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FIRST AMENDMENT TO THE STOCK PURCHASE AGREEMENT
This FIRST AMENDMENT, is made and entered into as of December 30, 1998
(this "Amendment") to amend the Stock Purchase Agreement dated as of December 3,
1998, by and among Niemin Porter & Co. d/b/a Cast Alloys, Inc., a California
corporation, the Sellers (as defined therein) and Neenah Foundry Company, a
Wisconsin corporation (the "Stock Purchase Agreement") as set forth herein.
The Stock Purchase Agreement as amended by this Amendment is referred
to herein as the "Amended Stock Purchase Agreement". All other capitalized terms
used and not otherwise defined herein shall have the meaning assigned to such
terms in the Stock Purchase Agreement. Unless otherwise specified, all section
references herein are to the corresponding sections of the Stock Purchase
Agreement.
WHEREAS, pursuant to the Stock Purchase Agreement, Buyer has agreed to
purchase from Sellers, and Sellers have agreed to sell, transfer and convey to
Buyer, the Stock and the Warrants, all subject to the terms and conditions of
the Stock Purchase Agreement;
WHEREAS, since the date of the signing of the Stock Purchase Agreement,
certain events unanticipated by the Parties at the time of signing, have
occurred; and
WHEREAS, Buyer and Sellers desire to amend the Stock Purchase Agreement
to provide for the purchase and sale of the Stock and the Warrants upon and
subject to the terms and conditions of the Amended Stock Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1. Amendments. The Stock Purchase Agreement is hereby amended
as follows:
(a) The Table of Contents to the Stock Purchase Agreement is hereby
amended by:
(i) deleting the words "Section 2.7 EBITDA Adjustment" from
page -i- thereof and replacing them with the following words "Section
2.7 [INTENTIONALLY DELETED PRIOR TO CLOSING]."
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(ii) deleting the words "Exhibit C EBITDA Calculation" from
page -iv- thereof and replacing them with the following words "Exhibit
C [INTENTIONALLY DELETED PRIOR TO CLOSING]."
(b) Section 1.1 is hereby amended as follows:
(i) the definition of "Disclosure Schedule" is hereby amended
by adding the following words after the word "Parties" but before the
period in the second line thereof:", as amended by the First Amendment
to the Disclosure Schedule" a copy of which First Amendment is attached
hereto as Exhibit A.
(ii) The term and corresponding definition of "Earn-Out
Amount" are deleted in their entirety.
(iii) The term and corresponding definition of "Earn-Out
Statement" are deleted in their entirety.
(iv) The definition of "EBITDA" is hereby amended by deleting
the words "has the meaning specified in Section 2.7(c)" and replacing
them with the following words: "means, for any period, the consolidated
net income or loss of the Company, excluding any gains or losses from
the sale of assets outside the ordinary course of business and any
extraordinary gains or losses, plus, without duplication and to the
extent deducted in determining net income of the Company for such
period, the sum of (i) interest expense for indebtedness for borrowed
money (including capitalized leases) for such period, (ii) Income Tax
expense for such period, (iii) non-cash charges or non-cash losses
(including non-cash transaction expenses and the amortization of debt
discounts), (iv) management fees, director's fees and charge-offs of
impaired assets, to the extent incurred after the Closing Date, and (v)
the amount of depreciation and amortization in respect of the Company's
assets for such period in each case determined in accordance with the
accounting principles set forth in Section 1.4 and derived from the
Company's consolidated financial statements for such period."
(v) The term and corresponding definition of "EBITDA
Deficiency" are deleted in their entirety.
(vi) The term and corresponding definition of "EBITDA Rebate
Amount" are deleted in their entirety.
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(vii) The term and corresponding definition of "Escrow
Portion" are deleted in their entirety.
(viii) The definition "1998 EBITDA" is hereby amended by
deleting the words "has the meaning specified in Section 2.7" and
replacing them with the following words "means EBITDA for the Company's
1998 Fiscal Year determined in accordance with the definition of EBITDA
set forth herein."
(c) Section 1.4 is hereby amended by deleting the words "and the
Earn-Out Statement" from the third line thereof and deleting the words "or
Exhibit C with respect to the Earn-Out Statement" from the seventh and eighth
lines thereof.
