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STOCK PURCHASE AGREEMENT
By and Among
DALTON CORPORATION
and
DALTON CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN AND TRUST
as Seller
and
NEENAH FOUNDRY COMPANY,
as Buyer
August 7, 1998
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TABLE OF CONTENTS
PAGE
1. DEFINITIONS; INTERPRETATION..............................................................................1
1.1 Definitions.....................................................................................1
1.2 Interpretation..................................................................................4
2. SALE AND TRANSFER OF SHARES; CLOSING.....................................................................5
2.1 Shares..........................................................................................5
2.2 Consideration for Shares........................................................................5
2.3 Purchase Price Adjustment.......................................................................5
2.4 Closing.........................................................................................7
2.5 Closing Obligations.............................................................................7
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SELLER.................................................8
3.1 Organization And Good Standing..................................................................8
3.2 Authority; No Conflict..........................................................................8
3.3 Capitalization..................................................................................9
3.4 Financial Statements............................................................................9
3.5 Books And Records..............................................................................10
3.6 Title to Assets; Sufficiency...................................................................10
3.7 Title To Properties; Encumbrances..............................................................10
3.8 No Undisclosed Liabilities.....................................................................11
3.9 Tax Matters....................................................................................11
3.10 No Material Adverse Change.....................................................................13
3.11 Contracts......................................................................................14
3.12 Employee Benefits..............................................................................15
3.13 Compliance With Legal Requirements.............................................................18
3.14 Litigation.....................................................................................18
3.15 Absence Of Certain Changes And Events..........................................................18
3.16 Insurance......................................................................................19
3.17 Labor and Employment Matters...................................................................20
3.18 Environmental, Health And Safety Matters.......................................................21
3.19 Intellectual Property..........................................................................22
3.20 Transaction With Affiliates....................................................................23
3.21 Funded Debt....................................................................................23
3.22 Due Inquiry....................................................................................23
3.23 Disclosure.....................................................................................23
3.24 Representations And Warranties Concerning The ESOP.............................................23
3.25 Brokers Or Finders.............................................................................24
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4. REPRESENTATIONS AND WARRANTIES OF BUYER.................................................................24
4.1 Organization And Good Standing.................................................................24
4.2 Authority; No Conflict.........................................................................24
4.3 Brokers Or Finders.............................................................................24
5. COVENANTS OF THE COMPANY, AND SELLER WITH RESPECT TO THE ESOP...........................................25
5.1 Access And Investigation.......................................................................25
5.2 Operation Of The Businesses Of The Acquired Companies..........................................25
5.3 Negative Covenant..............................................................................25
5.4 Notification...................................................................................25
5.5 Fairness Opinion...............................................................................26
5.6 Termination Of ESOP............................................................................26
5.7 Best Efforts...................................................................................26
5.8 Exclusivity....................................................................................26
5.9 S Corporation Status...........................................................................27
5.10 Disclosure Schedule............................................................................28
5.11 Tax Returns....................................................................................28
6. COVENANTS OF BUYER......................................................................................28
6.1 Approvals Of Governmental Bodies...............................................................28
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE.....................................................28
7.1 Accuracy Of Representations....................................................................28
7.2 Performance....................................................................................29
7.3 Consents.......................................................................................29
7.4 Documents to be Delivered by Company...........................................................29
7.5 HSR Act Waiting Period.........................................................................30
7.6 No Injunction..................................................................................30
7.7 Real Property..................................................................................30
7.8 Participant Vote...............................................................................31
7.9 No Material Adverse Effect.....................................................................31
7.10 Absence of Litigation..........................................................................31
7.11 Management Arrangements........................................................................32
7.12 Financing......................................................................................32
7.13 Due Diligence..................................................................................32
7.14 All Proceedings To be Satisfactory.............................................................32
7.15 Sale of Ashland Facility.......................................................................32
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE....................................................32
8.1 Accuracy Of Representations....................................................................32
8.2 Performance....................................................................................32
8.3 Consents.......................................................................................32
8.4 Additional Documents...........................................................................33
8.5 Participant Vote...............................................................................33
8.6 No Injunction..................................................................................33
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8.7 Minimum Purchase Price.........................................................................33
9. TERMINATION.............................................................................................33
9.1 Termination Events.............................................................................33
9.2 Effect Of Termination..........................................................................34
10. NO INDEMNIFICATION......................................................................................34
11. POST-CLOSING COVENANTS..................................................................................35
11.1 Determination Letter...........................................................................35
11.2 Distribution Of Trust Assets...................................................................35
11.3 Valuation Report...............................................................................35
11.4 Existing Agreements............................................................................35
12. GENERAL PROVISIONS......................................................................................35
12.1 Expenses.......................................................................................35
12.2 Public Announcements...........................................................................35
12.3 Confidentiality................................................................................36
12.4 Notices........................................................................................36
12.5 Further Assurances.............................................................................37
12.6 Entire Agreement; Amendments and Notices.......................................................37
12.7 Assignments, Successors, And No Third-Party Rights.............................................38
12.8 Severability...................................................................................38
12.9 Section Headings, Construction.................................................................38
12.10 Time Of Essence................................................................................38
12.11 Choice of Law..................................................................................38
12.12 Specific Performance...........................................................................38
12.13 Waiver of Jury Trial...........................................................................39
12.14 Counterparts...................................................................................39
Exhibits
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Exhibit 1.1 Sample Working Capital Statement
Exhibit 7.4(b) Form of Opinion of Dutton & Overman
Exhibit 7.4(c) Form of Opinion of Ludwig Goldberg & Krenzel
Exhibit 7.4(l) Form of Resignation and Release
Exhibit 8.4(c) Form of Opinion of Kirkland & Ellis
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement"), dated as of August 7,
1998, is made by Neenah Foundry Company, a Wisconsin corporation ("Buyer"), the
Dalton Corporation Employee Stock Ownership Plan and Trust ("ESOP" or "Seller")
and Dalton Corporation, an Indiana corporation ("Company"). Buyer, Seller and
the Company are referred to collectively herein as the "Parties".
RECITALS
Seller owns 2,371,342.8776 shares of common stock of the Company,
constituting all of the issued and outstanding capital stock of the Company.
Seller desires to sell, and Buyer desires to purchase, all of such issued and
outstanding shares ("Shares"), for the consideration and on the terms set forth
in this Agreement.
THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties contained herein, the Parties agree as follows:
1. DEFINITIONS; INTERPRETATION.
1.1 Definitions. For purposes of this Agreement, the following terms
have the meanings specified or referred to in this Section 1:
"Acquired Companies"--collectively, the Company and its wholly-owned
Subsidiaries: Dalton Corporation, Warsaw Manufacturing Facility; Dalton
Corporation, Kendallville Manufacturing Facility, Dalton Corporation, Ashland
Manufacturing Facility and Dalton Corporation, Stryker Machining Facility.
"Affiliated Group" means any affiliated group within the meaning of
Code Section 1504(a) or any similar group defined under a similar provision of
state, local or foreign law.
"Annex I"--exceptions to Buyer's representations and warranties,
delivered to Seller and the Company concurrently with the execution and delivery
of this Agreement.
"Applicable Contract"--any Contract (a) under which any Acquired
Company has or may acquire any rights, (b) under which any Acquired Company has
or may become subject to any obligation or liability, or (c) by which any
Acquired Company or any of the assets owned or used by it is or may become
bound.
"Ashland Facility"--Dalton Corporation, Ashland Manufacturing Facility,
located at 1681 Orange Street, Ashland, Ohio 44805.
"Balance Sheet"--as defined in Section 3.4.
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"Buyer"--as defined in the first paragraph of this Agreement.
"Code"--the Internal Revenue Code of 1986, as amended, or any successor
law, and regulations issued thereunder.
"Closing"--as defined in Section 2.3.
"Closing Date"--the date and time as of which the Closing actually
takes place.
"Company"--as defined in the first paragraph of this Agreement.
"Contemplated Transactions"--all of the transactions contemplated by
this Agreement,including:
(a) The sale of the Shares by Seller to Buyer;
(b) Buyer's delivery of the Purchase Price to Seller; and
(c) The performance by Buyer and Seller of their respective
covenants and obligations under this Agreement.
"Contract"--as defined in Section 3.11.
"Determination Date"--as defined in Section 2.3(a).
"Disclosure Schedule"--the disclosure letter delivered to Buyer by
Seller and the Company concurrently with the execution and delivery of this
Agreement.
"Environmental, Health, and Safety Liabilities"--any cost (including
response costs and corrective action costs), damages, expense, liability,
obligation, fees, or other responsibility arising from or under Environmental
Law or Occupational Safety and Health Law.
"Environmental Law"--all applicable laws of federal, state or local
governments, and agencies thereof, all judicial and administrative orders and
determinations, all contractual obligations and all common law concerning public
health and safety, and pollution or protection of the environment, including
without limitation all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control, or cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or byproducts, asbestos, polychlorinated
biphenyls, noise or radiation, each as amended and as now or hereafter in
effect.
"ERISA"--the Employee Retirement Income Security Act of 1974, as
amended, or any successor law, and regulations and rules issued pursuant to that
Act or any successor law.
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"ESOP Fiduciary"--Consulting Fiduciaries, Inc., an Illinois
corporation.
"Financial Statements" has the meaning set forth in Section 3.4.
"Funded Debt"--without duplication, all obligations of any Acquired
Company under indebtedness for borrowed money (including, without limitation,
principal, interest, overdrafts, penalties, premiums, fees, expenses,
indemnities and breakage costs), all obligations of any Acquired Company under
capital leases, notes payable, guaranties and drafts accepted representing
extensions of credit.
"GAAP"--United States generally accepted accounting principles, applied
on a basis consistent with the basis on which the Balance Sheet and the other
financial statements referred to in Section 3.4 were prepared.
"HSR Act"--the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, or any successor law, and regulations and rules issued pursuant to that
Act or any successor law.
"IRS"--the United States Internal Revenue Service or any successor
agency.
"LIFO Reserves"--means any contra asset amounts recorded to report
inventory on a LIFO basis in the Balance Sheet, Most Recent Balance Sheet or
Proposed Closing Balance Sheet.
"Most Recent Balance Sheet"--as defined in Section 3.4.
"Most Recent Financial Statements"--as defined in Section 3.4.
"Occupational Safety and Health Law"--all applicable laws of federal,
state or local governments, and agencies thereof, designed to provide safe and
healthful working conditions and to reduce occupational safety and health
hazards.
"Ordinary Course of Business"--ordinary course of business consistent
with past custom and practice (including with respect to quantity and
frequency).
"Organizational Documents"--(a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) any charter or similar document adopted or filed in connection
with the creation, formation, or organization of any person or other entity; and
(e) any amendment to any of the foregoing.
"Security Interest"--any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's, and
similar liens, (b) liens for Taxes not yet due and payable or for Taxes that the
taxpayer is contesting in good faith through appropriate proceedings and for
which adequate reserves have been established on the Balance Sheet, (c) purchase
money liens and liens securing rental payments under capital lease arrangements,
and
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(d) other liens arising in the Ordinary Course of Business and not incurred in
connection with the borrowing of money.
"Seller"--as defined in the first paragraph of this Agreement.
"Shares"--as defined in the Recitals of this Agreement.
