing for such investment, have credit ratings from Moody's and
S&P of at least P-l and A-l+, respectively, in the case of the commercial paper,
and a credit rating from Moody's and S&P of at least A3 and A-, respectively, in
the case of long-term unsecured debt obligations, and not having maturities
greater than thirty (30) days; or (iii) such other investments as Parent and
Company Representative shall approve in writing.
(b) All cash funds held from time to time in the Interest
Account shall be invested by the Escrow Agent in accordance with the directions
of the Company Representative or distributed in accordance with Section 4 of
this Escrow Agreement.
6. Authority for Payments. The Escrow Fund has been established to
provide an exclusive source of payment to Parent and Newco for recovery of
claims for indemnification Parent and Newco
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may have as provided in Section 8.2 of the Agreement, with the balance payable
to the Company Shareholders. Accordingly, the Escrow Agent shall disburse funds
from the Escrow Fund only pursuant to or in accordance with the following
procedure:
(a) Parent may at any time and from time to time prior to the
Cut-off Date give written notice to Company Representative and Escrow Agent in
accordance with Section 8.4 of the Agreement that Parent is asserting one or
more claims for indemnification (a "Notice of Claim").
(b) If the Escrow Agent and Parent shall not have received
from Company Representative prior to the forty-fifth calendar day following the
date of delivery of such Notice of Claim, a written notice from Company
Representative of the type contemplated by clause (c) below, on such forty-fifth
(45th) day or, if not a business day, on the next succeeding business day, the
Escrow Agent shall withdraw from the Escrow Fund and pay to Parent by certified
check or wire transfer of immediately available funds to an account designated
by Parent an amount equal to the lesser of (i) the aggregate of the claims
asserted in the Notice of Claim or (ii) the balance in the Escrow Fund on the
date of payment. Any claim set forth in a Notice of Claim that is not
specifically disputed in a written notice from Company Representative of the
type contemplated by clause (c) below shall be paid by the Escrow Agent in
accordance with the preceding sentences even though a notice of dispute might
otherwise have been received by the Escrow Agent with respect to other claims
set forth in Parent's Notice of Claim.
(c) Company Representative may deliver to the Escrow Agent and
Parent, prior to the forty-fifth calendar day following the date of delivery of
the above Notice of Claim, a written notice to the effect that Company
Representative disputes the fact or amount of any one or more of the claims
asserted in Parent's Notice of Claim. If such notice of dispute from Company
Representative is delivered to the Escrow Agent and Parent within such time
period, then the Escrow Agent shall refrain from making any disbursement from
the Escrow Fund of the amount or amounts specifically disputed in the notice of
dispute from Company Representative unless pursuant to or in accordance with:
(i) a written authorization signed by Company Representative and Parent to the
effect that it incorporates the resolution of the matter by such parties, which
authorization shall set forth the amount of the Escrow Fund to be distributed to
Parent, or (ii) a certified copy of a final judgment of a court of competent
jurisdiction, provided, however, that a certified copy of a final judgment shall
serve as a valid determination only if the time for appeal has expired and no
appeal has been perfected or all appeals have been exhausted or no right of
appeal exists. Any distribution from the Escrow Fund to Parent in accordance
with this paragraph (c) shall be paid by certified check or wire transfer of
immediately available funds to an account designated by Parent.
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(d) On the date (the "Termination Date") that is forty-nine
(49) months after the date first above written, any and all funds and property
then held in the Escrow Fund in excess of that which the Escrow Agent is or may
be required to pay in respect of claims asserted in any Notice of Claim prior to
the Cut-off Date which have not theretofore been paid, shall be distributed to
Company Representative on behalf of the Company Shareholders. Any funds then
included in the Escrow Fund which are not distributed in accordance with the
preceding sentence shall be retained by the Escrow Agent until such time as any
and all such claims of Parent which have not been paid or otherwise resolved on
or prior to the Termination Date shall have been paid or otherwise resolved in
accordance with clause (c) above, at which time all of the remaining funds then
held by the Escrow Agent in the Escrow Fund shall be distributed to Company
Representative on behalf of the Company Shareholders.
7. Fees and Expenses. The Escrow Agent shall be entitled to a
reasonable fee for its services under this Escrow Agreement in accordance with
the fee schedule attached hereto as Schedule A and to reimbursement for all
reasonable out-of-pocket costs, charges and expenses incurred by it in
connection therewith. Company Representative shall be responsible for, and shall
discharge, one-half (1/2) of such fee, costs, charges and expenses, and Parent
shall be responsible for and shall discharge one-half (1/2) of such fee, costs,
charges and expenses.
8. Limitations on Duties and Liabilities of the Escrow
Agent. Unless otherwise expressly provided in this Escrow
Agreement, the Escrow Agent shall:
(a) not be held liable for any action taken or omitted under
this Escrow Agreement so long as it shall have acted in good faith and without
negligence;
(b) have no responsibility to inquire into or determine the
genuineness, authenticity, or sufficiency of any securities, checks, or other
documents or instruments submitted to it in connection with its duties under and
pursuant to this Escrow Agreement;
(c) be entitled to deem (unless it has actual knowledge to the
contrary) the signatories of any documents or instruments submitted to it
pursuant to this Escrow Agreement as being those purported to be authorized to
sign such documents or instruments on behalf of the parties to this Escrow
Agreement and shall be entitled to rely (unless it has actual knowledge to the
contrary) upon the genuineness of the signatures of such signatories without
inquiry and without requiring substantiating evidence of any kind; and
(d) have no responsibility or liability for any diminution
which may result from any investments or reinvestments made in accordance with
any provisions contained in this Escrow Agreement.
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9. Resignation and Removal of the Escrow Agent.
(a) The Escrow Agent may resign as such thirty (30) days
following the giving of prior written notice thereof to Company Representative
and Parent. Similarly, the Escrow Agent may be removed and replaced following
the giving of thirty (30) days' prior written notice to the Escrow Agent by
Company Representative and Parent. Notwithstanding the foregoing, no such
resignation or removal shall be effective until a successor Escrow Agent has
acknowledged its appointment as such as provided in paragraph (c) below. In
either event, upon the effective date of such resignation or removal, the Escrow
Agent shall deliver the property comprising the Escrow Fund and the Interest
Account to a successor Escrow Agent appointed by Company Representative and
Parent as evidenced by a written notice executed by Company Representative and
Parent and filed with the Escrow Agent.
(b) If Company Representative and Parent are unable to agree
upon a successor Escrow Agent, or shall have failed to appoint a successor
Escrow Agent prior to the expiration of thirty (30) days following the date of
the notice of such resignation or removal, the then acting Escrow Agent may
petition any court of competent jurisdiction for the appointment of a successor
Escrow Agent, or other appropriate relief, and any such resulting appointment
shall be binding upon all of the parties to this Escrow Agreement.
(c) Upon acknowledgment by any successor Escrow Agent
appointed in accordance with the foregoing provisions of this Section 9 of the
receipt of the property then comprising the Escrow Fund and the Interest
Account, the then acting Escrow Agent shall be fully released and relieved of
all duties, responsibilities, and obligations under this Escrow Agreement.
