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EXHIBIT 10.06
STOCK PURCHASE AGREEMENT
CTB, INC.
Dated as of November 29, 1995
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Table of Definitions
Page
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accumulated funding deficiency...................................... 14
Adjusted Closing Date Statement..................................... 3
Adjusted Net Asset Value............................................ 3
Adjustment Amount................................................... 4
ASCP Affiliates..................................................... 27
Balance Sheet....................................................... 10
Buyer............................................................... 1
Cash................................................................ 3
Claims.............................................................. 31
Closing............................................................. 1
Closing Date........................................................ 1
Closing Date Statement.............................................. 2
Code................................................................ 13
common control...................................................... 13
Common Control Entity............................................... 14
Common Stock........................................................ 1
Company............................................................. 1
Company's knowledge after due inquiry............................... 10
complete withdrawal................................................. 15
controlled group of corporations.................................... 13
CTB Property........................................................ 21
Cumulative EBITDA................................................... 4
Debt................................................................ 3
Disclosure Schedule................................................. 7
Earn-out Amount..................................................... 4
EBITDA Target....................................................... 4
employee pension benefit plan....................................... 14
Environmental Claim................................................. 21
Environmental Laws.................................................. 21
Environmental Permits............................................... 22
ERISA............................................................... 13
Escrow Agent........................................................ 2
Escrow Fund......................................................... 2
Estimated Balance Sheet............................................. 2
Estimated Purchase Price............................................ 2
excess parachute payment............................................ 12
Financial Statements................................................ 9
Interim Balance Sheet............................................... 10
Liens............................................................... 12
material agreement.................................................. 12
Material Adverse Effect............................................. 16
Materials of Environmental Concern.................................. 22
multi-employer pension plan......................................... 13
Multi-employer Plan................................................. 14
Net Cash Surrender Value............................................ 3
other assets........................................................ 3
Parent.............................................................. 1
Parent Investment................................................... 27
partial withdrawal.................................................. 15
PBGC................................................................ 14
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Pension Plan........................................................ 14
Plans............................................................... 13
prohibited transaction.............................................. 15
reportable event.................................................... 14
Resolution Period................................................... 5
Resolution Period................................................... 3
Selling Shareholder................................................. 1
Selling Shareholders................................................ 1
Shares.............................................................. 1
tax................................................................. 12
Welfare Plan........................................................ 13
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This STOCK PURCHASE AGREEMENT (this "Agreement") dated as of November
29, 1995 is made and entered into by and among CTB Holdings, Inc., a Delaware
corporation ("Parent"), CTB Ventures, Inc., an Indiana corporation and a wholly
owned subsidiary of Parent ("Buyer"), CTB, Inc., an Indiana corporation (the
"Company"), and each of the persons identified on Schedule I hereto
(individually, a "Selling Shareholder" and collectively, the "Selling
Shareholders") with respect to all of the issued and outstanding common stock of
the Company.
W I T N E S S E T H :
WHEREAS, the Selling Shareholders own all of the issued and
outstanding shares (the "Shares") of common stock, no par value (the "Common
Stock"), and all of the options, warrants and other equity interests, of the
Company; and
WHEREAS, the Buyer and certain of the Selling Shareholders
desire to effect the Parent Investment (as defined herein) with respect to their
Shares, and the other Selling Shareholders desire to transfer the ownership of
the remaining Shares to the Buyer for the consideration specified herein;
NOW THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants, agreements, terms and conditions
contained herein, and in order to set forth the terms and conditions of the
purchase and sale of the Shares, the parties hereto do hereby agree as follows:
ARTICLE I
CLOSING
1.1 The Closing. The closing (the "Closing") of the
transactions provided for in this Agreement shall be held at the offices of
Yoder, Ainlay, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, Goshen, Indiana (or such other place Buyer
shall indicate to the Selling Shareholders in writing) on the Closing Date. The
"Closing Date" shall mean any date not later than January 5, 1996 mutually
agreed upon by the Buyer and Selling Shareholders.
1.2 Transfer of Stock. On the Closing Date and subject to the
terms and conditions set forth in this Agreement, the Selling Shareholders will
sell, assign, transfer and deliver to Buyer the Shares (other than Shares
subject to the Parent Investment), free and clear of all options, pledges,
security interests, liens or other encumbrances or restrictions of any kind.
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1.3 Consideration. On the Closing Date and subject to the
terms and conditions set forth in this Agreement, in reliance on the
representations, warranties, covenants and agreements of the parties contained
herein and in consideration of the sale, assignment, transfer and delivery of
the Shares (other than Shares subject to the Parent Investment), the Buyer
agrees to purchase from the Selling Shareholders such Shares for the
consideration specified below in this Article I.
1.4 Base Purchase Price. The Selling Shareholders shall cause
the Company to prepare and deliver to Buyer three business days prior to the
Closing Date an estimated balance sheet of the Company as of the close of
business on such date (the "Estimated Balance Sheet"), which shall be prepared
on a basis consistent with the basis to be used for the Closing Date Statement
(as defined below) referred to in Section 1.5. On the Closing Date, the Buyer
shall pay the Selling Shareholders an aggregate amount (adjusted on a pro-rata
basis for Shares subject to the Parent Investment) equal to (i) $106,500,000
plus (ii) the amount of Cash (as defined in Section 1.5) on the Estimated
Balance Sheet minus (iii) the amount of Debt (as defined in Section 1.5) on the
Estimated Balance Sheet minus (iv) the positive amount, if any, of the excess of
$31,554,000 over the Adjusted Net Asset Value (as defined in Section 1.5) on the
Estimated Balance Sheet (the "Estimated Purchase Price"), which will be
allocated among the Selling Shareholders in proportion to their respective share
holdings. Of the Estimated Purchase Price, $5,000,000 is to be delivered to an
escrow agent which shall be mutually and reasonably selected by Buyer and the
Shareholders Representative prior to the Closing ("Escrow Agent") to be held
pursuant to an Escrow Agreement substantially in the form attached as Exhibit
1.4 hereto, and the balance is to be paid to the Selling Shareholders at Closing
by delivery of cash by wire transfer or delivery of other immediate funds to one
account designated by the Selling Shareholders; amounts so held by the Escrow
Agent are to be referred to therein as the "Escrow Fund".
1.5 Purchase Price Adjustment. (a) As soon as practicable, but
in no event later than 75 days following the Closing Date, the Company shall
prepare and deliver to Buyer and the Selling Shareholders a Statement of
Adjusted Net Asset Value (as defined below) as of the close of business on the
Closing Date (including the notes thereto, the "Closing Date Statement")
together with the workpapers used in the preparation thereof. The Closing Date
Statement shall present the amounts of Cash and Debt and the Adjusted Net Asset
Value of the Company and its subsidiaries as of the close of business on the
Closing Date. The Closing Date Statement shall be prepared as if the Closing
Date was the Company's normal year end, in accordance with GAAP applied on a
basis consistent with the Financial Statements (as
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defined in Section 2.2(g)) except that life insurance policies shall be
reflected at their net cash surrender value reduced by expenses to convert such
policies to cash, including, without limitation, any taxes payable as a result
of such conversion ("Net Cash Surrender Value"); provided that the full
portfolio of the common stock included as "other assets" on the Interim Balance
Sheet shall have been converted to their net cash values prior to the Closing
and appropriate tax accruals therefor shall have been made on the Closing Date
Statement. Reserves, liabilities, allowances and similar items shall be made on
the Closing Date Statement for all liabilities (whether contingent or otherwise)
and to appropriately value the assets of the Company and its subsidiaries. As
used herein, the following terms shall have the following meanings:
"Adjusted Net Asset Value" means shareholders' equity minus
Cash plus Debt.
"Cash" means cash and cash equivalents (without duplication,
net of outstanding checks), and includes Net Cash Surrender Value
included in other assets.
"Debt" means, without duplication, "long-term debt", other
funded indebtedness (whether short-term or long-term), capitalized
leases, including any of the foregoing reflected as current
liabilities. Debt does not include deferred income taxes.