"Subsidiary"--means any Person whose securities having ordinary voting
power to elect a majority of its board of directors or managing or general
partners (or other persons having similar functions) or other ownership
interests (including partnership and membership interests) ordinarily
constituting a majority interest in the capital, profits or cash flow of such
Person, are at the time, directly or indirectly, owned or controlled by such
other Person, or by one or more other Subsidiaries of such other Person, or by
such other Person and one or more of its other Subsidiaries; when used in this
Agreement, "Subsidiary" means a Subsidiary of the Company.
"Tax" means 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 Return" means 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.
"Target Working Capital" shall mean $19,998,676.00
"Working Capital" means, as of the date of determination, an amount
equal to the consolidated current assets of the Company , less the consolidated
current liabilities of the Company, in each case determined in accordance with
GAAP, applied in a manner consistent with the preparation of the Financial
Statements and the accounting conventions set forth in Section 2.3(e); provided,
that (i) all amounts in respect of income Taxes or Taxes imposed pursuant to
Section 1374 of the Code (Tax Imposed on Certain Built-In Gains) shall be
excluded from the determination of current assets and current liabilities, (ii)
all amounts in respect of Funded Debt shall be excluded from the determination
of current assets and current liabilities, (iii) all amounts in respect of LIFO
Reserves shall be excluded from the determination of current assets, and (iv)
all amounts in respect of contributions made or to be made to the ESOP prior to
Closing shall be excluded from the determination of current liabilities in each
case, in accordance with Exhibit 1.1.
1.2 Interpretation. Unless otherwise indicated to the contrary herein
by the context or use thereof: (i) the words, "herein," "hereto," "hereof" and
words of similar import refer to this Agreement as a whole and not to any
particular Section or paragraph hereof; (ii) the word "including" means
"including, but not limited to"; (iii) masculine gender shall also include the
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feminine and neutral genders, and vice versa; and (iv) words importing the
singular shall also include the plural, and vice versa.
2. SALE AND TRANSFER OF SHARES; CLOSING.
2.1 Shares. Subject to the terms and conditions of this
Agreement, at the Closing, Seller will sell, convey, transfer and deliver the
Shares to Buyer, and, in reliance upon the representations, warranties and
covenants contained herein, Buyer will purchase the Shares from Seller.
2.2 Consideration for Shares. Upon the terms and subject to the
conditions contained herein, as consideration for the purchase of the Shares,
Buyer shall pay to Sellers, in the aggregate, an amount equal to the difference
of (x) $102,000,000.00 less (y) without duplication, the sum of (i) the greater
of the total amount of Funded Debt outstanding as of the close of business on
the Determination Date and the total amount of Funded Debt outstanding as of the
Closing, provided, that there shall be excluded from the determination of Funded
Debt as of the Closing any amount which represents an increase in Funded Debt
between the Determination Date and the Closing due to the payment of any
liability to the extent that the payment of such liability results in a
corresponding dollar-for-dollar decrease to a liability reflected on the Working
Capital Statement, plus, (ii) all fees and expenses of the Seller and the
Acquired Companies incurred in connection with the transactions contemplated by
this Agreement in accordance with Section 12.1 to the extent not paid prior to
the date hereof and reflected in the Most Recent Financial Statements, plus
(iii) all fees and expenses incurred by any Acquired Company in connection with
the sale or attempted sale of the Ashland Facility to the extent not paid prior
to the date hereof and reflected in the Most Recent Financial Statements, plus
(iv) all brokers fees and other expenses of any of the Acquired Companies or
Seller in connection with the Contemplated Transactions, to the extent not paid
prior to the date hereof and reflected in the Most Recent Financial Statements,
plus (v) the amount of any disallowed deduction or increased Tax liabilities of
any Acquired Company pursuant to Code Section 280G (the "Base Purchase Price")
subject to adjustment as provided in Section 2.3 hereof (as so adjusted, the
"Purchase Price"), payable in the manner specified in Section 2.5 below. Buyer
and the Company shall cooperate with one another to determine the Purchase Price
on and as of the Closing Date in accordance with the foregoing.
2.3 Purchase Price Adjustment.
(a) Proposed Closing Balance Sheet. The Company shall prepare
and deliver to Buyer a balance sheet (the "Proposed Closing Balance Sheet"), on
or before a date not more than ten (10) and not less than one (1) business day
prior to the Closing Date together with a statement of the Company's
determination of the Working Capital of the Company as at the close of business
on August 29, 1998, or in the event the Closing shall not have occurred on or
prior to September 4, 1998, as of the close of business on the Closing Date (the
date of such determination of Working Capital, the "Determination Date"), which
shall be reasonably acceptable to Buyer in form and substance (the "Working
Capital Statement"). The Proposed Closing Balance Sheet shall be prepared from
the books and records of the Company in
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accordance with the accounting principles set forth in subsection (d) below
taking into account the payments to be made by the Company at the Closing
(including any payments of expenses or Taxes in accordance with Section 12.1).
(b) Working Capital Adjustment. If the Final Closing Working
Capital (i) is less than the Target Working Capital, then the Purchase Price
payable at Closing shall be reduced dollar-for-dollar by the excess of the
Target Working Capital over the Final Closing Working Capital or (ii) is greater
than the Target Working Capital, then the Purchase Price payable at Closing
shall be increased dollar-for-dollar by the excess of the Final Closing Working
Capital over the Target Working Capital (the "Closing Date Adjustment").
(c) Preparation of Closing Balance Sheet; Dispute Resolution.
(i) During the preparation of the Proposed Closing Balance
Sheet and the Working Capital Statement and all activities in connection
therewith, Buyer will be entitled to designate a representative ("Buyer's
Accountant") to observe and comment on the preparation of the Proposed Closing
Balance Sheet and the Working Capital Statement and procedures relating
thereto. On or prior to the Closing Date Buyer may notify the Company of its
objections, if any (an "Objection Notice"), to the Proposed Closing Balance
Sheet and/or the determination of the Working Capital from the Working Capital
Statement. If the Buyer does not tender to the Company an Objection Notice on
or prior to the Closing Date, then the Proposed Closing Balance Sheet and the
determination of Working Capital from the Working Capital Statement will be
conclusive and binding upon the parties and the Working Capital of the Company
as of the Determination Date determined from the Working Capital Statement will
be deemed to be the Final Closing Working Capital for purposes of Section
2.3(b) above.
(ii) Dispute and Amicable Resolution. If the Buyer timely
gives an Objection Notice as described in subsection (i) above, then
the Company, the Seller and the Buyer will attempt amicably to resolve their
disputes as reflected in the Objection Notice, and any amount agreed to in
writing by the Company, the Seller and the Buyer as the Working Capital of the
Company as of the Determination Date, will be deemed to be the Final Closing
Working Capital for purposes of Section 2.3(b) above.
(iii) Resolution by Independent Accounting Firm. If the
Company, the Seller and the Buyer do not resolve all disputes as reflected
in the Objection Notice on or prior to the Closing Date, then the Company, the
Seller and the Buyer will retain a firm of certified public accountants that is
mutually acceptable to the Company, the Seller and the Buyer (if the Company,
the Seller and the Buyer are unable to agree on a mutually acceptable
accounting firm prior to the 15th day following delivery of the Objection
Notice, then such firm will be chosen randomly by lot from among the accounting
firms formerly constituting the "big six", other than the Company's accountant
and the Buyer's Accountant) (the "Independent Accounting Firm") to determine
the Working Capital of the Company as of the Determination Date, as soon as
practicable, and, in any event, within 30 days after the submission of any
dispute thereto, all in accordance with the standards and definitions set forth
herein and in subsection (d) below. The Working Capital, determined by the
Independent Accounting Firm (1) must be within the range
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of values established for such amount as determined by reference to the value
assigned to such amount by the Buyer's Accountant and the Company in the
Objection Notice and the Proposed Closing Balance Sheet, respectively, and,
assuming compliance with the preceding clause, (2) will be conclusive and
binding upon the Parties for purposes of Section 2.3(b) above. The fees and
expenses of the Independent Accounting Firm will be split equally between the
Buyer and the Company, and the portion thereof attributable to the Company shall
be considered an expense of the Company for purposes of Section 2.2 above.
(iv) "Final Closing Working Capital" means the Working
Capital as of the close of business on the Determination Date as finally
determined pursuant to clauses (i), (ii) and (iii) above.
(d) Accounting Conventions. Each accounting term used herein
shall have the meaning that is applied thereto in accordance with GAAP and each
account included in the Closing Date Balance Sheet shall be calculated in
accordance with GAAP and shall be consistent with the books and records of the
Company; provided, that all known arithmetic errors shall be taken into account
in the calculation of each account set forth above, regardless of their
materiality. 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, 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. For purposes of the preceding sentence, "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.
2.4 Closing. The purchase and sale (the "Closing") provided for in
this Agreement will take place at the offices of Buyer's counsel at 153 E. 53rd
St., New York, New York, at 10:00 a.m. (local time) on the later of (a)
September 4, 1998 or (b) three (3) business days after the satisfaction or
waiver of all conditions to Closing contained in Sections 7 and 8 below. Subject
to termination in accordance with provisions of Section 9 hereof, failure to
consummate the purchase and sale provided for in this Agreement on the date and
time and at the place determined pursuant to this Section 2.4 will not result in
the termination of this Agreement and will not relieve any party of any
obligation under this Agreement.
2.5 Closing Obligations. At the Closing, (a) Seller will deliver to
Buyer (i) certificates representing the Shares, duly endorsed (or accompanied by
duly executed stock powers) for transfer to Buyer free and clear of all liens,
charges, security interests, encumbrances and restrictions on transfer
whatsoever, and (ii) the documents referred to in Section 7.4; and (b) Buyer
will deliver to Seller (i) by wire transfer to an account designated by Seller
by notice to Buyer not less than five (5) business days prior to Closing,
immediately available funds in the aggregate in the amount of the Purchase Price
and (ii) the documents referred to in Section 8.4.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SELLER.
The Company and Seller with respect to the ESOP represent and warrant
to Buyer that the statements contained in this Section 3 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 3), except as
set forth in the Disclosure Schedule. The Disclosure Schedule will be arranged
in paragraphs corresponding to the lettered and numbered paragraphs contained in
this Section 3.
3.1 Organization And Good Standing. Section 3.1 of the Disclosure
Schedule contains a complete and accurate list for each Acquired Company of its
name, its jurisdiction of incorporation, other jurisdictions in which it is
authorized to do business, its capitalization (including the identity of each
stockholder and the number of shares held by each) and its officers and
directors. Each Acquired Company is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to conduct its business
as it is now being conducted and to own or use the properties and assets that it
purports to own or use. Each Acquired Company is duly qualified to do business
as a foreign corporation and is in good standing under the laws of each state or
other jurisdiction in which either the ownership or use of the properties owned
or used by it, or the nature of the activities conducted by it, requires such
qualification, except where the failure to so qualify would not have a material
adverse effect on its business, operations or financial condition or the
ownership of any of its assets. Seller has delivered to Buyer true and complete
copies of the Organizational Documents of each Acquired Company, as currently in
effect.
3.2 Authority; No Conflict.
(a) Each of the Company and Seller has full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding obligation
of each of the Company and Seller, enforceable in accordance with its terms.
(b) Except as set forth in Section 3.2(b) of the Disclosure
Schedule, neither the execution and delivery of this Agreement nor the
consummation or performance of the transactions contemplated by this Agreement
will, directly or indirectly (with or without notice or lapse of time): (i)
contravene, conflict with, or result in a violation of any provision of the
Organizational Documents of the Acquired Companies; (ii) contravene, conflict
with, or result in a violation of any order, writ, decree or injunction of any
court or governmental agency having jurisdiction over the Seller or any of the
Acquired Companies or any of their respective properties; (iii) contravene,
conflict with, or result in a violation or breach of any provision of, or give
any person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate, or modify,
any Applicable Contract; or (iv) result in the imposition or creation of any
lien, security interest or encumbrance upon or with respect to any of the assets
owned or used by any Acquired Company.