(d) Section 2.3(a) is hereby amended and restated by deleting it in its
entirety and replacing it with the following amended and restated Section
2.3(a):
"(a) Upon the terms and subject to the conditions contained in
the Amended Stock Purchase Agreement, as consideration for the purchase
of the Stock and the Warrants, Buyer shall pay to Sellers an aggregate
amount of $42,000,000 (the "Purchase Price"), as the same may be
adjusted as described in Section 2.4 below by (i) depositing or causing
to be deposited with the Escrow Agent by wire transfer of immediately
available funds, $1,000,000 (the "Escrow Deposit") to be held by the
Escrow Agent in accordance with Sections 2.4 and 10.2 of this Agreement
and in accordance with the Escrow Agreement and (ii) tendering to
Sellers, in accordance with Section 2.6, an aggregate amount (the "Cash
Purchase Price") equal to $41,000,000 less the sum of (A) the amount of
any Funded Debt outstanding as of the close of business on the Closing
Date, (B) the aggregate amount of any liability for Taxes shown as a
current obligation, liability or reserve on the Estimated Closing
Balance Sheet, determined after giving effect to the exercise of the
Employee Options and the Executive Options in accordance with Section
2.8, (C) the aggregate amount of any liability for bonuses to employees
shown as a current obligation, liability or reserve on the Estimated
Closing Balance Sheet, (D) the Option Share Purchase Price, and (E) the
Estimated Adjustment, if any. The Cash Purchase Price will be allocated
among the Sellers as set forth in Section 2.3(a) of the Disclosure
Schedule, as amended as of the Closing Date, taking into account the
transfer of the Common Stock, Preferred Stock and Warrants held by each
Seller and the exercise or surrender of any Option Shares thereby in
accordance with Section 2.8 hereof. Buyer and Sellers have agreed that
the portion of the Purchase Price allocable to the transfer of all of
the capital stock of International Golf shall be $20,000."
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(e) Section 2.4(d)(ii) is hereby amended and restated by deleting
Section 2.4(d)(ii) in its entirety and replacing it with the following amended
and restated Section 2.4(d)(ii):
"(ii) If the Final Closing Date Working Capital is less than
the Estimated Closing Working Capital, then the Purchase Price will be
decreased on a dollar-for-dollar basis by the amount of such deficiency
plus interest thereon at the Base Rate from the Closing Date (the "Working
Capital Rebate Amount"). In such event, each of the Sellers shall be
jointly and severally liable to pay to the Buyer the Working Capital Rebate
Amount no later than five (5) business days after completion of the Final
Closing Date Balance Sheet by wire transfer of immediately available funds
to an account or accounts designated by Buyer in writing; provided that at
the Buyer's sole discretion, the Buyer may direct the Escrow Agent to pay
to the Buyer all or any portion of the Working Capital Rebate Amount from
the Escrow Deposit."
(f) Section 2.5(a)(vi) is hereby amended by inserting the following
words after the semicolon at the end thereof:
"provided, however, that the parties acknowledge and agree that with
respect to the shares of International Golf to be transferred to Buyer or
its designee, such shares will not be transferred until the parties have
provided the corresponding concentration notification established in
Article 20 of the Mexican Federal Competition Law (Ley Federal de
Competencia Economica) to the Mexican Economic Competition Commission
("ECC") in the event said notification is to be applicable to the
transaction. Thus, it is understood by both parties that the transaction
related to the Subsidiary will legally and economically take place only
after the notification of concentration mentioned above has been officially
filed with the ECC;"
(g) Section 2.7 is hereby amended and restated by deleting Section 2.7
in its entirety and replacing it with the following "Section 2.7. [INTENTIONALLY
DELETED PRIOR TO CLOSING]."
(h) Section 3.2(c) is hereby amended by deleting the following words
from the last nine lines thereof: "The parties acknowledge and agree that with
respect to the shares of International Golf to be transferred to Buyer or its
designee, such shares will not be transferred until the parties have provided
the corresponding concentration notification established in Article 20 of the
Mexican Federal Competition Law (Ley Federal de Competencia Economica) to the
Mexican Economic Competition Commission ("ECC") in the event said notification
is to be applicable to the transaction. Thus, it is understood by both parties
that the transaction related to the Subsidiary will legally and
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economically take place only after the notification of concentration mentioned
above has been officially filed with the ECC."