10. Indemnification of the Escrow Agent. Company Representative and
Parent or their respective successors and assigns, each agree to indemnify and
save and hold harmless the Escrow Agent and its successors and assigns of, from
and against all losses, costs and expenses which the Escrow Agent shall sustain
or incur as a result of the Escrow Agent's involvement as a party thereto in any
litigation commenced prior to the termination of this Escrow Agreement, arising
from the performance by the Escrow Agent of its duties and responsibilities
under and pursuant to this Escrow Agreement which is not attributable in any
manner, or to any extent, to any action taken, or omitted, by the Escrow Agent
in connection with this Escrow Agreement in respect of which the Escrow Agent
shall have been adjudged to have been negligent, but in, and only in, the
following manner and to, and only to, the following extent, and subject to the
following limitations and restrictions:
(a) Company Representative and its successors and assigns,
shall indemnify and save and hold harmless the Escrow Agent to the extent, but
only to the extent, of one-half (1/2) of any such losses, costs and expenses;
and
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(b) Parent and its successors and assigns, shall indemnify and
save and hold harmless the Escrow Agent to the extent, but only to the extent,
of one-half (1/2) of any such losses, costs and expenses.
11. Termination of Escrow Fund. This Escrow Agreement (other than
Sections 7 and 10) shall automatically terminate when all of the funds held by
the Escrow Agent as part of the Escrow Fund at any time while this Escrow
Agreement remains in effect shall have been distributed, or otherwise disposed
of, by the Escrow Agent in accordance with the terms of this Escrow Agreement.
At such time, any amounts remaining in the Interest Account shall be distributed
to the Company Shareholders to the extent of their respective Pro Rata Portions
thereof as directed by the Company Representative.
12. Notices. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally delivered; (b)
sent by telecopier, facsimile transmission or other electronic means of
transmitting written documents; or (c) sent to the parties at their respective
addresses indicated herein by registered or certified U.S. mail, return receipt
requested and postage prepaid, or by private overnight mail courier service. The
respective addresses to be used for all such notices, demands or requests are as
follows:
TO COMPANY REPRESENTATIVE: E. W. Aylward
241 Lake Road
Menasha, WI 54952
With a copy to: Quarles & Brady
Attn: Bruce C. Davidson
411 East Wisconsin Avenue
Milwaukee, WI 53202
TO PARENT, NEWCO OR THE COMPANY: NFC Castings, Inc.
c/o Citicorp Venture
Capital, Ltd.
Attn: David F. Thomas
399 Park Avenue
14th Floor, Zone 4
New York, NY 10043
With copies to: Kirkland & Ellis
Attn: Kirk A. Radke
Citicorp Center
153 East 53rd Street
New York, NY 10022-4675
and
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Citicorp Venture Capital, Ltd.
Attn: David F. Thomas
399 Park Avenue
14th Floor, Zone 4
New York NY 10043
TO THE ESCROW AGENT: Bank One, Milwaukee, N.A.
Attn:_____________________
__________________________
Milwaukee WI _____________
If personally delivered, such communication shall be deemed delivered
upon actual receipt; if electronically transmitted pursuant to this paragraph,
such communication shall be deemed delivered the next business day after
transmission (and sender shall bear the burden of proof of delivery); if sent by
overnight courier pursuant to this paragraph, such communication shall be deemed
delivered upon receipt; and if sent by U.S. mail pursuant to this paragraph,
such communication shall be deemed delivered as of the date of delivery
indicated on the receipt issued by the relevant postal service, or, if the
addressee fails or refuses to accept delivery, as of the date of such failure or
refusal. Delivery to the Company Representative shall constitute delivery to all
Company Shareholders. Any Person may change its address for the purposes of this
Escrow Agreement by giving notice thereof in accordance with this Section.
13. Continuance of Agreement. This Escrow Agreement shall be
binding upon the parties hereto and their respective successors and
assigns.
14. Applicable Law. This Escrow Agreement shall be governed by
and construed under and in accordance with the laws of the State of
Wisconsin.
15. Counterparts. This Escrow Agreement may be executed in
any number of counterparts, any one of which shall be considered an
original but all of which together shall constitute one agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow
Agreement as of the date and year first above written.
NEWCO:
NC MERGER COMPANY
Attest: By:___________________________
______________________ Its:__________________________
(Assistant) Secretary
PARENT:
NFC CASTINGS, INC.
Attest: By:___________________________
_____________________________ Its:__________________________
(Assistant) Secretary
THE COMPANY:
NEENAH CORPORATION
Attest: By:___________________________
_____________________________ Its:__________________________
(Assistant) Secretary
COMPANY REPRESENTATIVE:
______________________________
E. W. Aylward
ESCROW AGENT:
BANK ONE, MILWAUKEE, N.A.
Attest: By:___________________________
______________________________ Its:__________________________
Title:________________________
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EXHIBIT D
MERGER PAYMENT STATEMENT
Neenah Corporation Shareholder: Date _______________, 199_
Address:
Number
1. Shares You Hold of Shares
1.1 Class A Common Stock
1.2 Class B Common Stock
1.3 Share Payment Class A Common Stock -
$_____ (Merger Price Per Share)
times total Class A shares
(item 1.1) = $
1.4 Share Payment Class B Common Stock -
$_____ (Merger Price Per Share)
times total Class B shares
(item 1.2) = $
1.5 Total Gross Share Payment (Class A
& Class B) (items 1.3 & 1.4) = $
2. Deductions for pro rata portion
of brokerage fees and expenses = $
3. Pro rata portion of $12,000,000.00
Escrow Deposit = $
4. Net Merger Payment (item 1.5 less items
2 and 3), to be reduced by proportionate
share of professional fees and expenses. = $
=======
5. After reduction for proportionate share of professional
fees and expenses, net payment to be made upon receipt of
signed Merger Payment Statement and after Closing.
81
"Merger Price Per Share" means the quotient determined by dividing the Merger
Price of $240,000,000 to be delivered by Newco at Closing by the total number of
shares of Class A Common Stock and Class B Common Stock issued and outstanding
immediately prior to the Effective Time. (For illustration purposes only, based
on 619.5 and 3,820 issued and outstanding shares of Class A Common Stock and
Class B Common Stock, respectively, the Merger Price Per Share would equal
$54,060.14.)
Please check, and complete where appropriate, one of the following:
_____ Please mail my check _____ Please have my check
to the following held for my pickup at
address: the offices of the
Paying Agent:
______________________________ ______________________________
______________________________ ______________________________
______________________________ ________________, WI_________*
_____ Please wire payment to me
using the following wire
transfer instructions:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
*If the shareholder elects to pick up his check at the offices of the Paying
Agent set forth above, the shareholder understands that the Paying Agent will
require appropriate identification from the shareholder prior to delivery of the
check.
Important Tax Information
Under the federal income tax law, a Neenah Corporation shareholder who
receives payment in connection with the Merger is required to provide the Paying
Agent with such shareholder's correct taxpayer identification number by
completing the IRS Form W-9 attached hereto certifying that the taxpayer
identification number provided on the IRS Form W-9 is correct (or that such
shareholder is awaiting a taxpayer identification number). If the Paying Agent
is not provided with the correct taxpayer identification number, payments that
are made to such shareholder pursuant to the Merger may be subject to backup
withholding.
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82
If backup withholding applies, the Paying Agent is required to withhold
20% of any gross payments due to the Neenah Corporation shareholder. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service. If backup withholding does not apply to you, the
box in Part II of the W-9 Form must be checked.
Agreed and accepted this ____ day of ____________, 199_.