(b) Buyer and the Selling Shareholders shall have 30 days to
review the Closing Date Statement after receipt thereof. If either party so
notifies the other party of its objection to the Closing Date Statement, Buyer
and the Selling Shareholders shall, within 30 days following such notice (the
"Resolution Period"), attempt to resolve their differences and any resolution by
them as to any disputed amounts shall be final, binding and conclusive. If, at
the conclusion of the Resolution Period, any amounts remain in dispute, then all
amounts remaining in dispute shall be submitted to arbitration pursuant to
Section 8.8 hereof. All fees and expenses relating to the work, if any, to be
performed by the arbitrator shall be borne entirely by the non-prevailing party
(i.e. the party whose claim is furthest from the arbitrator's award), who shall
be determined by the arbitrator. The arbitrator shall determine, based solely on
presentations by the Selling Shareholders and Buyer, and not by independent
review, only those issues still in dispute. The arbitrator's determination shall
be made within 30 days of submission as provided above, whether or not such
presentations by the Selling Shareholders and Buyer have been made within such
period, and shall be set forth in a written statement delivered to the Selling
Shareholders and Buyer and shall be final, binding and conclusive. The term
"Adjusted Closing Date Statement," as hereinafter used, shall mean the
definitive Closing Date Statement agreed to by Buyer and the Selling
Shareholders or the
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definitive Closing Date Statement resulting from the determinations made by the
arbitrator (in addition to those items theretofore agreed to by the Selling
Shareholders and Buyer).
(c) The difference of (A) the Estimated Purchase Price over
(B) the amount equal to (i) $106,500,000 plus (ii) the amount of Cash on the
Adjusted Closing Date Statement minus (iii) the amount of Debt on the Adjusted
Closing Date Statement minus (iv) the positive amount, if any, of the excess of
$31,554,000 over the Adjusted Net Asset Value on the Adjusted Closing Date
Statement shall herein be referred to as the "Adjustment Amount". Within five
business days after the Adjusted Closing Date Statement is agreed to or any
remaining disputed items are ultimately resolved pursuant to Section 1.5(b): (x)
if the Adjustment Amount is a positive number, the Selling Shareholders shall
pay Buyer the Adjustment Amount (plus interest accrued thereon from the Closing
Date to the date of payment at a rate equal to the prime rate of the Company's
senior lender) by wire transfer in immediately available funds to the account
specified by Buyer and (y) if the Adjustment Amount is a negative number, Buyer
and Parent shall jointly and severally pay the Selling Shareholders the absolute
value of the Adjustment Amount (plus interest accrued thereon from the Closing
Date to the date of payment at a rate equal to the prime rate of the Company's
senior lender) by wire transfer in immediately available funds to the account
specified by the Selling Shareholders.
1.6 Contingent Earn-Out Payments. (a) If the Cumulative EBITDA
(as defined below) equals or exceeds $89,500,000 (the "EBITDA Target"), the
Buyer and Parent shall jointly and severally pay the Selling Shareholders an
aggregate amount equal to $13,500,000; if the Cumulative EBITDA equals 85% of
the EBITDA Target, the Buyer and Parent shall jointly and severally pay the
Selling Shareholders an aggregate amount equal to $6,750,000; or, if the
Cumulative EBITDA is between 85% and 100% of the EBITDA Target, the aggregate
amount jointly and severally payable by the Buyer and Parent to the Selling
Shareholders shall be adjusted on a linear basis between $6,750,000 and
$13,500,000 (e.g. the aggregate amount payable would be $10,125,000 if 92.5% of
the EBITDA Target is achieved) (such aggregate amount, the "Earn-out Amount").
If the Cumulative EBITDA is less than 85% of the EBITDA Target, no payments
shall be made under this Section 1.6. "Cumulative EBITDA" shall mean total
earnings of the Company's operations as of the Closing Date for the three year
period ended December 31, 1998 before, without duplication, interest expense,
amortization of deferred financing fees and acquisition related bank/financing
fees, income taxes, depreciation, amortization (including amortization of
increases in inventory arising from application of APB 16), and any management
fees owed to Buyer or its affiliates and after all bonus and profit sharing
expenses of the Company of any kind (other than expenses relating to
performance-based stock option plans). In the event the Company makes any
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capital expenditures not contemplated by the projections on which the Cumulative
EBITDA and EBITDA target are based or consummates any mergers or acquisitions or
divestitures (whether of assets, or stock or other interests) or other
extraordinary transaction, the Parent will determine in good faith appropriate
adjustments to the Cumulative EBITDA and EBITDA target, which adjustments shall
be final and binding. Calculations of Cumulative EBITDA shall be prepared in
accordance with GAAP applied on a basis consistent with the Financial
Statements.
(b) The Earn-out Amount shall be calculated by the Company and
delivered to the Shareholders Representative (as defined in Section 8.6) within
30 days of the delivery of the 1998 audited financial statements of the Company
and shall be paid in four installments allocated pro-rata among the Selling
Shareholders in accordance with their Share ownership on the Closing Date. The
installment dates shall be August 31, 1998, February 28, 1999, July 1, 1999 and
January 1, 2000. The first installment shall be equal to 25% of the Company's
reasonable estimate of the Earn-out Amount, and the Company shall give notice of
the amount of such estimate (along with a reasonably detailed computation
thereof) to the Shareholder Representative on or prior to August 20, 1998. The
second installment shall be equal to (i) an amount equal to 50% of the actual
Earn-out Amount minus (ii) the amount of the first installment. The third and
fourth installments shall each be equal to 25% of the actual Earn-out Amount.
Accrued interest from January 1, 1999 at the prime rate quoted in the Wall
Street Journal on the last business day of 1998 shall be payable on the third
and fourth installments, provided that the Company shall be credited with
interest at such interest rate on the first installment from August 31, 1998 to
December 31, 1998.
(c) The Selling Shareholders shall have 30 days to review
calculation of the Earn-out Amount after receipt thereof. If the Selling
Shareholders notifies the Company of its objection to such calculation, the
Company and the Selling Shareholders shall, within 30 days following such notice
(the "Resolution Period"), attempt to resolve their differences and any
resolution by them as to any disputed amounts shall be final, binding and
conclusive. If, at the conclusion of the Resolution Period, any amounts remain
in dispute, then all amounts remaining in dispute shall be submitted to
arbitration pursuant to Section 8.8. All fees and expenses relating to the work,
if any, to be performed by the arbitrator shall be borne entirely by the
non-prevailing party (i.e. the party whose claim is furthest from the
arbitrator's award), who will be determined by the arbitrator. The arbitrator
shall determine, based solely on presentations by the Selling Shareholders and
the Company, and not by independent review, only those issues still in dispute.
The arbitrator's determination shall be made within 30 days of submission as
provided above, whether or not such presentations by the Selling Shareholders
and the Company have been made within such period,
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and shall be set forth in a written statement delivered to the Selling
Shareholders and the Company and shall be final, binding and conclusive.
(d) No Selling Shareholder shall have any right to assign,
hypothecate, convey, pledge or otherwise transfer any of his rights or interests
under this Section to any person except to the Company or its successors and
assigns or by will, living trust, estate planning documentation or the laws of
intestate succession. The Company shall not recognize any assignments,
hypothecations, conveyances, pledges or other transfers in contravention of this
Agreement.
(e) Notwithstanding the other provisions of this Section, the
Company, Buyer and/or Parent shall not be required to make any payments under
this Section to the extent the same would cause a breach of any of the
agreements or undertakings in the senior credit agreements of the Company, Buyer
or Parent; provided, however, that interest shall accrue on the unpaid amount of
any such payment at a rate equal to the prime rate of the Company's senior
lender plus 2% per annum; provided, further, the Company, Buyer and/or Parent
shall be obligated to make such payments as soon as practicable when the same
would not cause a breach of any of the agreements or undertakings in such senior
credit agreements. Any refinancing of the senior credit agreement of the Company
shall make provision for any payments required under this Section 1.6.