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(c) Except as set forth in Section 3.2(c) of the Disclosure
Schedule, neither Seller nor any Acquired Company is or will be required to give
any notice to, make any declaration, filing or registration with or obtain any
waiver, authorization, approval or consent from any person or other entity in
connection with the execution and delivery of this Agreement, the consummation
or performance of the Contemplated Transactions or the continuation of any
Acquired Company's rights under any Applicable Contract.
3.3 Capitalization. The authorized equity securities of the Company
consist of 8,750,000 shares of common stock without par value, of which
2,371,342.8776 shares are issued and outstanding and constitute the Shares.
Seller is and will be on the Closing Date the record owner and holder of the
Shares, free and clear of all encumbrances. The Company is the owner of record
and beneficially of all the outstanding equity securities of each other Acquired
Company, free and clear of all encumbrances. All of the outstanding equity
securities of each Acquired Company have been duly authorized and validly issued
and are fully paid and nonassessable. All of the issued and outstanding Shares
have been duly authorized, are validly issued, fully paid, and nonassessable,
and are held beneficially and of record by Seller free and clear of all Taxes,
liens, claims, charges, pledges, encumbrances, options, warrants, purchase
rights, contracts, commitments, equities, claims, demands and restrictions
whatsoever. No shares of the capital stock of any Acquired Company are reserved
for issuance. There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
commitments that could require any Acquired Company to issue, sell, or otherwise
cause to become outstanding any of its or any other Acquired Company's capital
stock, nor any stock appreciation rights, phantom stock, or similar rights or
instruments. There are no voting trusts, proxies, or other agreements or
understandings with respect to the voting of any capital stock of any Subsidiary
of the Company. All of the shares of capital stock of each Subsidiary have been
duly authorized and are validly issued, fully paid, and nonassessable. The
Company owns all of the issued and outstanding shares of capital stock in each
of its Subsidiaries free and clear of any restrictions on transfer, Taxes,
liens, claims, charges, pledges, encumbrances, options, warrants, purchase
rights, contracts, commitments, equities, and demands and restrictions
whatsoever. There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require any of the Company or its
Subsidiaries to sell, transfer, or otherwise dispose of any capital stock of any
of its Subsidiaries or that could require any Subsidiary of the Company to
issue, sell, or otherwise cause to become outstanding any of its own capital
stock, nor any stock appreciation rights, phantom stock, or similar rights or
instruments.
3.4 Financial Statements. The Company has delivered to Buyer (a)
audited, consolidated balance sheets of the Acquired Companies as at January 3,
1998 (the "Balance Sheet"), December 28, 1996 and December 30, 1995 and the
related audited, consolidated statements of income, stockholders' equity and
cash flow for the fiscal year then ended (collectively, the "Financial
Statements"), together with the report thereon of Price Waterhouse LLP with
respect to the 1995 and 1996 fiscal years and of Price Waterhouse Coopers LLP,
with respect to the 1997 fiscal year, in each case as the Company's independent
certified public accountants, and (b) an unaudited, consolidated and
consolidating balance sheet of the Acquired Companies as at June 30, 1998 (the
"Most Recent Balance Sheet") and the related unaudited,
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consolidated statements of income, shareholders' equity and cash flow for the 6
months then ended (the "Most Recent Financial Statements"). The Financial
Statements (including the notes thereto) have been prepared from the books and
records of the Company, are correct and complete, have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods
covered thereby and present fairly the transactions, assets and liabilities of
the Acquired Companies as of such dates and the financial condition of the
Acquired Companies as of such dates and the results of operations of the
Acquired Companies for such periods; provided, however, that the Most Recent
Financial Statements are subject to normal year-end adjustments (which will not
be material individually or in the aggregate) and lack footnotes and other
presentation items.
3.5 Books And Records. The books of account, minute books, stock
record books, and other records of the Acquired Companies, all of which have
been made available to Buyer, are complete and correct and have been maintained
in accordance with sound business practices. The stock records of the Acquired
Companies fairly and accurately reflect in all respects the record ownership of
all of the outstanding Shares of capital stock of the Acquired Companies.
3.6 Title to Assets; Sufficiency. Except as set forth in Section
3.6 of the Disclosure Schedule, the Acquired Companies have good and
marketable title to, or a valid leasehold interest in, the properties and
assets used by them or otherwise necessary to conduct their business, located
on their premises, or shown on the Most Recent Balance Sheet or acquired after
the date thereof, free and clear of all Security Interests, except for
properties and assets disposed of in the Ordinary Course of Business since the
date of the Most Recent Balance Sheet. The assets currently owned by the
Acquired Companies, or leased by any Acquired Company pursuant to any valid and
enforceable lease agreement entered into in the Ordinary Course of Business or
otherwise disclosed to Buyer constitute all of the assets necessary to conduct
the business of the Company and its Subsidiaries in accordance with past
practices as of the most recent fiscal month end and as of the date hereof.
3.7 Title To Properties; Encumbrances.
(a) Section 3.7(a) of the Disclosure Schedule sets forth the
address and legal description of each parcel of real property owned by an
Acquired Company (the "Owned Real Property"). The applicable Acquired Company
has good and marketable title in and to all of the Owned Real Property subject
to no liens, encroachments, encumbrances or other defects in title
(collectively, "Liens"), except as described on such Section of the Disclosure
Schedule.
(b) Section 3.7(b) of the Disclosure Schedule sets forth a
list of all leases, subleases and other occupancy agreements, including all
amendments, extensions and other modifications (the "Leases") for real property
(the "Leased Real Property"; the Owned Real Property and the Leased Real
Property, collectively, the "Real Property") to which any Acquired Company is a
"tenant", "subtenant"or other lessee party. The applicable Acquired Company has
a good and valid leasehold interest in and to all of the Leased Real Property,
subject to no Liens except as described in such Section of the Disclosure
Schedule. Each Lease is in full force and effect and is enforceable in
accordance with its terms. There exists no default or condition
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which, with the giving of notice, the passage of time or both, could become a
default under any Lease.
(c) The Real Property constitutes all of the real property owned,
leased, occupied or otherwise utilized in connection with the business of the
Acquired Companies. Other than the Acquired Companies, there are no parties in
possession or parties having any current or future right to occupy any of the
Real Property. The Real Property is in good condition and repair and is
sufficient and appropriate for the conduct of the business of the Acquired
Companies. The Real Property and all plants, buildings and improvements located
thereon conform to all applicable building, zoning and other laws, ordinances,
rules and regulations. 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. There exists no violation of
any covenant, condition, restriction, easement, agreement or order affecting any
portion of the Real Property. All improvements located on the Real Property have
direct access to a public road adjoining such Real Property. No such
improvements or accessways encroach on land not included in the Real Property
and no such improvement is dependent for its access, operation or utility on any
land, building or other improvement not included in the Real Property. There is
no pending or, to the knowledge of any Acquired Company, any threatened
condemnation proceeding affecting any portion of the Real Property. There are no
outstanding options or rights of first refusal with respect to the purchase or
use of any of the Owned Real Property, any portion thereof or interest therein.
None of the Acquired Companies are obligated to purchase or lease any real
property.
(d) The Company has delivered or made available to Buyer copies
of the deeds and other instruments by which the Acquired Companies acquired all
Real Property, leaseholds or other interests owned by the Acquired Companies,
and copies of all title insurance policies, opinions, abstracts, and surveys in
the possession of the Acquired Companies and relating to such property or
interests.
3.8 No Undisclosed Liabilities. Except as set forth in Section 3.8 of
the Disclosure Schedule, the Acquired Companies have no liabilities or
obligations of any nature (whether absolute, accrued, contingent, or otherwise)
except for liabilities or obligations reflected or reserved against in the most
recent Balance Sheet and current liabilities incurred in the ordinary course of
business since the date thereof, none of which is a liability resulting from,
arising out of, relating to, in the nature of or caused by any breach of
contract, breach of warranty, tort, infringement, claim or lawsuit.
3.9 Tax Matters. Except as set forth in the applicable
subsection of Section 3.9 of the Disclosure Schedule:
(a) Each of the Company and its Subsidiaries has filed all Tax
Returns that it was required to file. All such Tax Returns were correct and
complete in all respects. All Taxes owed by any of the Company and its
Subsidiaries (whether or not shown on any Tax Return) have been paid. Except as
set forth in Section 3.9(a)(i) of the Disclosure Schedule, none of the Company
and its Subsidiaries currently is the beneficiary of any extension of time
within which
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to file any Tax Return. Except as set forth in Section 3.9(a)(ii) of the
Disclosure Schedule, no claim has ever been made by an authority in a
jurisdiction where any of the Company and its Subsidiaries does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction. There are
no security interests or liens on any of the assets of any of the Company and
its Subsidiaries that arose in connection with any failure (or alleged failure)
to pay any Tax.
(b) Each of the Company and its Subsidiaries has withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other third party.
(c) No director or officer (or employee responsible for Tax
matters) of any of the Company and its Subsidiaries expects any authority to
assess any additional Taxes for any period for which Tax Returns have been
filed. There is no dispute or claim concerning any Tax Liability of any of the
Company and its Subsidiaries either (A) claimed or raised by any authority in
writing or (B) as to which any of the directors and officers (and employees
responsible for Tax matters) of the Company and its Subsidiaries has Knowledge
based upon personal contact with any agent of such authority. Section 3.9(c) of
the Disclosure Schedule lists all federal, state, local, and foreign income Tax
Returns filed with respect to any of the Company and its Subsidiaries for
taxable periods ended on or after December 31, 1991, indicates those Tax Returns
that have been audited, and indicates those Tax Returns that currently are the
subject of audit. The Company has delivered to the Buyer 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 its
Subsidiaries since December 31, 1991.
(d) None of the Company and its Subsidiaries has waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.
(e) None of the Company and its Subsidiaries has filed a consent
under Code Section 341(f) concerning collapsible corporations. None of the
Company and its 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. None of the Company and its Subsidiaries has been a United States real
property holding corporation within the meaning of Code Section 897(c)(2) during
the applicable period specified in Code Section 897(c)(1)(A)(ii). Each of the
Company and its 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. None of the Company
and its Subsidiaries is a party to any Tax allocation or sharing agreement. None
of the Company and its Subsidiaries (A) has been a member of an Affiliated Group
filing a consolidated federal income Tax Return (other than a group the common
parent of which was the Company) or (B) has any Liability for the Taxes of any
Person (other than any of the Company and its 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.
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(f) Section 3.9(f) of the Disclosure Schedule sets forth the
following information with respect to each of the Company and its Subsidiaries
(or, in the case of clause (B) below, with respect to each of the Subsidiaries)
as of the most recent practicable date: (A) the basis of the Company or such
Subsidiary in its assets; (B) the basis of the stockholder(s) of each Subsidiary
in its stock (or the amount of any Excess Loss Account (as such term is defined
in the Code)); (C) the amount of any net operating loss, net capital loss,
unused investment or other credit, unused foreign tax, or excess charitable
contribution allocable to the Company or any Subsidiary; (D) the amount of any
deferred gain or loss allocable to the Company or any Subsidiary arising out of
any Deferred Intercompany Transaction (as such term is defined in the Code); and
(E) sufficient detail regarding each asset of the Company or any Subsidiary
sold, transferred, conveyed, assigned or otherwise disposed of since the date of
the Balance Sheet to permit Buyer to determine the amount of any Tax (including
any Tax imposed pursuant to Section 1374 of the Code (Tax Imposed on Certain
Built-In Gains)) incurred or to be incurred through the Closing Date by any
Acquired Company for each taxable period ending on or after the Closing Date.