______________________________
Signature of Neenah
Corporation Shareholder**
(IF MORE THAN ONE PERSON IS LISTED AS THE NEENAH CORPORATION SHAREHOLDER, EACH
PERSON MUST SIGN HIS NAME EXACTLY AS IT APPEARS ON PAGE ONE OF THE MERGER
PAYMENT STATEMENT IN ORDER FOR THE PAYING AGENT TO ACCEPT THE MERGER PAYMENT
STATEMENT.)
**If the Neenah Corporation shareholder is a partnership or corporation, the
person signing on behalf of the shareholder must also print the name of the
shareholder and the title of the person signing. If the Merger Payment Statement
or the IRS Form W-9 are executed by attorneys, executors, administrators,
trustees, guardians, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and
proper evidence, satisfactory to Neenah Corporation, which may include a
signature guaranty guaranteed by a commercial bank, a trust company or by a
member firm of any securities exchange of the National Association of Securities
Dealers, Inc., of their authority so to act must be submitted to Neenah
Corporation.
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EXHIBIT E
____________, 1997
NFC Castings, Inc. NC Merger Company
c/o Citicorp Venture c/o Citicorp Venture
Capital, Ltd. Capital, Ltd.
399 Park Avenue 399 Park Avenue
14th Floor, Zone 4 14th Floor, Zone 4
New York, NY 10043 New York, NY 10043
Gentlemen:
We have acted as counsel to Neenah Corporation, a Wisconsin corporation
(the "Company"), in connection with the negotiation, preparation, execution and
delivery of an Agreement and Plan of Reorganization dated as of ____________,
1996 (the "Agreement") by and among the Company, NC Merger Company, a Wisconsin
corporation ("Newco") and NFC Castings, Inc., a Delaware corporation ("Parent").
Pursuant to the Agreement, the Company has this day executed and delivered to
Parent and Newco the following documents, all dated the date hereof: (a) the
Articles of Merger; (b) the Merger Agreement; (c) the Escrow Agreement; and (d)
the Paying Agent Agreement (the foregoing documents together with the Agreement
are collectively referred to herein as the "Transaction Documents").
This opinion is delivered to you at the request of the Company pursuant
to Section 6.9(c) of the Agreement. Any capitalized term used herein without
definition shall have the meaning assigned to such term in the Agreement.
Pursuant to the Agreement, Parent is this day acquiring all of the
issued and outstanding shares of capital stock of the Company through the merger
of Newco, a wholly owned subsidiary of Parent, with and into the Company.
In rendering this opinion, we have examined or considered such of the
following as we deemed relevant and necessary as a basis for the opinions
hereinafter set forth: (a) corporate records, certificates, agreements,
instruments and other documents (collectively referred to as the "Ancillary
Documents"); (b) questions and matters of law; and (c) certificates or
comparable documents of public officials and of officers and representatives of
the Company. We have also made such inquiries of such officers and
representatives of the Company as we have deemed relevant and necessary as a
basis for the opinions hereinafter set forth.
84
NFC Castings, Inc.
NC Merger Company
_____________, 1996
Page 2
In giving the various opinions set forth below, we have, with respect
to factual matters, relied on: (a) the representations and warranties of the
Company contained in the Agreement; and (b) representations and warranties of
officers and representatives of the Company contained in certificates delivered
to us.
We have assumed that: (a) all certificates or comparable documents of
public officials examined by us are accurate; (b) each Ancillary Document
submitted to us as an original is authentic and complete; (c) each Ancillary
Document submitted to us as a certified or photostatic copy conforms to an
authentic original; (d) each of the parties (other than the Company) to the
Transaction Documents has duly and validly executed and delivered the
Transaction Documents to which it is a signatory; (e) all signatures (other than
the signatures of the Company) on Ancillary Documents reviewed by us are
genuine; (f) each person executing any Transaction Documents (other than the
Company) on behalf of such party is authorized to do so; (g) the obligations of
each party (other than the Company) under the Transaction Documents are such
party's legal, valid and binding obligations, enforceable and effective in
accordance with the terms of the Transaction Documents; (h) the Transaction
Documents accurately describe and contain the mutual understanding of the
parties; (i) there are no oral or written statements or agreements that purport
to modify, amend or vary any of the terms of the Transaction Documents; (j) all
individuals executing and delivering the Transaction Documents have the legal
capacity to so execute and deliver such document; and (k) Parent and Newco have
the corporate power and authority to enter into the Transaction Documents.
Based upon the foregoing and subject to the qualifications, assumptions
and limitations set forth herein, it is our opinion that:
1. The Company is a corporation validly existing under the laws of the
State of Wisconsin. As of January 1, 1991, Wisconsin no longer recognizes the
concept of "good standing" for corporations. We have received a certificate of
status from the Wisconsin Department of Financial Institutions for the Company
which is conclusive evidence of its existence. Wis. Stat. Section 180.0128.
2. The Company has the requisite corporate power and authority to carry
on its business as now being conducted and to own its assets and properties.
3. To our knowledge, the entire authorized capital stock of the Company
consists of: (i) 1,000 shares of Class A Common Stock,
85
NFC Castings, Inc.
NC Merger Company
_____________, 1996
Page 3
with a par value of $100.00 per share, of which 619.5 shares are issued and
outstanding; (ii) 10,000 shares of Class B Common Stock, with a par value of
$100.00 per share, of which 3,820 shares are issued and outstanding and (iii)
3,000 shares of Preferred Stock, with a par value of $100.00 per share, of which
no shares are issued and outstanding.
4. To our knowledge, there are no options, warrants, conversion rights,
agreements or other rights to subscribe for or purchase the capital stock of the
Company, other than the Agreement and as disclosed in the Disclosure Schedule.
5. The execution, delivery and performance by the Company of the
Transaction Documents are within the corporate power and authority of the
Company and have been duly authorized by all necessary corporate action by the
Company.
6. The Transaction Documents have been duly executed and delivered by
the Company and constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, moratorium or similar laws generally
affecting the rights of creditors, and subject to general equity principles.
7. To our knowledge, the execution, delivery and performance by the
Company of the Transaction Documents do not result in a material breach of, or
constitute a default under, or result in a violation of: (a) any applicable
provision of laws or regulations of the State of Wisconsin or laws or
regulations of the United States of America; or (b) any judgment, injunction,
order or decree binding upon the Company; or (c) the Restated Articles of
Incorporation, as amended and restated effective as of the date hereof, or
Bylaws of the Company.
8. To our knowledge, except for consents that have been obtained, no
consent, order, authorization or approval of any governmental authority is
required in connection with the execution, delivery and performance of the
Transaction Documents by or the consummation by the Company of the transactions
contemplated thereby.
9. To our knowledge, no suit, action, investigation, inquiry or other
proceeding by any person or governmental agency or body has been instituted and
is pending against the Company which questions the validity or legality of the
Agreement or any of the transactions contemplated thereby.
86
NFC Castings, Inc.
NC Merger Company
_____________, 1996
Page 4
Each of the opinions as to the enforceability of any agreement or
instrument is: (a) subject to the limitations set forth in the General
Qualifications stated in the Legal Opinion Accord of the ABA Section of Business
Law (1991), which General Qualifications are attached hereto as Schedule 1; and
(b) subject to the qualification that certain provisions of such documents may
be unenforceable in whole or in part, but the inclusion of such provisions does
not affect the validity of any such documents as a whole and each of such
documents contains legally adequate provisions for the realization of the
principal legal rights and benefits afforded by it.
