EXHIBIT 2.1
SHARE PURCHASE AGREEMENT
THIS AGREEMENT, made and entered into this 23rd day of December, 1997, by
and between Price Brothers Company, a Michigan corporation whose principal
offices are located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxx ("Seller") and
Keystone Consolidated Industries, Inc. a Delaware corporation whose principal
place of business is located at Three Lincoln Centre, 0000 XXX Xxxxxxx, Xxxxxx,
Xxxxx ("Purchaser").
The parties have reached agreement with respect to the sale by the Seller
to the Purchaser of all of the common shares of Engineered Wire Products, Inc.,
presently owned by the Seller. Engineered Wire Products, Inc. is an Ohio
corporation, whose principal place of business is located at Xxxxx Xxxx 000,
Xxxxx Xxxxxxxx, Xxxx ("XXX").
IT IS THEREFORE AGREED, AS FOLLOWS:
1. SALE OF COMMON SHARES.
Seller will sell and Purchaser will purchase, all eighty (80) of the common
shares of EWP owned by Seller. In consideration of the sale of the common
shares by Seller, Purchaser will pay to Seller, in cash at the Closing (defined
below) the sum of
Ten Million Five Hundred Thousand and 00/100 Dollars ($10,500,000.00) (the
"Purchase Price").
2. CLOSING.
a) The Closing of the transactions described herein will take place on
December 23, 1997, at 9:00AM, at the office of the Seller, 000 Xxxx
Xxxxxx Xxxxxx, Xxxxxx, Xxxx (the "Closing"). At the Closing,
Purchaser will pay to the Seller the Purchase Price and the payment
for the grant of the Restrictive Covenant set forth in paragraph ten
(10) hereof. Upon receipt of the Purchase Price and the payment for
the Restrictive Covenant by Seller, the Seller will deliver to the
Purchaser, free and clear from all encumbrances, a certificate for all
eighty (80) common shares of EWP held by Seller, duly endorsed in
blank or with duly executed stock powers attached, in proper form for
transfer to Purchaser. Payment of the Purchase Price will be effected
by Purchaser, by electronic funds transfer to the account of the
Seller, as follows:
First Chicago NBD Bank
Price Brothers General Account
Account No. 663773
ABA No. 000000000
b) The parties reserve the right to conduct the Closing of these
transactions by mail, express delivery service and facsimile, in lieu
of conducting the Closing at the offices of Seller.
3. REPRESENTATIONS AND WARRANTIES OF SELLER.
The Seller represents and warrants to Purchaser as follows:
a) That EWP is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio.
b) That the total authorized capital stock of EWP consists of one hundred
(100) common shares, validly issued, in good standing, fully paid,
non-assessable and that the Seller owns eighty (80) of the common
shares.
c) That the Seller has the authority to convey good and indefeasible
title to the eighty (80) common shares of EWP owned by it, free and
clear of all covenants, restrictions, revisions, remainders, or
interests of others and all liens, pledges, charges or encumbrances of
any nature.
d) That the balance sheet and income statement attached to this Agreement
and incorporated herein by this reference as Schedule A, set forth the
earnings, assets and liabilities of EWP for the periods and as of the
date(s) indicated in accordance with generally accepted accounting
principals (the "Schedule A Balance Sheet").
e) To Seller's knowledge, all customer and trade notes and accounts
receivable owned by EWP on the date of the Schedule A Balance Sheet
are collectible less any reserves recorded against specific accounts,
which reserves are included in the Schedule A Balance Sheet.
f) To the Seller's knowledge, EWP has no material liabilities of any
nature, whether absolute, contingent or otherwise, except as set forth
in the Schedule A Balance Sheet, other than liabilities incurred in
the ordinary course of business after the date of the Schedule A
Balance Sheet. EWP is not in breach or default nor in arrears in
respect of the terms of any such liabilities and no waiver or
forbearance has been granted by any holder of any such liability with
respect to any such liability.
g) EWP has good and marketable title to all real and personal property
reflected in the Schedule A Balance Sheet, except as set forth on
Schedule B to this Agreement, attached hereto and incorporated herein.
h) From and after the date of the Schedule A Balance Sheet, Seller has
caused and will cause EWP to operate its business in the normal, usual
and ordinary course consistent with past procedure.
i) EWP has filed all Tax Returns required to be filed and has paid or
established adequate reserves for the payment of all Taxes.
For purposes of this Agreement:
(1) "Tax" or "Taxes" shall mean any and all federal, state,
local, foreign and other taxes, levies, fees, imposts, duties and
charges of whatever kind (including any interest, penalties or
additions to the tax imposed in connection therewith or with respect
thereto), including, without limitation, taxes imposed on, or measured
by, income, franchise, profits, or gross receipts, and also ad
valorem, value added, sales, use, service, real or personal property,
capital stock, license, payroll, withholding, employment, social
security, workers' compensation, unemployment compensation, utility,
severance, production, excise, stamp, occupation, premium, windfall
profits, transfer, and gain taxes, and customs duties.