(g) The unpaid Taxes of the Company and its Subsidiaries (A) did
not, as of the date of the Most Recent Balance Sheet, 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 on the face of the
Most Recent Balance Sheet (rather than in any notes thereto) and (B) do not
exceed that reserve as adjusted for the passage of time through the day of the
Closing Date in accordance with the past custom and practice of the Company and
its Subsidiaries in filing their Tax Returns.
(h) The Company has been a validly electing S corporation within
the meaning of Code Sections 1361 and 1362 at all times since January 4, 1998
and the Company will be an S corporation up to and including the Closing Date.
(i) Section 3.9(i) of the Disclosure Schedule identifies each
Acquired Company that is a "qualified subchapter S subsidiary" within the
meaning of Code Section 1361(b)(3)(B). Each Subsidiary so identified has been a
qualified subchapter S subsidiary at all times since the date shown on such
schedule up to and including the Closing Date.
(j) Neither the Company nor any qualified subchapter S
subsidiary of the Company has, in the past 10 years, (A) acquired assets from
another Person in a transaction in which the Company's Tax basis for the
acquired assets was determined, in whole or in part, by reference to the Tax
basis of the acquired assets (or any other property) in the hands of the
transferor or (B) acquired the stock of any corporation which is a qualified
subchapter S subsidiary.
3.10 No Material Adverse Change. Since the date of the Balance
Sheet there has not been any material adverse change in the business,
operations, properties, prospects, assets, or condition (financial or
otherwise) of any Acquired Company.
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3.11 Contracts. Section 3.11 of the Disclosure Schedule lists the
following contracts and other agreements to which any Acquired Company is a
party (each a "Contract" and collectively, the "Contracts"):
(a) any agreement (or group of related agreements) for the
consignment or lease of machinery, equipment or other personal property to or
from any Person providing for lease payments in excess of $50,000 per annum;
(b) any agreement (or group of related agreements) for the
purchase or sale of raw materials, products, machinery, equipment or other
personal property, or for the furnishing or receipt of services, the performance
of which will extend over a period of more than one year or involve
consideration in excess of $50,000;
(c) any capitalized lease, pledge, conditional sale or title
retention agreement involving the payment of more than $50,000 in the aggregate;
(d) any agreement concerning a partnership or joint venture;
(e) any agreement (or group of related agreements) under which
it has created, incurred, assumed, or guaranteed any indebtedness for borrowed
money, or any capitalized lease obligation, or under which it has imposed a
Security Interest on any of its assets, tangible or intangible;
(f) any agreement concerning confidentiality or noncompetition
or otherwise prohibiting the Company or any of its Subsidiaries from freely
engaging in any business;
(g) any material agreement with the Seller or any of its
Affiliates;
(h) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other material plan or
arrangement for the benefit of its current or former directors, officers, or
employees;
(i) any license, royalty or other agreement relating to any
Acquired Company's Intellectual Property;
(j) any agreement containing commitments of suretyship, guarantee
or indemnification (except for guarantees, warranties and indemnities provided
by the Company or any Subsidiary in the ordinary course of business and those
having a contract value, individually or in the aggregate of $25,000 or less);
(k) any agreement involving a governmental body;
(l) any collective bargaining agreement;
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(m) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual compensation
in excess of $50,000 or providing material severance benefits;
(n) any agreement under which the consequences of a default or
termination could have a material adverse effect on the business, assets,
conditions, properties or prospects of any Acquired Company;
(o) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $50,000; or
(p) any commitment to do any of the foregoing described in
clauses (a) through (o).
The Company has delivered to the Buyer a correct and complete
copy of each written agreement listed in Section 3.11 of the Disclosure Schedule
and a written summary setting forth the material terms and conditions of each
oral agreement referred to in Section 3.11 of the Disclosure Schedule. With
respect to each such agreement: (A) the agreement is legal, valid, binding,
enforceable, and in full force and effect in all material respects and will
continue to be so following the Closing; (B) no party is in material breach or
default, and no event has occurred which with notice or lapse of time would
constitute a material breach or default, or permit termination, modification, or
acceleration, under the agreement; and (C) no party has repudiated any material
provision of the agreement. Except as specifically identified in Section 3.11 of
the Disclosure Schedule, no Acquired Company 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.
3.12 Employee Benefits.
(a) As used in this Section 3.12, the following terms have the
meanings set forth below.
"Employee Benefit Plan"--any Pension Plan, Welfare Plan, or
Multi-Employer Plan which any of the Acquired Companies maintains or contributes
to, or with respect to which any of the Acquired Companies has any liability or
potential liability.
"Multi-Employer Plan"--has the meaning given in ERISA Section
3(37)(A).
"Other Benefit Obligation"--means all obligations, arrangements, or
customary practices, whether or not legally enforceable, to provide benefits,
other than salary, as compensation for services rendered, to present or former
directors, employees, or agents, other than obligations, arrangements, and
practices that are Plans with respect to which any of the Acquired Companies has
any liability or potential liability. Other Benefit Obligations include
consulting agreements under which the compensation paid does not depend upon the
amount of service rendered,
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sabbatical policies, severance payment policies, and fringe benefits within the
meaning of Section 132 of the Code.
"PBGC"--means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan"--has the meaning given in ERISA Section 3(2)(A).
"Plan"--has the meaning given in ERISA Section 3(3).
"Welfare Plan"--has the meaning given in ERISA Section 3(1).
(b) Section 3.12(b) of the Disclosure Schedule contains a
complete and accurate list of each Employee Benefit Plan and each other Benefit
obligation.
(c) The Company has delivered to Buyer, as applicable:
(i) All documents that set forth the terms of each
Employee Benefit Plan and each other Benefit obligation and of any related
trust, including plan documents and summary plan descriptions;
(ii) All personnel, payroll, and employment manuals and
policies;
(iii) All collective bargaining agreements pursuant to
which contributions have been made or obligations incurred by the Acquired
Companies;
(iv) A written description of any Other Benefit Obligation
that is not otherwise in writing;
(v) All insurance policies purchased by or to provide
benefits under any Employee Benefit Plan or Other Benefit Obligation;
(vi) All contracts with third party administrators,
actuaries, investment managers, consultants, and other independent contractors
that relate to any Employee Benefit Plan or Other Benefit Obligation;
(vii) The Forms 5500 filed with respect to each Employee
Benefit Plan in each of the most recent three plan years, including all
schedules thereto;
(viii) The most recent determination letter received with
respect to each Employee Benefit Plan from the IRS; and
(ix) The actuarial reports prepared with respect to each
Employee Benefit Plan in each of the most recent three plan years.
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(d) Except as set forth in Section 3.12(d) of the Disclosure Schedule:
(i) The Acquired Companies have performed all of their
respective obligations under all Employee Benefit Plans and Other Benefit
Obligations;
(ii) The Acquired Companies, with respect to all Employee Benefit
Plans and Other Benefit Obligations are in full compliance with ERISA, the Code,
and other applicable laws and with any applicable collective bargaining
agreement, no prohibited transaction has occurred, no Acquired Company has any
liability to the IRS or the PBGC, and all filings required by ERISA and the Code
as to each Employee Benefit Plan have been timely filed; and
(iii) Other than ordinary claims for benefits submitted by
participants or beneficiaries, no claim against or legal proceeding involving
any Employee Benefit Plan or Other Benefit Obligation is pending or, to the
Company's knowledge, is threatened.
(e) Each Employee Benefit Plan that is intended to be qualified within
the meaning of Code Section 401(a) has received a determination from the IRS
that such Employee Benefit Plan is so qualified and nothing has occurred since
the date of such determination that could adversely affect the qualification of
such Employee Benefit Plan.
(f) Each Employee Benefit Plan and any related trust, insurance
contract or fund has been maintained, funded and administered in compliance with
its respective terms and the terms of any applicable collective bargaining
agreements and in compliance with all applicable laws and regulations,
including, but not limited to, ERISA and the Code; there has been no application
for or waiver of the minimum funding standards imposed by Code Section 412 with
respect to any Employee Benefit Plan, and there are no circumstances that would
materially change the funded status of any Employee Benefit Plan; no asset that
is to be acquired by Buyer, directly or indirectly, pursuant to this Agreement
is subject to any lien under ERISA or the Code; and none of the Acquired
Companies has incurred any liability under Title IV of ERISA (other than for
contributions not yet due) or to the PBGC (other than for payment of premiums
not yet due).
(g) None of the Acquired Companies has incurred any liability on
account of a "partial withdrawal" or a "complete withdrawal" (within the meaning
of Section 4205 and 4203, respectively, of ERISA) from any Multi-Employer Plan,
no such liability has been asserted, and there are no events or circumstances
which could result in any such partial or complete withdrawal; and none of the
Acquired Companies is bound by any contract or agreement or has any obligation
or liability described in Section 4204 of ERISA.
(h) Each of the Acquired Companies has complied with the health care
continuation requirements of Part 6 of Subtitle B of Title I of ERISA; and none
of the Acquired Companies has any obligation under any Employee Benefit Plan or
otherwise to provide health or life insurance benefits to former employees of
the Acquired Companies or to any other person, except as specifically required
by Part 6 of Subtitle B of Title I of ERISA.
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(i) The Company has no liability with respect to any "employee
benefit plan" (as defined in Section 3(3) of ERISA) solely by reason of being
treated as a single employer under Code Section 414 with any trade, business or
entity other than the Acquired Companies.
3.13 Compliance With Legal Requirements. Except as set forth in Section
3.13 of the Disclosure Schedule, each Acquired Company has complied with and is
in compliance with all applicable laws (including rules, regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings and charges thereunder)
of federal, state or local governments, and all agencies thereof, and no action,
suit, proceeding, hearing, investigation, charge, complaint, claim, demand,
grievance or notice has been filed or commenced against any of them alleging any
failure to comply.
3.14 Litigation. Except as set forth in Section 3.14 of the Disclosure
Schedule, none of the Acquired Companies nor their respective officers,
directors, employees or agents, in their capacities as such, are engaged in, a
party to, or threatened with any legal action or other proceeding or
investigation before any court, arbitrator or governmental agency, or are
subject to any pending or threatened adverse claim, the existence or outcome of
which could result in a monetary or non-monetary judgment, order or award that
could have a material adverse effect upon the business, operations or financial
condition of any Acquired Company.
3.15 Absence Of Certain Changes And Events. Except as set forth in
Section 3.15 of the Disclosure Schedule, since the date of the Most Recent
Balance Sheet, the Acquired Companies have conducted their businesses only in
the Ordinary Course of Business and, without limiting the generality of the
foregoing, there has not been any:
(a) change in any Acquired Company's authorized or issued capital
stock, grant of any stock option or right to purchase shares of capital stock of
any Acquired Company, issuance of any security convertible into such capital
stock, or declaration or payment of any dividend or other distribution or
payment in respect of shares of capital stock or redemption, purchase of or
other acquisition of shares of any Acquired Company's capital stock;
(b) amendment to the Organizational Documents of any Acquired
Company (except as provided in Section 5.3).