We are attorneys licensed to practice law in the State of Wisconsin.
The opinions expressed herein are specifically limited to the present internal
law of the State of Wisconsin and the federal law of the United States of
America, are given as of the date of this letter, are intended to apply only to
the facts and circumstances that exist as of the date hereof, and we assume no
obligation or responsibility to update or supplement this opinion to reflect any
facts or circumstances occurring after the date hereof that would alter the
opinions contained herein.
Whenever this opinion refers to matters within our "knowledge" or
"known to us," such reference is limited to facts within our actual knowledge
after inquiry of the attorneys in our firm who have given substantive legal
attention to the representation of the Company, and after a review of our files
related to the Company, and facts represented to us by officers and
representatives of the Company. Each of the opinions set forth above is subject
to the matters disclosed by the Company in the Agreement and the Disclosure
Schedule.
The opinions set forth above are delivered to you in connection with
the transactions described in the Agreement. This opinion letter is rendered
solely for your information and assistance in connection with the transactions
described in the Agreement and may not be provided to, or used or relied upon
by, any other person or for any other purpose without our prior written consent.
Very truly yours,
QUARLES & BRADY
87
EXHIBIT F
______________, 1997
E.W. Aylward Neenah Corporation
241 Lake Road Attention: E.W. Aylward
Menasha, WI 54952 2121 Brooks Avenue
P.O. Box 729
Neenah WI 54957
Gentlemen:
We have acted as counsel to NC Merger Company, a Wisconsin corporation
("Newco") and NFC Castings, Inc., a Delaware corporation ("Parent"), in
connection with the negotiation, preparation, execution and delivery of an
Agreement and Plan or Reorganization dated as of _____________, 1996 (the
"Agreement") by and among Newco, Parent and Neenah Corporation, a Wisconsin
corporation (the "Company"). Pursuant to the Agreement, Parent and Newco have
this day executed and delivered to the Company the following documents, all
dated the date hereof: (a) the Articles of Merger; (b) the Merger Agreement; (c)
the Escrow Agreement; and (d) the Paying Agent Agreement (the foregoing
documents together with the Agreement are collectively referred to herein as the
"Transaction Documents").
This opinion is delivered to you at the request of Parent pursuant to
Section 7.5(b) of the Agreement. Any capitalized term used herein without
definition shall have the meaning assigned to such term in the Agreement.
Pursuant to the Agreement, Parent is this day acquiring all of the
issued and outstanding shares of capital stock of the Company through the merger
of Newco, a wholly owned subsidiary of Parent, with and into the Company.
In rendering this opinion, we have examined or considered such of the
following as we deemed relevant and necessary as a basis for the opinions
hereinafter set forth: (a) corporate records, certificates, agreements,
instruments and other documents (collectively referred to as the "Ancillary
Documents"); (b) questions and matters of law; and (c) certificates or
comparable documents of public officials and of officers and representatives of
Parent and Newco. We have also made such inquiries of such officers and
representatives of Parent and Newco as we have deemed
88
Neenah Corporation
_________________, 1997
Page 2
relevant and necessary as a basis for the opinions hereinafter set
forth.
In giving the various opinions set forth below, we have, with respect
to factual matters, relied on: (a) the representations and warranties of Parent
and Newco contained in the Agreement; and (b) representations and warranties of
officers and representatives of Parent and Newco contained in certificates
delivered to us.
We have assumed that: (a) all certificates or comparable documents of
public officials examined by us are accurate; (b) each Ancillary Document
submitted to us as an original is authentic and complete; (c) each Ancillary
Document submitted to us as a certified or photostatic copy conforms to an
authentic original; (d) each of the parties (other than Parent or Newco) to the
Transaction Documents has duly and validly executed and delivered the
Transaction Documents to which it is a signatory; (e) all signatures (other than
the signatures of Parent or Newco) on Ancillary Documents reviewed by us are
genuine; (f) each person executing the Transaction Documents (other than Parent
or Newco) on behalf of such party is authorized to do so; (g) the obligations of
each party (other than Parent or Newco) under the Transaction Documents are such
party's legal, valid and binding obligations, enforceable in accordance with the
terms of the Transaction Documents; (h) the Transaction Documents accurately
describe and contain the mutual understanding of the parties; (i) there are no
oral or written statements or agreements that purport to modify, amend or vary
any of the terms of the Transaction Documents; (j) all individuals executing and
delivering the Transaction Documents have the legal capacity to so execute and
deliver such document; and (k) the Company has the corporate power and authority
to enter into the Transaction Documents.
Based upon the foregoing and subject to the qualifications, assumptions
and limitations set forth herein, it is our opinion that:
1. Parent is a corporation validly existing and in good standing under
the laws of the State of Delaware. Newco is a corporation duly incorporated and
validly existing under the laws of the State of Wisconsin. As of January 1,
1991, Wisconsin no longer recognizes the concept of "good standing" for
corporations. We have received a certificate of status from the Wisconsin
Department of Financial Institutions for Newco which is conclusive evidence of
its existence. Wis. Stat. Section 180.0128.
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Neenah Corporation
_________________, 1997
Page 3
2. Parent and Newco each have the requisite corporate power and
authority to carry on its business as now being conducted and to own its assets
and properties.
3. The execution, delivery and performance by Parent and Newco of the
Transaction Documents are within the corporate power and authority of Parent and
Newco and have been duly authorized by all necessary corporate action by Parent
and Newco.
4. The Transaction Documents have been duly executed and delivered by
Parent and Newco and constitute legal, valid and binding obligations of Parent
and Newco, enforceable against Parent and Newco in accordance with their
respective terms, except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, moratorium or similar laws
generally affecting the rights of creditors and subject to general equity
principles.
5. To our knowledge, the execution, delivery and performance by Parent
and Newco of the Transaction Documents do not result in a material breach of, or
constitute a default under, or result in a violation of: (a) any applicable
provision of laws or regulations of the State of _______________ or laws or
regulations of the United States of America; or (b) any judgment, injunction,
order or decree binding upon Parent or Newco or both; or (c) the Articles of
Incorporation or Bylaws of Parent or Newco.
6. To our knowledge, except for consents that have been obtained, no
consent, order, authorization or approval of any governmental authority is
required in connection with the execution, delivery and performance of the
Transaction Documents by Parent and Newco or the consummation by Parent and
Newco of the transactions contemplated thereby.
7. To our knowledge, no suit, action, investigation, inquiry or other
proceeding by any person or governmental agency or body has been instituted and
is pending against Parent or Newco which questions the validity or legality of
the Agreement or any of the transactions contemplated thereby.
Each of the opinions as to the enforceability of any agreement or
instrument is: (a) subject to the limitations set forth in the General
Qualifications stated in the Legal Opinion Accord of the ABA Section of Business
Law (1991), which General Qualifications are attached hereto as Schedule 1; and
(b) subject to the qualification that certain provisions of such documents may
be
90
Neenah Corporation
_________________, 1997
Page 4
unenforceable in whole or in part, but the inclusion of such provisions does not
affect the validity of any such documents as a whole and each of such documents
contains legally adequate provisions for the realization of the principal legal
rights and benefits afforded by it.