(2) "Tax Return" shall mean returns, reports, information
statements, and other documentation (including any additional or
supporting material) filed or maintained, or required to be filed or
maintained, in connection with the calculation, determination,
assessment or collection of any Tax.
j) There is no suit, action, litigation, administrative arbitration or
other proceeding nor governmental investigation or inquiry of any
kind, pending or to the Seller's knowledge, threatened, regarding EWP
or its business or properties that might, severally or in the
aggregate, materially and adversely affect the financial condition,
business, assets or prospects of EWP.
k) To the Seller's knowledge, EWP has complied with and is not in default
in any material respect of any law, ordinance, requirement, regulation
or order applicable to its business and properties and EWP has not
received notice of any claimed default with respect to the foregoing.
l) To the Seller's knowledge, neither Seller nor EWP is a party to any
agreement or instrument nor subject to any charter or other corporate
restriction nor subject to any judgment, order, writ, injunction,
decree, rule or regulation, that materially and adversely affects the
business operations, prospects, properties, assets or financial
condition of EWP.
m) EWP does not, and will not as of the Closing have any deffered gain or
loss arising from deffered intercompany transactions, within the
meaning of United States Treasury Regulations Section 1.1502-13.
n) Neither the Seller, its other affiliates or subsidiaries, nor EWP is
currently under examination, or has been notified of examination, by
any federal, state, foreign or local tax authority. Nor has the
Seller agreed to extend any statute of limitations for any Tax period
ending on or before the Closing. EWP has received an inquiry from tax
authorities from the State of Ohio regarding personal property taxes.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
The Purchaser represents and warrants to Seller as follows:
a) That Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
b) That Purchaser has all requisite corporate power to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby; the execution and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of the Purchaser; and this
Agreement is valid and legally binding on the Purchaser, enforceable
against it in accordance with its terms.
c) That the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby will not conflict with or
constitute a default under any charter or other corporate documents of
the Purchaser or any contract, agreement, instrument, commitment,
mortgage, lease, judgment, order or decree or any other restriction of
any kind or character to which the Purchaser is a party to or is
bound.
d) The Purchaser acknowledges that the Seller has (i) afforded to
employees and representatives of the Purchaser access to information
(financial and other) concerning EWP, (ii) made available to employees
and representatives of the Purchaser the officers, accountants and
employees of EWP for the purpose of discussing and responding to
questions concerning EWP, its business and prospects and (iii)
furnished to the Purchaser copies of all instruments, agreements,
financial statements or other documents pertaining to EWP, its
business and prospects requested by Purchaser.
5. CONDUCT OF BUSINESS PENDING CLOSING.
The Seller covenants from and after December 3, 1997, (the date on which
Purchaser commenced its due diligence investigation related to the transactions
contemplated by this Agreement) and until Closing:
a) EWP's business will be conducted only in the ordinary course.
b) No change will be made in EWP's Articles of Incorporation or
Regulations.
c) No change will be made in EWP's authorized or issued shares.
d) No dividend or other distribution or payment will be declared or made
in respect of EWP's shares.
e) No material increase will be made in the compensation payable or to
become payable by EWP to any officer, employee, or agent, nor will any
bonus payment or arrangement or other benefits to be paid by EWP to or
with any officer, employee, or agent without the Purchaser's prior
approval, except as may have been agreed to and approved by the Board
of Directors of EWP by unanimous vote.
f) No contract or commitment will be entered into by or on behalf of EWP
extending beyond December 31, 1997, except normal commitments for the
purchase of raw materials and supplies and for the manufacture and
sale by EWP of its product, in the ordinary course of its business, as
such business has been conducted since October 31, 1994, without the
Purchaser's prior written approval.
g) No change will be made affecting the personnel, compensation, or
banking arrangements of EWP without the Purchaser's prior written
approval.
h) All debts of EWP will be paid as they become due.
i) No material contract right of EWP will be waived.
j) Except as agreed to by the Purchaser, the Seller will cause EWP to use
its best efforts (without making any commitment on the Purchaser's
behalf) to preserve EWP's business organization intact; to keep
available to EWP the services of its present officers and employees;
and to preserve for EWP the goodwill of its suppliers, customers, and
others having business relations with EWP.
6. ACTIONS EFFECTIVE AT CLOSING.
a) At the Closing, the Seller will deliver to the Purchaser the written
resignations of Xxxxx X. Xxxxx, Xx., Director and Chairman, Xxxxxx X.