ARTICLE II
2.1 Representations and Warranties by Buyer. Buyer and Parent
represent and warrant to, and agree with, the Selling Shareholders as follows:
a. Organization, etc. Each of Buyer and Parent is a
corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation, with full corporate power and authority to
own all of its property and assets and to carry on its business as it is now
being conducted. Each of Buyer and Parent is duly qualified or licensed to do
business and is in good standing or validly existing in each jurisdiction in
which the nature of its business or the character of its property makes such
qualification necessary. The copies of the Certificate of Incorporation and
By-laws of each of Buyer and Parent, which have been delivered to the Selling
Shareholders are complete and correct, and such instruments, as so amended, are
in full force and effect.
b. Authority Relative To Agreement. Each of Buyer and
Parent has the power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery by
each of Buyer
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and Parent of this Agreement and the consummation by Buyer and Parent of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action or proceedings. This Agreement has been duly executed and
delivered by each of Buyer and Parent and is a valid and binding agreement of
Buyer and Parent, enforceable in accordance with its terms.
c. Non-Contravention. The execution and delivery of
this Agreement by Buyer and Parent does not, and the consummation by Buyer and
Parent of the transactions contemplated hereby will not, violate any provision
of the Certificate of Incorporation or By-Laws of either Buyer or Parent, or
violate, or result with the giving of notice or the lapse of time or both in a
violation of, any provision of any mortgage, lien, lease, agreement, license,
instrument, law, ordinance, regulation, order, arbitration award, judgment or
decree to which Buyer or Parent or any of their properties or assets (real,
personal or mixed, tangible or intangible) are bound.
d. Consents, etc. As of the Closing Date, Buyer and
Parent shall have obtained all licenses, permits, consents, authorizations,
orders or approvals of any governmental commission, board or regulatory body
necessary for their execution and delivery of this Agreement and its
consummation of the transactions contemplated hereby.
2.2 Representations and Warranties by the Company and the
Selling Shareholders. Except as set forth by Article, Section or Subsection
numbers in the Disclosure Schedule dated as of the date of this Agreement
prepared by the Company and made a part of this Agreement (the "Disclosure
Schedule"), the Company and the Selling Shareholders represent and warrant to,
and agree with, Buyer and Parent as follows:
a. Organization. The Company is a corporation duly
organized and validly existing under the laws of the State of Indiana, with full
corporate power and authority to own all of its properties and assets and to
carry on its business as it is now being conducted. The Company is duly
qualified or licensed to do business and is in good standing or validly existing
in the states in which it has facilities and each other jurisdiction in which
the nature of its business or the character of its properties requires such
qualification. The copies of the Certificate of Incorporation and By-laws, as
amended, of the Company, which have been delivered to Buyer, are complete and
correct, and such instruments are in full force and effect.
b. Capital Stock and Securities. The authorized
capital stock of the Company consists of 200,000 shares of Common Stock. As of
the Closing Date and prior to the Parent Investment, 62,490 shares of Common
Stock will be issued and outstanding, all of which will be owned, beneficially
and of record, by the Selling Shareholders in the amounts set forth on
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Schedule I attached hereto. Each share of capital stock of the Company is owned
by the Selling Shareholders free and clear of any and all liens, charges,
pledges, security interests or other encumbrances of any kind. Each outstanding
share of capital stock of the Company is and shall be duly authorized, validly
issued, fully paid and nonassessable. The Company does not have any outstanding
commitments to issue or sell any shares of its capital stock, or any securities
or obligations convertible into or exchangeable for, or giving any person any
right to subscribe for or acquire from the Company any shares of its capital
stock, and no securities or obligations evidencing any such right are
outstanding. The Company does not have outstanding any other debt or equity
securities other than its Common Stock and existing indebtedness, which,
including the terms thereof, are fully described in the Disclosure Schedule.
c. Subsidiaries. Set forth on the Disclosure Schedule
is a correct and complete list of the Company's Subsidiaries, showing as to
each, its name, its corporate, partnership or joint venture form, the
jurisdiction of its incorporation or formation, the number of shares of stock of
each class of each Subsidiary which is outstanding and the number of such
outstanding shares owned by each of the Company and its Subsidiaries. Each
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Each Subsidiary
has the corporate or other power and authority to carry on its business as now
being conducted and to own and lease its properties and is duly qualified to do
business as a foreign corporation in each jurisdiction in which the nature of
its business or properties makes such qualification necessary. All of the
outstanding shares of capital stock of each Subsidiary have been validly issued,
are fully paid and non-assessable with no personal liability attaching to the
ownership thereof and are free and clear of all liens. The Company is the sole
beneficial owner of all the outstanding shares of each Subsidiary which is a
corporation and there are no other securities of any Subsidiary which is a
corporation other than such outstanding shares. There are no outstanding rights,
warrants, options or agreements with respect to any such outstanding shares of
Subsidiaries including, without limitation, agreements granting to any person
rights to acquire any capital stock or agreements with respect to the voting
thereof. Neither the Company nor any of its Subsidiaries has any investment
(whether equity, debt or other) in any other person. The copies of the
Certificate of Incorporation and By-laws, as amended, of each Subsidiary, which
have been delivered to Buyer, are complete and correct, and such instruments are
in full force and effect.
d. Authority Relative to Agreement. The Company and
each Selling Shareholder has the power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery by
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the Company and each Selling Shareholder of this Agreement and the consummation
by such parties of the transactions contemplated hereby have been duly
authorized by each such party. No other proceedings on the part of the Company
or any Selling Shareholder are necessary, and no vote or consent by the
shareholders of the Company is necessary, to authorize the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the Company and
each Selling Shareholder and is a valid and binding agreement of each such
party, enforceable in accordance with its terms.
e. Non-Contravention. The consummation of the
transactions contemplated hereby will not violate any provision of the
Certificate of Incorporation or By-Laws of the Company or any of its
Subsidiaries, or violate, or result with the giving of notice or the lapse of
time or both in a violation of, any provision of any mortgage, lien, lease,
agreement, license, instrument, law, ordinance, regulation, order, arbitration
award, judgment or decree to which the Company, any of its Subsidiaries or any
of their properties or assets (real, personal or mixed, tangible or intangible)
are bound.
f. Consents, etc. As of the Closing Date, the Company
and the Selling Shareholders shall have obtained all licenses, permits,
consents, authorizations, orders or approvals of any governmental commission,
board or regulatory body, if any, necessary for the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby.
g. Financial Statements. The Company and the Selling
Shareholders have heretofore delivered to Buyer the audited consolidated
financial statements of the Company and its subsidiaries for the fiscal years
ended December 31, 1993 and 1994 and the unaudited consolidated financial
statements of the Company and its subsidiaries for the 7 month period ended July
31, 1995 including their consolidated balance sheets as of each such date and
the related consolidated statements of income, cash flow, and shareholders'
equity for each of the respective periods then ended (the "Financial
Statements"). Such Financial Statements are attached hereto as Exhibit 2.2(g)
and have been prepared from the books and records of the Company and its
subsidiaries, and are in accordance with generally accepted accounting
principles consistently applied and fairly present the financial condition,
results of operations, and cash flows of the Company and its subsidiaries as of
the respective dates and for the respective periods thereof except in the case
of the July 31, 1995 Financial Statements footnotes have been omitted and it is
subject to normal year-end adjustments (which adjustments (with exception to the
inventory count and adjustment arising therefrom), individually or in the
aggregate, will not be material).