(c) damage to or destruction or loss of any asset (tangible or
intangible) or property of any Acquired Company, whether or not covered by
insurance, materially and adversely affecting the properties, assets, business
or financial condition of any Acquired Company;
(d) cancellation or compromise of any debt to, claim by or right
of the Acquired Companies except in the Ordinary Course of Business and as noted
on the books and records of the Acquired Companies;
(e) amendment or termination of any material contract or
commitment to which an Acquired Company is a party, other than in the Ordinary
Course of Business;
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(f) extraordinary transaction outside the Ordinary Course of
Business;
(g) sale, lease, transfer, or assignment of or lien or Security
Interest imposed upon, or any license or sublicense of, any material assets,
tangible or intangible, of any Acquired Company outside the Ordinary Course of
Business;
(h) material agreement, contract, lease, or license entered into
by any Acquired Company outside the Ordinary Course of Business;
(i) acceleration, termination, material modification to, or
cancellation of any material agreement, contract, lease, or license to which any
Acquired Company is a party or by which any of them is bound;
(j) capital expenditures in an amount in excess of $100,000.00
individually or in the aggregate or any capital investment in, or any loan to,
any other Person;
(k) loan to, or any other transaction entered into with, any
Acquired Company's directors, officers, and employees, other than employment
arrangements entered into in the Ordinary Course of Business and disclosed in
writing to Buyer;
(l) increase in the base compensation of or any other material
change in the employment terms of any Acquired Company's directors, officers and
employees;
(m) employment contract or collective bargaining agreement,
written or oral, entered into by any Acquired Company or any modification of the
terms of any existing such contract or agreement;
(n) adoption, amendment, modification, or termination of any
bonus, profit-sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any Acquired Company's directors, officers, and
employees (and no such action has been taken with respect to any other Employee
Benefit Plan);
(o) change in the accounting principles, practices, procedures or
methods of any Acquired Company or in its cash management practices; or
(p) commitment by any Acquired Company to do any of the
foregoing.
3.16 Insurance.
(a) The Company has delivered to Buyer true and complete copies
of all policies of insurance (including policies providing property, casualty,
liability and workers' compensation coverage and bond and surety arrangements)
currently in force to which any Acquired Company is a party or under which any
Acquired Company, or any director or officer of any Acquired Company, is
covered.
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(b) Section 3.16(b) of the Disclosure Schedule sets forth with
respect to each policy (i) the name, address and telephone number of the agent,
(ii) the name of the insured, the name of the policy holder and the name of each
covered insured, (iii) the policy number and period of coverage, and (iv) a
description of any retroactive premium adjustment or other experience-based
liability on the part of any Acquired Company, and (iv) any contract or
arrangement, other than a policy of insurance, for the transfer or sharing of
any risk by any Acquired Company.
(c) Except as set forth in Section 3.16(c) of the Disclosure
Schedule, all policies to which any Acquired Company is a party or that provide
coverage to either Seller, any Acquired Company, or any director or officer of
an Acquired Company: (i) Are valid, outstanding, and enforceable, (ii) are
issued by an insurer that is financially sound and reputable, (iii) taken
together, provide adequate insurance coverage for the assets and the operations
of the Acquired Companies for all risks to which the Acquired Companies are
normally exposed, (iv) neither the Company, its Subsidiaries nor any other party
to the policy is in material breach or default (including with respect to the
payment of premiums or the giving of notices), and no event has occurred which,
with notice or the lapse of time, would constitute such a material breach or
default, or permit termination, modification, or acceleration, under the policy;
and (v) no party to the policy has repudiated any material provision thereof.
Section 3.16(c) of the Disclosure Schedule describes any material self-insurance
arrangements affecting any of the Company and its Subsidiaries.
(d) 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 are described in Section 3.16(d) of the
Disclosure Schedule and, except as disclosed in Section 3.16(d) of the
Disclosure Schedule, no claims have been denied coverage during the last three
years.
3.17 Labor and Employment Matters.
(a) Except as set forth in Section 3.17 of the Disclosure
Schedule, no Acquired Company is party to or bound by any collective bargaining
agreement or relationship with any labor organization. Except as disclosed in
Section 3.17 of the Disclosure Schedule with respect to the Acquired Companies:
(i) no executive, key employee or group of employees has any plans to terminate
employment; (ii) no labor organization or group of employees has filed any
representation petition or made any written or oral demand for recognition;
(iii) no union organizing or decertification efforts are underway or threatened
and no other question concerning representation exists; (iv) within the past
five years no labor strike, work stoppage or slowdown, or other material labor
dispute has occurred, and none is underway or threatened; (v) there is no
employment-related charge, complaint, grievance, investigation, inquiry or
obligation of any kind, pending or threatened in any forum, relating to an
alleged violation or breach by any such Acquired Company (or its or their
officers or directors) of any law, regulation or contract; and (vi) no Acquired
Company or agent thereof has committed any act or omission giving rise to
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liability for any violation identified in subsection (v) above, or as a result
of any adverse workman's compensation experience.
(b) Any notice required under any law or collective bargaining
agreement has been given, and all bargaining obligations with any employee
representative have been satisfied. No Acquired Company has implemented any
plant closing or mass layoff of employees as those terms are defined in the
Worker Adjustment Retraining and Notification ("WARN") Act of 1988, as amended,
or any similar state or local law or regulation, and no layoffs that could
implicate such laws or regulations will be implemented before Closing without
advance notification to Buyer.
3.18 Environmental, Health And Safety Matters. Except as set forth in
Section 3.18 of the Disclosure Schedule:
(a) Each Acquired Company has complied and is in full compliance
with, and is not in violation of or liable under, any Environmental Law. There
is no threatened notice, claim, citation or directive from any federal, state or
local government, or any agency thereof, or private citizen acting in the public
interest, of any actual or potential violation or failure to comply with any
Environmental Law, or of any actual or threatened obligation to undertake or
bear the cost of any Environmental, Health, and Safety Liabilities with respect
to any property or assets (whether real, personal, or mixed) in which any
Acquired Company has or had an interest.
(b) There is no pending or threatened notice, claim, citation or
directive that relates to hazardous activity or hazardous materials, or any
alleged, actual or potential obligation to undertake or bear the cost of any
Environmental, Health, and Safety Liabilities with respect to any of the
properties or assets (whether real, personal, or mixed) in which any Acquired
Company has or had an interest, with respect to which hazardous materials have
been generated, handled, treated, stored or disposed of.
(c) The Company has delivered to Buyer true and complete copies
and results of all reports, studies, analyses, tests, or monitoring possessed by
any Acquired Company pertaining to hazardous materials or hazardous activities
in, on, or under the Real Property or concerning compliance by any Acquired
Company with Environmental Laws, except for such materials that are generated
routinely in the ordinary course of compliance with the terms of permits or
monitoring requirements imposed by Environmental Laws.
(d) Other than as disclosed in Section 3.18(d) of the Disclosure
Schedule, all properties and equipment used in the business of any Acquired
Company and their respective predecessors and Affiliates have been free of
asbestos, PCB's, methylene chloride, trichloroethylene,
1,2-transdichloroethylene, dioxins, dibenzofurans, and Extremely Hazardous
Substances.
(e) No Acquired Company has treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled, or released any
substance, including without limitation any hazardous substance, or owned or
operated any property or facility and no such
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property or facility is contaminated by any such substance, in a manner that has
given or would give rise to material liabilities, including any liability for
response costs, corrective action costs, personal injury, property damage,
natural resources damages or attorney fees, or any investigative, corrective or
remedial obligations, pursuant to any Environmental Law (including CERCLA and
RCRA).
(f) None of the following exists at any Owned Real Property or
Leased Real Property: (1) underground storage tanks; (2) asbestos-containing
material in any form or condition; (3) materials or equipment containing
polychlorinated biphenyls; or (4) landfills, surface impoundments or disposal
areas, except (x) in the case of clauses (1), (3) or (4), for such items that
are in compliance in all material respects with all applicable Environmental
Laws and (y) in the case of clause (2), for such items for which no remedial
actions are necessary to prevent any present or future material liability.
(g) Neither this Agreement nor the consummation of the
transactions contemplated hereby will result in any obligations for site
investigation or cleanup, or notification to or consent of government agencies
or third parties, pursuant to any so-called "transaction-triggered" or
"responsible transfer" Environmental Laws.
3.19 Intellectual Property.
(a) The Acquired Companies own or have the right to use pursuant
to a valid and enforceable license, agreement or permission all Intellectual
Property necessary for the operation of their businesses as presently conducted.
(b) No Acquired Company has interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property
rights of third parties, and no Acquired Company has ever received any charge,
complaint, claim, demand or notice alleging any such interference, infringement,
misappropriation or violation or contesting the validity or enforceability of
any Intellectual Property owned or used by the Acquired Companies.
(c) Section 3.19(c) of the Disclosure Schedule identifies each
item of patented, registered and applied for Intellectual Property, and material
unregistered trademarks, service marks, trade names, copyrights, in each case
owned by any of the Acquired Companies, and any Intellectual Property that any
third party owns and that the Acquired Companies use pursuant to license,
sublicense, agreement or permission. The Company has delivered to Buyer correct
and complete copies of all such licenses, agreements and permissions as
currently in effect with respect to each item of Intellectual Property so
identified.
(d) None of the Acquired Companies have any notice of or are
aware of any facts which indicate a likelihood of any infringement or
misappropriation by any third party with respect to the Intellectual Property of
the Acquired Companies.
(e) All Intellectual Property owned or used by the Acquired
Companies immediately prior to the Closing will be owned or available for use by
the Acquired Companies on identical terms and conditions immediately subsequent
to the Closing.
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(f) "Intellectual Property" shall mean all patents, patent
applications and patent disclosures; all inventions (whether or not patentable
and whether or not reduced to practice); all trademarks, service marks, trade
dress, trade names and corporate names and all the goodwill associated
therewith; all mask works; all registered and unregistered statutory and common
law copyrights; all registrations, applications and renewals for any of the
foregoing; all trade secrets, confidential information, ideas, formulae,
compositions, know-how, manufacturing and production processes and techniques,
research information; drawings, specifications, designs, plans, improvements,
proposals, technical and computer data, documentation and software, financial,
business and marketing plans, customer and supplier lists and related
information, marketing materials and all other intellectual property rights.
3.20 Transaction With Affiliates. Except as set forth on in Section
3.20 of the Disclosure Schedule, none of the Company's nor any of its
Subsidiaries' shareholders, directors, officers or employees nor any of their
respective relatives or Affiliates is involved in any business arrangement or
relationship with the Company or any of its Subsidiaries (whether written or
oral), and none of the Company's or any of its Subsidiaries' shareholders,
directors, officers or employees nor any of their respective relatives or
Affiliates owns any property or right, tangible or intangible, which is used by
the Company or any of its Subsidiaries or necessary to the business of any
Acquired Company.
3.21 Funded Debt. Except as set forth in Section 3.21 of the
Disclosure Schedule neither the Company nor any of its Subsidiaries has
outstanding any Funded Debt nor is a guarantor or is otherwise responsible for
any liability or obligation (including indebtedness) of any other Person.
3.22 Due Inquiry. Each of the directors and officers of each Acquired
Company has reviewed each of the representations and warranties contained in
this Section 3 and the Company has made due inquiry of each person who is in a
corporate management, plant management or superintendent level position who
might reasonably be expected, within the scope of his or her management or
supervisory responsibility, to have information regarding or knowledge of any
fact, event or other circumstance which may constitute a breach of any
representation or warranty of the Company contained herein.