Xxxxxx, Director and Treasurer and Xxxxxxx X. Xxxxx, Director and
Secretary, of EWP.
b) Effective on the date of the Closing, the Management Agreement between
the Seller and EWP dated October 31, 1994 is terminated.
c) At the Closing, the Seller will assign all of its right, title and
interest in and all of its rights and responsibilities under the Price
Brothers Pension Plan Number 13, for employees of EWP who are members
of Local Union Number 40, International Brotherhood of Teamsters,
Chauffeurs, Warehousemen and Helpers of America to EWP; and, the
Seller will assign all of its right, title and interest in and all of
its rights and responsibilities under the Trust established for Plan
Number 13 with Bank One Trust Co., N.A., Trustee, to DeSoto, Inc., a
Delaware corporation whose main office is located at Three Lincoln
Centre, 0000 XXX Xxxxxxx, Xxxxxx, Xxxxx. DeSoto, Inc., is a wholly
owned subsidiary of the Purchaser.
7. CONDITIONS PRECEDENT FOR PURCHASER.
All obligations of the Purchaser under this Agreement are, at its option,
subject to the fulfillment, prior to or at the Closing, of each of the following
conditions:
a) REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING. The Seller's
representations and warranties contained in this Agreement shall be
true at Closing as though such representations and warranties were
made at Closing.
b) PERFORMANCE. The Seller shall have performed and complied with all
agreements and conditions required by this Agreement to be performed
or complied with by it prior to or at Closing.
c) OPINION OF SELLER'S COUNSEL. The Seller will have delivered to
Purchaser an opinion of the Seller's counsel, Xxxxxxx X. Xxxxx, of
Xxxxxxxxx, Xxxxxx & Xxxxx P.L.L., dated the closing date, that the
corporate existence, good standing, and authorized and issued common
shares are as stated in subparagraphs (a) and (b) of paragraph 3 of
this Agreement, and that, except as may be specified by such counsel,
there is no litigation, proceeding, or governmental investigation
pending or, to such counsel's knowledge, threatened against, or
relating to, EWP, its properties or business.
8. INDEMNIFICATION.
a) The Seller will indemnify and hold harmless EWP and the Purchaser for
a period or two (2) years after the date of this Agreement, against
and in respect of any damage or deficiency resulting from any
misrepresentation,
breach of warranty, or nonfulfillment of any agreement on the part of
the Seller under this Agreement, or from any misrepresentation in or
omission from any certificate or other instrument furnished or to be
furnished to the Purchaser hereunder;
b) Seller agrees to indemnify the Purchaser from and against any
liability of EWP for (i) any Taxes of EWP with respect to any Tax year
or portion thereof ending on or before December 31, 1997 to the extent
such Taxes are not reflected in the reserve for Tax liability (rather
than any reserve for deferred Taxes established to reflect temporary
differences between the book and tax basis of EWP's assets and
liabilities) shown on the Schedule A Balance Sheet; (ii) for the
unpaid taxes of any person (other than EWP) under United States
Treasury Department Regulations Section 1.1502-6 (or similar provision
of state, local or foreign law) as a transferee or successor, by
contract, or otherwise. For the purposes of this Agreement "Person"
means an individual, a partnership, a corporation, an association, a
joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or
political subdivision thereof). The two (2) year limitation for
indemnity, set forth above, shall not apply to indemnity owed pursuant
to this paragraph 8b.
c) No obligation of indemnity shall be owed by Seller hereunder, unless
and until Purchaser's claims for indemnification, if any, aggregate to
Twenty Five Thousand and 00/100 Dollars ($25,000.00). Provided
however, that the Twenty Five Thousand and 00/100 Dollars ($25,000.00)
threshold shall not apply to Taxes and Seller shall completely
indemnify the Purchaser from any liability for Tax as described in
Section 8(b).
d) Purchaser will indemnify and hold harmless Seller at all times after
the date of this Agreement against and in respect of any damage or
deficiency resulting from the operations of EWP after the Closing.
e) If, at any time after the Closing, either party becomes aware of any
facts which would lead a reasonable person to believe that the other
party may be called upon to fulfill its obligations of indemnity as
set forth in this Agreement, the party becoming so aware, shall
immediately and in no event more than fifteen (15) days, after
becoming aware, notify the other party. Such notification shall be in
writing and shall reveal all facts known regarding the matter in
question. The party providing such notification shall allow the party
from whom indemnity may be sought the option to challenge whatever
claim, demand or factual circumstance exists and which may be the
source of an obligation to indemnify and to resolve such claim, demand
or factual circumstance, in whatever lawful fashion it might choose,
provided that the indemnifying party in its resolution of the claim,
demand or factual circumstance, continues to indemnify and hold
harmless the other party, and if applicable, EWP. Failure by either
party to provide timely notice of and the option to challenge any
claim, demand or factual circumstance, shall void the obligation to
indemnify and hold harmless set forth herein as to that claim, demand
or factual circumstance.
