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EXECUTION COPY
EXHIBIT 10
STOCK PURCHASE AGREEMENT
DATED AS OF OCTOBER 2, 2000
BY AND BETWEEN
NEENAH FOUNDRY COMPANY
(AS SELLER)
AND
XXXXXXX TECHNOLOGIES CORPORATION
(AS BUYER)
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TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS
Section 1.1 General...............................................................1
Section 1.2 Definitions...........................................................1
Section 1.3 Interpretation........................................................8
Section 1.4 Accounting Conventions................................................8
ARTICLE II
SALE AND PURCHASE OF SHARES
Section 2.1 Sale and Purchase of Shares...........................................8
Section 2.2 Payment of the Purchase Price.........................................9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.1 Corporate Status; Authority of Seller; Enforceability................11
Section 3.2 Accounts Receivable..................................................11
Section 3.3 Inventories..........................................................11
Section 3.4 Trade Names, Trademarks and Copyrights...............................12
Section 3.5 Patent Rights........................................................12
Section 3.6 Contracts............................................................13
Section 3.7 Compliance with Laws.................................................13
Section 3.8 Litigation...........................................................13
Section 3.9 Personnel Identification and Compensation............................13
Section 3.10 Existing Employment Contracts.......................................13
Section 3.11 Capitalization; Subsidiaries........................................14
Section 3.12 Title to Purchased Shares...........................................14
Section 3.13 Environmental.......................................................14
Section 3.14 Certain Transactions................................................15
Section 3.15 Employee Benefit Matters............................................15
Section 3.16 Tax Matters.........................................................16
Section 3.17 Title to Assets.....................................................18
Section 3.18 Real Property.......................................................18
Section 3.19 Intentionally Omitted...............................................19
Section 3.20 Consents............................................................19
Section 3.21 Licenses and Permits................................................19
Section 3.22 Occupational Safety and Health......................................19
Section 3.23 Insurance...........................................................19
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Section 3.24 Financial Statements................................................20
Section 3.25 Intentionally Omitted...............................................20
Section 3.26 Conduct of Business Since Interim Balance Sheet Date................20
Section 3.27 Brokers Fees........................................................21
Section 3.28 Banking Arrangements................................................21
Section 3.29 Powers of Attorney..................................................21
Section 3.30 NO ADDITIONAL REPRESENTATIONS.......................................21
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Section 4.1 Corporate Status.....................................................21
Section 4.2 Due Authorization....................................................21
Section 4.3 Authority of Purchaser...............................................22
Section 4.4 Enforceability.......................................................22
Section 4.5 Consents.............................................................22
Section 4.6 Broker's Fees........................................................22
Section 4.7 Phase I Environmental Report.........................................22
ARTICLE V
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
Section 5.1 Obligations to be Satisfied on or prior to Closing Date..............22
Section 5.2 Procedure for Failure to Satisfy Conditions..........................24
ARTICLE VI
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
Section 6.1 Obligations to be Satisfied on or prior to Closing Date..............24
Section 6.2 Procedure for Failure to Satisfy Conditions..........................25
ARTICLE VII
CLOSING
Section 7.1 Time and Place.......................................................25
Section 7.2 Closing Transactions.................................................25
Section 7.3 Deliveries by Seller to Purchaser....................................25
Section 7.4 Deliveries by Purchaser to Seller....................................26
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ARTICLE VIII
OTHER AGREEMENTS
Section 8.1 Further Assurance....................................................27
Section 8.2 Confidentiality......................................................27
Section 8.3 Employment Matters...................................................28
Section 8.4 Employee Benefits....................................................28
Section 8.5 Indemnification for Employment Matters...............................29
Section 8.6 Section 338 Elections................................................29
Section 8.7 Tax Matters..........................................................30
Section 8.8 Non-Compete..........................................................32
ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnification by Seller............................................33
Section 9.2 Indemnification by Purchaser.........................................34
Section 9.3 Procedure for Indemnification........................................34
Section 9.4 Limitations on Indemnity.............................................36
Section 9.5 Payment..............................................................37
Section 9.6 Adjustments to Purchase Price........................................37
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 Public Announcements................................................37
Section 10.2 Post-Closing Deliveries.............................................38
Section 10.3 Notices.............................................................38
Section 10.4 Assignment..........................................................39
Section 10.5 Benefit of the Agreement............................................39
Section 10.6 Exhibits and Schedules..............................................39
Section 10.7 Headings............................................................39
Section 10.8 Entire Agreement....................................................40
Section 10.9 Modifications and Waivers...........................................40
Section 10.10 Counterparts.......................................................40
Section 10.11 Severability.......................................................40
Section 10.12 GOVERNING LAW......................................................40
Section 10.13 Expenses...........................................................40
Section 10.14 Arbitration........................................................41
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EXHIBITS
Exhibit 7.3(h) Form of Withholding Certificate
SCHEDULES
Schedule 1.2 Description of Assets
Schedule 3.2 Accounts Receivable from Affiliates
Schedule 3.8 Litigation
Schedule 3.9 Personnel Identification and Compensation
Schedule 3.10 Existing Employment Contracts
Schedule 3.11(b) Treasury Shares
Schedule 3.11(f) Security Interest
Schedule 3.13-A Environmental Disclosures
Schedule 3.13-B Environmental Reports
Schedule 3.14 Certain Transactions
Schedule 3.15 Employee Benefit Matters
Schedule 3.16 Taxes
Schedule 3.17 Title to Assets
Schedule 3.20 Consents
Schedule 3.21 Licenses and Permits
Schedule 3.23 Insurance
Schedule 3.26 Interim Balance Sheet Date Conduct
Schedule 3.28 Banking Arrangements
Schedule 8.3(a) Employment Matters
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into as of October 2, 2000 by
and between XXXXXXX TECHNOLOGIES CORPORATION, a Delaware corporation
("Purchaser"), and NEENAH FOUNDRY COMPANY, a Wisconsin corporation ("Seller").
RECITALS
A. Seller owns all of the issued and outstanding shares of capital
stock of Xxxxxxx Controls Corporation, a Wisconsin corporation (the "Company"),
consisting of 100 shares of common stock, par value $100 per share (the
"Shares").
B. The Company owns and operates a business under the tradename
"Xxxxxxx Controls" which designs, manufactures, sells and services foundry sand
preparation equipment, sand control equipment, foundry core room gas generation
equipment, foundry core room odor scrubbing equipment and parts related thereto
(the "Business").
C. Purchaser desires to purchase the Shares from Seller and Seller
desires to sell and transfer the Shares to Purchaser, all subject to the terms
and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing Recitals and the
representations, warranties, agreements and covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Purchaser and Seller hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 General.
Each term defined in the first paragraph of this Agreement and in the
Recitals shall have the meaning set forth above whenever used herein, unless
otherwise expressly provided or unless the context clearly requires otherwise.
Section 1.2 Definitions.
As used herein, the following terms shall have the meanings ascribed to
them in this Section 1.2:
Accounts Receivable. All present and future rights to payment
for goods sold or services rendered whether or not earned by performance,
including all accounts and notes receivable owned or held by the Company.
Adjustment Report. As defined in Section 2.2(c)(iii).
Adverse Consequences. All allegations, charges, complaints,
actions, suits, proceedings, hearings, investigations, claims, demands, Orders,
damages, dues, penalties, fines,
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costs, amounts paid in settlement, Liabilities, Taxes, interest, Liens, losses,
expenses and fees, including all accounting, consultant and attorneys' fees and
court costs, costs of expert witnesses and other expenses of litigation.
Affiliate. As set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act of 1934.
Agreement. This Stock Purchase Agreement, together with all
Exhibits and Schedules referred to herein, as amended, modified or supplemented
from time to time in accordance with the terms hereof.
Assumed Liabilities. Those Liabilities of the Company:
(a) included in the Final Net Worth Calculation, including the
Company's trade payables and accrued expenses incurred in the Ordinary Course of
Business (other than any payables owed to Seller or any officer, employee or
Affiliate of any thereof); and
(b) under the Contracts, other than any such Liability to the
extent arising from or otherwise attributable to any breach or default
thereunder occurring on or prior to the Closing.
Assumption Agreement. As defined in Section 5.1(j).
Authority. Any governmental, regulatory or administrative
body, agency or authority, any court of judicial authority, any arbitrator or
any public, private or industry regulatory authority, whether foreign, federal,
state or local.
Business. As defined in the Recitals hereto.
CERCLA. Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. ss. 9601, et seq.
Closing. The actual sale, transfer, conveyance, assignment and
delivery of the certificates representing the Shares to Purchaser in exchange
for the consideration payable to Seller on the Closing Date pursuant to this
Agreement.
Closing Date. The day five (5) days following the date on
which Purchaser and Seller mutually agree all closing conditions have been
satisfied (or will be satisfied on the Closing Date) or waived or such other
date as Purchaser and Seller may mutually agree in writing, in either case, upon
which the Closing shall occur.
Code. Internal Revenue Code of 1986.
Company. As defined in the Recitals hereto.
Confidential Information. As defined in Section 8.2(a).
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Contracts. All contracts, charters, licenses, leases,
subleases, arrangements, commitments and other agreements of the Company,
including all customer agreements, vendor agreements, purchase orders,
installation and maintenance agreements, computer software licenses, hardware
lease or rental agreements, contract claims and all other arrangements and
understandings of the Company related to the Business, including those items
which are listed on Schedule 1.2 under the heading "Contracts".
Environmental Claims. As defined in Section 3.13(d).
Environmental Law(s). Each and every Law, Order, Permit or
similar requirement of each and every Authority and the common law, pertaining
to (i) pollution, (ii) the protection of the environment, natural resources or
wildlife, (iii) the protection of surface water or groundwater, or (iv) the
management, manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, Release, threatened Release, abatement, removal,
remediation or handling of, or exposure to, petroleum or any "hazardous
substance" as that term is used in CERCLA.
Equipment and Improvements. All machinery, equipment,
improvements, facilities and structures, buildings, installations, fixtures,
improvements, betterments and additions located on or within the Real Property,
appliances, furniture, office furniture, fixtures, office supplies and office
equipment, computers, computer terminals and printers, computer software,
telephone systems, telecopiers and photocopiers, and other tangible personal
property of every kind and description that are located upon or within the Real
Property, which are owned or leased by the Company, or are utilized primarily in
connection with the Business, including the items listed on Schedule 1.2 under
the heading "Equipment and Improvements".
ERISA. Employee Retirement Income Security Act of 1974.
Final Balance Sheet. As defined in Section 2.2(c)(v).
Final Net Worth Calculation. As defined in Section 2.2(c)(ii).
Financial Statements. The unaudited balance sheet and
statements of income, retained earnings and cash flows of the Company as of and
for each of the three years ended September 30, 1997, 1998 and 1999 and the
Interim Financial Statements, copies of which have been delivered to Purchaser.
GAAP. Generally accepted accounting principles in the United
States consistently applied.
Hazardous Substance. Any substance which is (i) defined as a
hazardous substance, hazardous material, hazardous waste, pollutant or
contaminant under any Environmental Law, (ii) a petroleum hydrocarbon, including
crude oil or any fraction thereof, or (iii) regulated pursuant to any
Environmental Law.
Indemnified Party. As defined in Section 9.3.
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Indemnifying Party. As defined in Section 9.3.
Independent Auditors. As defined in Section 2.2(c)(iv).
Intangibles. All patents, trade names, trademarks, service
marks, copyrights, trade secrets, registrations and applications for any
thereof, and all technical know-how and other intellectual property rights or
intangibles used by the Company in the operation of the Business, including
those patent, trademark and copyright registrations and applications for
registration listed on Schedule 1.2 under the headings "Patents" and
"Intangibles", and all goodwill associated therewith, licenses and sublicenses
granted and obtained with respect thereto and rights thereunder, remedies
against infringement thereof and rights to protection of interests therein under
all applicable Laws.
Interim Balance Sheet. The balance sheet included in the
Interim Financial Statements.
Interim Balance Sheet Date. July 31, 2000.
Interim Financial Statements. The unaudited balance sheet and
statements of income, retained earnings and cash flows of the Company as of and
for the twelve-month period ended on the Interim Balance Sheet Date.
Inventories. All of the Company's inventory, consumable
supplies, spare parts, repair materials and work-in-process and any and all
other inventories of the Company, an approximate summary of such inventories
currently on hand is set forth on Schedule 1.2 under the heading "Inventories",
plus any replacements for or additions to such inventories acquired on or before
the Closing Date, and minus any items of inventory sold or consumed by the
Company in the Ordinary Course of Business on or before the Closing Date.
IRS. Internal Revenue Service.