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The December 31, 1994 balance sheet delivered as part of the
Financial Statements is referred to as the "Balance Sheet" and the July 31, 1995
balance sheet delivered as part of the Financial Statements is referred to as
the "Interim Balance Sheet".
h. Government Authorizations and Compliance with
Laws. The business of the Company and its Subsidiaries has been operated in
material compliance with all laws, ordinances, regulations and orders, of all
governmental entities, domestic or foreign. The Company and its Subsidiaries
have all material permits, certificates, licenses, approvals and other
authorizations required in connection with the operation of their business. No
notice has been received by the Company or any of its Subsidiaries and, to the
Company's knowledge after due inquiry, no investigation or review is pending or
threatened by any governmental entity with respect to (i) any alleged violation
by the Company or any of its Subsidiaries of any law, ordinance, regulation,
order, policy or guideline of any governmental entity, or (ii) any alleged
failure to have all permits, certificates, licenses, approvals and other
authorizations required in connection with the operation of the business of the
Company and its Subsidiaries. As used in this Agreement, "Company's knowledge
after due inquiry" shall refer to matters within the knowledge of the Selling
Shareholders who will receive Parent stock options at Closing as contemplated in
Section 4.2(d) and matters which should have been known by such persons in the
course of their duties in respect of the Company, in each case after reasonable
inquiry by them of the Company's employees having responsibility for matters in
the subject area of the statement made and review of the Company's records with
respect to such subject matter.
i. Tax Matters. All federal, state, local and foreign
tax returns and tax reports required to be filed by or with respect to the
Company or its Subsidiaries have been duly filed. All taxes (including interest,
penalties and related costs) with respect to the Company and its Subsidiaries
for all taxable periods ending on or prior to the Closing Date have been paid,
except (a) to the extent of reserves for taxes (other than deferred taxes)
reflected on the Interim Balance Sheet less payments of such taxes on or prior
to the Closing Date and (b) for such taxes (other than deferred taxes) that are
provided for in the books and records of the Company and its Subsidiaries for
the period beginning immediately following the date of the Interim Balance Sheet
and ending on the Closing Date but only to the extent that such taxes arise from
taxable income resulting from the day to day sales and operations of the Company
and its Subsidiaries occurring during such period and not taxes arising from
other transactions or events, including, without limitation, any taxes on income
resulting from transactions contemplated by this Agreement and any taxes
relating to prior periods; provided, however, that the reserve set forth in
clause (a) above and the
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provision for taxes set forth in clause (b) above shall be reduced for the tax
effect of any deductions relating to the exercise or cancellation of any stock
options. No issues have been raised, either orally or in writing, (and are
currently pending) by any foreign, federal, state or local taxing authority in
connection with any of the returns or reports referred to in this Section
2.2(i). No waivers of statutes of limitations as to any tax matters are
currently in effect with respect to the Company or its Subsidiaries.
All tax returns filed by the Company and its Subsidiaries were
true and correct in all material respects as of the date on which they were
filed. Complete copies of all federal, state and local income tax returns for
the Company and its Subsidiaries that have been filed with respect to taxable
periods for which the statute of limitations period has not run have been
delivered to Buyer. The Company has provided to Buyer all revenue agent's
reports and other written assertions by governmental authorities of deficiencies
or other liabilities for taxes of the Company and its Subsidiaries with respect
to past periods for which the statute of limitations period has not run. All
amounts required to be collected or withheld by the Company and its Subsidiaries
with respect to taxes have been duly collected or withheld and any such amounts
that are required to be remitted to any taxing authority have been duly
remitted.
No extension of time within which to file any tax return that
related to the Company and its Subsidiaries has been requested, which return has
not since been filed. There are no tax rulings, requests for rulings, or closing
agreements to which the Company or its Subsidiaries is a party or is subject
which could affect the liability for taxes for any period after the Closing
Date. All federal income tax returns of the Company and its Subsidiaries with
respect to taxable periods through the year ended December 31, 1989, have been
examined and closed or are returns with respect to which the applicable statute
of limitations period has expired without extension or waiver. No power of
attorney has been granted by the Company or its Subsidiaries with respect to any
matter relating to taxes of the Company and its Subsidiaries which is currently
in force.
The Company and its Subsidiaries have not filed a consent
under Section 341(f) of the Code or any comparable provision of state revenue
statutes. The Company and its Subsidiaries have made all payments of estimated
taxes required to be make under Section 6655 of the Code and any comparable
provisions of state, local or foreign law. Any adjustment of taxes of the
Company and its Subsidiaries made by the Internal Revenue Service in any
examination which is required to be reported to the appropriate state, local or
foreign taxing authorities has been reported, and any additional taxes due with
respect thereto have been paid.
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The Company and its Subsidiaries have not agreed or are not
required to include in income any adjustment pursuant to Section 481(a) of the
Code (or similar provisions of other law or regulations) by reason of a change
in accounting method. No excess loss accounts exist with respect to the Company
or any Subsidiary. There is no deferred gain or loss arising from deferred
intercompany transactions between the Company and its Subsidiaries. The Company
or its Subsidiaries are not a party to any agreement that would result by its
terms in the payment of a non-deductible "excess parachute payment" within the
meaning of Section 280G of the Code. The amount of deferred tax assets and
liabilities reflected on the Balance Sheet and the Interim Balance Sheet are
determined in accordance with GAAP (subject, in the case of the Interim Balance
Sheet, to normal year-end adjustments consistent with past practice).
For the purpose of this Agreement, any federal, state, local
or foreign income, franchise, sales, use, transfer, payroll, unemployment,
Social Security, personal property, occupancy or other tax, levy, impost,
imposition, assessment or similar charge, together with any related addition to
tax, interest or penalty thereon, is referred to as a "tax."
j. Title to Properties; Absence of Liens and
Encumbrances, etc. The Company and its Subsidiaries have good and marketable
title to all of the properties and other assets (real, personal and mixed,
tangible and intangible) reflected in the Balance Sheet or acquired after the
date thereof (except for properties and assets sold or otherwise disposed of
since December 31, 1994 in the ordinary and usual course of business, free and
clear of any and all liens, charges, pledges, mortgages, security interests or
other encumbrances of any kind ("Liens"). Except for those properties or assets
acquired since December 31, 1994, all properties and assets (real, personal and
mixed, tangible and intangible) used in the business of the Company and its
Subsidiaries are reflected in the Balance Sheet in the manner and to the extent
required by generally accepted accounting principles.
k. Material Agreements. The Disclosure Schedule lists
every material agreement to which the Company or any of its Subsidiaries is a
party or by which it or any of their properties or assets (real, personal or
mixed, tangible or intangible) is bound which is to be performed in whole or in
part after the Closing Date. Solely for the purpose of this Section 2.2(k), the
term "material agreement" shall mean any single agreement or lease, including
agreements with respect to notes receivable, pursuant to which any party thereto
is obligated after the date hereof to make payments aggregating more than
$50,000. There is no default, nor will any default occur hereafter, as a result
of the consummation of the transactions contemplated hereby or otherwise, in any
obligation to be performed by any party to any material agreement to which the
Company or any of its
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Subsidiaries is a party or by which it or any of its properties or assets (real,
personal or mixed, tangible or intangible) is bound. Each agreement listed in
the Disclosure Schedule is valid and binding in accordance with its terms. Other
than this Agreement, there are no agreements or options to sell or lease any of
the properties or assets (real, personal or mixed, tangible or intangible) of
the Company or any of its Subsidiaries except in the ordinary and usual course
of its business. The Company has delivered to Buyer true and complete copies of
all agreements listed in the Disclosure Schedule, including supporting
documentation.
l. Litigation. (i) There is no claim, action, suit or
proceeding pending or, to the Company's knowledge after due inquiry, threatened
against the Company, any of its Subsidiaries or any of their properties or
assets (real, personal or mixed, tangible or intangible) or which seeks to
prohibit, restrict or delay consummation of the transactions contemplated by
this Agreement or any of the conditions to consummation of the transactions
contemplated by this Agreement, nor is there any judgement, decree, injunction,
ruling, award or order of any court, governmental department, commission, agency
or instrumentality or arbitrator outstanding or, to the Company's knowledge
after due inquiry, threatened against the Company, any of its Subsidiaries or
any of their properties or assets (real, personal or mixed, tangible or
intangible); or (ii) neither the Company, any of its Subsidiaries nor any of
their officers or, to the Company's knowledge after due inquiry, employees is
currently charged with, or is currently under investigation with respect to, any
violation of any provision of any federal, state, foreign or other applicable
law or administrative regulation in respect of the business of the Company and
its Subsidiaries.
m. Employee Benefit Plans. The Disclosure Schedule
contains a complete list of "Plans" consisting of each:
(1) "employee welfare benefit plan", as
defined in Section 3(1) of the Employee Retirement Income
Security Act of 1974 ("ERISA"), to which the Company or any of
its Subsidiaries contributes or is required to contribute,
including each multi-employer welfare plan ("Welfare Plan"),
and sets forth the amount of any liability of the Company or
its Subsidiaries for payments more than thirty days past due
with respect to each Welfare Plan as of the Closing Date;
(2) "multi-employer pension plan," as
defined in Section 3(37) of ERISA, to which the Company (or
any entity which is a member of a "controlled group of
corporations" with or is under "common control" with the
Company as defined in Section 414(b) or (c) of the Internal
Revenue Code of 1986 as amended ("Code")
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("Common Control Entity")) has contributed or been obligated
to contribute at any time after September 25, 1980
("Multi-employer Plan").