We are attorneys licensed to practice law in the State of
______________. The opinions expressed herein are specifically limited to the
present internal law of the State of _____________ and federal law of the United
States of America, are given as of the date of this letter, are intended to
apply only to those facts and circumstances that exist as of the date hereof,
and we assume no obligation or responsibility to update or supplement this
opinion to reflect any facts or circumstances occurring after the date hereof
that would alter the opinions contained herein.
Whenever this opinion refers to matters within our "knowledge" or
"known to us," such reference is limited to facts within our actual knowledge
after inquiry of the attorneys in our firm who have given substantive legal
attention to the representation of Parent and Newco, and after a review of our
files related to Parent and Newco, and facts represented to us by officers and
representatives of Parent and Newco.
The opinions set forth above are delivered to you in connection with
the transactions described in the Agreement. This opinion letter is rendered
solely for your information and assistance in connection with the transactions
described in the Agreement and may not be provided to, or used or relied upon
by, any other person or for any other purpose without our prior written consent.
Very truly yours,
---------------------------
91
EXHIBIT G
PAYING AGENT AGREEMENT
THIS PAYING AGENT AGREEMENT is made as of ____________, 199_, by and
among NFC CASTINGS, INC., a Delaware corporation ("Parent"), NC MERGER COMPANY,
a Wisconsin corporation ("Newco"), NEENAH CORPORATION, a Wisconsin corporation
("the Company"), E.W. AYLWARD, in his capacity as Company Representative
("Company Representative") and BANK ONE, MILWAUKEE, N.A., in its capacity as
paying agent hereunder (in such capacity, the "Paying Agent").
RECITALS
A. Parent, Newco and the Company are parties to an Agreement and Plan
of Reorganization (the "Agreement") dated as of _______________, 1996, a copy of
which has been furnished to the Paying Agent. (Any word, term or phrase which is
defined in the Agreement and not otherwise defined herein shall, when used
herein, have the meaning which each respectively has when used in the
Agreement.)
B. The Agreement contemplates and provides for the merger of Newco with
and into the Company pursuant to which all of the outstanding shares of the
Company's Class A and Class B Common Stock will be converted into the right to
receive cash and all of the issued and outstanding shares of Newco Common Stock
will be converted into shares of the Company's Class A Common Stock.
C. The Agreement further contemplates and provides for the distribution
of the Merger Price by the Paying Agent to the Escrow Agent and the Company
Shareholders. The parties wish to establish by means of this Paying Agent
Agreement a procedure to provide for the orderly payment of the Merger Price to
the Escrow Agent and to the Company Shareholders.
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and intending to be legally bound, the parties
hereto agree as follows:
1. Delivery of Merger Price. Parent herewith deposits with the Paying
Agent the Merger Price and the Paying Agent hereby acknowledges the receipt and
the payment of such sum (the "Merger Fund"). The Paying Agent accepts the Merger
Fund and agrees to hold the same in a separate and segregated account (the
"Merger Account"), to invest and reinvest the Merger Fund, and to disburse the
same in accordance with the terms of this Paying Agent Agreement.
2. Investment of Merger Fund. The Paying Agent shall invest and
reinvest all cash funds from time to time comprising part of the Merger Fund in
(i) bonds or other obligations of the government of the United States of America
and not having maturities of greater than thirty (30) days; or (ii) demand or
time deposits in, certificates of deposit of, or money market accounts/funds of
a
92
depository institution or trust company incorporated under the laws of the
United States of America, any state thereof or the District of Columbia if the
commercial paper, if any, and the long-term unsecured debt obligations (other
than such obligations whose rating is based on the credit of a person or entity
other than such institution or trust company) of such depository institution or
trust company, at the time of the Paying Agent's investment therein or
contractual commitment providing for such investment, have credit ratings from
Moody's and S&P of at least P-l and A-l+, respectively, in the case of the
commercial paper, and a credit rating from Moody's and S&P of at least A3 and
A-, respectively, in the case of long-term unsecured debt obligations, and not
having maturities greater than thirty (30) days; or (iii) such other investments
as Parent and Company Representative shall approve in writing. Interest and
other income earned on the Merger Fund shall be paid to a Merger Payee pro rata
in accordance with such Merger Payee's respective interest in the Merger Fund at
the time a disbursement is made to such Merger Payee in accordance with
paragraph 4 below.
3. Merger Payment Statements. The Company has heretofore delivered to
the Paying Agent unsigned copies of Merger Payment Statements for all of the
Company Shareholders, which statements show the net merger payment for each of
the Company Shareholders (after deductions for each Company Shareholder's
proportionate share of brokerage fees and expenses and each Company
Shareholder's pro rata share of the Escrow Deposit). The Company shall deliver
to the Paying Agent a copy of each signed Merger Payment Statement it receives
promptly after the receipt thereof.
4. Release and Disbursement of Amounts in Merger Account. The amounts
in the Merger Account from time to time shall be released and disbursed by the
Paying Agent in the manner and under the circumstances hereinafter specified:
(a) Immediately after the Effective Time, the Paying Agent
shall deposit or shall cause to be deposited the Escrow Deposit with the Escrow
Agent.
(b) Immediately after the Effective Time, the Paying Agent
shall pay or cause to be paid (i) to each Merger Payee for whom Paying Agent has
received a Merger Payment Statement duly signed by such Merger Payee, an amount
equal to the "Net Merger Payment" shown on such Merger Payment Statement less
such Merger Payee's proportionate share of professional fees and expenses as set
forth in a schedule to be delivered by Company Representative to the Paying
Agent, and (ii) such professional fees and expenses as directed by Company
Representative in such schedule.
(c) In the event the Paying Agent does not receive a Merger
Payment Statement with respect to any Merger Payee, the Paying Agent shall
notify Parent, the Company and Company Representative of that fact and shall not
disburse any amount allocable to that Merger Payee until Paying Agent receives a
Merger Payment Statement duly signed by such Merger Payee.
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(d) Any payment to be made by the Paying Agent out of the
Merger Fund shall be made in immediately available funds in the amount of the
payment to be made and transmitted to the payee in the manner specified in the
Merger Payment Statement.
(e) At any time after 180 days after the date hereof, Parent,
by notice to Paying Agent, may require Paying Agent to pay the remaining portion
of the Merger Fund (including interest and other income earned thereon) to the
Company as provided in Section 2.5(c) of the Agreement.
(f) Paying Agent shall not disburse any amount allocable to a
Company Shareholder who is not a Merger Payee until Paying Agent receives a
notice from the Company authorizing the release and disbursement of amounts to
such Company Shareholder, which notice shall not be unreasonably withheld by the
Company.
5. Accounting. Within a reasonable time after the delivery of the
remainder of the funds in the Merger Account in accordance with paragraph 4
hereof, the Paying Agent shall deliver to Parent and Company Representative an
accounting which shall consist of a statement of all receipts of and
disbursements made from the Merger Account. Unless Parent or Company
Representative shall object to such accounting within thirty (30) days after the
date of the delivery of such accounting to it, the Paying Agent shall be
discharged forever and absolutely from any and all liabilities and obligations
whatsoever to Parent or to Company Representative arising by virtue of this
Agreement or the Merger Fund, and in no event whatsoever shall the Paying Agent
be required otherwise to account for, or give evidence of the fact, amount or
propriety of, any disbursements made by it, except as provided in this paragraph
5, unless the Paying Agent shall have acted in gross negligence or with willful
misconduct. Any such objection to such accounting must be in writing and must be
delivered or sent to the Paying Agent by registered or certified mail.