9. BROKERAGE.
The Seller represents and warrants that all negotiations relative to this
Agreement have been carried on by it directly with the Purchaser without the
intervention of any person, and the Seller shall indemnify the Purchaser and
hold it harmless against and in respect of any claim for brokerage or other
commissions relative to this Agreement, or to the transactions contemplated
hereby, and also in respect of all expenses of any character incurred by the
Seller in connection with this Agreement or such transactions. The Purchaser
represents and warrants that all negotiations relative to this Agreement have
been carried on by it directly with the Seller, without the intervention of any
person, and the Purchaser shall indemnify the Seller and hold it harmless
against and in respect of any claim for brokerage or other commissions relative
to this Agreement, or to the transactions contemplated hereby, and also in
respect of all expenses of any character incurred by the Purchaser in connection
with this Agreement or such transactions.
10. RESTRICTIVE COVENANT.
a) Seller agrees that, it will not, for a period of five (5) years after
the Closing, without the Purchaser's prior written consent, directly
or indirectly own, manage, operate, control, or participate in, or be
connected with any business in any manner, directly or indirectly in
competition with, or become interested in any competitor of, EWP as
its business is composed and conducted as of Closing, nor operate
under any name similar to that of EWP. The Seller acknowledges that
the remedy at law for any breach by Seller of the foregoing will be
inadequate, and that EWP and the Purchaser will be entitled to
injunctive relief.
b) In consideration for the foregoing restrictive covenant by the Seller,
the Purchaser agrees to pay to the Seller, in cash, at Closing, the
sum of
Seven Hundred Thousand and 00/100 Dollars ($700,000.00).
11. PURCHASE FOR INVESTMENT.
The Purchaser represents that its purchase hereunder is being made for its
own account for investment, and with no present intention of resale. All stock
certificates representing the shares purchased under this Agreement shall be
endorsed with the following restrictive legend:
The Shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, nor
under any state securities law, and said Shares may not be
offered or sold and no transfer will then be made by EWP or its
transferee except in compliance with the Securities Act of 1933
and the rules and regulations promulgated thereunder and any
applicable state securities
law.
12. POST CLOSING EVENTS.
a) Adjustments
The Seller agrees to adjust the Schedule "A" Balance Sheet and the
December 23, 1997 Balance Sheet of EWP in the event that an audit of
the book and records of EWP by Delloitte & Touche LLP of the 1997
operations of EWP concludes that such adjustment is necessary. The
Purchaser agrees that under no circumstances will such adjustment
decrease the amounts owed to Seller for the Purchase Price or
Purchaser's payment for the Restrictive Covenant of Seller set forth
at paragraph 10 hereof; nor the fact that such payments are due in
full at Closing; nor will such adjustment result in any payment by
Seller to Purchaser.
b) Cooperation of the Parties, Post Closing.
Each of the parties agrees that, upon the event of an audit,
investigation, presentation of claim, initiation or threat of civil or
criminal legal action or any similar such event and upon the request of
the other party, at any time after the Closing, it will, during regular
business hours, upon reasonable notice, provide access to any of its
documents, information or personnel and in general, will assist the party
making the request, all out of pocket costs for such cooperation being
borne by the party requesting such assistance.
13. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon, and inure to the benefit of, the
successors and assigns of the Seller.
14. CONSTRUCTION.
This Agreement is being delivered and is intended to be performed in the
State of Ohio and shall be construed and enforced in accordance with the laws
of that state.
15. NOTICES.
All notices, requests, demands, and other communications hereunder shall
be in writing, and shall be deemed to have been duly given if delivered as
follows:
TO SELLER: TO PURCHASER:
PRICE BROTHERS COMPANY KEYSTONE CONSOLIDATED INDUSTRIES, INC.
000 Xxxx Xxxxxx Xxxxxx Three Lincoln Centre
Post Xxxxxx Xxx 000 0000 XXX Xxxxxxx
Xxxxxx, Xxxx 00000 Xxxxxx, Xxxxx 00000
Attention: President
Attention: Xxxxx End, Vice President
and General Counsel
16. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement.
PRICE BROTHERS COMPANY KEYSTONE CONSOLIDATED
INDUSTRIES, INC.
By: By:
Xxxxx X. Xxxxx, Xx. Xxxxxx X. Xxxxxx
Chairman and President President and CEO
SCHEDULE A
BALANCE SHEET
SCHEDULE B
EXCEPTIONS TO TITLE
LEASED ASSETS
The following items are used in the operation of Engineered Wire Products,
Inc.'s business and are leased:
Telephone System (1)
Forklifts (4)
Fax Machines (2)
Copiers (2)
Automobiles Operated by:
J. Xxxxxxx
X. Xxxxxx
X. Xxxxxxx
X. Xxxx
X. Xxxxxxx
X. Xxxx
X. Xxxxxx
Truck Operated by:
X. Xxxx