Knowledge. Actual knowledge of Xxxx XxXxxx, Xxxxxxx Xxxxxxx,
Xxxxxxx Xxxxxx, Xxxxxxx Xxxxxx and Xxxxxx Xxx.
Law. Any law, statute, regulation, rule, ordinance,
requirement, announcement or other binding action or requirement of an
Authority.
Liabilities. Any obligation or liability (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated and whether due or to
become due), including any liability for Taxes.
Lien. Any lien (statutory or otherwise), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement of any kind or nature whatsoever (including the
interest of a vendor or lessor under any conditional sale, capitalized lease or
other title retention agreement).
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Material Adverse Effect. Any material adverse effect on (i)
the business condition or results of operations of the Company or (ii) the
ability of Seller to consummate the transactions contemplated hereby.
Net Worth. The sum of (a) the Company's total assets (other
than Retained Assets) minus (b) the Company's total liabilities (other than any
Retained Liabilities) including accrued vacation, in each case, as determined in
accordance with GAAP.
Order. Any decree, order, judgment, writ, award, injunction,
stipulation or consent of or by an Authority.
Ordinary Course of Business. The ordinary course of business
of the Company in accordance with past custom and practice (including with
respect to quantity and frequency).
Permits. As defined in Section 3.21.
Permitted Liens. Collectively, (a) Liens released in
connection with the Closing; (b) Liens for those real estate taxes, assessments
and other governmental levies, fees or charges imposed with respect to the Real
Property for the year 2000 and subsequent years that are not yet due and
payable; (c) zoning, building codes and other land use laws regulating the use
or occupancy of the Real Property or the activities conducted thereon; (d)
easements, covenants, conditions, restrictions and other similar matters
disclosed in the Title Policy; and (e) carrier's, warehousemen's, mechanics,
materialmen's, repairmen's or other like Liens arising, in the case of each Lien
described in clause (e), in the Ordinary Course of Business and securing
obligations that are not yet due and payable.
Person. Any natural person, corporation, limited liability
company, partnership, firm, joint venture, joint-stock company, trust,
association, Authority, unincorporated entity or organization of any kind.
Plan. As defined in Section 3.15(a).
Preliminary Closing Balance Sheet. As defined in Section
2.2(c)(i).
Preliminary Net Worth Calculation. As defined in Section
2.2(c)(i).
Purchase Price. As defined in Section 2.2(a).
Purchaser Warranty Claim. As defined in Section 10.1(a).
RCRA. Resource Conservation and Recovery Act, 42
U.S.C. ss. 6901, et seq.
Real Property. That certain parcel of land more fully
described on Schedule 1.2 under the heading "Real Property", together with all
estates, franchises, development rights, remainders, reversions, rents, issues,
profits, liberties, homestead rights, reservations, privileges and appurtenances
thereto and all plants, buildings, structures, installations, fixtures,
fittings,
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improvements, betterments and additions situated thereon and together with all
licenses, easements and rights-of-way used or useful in connection therewith.
Records. All books of account, ledgers, forms, records,
documents, files, invoices, vendor or supplier lists, plans and other data which
are necessary to or desirable for the ownership, use, maintenance or operation
of the Business and which are owned or used by the Company, including all
blueprints and specifications, all Tax, personnel, payroll, payroll tax and
labor relations records, all environmental control records, environmental impact
reports, statements, studies and related documents, handbooks, technical manuals
and data, engineering specifications and work papers, all pricing and cost
information, all sales records, all accounting and financial records, all sales
and use tax returns, reports, files and records, asset history records and
files, all data entry and accounting systems, all maintenance and repair
records, all correspondence, notices, citations and all other documents received
from, sent to or in the Company's possession in connection with any Authorities
(including foreign, federal, state, county or regional environmental protection,
air or water quality control, occupational health and safety, land use, planning
or zoning, and any alcohol, beverage or fire prevention Authorities), all plans,
maps and surveys of the Real Property, and all plans and designs of buildings,
structures, fixtures and equipment.
Reference Net Worth. $1,368,000.
Release. Any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment (including the abandonment or discarding of barrels, containers
and other receptacles containing any Hazardous Substance).
Retained Assets. The following assets of the Company:
(a) income tax assets;
(b) all Accounts Receivable owing to the Company set forth on
Schedule 3.2; and
(c) any benefit, right or claim relating to any Liability or
contract assumed by Seller pursuant to the Assumption Agreement.
Retained Liabilities. All Liabilities of the Company as of the
Closing (other than the Assumed Liabilities), including the following:
(a) any and all product liability claims arising before the
Closing based on defective products or parts which were designed, manufactured,
distributed, serviced or sold by the Company;
(b) any liability or obligation of the Company with respect to
any employee benefit or incentive plan, agreement or arrangements (other than
any such plan, agreement or arrangement adopted after the Closing), including
any pension, life insurance, profit sharing, bonus, incentive, deferred
compensation, stock purchase, stock option, group insurance, vacation
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pay, severance pay or retirement plan, agreement or post-retirement obligations
and all obligations of the Company that are to be assumed by Seller in
accordance with Sections 8.3 and 8.4;
(c) any liability of the Company for any federal, state, local
or foreign income, or other taxes relating to the Business for any periods
ending prior to or on the Closing Date, other than payroll, sales or similar
taxes, if any, included in the Final Net Worth Calculation;
(d) the fees, costs and expenses of any Person acting on
behalf of, or representing the Company or Seller as broker, finder, investment
banker, financial advisor, accountant, attorney or in any similar capacity;
(e) any debt, obligation or liability of the Company for money
borrowed or of the Company to Seller, its shareholders, officers, employees,
Affiliates or related parties;
(f) any liability or obligation for any federal, state, local
or other transfer, sales or use taxes applicable to, imposed upon or arising out
of the transfer to the Purchaser of the Shares, including any and all real
estate transfer taxes or documentary stamp taxes due on or on account of any
deemed transfer of the Real Property and any income taxes (including recapture
items) arising out of the transfer to the Purchaser of the Shares; and
(g) the Company's obligations under a Contract to the extent
arising from or otherwise attributable to a breach or default thereunder
occurring prior to the Closing.
Section 338(h)(10) Election. As defined in Section 8.6(a).
Seller Warranty Claim. As defined in Section 9.2(a).
Settlement Date. As defined in Section 2.2(c)(v).
Shares. As defined in the Recitals hereto.
Survey. A survey, certified by a registered land surveyor as
of the date hereof, of the Real Property prepared in accordance with 1997
ALTA/ACSM standards, certified to such parties as may be reasonably required by
Purchaser, and showing with respect to such real estate: (a) the legal
description; (b) all buildings, structures and improvements thereon and all
"setback" lines, restrictions of record and other restrictions that have been
established by an applicable zoning or building code or ordinance and all
easements or rights of way; (c) any encroachments upon such parcel or upon
adjoining parcels by buildings, structures, improvements or easements; and (d)
access to such parcel.
Taxes. As defined in Section 3.16(a).
Third-Party Notice. As defined in Section 9.3.
Title Company. A title insurance company reasonably acceptable
to Purchaser.
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Title Policy. An owner's title insurance policy on ALTA 1992
Owner's Form insuring the fee simple title of the Company in the Real Property
in an amount reasonably satisfactory to Purchaser, subject only to exceptions
which are reasonably satisfactory to Purchaser, and shall include extended
coverage, a non-imputation endorsement, an owner's comprehensive endorsement, a
doing business endorsement, a tie-in endorsement, a same as survey endorsement,
an access endorsement, a tax lot endorsement, a contiguity endorsement and such
other endorsements or coverages deemed necessary or advisable in the reasonable
judgment of Purchaser.
Section 1.3 Interpretation.
Unless otherwise expressly provided or unless the context requires
otherwise, (a) all references in this Agreement to Articles, Sections, Schedules
and Exhibits shall mean and refer to Articles, Sections, Schedules and Exhibits
of this Agreement; (b) all references to statutes and related regulations shall
include all amendments of the same and any successor or replacement statutes and
regulations; (c) words using the singular or plural number also shall include
the plural and singular number, respectively; (d) references to "hereof",
"herein", "hereby" and similar terms shall refer to this entire Agreement
(including the Schedules and Exhibits hereto); (e) references to any Person
shall be deemed to mean and include the successors and permitted assigns of such
Person (or, in the case of an Authority, Persons succeeding to the relevant
functions of such Person); (f) masculine gender shall also include the feminine
and neutral genders, and vice versa; and (g) the term "including" shall be
deemed to mean "including, without limitation."
Section 1.4 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 Preliminary
Closing 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.
ARTICLE II
SALE AND PURCHASE OF SHARES
Section 2.1 Sale and Purchase of Shares.
Subject to the terms and conditions hereof, and in reliance upon the
representations, warranties, covenants and agreements made herein by Seller and
Purchaser, Purchaser shall
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purchase and accept from Seller, and Seller shall sell, transfer, convey, assign
and deliver to Purchaser, on the Closing Date, the Shares. At the Closing,
Seller shall deliver to Purchaser the certificates evidencing the Shares owned
by Seller.
Section 2.2 Payment of the Purchase Price.
(a) The aggregate purchase price (the "Purchase Price") payable by
Purchaser to Seller in consideration for the Shares shall be Five Million Five
Hundred Thousand Dollars ($5,500,000), as adjusted, if at all, pursuant to
Section 2.2(c).
(b) On the Closing Date, subject to adjustment pursuant to Section
2.2(c)(i) below, Purchaser shall pay $5,500,000 by wire transfer in immediately
available federal funds to an account designated prior to the Closing Date by
Seller to Purchaser.
(c) (i) At least one (1) day prior to the Closing Date, Seller shall
prepare and deliver to Purchaser (A) an estimated pro forma unaudited balance
sheet of the Company as of the Closing Date (the "Preliminary Closing Balance
Sheet") and (B) a calculation of Net Worth determined from the Preliminary
Closing Balance Sheet (the "Preliminary Net Worth Calculation"). The Preliminary
Closing Balance Sheet and the Preliminary Net Worth Calculation shall be
prepared in a manner consistent with the application of the accounting
principles applied in the preparation of the Interim Balance Sheet. The amounts
to be paid by Purchaser to Seller pursuant to Section 2.2(b) shall be (I)
increased by the lesser of (1) the excess, if any, of the Preliminary Net Worth
Calculation over the Reference Net Worth, and (2) $100,000 or (II) decreased by
the lesser of (1) the excess, if any, of the Reference Net Worth over the
Preliminary Net Worth Calculation and (2) $100,000, as applicable.
(ii) Purchaser shall prepare and deliver to Seller within
thirty (30) business days after the Closing Date (A) an unaudited balance sheet
of the Company as of the Closing Date (the "Final Balance Sheet") and (B) a
calculation of Net Worth determined from the Final Balance Sheet (the "Final Net
Worth Calculation"). The Final Balance Sheet and the Final Net Worth Calculation
shall be prepared in a manner consistent with the application of the accounting
principles applied in the preparation of the Interim Balance Sheet.
(iii) Within fifteen (15) business days after the Final
Balance Sheet and the Final Net Worth Calculation are delivered to Seller
pursuant to Section 2.2(c)(ii), Seller shall deliver to Purchaser either (A) a
written acknowledgment accepting the Final Balance Sheet and the Final Net Worth
Calculation or (B) a written notice setting forth in reasonable detail any
proposed adjustments to the Final Balance Sheet or the Final Net Worth
Calculation (the "Adjustment Report"). If Seller fails to deliver such
acknowledgment or notice to Purchaser within such 15-day period, Seller shall be
deemed to have accepted and agreed to the Final Balance Sheet and the Final Net
Worth Calculation as delivered pursuant to Section 2.2(c)(ii).
(iv) In the event that Seller and Purchaser fail to agree on
any of Seller's proposed adjustments set forth in the Adjustment Report within
fifteen (15) business days after Purchaser receives the Adjustment Report,
Seller and Purchaser agree that a mutually acceptable accounting firm of
nationally recognized standing (the "Independent Auditors") shall, within the
15-day period immediately following such 15-day period, make the final
determination of the
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Final Net Worth Calculation in accordance with the terms of this Agreement.
Purchaser and Seller each shall provide the Independent Auditors with their
respective determinations of the Final Net Worth Calculation. The Independent
Auditors shall make an independent determination of the Final Net Worth
Calculation that shall be within the range proposed by Purchaser and Seller. The
decision of the Independent Auditors shall be final and binding on Seller and
Purchaser. The fees, costs and expenses of the Independent Auditors shall be
shared equally by Seller and Purchaser.
(v) The term "Final Balance Sheet" as that term has been
hereinbefore, and will be hereinafter, used shall mean the Final Balance Sheet
delivered pursuant to Section 2.2(c)(ii) as adjusted, if at all, pursuant to
Sections 2.2(c)(iii) and (iv). The date on which the Final Balance Sheet is
finally determined pursuant to this Section 2.2(c) shall hereinafter be referred
to as the "Settlement Date".