(3) "employee pension benefit plan," as
defined in Section 3(2) of ERISA, (other than a Multi-employer
Plan) to which the Company or any Common Control Equity
contributes or is required to contribute ("Pension Plan"); and
(4) deferred compensation plan, bonus plan,
stock option plan, employee stock purchase plan and any other
employee benefit plan, agreement, arrangement or commitment,
other than normal payroll practices and policies concerning
holidays, vacations and salary continuation during short
absences for illness or other reasons, maintained by the
Company or its Subsidiaries.
n. Pension Plans. The funding method used in
connection with each Pension Plan which is subject to the minimum funding
requirements of ERISA is acceptable and the actuarial assumptions used in
connection with funding each such plan, in the aggregate, are reasonable. The
assets of each Pension Plan are sufficient to discharge all liabilities under
such plan, on an ongoing basis and on a termination basis, and there is no
"accumulated funding deficiency," as defined in Section 302(a)(2) of ERISA, with
respect to any plan year of any such plan. Neither the Company nor any Common
Control Entity has any liability for unpaid contributions with respect to any
Pension Plan.
(1) Each Pension Plan and each related trust
agreement, annuity contract or other funding instrument is
qualified and tax-exempt under the provisions of Code Sections
401(a) (or 403(a) as appropriate) and 501(a).
(2) Each Pension Plan and each related trust
agreement, annuity contract or other funding instrument
complies currently, and has complied at all times in the past,
both as to form and in operation, with the provisions of
applicable Federal law, including the Code and ERISA.
(3) The Company have paid all premiums (and
interest charges and penalties for late payment, if
applicable) due the Pension Benefit Guaranty Corporation
("PBGC") with respect to each Pension Plan for each plan year
thereof for which such premiums are required. There has been
no "reportable event" (as defined in Section 4043(b) of ERISA
and the PBGC regulations under such Section) with respect to
any Pension Plan. No liability to the PBGC has been
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incurred by the Company or any Common Control Entity on
account of the termination of any Pension Plan. No filing has
been made by the Company or any Common Control Entity with
PBGC, and no proceeding has been commenced by the PBGC, to
terminate any Pension Plan. Neither the Company nor any Common
Control Entity has, at any time, (a) ceased operations at a
facility so as to become subject to the provisions of Section
4062(e) of ERISA, (b) withdrawn as a substantial employer so
as to become subject to the provisions of Section 4063 of
ERISA, or (c) ceased making contributions on or before the
Closing Date to any Pension Plan subject to Section 4064(a) of
ERISA to which the Company or any Common Control Entity made
contributions during the five years prior to the Closing Date.
o. Multi-employer Plans. Neither the Company nor any
Common Control Entity has, at any time, withdrawn from a Multi-employer Plan in
a "complete withdrawal" or a "partial withdrawal" as defined in ERISA Sections
4203 and 4205, respectively.
p. Prohibited Transactions. Neither the Company, any
of its Subsidiaries nor, to the Company's knowledge after due inquiry, any plan
fiduciary of any Welfare Plan or Pension Plan has engaged in any transaction in
violation of Section 406(a) or (b) of ERISA or any "prohibited transaction," as
defined in Section 4975(c)(1) of the Code, for which no exemption exists under
Section 4975(c)(2) or 4975(d) of the Code.
q. Copies of Relevant Plan Documents. True and
complete copies of each of the following documents have been delivered by the
Company to Buyer: (i) each Welfare Plan and each Pension Plan, related trust
agreements, annuity contracts or other funding instruments, (ii) each plan,
agreement, arrangement and commitment referred to in Sections 2.2(m) and (n),
and complete descriptions of any such plan which is not in writing, (iii) the
most recent determination letter issued by the Internal Revenue Service with
respect to each Pension Plan, (iv) Annual Reports on Form 5500 Series required
to be filed with any governmental agency for each Welfare Plan and each Pension
Plan for the two most recent plan years and (v) all actuarial reports prepared
for the last three years for each Pension Plan.
r. Validity and Enforceability of Plans. Each Welfare
Plan, Pension Plan, related trust agreement, annuity contract or other funding
instrument and each plan, agreement, arrangement and commitment referred to in
Sections 2.2(m) and (n) is legally valid and binding and in full force and
effect.
s. Payments to Retirees. Neither the Company, any of
its Subsidiaries nor any Welfare Plan has any obligation to make any payment to
or with respect to any former or current
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employee of the Company pursuant to any retiree medical benefit or other Welfare
Plan.
t. Litigation Under Plans. Neither the Company, any
of Subsidiaries nor any Plan is a party to any litigation relating to, or
seeking benefits under, any Plan.
u. Employment Agreements. Neither the Company nor any
of its Subsidiaries is a party to any employment, severance or similar
agreements.
v. Change in Control Provisions. Neither the Company
nor any of its Subsidiaries is a party to any agreement which contains any
provision pursuant to which the Company or any of its Subsidiaries will be
obligated to make any payment as a result of the transactions contemplated
hereby.
w. Labor Matters. There are no controversies pending
between the Company and its Subsidiaries and any of their employees or officers.
Neither the Company nor any of its Subsidiaries is subject to any collective
agreements and, to the Company's knowledge after due inquiry, there is no
current prospect for any union election.
x. Absence of Certain Changes or Events. Since
December 31, 1994 there has not been (i) any change, or any development
involving a prospective change, which, individually or in the aggregate, has had
or could have a material adverse effect ("Material Adverse Effect") on the
financial condition, business, operations, or prospects of the Company and its
Subsidiaries taken as a whole; (ii) any damage, destruction or other loss with
respect to property owned by the Company or any of its Subsidiaries, whether or
not covered by insurance, or any strike, work stoppage or slowdown or other
labor trouble involving the Company or any of its Subsidiaries; (iii) any direct
or indirect redemption, purchase or other acquisition by the Company or any of
its Subsidiaries of any shares of the capital stock of the Company or any of its
Subsidiaries; (iv) any declaration, setting aside or payment of any dividend or
distribution (whether in cash, capital stock or property); or (v) the entry by
the Company or any of its Subsidiaries into any commitment or transaction which
is not in the ordinary course of business.
y. Absence of Undisclosed Liabilities and Agreements.
Except as specifically provided for in the Balance Sheet, the Company and its
Subsidiaries (i) did not have, as of December 31, 1994, any material debts,
liabilities or obligations, whether accrued, absolute, contingent or otherwise
and whether due or to become due (including, without limitation, any liabilities
resulting from the failure to comply with any law applicable to the Company, any
of its Subsidiaries or to the conduct of their business) (ii) have not incurred,
since December
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31, 1994, any such debts, liabilities or obligations other than in the ordinary
and usual course of their business, or (iii) except in connection with the
transactions contemplated in this Agreement, have not, since December 31, 1994,
conducted their business otherwise than in the ordinary and usual course.
z. Insurance. The Company and its Subsidiaries have
insurance policies in full force and effect which provide for coverages which
are normal in both amount and scope for the business conducted by the Company
and its Subsidiaries. The current insurance coverage of the Company and its
Subsidiaries is as described in the Disclosure Schedule.
aa. Payments. The Company and its Subsidiaries have
not, directly or indirectly, paid or delivered any fees, commissions or other
sums of money or items of property however characterized to any finders, agents,
customers, government officials or other parties, in the United States or in any
other country, which in any manner are related to the business or operations of
the Company and its Subsidiaries, and which have been illegal under any federal,
state or local laws of the United States or any other country or territory
having jurisdiction over the Company or any of its Subsidiaries. The Company and
its Subsidiaries have not participated, directly or indirectly, in any boycotts
or similar practices.
ab. Renegotiation. The Company and its Subsidiaries
are not subject to renegotiation, redetermination or excess profit recovery with
respect to any fiscal year by reason of U.S. Government contracts performed by
them.
ac. Inventories. All inventories carried by the
Company and its Subsidiaries as of July 31, 1995 and reflected on the Interim
Balance Sheet, are valued at the lower of cost or market on a last-in-first-out
basis consistent with generally accepted accounting principles. The Company has
adequate obsolescence reserves to cover inventory items which have a market
value lower than cost. Except to the extent of inventory reserves reflected in
the Interim Balance Sheet, the items included in said inventories are normal
items of inventory carried by the Company and its Subsidiaries, and are current,
suitable and merchantable at customary prices for the filling of orders in the
normal course of business, and are not obsolete, damaged, defective or slow
moving.
ad. Products Liability. There are no facts or the
occurrence of any event known or which reasonably should be known to the Company
forming the basis for any claim against the Company or any of its Subsidiaries
for products liability, whether in tort or strict liability or on account of any
express or implied warranty, and all reserves therefor on the Balance Sheet are
adequate.