6. Tax Information. The Paying Agent shall be responsible for the
preparation of any required tax reports related to the Merger Account, and shall
provide any necessary tax information to the Company Shareholders.
7. Conditions to Responsibilities of Paying Agent. Acceptance by the
Paying Agent of its duties under this Paying Agent Agreement is subject to the
following terms and conditions, which all parties to this Paying Agent Agreement
hereby agree shall define the rights, duties and immunities of the Paying Agent:
(a) The duties and obligations of the Paying Agent shall be
determined solely by the express provisions of this Paying Agent Agreement, and
the Paying Agent shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this Paying Agent Agreement.
Except for the services it will render as Escrow Agent, the Paying Agent shall
not have any duty or responsibility for or with respect to the Agreement or any
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related undertaking and shall in no way be bound or obligated by the terms
thereof.
(b) The Paying Agent shall not be responsible for any failure
or inability of Parent or the Company to comply with any of the provisions of
any other agreement to which they may be parties.
(c) The Company shall reimburse and indemnify the Paying Agent
for, and hold it harmless against, any loss, liability or expense, including but
not limited to attorneys' fees and disbursements, incurred without gross
negligence or willful misconduct on the part of the Paying Agent, arising out of
or in connection with its acceptance of, or the performance of its duties and
obligations under, this Paying Agent Agreement or its defending against any
claim or liability arising out of or relating to this Paying Agent Agreement,
other than claims or liabilities established to have arisen out of the gross
negligence or willful misconduct of the Paying Agent.
(d) The Paying Agent shall be fully protected in acting on and
relying upon any written notice, direction, request, waiver, consent, receipt or
other paper or document which the Paying Agent in good faith believes to be
genuine and to have been signed or presented by the proper party or parties.
(e) The Paying Agent shall not be liable for any error of
judgment, or for any act done or step taken or omitted by it in good faith or
for any mistake, in fact or law, or for anything else which it may do or refrain
from doing in connection herewith, except for its own gross negligence or
willful misconduct.
(f) The Paying Agent may seek the advice of legal counsel in
the event of any dispute or question as to the construction of any of the
provisions of this Paying Agent Agreement or its duties hereunder, and it shall
incur no liability and shall be fully protected in respect of any action taken,
omitted or suffered by it in good faith in accordance with the advice of such
counsel.
(g) In the event of any dispute hereunder, the Paying Agent
shall have the right (but shall not be obligated) to pay into court the entire
Merger Account and thereafter be absolved of any further duty or obligation
hereunder with respect to the Merger Account.
8. Compensation. The Paying Agent shall be paid the sum of $_______ for
its services to be rendered hereunder, which amount shall be paid by the
Company.
9. Resignation of Paying Agent; Appointment of Successor. The Paying
Agent acting at any time hereunder may resign at any time by giving ten days'
prior written notice of resignation to Parent and Company Representative, such
resignation to be effective on the date specified in such notice. In addition,
Parent and Company Representative may jointly cause the removal of the Paying
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Agent at any time upon the giving of ten days' written notice. In either event
Parent and Company Representative shall appoint as successor Paying Agent a bank
or trust company mutually satisfactory to them by a written instrument delivered
to each of the retiring Paying Agent and the successor Paying Agent, and upon
such appointment and its acceptance thereof, the successor Paying Agent shall
succeed to all the rights and obligations of the retiring Paying Agent as of the
effective date of resignation or removal as though it had been originally named
herein, the retiring Paying Agent shall be discharged from all duties and
obligations thereafter arising or accruing hereunder, and the retiring Paying
Agent shall duly transfer and deliver to the successor Paying Agent the Merger
Account and any other property then held by the retiring Paying Agent hereunder.
After any retiring Paying Agent's resignation or removal hereunder, the
provisions of this Paying Agent Agreement shall inure to its benefit as to any
actions taken, omitted or suffered by it while it was the Paying Agent
hereunder.
10. Amendment and Termination. This Paying Agent Agreement may be
amended or terminated only by a written agreement signed by each of the Paying
Agent, Parent, the Company and Company Representative.
11. Notices. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally delivered; (b)
sent by telecopier, facsimile transmission or other electronic means of
transmitting written documents; or (c) sent to the parties at their respective
addresses indicated herein by registered or certified U.S. mail, return receipt
requested and postage prepaid, or by private overnight mail courier service. The
respective addresses to be used for all such notices, demands or requests are as
follows:
If to Parent, Newco NFC Castings, Inc.
or the Company: c/o Citicorp Venture Capital, Ltd.
Attn: David F. Thomas
399 Park Avenue, 14th Floor, Zone 4
New York, NY 10043
With a copy to: Kirkland & Ellis
Attn: Kirk A. Radke
Citicorp Center
153 East 53rd Street
New York, NY 10022-4675
If to Company E.W. Aylward
Representative: 241 Lake Road
Menasha, WI 54952
With a copy to: Quarles & Brady
Attn: Bruce C. Davidson
411 East Wisconsin Avenue
Milwaukee, WI 53202
Facsimile: (414) 271-3552
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96
If to the Paying Agent: Bank One, Milwaukee, N.A.
Attn:_____________________
__________________________
__________________________
Milwaukee WI _____________
If personally delivered, such communication shall be deemed delivered
upon actual receipt; if electronically transmitted pursuant to this paragraph,
such communication shall be deemed delivered the next business day after
transmission (and sender shall bear the burden of proof of delivery); if sent by
overnight courier pursuant to this paragraph, such communication shall be deemed
delivered upon receipt; and if sent by U.S. mail pursuant to this paragraph,
such communication shall be deemed delivered as of the date of delivery
indicated on the receipt issued by the relevant postal service, or, if the
addressee fails or refuses to accept delivery, as of the date of such failure or
refusal. Delivery to the Company Representative shall constitute delivery to all
Company Shareholders. Any Person may change its address for the purposes of this
agreement by giving notice thereof in accordance with this Section.
12. Governing Law. This Paying Agent Agreement is being delivered and
is intended to be performed in the State of Wisconsin and shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the laws of the State of Wisconsin.
13. Entire Agreement. This Paying Agent Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings, written and
oral. This Paying Agent Agreement shall be binding upon the parties hereto and
their successors and assigns.
14. Headings. The headings in this Paying Agent Agreement are inserted
for convenience only and shall not constitute a part hereof.
15. Counterparts. This Paying Agent Agreement may be executed in any
one or more counterparts, each of which shall constitute one and the same
agreement.
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97
IN WITNESS WHEREOF, the parties have caused this Paying Agent Agreement
to be executed on the date first above written.
NFC CASTINGS, INC.
By: _______________________________
Title:
NC MERGER COMPANY
By: _______________________________
Title:
NEENAH CORPORATION
By: _______________________________
Title:
________________________________________
E.W. Aylward, Company Representative
BANK ONE, MILWAUKEE, N.A.
as Paying Agent
By: _______________________________
Title:
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FIRST AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION
This First Amendment to Agreement and Plan of Reorganization is dated
as of January 13, 1997 by and among NFC Castings, Inc., a Delaware corporation
("Parent"), NC Merger Company, a Wisconsin corporation ("Newco"), and Neenah
Corporation, a Wisconsin corporation (the "Company").