(vi) No later than ten (10) business days after the Settlement
Date, (A) Purchaser shall pay to Seller an amount equal to the excess, if any,
of the Final Net Worth Calculation over the Preliminary Net Worth Calculation or
(B) Seller shall pay to Purchaser an amount equal to the excess, if any, of the
Preliminary Net Worth Calculation over the Final Net Worth Calculation.
(vii) Any payment required pursuant to Section 2.2(c)(vi)
shall be by certified or cashier's check, or at the option of the recipient, by
the wire transfer of immediately available federal funds for credit to the
recipient at a bank account designated by such recipient in writing.
(viii) Notwithstanding anything herein to the contrary, in no
event will the Purchase Price be increased to be more than $5,600,000 or
decreased to be less than $5,400,000, pursuant to this Section 2.2(c).
(ix) Notwithstanding anything to the contrary in this Section
2.2(c), if the amount of "Deferred Xxxxxxxx" included in the Final Net Worth
Calculation exceeds the sum of (i) cash of the Company included in the Final
Balance Sheet, (ii) Accounts Receivable of the Company included in the Final
Balance Sheet, but only to the extent attributable to such "Deferred Xxxxxxxx",
(iii) the amount of Inventory of the Company included in the Final Balance
Sheet, but only to the extent attributable to such "Deferred Xxxxxxxx" and (iv)
$25,000, then Seller shall pay the amount of such excess to Purchaser in cash by
no later than ten (10) business days following the Settlement Date.
Notwithstanding Section 2.2(c)(i) or Section 2.2(c)(viii), the amount, if any,
owed to Purchaser from Seller pursuant to this Section 2.2(c)(ix) shall not be
included in the cap to the Purchase Price adjustment as set forth in this
Section 2.2.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into and perform its obligations
under this Agreement, and in consideration of the covenants of Purchaser
contained herein, Seller represents and warrants to Purchaser as follows:
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Section 3.1 Corporate Status; Authority of Seller; Enforceability.
(a) The Company is a corporation duly organized and validly existing
under the laws of the State of Wisconsin and is duly qualified and in good
standing in each other jurisdiction where the failure to so qualify would
reasonably be expected to have a Material Adverse Effect. The Company has the
corporate power and authority necessary to own, lease, operate or otherwise hold
its properties and assets and to carry on its business as presently conducted.
(b) Seller is a corporation duly organized and validly existing under
the laws of the State of Wisconsin. Seller has the corporate power and authority
to execute and deliver this Agreement and to perform its obligations hereunder.
Neither the execution or delivery of this Agreement by Seller nor the
performance by Seller of its obligations under this Agreement will conflict with
or result in a breach of any of the terms or provisions of, or constitute a
default under, any (i) material contract or agreement to which Seller is a party
or is bound, (ii) its articles of incorporation or by-laws or (iii) any
applicable Law or Order to which Seller is a party or by which Seller is bound.
This Agreement has been duly executed and delivered by Seller and is binding
upon, and enforceable against, Seller in accordance with its terms, subject to
bankruptcy, insolvency, reorganization and other laws affecting creditors'
rights generally and by general principles of equity (whether in a proceeding at
law or in equity). The execution and delivery by Seller of this Agreement, and
the performance by Seller of its obligations hereunder, have been duly and
validly authorized and approved by all necessary corporate action on the part of
Seller.
(c) Neither the execution or delivery of this Agreement by Seller nor
the performance by Seller of its obligations under this Agreement will (assuming
the receipt of all consents described in Schedule 3.20), conflict with or result
in a breach of any of the terms or provisions of, or constitute a default under,
any (i) Contract or Permit to which the Company is a party or is bound, (ii) the
articles of incorporation or by-laws of the Company or (iii) any applicable Law
or Order by which the Company is bound.
Section 3.2 Accounts Receivable.
Except as reserved against on the Interim Financial Statements, the
Accounts Receivable reflected on such balance sheet: (a) were acquired by the
Company in the Ordinary Course of Business; (b) are, to Seller's Knowledge, not
subject to any material claim, counterclaim, set-off or deduction; and (c) are
owned by the Company free and clear of all Liens against the Company (other than
Liens which will be released on or before the Closing Date). Schedule 3.2 sets
forth all Accounts Receivable due from any Affiliate of the Company.
Section 3.3 Inventories.
The Inventories included in the Final Balance Sheet consist of items of
a quality and quantity useable or saleable in the Ordinary Course of Business.
All items included in the Inventories included in the Final Balance Sheet are
the property of the Company; for each of these sales either the purchaser has
made full payment or the purchaser's liability to make payment is reflected in
the books of the Company. Except as disclosed on Schedule 3.17, no items
included in the Inventories have been pledged as collateral, or are held by the
Company on consignment from third parties. The Company's inventories shown on
the balance sheets
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included in the Financial Statements are based on quantities determined by
physical count or measurement, taken within the preceding twelve (12) months,
and are valued at the lower of cost (determined on a first-in, first-out basis)
or market value and on a basis consistent with prior years.
Section 3.4 Trade Names, Trademarks and Copyrights.
Schedule 1.2 under the heading "Intangibles", contains a true and
complete list of all trademark, service xxxx and copyright registrations and
applications and trade names owned by the Company, or in which the Company has
any rights or licenses, including all website locations and URL addresses on the
Internet. To Seller's Knowledge, there is no infringement or alleged
infringement by any Person of any such trademark, service xxxx, trade name or
copyright. To Seller's Knowledge, the Company has not, within the past five (5)
years, infringed, nor is now infringing on any trademark, service xxxx, trade
name or copyright belonging to any other Person. The Company is not a party to
any license, agreement or arrangement, whether as licensor, licensee,
franchisor, franchisee or otherwise, with respect to any trademarks, service
marks, trade names or any copyrights or any applications therefor other than
licenses of computer software. The Company owns or holds adequate licenses or
other rights to use all material trademarks, service marks, trade names and
copyrights used by it in the operation of the Business, including those listed
on Schedule 1.2 under the heading "Intangibles". The Company owns or holds
adequate licenses or other rights to use any and all software used or necessary
in the operation of the Business as currently conducted, free and clear of any
adverse claim of any employee of the Company, or to Seller's Knowledge, any
other Person.
Section 3.5 Patent Rights.
(a) Schedule 1.2 under the heading "Patents" sets forth a true and
complete list of all patents, and patent applications owned by the Company or to
which the Company has any rights or licenses or sublicenses. All patent
registrations listed in Schedule 1.2 under the heading "Patents" are in good
standing, subsisting and have not been adjudicated to be invalid or
unenforceable. Except as set forth in Schedule 1.2 under the heading "Patents",
no licenses, sublicenses, covenants or agreements have been granted or entered
into by or on behalf of the Company in respect of any such patents or any
applications therefor.
(b) To Seller's Knowledge, there is not now and has not been during the
past five (5) years any infringement, misuse or misappropriation by the Company
of any valid patent which relates to the Business and which is owned by any
third party. There is not now any existing or, to Seller's Knowledge, threatened
claim against the Company for infringement, misuse or misappropriation of any
such patent used in connection with the Business.
(c) There is no pending or threatened claim by or on behalf of the
Company against others for infringement, misuse or misappropriation of any
patent.
(d) The Company owns all right, title and interest in and to any and
all "Patents" listed in Schedule 1.2 under the heading "Patents", free and clear
of any adverse claim of any employee of the Company or, to Seller's Knowledge,
any other Person.
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Section 3.6 Contracts.
Schedule 1.2 under the heading "Contracts", contains a complete list of
all Contracts to which the Company is party or by which the Company is currently
bound (other than Contracts that (a) involve the payment by (or to) the Company
of less than $10,000 or (b) are terminable by the Company without penalty or
payment upon not more than thirty (30) days notice to the other party thereto)
and true and complete copies of such written Contracts have been provided to
Purchaser. The Company is not a party to any Contract not entered into in the
Ordinary Course of Business. To Seller's Knowledge, all Contracts are valid and
binding upon the parties thereto except as limited by bankruptcy and insolvency
laws and by other laws affecting the rights of creditors generally. To Seller's
Knowledge, there is no default or event that with notice or lapse of time, or
both, would constitute a default by any party to any of the Contracts. The
Company has not received notice that any party to any of the Contracts intends
to cancel or terminate any of such agreements or to exercise or not exercise any
options under any of such agreements.
Section 3.7 Compliance with Laws.
During the past five (5) years, the Company has complied with all, and
is not in violation of any, applicable Laws or Orders affecting its properties
or the Business.
Section 3.8 Litigation.
Schedule 3.8 sets forth a brief description of all suits, actions,
arbitrations, and legal, administrative and other proceedings and governmental
investigations pending or, to Seller's Knowledge, threatened against or
affecting the Company, the Business, the Real Property or any other material
assets of the Company. Except for the actions set forth on Schedule 3.8, the
Company is not presently engaged in any legal action to recover moneys due to it
or damages sustained by it. None of the matters set forth on Schedule 3.8, if
decided adversely to the Company, would reasonably be expected to have a
Material Adverse Effect.
Section 3.9 Personnel Identification and Compensation.
Schedule 3.9 contains a true and complete list of the names and titles
of all current officers, directors, employees, agents and representatives of the
Company. Seller has previously delivered to Purchaser a true and complete
schedule stating the rates of compensation payable (or paid, as the case may be)
to each such person.
Section 3.10 Existing Employment Contracts.
The Company has no employment contracts, collective bargaining
agreements or similar arrangements except those described on Schedule 3.10. All
such contracts and arrangements are in full force and effect, and neither the
Company, nor, to Seller's Knowledge, any other Person is in default under any
such contract or arrangement. There is no pending or, to Seller's Knowledge,
threatened labor dispute, strike or work stoppage affecting the Business.
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Section 3.11 Capitalization; Subsidiaries.
(a) The total number of shares of capital stock and the par value
thereof which the Company is authorized to issue and the number of such shares
which are issued and outstanding are as follows:
Issued and
Class Authorized Shares Outstanding Shares
----- ----------------- ------------------
Common Stock, $100 par value 1,000 100
(b) Except as described on Schedule 3.11(b), no shares of the Company's
capital stock are held as treasury stock.
(c) There are no outstanding rights, options, warrants, subscriptions,
calls, puts, convertible securities, phantom stock plans or other agreements of
any character or nature under which the Company is or may become obligated to
issue, redeem or repurchase any of its securities and there are no outstanding
preemptive rights, rights of first refusal or similar rights to subscribe for or
acquire any securities of the Company.
(d) The Shares have been duly and validly issued and are fully paid and
nonassessable and are not subject to any preemptive rights; and there are no
voting trust agreements or other contracts restricting voting or dividend rights
or transferability with respect to the outstanding shares of capital stock of
the Company.
(e) The Company has not violated any Law in connection with the offer
for sale or sale and issuance of its outstanding shares of capital stock or any
other securities.
(f) The Company does not own any securities or any other direct or
indirect interest in any other Person, other than as described on Schedule
3.11(f).
Section 3.12 Title to Purchased Shares.
Seller is the record and beneficial owner of all of the issued and
outstanding shares of capital stock of the Company free and clear of all Liens
(other than Permitted Liens of the type described in clause (a) of the
definition thereof). The Shares constitute all of the issued and outstanding
shares of capital stock of the Company.
Section 3.13 Environmental.
Except as disclosed in Schedule 3.13-A: (a) The Company has been, since
September 1, 1995, and is in compliance with all applicable Environmental Laws
and has not received written notice of any violation of or liability arising
under applicable Environmental Laws or of any administrative or judicial
proceeding pursuant to any Environmental Laws.
(b) Except as set forth in Schedule 3.13-A, there is no litigation
(including any civil or criminal judicial or administrative action or proceeding
brought by any Authority or private
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party) nor any demand, claim, hearing or notice of violation pending or, to the
Seller's Knowledge, threatened against the Company under any Environmental Laws.
(c) Except as set forth in Schedule 3.13-A, (i) there has been no
release, spill or discharge of a Hazardous Substance on, in, under or from the
Real Property in an amount or condition which requires investigative or remedial
action under Environmental Laws; and (ii) to the Seller's Knowledge, there has
been no release, spill or discharge anywhere of a Hazardous Substance generated
at the Real Property in an amount or condition which requires investigative or
remedial action under Environmental Laws.
(d) The Company has not received written notice from any Authority or
private party of any claim that it is or may be liable for the Release of a
Hazardous Substance.