3.23 Disclosure. Taken as a whole, the representations and warranties
contained in this Section 3 do not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements and information contained in this Section 3 not misleading.
3.24 Representations And Warranties Concerning The ESOP.
(a) The sale of the Shares will not violate or conflict with the
governing documents of the ESOP and will not constitute a "prohibited
transaction" as defined in Code Section 4975(c) and Sections 406 and 407 of
ERISA and the regulations thereunder.
(b) Except as set forth in Section 3.24(b)(i) or (ii) of the
Disclosure Schedule, as applicable, during the 3-year period ending on the
Closing Date, (i) there have been no sales
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of securities to the ESOP and (ii) there have been no sales of securities to the
ESOP as to which the Company has provided or agreed to provide the written
statement required by Code Section 1042(b)(3) or which could otherwise cause any
Acquired Company to be subject to any Tax pursuant to Code Section 4978.
(c) There are no outstanding loans with respect to the ESOP, and
no unallocated shares are held in the ESOP suspense account.
3.25 Brokers Or Finders. Except as set forth in Section 3.25 of the
Disclosure Schedule, no Acquired Company has incurred any obligation or
liability for any fee or commission to any broker, finder or agent in connection
with this Agreement or with respect to the Contemplated Transactions or the sale
of the Ashland Facility or which could otherwise result in the obligation of
Buyer to pay any such fee or commission.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as follows:
4.1 Organization And Good Standing. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Wisconsin.
4.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
(b) Except as set forth in Annex I, neither the execution and
delivery of this Agreement by Buyer nor the consummation or performance of the
Contemplated Transactions on the terms and conditions prescribed herein will
give any person or entity the right to prevent, delay, or otherwise interfere
with any of the Contemplated Transactions pursuant to: (i) any provision of
Buyer's Organizational Documents, (ii) any order, writ, decree or injunction of
any court or governmental agency having jurisdiction over it or any of its
properties, or (iii) any contract, commitment or other obligation to which Buyer
is a party or by which Buyer may be bound.
(c) Except as set forth in Annex I or with respect to
requirements under the HSR Act, Buyer is not and will not be required to obtain
any consent from any governmental or regulatory authority or other person or
entity in connection with the execution and delivery of this Agreement or the
consummation or performance of the Contemplated Transactions on the terms and
conditions prescribed herein.
4.3 Brokers Or Finders. Buyer has incurred no obligation or liability
for any fee or commission to any broker, finder or agent, and will not incur any
such obligation or liability, in connection with this Agreement which would
result in the obligation of Seller to pay any such fee or commission with
respect to the Contemplated Transactions.
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5. COVENANTS OF THE COMPANY, AND SELLER WITH RESPECT TO THE ESOP.
5.1 Access And Investigation. Between the date of this Agreement and
the Closing Date, the Company and Seller will, and will cause each Acquired
Company and its representatives and employees to, (a) afford Buyer and its
representatives and prospective lenders and their representatives (collectively,
"Buyer's Advisors") full and free access to each Acquired Company's personnel,
properties (including subsurface testing), contracts, books and records, Tax
Returns and other documents and data, (b) furnish Buyer and Buyer's Advisors
with copies of all such contracts, books and records, and other existing
documents and data as Buyer may reasonably request, and (c) furnish Buyer and
Buyer's Advisors with such additional financial, operating, and other data and
information as Buyer may reasonably request and cause its officers, employees,
consultants, agents, accountants and attorneys to cooperate fully with such
representatives in connection with such review and examination and to make full
disclosure to Buyer and its lenders of all material facts affecting the
financial condition and business operations of the Company and its Subsidiaries.
5.2 Operation Of The Businesses Of The Acquired Companies. Between the
date of this Agreement and the Closing Date, the Company and Seller will, and
will cause each Acquired Company to: (a) conduct the business of such Acquired
Company only in the Ordinary Course of Business; (b) use their best efforts to
preserve intact its current business, assets and organization and maintain the
relations and good will with suppliers, customers, landlords, licensors,
creditors, employees, agents, and others having business relationships with such
Acquired Company; (c) confer with Buyer concerning operational matters of a
material nature; and (d) otherwise report periodically to Buyer, as Buyer may
reasonably request, concerning the status of the business, operations, and
finances of such Acquired Company.
5.3 Negative Covenant. Except as otherwise expressly permitted by this
Agreement, between the date of this Agreement and the Closing Date, the Company
and Seller will not, and will cause each Acquired Company not to, without the
prior consent of Buyer, take any affirmative action, or fail to take any
reasonable action within their or its control, as a result of which any of the
changes or events listed in Section 3.15 will or is likely to occur, except:
prior to the Closing the by-laws of the Company will be duly amended, effective
with and contingent upon the Closing, to delete section 2.01 thereof, which
currently limits the ownership of substantially all of the Company's outstanding
shares to the salaried employees and the trustee of the ESOP. From and after the
Determination Date, none of the Acquired Companies shall pay, cause to be paid
or permit to be paid any amount that would have the effect of reducing the
amount of any outstanding Funded Debt other than in accordance with the terms
thereof, to the extent necessary to avoid the occurrence or continuation of any
default or event of default thereunder, or on the Closing Date in accordance
with Section 2.2.
5.4 Notification. Between the date of this Agreement and the Closing
Date, the Company and Seller will promptly notify Buyer in writing if Seller or
any Acquired Company or any of its employees becomes aware of any fact or
condition that causes or constitutes a breach of any of their representations
and warranties as of the date of this Agreement, or if Seller or any Acquired
Company or any of its employees becomes aware of the occurrence after the
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date of this Agreement of any fact or condition that would (except as expressly
contemplated by this Agreement) cause or constitute a breach of any such
representation or warranty had such representation or warranty been made as of
the time of occurrence or discovery of such fact or condition. Should any such
fact or condition require any change in the Disclosure Schedule if the
Disclosure Schedule were dated the date of the occurrence or discovery of any
such fact or condition, the Company and Seller will promptly deliver to Buyer a
supplement to the Disclosure Schedule specifying such change; provided, that any
such disclosure shall not be effective to cure any such breach for purposes of
Section 7.1 without the written consent of Buyer.
5.5 Fairness Opinion. Prior to the Closing Date, Seller shall retain
Duff & Phelps or such other qualified, independent financial advisor (as is
reasonably acceptable to Buyer) to make an appraisal of the fair market value of
the ESOP and to render an opinion at Closing to the effect that the Purchase
Price is not less than the fair market value of the Shares, and the Contemplated
Transactions are fair to the ESOP from a financial point of view.
5.6 Termination Of ESOP. Prior to the Closing, the Company's Board of
Directors will adopt resolutions to terminate the ESOP, effective with and
contingent upon the Closing.
5.7 Best Efforts. Between the date of this Agreement and the Closing
Date, the Company and Seller will use their best efforts to cause the conditions
in Sections 7 and 8 to be satisfied. Seller and the Company will, as soon as
reasonably practicable, commence to take all commercially reasonable actions
required to obtain all consents, approvals, waivers and agreements of, and to
give all notices and make all other registrations or filings with, any third
parties, including governmental authorities, including any such filing required
under the HSR Act, necessary to authorize, approve or permit the full and
complete sale, conveyance, assignment, transfer and delivery of the Shares and
the continuance in full force and effect of the permits, contracts and other
agreements set forth on the Disclosure Schedule, and shall cooperate with Buyer
with respect thereto; provided, that it shall be the obligation of the Company
and Seller to procure all authorizations, consents and approvals set forth in
Section 3.2(c) of the Disclosure Schedule.
5.8 Exclusivity. (a) Until the earlier occurs of the Closing or the
termination of this Agreement, none of the Seller, any Acquired Company, nor any
of their respective directors, officers, employees, agents, representatives,
shareholders or Affiliates (collectively, the "Company Group") shall initiate,
solicit, entertain, negotiate, accept or discuss, directly or indirectly, or
encourage inquiries or proposals (each, an "Acquisition Proposal") with respect
to, or furnish any information relating to or participate in any negotiations or
discussions concerning, or enter into any agreement with respect to, any
acquisition or purchase of all or a substantial portion of the business, assets,
properties, capital stock or capital stock equivalents of the Company or any of
its Subsidiaries (a "Potential Sale"), whether by merger, combination, sale of
stock, sale of assets, recapitalization, or otherwise (an "Acquisition"), or
enter into any agreement, arrangement or undertaking requiring it to abandon,
terminate or fail to consummate the transaction contemplated by this Agreement.
The Seller and the Company shall, and shall cause each other member of the
Company Group to, immediately cease and cause to be terminated any existing
activities, including discussions or negotiations with any parties, other than
Buyer, conducted prior to the
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date hereof with respect to any Acquisition Proposal. The Company shall (i)
immediately inform Buyer of any inquiries any member of the Company Group
receives after the date hereof concerning an Acquisition Proposal or Potential
Sale and provide Buyer with copies of all correspondence or other documents
received in connection therewith and (ii) inform the Persons sending such
inquiries, requests or proposals that the Company is bound by an exclusivity
arrangement (without any reference to Buyer, its Affiliates, or its potential
financing sources). The Seller and the Company represent that each is not a
party to or bound by any agreement with respect to an Acquisition Proposal other
than under this Agreement. Each of the Seller and the Company shall cause its
officers, directors, agents and advisors to comply with the provisions of this
Section 5.8. Notwithstanding the foregoing, Seller and Company shall not be
prohibited by this Section 5.8 from participating in negotiations to sell the
Ashland Facility; provided that the Company shall keep the Buyer duly apprised
of all such negotiations or transactions and provide Buyer with any such
information or details regarding such transaction as Buyer shall reasonably
request.
(b) Termination Rights. If the ESOP Fiduciary shall determine or
the Board of Directors of the Company shall determine by a majority vote, in
each case, in good faith, after consultation with its financial and legal
advisors, with respect to any unsolicited written proposal from a third party
for an Acquisition Proposal received after the date hereof that failure to enter
into such Acquisition Proposal would constitute a breach of the fiduciary duties
of the ESOP Fiduciary or the Board of Directors of the Company, as the case may
be, under applicable law and that such Acquisition Proposal is more favorable to
the Seller and the Company than the transactions contemplated by this Agreement
and is in the best interest of the Seller and the Company and the Company has
received the advice of its outside legal counsel setting forth the relevant
factors the Board of Directors must consider under applicable law, and in the
written opinion of such counsel, the failure to consider such an Acquisition
Proposal would constitute a breach of the Company's Board of Directors'
fiduciary duties under applicable law, then the Company may terminate this
Agreement and enter into a letter of intent, agreement-in-principle, acquisition
agreement or other similar agreement (each, as an "Acquisition Agreement") with
respect to such Acquisition Proposal; provided that, (A) prior to any such
termination, the Company has provided Buyer written notice that it intends to
terminate this Agreement pursuant to this Section 5.8(b) and Section 9,
identifying the Acquisition Proposal then determined to be more favorable and
the parties thereto and delivering an accurate description of all material terms
(including any changes or adjustment to such terms as a result of negotiations
or otherwise) of the Acquisition Agreement to be entered into for such
Acquisition Proposal, (B) prior to such termination the Company shall offer to
Buyer the right to amend this Agreement to provide terms substantially
equivalent to or better than such Acquisition Proposal, and (C) the Company
shall pay or cause to be paid to Buyer the amount set forth in Section 9.2(b).