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ae. Notes and Accounts Receivable and Liabilities.
Each of the material liabilities of the Company and its Subsidiaries as of
December 31, 1994 and July 31, 1995 is reflected or reserved for on the Balance
Sheet and the Interim Balance Sheet, respectively, and the amounts so reflected
or reserved are true and correct according to GAAP. Notes and accounts
receivable will be fully collectible, except to the extent of reserves for
doubtful accounts reflected in the Interim Balance Sheet.
af. Proprietary Rights. The proprietary rights listed
in the Disclosure Schedule are all those used in the business of the Company and
its Subsidiaries. The Company's and its Subsidiaries' use of such proprietary
rights is not infringing upon or otherwise violating the rights of any third
party in or to such proprietary rights, and no proceedings have been instituted
against or notices received by the Company or any of its Subsidiaries that are
presently outstanding alleging that the Company's or any Subsidiary's use of
such proprietary rights infringes upon or otherwise violates any rights of a
third party in or to such proprietary rights.
ag. Books of Account. The books of account of the
Company and its Subsidiaries have and will adequately reflect all of their
respective items of income and expense and all of their assets, liabilities and
accruals, in accordance with generally accepted accounting principles.
ah. Purchase Commitments and Outstanding Bids. As of
the date of this Agreement and as of the Closing Date, there are no claims
against the Company or any of its Subsidiaries to return in excess of an
aggregate of $50,000 by reason of alleged over-shipments, defective merchandise
or otherwise, or of merchandise in the hands of customers under an understanding
that such merchandise would be returnable. The Disclosure Schedule lists all
capital expenditures committed for but not paid for by the Company. No
outstanding purchase or outstanding lease commitment of the Company or any of
its Subsidiaries presently is in excess of the normal, ordinary and usual
requirements of its business or contains terms and conditions more onerous than
those usual and customary in the business of the Company and its Subsidiaries.
ai. Customers and Suppliers. The Disclosure Schedule
contains a complete and accurate list of (i) the 10 largest customers of the
Company and its Subsidiaries in terms of revenues during each of the Company's
last fiscal year and current fiscal year (through October 31, 1995), showing the
approximate total sales to each such customer during such period; and (ii) the
10 largest suppliers of the Company and its Subsidiaries in terms of purchases
during each of the Company's last fiscal year and current fiscal year (through
October 31, 1995), showing the approximate total purchases from each such
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supplier during such period. Since December 31, 1994, to the Company's knowledge
after due inquiry, there has been no material adverse change in the business
relationship of the Company and its Subsidiaries with any customer or supplier
named in the Disclosure Schedule.
aj. Permits. The Disclosure Schedule contains a
complete and accurate list of all permits held by the Company or any of its
Subsidiaries or for which the Company or any Subsidiary has applied, which are
the only material permits necessary for or used by the Company and its
Subsidiaries to carry on their business as presently conducted.
ak. Environmental Matters. (1) The Company and each
of its Subsidiaries is in compliance in all material respects with all
applicable Environmental Laws, and for the past five years has been in
such compliance; and the Company and each Selling Shareholder have no
reason to believe that circumstances exist which could prevent or
interfere with (A) continued compliance in all material respects by the
Company and each of its Subsidiaries with all applicable Environmental
Laws after the Closing Date, or (B) Environmental Laws that the Company
or any Selling Shareholder has reason to believe are likely to become
applicable to the Company or any of its Subsidiaries after the Closing
Date and that could individually or in the aggregate, have a Material
Adverse Effect after the Closing Date if adopted.
(2) The Company and its Subsidiaries hold all material
Environmental Permits necessary to conduct their operations as they are
currently conducted; the Disclosure Schedule includes a true and
complete list of all such Environmental Permits and their expiration
dates, and the Company has no reason to believe that such permits (A)
will not be renewed, or (B) will be renewed under terms that could
reasonably be expected to have an adverse effect on the Company and its
Subsidiaries.
(3) There are no Materials of Environmental Concern present
at, and no Materials of Environmental Concern are or have been in any
way released or threatened to be released from, any CTB Property,
former CTB Property, or as a result of present or former operations of
the Company or any of its Subsidiaries or any predecessor entity
(including without limitation the disposal of Materials of
Environmental Concern at any location other than a CTB Property or
former CTB Property), that could reasonably be expected to be in
material violation of or otherwise to give rise to material liability
of the Company or any of its Subsidiaries under any Environmental Law.
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(4) No reports of any kind have been made to or required by
any Governmental Authority pursuant to any Environmental Law concerning
spills or any other releases of any kind at, or in any way from, any
CTB Property, former CTB Property, or as a result of present or former
operations of the Company or any of its Subsidiaries or any predecessor
entity, for which spills, releases, or reports thereof the Company or
any of its Subsidiaries may be liable under any Environmental Law; true
and complete copies of all written reports concerning such spills and
other releases have been provided or made available to Buyer.
(5) None of the following are or have been on, under, in or at
any CTB Property, or to the Company's knowledge after due inquiry, any
former CTB Property: (A) underground or aboveground storage tanks
containing Materials of Environmental Concern; (B) polychlorinated
biphenyls; (C) asbestos or asbestos-containing materials; (D) septic
tanks, septic fields, dry-▇▇▇▇▇, or similar structures; (E) lagoons or
impoundments; or other bodies of water to which Materials of
Environmental Concern may have been discharged; (F) landfills or
dumping areas; or similar locations where Materials of Environmental
Concern may have been placed.
(6) Neither the Company nor any of its Subsidiaries has
received any Environmental Claim, and to Company's knowledge after due
inquiry, no Environmental Claim has been threatened against the Company
or any of its Subsidiaries by any person.
(7) Neither the Company nor any of its Subsidiaries has
entered into, agreed to, nor is the Company or any of its Subsidiaries
otherwise subject to any judgment, decree, order or similar requirement
under any Environmental Law, nor to the Company's knowledge after due
inquiry is any such judgment, decree, order or requirement being
negotiated that may obligate or affect the Company or any of its
Subsidiaries.
(8) Neither the Company nor any of its Subsidiaries has
assumed or retained, contractually or by operation of law, any
liabilities or obligations of other persons, contingent or otherwise,
in connection with any Environmental Law.
(9) There are no past or present actions, activities, events,
conditions or circumstances, including without limitation the release,
threatened release, emission, discharge, generation, treatment, storage
or disposal of Materials of Environmental Concern, that could
reasonably be expected to give rise to any material liability or
obligation of the Company or any of its Subsidiaries under any
Environmental Laws. None of the matters set forth on
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the Disclosure Schedule, or any aggregation thereof, could reasonably
be expected to have a Material Adverse Effect.
(10) True and complete copies of all reports, studies,
assessments, audits, and similar documents in the possession or control
of the Company, any of its Subsidiaries or any Selling Shareholder that
address any issues of actual or potential noncompliance in any material
respect with, or actual or potential material liability under, any
Environmental Laws that may affect the Company or any of its
Subsidiaries have been provided to Buyer prior to the signing hereof.
(11) As used in this Section 2.2(ak):
"CTB Property" means all real property in which the Company or
any of its Subsidiaries have any legal interest, including without
limitation a leasehold interest, and any equipment or other property
owned or leased by the Company or any of its Subsidiaries.