(e) Except as set forth on Schedule 3.13-A, (i) there are no
aboveground or underground storage tanks currently or formerly located on the
Real Property and used or formerly used for the purpose of storing any Hazardous
Substance, (ii) since September 1, 1995 no asbestos abatement or remediation
work has been performed on the Real Property and (iii) to the Seller's
Knowledge, there is no PCB-containing equipment or PCB-containing material
located on the Real Property.
(f) The Real Property and, to Seller's Knowledge, any real property
formerly owned, operated, leased, or used by the Company or any real property to
which Hazardous Substances generated by or related to the Business or the
Company came to be located: (i) is not listed on or nominated for listing on the
National Priority List promulgated by the United States Environmental Protection
Agency pursuant to CERCLA or any analogous remedial priority list promulgated or
published pursuant to any comparable state law; and (ii) to Seller's Knowledge,
no such restrictions or Liens are imminent or pending.
(g) Schedule 3.13-B contains a correct and complete list of all Phase
I, Phase II, compliance audit, remedial investigation or cleanup reports or
similar reports prepared by or on behalf of Seller or in Seller's possession or
control relating to environmental matters of the Business or the Real Property.
Section 3.14 Certain Transactions.
Except as set forth on Schedule 3.14, neither any shareholder, officer,
director or employee of the Company, nor any Affiliate, spouse, child or other
relative of any of such Persons, owns, or has any interest, directly or
indirectly, in any of the real or personal property owned by or leased to the
Company.
Section 3.15 Employee Benefit Matters.
(a) Schedule 3.15 contains a true and complete list of each pension,
retirement, profit sharing, savings, stock option, restricted stock, severance,
termination, bonus, fringe benefit, insurance, supplemental benefit, medical,
education reimbursement or other employee benefit plan, program, agreement or
arrangement, including each "employee benefit plan" as defined in
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Section 3(3) of ERISA, sponsored or maintained by the Company, or with respect
to which the Company makes contributions (each a "Plan").
(b) The Company does not have any liability, contingent or otherwise,
with respect to a plan termination under Title IV of ERISA, a funding deficiency
under Section 412 of the Code or Section 302 of ERISA or a withdrawal from a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA.
Section 3.16 Tax Matters.
(a) The term "Taxes" means all net income, capital gains, gross income,
gross receipts, sales, use, transfer, ad valorem, franchise, profits, license,
capital, withholding, payroll, employment, excise, goods and services,
severance, stamp, occupation, premium, property, assessments or other
governmental charges of any kind whatsoever, together with any interest, fines
and any penalties, additions to tax or additional amounts incurred or accrued
under applicable federal, state, local or foreign tax law or assessed, charged
or imposed by any Authority, provided that any interest, penalties, additions to
tax or additional amounts that relate to Taxes for any taxable period (including
any portion of any taxable period ending on or before the Closing Date) shall be
deemed to be Taxes for such period, regardless of when such items are incurred,
accrued, assessed or charged. For the purposes of this Section 3.16 and Section
9.1, the Company shall be deemed to include any predecessor to the Company and
any subsidiary of the Company.
(b) The Company has duly and timely filed (and prior to the Closing
Date will duly and timely file) Tax returns, reports or estimates that are true,
correct and complete in all material respects, all prepared in accordance with
applicable Laws, for all years and periods (and portions thereof), for all
jurisdictions (whether federal, state, local or foreign) in which any such
returns, reports or estimates are required to be filed by any applicable Law on
or prior to the Closing Date. Except as set forth on Schedule 3.16, all Taxes
shown as due and payable on such returns, reports and estimates have been paid
(or will be paid prior to the Closing), and there is no current liability for
any Taxes due and payable in connection with any such returns. All taxes not yet
due and payable have been fully accrued on the books of the Company and adequate
reserves have been established therefor. There are no unpaid assessments for
additional taxes for any period and there is no basis therefor. Any charges,
accruals and reserves for Taxes provided for on the Financial Statements and the
Interim Financial Statements are adequate in accordance with past custom and
practice of the Company in filing its Tax returns. There are no existing liens
for Taxes upon any of the Company's assets other than Taxes not yet delinquent.
Seller has provided to Purchaser copies of all separate federal, state and
foreign tax returns filed by the Company for the past five (5) years.
(c) The Company has (i) withheld all required amounts from its
employees, agents, contractors and nonresidents and remitted such amounts to the
proper Authorities; (ii) paid all employer contributions and premiums; and (iii)
filed all federal, state, local and foreign returns and reports with respect to
employee income Tax withholding, and social security and unemployment Taxes and
premiums, all in compliance with the withholding provisions of the Code and
other applicable Laws.
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(d) None of the Company's assets is tax exempt use property under Code
Section 168(h). None of the Company's assets is property that the Company is
required to treat as being owned by any other Person pursuant to the safe harbor
lease provision of former Code Section 168(f)(8).
(e) No portion of the cost of any of the Company's assets was financed
directly or indirectly from the proceeds of any tax exempt state or local
government obligation described in Code Section 103(a).
(f) Except as disclosed in Schedule 3.16, the Company has no (and has
not previously had any) permanent establishment in any foreign country and the
Company does not engage (and has not previously engaged) in a trade or business
within the meaning of the Code relating to the creation of a permanent
establishment in any foreign country.
(g) Neither Seller nor the Company is a foreign person within the
meaning of Code Section 1445.
(h) Except for a group that includes Seller, the Company has not,
within twenty (20) years preceding the Closing, been a member of any
consolidated, combined or unitary group for federal, state, local or foreign Tax
purposes.
(i) Except as disclosed in Schedule 3.16, the Company is not a party to
any joint venture, partnership or other arrangement that could be treated as a
partnership for federal income Tax purposes.
(j) Except as set forth on Schedule 3.16, the federal income Tax
returns of the Company have been examined by the IRS through March 31, 1996, and
have otherwise been closed by the applicable statute of limitations, for all
periods through September 30, 1996; the state Tax returns of the Company have
been examined by the relevant agencies through March 31, 1995 and such returns
have otherwise been closed by the applicable statute of limitations for all
periods through September 30, 1996; and no deficiencies or reassessments for any
Taxes have been proposed, asserted or assessed against the Company by any
federal, state, local or foreign taxing authority.
(k) Except as set forth on Schedule 3.16, the Company has not executed
or filed with any taxing authority (whether federal, state, local or foreign)
any agreement or other document extending or have the effect of extending the
period for assessment, reassessment or collection of any Taxes, and no power of
attorney granted by the Company with respect to any Taxes that will survive the
Closing.
(l) Except as disclosed in Schedule 3.16, no federal, state, local or
foreign Tax audits or other administrative proceedings, discussions or court
proceedings are presently pending with regard to any Taxes or Tax returns of the
Company and no additional issues are being asserted against the Company in
connection with any existing audits of the Company.
(m) The Company has not entered into any agreement relating to Taxes
which affects any taxable year ending after the Closing Date.
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(n) The Company has not agreed to and it is not required to make any
adjustment by reason of a change in accounting methods that affects any taxable
year ending after the Closing Date. Neither the IRS nor any other agency has
proposed any such adjustment or change in accounting methods that affects any
taxable year ending after the Closing Date. The Company has no application
pending with any taxing authority requesting permission for any changes in
accounting methods that relate to its business or operations and that affects
any taxable year ending after the Closing Date.
(o) Except as disclosed in Schedule 3.16, the Company is not and never
has been a party to any Tax sharing agreement or similar arrangement for the
sharing of Tax liabilities or benefits.
(p) The Company has not consented to the application of Code Section
341(f).
(q) There is no Contract covering any employee or former employee of
the Company that, individually or collectively, could give rise to the payment
by the Company of any amount that would not be deductible by reason of Code
Section 280G.
(r) In the past five years, the Company has not been a party to a
transaction reported as a reorganization within the meaning of Code Section 368,
distributed a corporation in a transaction reported as qualifying under Code
Section 355 or been distributed in a transaction reported as qualifying under
Code Section 355.
Section 3.17 Title to Assets.
Except as otherwise disclosed on Schedule 3.17, the Company (i) has
good and marketable title to, all of its assets, free and clear of all Liens
other than Permitted Liens and (ii) owns or otherwise has an enforceable right
under a Contract to use all of the assets and rights used in or necessary to the
operation of the Business in the Ordinary Course of Business as of the date
hereof.
Section 3.18 Real Property.
(a) Other than its fee simple interest in the Real Property, the
Company has no title to or interest (including leasehold interest) in any real
property, including any easements in gross, usufructs, licenses or other real
property interests. No amounts due and payable with respect to the Real
Property, including real estate taxes and assessments, are delinquent and there
exists no lien for real estate taxes or assessments against the Real Property,
other than a lien for real estate taxes not yet due and payable.
(b) To Seller's Knowledge, the zoning of the parcel of Real Property
permits the presently existing improvements and the continuation of the business
presently being conducted on such parcel. There is no pending or, to Seller's
Knowledge, contemplated rezoning of any Real Property. To Seller's Knowledge,
all the Real Property is in compliance with applicable state law and local
subdivision ordinances, and no final subdivision or parcel map is required in
connection with the transfer of the Real Property to Purchaser.
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(c) There are no outstanding, defaulted or unsatisfied contracts
(including developer agreements) or understandings which have been made to, with
or for the benefit of any utility companies, school districts, water districts,
improvement districts or other Authorities which could reasonably be expected to
impose any obligation, liability or condition on the Company, to grant any
easements or to make any payments, contributions or dedications of money or land
or to construct, install or maintain or to contribute to the construction,
installation or maintenance of any improvements of a public or private nature,
whether on or off the Real Property.
(d) There are no presently pending or, to Seller's Knowledge,
threatened, proceedings to (i) condemn, take or demolish the Real Property or
any part thereof, (ii) declare the Real Property or any part of it a nuisance or
(iii) exercise the power of eminent domain or a similar power with respect to
all or any part of the Real Property.
Section 3.19 Intentionally Omitted.
Section 3.20 Consents.
Except as otherwise disclosed on Schedule 3.20, no consent, approval,
order or authorization of, or registration, declaration or filing with, any
Authority or any other Person is required to be obtained or made by Seller or
the Company in connection with the execution and delivery of this Agreement or
the performance by Seller of its obligations hereunder; provided, that Seller
makes no representation as to any requirement under federal or state antitrust
laws.
Section 3.21 Licenses and Permits.
Schedule 3.21 lists all material qualifications, registrations,
filings, privileges, franchises, immunities, licenses, permits, authorizations
and approvals of Authorities which are used or required in order for the Company
to own and operate the Business (collectively, "Permits"); and to Seller's
Knowledge, each such Permit is in good standing, valid and subsisting, and in
full force and effect in accordance with its terms.
Section 3.22 Occupational Safety and Health.
The Company has not received any notice, citation, claim, assessment or
proposed assessment as to or alleging any violation of any federal, state or
local occupational safety and health laws nor has the Company been subject to
any investigation by any federal, state or local occupational safety and health
agency within the three (3) years preceding the date hereof, and, to Seller's
Knowledge, no such violation exists. The Company is not a party to any pending
dispute with respect to compliance with any federal, state or local occupational
safety and health law.
Section 3.23 Insurance.
(a) Schedule 3.23 sets forth a list and brief description of all
insurance policies maintained by the Company, including workers' compensation,
unemployment, life, medical, liability and casualty insurance.
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(b) The Company is not in default in any material respect with respect
to any provision contained in any such insurance policy, nor has it failed to
give any notice or present any claim thereunder in a due and timely fashion.
Section 3.24 Financial Statements. The Financial Statements were
prepared from and based on the books and Records of the Company in accordance
with GAAP (except that the Interim Financial Statements do not include normal
year-end adjustments or footnote disclosure) and present fairly the financial
position and results of operations of the Company at the dates and for the
periods indicated therein.
Section 3.25 Intentionally Omitted.
Section 3.26 Conduct of Business Since Interim Balance Sheet Date.
Since the Interim Balance Sheet Date:
(a) the Business has been conducted only in the Ordinary Course of
Business;
(b) except (i) as described on Schedule 3.26, (ii) for equipment,
inventory and supplies purchased, sold or otherwise disposed of in the Ordinary
Course of the Business, or (iii) dividends or distributions to Seller of the
Retained Assets, the Company has not purchased, sold, leased, mortgaged, pledged
or otherwise acquired or disposed of any material properties or assets;
(c) the Company has not sustained or incurred any material loss or
damage with respect to the Business (whether or not insured against) on account
of fire, flood, accident or other calamity;
(d) the Company has not increased the rate of compensation of any
officer or other employee of the Business, except in the Ordinary Course of
Business in accordance with the Contracts;
(e) there has been no material adverse change in or with respect to the
financial condition, operations, business, rights, properties, assets or
liabilities of the Business or the Company's relations with Authorities or its
employees, creditors, suppliers, customers or others having business
relationships with the Company;
(f) the Company has not canceled any material debts or claims owed to
it and has paid and satisfied its accounts payable in the Ordinary Course of
Business;
(g) the Company has not changed any accounting methods or practices
(including any change in depreciation or amortization policies or rates); and
(h) the Company has not agreed to take any of the actions described in
paragraphs (b), (d), (f) or (g) above.