(i) Section 6.1(b)(ii) is hereby amended by changing "December 31,
1998" to "January 15, 1998".
(j) Section 10.2(b) is hereby amended by deleting the following words
from the tenth line thereof: "(iii) the EBITDA Rebate Amount (plus) interest, if
any (but only to the extent that such EBITDA Rebate Amount has not been paid to
Buyer in accordance with Section 2.7 hereof)" and renumbering the remaining
clauses of Section 10.2(b) accordingly.
(k) Section 10.2(d) is hereby amended by deleting the following words
from the sixth line thereof: "and 2.7".
(l) Section 10.2(e) is hereby amended by deleting the following words
from the fifth and sixth line thereof: ", including any amounts payable in
respect of the Earn-Out Amount".
(m) Section 10.4(b)(ii) is hereby amended by deleting the words "the
lesser of $5,000,000 or" from the third line thereof.
Section 2. Effect of Amendment. Except as expressly set forth herein,
this Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect, the rights and remedies of the Parties under the
Stock Purchase Agreement, and shall not alter, modify, amend or in any way
affect any of the terms, conditions, obligations, covenants or agreements
contained in the Stock Purchase Agreement, all of which are ratified and
affirmed in all respects and shall continue in full force and effect. This
Amendment shall apply and be effective only with respect to the provisions of
the Stock Purchase Agreement specifically referred to herein.
Section 3. Choice of Law. This Amendment shall be governed by, and
construed in accordance with, the internal laws of the State of New York,
without giving effect to any choice of law or conflicts of law principles,
provisions or rules (whether of the State of New York or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of New York.
Section 4. Counterparts. This Amendment 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.
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Section 5. Invalidity. In the event that any one or more of the
provisions contained in this Amendment or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Amendment or any other such instrument.
Section 6. Headings. The headings of the Sections herein are inserted
for convenience of reference only and are not intended to be a part of or to
affect the meaning or interpretation of this Amendment.
Section 7. Waiver of Jury Trial. Each of the parties hereto waives to
the fullest extent permitted by law any right it may have to trial by jury in
respect of any claim, demand, action or cause of action based on, or arising out
of, under or in connection with this Amendment, or any course of conduct, course
of dealing, verbal or written statement or action of any party hereto, in each
case whether now existing or hereafter arising, and whether in contract, tort,
equity or otherwise. The parties to this Amendment each hereby agrees that any
such claim, demand, action or cause of action shall be decided by court trial
without a jury and that the parties to this Amendment may file an original
counterpart of a copy of this Amendment with any court as evidence of the
consent of the parties hereto to the waiver of their right to trial by jury.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date and year first above written.
NEENAH FOUNDRY COMPANY
By: /s/ James K. Hildebrand
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Name: James K. Hildebrand
Its: CEO
NIEMIN PORTER & CO., d/b/a CAST ALLOYS, INC.
By: /s/ John R.C. Porter
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Name: John R.C. Porter
Its: Chairman
/s/ John R.C. Porter
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JOHN R.C. PORTER
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ADHILL LIMITED PARTNERSHIP
By: /s/ Thomas H. Laller
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Name: Thomas H. Laller
Its: Authorized Representative
ADVENT INTERNATIONAL INVESTORS II
LIMITED PARTNERSHIP
By: /s/ Thomas H. Laller
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Name: Thomas H. Laller
Its: Authorized Representative
INTERNATIONAL NETWORK FUND LP
By: /s/ Thomas H. Laller
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Name: Thomas H. Laller
Its: Authorized Representative
ADVENT PERFORMANCE MATERIALS
LIMITED PARTNERSHIP
By: /s/ Thomas H. Laller
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Name: Thomas H. Laller
Its: Authorized Representative
/s/ Ajendra Singh
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AJENDRA SINGH
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/s/ Randy Kelch
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RANDY KELCH
/s/ John Sheehan
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JOHN SHEEHAN
PERFORMANCE MATERIALS FUND
By: /s/ Thomas H. Laller
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Name: Thomas H. Laller
Its: Authorized Representative