5.9 S Corporation Status. Neither the Company nor Seller will revoke
the Company's election to be taxed as an S corporation within the meaning of
code Sections 1361 and 1362. Neither the Company nor Seller will take or allow
any action that would result in the termination of the Company's status as a
validly electing S corporation within the meaning of Code Sections 1361 and
1362.
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5.10 Disclosure Schedule. Seller and the Company shall deliver the
Disclosure Schedule in form and substance reasonably acceptable to Buyer as
promptly as practicable after the date hereof (but in any event within 10 days
of the date hereof); provided, that upon acceptance thereof by the Buyer, such
Disclosure Schedule shall be deemed to be effective as of the date hereof.
5.11 Tax Returns. The Company shall prepare Tax Returns for all
complete taxable periods (including United States federal, state and local
income tax returns for the 1997 tax year) which have not been and will not be
filed prior to the Closing Date and shall deliver such Tax Returns to the Buyer
not less than ten (10) days prior to the Closing together with all supporting
worksheets, documents and other information. The Company shall permit the Buyer
and its representatives and advisors to have full access, at any reasonable time
and from time to time until the Closing to all pre-Closing Tax Returns and all
books and records, wherever located, relevant to such Tax Returns and the
Company shall cause its accountants or other persons necessary to, responsible
for or connected to the preparation of such Tax Returns to be made available to
Buyer and its representatives and advisors and to cooperate with the Buyer in
the preparation of such Tax Returns. Each Tax Return (including any schedule and
statement thereto) shall be true, correct and accurate in all respects and in
the condition necessary for the Company to file such Tax Returns following the
Closing as and when due.
6. COVENANTS OF BUYER.
6.1 Approvals Of Governmental Bodies. As promptly as practicable
after the date of this Agreement, Buyer will use commercially reasonable efforts
to make all filings required to be made by it to consummate the Contemplated
Transactions (including all filings under the HSR Act). Between the date of this
Agreement and the Closing Date, Buyer will cooperate (without incurring any cost
or expense) with the Company and Seller with respect to all filings that they
are required to make in connection with the Contemplated Transactions, and shall
cooperate with the Company and Seller in obtaining all consents identified in
Section 3.2 of the Disclosure Schedule.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE.
Buyer's obligation to purchase the Shares and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, at
or prior to Closing, of each of the following conditions (any of which may be
waived by Buyer in its sole discretion, in whole or in part):
7.1 Accuracy Of Representations. All representations and warranties
of the Company and Seller contained in this Agreement must have been accurate in
all material respects as of the date of this Agreement and must be accurate in
all material respects as of the Closing Date as if made on the Closing Date.
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7.2 Performance. All of the covenants and obligations that Seller is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing must have been duly performed and complied with in all material
respects.
7.3 Consents. Each of the Consents, if any, identified in Section 3.2
of the Disclosure Schedule shall have been obtained and must be in full force
and effect.
7.4 Documents to be Delivered by Company. At the Closing, Company and
Seller shall have delivered to Buyer the following documents, in each case duly
executed or otherwise in proper form:
(a) A copy of the opinion, dated as of the Closing Date, of the
independent financial advisor to the ESOP to the effect that as of the Closing
Date the Purchase Price is not less than the fair market value of the Shares,
and the Contemplated Transactions are fair to the ESOP from a financial point of
view.
(b) An opinion of Dutton & Overman, P.C., counsel to the Company,
substantially in the form of Exhibit 7.4(b).
(c) An opinion of Ludwig Goldberg & Krenzel, counsel to the ESOP,
in the form of Exhibit 7.4(c).
(d) Fully executed Mortgage Releases, UCC-3 Termination
Statements, and other releases necessary to release all liens on and security
interests in assets of the Acquired Companies.
(e) Stock Certificate(s). Shares certificates representing all of
the outstanding shares of the Shares, duly endorsed in blank or otherwise
acceptable for transfer, with all restrictive legends (if any) either removed or
properly canceled.
(f) Stock Option, etc. Evidence of the exercise, conversion or
cancellation of all options, warrants, convertible securities and other rights
or securities disclosed in Section 3.3 of the Disclosure Schedule, in form and
substance satisfactory to Buyer.
(g) Compliance Certificate. A certificate signed on behalf of the
Company 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, 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 complies with on or prior to the Closing Date.
(h) Certified Resolutions. Certified copies of the resolutions of
the Board of Directors and the stockholders of the Company, authorizing and
approving this Agreement and the consummation of the transactions contemplated
hereby.
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(i) Articles; Bylaws; Good Standings. (i) A copy of the articles
of incorporation of the Company and each Subsidiary certified as of a recent
date by the Secretary of State of the state of incorporation of each such
company, (ii) a copy of the bylaws of the Company and each Subsidiary certified
by the secretary of the Company and each Subsidiary, respectively and (iii)
certificates of good standing for the Company and its Subsidiary from the
Secretary of State of the state of incorporation of each such company and from
each other jurisdiction in which such company is required to qualify to do
business, in each case dated not more than ten (10) days prior to the Closing
Date.
(j) Consents and Approvals. Material consents, if any, of third
parties necessary for the Company, or the Sellers to execute, deliver and
perform this Agreement.
(k) Incumbency Certificate. Incumbency certificates relating to
each person executing (as corporate officer or otherwise on behalf of another
person) any document executed and delivered to Buyer pursuant to the terms
hereof.
(l) Resignations. Written resignations and releases of the
directors and officers of the Company and its Subsidiary substantially in the
form of Exhibit 7.4(l).
(m) Other Documents. All other documents, instruments or writings
required to be delivered to Buyer at or prior to the Closing pursuant to this
Agreement and such other certificates of authority and documents as Buyer may
reasonably request.
7.5 HSR Act Waiting Period. All applicable waiting periods related to
the HSR Act shall have expired.
7.6 No Injunction. No injunction or other restraining order
prohibiting the sale of the Shares by Seller to Buyer shall be in effect.
7.7 Real Property. (a) A title insurance company selected by Buyer
(the "Title Company") shall be willing to insure at standard rates the
applicable Acquired Company's marketable title in and to the Owned Real Property
in fee simple, the applicable Acquired Company's leasehold estate in any
financeable Leased Real Property (a "Financeable Leasehold") and Buyer's
lender's mortgage lien on the Owned Real Property and each Financable Leasehold,
in each case free and clear of all Liens, defects, claims, leases, rights of
possession or other encumbrances (other than the matters disclosed in Sections
3.7(a) and 3.7(b) of the Disclosure Schedule) including such endorsements and
affirmative coverages as Buyer and Buyer's lender (the "Lender") shall
reasonably require (including without limitation non-imputation endorsements).
The Company shall provide all such affidavits and indemnities as the Title
Company reasonably shall require in order to afford such coverages.
(b) Buyer shall have obtained a survey of each Owned Real
Property and each Leased Real Property to which an Acquired Company holds a
Financable Leasehold conforming to the Minimum Standard Detail Requirements
jointly established and approved in 1992 by ALTA and ACSM certified to the
Buyer, the applicable Acquired Company, the Lender and the
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Title Company and showing no Liens, defects, encroachments or encumbrances other
than the matters disclosed in Sections 3.7(a) and 3.7(b) of the Disclosure
Schedule.
(c) All Real Property shall be in substantially the same condition
and repair as that on the date of this Agreement, reasonable wear and tear
excepted.
(d) Buyer shall have received (i) from each landlord under a Lease
an estoppel, (ii) from each landlord under a Lease described in Section 3.2(c)
of the Disclosure Schedule a consent to the transactions contemplated by this
Agreement and (iii) from each mortgagee and ground lessor of any Leased Real
Property a nondisturbance agreement, in each case in form and substance
reasonably satisfactory to Buyer and Lender. Lender shall have received from
each landlord under a Lease designated by Lender an agreement regarding the
subordination to Lender of such landlord's lien against personal property on the
applicable demised premises and such other matters as Lender reasonably may
require.
(e) The Company shall have timely paid any and all real property
transfer, transfer gains, stamp and other similar taxes, if any, assessed in
connection with the transactions contemplated by this Agreement and shall have
delivered evidence satisfactory to Buyer and the Title Company of the payment of
such taxes.
(f) Buyer shall have received from each Acquired Company that owns
any of the Owned Real Property an affidavit (i) stating that such entity is not
a "foreign person", as defined in Section 1445(f)(3) of the Internal Revenue
Code, (ii) setting forth such entity's taxpayer identification number, (iii)
stating that such entity intends to file a U.S. income tax return with respect
to the sale of such Owned Real Property, and (iv) granting Buyer permission to
furnish a copy of such affidavit to the Internal Revenue Service.
7.8 Participant Vote. If this Agreement and the Contemplated
Transactions shall have been submitted to a vote of the ESOP participants for
approval or disapproval, on the basis of one vote for each of the Shares
allocated to participants' ESOP accounts, this Agreement and the Contemplated
Transactions shall have been approved by the participant's whose ESOP accounts
represent not less than a majority of the Shares.
7.9 No Material Adverse Effect. During the period from the date hereof
to the Closing Date, no event shall have occurred or be continuing (including
any litigation) which has had or could reasonably be expected to have a material
adverse effect on the business, assets, properties, condition (financial or
otherwise) or prospects of any Acquired Company.
7.10 Absence of Litigation. No action, suit, investigation or
proceeding shall have been commenced or threatened by a governmental agency or
third party against Buyer, the Company, its 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.
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7.11 Management Arrangements. Such members of the Company's management
as Buyer shall determine, shall have entered into formal arrangements with
Buyer, on terms and conditions satisfactory to Buyer in its sole discretion.
7.12 Financing. Buyer shall have received cash proceeds of financing in
an amount necessary to consummate the purchase of the Shares and to pay all fees
and expenses in connection therewith and to provide for ongoing working capital
needs of Buyer and the Company, and having such terms and conditions as are
satisfactory to Buyer in its sole discretion.
7.13 Due Diligence. Buyer shall have completed its due diligence review
of the Company and the Subsidiaries, and Buyer shall, in good faith, be
satisfied with the results of such due diligence review.
7.14 All Proceedings To be Satisfactory. All corporate and other
proceedings to be taken by the Sellers in connection with the transactions
contemplated hereby, and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Buyer and its counsel, and the Buyer
and said counsel shall have received all such counterpart originals or certified
or other copies of such documents as it or they may reasonably request.
7.15 Sale of Ashland Facility. If the Company shall have entered into
an agreement for or consummated the sale of the Ashland Facility, such
transaction must be on terms and conditions satisfactory to Buyer in all
respects.
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE.
Seller's obligation to sell the Shares and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Seller, in whole or in part):
8.1 Accuracy Of Representations. All representations and warranties of
Buyer contained in this Agreement must have been accurate in all material
respects as of the date of this Agreement and must be accurate in all material
respects as of the Closing Date as if made on the Closing Date.
8.2 Performance. All of the covenants and obligations that Buyer is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing must have been duly performed and complied with in all material
respects.
8.3 Consents. Each of the Consents identified in Section 4.2 of Annex I
shall have been obtained and must be in full force and effect.
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8.4 Additional Documents. Each of the following documents shall have
been delivered to Seller:
(a) The opinion, dated as of the Closing Date, of the independent
financial advisor to the ESOP to the effect that as of the Closing Date the
Purchase Price is not less than the fair market value of the Shares, and the
Contemplated Transactions are fair to the ESOP from a financial point of view.
(b) Written evidence of approval of the Contemplated Transactions
on behalf of the ESOP by the ESOP Fiduciary.