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Section 3.27 Brokers Fees.
Neither the Company nor Seller has dealt with any broker, finder or
consultant in connection with the transactions contemplated by this Agreement,
and no Person acting on behalf of or at the direction of the Company or Seller
is entitled to any commission or finder's fee in connection with the sale of the
Shares to Purchaser.
Section 3.28 Banking Arrangements.
Except as set forth in Schedule 3.28, the Company has no banking,
borrowing or depository relationship, or accounts or deposits of funds, and all
persons authorized as signatories on each such account are listed in Schedule
3.28.
Section 3.29 Powers of Attorney.
To the Seller's Knowledge, no Person holds any power of attorney from
the Company other than in the Ordinary Course of Business or those being
released in connection with the Closing or in favor of Seller or its Affiliates
which Seller hereby releases, other than with respect to pre-closing Taxes or
claims.
Section 3.30 NO ADDITIONAL REPRESENTATIONS. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN ARTICLE III OF THIS AGREEMENT, SELLER EXPRESSLY DISCLAIMS
ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR IMPLIED, AS
TO THE CONDITION, VALUE OR QUALITY OF THE SUBJECT ASSETS OR THE BUSINESS, AND
SELLER SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY,
USAGE, SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE
SUBJECT ASSETS, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE
ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into and perform its obligations
under this Agreement, and in consideration of the covenants of Seller contained
herein, Purchaser represents and warrants to Seller as follows:
Section 4.1 Corporate Status.
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
Section 4.2 Due Authorization.
The execution and delivery by Purchaser of this Agreement, and the
performance by Purchaser of its obligations hereunder, have been duly and
validly authorized and approved by all necessary corporate action on the part of
Purchaser.
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Section 4.3 Authority of Purchaser.
Purchaser has the corporate power and authority to execute and deliver
this Agreement and to perform its obligations hereunder. Neither the execution
or delivery of this Agreement by Purchaser nor the performance by Purchaser of
its obligations under this Agreement will conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under, any contract,
lease, indenture, mortgage, deed of trust, note agreement or other agreement or
instrument to which Purchaser is a party or is bound, its certificate of
incorporation, by-laws or any applicable Law or Order to which Purchaser is a
party or by which Purchaser is bound.
Section 4.4 Enforceability.
This Agreement has been duly executed and delivered by Purchaser and is
binding upon, and enforceable against, Purchaser in accordance with its terms,
subject to bankruptcy, insolvency, reorganization and other laws affecting
creditors' rights generally and by principles of equity (whether in a proceeding
at law or in equity).
Section 4.5 Consents.
Except as contemplated by this Agreement, no consent, approval, order
or authorization of, or registration, declaration or filing with, any Authority
or any other Person is required to be obtained or made by Purchaser in
connection with its execution and delivery of this Agreement or the performance
by it of its obligations hereunder.
Section 4.6 Broker's Fees.
Purchaser has not dealt with any broker, finder or consultant in
connection with any of the transactions contemplated by this Agreement, and no
Person acting on its behalf or at its direction is entitled to any commission or
finder's fee in connection with the sale of the Shares to Purchaser.
Section 4.7 Phase I Environmental Report.
Purchaser has received a Phase I environmental report for the Real
Property.
ARTICLE V
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
Section 5.1 Obligations to be Satisfied on or prior to Closing Date.
The obligation of Purchaser to purchase the Shares under this Agreement
is subject to the satisfaction (or waiver by Purchaser), on or prior to the
Closing Date, of the following conditions:
(a) Accuracy of Representations and Warranties. Except as otherwise
permitted by this Agreement, each of the representations and warranties made by
Seller in this Agreement shall be true and complete in all materials respects on
the Closing Date as though made on such date.
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(b) Compliance with Agreement. Seller shall have performed or complied
in all material respects with the covenants, agreements and obligations required
by this Agreement to be performed or complied with by Seller on or prior to the
Closing Date.
(c) Consents. All necessary authorizations, agreements and consents of
any Persons or Authorities to the consummation of the transactions contemplated
by this Agreement, or otherwise pertaining to the matters covered by it,
including all consents, approvals, orders, authorizations, registrations,
declarations and filings described on Schedule 3.20 shall have been obtained or
made by Seller and delivered to Purchaser and shall be in full force and effect
as of the Closing Date, and no such authorizations, agreements and consents
shall impose any burdensome or, in Purchaser's reasonable determination,
unsatisfactory conditions or requirements on Purchaser or the Company.
(d) No Adverse Proceedings. No investigation, action, suit or
proceeding shall have been threatened or instituted against Seller, the Company
or Purchaser, which, in any case, in the reasonable judgment of Purchaser,
challenges, or could reasonably be expected to result in a challenge to, the
consummation of the transactions contemplated hereby, or which claims, or could
reasonably be expected to give rise to a claim for, damages in a material amount
against Purchaser or the Company as a result of the consummation of such
transactions.
(e) No Material Adverse Change. There shall have occurred no material
adverse change in or with respect to the financial condition, business, rights,
properties, assets or supplier, customer or employee relationships of the
Business or the Company since April 30, 2000 and the Company's assets will be in
good working condition and repair, in all material respects, ordinary wear and
tear excepted.
(f) Closing Documents. Seller shall have delivered all reports,
agreements, certificates, instruments, opinions and other documents required to
be delivered by Seller on the Closing Date pursuant to Section 7.3, and the form
and substance of all such reports, agreements, certificates, instruments,
opinions and other documents shall be reasonably satisfactory to Purchaser.
(g) UCC, Tax Lien and Judgment Search Results. Purchaser shall have
received, at Seller's sole cost and expense, a report, in form and substance
reasonably satisfactory to Purchaser, as to the results of an examination of
financing statements filed under the Uniform Commercial Code, and tax lien and
judgment records, in each office in each such jurisdiction as Purchaser shall
reasonably request within two (2) days of the date hereof and such report shall
indicate no security interests, tax liens, judgments or other Liens not
previously disclosed in writing to Purchaser, except for such Liens to be
released in connection with the transactions contemplated herein and other
Permitted Liens.
(h) Regulatory Approvals. All approvals, permits or qualifications from
all appropriate Authorities required for the consummation of the transactions
contemplated hereby shall have been obtained.
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(i) Title Insurance; Survey. Purchaser shall have obtained a commitment
by a title insurance company to issue the Title Policy, dated the Closing Date,
and the Survey, each in form and substance reasonably satisfactory to Purchaser.
(j) Assumption of Retained Liabilities. Seller shall have executed and
delivered to Purchaser an assumption agreement, in form and substance reasonably
satisfactory to Purchaser (the "Assumption Agreement"), pursuant to which Seller
shall have assumed the Retained Liabilities.
Section 5.2 Procedure for Failure to Satisfy Conditions.
In the event that, in Purchaser's reasonable judgment, any of the
conditions precedent set forth in Section 5.1 have not been satisfied, Purchaser
shall notify Seller in writing indicating Purchaser's election to waive such
condition precedent.
ARTICLE VI
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
Section 6.1 Obligations to be Satisfied on or prior to Closing Date.
The obligation of Seller to sell the Shares under this Agreement is
subject to the satisfaction (or waiver by Seller), on or prior to the Closing
Date, of the following conditions:
(a) Accuracy of Representations and Warranties. Each of the
representations and warranties made by Purchaser in this Agreement shall be true
and complete in all material respects on the Closing Date as though made on such
date.
(b) Compliance with Agreement. Purchaser shall have performed or
complied in all material respects with the covenants, agreements and obligations
required by this Agreement to be performed or complied with by it on or prior to
the Closing Date.
(c) No Adverse Proceedings. No Law shall have been enacted or
promulgated, and no investigation, action, suit or proceeding shall have been
threatened or instituted against Seller, the Company or Purchaser, which, in any
case, in the reasonable judgment of Seller, challenges, or could reasonably be
expected to result in a challenge to, the consummation of the transactions
contemplated hereby, or which claims, or could reasonably be expected to give
rise to a claim for, damages in a material amount against Seller as a result of
the consummation of such transactions.
(d) Closing Documents. Purchaser shall have delivered all reports,
agreements, certificates, instruments, opinions and other documents required to
be delivered by it on the Closing Date pursuant to Section 7.4, and the form and
substance of all such certificates, instruments, opinions and other documents
shall be reasonably satisfactory to Seller.
(e) Regulatory Approvals. All approvals, permits or qualifications from
all appropriate Authorities required for the consummation of the transactions
contemplated hereby shall have been obtained.
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Section 6.2 Procedure for Failure to Satisfy Conditions.
In the event that, in Seller's reasonable judgment, any of the
conditions precedent set forth in Section 6.1 have not been satisfied, Seller
shall notify Purchaser in writing indicating Seller's election to waive such
conditions precedent.
ARTICLE VI
CLOSING
Section 7.1 Time and Place.
The Closing shall take place at 10:00 a.m. (local time) on the Closing
Date at the offices of Winston & Xxxxxx, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx, or at such other time and place as Seller and Purchaser may mutually
agree.
Section 7.2 Closing Transactions.
All documents and other instruments required to be delivered at the
Closing shall be regarded as having been delivered simultaneously, and no
document or other instrument shall be regarded as having been delivered until
all have been delivered.
Section 7.3 Deliveries by Seller to Purchaser.
At the Closing, Seller shall deliver or cause to be delivered to
Purchaser:
(a) certificates representing all of the Shares, which certificates
shall be either duly endorsed or accompanied by stock powers duly endorsed,
together with evidence satisfactory to Purchaser that any Lien on such Shares
has been released or terminated;
(b) (i) the articles of incorporation of the Company certified by the
Secretary of State of the State of Wisconsin as of a date not earlier than
fifteen (15) days prior to the Closing Date and (ii) the by-laws of the Company
and a list of all of the Company's officers and directors certified by the
Secretary or an Assistant Secretary of the Company as of the Closing Date;
(c) certificate of status for the Company from the State of Wisconsin
and a certificate of good standing from each state where the Company's failure
to be qualified to transact business as a foreign corporation would have a
material adverse effect on the Company or its business or financial condition;
(d) the legal opinion of Xxxxxxxx & Xxxxx, counsel for Seller and the
Company, in form and substance reasonably satisfactory to Purchaser;
(e) a certificate executed by Seller, dated as of the Closing Date,
certifying that all representations and warranties of Seller herein contained
are true and complete in all material respects as of the Closing Date as if made
thereon and that Seller has performed or complied in all material respects with
all of the covenants, agreements and obligations required by this Agreement to
be performed or complied with by Seller on or prior to the Closing Date;
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(f) an executed original of each consent required to be obtained
pursuant to Section 5.1(d);
(g) all releases necessary to terminate and discharge any and all Liens
on the Shares and the Company's assets (other than Permitted Liens);
(h) withholding certificates, in the form of Exhibit 7.3(h), duly
executed by Seller and the Company;
(i) evidence of the resignations of all directors and officers of the
Company;
(j) evidence of the repayment in full or release of the aggregate
amount of all loans due and owing between the Company and Seller or any of the
Company's Affiliates, employees, officers or directors;
(k) a GAP undertaking, ALTA statement and all other documents deemed
reasonably necessary by the Title Company for purposes of delivering the Title
Policy;
(l) evidence satisfactory to Purchaser that all guarantees,
indemnifications, contributions, tax sharing agreements, liens or similar
obligations entered into by the Company for any obligation of Seller or any of
its Affiliates (including with respect to any equity or debt financing of Seller
or its Affiliates) have been cancelled or terminated; and
(m) such other instruments and documents as are: (i) required by any
other provisions of this Agreement to be delivered on the Closing Date by Seller
to Purchaser; or (ii) reasonably necessary, in the opinion of Purchaser, to
evidence the performance by Seller of its obligations under this Agreement.
Section 7.4 Deliveries by Purchaser to Seller.