RECITALS
Parent, Newco and the Company entered into an Agreement and Plan of
Reorganization dated as of November 20, 1996 ("Agreement") pursuant to which
they agreed to consummate a transaction in which Parent would acquire the
Company for cash through a reverse triangular merger of Newco with and into the
Company, whereby all of the outstanding shares of the capital stock of the
Company would be converted into the right to receive cash and all of the
outstanding shares of the capital stock of Newco would be converted into shares
of the capital stock of the Company, upon the terms and subject to the
conditions set forth in the Agreement. The parties desire to amend certain
provisions of the Agreement in the manner and to the extent set forth herein, to
extend the closing date and the outside date for such transaction.
Accordingly, in consideration of the premises and of the mutual
agreements, provisions and covenants herein contained, the parties hereto hereby
agree as follows:
1. AMENDMENT OF THE AGREEMENT.
1.1 Closing Date. Sections 2.2, 9.1(b)(ii) and 9.1(c)(ii) of the
Agreement are amended by substituting the date "February 20, 1997" for the date
"January 31, 1997" each place it appears.
1.2 Outside Date. Sections 9.1(b)(iii) and 9.1(c)(iii) of the Agreement
are amended by substituting the date "February 21, 1997" for the date "February
15, 1997" each place it appears.
2. RATIFICATION.
Except as expressly amended by this Amendment, all of the terms and
conditions of the Agreement shall remain in full force and effect. The
Agreement, as amended hereby, and all rights and powers created thereby and
thereunder are in all respects ratified and confirmed.
3. COUNTERPARTS.
This Amendment may be signed in any number of counterparts, all of
which taken together shall constitute one fully-executed agreement.
99
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
NFC CASTINGS, INC.
By: /s/ John Weber
________________________________
Title: Vice President
_____________________________
NC MERGER COMPANY
By: /s/ John Weber
________________________________
Title: Vice President
____________________________
NEENAH CORPORATION
By: /s/ E. W. Aylward
________________________________
Title: Chairman
_____________________________
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SECOND AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION
This Second Amendment to Agreement and Plan of Reorganization (the
"Second Amendment") is dated as of February 21, 1997 by and among NFC Castings,
Inc., a Delaware corporation ("Parent"), NC Merger Company, a Wisconsin
corporation ("Newco"), and Neenah Corporation, a Wisconsin corporation (the
"Company").
RECITALS
Parent, Newco and the Company entered into an Agreement and Plan of
Reorganization dated as of November 20, 1996 ("Agreement and Plan of
Reorganization") pursuant to which they agreed to consummate a transaction in
which Parent would acquire the Company for cash through a reverse triangular
merger of Newco with and into the Company, whereby all of the outstanding shares
of the capital stock of the Company would be converted into the right to receive
cash and all of the outstanding shares of the capital stock of Newco would be
converted into shares of the capital stock of the Company, upon the terms and
subject to the conditions set forth in the Agreement and Plan of Reorganization.
Parent, Newco and the Company entered into a First Amendment to Agreement and
Plan of Reorganization dated as of January 13, 1997 ("First Amendment") pursuant
to which they agreed to amend certain provisions of the Agreement and Plan of
Reorganization. (The Agreement and Plan of Reorganization, as amended by the
First Amendment, is referred to herein as the "Agreement".) The parties desire
to further amend certain provisions of the Agreement in the manner and to the
extent set forth herein.
Accordingly, in consideration of the premises and of the mutual
agreements, provisions and covenants herein contained, the parties hereto hereby
agree as follows:
1. AMENDMENT OF THE AGREEMENT.
1.1 Closing Date. Sections 2.2, 9.1(b)(ii) and 9.1(c)(ii)
of the Agreement are amended by substituting the date "April 11,
1997" for the date "February 20, 1997" each place it appears.
1.2 Outside Date. Sections 9.1(b)(iii) and 9.1(c)(iii) of
the Agreement are amended by substituting the date "April 11,
1997" for the date "February 21, 1997" each place it appears.
1.3 Definitions. Section 1.1 of the Agreement is amended
by amending the definitions of "Merger Price" and "Merger Price
Per Share" to read in their entirety as follows:
"Merger Price" shall mean the sum of $240,000,000.00
less an amount equal to the Settlement Adjustment Amount, to
be delivered by Newco pursuant to Article II of this
Agreement, subject to later
101
adjustment as provided in Section 2.6(e) of this
Agreement.
"Merger Price Per Share" shall mean the quotient
determined by dividing the Merger Price to be delivered by
Newco at Closing by the total number of shares of the Company
Common Stock issued and outstanding immediately prior to the
Effective Time. (For illustration purposes only, based on the
total issued and outstanding shares of Company Common Stock
set forth in Section 3.1(c) of this Agreement, the Merger
Price Per Share would equal $54,060.14 less the amount
determined by dividing the Settlement Adjustment Amount by the
number 4439.50.)
1.4 Definitions. Section 1.1 of the Agreement is amended
by adding thereto the following additional defined terms:
"Former Shareholder" shall mean any former holder of
any shares of capital stock of the Company, whose shares of
capital stock were repurchased by the Company at any time
prior to the date of this Agreement.
"Former Shareholder Claim" shall mean any claim,
demand, cause of action, suit, obligation or liability
whatsoever, in law or equity, known or unknown, whether or not
asserted or assertable, and whether or not paid or settled,
that any Former Shareholder (and such Former Shareholder's
directors, officers, employees, stockholders, heirs,
successors, assigns and agents) had, has or may have against,
or that has been, might have been or may be asserted against,
the Company, any of the Subsidiaries or any of the Company
Shareholders, or any of the respective directors, officers,
employees, stockholders, heirs, successors, assigns or agents
of the Company, any of the Subsidiaries or any of the Company
Shareholders, including without limitation any claim, demand,
cause of action, suit, obligation or liability arising from or
in connection with any sale or conveyance of any of such
Former Shareholder's or any other Person's shares of the
capital stock of the Company, including any claim, demand,
cause of action, suit, obligation or liability based upon an
allegation that such Former Shareholder did not receive fair
value for his or her shares of the capital stock of the
Company at the time such shares were repurchased by the
Company or any other allegation in connection with such
repurchase or in connection with the transactions contemplated
by this Agreement.
"Former Shareholder Release" shall mean a
Confidential Settlement Agreement and Release substantially in
the form of Exhibit H attached to this Agreement and otherwise
in substance and amount reasonably acceptable to Parent and
the Company.
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"Recent Former Shareholder" shall mean any of the
following Former Shareholders: James P. Keating, Jr.,
Mary K. and James H. Russell, Jr., Katherine K. Wilson,
Dan E. Johnson and the Neenah Foundry Foundation, Inc.
"Recent Former Shareholder Claim" shall mean any
claim, demand, cause of action, suit, obligation or liability
whatsoever, in law or equity, known or unknown, whether or not
asserted or assertable, and whether or not paid or settled,
that any Recent Former Shareholder (and such Recent Former
Shareholder's directors, officers, employees, stockholders,
heirs, successors, assigns and agents) had, has or may have
against, or that has been, might have been or may be asserted
against, the Company, any of the Subsidiaries or any of the
Company Shareholders, or any of the respective directors,
officers, employees, stockholders, heirs, successors, assigns
or agents of the Company, any of the Subsidiaries or any of
the Company Shareholders, arising from or in connection with
any sale or conveyance of any of such Recent Former
Shareholder's or any other Person's shares of the capital
stock of the Company, including any claim, demand, cause of
action, suit, obligation or liability based upon an allegation
that such Recent Former Shareholder did not receive fair value
for his or her shares of the capital stock of the Company at
the time such shares were repurchased by the Company or any
other allegation in connection with such repurchase or in
connection with the transactions contemplated by this
Agreement.