"Environmental Claim" means any written or oral notice, claim,
demand, action, suit, complaint, proceeding or other communication by
any person alleging liability or potential liability (including without
limitation liability or potential liability for investigatory costs,
cleanup costs, governmental response costs, natural resource damages,
property damage, personal injury, fines or penalties) arising out of,
relating to, based on or resulting from (i) the presence, discharge,
emission, release or threatened release of any Materials of
Environmental Concern at any location, (ii) circumstances forming the
basis of any violation or alleged violation of any Environmental Law or
Environmental Permit, or (iii) otherwise relating to obligations or
liabilities under any Environmental Law.
"Environmental Laws" means all foreign (to the extent
applicable), federal, state and local statutes, rules, regulations,
ordinances, orders, judgments, decrees and common law relating in any
manner to contamination, pollution, or protection of human health or
the environment, including without limitation the Comprehensive
Environmental Response, Compensation and Liability Act, the Solid Waste
Disposal Act, the Clean Air Act, the Clean Water Act, the Toxic
Substances Control Act, the Endangered Species Act, the National
Environmental Protection Act, the Occupational Safety and Health Act,
the Emergency Planning and Community-Right-to-Know Act, the Safe
Drinking Water Act, all as amended, and similar laws of any other
Governmental Authority.
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"Environmental Permits" means all permits, licenses,
registrations and other governmental authorizations or exemptions
required under Environmental Laws.
"Materials of Environmental Concern" refers to any waste,
pollutant, contaminant or other substance of any kind (including
without limitation odors, radioactivity, and electromagnetic fields)
regulated by or under, or which may otherwise give rise to liability
under, any Environmental Law.
al. Transactions with Certain Persons. Neither
any officer, director, shareholder or employee of the Company and its
Subsidiaries nor any member of any such person's immediate family is presently a
party to any material transaction with the Company or any of its Subsidiaries
relating to the business of the Company and its Subsidiaries, including without
limitation, any contract, agreement or other arrangement (i) providing for the
furnishing of material services by (other than for services as officers,
directors or employees of the Company and its Subsidiaries), (ii) providing for
the rental of material real or personal property from, or (iii) otherwise
requiring material payments to (other than for services as officers, directors
or employees of the Company and its Subsidiaries) any such person or
corporation, partnership, trust or other entity in which any such person has a
substantial interest as a shareholder, officer, director, trustee or partner.
am. Information. The Company and the Selling
Shareholders have furnished and will continue to furnish to Buyer detailed
information with respect to the assets, earnings, and business of the Company
and its Subsidiaries, and acknowledge that Buyer has relied and will rely
thereon in entering into this Agreement and consummating the transaction
contemplated by this Agreement. No such information, the preparation of which
was under the Company's and any Selling Shareholder's direct control, as it has
been corrected from time to time by the Company or Selling Shareholders,
contains an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made not misleading.
ARTICLE III
ACTIONS PRIOR TO THE CLOSING
3.1 Conduct of the Company. During the period from
the date hereof to the Closing Date:
a. Operations in the Ordinary Course of Busi-
ness. Except as contemplated by this Agreement, the Company and
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its Subsidiaries shall, and the Selling Shareholders shall cause the Company and
its Subsidiaries to, conduct their business operations according to the ordinary
and usual course of business and will use their reasonable best efforts (i) to
preserve intact their business organization; (ii) to maintain their books and
records in accordance with past practices; (iii) to keep available the services
of their officers and employees; and (iv) to maintain satisfactory relationships
with licensors, suppliers, distributors, customers and others having business
relationships with them. The Company and the Selling Shareholders shall confer
with Buyer or its representatives to keep it informed with respect to
operational matters of a material nature and to report the general status of the
ongoing operations of the business of the Company and its Subsidiaries.
b. Forbearances by the Company. Except as con-
templated by this Agreement, the Company and its Subsidiaries will not, and the
Selling Shareholders will not permit the Company and its Subsidiaries to,
without the prior written consent of Buyer:
(1) incur any new debt, liability or
obligation, direct or indirect, whether accrued, absolute,
contingent or otherwise (other than short-term indebtedness in
the ordinary course of business consistent with past practice
in an amount not to exceed $50,000);
(2) assume, guarantee, endorse or otherwise
become responsible for the obligations of, or make any loans
or advances to, any other individual, firm or corporation
(other than the Company or any of its subsidiaries);
(3) make any direct or indirect redemption,
purchase or other acquisition of any shares of its capital
stock or declare, set aside or pay any dividend or
distribution (whether in cash, capital stock or property),
other than any dividends to the Company from any of its
Subsidiaries;
(4) mortgage, pledge or otherwise encumber
any of its properties or assets other than in the ordinary
course of business consistent with past practice;
(5) sell, lease, transfer or dispose of any
of its properties or assets, waive or release any rights of
material value, or cancel, compromise, release or assign any
indebtedness owed to it or any claims held by it except for
sales of inventory in the
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ordinary and usual course of business and consistent
with past practice;
(6) except for capital expenditures not to
exceed $10,000 in the aggregate or items included in the
capital budget included in the Disclosure Schedule, make any
investment or expenditure of a capital nature either by
purchase of stock or securities, contributions to capital,
property transfers or otherwise, or by the purchase of any
property or assets of any other individual, firm or
corporation;
(7) enter into any transaction other than in
the ordinary and usual course of its business and consistent
with past practice;
(8) enter into or terminate any agreement,
plan or lease, or make any change in any of its agreements,
plans or leases other than in the ordinary course of business
consistent with past practice;
(9) permit any insurance policy naming it as
a beneficiary or a loss payable payee to be cancelled or
terminated or any of the coverage thereunder to lapse;
(10) enter into any collective bargaining
agreements;
(11) hire any new employees (other than in
the ordinary course of business consistent with past practice)
or increase in any manner the compensation, remuneration or
fringe benefits of any of its officers or employees or pay or
agree to pay any pension, retirement allowance, or other
benefit not required by any existing employee benefit plan to
any such officers or employees, commit itself to any
employment agreement or employee benefit plan with or for the
benefit of any of its officers or employees or any other
person, or alter, amend, terminate in whole or in part, or
curtail or permanently discontinue distributions to, any
pension plan or any other employee benefit plan;
(12) issue any shares of capital stock or
issue any warrants, options, calls, subscriptions, or other
agreements or commitments obligating it to issue shares of
capital stock;
(13) enter into an agreement to do any of
the things described in clauses (1) through (12) of this
Section 3.1; or
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(14) take any action which would render
inaccurate any representation and warranty made herein.
3.2 Regulatory Consents, Authorizations, etc. Each party
hereto will use its best efforts to obtain all consents, authorizations, orders
and approvals of, and make all filings and registrations with, any governmental
commission, board or other regulatory body or any other person required for or
in connection with the consummation of the transactions contemplated hereby and
will cooperate fully with the other parties in assisting them to obtain such
approvals and to make such filings and registrations. No party hereto will take
or omit to take any action for the purpose of delaying, impairing or impeding
the receipt of any required consent, authorization, order or approval or the
making of any required filing or registration.
3.3 Investigation by Buyer. Prior to the Closing Date, Buyer
and its lenders and advisors may make or cause to be made such investigation of
the business, properties, assets and liabilities of the Company and its
financial and legal conditions as they deem necessary or advisable to
familiarize themselves therewith, provided that such investigation shall not
unreasonably interfere with the normal operations of the Company. Such
investigation may include, without limitation, an examination and valuation of
inventory by Buyer's accountants and an appraisal of all assets of the Company.
Prior to the Closing Date, upon reasonable prior notice, the Company and the
Selling Shareholders agree to permit Buyer and its authorized representatives
(including its lenders and advisors), or cause them to be permitted, to have
full access to the premises, books and records, officers, employees, and
independent accountants (including the independent accountant's work-papers) of
the Company at reasonable hours, and prior to the Closing Date the officers of
the Company shall furnish Buyer and its lenders and advisors with such financial
and operating data and other information with respect to the business,
properties and assets of the Company as they shall from time to time reasonably
request. Prior to the Closing Date, or in the event this Agreement is
terminated, Buyer shall not use any information relating to the Company obtained
by it from the Company or the Selling Shareholders pursuant to this Section 3.3,
which is not otherwise publicly available, for any purpose unrelated to the
consummation of the transactions contemplated hereby, and prior to such Closing
Date, Buyer will not disclose any such information to any person, unless and
until such time as such information is otherwise publicly available or as Buyer
is advised by counsel that such information is required by law to be disclosed.