At the Closing, Purchaser shall deliver or cause to be delivered to
Seller:
(a) the Purchase Price in accordance with Section 2.2(b);
(b) a certificate of the Secretary or an Assistant Secretary of
Purchaser, dated as of the Closing Date, certifying to (i) the certificate of
incorporation and by-laws of Purchaser; (ii) resolutions of the Board of
Directors of Purchaser approving the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby; and
(iii) incumbency and signatures of the officers of Purchaser executing this
Agreement and any other certificate or document delivered by Purchaser in
connection herewith;
(c) a certificate executed by the President or any Vice President of
Purchaser, dated as of the Closing Date, certifying that all representations and
warranties of Purchaser herein contained are true and complete in all material
respects as of the Closing Date as if made thereon and that Purchaser has
performed or complied in all material respects with all of the covenants,
agreements and obligations required by this Agreement to be performed or
complied with by Purchaser on or prior to the Closing Date;
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(d) the certificate of incorporation of Purchaser certified by the
Secretary of State of the state of its incorporation as of a date not earlier
than five (5) days prior to the Closing Date;
(e) such other instruments and documents as are: (i) required by any
other provisions of this Agreement to be delivered on the Closing Date by
Purchaser to Seller; or (ii) reasonably necessary, in the opinion of Seller, to
evidence the performance by Purchaser of its obligations under this Agreement;
and
(f) the legal opinion of Winston & Xxxxxx, counsel to Purchaser, in
form and substance reasonably satisfactory to Seller.
ARTICLE VIII
OTHER AGREEMENTS
Section 8.1 Further Assurance.
At any time and from time to time from and after the Closing, Seller
and Purchaser will, at the request and expense of the other party hereto,
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such instruments and other documents and perform or cause to be
performed such acts and provide such information, as may reasonably be required
to evidence or effectuate the sale, conveyance, transfer, assignment and
delivery to Purchaser of the Shares or for the performance by Seller or
Purchaser of any of their other respective obligations under this Agreement.
Section 8.2 Confidentiality.
(a) The parties hereto agree with respect to the terms and conditions
of this Agreement, including the Purchase Price, and all information that is
furnished or disclosed to it by the other party (collectively, "Confidential
Information"), that (i) such Confidential Information is confidential and/or
proprietary to the furnishing/disclosing party and entitled to and shall receive
treatment as such by the receiving party; (ii) the receiving party will hold in
confidence and not disclose nor use (except in respect of the transactions
contemplated by this Agreement) any such Confidential Information, treating such
Confidential Information with the same degree of care and confidentiality as it
accords its own confidential and proprietary information; provided, however,
that the receiving party shall not have any restrictive obligation with respect
to any Confidential Information which (A) is contained in a printed publication
available to the general public, (B) is or becomes publicly known through no
wrongful act or omission of the receiving party, (C) is known by the receiving
party without any proprietary restrictions by the furnishing/disclosing party at
the time of receipt of such Confidential Information, (D) is subject to
disclosure pursuant to any Order or regulation of any Authority or (E) is
required to be disclosed to financing sources of either Purchaser or Seller; and
(iii) all such Confidential Information furnished to either party by the other,
unless otherwise specified in writing, shall remain the property of the
furnishing/disclosing party, and in the event this Agreement is terminated,
shall be returned to it, together with any and all copies made thereof, upon
request for such return by it (except for documents submitted to an Authority
with the consent of the furnishing/disclosing party or upon subpoena and which
cannot be retrieved with reasonable effort).
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(b) Each party hereto acknowledges that the remedy at law for any
breach by either party of its obligations under Section 8.2(a) is inadequate and
that the other party shall be entitled to equitable remedies, including an
injunction, in the event of breach by any other party.
Section 8.3 Employment Matters.
(a) Upon the Closing, Purchaser intends to cause the Company to retain
all of the Company's full-time active employees, other than Xxxxxxx X. Xxxxxx.
Except to the extent reflected in the Interim Balance Sheet, incurred in the
Ordinary Course of Business after the Interim Balance Sheet Date or disclosed on
Schedule 8.3(a), Seller shall assume the payment of all compensation and other
benefits payable to, or accrued in respect of, all such employees for all times
prior to the Closing Date. Seller shall assume all Liabilities with respect to
all of the Company's employees and former employees (including any and all
beneficiaries thereof), if any, who are not retained as employees of the Company
at the Closing.
(b) Seller shall assume any and all severance claims or any other
claims or causes of action to the extent relating to or arising out of
employment with the Company prior to the Closing or that are asserted by any
employee or former employee of the Company who is not retained by the Company at
the Closing, if any.
Section 8.4 Employee Benefits.
(a) Except to the extent reflected in the Interim Balance Sheet,
incurred in the Ordinary Course of Business after the Interim Balance Sheet Date
or covered by the Company's insurance policies:
(i) Seller shall assume all Liabilities arising from workers'
compensation claims, both medical and disability, or other
government-mandated programs which are based on injuries occurring
prior to the Closing Date regardless of when such claims are filed. The
Company shall be solely responsible for such claims based on injuries
occurring after Closing.
(ii) Seller shall assume all claims for medical, dental, life
insurance, health, accident, disability or other benefits brought by or
in respect of employees under any of the Company's welfare benefit
plans where the claims were incurred prior to the Closing regardless of
when such claims are filed.
(iii) Seller shall assume all Liabilities in connection with
claims for benefits brought by or in respect of all employees and
former employees of the Company not retained by the Company under any
of the Company's welfare benefit plans with respect to medical, dental,
life insurance, health, accident or disability or other benefits,
including continuation coverage pursuant to Section 4980B of the Code
and Part 6 of Subpart B of Title I of ERISA.
(b) Effective as of the Closing Date, Seller shall take any actions as
may be necessary to cause employees of the Company to become fully vested in
their account balances determined as of the Closing Date under any qualified
defined contribution plan maintained by Seller. From
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and after the Closing Date, Purchaser shall take any and all actions as may be
necessary to permit and cause employees of the Company to participate in any
employee benefit plans, programs, policies or arrangements maintained by
Purchaser for similarly situated employees of Purchaser (the "Purchaser Employee
Benefit Plans"). Purchaser shall cause each Purchaser Employee Benefit Plan
which is an "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) to credit the service of employees of the Company earned with the Company
prior to the Closing Date as employment with Purchaser for purposes of
eligibility and vesting, and Purchaser shall cause each Purchaser Employee
Benefit Plan which is an "employee welfare benefit plan" (as defined in Section
3(1) of ERISA) to waive all limitations as to preexisting conditions and all
waiting or elimination periods and service requirements otherwise applicable to
employees of the Company, except to the extent preexisting conditions,
limitations, waiting or elimination periods or service requirements were in
effect immediately prior to the Closing Date with respect to such employees
under any Plan. Any Purchaser Employee Benefit Plan which provides for vacation,
sick leave or severance benefits and any seniority policies applied to employees
of the Company shall recognize the service of employees of the Company earned
with the Company prior to the Closing Date as employment with Purchaser for
purposes of determining eligibility for and entitlement to benefits or seniority
privileges, and Purchaser shall assume Seller's liabilities for accrued vacation
or holiday benefits relating to the employees of the Company determined as of
the Closing Date.
Section 8.5 Indemnification for Employment Matters.
Seller and Purchaser each agree to indemnify, defend and hold the other
harmless from and against any and all Adverse Consequences for which it is
responsible under Sections 8.3 and 8.4, without regard to the limitations set
forth in Section 9.4.
Section 8.6 Section 338 Elections.
(a) Purchaser and Seller agree to join, in an appropriate and timely
manner, in making an election under Section 338(h)(10) of the Code (and, to the
extent necessary to allow for an election under Section 338(h)(10) of the Code
and, only if such an election is made, an election under Section 338(g) of the
Code) and any corresponding election permitted under any local, state or foreign
jurisdiction (collectively, the "Section 338(h)(10) Election") with respect to
Purchaser's acquisition of the Shares. Purchaser and Seller agree that no other
election under Section 338 with respect to the acquisition of the Shares shall
be made.
(b) Seller agrees to cooperate with Purchaser to take all actions
necessary and appropriate to effect and preserve a timely Section 338(h)(10)
Election with respect to Purchaser's acquisition of the Shares, including, but
not limited to, participating in the timely filing of IRS Form 8023 and any
related or comparable forms for state, local, or foreign law purposes. Purchaser
shall prepare, at its expense, all necessary forms to make a Section 338(h)(10)
Election and for preparing a schedule allocating the Aggregate Deemed Sales
Price (as defined in Temporary Treasury Regulation Section 1.338-4) and the
Adjusted Grossed-Up Basis (as defined in Temporary Treasury Regulation Section
1.338-5) among the assets of the Company in accordance with the provisions of
Temporary Treasury Regulation Section 1.338-6. If any increase or decrease in
the Modified Aggregate Deemed Sales Price or the Adjusted
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Grossed-Up Basis occurs as a result in an adjustment to the Purchase Price,
Purchaser shall be responsible for recomputing the Aggregate Deemed Sales Price
and the Adjusted Grossed-Up Basis and preparing a revised schedule allocating
such revised amounts among the assets of the Company in accordance with the
provisions of Temporary Treasury Regulation Section 1.338-7.
(c) Purchaser, Seller and the Company shall prepare all tax returns
consistent with, and take no position that is inconsistent with, such election
and the allocation of the Aggregate Deemed Sales Price and the Adjusted
Grossed-Up Basis among the assets of the Company as set forth in the schedules
prepared by Purchaser and approved by Seller (such approval not to be
unreasonably withheld).
Section 8.7 Tax Matters.
(a) Seller shall be liable and indemnify Purchaser and the Company for
all Taxes (including Taxes that are due as a result of transferee liability,
contract, or joint and several liability) imposed on or incurred by the Company,
including any Taxes that result from a Section 338(h)(10) Election (except to
the extent such Taxes are adequately provided for as current payroll, sales or
similar Taxes on the Final Balance Sheet) (i) for any taxable period ending on
or before the Closing Date and (ii) with respect to any taxable period not
ending on or before the Closing Date, for the portion of any Taxes attributable
to the period ending on the Closing Date.
(b) For purposes of applying Section 8.7(a) to any period that includes
but does not end on the Closing Date, (i) liability for any Taxes determined by
reference to income, capital gains, gross income, gross receipts, sales, net
profits, windfall profits or similar items or resulting from a transfer of
assets shall be allocated between Seller and the Company based on the date on
which such items accrued; and (ii) liability for all other Taxes shall be
allocated between Seller and the Company, pro rata based on the number of days
in the taxable period for which each party is liable for Taxes hereunder.
(c) Seller and Purchaser shall provide each other with such assistance
as may reasonably be requested by the other in connection with the preparation
of any return or report of Taxes, any audit or other examination by any taxing
authority, or any judicial or administrative proceedings relating to liabilities
for Taxes. Such assistance shall include making employees available on a
mutually convenient basis to provide additional information or explanation of
material provided hereunder and shall include providing copies of relevant Tax
returns and supporting material. The party requesting assistance hereunder shall
reimburse the assisting party for reasonable out-of-pocket expenses incurred in
providing assistance. Seller and Purchaser shall retain for the full period of
any statute of limitations and provide the other with any records or information
which may be relevant to such preparation, audit, examination, proceeding or
determination.
(d) Seller shall be responsible for filing or causing the Company to
file all Tax returns and reports of the Company due on or prior to the Closing
Date, which such returns and reports shall be prepared and filed timely and on a
basis consistent with existing procedures for preparing such returns or reports
and consistent with prior practice with respect to the treatment of specific
items on the returns or reports and for all Tax returns or reports of any
consolidated,
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combined or unitary group that includes Seller and the Company whether due prior
to, on, or after the Closing Date. Purchaser shall cause the Company to prepare
and file all other Tax returns and reports of the Company due after the Closing
Date, which returns and reports, to the extent they relate to taxable periods
beginning prior to, but including the Closing Date, and for the purpose of
determining Seller's liability for Taxes, shall be prepared and filed timely and
on a basis consistent with existing procedures for preparing such returns and in
a manner consistent with prior practice with respect to the treatment of
specific items on the returns and reports, unless such treatment does not have
sufficient legal support to avoid the imposition of penalties. In the event
Seller is liable under Section 8.7(a) for Taxes due in connection with any
returns filed pursuant to this Section, Seller shall pay the amount of such
liability to the Company immediately upon request or at least three (3) business
days prior to the filing of such returns, whichever is later.
(e) If in connection with any examination, investigation, audit or
other proceeding in respect of any Tax return covering the operations of the
Company on or before the Closing Date, any Authority issues to the Company a
written notice of deficiency, a notice of reassessment, a proposed adjustment,
an assertion of claim or demand concerning the taxable period covered by such
return, Purchaser or the Company shall notify Seller of its receipt of such
communication from the Authority within thirty (30) calendar days after
receiving such notice of deficiency, reassessment, adjustment or assertion of
claim or demand. No failure or delay of Purchaser or the Company in the
performance of the foregoing shall reduce or otherwise affect the obligations or
liabilities of Seller pursuant to this Agreement, except to the extent that such
failure or delay shall have adversely affected Seller ability to defend against
any liability or claim for Taxes that Seller is obligated to pay hereunder.