(c) An opinion of Kirkland & Ellis, counsel to Buyer,
substantially in the form of Exhibit 8.4(c).
(d) Such other documents as may be required by this Agreement to
be delivered to Seller at or prior to Closing.
8.5 Participant Vote. If this Agreement and the Contemplated
Transactions shall have been submitted to a vote of the ESOP participants for
approval or disapproval, on the basis of one vote for each of the Shares
allocated to participants' ESOP accounts, this Agreement and the Contemplated
Transactions shall have been approved by the participant's whose ESOP accounts
represent not less than a majority of the Shares.
8.6 No Injunction. No injunction or other restraining order
prohibiting the sale of the Shares by Seller to Buyer shall be in effect.
8.7 Minimum Purchase Price. The quotient of aggregate Purchase Price
payable to the Seller pursuant to Section 2.2 divided by 2,371,342.8776 shall be
equal to or greater than $26.50.
9. TERMINATION.
9.1 Termination Events. This Agreement may, by notice given prior to
or at the Closing, be terminated:
(a) (i) By Buyer if any of the conditions in Section 7 has not
been satisfied as of the Closing Date and Buyer has not waived such condition on
or before the Closing Date; or (ii) by Seller, if any of the conditions in
Section 8 has not been satisfied as of the Closing Date and Seller has not
waived such condition on or before the Closing Date.
(b) By mutual consent of Buyer and Seller; or
(c) By either Buyer or Seller if the Closing has not occurred on
or before September 4, 1998, or such later date as the parties may agree upon.
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(d) By Seller in accordance with Section 5.8(b).
(e) By Buyer in the event that the Company and Seller shall not
have delivered to Buyer the Disclosure Schedule in form and substance reasonably
satisfactory to Buyer within 10 days after the date hereof, provided that Buyer
shall have until the 5th business day following receipt of the Disclosure
Schedule to review the same and exercise its rights under this Section 9.1(e).
9.2 Effect Of Termination.
(a) If this Agreement is terminated pursuant to Section 9.1, all
further obligations of the parties under this Agreement will terminate and no
party shall have any liability to the other party, except for obligations of the
parties hereto in Sections 12.1, 12.2 and 12.3, which shall survive the
termination of this Agreement, and except that nothing herein will relieve any
party from liability for any breach of any agreement or covenant contained
herein prior to such termination or liability for any breach of any
representation or warranty by such party which breach is known to such party as
of the date of this Agreement. For purposes o the foregoing sentence, a breach
shall be deemed to be known to a party if such party had actual knowledge of any
fact or other matter the existence of which is contradictory to or constitutes
the basis of a breach or any representation or warranty, or, with respect to the
Company's obligation under Section 3.22, is discovered upon completion of the
due inquiry there specified.
(b) If this Agreement is terminated pursuant to Section 9.1(d)
and, within 12 months after the date of this Agreement, an Acquisition is
completed, then the Company shall pay to Buyer a fee of $5,000,000.00 to, among
other things, compensate Buyer for its time and effort and for out-of-pocket
expenses (whether incurred prior to or after the date of this Agreement)
incurred by the Buyer and its Affiliates in connection with the transactions
contemplated by this Agreement, which amount shall be payable by wire transfer
of immediately available funds immediately prior to the consummation of such
Acquisition.
10. NO INDEMNIFICATION.
Following the Closing, neither Seller nor any Acquired Company, nor
Buyer, nor their respective officers, directors, employees or agents, shall have
any liability for breach of any representation, warranty, covenant, commitment
or other obligation contained in or arising out of this Agreement, other than
any such obligation pursuant to Section 11 or Section 12 hereof. Nothing
contained in this Agreement shall be interpreted to eliminate, diminish, or
affect the rights of current and former directors, officers, employees and
agents of the Company to any rights of indemnification to which they are
entitled under the Company's Code of By-laws or the Indiana Business Corporation
Law. The obligations of the parties hereto provided in Sections 12.1, 12.2 and
12.3 shall survive the termination of this Agreement.
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11. POST-CLOSING COVENANTS.
11.1 Determination Letter. As soon as practicable after the Closing, an
application shall be filed by the Company with the appropriate District Director
of Internal Revenue, requesting a determination that the ESOP is qualified under
Code Section 401(a) upon its termination. Any ESOP amendments or such other
related documents or information as shall be necessary or appropriate to obtain
such determination, or as the IRS shall request, shall be submitted in
connection with such application.
11.2 Distribution Of Trust Assets. As soon as practicable after the
issuance by the IRS of a favorable determination letter as provided in Section
11.1 above, all ESOP trust assets shall be distributed to the ESOP participants
in accordance with the terms of the ESOP.
11.3 Valuation Report. Immediately following the Closing, the ESOP
Fiduciary shall deliver or cause to be delivered to Buyer a copy of the
valuation report prepared by Duff & Phelps, as financial advisor to the ESOP,
which supports the fairness opinion referred to in Sections 5.5 and 7.4(a).
11.4 Existing Agreements. Buyer shall cause the Company to perform and
the Company shall continue the performance of all its obligations under the
employment agreements, supplemental benefits agreements and split dollar
agreements between the Company and certain current and former executives as
identified in Sections 3.11(h) and 3.12(b) of the Disclosure Schedule, in
accordance with their respective terms.
12. GENERAL PROVISIONS.
12.1 Expenses. All costs and expenses incurred by each of Buyer and the
Company in connection with the negotiation, preparation, execution and
performance of this Agreement and the consummation of the Contemplated
Transactions will be paid by Buyer and the Company, respectively. All such costs
and expenses incurred by Seller shall be paid by the Company. The Company shall
pay on behalf of Seller any and all real property transfer, transfer, gains,
stamp and other similar Taxes, if any, assessed in connection with the
transactions contemplated by this Agreement and shall have delivered evidence
satisfactory to Buyer and the company providing title insurance thereto, of the
payment of such Taxes. The Purchase Price specified in Section 2.2 shall be net
of all such costs and expenses of Seller and the Company, including the
estimated costs of the actions to be taken pursuant to Sections 11.1 and 11.2
above.
12.2 Public Announcements. The timing and content of all announcements
regarding any aspect of this Agreement or the transactions contemplated hereby
to the financial community, government agencies, employees or the general public
shall be mutually agreed upon in advance by the Parties hereto; provided, that
each party hereto may make any such announcement which it in good faith
believes, based on advice of counsel, is necessary or advisable in connection
with any requirement of law or regulation, it being understood and agreed that
each party shall promptly provide the other parties hereto with copies of any
such announcement; and provided further that Buyer or its affiliates may make
any announcement or disclosure to current or future
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financing sources or subsequent purchasers or assignees of substantially all of
the capital stock or assets of Buyer, or any Subsidiary or Affiliate thereof
without consent of or disclosure to the Company or the Seller.
12.3 Confidentiality. Until the Closing Date the parties and the
Acquired Companies will maintain in confidence, and will cause their officers,
directors, employees, agents and advisors to maintain in confidence any written,
oral, or other information obtained in confidence from another party or an
Acquired Company in connection with this Agreement or the Contemplated
Transactions or which such party has reason to believe is confidential or
commercially sensitive. If the Contemplated Transactions are not consummated,
each party will return or destroy as much of such written information as the
other party may reasonably request.
12.4 Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and shall be delivered personally, by
telecopier, by certified mail, return receipt requested, or by a nationally
recognized overnight delivery service (costs prepaid), and shall be deemed given
or made upon receipt thereof. All such notices are to be given or made to the
parties at the following addresses (or to such other address as any party may
designate by a notice given in accordance with the provisions of this Section):
If to Buyer:
Neenah Foundry Company
2121 Brooks Avenue
Neenah, Wisconsin 54957
Attention: James K. Hildebrand
Telecopy No.: (920) 729-3603
With copies (which shall not constitute notice to Buyer:
Citicorp Venture Capital, Ltd.
399 Park Avenue, 14th Floor, Zone 4
New York, NY 10043
Attention: John D. Weber
Telecopy No.: (212) 888-2940
and
Kirkland & Ellis
153 East 53rd Street
New York, NY 10022
Attention: Kirk A. Radke, Esq.
Telecopy No.: (212) 446-4900
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If to the Company or Seller:
Dalton Corporation
Corporate Office
P.O. Box 230
Warsaw, IN 46581-0230
Attention: K.L. Davidson
Telecopy No.: (219) 268-2731
With copies (which shall not constitute notice to Company or Seller) to:
Dutton & Overman, P.C.
710 Century Building
36 South Pennsylvania Street
Indianapolis, IN 46204
Attention: Carl D. Overman
Telecopy No.: (317) 633-1494
and
Ludwig Goldberg Krenzel
50 California Street
36th Floor
San Francisco, CA 94111
Attention: Ronald L. Ludwig
Telecopy No.: (415) 433-6496
12.5 Further Assurances. The parties agree (a) to furnish upon request
to each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
12.6 Entire Agreement; Amendments and Notices. This Agreement
supersedes all prior agreements between the parties with respect to its subject
matter and constitutes (along with the documents referred to in this Agreement)
a complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be amended
except by a written agreement executed on behalf of all the parties to this
Agreement. No waiver of any of the provisions of this Agreement shall be deemed
or shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
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12.7 Assignments, Successors, And No Third-Party Rights. Neither party
may assign any of its rights under this Agreement without the prior written
consent of the other Parties, except that Buyer may, without any such consent or
any notice to Company or Seller, assign, directly or indirectly, any or all of
its rights and obligations under this Agreement to any of its Affiliates, to any
Person which provides financing to the Buyer or any of its Subsidiaries or to
any subsequent purchaser of the Buyer or any of its Subsidiaries or Affiliates
(whether by merger, consolidation, sale of stock, sale of assets or otherwise).
Subject to the preceding sentence, this Agreement will apply to, be binding in
all respects upon, and inure to the benefit of the successors and permitted
assigns of the Parties. Nothing expressed or referred to in this Agreement will
be construed to give any person other than the Parties to this Agreement any
legal or equitable right, remedy, or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement and all of its
provisions and conditions are for the sole and exclusive benefit of the Parties
to this Agreement and their successors and assigns.
12.8 Severability. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
12.9 Section Headings, Construction. The headings of Sections in this
Agreement are provided for convenience of reference only and are not intended to
and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement.
12.10 Time Of Essence. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence. 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.
12.11 Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO THE CHOICE OF LAW OR CONFLICTS OF LAW PRINCIPLES THEREOF. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK OR THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
PARTY HERETO HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING, WITHOUT LIMITATION,
ANY FORUM NON CONVENIENS, WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
12.12 Specific Performance. Each of the Buyer, the Company and Seller
acknowledges and agrees that the other party would be damaged irreparably in the
event any of the provisions of this Agreement are not performed in accordance
with their specific terms or otherwise are breached. Accordingly, each party
agrees that the other party shall be entitled to an injunction
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or injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state thereof having
jurisdiction over the parties and the matter, in addition to any other remedy to
which they may be entitled, at law or in equity.
12.13 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 Agreement, 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 Agreement 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 Agreement may file an original
counterpart of a copy of this Agreement with any court as evidence of the
consent of the parties hereto to the waiver of their right to trial by jury.
12.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
* * * *
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
DALTON CORPORATION
By:
---------------------------------
Name:
Title
DALTON CORPORATION EMPLOYEE
STOCK OWNERSHIP PLAN AND TRUST
By:
---------------------------------
Name:
Title
NEENAH FOUNDRY COMPANY
By:
---------------------------------
Name:
Title