"Settlement Adjustment Amount" shall mean one-half
(1/2) of the aggregate amount actually paid by Parent or Newco
to the Recent Former Shareholders in exchange for obtaining
Former Shareholder Releases from them, provided, however, that
in no event shall the Settlement Adjustment Amount exceed
$2,000,000.00.
1.5 Payments to Recent Former Shareholders. Article II of
the Agreement is amended by adding thereto, after Section 2.3
thereof, the following additional Section 2.3A:
2.3A Payments by Parent or Newco to Recent Former
Shareholders. At the Closing, Parent or Newco shall pay to
each of the Recent Former Shareholders the settlement amount
recited in the Former Shareholder Release applicable to such
Recent Former Shareholder.
1.6 Escrow Deposit. Section 2.5(a) of the Agreement is
amended to read in its entirety as follows:
(a) Immediately after the Effective Time, the
Paying Agent shall deposit or shall cause to be
deposited with the Escrow Agent by wire transfer of
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immediately available funds, a portion of the Merger Price
equal to $12,000,000.00 less an amount equal to the Settlement
Adjustment Amount (the "Escrow Deposit"), to be held by the
Escrow Agent in accordance with Section 8.2 of this Agreement
and in accordance
with the Escrow Agreement.
1.7 Post-Closing Adjustment. Section 2.6(a) of the
Agreement is amended by replacing the period at the end of clause
(ii) thereof with a semi-colon and adding thereto the following
additional clauses (iii), (iv) and (v):
(iii) no reserves, accruals or other liabilities for any
Former Shareholder Claims shall be established with
respect to the Company or any Subsidiary, and the
Closing Date Balance Sheet and the Final Closing Date
Balance Sheet shall contain no such reserves,
accruals or liabilities; and
(iv) no expense for any accrual or payment of any portion
of any Former Shareholder Claims, whether in
settlement thereof or otherwise, shall be allowed or
taken into account in computing the net income of the
Company for the interim period ending immediately
prior to the Effective Time on the Closing Date; and
(v) no reduction or decrease shall be made in any asset
account of the Company or any Subsidiary for any
payments made to the Recent Former Shareholders
pursuant to Section 2.3A of this Agreement to the
extent any such payments are considered or deemed to
have been made by the Company or any Subsidiary.
1.8 Approval of Supplemental Disclosures. Section 5.7(b)
of the Agreement is amended by adding the following sentence to
the end thereof:
Notwithstanding the immediately preceding sentence, for
purposes of this Agreement, including without limitation
Section 6.1 of this Agreement, Parent hereby consents to all
of the updates and supplements to the Disclosure Schedule set
forth in the First Addendum to Disclosure Schedule to
Agreement and Plan of Reorganization dated as of January 28,
1997 (except for the matter regarding the Recent Former
Shareholders disclosed as new Item 7 under Section 3.10) and
in the Second Addendum to Disclosure Schedule to Agreement and
Plan of Reorganization dated as of February 7, 1997, and
accordingly such updates and supplements (except for such
matter regarding the Recent Former Shareholders disclosed as
new Item 7 under Section 3.10) shall be taken into account for
purposes of Section 6.1 of this Agreement.
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1.9 Minimum Cash on Hand. Section 6.17 of the Agreement is amended to
read in its entirety as follows:
6.17 Minimum Cash on Hand. The Company and its
Subsidiaries on a consolidated basis shall have at least
$18,000,000 cash and cash equivalents on hand at Closing (net
of checks issued but not yet presented), less the amount of
any payments made to the Recent Former Shareholders pursuant
to Section 2.3A of this Agreement to the extent any such
payments are considered or deemed to have been made by the
Company or any Subsidiary.
1.10 Conditions Precedent to Parent's and Newco's Obligations. Article
VI of the Agreement is amended by adding thereto the following additional
Section 6.18:
6.18 Former Shareholder Releases. Parent shall have
received an irrevocable, duly executed Former Shareholder
Release from each of the Recent Former Shareholders, the
continued effectiveness of each of which as to the applicable
Recent Former Shareholder is conditioned only upon payment to
such Recent Former Shareholder at or before the Closing of the
settlement amount recited in the Former Shareholder Release
applicable to such Recent Former Shareholder.
1.11 Conditions Precedent to Company's Obligations. Article VII of the
Agreement is amended by adding thereto the following additional Section 7.10:
7.10 Former Shareholder Releases. Parent shall have
received, and Parent shall have delivered to the Company
Representative a true and correct copy of, an irrevocable,
duly executed Former Shareholder Release from each of the
Recent Former Shareholders, the continued effectiveness of
each of which as to the applicable Recent Former Shareholder
is conditioned only upon payment to such Recent Former
Shareholder at or before the Closing of the settlement amount
recited in the Former Shareholder Release applicable to such
Recent Former Shareholder.
1.12 Indemnification on Behalf of Company Shareholders --Limitations.
Section 8.2(b) of the Agreement is amended by replacing the period at the end of
clause (xiii) thereof with "; and" and adding thereto the following additional
clause (xiv):
(xiv) for any Recent Former Shareholder Claims or
Losses attributable thereto.
1.13 Termination of Agreement. Section 9.1(b) of the Agreement is
amended by adding thereto the following additional clause (iv):
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(iv) the condition provided for in Section
6.18 of this Agreement has not been satisfied, or
waived by Parent or Newco in writing, by March 14,
1997; or
1.14 Termination of Agreement. Section 9.1(c) of the Agreement is
amended by replacing the period at the end of clause (iv) thereof with "; or"
and adding thereto the following additional clause (v):
(v) the condition provided for in Section
7.10 of this Agreement has not been satisfied, or
waived by the Company in writing, by March 14, 1997.
1.15 Exhibits. The Agreement is amended by adding thereto as Exhibit H
the form of Confidential Settlement Agreement and Release attached hereto as
Exhibit H, and the schedule of Exhibits is modified accordingly.
1.16 Exhibits and Schedules. Prior to Closing, the exhibits and
schedules to the Agreement shall be amended to the extent necessary to reflect
the amendments to the Agreement set forth in this Second Amendment.
2. RATIFICATION.
Except as expressly amended by this Second Amendment, all of the terms
and conditions of the Agreement shall remain in full force and effect. The
Agreement, as amended hereby, and all rights and powers created thereby and
thereunder are in all respects ratified and confirmed.
3. COUNTERPARTS.
This Second Amendment may be signed in any number of counterparts, all
of which taken together shall constitute one fully-executed agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed as of the day and year first above written.
NFC CASTINGS, INC.
By: /s/ John Weber
________________________________
Title:_____________________________
NC MERGER COMPANY
By: /s/ John Weber
________________________________
Title:_____________________________
NEENAH CORPORATION
By: /s/ E. W. Aylward
________________________________
Title: Chairman, President & CEO
_____________________________
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