Except as provided below, Seller shall, at its expense, have the sole right to
control the contest of any such assessment, proposal, claim, reassessment,
demand or other proceedings in connection with any Tax return covering taxable
periods of the Company ending on or before the Closing Date, provided that
Seller shall consult with Purchaser regarding the status of such examination,
investigation, audit or other proceeding. Purchaser and the Company will not be
obligated to settle or resolve any issue related to Taxes for such a period,
which, if so settled or resolved, could have an effect on the Company or
Purchaser for periods after the Closing Date, unless Seller agrees in writing
with Purchaser and the Company, in terms reasonably satisfactory to Purchaser
and the Company, to indemnify Purchaser, any affiliate of the Purchaser, and the
Company from any cost, damage, loss or expense relating to such settlement or
resolution, as if such settlement or resolution had been a judicial resolution
of such controversy. Notwithstanding anything in this Agreement to the contrary,
if any examination, investigation, audit or other proceeding relates (i) to a
Tax return for a period that begins before and ends after the Closing Date,
Purchaser and the Company shall have the sole right to control and resolve such
examination, investigation, audit or other proceeding, provided that Purchaser
shall consult with Seller regarding the status of such examination,
investigation, audit or proceeding; and (ii) to a Tax return or report for a
consolidated, unitary, or combined group that includes Seller, Seller shall,
subject to the preceding sentence, solely participate in, control, and resolve
such examination, investigation, audit, or proceeding.
(f) If there is an adjustment to any return or report of Taxes for the
Company which creates a deficiency in any Taxes for which Seller is liable under
the provisions of Section 8.7(a), Seller shall pay to Purchaser the amount of
such deficiency in Taxes. No liability of Seller under
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this Section 8.7(f) shall be payable until the occurrence of any action by any
Tax Authority that is final or, if not final, is acquiesced in by Seller during
the course of any audit or any proceeding relating to Taxes. All payments
required to be made by Seller pursuant to this Section 8.7(f) shall be made
within 20 days of this occurrence of the event described in the immediately
preceding sentence.
(g) Seller shall pay the cost of any transfer, stamp, sales, purchase,
use, value added, excise or similar tax and recording and filing fees imposed
under the laws of the United States, or any state or political subdivision
thereof, which arises out of the closing of the transactions contemplated
hereby. If the Company is required to carryback a deduction, loss, credit, or
similar item to a taxable year or period that ends on or prior to the Closing
Date, Seller shall pay Purchaser the amount of Tax benefit Seller or any
affiliate realizes as a result of such item.
(h) The provisions of this Section 8.7 shall not be governed by the
limitations contained in Article IX and to the extent of any inconsistency
between this Section 8.7 and Article IX, the provisions of this Section 8.7
shall control.
Section 8.8 Non-Compete. (a) Seller hereby covenants and agrees that
for a period of two (2) years from and after the Closing Date (the "Non-Compete
Period"), it will not, directly or indirectly: (i) own any interest in any
Person which, in competition with the Company and its post-Closing Affiliates
(the "Affiliated Companies"), sells, markets, distributes or deals in the
Business during the Non-Compete Period (all such Persons being referred to
herein as "Competitors"), anywhere in the Geographic Areas (as defined herein)
in which the Affiliated Companies are engaged in the Business at any time during
the Non-Compete Period; (ii) operate, join, control or otherwise participate in
any Competitor; (iii) lend credit or money for the purpose of assisting another
to establish or operate any Competitor; (iv) request or advise any "prospective
customer" or any customer, supplier or vendor of the Affiliated Companies to
withdraw, curtail or cancel its business with the Affiliated Companies; (v)
induce (or attempt to induce) any Person known by Seller to be engaged (as an
employee, agent, independent contractor or otherwise) by the Affiliated
Companies to terminate his, her or its employment or engagement for the purpose
of obtaining employment with a Competitor or Seller; provided, however, the
placing of an advertisement of a position of employment by Seller to members of
the public generally and the recruitment of a person through an employment
agency shall not constitute a breach of this Section 8.8, provided that Seller
does not, nor does any of its employees, officers, directors or representatives,
encourage or advise such agency to approach any employee of the Affiliated
Companies. Notwithstanding the foregoing, Seller may own and hold as an
investment up to five percent (5%) of any corporation that is listed on a
national stock exchange and that is engaged in a business that is competitive
with the Company, but Seller may not otherwise participate in (whether in
management or otherwise) such corporation. A "prospective customer" shall mean a
Person with which Seller knows, or reasonably should know, that any of the
Affiliated Companies has had actual contact or has begun formulating a target
strategy for contact at any time during such Non-Compete Period. "Geographic
Area" shall mean the United States of America and India.
(b) Seller acknowledges and agrees that the restrictions set forth in
this Section 8.8 are reasonable in geographic and temporal scope and essential
to the preservation of the
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Company's business and proprietary properties and that enforcement of these
restrictions will not cause Seller any hardship.
(c) If, at the time of enforcement of this Section 8.8, a court shall
hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law, but in any event not greater than the stated
period, scope or area.
(d) In the event of the breach or a threatened breach by Seller of any
of the provisions of this Section 8.8, the Company, in addition and
supplementary to other rights and remedies existing in its favor, shall be
entitled to seek specific performance and/or injunctive or other equitable
relief from a court of competent jurisdiction in order to enforce or prevent any
violations of the provisions hereof (without posting a bond or other security).
In addition, in the event of a breach or violation by Seller of this Section
8.8, the Non-Compete Period shall be tolled until such breach or violation has
been duly cured.
ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnification by Seller.
Subject to the limitations set forth in Section 9.4, Seller agrees to
indemnify, defend and hold harmless Purchaser, the Company and all of their
respective officers, directors, shareholders, Affiliates, employees and agents
(the "Purchaser Indemnified Persons") after the Closing from and against any
Adverse Consequence arising out of or resulting from:
(a) any facts or circumstances which constitute a misrepresentation or
breach by the Company of any representation or warranty of Seller contained in
this Agreement (provided that the relevant Purchaser Indemnified Person has
given Seller notice of the amount of such Adverse Consequences claimed hereunder
prior to expiration of the applicable survival period specified in Section 9.4)
(each a "Purchaser Warranty Claim") or the failure by Seller to perform any of
its covenants or obligations hereunder;
(b) any brokers' commissions, finders' fees or other like payments
incurred or alleged to have been incurred by Seller or the Company in connection
with the sale of the Shares or the consummation of the transactions contemplated
by this Agreement;
(c) any litigation, proceeding or action to which the Company is a
party to the extent attributable to events or circumstances occurring or
existing prior to the Closing (including all litigation, proceedings and actions
referenced in the Schedules);
(d) any matter disclosed in Schedule 3.13-A;
(e) any Plan; and
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(f) any Retained Liabilities.
Section 9.2 Indemnification by Purchaser.
Subject to the limitations set forth in Section 9.4, Purchaser agrees
to indemnify, defend and hold harmless Seller after the Closing from and against
any Adverse Consequences arising out of or resulting from:
(a) any facts or circumstances which constitute a misrepresentation or
breach by the Company of any representation or warranty of Purchaser contained
in this Agreement (provided that Seller has given Purchaser notice of the amount
of such Adverse Consequences claimed prior to expiration of the applicable
survival period specified in Section 9.4) (each a "Seller Warranty Claim") or
the failure by Purchaser to perform any of its covenants or obligations
hereunder; or
(b) any brokers' commissions, finders' fees or other like payments
incurred or alleged to have been incurred by Purchaser in connection with its
purchase of the Shares or the consummation of the transactions contemplated by
this Agreement;
Section 9.3 Procedure for Indemnification.
(a) If any Person shall claim indemnification (the "Indemnified Party")
hereunder for any claim other than a third party claim, the Indemnified Party
shall promptly give written notice to the other party from whom indemnification
is sought (the "Indemnifying Party") of the basis for such claim or demand and
setting forth the nature and amount of the claim in detail. If an Indemnified
Party shall claim indemnification hereunder arising from any claim or demand of
a third party, the Indemnified Party shall promptly give written notice (a
"Third-Party Notice") to the Indemnifying Party of the basis for such claim or
demand, setting forth the nature of the claim or demand in detail. In any case,
the failure to notify or delay in notifying an Indemnifying Party will not
relieve the Indemnifying Party of its obligations pursuant to Section 9.1 or
9.2, as applicable, except to the extent that such failure actually xxxxx the
Indemnifying Party. The Indemnifying Party shall defend and, if appropriate,
settle at its own cost and through counsel of the Indemnifying Party's choosing,
any claim or demand set forth in a Third-Party Notice giving rise to such claim
for indemnification for which the Indemnifying Party is obligated to indemnify
pursuant to this Article IX. In the event the Indemnifying Party undertakes to
compromise or defend any such claim or demand, it shall promptly (and in any
event, no later than fifteen (15) days after receipt of the Third-Party Notice)
notify the Indemnified Party in writing of its intention to do so and shall give
the Indemnified Party such security in that regard as the Indemnified Party
reasonably may request. The Indemnified Party shall fully cooperate with the
Indemnifying Party and its counsel in the defense or compromise of such claim or
demand. After the assumption of the defense by the Indemnifying Party, the
Indemnified Party shall not be liable for any legal or other expenses
subsequently incurred by the Indemnifying Party in connection with such defense,
but the Indemnified Party may participate in such defense at its own expense. No
settlement of a third party claim or demand defended by the Indemnifying Party
shall be made without the written consent of the Indemnified Party, such consent
not to be unreasonably withheld. The Indemnifying Party shall not, except with
written consent of the Indemnified Party, consent to the entry of a judgment or
settlement which does
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not include as an unconditional term thereof, the giving by the claimant or
plaintiff to the Indemnified Party of an unconditional release from all
liability in respect of such third party claim or demand.
(b) Special Procedures for Indemnification Matters Arising Under
Environmental Laws. In addition to the indemnification procedures set forth
above, any claim for indemnification under Section 9.1 with respect to a breach
of the representation and warranty set forth in Section 3.13 or for
indemnification under Section 9.1 with respect to Retained Liabilities arising
under Environmental Laws shall also be governed by the procedures set forth in
this Section 9.3(b).
Upon receipt of any such claim, Seller shall have the right, at its
option, to undertake control over such matter (including retention of
consultants, selection of remedial measures and negotiations and agreements with
interested government agencies and third parties). However, any such retention,
selection, negotiations, agreements or other major decisions related to such
matter shall be subject to reasonable review and approval by Purchaser. In
connection therewith, Purchaser agrees to provide Seller and its agents with
reasonable access to the subject facility (and to relevant documents and
personnel) for purposes of conducting any investigatory or remedial action
required hereunder. The parties shall keep one another apprised of major
developments relating to such matter and shall, subject to applicable legal
privileges, make all final reports, filings, and other documents relating to
such matter available for inspection by one another upon request. Any costs
incurred by Purchaser relating to oversight of activities undertaken hereunder
by Seller shall not be subject to indemnification hereunder. Seller shall have
no obligation to undertake any environmental investigation or cleanup, or
provide indemnification with respect to any matter governed hereunder to the
extent that such investigation or cleanup is not required by Closing Date
Environmental Standards and is required solely by virtue of Environmental Laws
which are more stringent than the Closing Date Environmental Standards. For the
purpose of this provision, the term "Closing Date Environmental Standards" shall
mean those Environmental Laws in effect as of the Closing Date. Additionally,
Seller shall have no obligation to undertake any environmental investigation or
cleanup, or provide indemnification with respect to any matter governed
hereunder, in respect of any matter that is identified through environmental
sampling and analysis conducted, or reports to governmental authorities
occurring, after the Closing Date, unless such sampling and analysis, or such
reporting, is required by Closing Date Environmental Standards or related to the
prudent management of the subject facility. Purchaser agrees, upon request by
Seller, in connection with any investigation or remediation conducted hereunder,
to accept imposition of a deed restriction on the subject facility, provided
that such deed restriction is reasonable in scope and nature and does not
materially impair the activities conducted (or planned to be conducted) by
Purchaser (or any of its agents, assigns or transferees) at the subject
facility, provided that any such activities conducted or planned to be conducted
at the subject facility are of a type generally consistent with industrial use
of the subject facility. Any obligation of Seller to conduct any investigation
or cleanup, or provide indemnification with respect to any matters governed
hereunder, shall not be deemed satisfied unless and until all matters subject to
indemnification have been brought into full compliance with all applicable
Closing Date Environmental Standards or is otherwise acceptable to applicable
Authorities. The parties agree to reasonably
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cooperate with one another in connection with any matter governed hereunder and
to generally conduct themselves in a cost effective manner with respect thereto.
Notwithstanding anything in this Section 9.3(b) to the contrary,
Purchaser may take such action as is reasonably necessary under the
circumstances to respond to an actual or threatened emergency arising from a
matter that is the subject, or is reasonably anticipated to be the subject, of
an indemnification claim arising under Environmental Laws, and such action shall
continue to be subject to indemnification by Seller.
Section 9.4 Limitations on Indemnity.
(a) The indemnities contained in this Article IX with respect to
Purchaser Warranty Claims and Seller Warranty Claims shall expire eighteen (18)
months following the Closing Date, except with respect to claims (i) under
Section 3.16 as to which the indemnification obligation shall survive until
thirty (30) days after the expiration of any applicable statute of limitations;
(ii) under Section 3.13 as to which the indemnification obligation shall survive
until the fourth anniversary of the Closing Date; and (iii) under Sections 3.1,
3.11, 3.12, 4.1, 4.2, 4.3, and 4.4 as to which there shall be no expiration
date; provided, that if at the stated expiration of any indemnification
obligation there shall then be pending any indemnification claim by a Person,
such Person shall continue to have the right to such indemnification with
respect to such claim notwithstanding such expiration.
(b) Seller's maximum aggregate liability to the Purchaser Indemnified
Persons for indemnification of Purchaser Warranty Claims pursuant to Section
9.1(a), determined without regard to any indemnity obligation arising under
Section 3.16, shall not exceed the Purchase Price.
(c) Except with respect to indemnification claims arising out of a
breach of representation, warranty, covenant or obligation contained in Section
3.16, Purchaser Indemnified Person shall not be entitled to indemnification for
a Purchaser Warranty Claim pursuant to Section 9.1(a) unless and until the
aggregate Adverse Consequences suffered by all Purchaser Indemnified Persons,
collectively exceed $100,000, whereupon the Purchaser Indemnified Persons shall
be entitled to indemnification hereunder from Seller for all Adverse
Consequences suffered by Purchaser Indemnified Persons in excess of such
threshold amount; provided, however, that no Purchaser Indemnified Persons shall
be entitled to make any claim against Seller in respect of any Individual Matter
(as defined below) unless such claim is for Adverse Consequences in an amount of
at least $4,000 and no such claim in an amount less than $4,000 shall be
considered for purposes of determining whether the threshold referred to in this
sentence has been exceeded. "Individual Matter" means any Purchaser Warranty
Claim or series of Purchaser Warranty Claims relating to the same underlying
event or circumstance.
(d) The dollar amount of indemnification due any party with respect to
any claim shall be reduced to the extent that such claim has been reimbursed by
the Indemnified Party's actual receipt of after Tax insurance proceeds net of
any increase in premium directly attributable to such claim.
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(e) The amounts for which the Indemnifying Party shall be liable to an
Indemnified Party shall be net of any Tax deduction, credit, refund, or other
benefit actually realized by the Indemnified Party as a result of the facts and
circumstances giving rise to the Indemnifying Party's liability; provided, that
to the extent that any tax deduction, credit, refund, or other benefit is
actually realized in a year other than the year in which the indemnity claim is
to be paid, the Indemnified Party shall pay the Indemnifying Party the amount of
such Tax benefits in the year in which they are actually realized.
(f) The indemnification provided in Article IX with respect to
Purchaser Warranty Claims and Seller Warranty Claims shall be the sole and
exclusive remedy other than for common law fraud claims.
Section 9.5 Payment.
Except for third-party claims being defended in good faith by the
Indemnifying Party in accordance with Section 9.3, the Indemnifying Party shall
satisfy its obligations hereunder within fifteen (15) days after receipt of
notice of a claim. Any amount not paid to the Indemnified Party by such date
shall bear interest per annum at a rate equal to the prime rate as reported in
the Wall Street Journal from the date due until the date paid.
Section 9.6 Adjustments to Purchase Price. All payments under this
Article IX or Section 8.7 shall be treated as adjustments to the Purchase Price;
provided, such adjustments under Article IX or Section 8.7 shall not be subject
to Section 2.2(c)(viii).
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 Public Announcements.
(a) Purchaser and Seller hereby agree that upon the request of Seller
or Purchaser, as applicable, each shall cooperate and coordinate in the
preparation and issuance of a press release (or other similar announcement) in
form and substance reasonably satisfactory to each of the parties hereto and
shall be free to respond to inquiries from third parties by disseminating
information consistent with any such press release. Purchaser and Seller agree
to not otherwise disclose, or permit any of their respective directors,
officers, employees, agents, advisors or lenders to disclose, the existence or
contents of this Agreement or the transactions contemplated hereby to any third
party without the prior written consent of the other party hereto.
(b) Notwithstanding the foregoing, nothing herein contained shall
restrict Purchaser or Seller from disclosing any information (i) to its legal
counsel, accountants, financial advisors, lenders, environmental consultants,
directors, employees, and others employed or engaged by either Purchaser or
Seller, (ii) to any party from whom consent is required in connection with the
consummation of the transactions contemplated hereby and (iii) otherwise
required to be so disclosed under contracts existing as of the date hereof or
applicable law or pursuant to judicial process.
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Section 10.2 Post-Closing Deliveries.
After the Closing, any monies, checks, instruments, invoices, bills,
receipts, notices, mail and other communications received by one party but
directed toward or due to another shall be promptly delivered to the other
party. Seller shall cooperate in good faith and at Purchaser's expense with
Purchaser after the Closing to ensure the orderly transition of the operation of
the Business from Seller to Purchaser and to minimize any disruption in the
business of Purchaser that might result from the transactions contemplated
hereby.
Section 10.3 Notices.
All notices or other communications required or permitted by this
Agreement shall be in writing and shall be deemed to have been duly received (a)
if given by telecopier, when transmitted and the appropriate telephonic
confirmation received if transmitted on a business day and during normal
business hours of the recipient, and otherwise on the next business day
following transmission, (b) if given by certified or registered mail, return
receipt requested, postage prepaid, three business days after being deposited in
the U.S. mails and (c) if given by courier or other means, when received or
personally delivered, and, in any such case, addressed as follows:
(i) if to Purchaser:
Xxxxxxx Technologies Corporation
000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
President
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice to Purchaser) to:
Winston & Xxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
(ii) if to Seller:
Neenah Foundry Company
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
President and Chief Executive Officer
Facsimile: (000) 000-0000
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with a copy (which shall not constitute notice to Seller) to:
Xxxxxxxx & Xxxxx
Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxx Xxxxx
Facsimile: (000) 000-0000
or to such other addresses as may be specified by any such Person to the other
Person pursuant to notice given by such Person in accordance with the provisions
of this Section 10.3.
Section 10.4 Assignment.
Neither party may assign or transfer any or all of its rights or
obligations under this Agreement without the prior written approval of all the
other party; provided, however, that Purchaser may assign or transfer all (but
not less than all) of its rights and obligations under this Agreement (a) to any
Person that is wholly-owned, directly or indirectly, by Purchaser or (b) after
the Closing, to any Person to whom Purchaser sells the Company or the Business
and substantially all of the Company's assets; and, provided further, that
Purchaser may collaterally assign its rights hereunder to any Person or Persons
providing financing to Purchaser in connection with the transactions
contemplated hereby; and, provided, further, that Seller may collaterally assign
its rights hereunder to any Person or Persons providing financing to Seller, or
to any purchaser of substantially all of the assets of Seller.
Section 10.5 Benefit of the Agreement.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, permitted assigns. This
Agreement shall not be construed so as to confer any right or benefit upon any
Person, other than the parties hereto and their respective successors and
permitted assigns.
Section 10.6 Exhibits and Schedules.
The Exhibits and Schedules hereto shall be construed with and as an
integral part of this Agreement to the same effect as if the contents thereof
had been set forth verbatim herein. No disclosure set forth in one Schedule
shall be deemed to constitute a disclosure for the purposes of any other
Schedule unless expressly so stated.
Section 10.7 Headings.
The headings used in this Agreement are for convenience of reference
only and shall not be deemed to limit, characterize or in any way affect the
interpretation of any provision of this Agreement.
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Section 10.8 Entire Agreement.
This Agreement contains the entire agreement and understanding of the
parties with respect to the subject matter hereof, and no other representations,
promises, agreements or understandings regarding the subject matter hereof shall
be of any force or effect unless in writing, executed by the party to be bound
thereby and dated on or after the date hereof. The Letter of Intent, dated
August 9, 2000 by and between Seller and Purchaser and the Confidentiality
Agreement dated June 12, 2000 by and between Seller and Purchaser are each
hereby terminated.
Section 10.9 Modifications and Waivers.
No change, modification or waiver of any provision of this Agreement
shall be valid or binding unless it is in writing, dated subsequent to the date
hereof and signed by Purchaser and Seller. No waiver of any breach, term or
condition of this Agreement by any party shall constitute a subsequent waiver of
the same or any other breach, term or condition.
Section 10.10 Counterparts.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
Section 10.11 Severability.
In case any one or more of the provisions contained herein for any
reason shall be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision or provisions had never been
contained herein.
Section 10.12 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
Section 10.13 Expenses.
Except as otherwise expressly provided herein, each party hereto shall
pay all of its own fees, costs and expenses incurred or to be incurred in
negotiating and preparing this Agreement and in closing and carrying out the
transactions contemplated by this Agreement; provided, that Seller shall be
responsible for all fees, costs and expenses incurred by the Company on or prior
to the Closing in connection with the transactions contemplated hereby, and
Seller shall pay all fees, costs and expenses associated with any UCC, tax lien
and judgment searches, the Title Policy and the Survey. Purchaser will pay all
fees, costs and expenses associated with the Phase I environmental report and
its appraisal of the Company's assets and any of the Purchaser's financing
costs. Any brokerage, finder or similar fees or commissions payable by reason of
the acquisition shall be the liability of the party that engaged such finder.
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Section 10.14 Arbitration.
In the event that Purchaser and Seller fail to agree on any dispute
arising out of or related to this Agreement or any other agreement or instrument
delivered in connection with the transactions contemplated hereby (including any
claims for indemnification hereunder), after using their best efforts to
negotiate and resolve their differences in good faith, such dispute shall be
resolved by arbitration in Chicago, Illinois. Any party electing to commence
arbitration shall give written notice to the other parties of such election. The
claim shall be settled by one arbitrator under the auspices of, and in
accordance with, the then prevailing rules of the American Arbitration
Association (the "AAA"). The parties shall agree upon such arbitrator within the
15-day interval following the service of written notice of election to
arbitrate. If the parties do not agree upon an arbitrator within that period,
any party may apply to the AAA for the appointment of an arbitrator. To the
extent possible, the arbitrator shall be a Person experienced in resolving
contract disputes. The determination of the arbitrator in all matters referred
to such arbitrator hereunder shall be final and binding on the parties hereto.
The award of such arbitrator may be confirmed or enforced in any court of
competent jurisdiction. The arbitrator or the arbitrator's designee shall have
full access to such records and physical facilities of the parties hereto as may
be required by such arbitrator. The costs and expenses of the arbitrator, and
the reasonable attorneys' fees and costs of the prevailing party incurred in
such arbitration (and in related matters), shall be included in the arbitration
award in favor of such prevailing party; provided, however, that if there shall
be no prevailing party in such arbitration, then such costs and expenses shall
be apportioned among the parties by such arbitrator in accordance with the
arbitrator's determination of the merits of their respective positions.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Stock
Purchase Agreement as of the date first written above.
PURCHASER: XXXXXXX TECHNOLOGIES CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
SELLER: NEENAH FOUNDRY COMPANY
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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EXHIBIT 7.3(h)
FORM OF WITHHOLDING CERTIFICATE - SELLER
The undersigned hereby certifies the following on behalf of Neenah
Foundry Company (the "Seller"):
1. The Seller is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations);
2. The Seller's U.S. employer identification number is ;
and
3. The Seller's office address is
--------------------------------------
--------------------------------------
The Seller understands that this certification may be disclosed to the
Internal Revenue Service.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief that it is true,
correct and complete, and I further declare that I have authority to sign this
document on behalf of .
NEENAH FOUNDRY COMPANY
By:
--------------------------------------
Name:
------------------------------------
Its:
-------------------------------------
Date:
------------------------------------
49
FORM OF WITHHOLDING CERTIFICATE - COMPANY
The undersigned hereby certifies the following on behalf of Xxxxxxx
Controls Corporation (the "Company"):
1. The Company is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations);
2. The Company's U.S. employer identification number is ;
and
3. The Company's office address is
--------------------------------------
--------------------------------------
The Company understands that this certification may be disclosed to the
Internal Revenue Service.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief that it is true,
correct and complete, and I further declare that I have authority to sign this
document on behalf of .
XXXXXXX CONTROLS CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Its:
-------------------------------------
Date:
------------------------------------