In the event this Agreement is terminated, Buyer agrees to keep confidential all
information it has obtained concerning the Company under the terms of this
Agreement for a 30-month period and to return promptly, if so requested by the
Company, every document furnished to Buyer by the Company and the
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Selling Shareholders, in connection with the transactions contemplated hereby,
and any copies thereof Buyer may have made, and to use its best efforts to cause
its representatives to whom such documents were furnished promptly to return
such documents, and any copies thereof any of them may have made.
3.4 Expenses. The Company agrees to pay all of the fees, costs
and expenses of the Company and the Selling Shareholders, and Buyer agrees to
pay all of the fees, costs and expenses of Buyer (including, without limitation,
those of all advisors, including financial advisors, lawyers or accountants)
incurred in connection with the negotiation, preparation, execution, delivery
and performance of this Agreement and the transactions contemplated hereby. The
Company and the Selling Shareholders agree that such fees and costs of the
Company and the Selling Shareholders will be paid or 100% accrued as a liability
and, in each case, expensed on the books of the Company on the Closing Date.
3.5 Negotiations with Others. During the period from the date
of this Agreement to the Closing Date, or until this Agreement is terminated in
accordance with the provisions of Article V, if it is so terminated, the
Company, the Selling Shareholders and their agents shall not, directly or
indirectly, solicit or initiate discussions or engage in negotiations with, or
provide any information to, or authorize any financial advisor or other person
to solicit or initiate discussions or engage in negotiations with, or provide
any information to, any corporation, partnership, person or other entity or
group (other than Buyer) concerning any possible proposal regarding a sale of
shares of capital stock of, or a merger, consolidation, sale of assets or other
similar transaction involving the Company, and the Company and the Selling
Shareholders will promptly notify Buyer if any such discussions or negotiations
are sought to be initiated with, any such information is requested from, or any
such proposal or possible proposal is received by the Company, the Selling
Shareholders and/or their agents (except if the disclosure of such information
is prohibited by the terms of any confidentiality agreement binding upon the
Company or its agents). The Selling Shareholders shall use their reasonable
efforts to obtain the return or destruction of all documents provided to
prospective buyers of the Company and a letter from each such prospective buyer
confirming the same.
3.6 Publicity. From the date hereof to the Closing Date, each
party hereto agrees not to issue any press release or to otherwise make any
public statement with respect to the transactions contemplated hereby without
the consent, which shall not be unreasonably withheld, of the Company (in the
case of releases or statements issued or made by Buyer) or Buyer (in the case of
releases or statements issued or made by the Company or the Selling
Shareholders).
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3.7 Parent Capitalization. Immediately prior to the Closing,
the relevant parties hereto agree to capitalize Parent with at least $30,000,000
in equity as follows: (i) J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the
"Chocolas") shall invest as contemplated in the Stockholders Agreement at the
same per share consideration as, and simultaneously with, the ASCP Affiliates
(as defined below) in shares of capital stock of Parent equivalent to one-third
(subject to the investment by the management shareholders referred to below) of
Parent's equity; (ii) the remaining $20,000,000 or two-thirds (subject to the
investment by the management shareholders referred to below) of the equity shall
be contributed to Parent by one or more affiliates of American Securities
Capital Partners, L.P. ("ASCP Affiliates"); and (iii) the Company's management
shareholders shall have been permitted to make an investment in the Parent on
the same terms as, and simultaneously with, the Chocolas and/or invest
additional equity in Parent on the same terms as, and simultaneously with, the
ASCP Affiliates. Any such investment in Parent by the management shareholders
shall dilute the equity interest of the Chocolas and the ASCP Affiliates on a
pro-rata basis, unless otherwise agreed to by the Chocolas and the ASCP
Affiliates. The investment in Parent by the Chocolas and the management
shareholders is herein referred to as the "Parent Investment".
3.8 Additional Agreements. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated hereby as soon as
reasonably practicable hereinafter.
ARTICLE IV
CONDITIONS TO THE CLOSING
4.1 Conditions to the Closing Relating to Buyer. Consummation
of the transaction contemplated hereby is subject to the fulfillment to the
reasonable satisfaction of Buyer, prior to or at the Closing Date, of each of
the following conditions:
a. Regulatory Consents, Authorizations, etc. All
consents, authorizations, orders and approvals of, and filings and registrations
with any governmental commission, board or other regulatory body or any other
person which are required, prior to the Closing Date, for or in connection with
the execution and delivery of this Agreement and the consummation by each party
hereto and the Company of the transactions contemplated hereby, or which are
required in order to avoid
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violation or termination of any agreement listed in the Disclosure Schedule,
shall have been obtained or made.
b. Representations and Warranties. The
representations and warranties of the Company contained in this Agreement are
true and correct in all material respects at and as of the Closing Date, except
for changes contemplated by this Agreement, with the same force and effect as if
made at and as of the Closing Date; and the Selling Shareholders and the Company
shall have performed or complied in all material aspects with all agreements and
covenants required by this Agreement to be performed or complied with by them at
or prior to the Closing Date.
c. Litigation; Other Events. No action, suit or
proceeding shall have been instituted by any person which seeks to prohibit,
restrict or delay consummation of the transaction contemplated herein or any of
the conditions to the transactions contemplated herein, or seeks damages as a
result of the consummation of the transactions contemplated herein, or speaks to
the conduct of the business of the Company after the Closing Date.
d. Financing. Buyer shall have completed
arrangements, on terms and conditions no less favorable to Buyer than the terms
and conditions set forth in the commitment letter attached hereto as Exhibit
4.1(d) (or alternative arrangements with a financial institution reasonably
acceptable to Buyer and J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ on terms and conditions
reasonably available in the commercial lending market for transactions of this
nature), for the financing of a portion of the purchase price and the ongoing
working capital requirements of the Company.
e. Escrow Agreement. The Escrow Agreement,
attached hereto, shall be executed and delivered substantially in the form of
Exhibit 1.4.
f. Environmental Audit. Buyer shall have
completed the Environmental Audit and the results of such audit shall be
satisfactory to it.
g. Existing Indebtedness. The holder of any
outstanding indebtedness for borrowed money of the Company shall have released
and discharged the same and its lien securing the same against payment by the
Buyer of the outstanding balance of such indebtedness without premium or
penalty.
h. Legal Opinion. Buyer shall have received a
legal opinion, dated as of the Closing Date, from Yoder, Ainlay, ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇▇, special counsel to the Company, substantially in the form of Exhibit
4.1(h) hereto.
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i. Due Diligence. Buyer shall have completed its
due diligence investigation of the Company and shall be reasonably satisfied
with the results thereof.
j. Parent Investment. Buyer shall be reasonably
satisfied with the with the equity investment in Parent by the Chocolas and the
management shareholders contemplated in Section 3.7.
k. Related Agreements. The Stockholders Agreement
substantially in the form of Exhibit 4.1(k)(i) shall have been executed and
delivered by the stockholders named therein. The Management Consulting
Agreement in the form of Exhibit 4.1(k)(ii) shall have been executed and
delivered by the parties named therein.
4.2 Conditions to the Closing Related to the Company and the
Selling Shareholders. Consummation of the transaction contemplated hereby is
subject to the fulfillment to the reasonable satisfaction of the Company and the
Selling Shareholders, prior to or at the Closing Date, of each of the following
conditions:
a. Representations and Warranties. The
representations and warranties of Buyer contained in this Agreement are true and
correct in all material respects on the date hereof and shall also be true and
correct in all material respects at and as of the Closing Date, except for
changes contemplated by this Agreement, with the same force and effect as if
made at and as of the Closing Date; and Buyer shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date.
b. No Injunctions. No injunction or restraining
order shall be in effect prohibiting the transactions contemplated herein.
c. Escrow Agreement. The Escrow Agreement attached
hereto, shall be executed and delivered substantially in the form of Exhibit
1.4.
d. Management Options. A management stock option
program for approximately 10% of the equity in Parent will have been implemented
pursuant to Non-Qualified Stock Option Agreements substantially in the form of
Exhibit 4.2(d) hereto.
e. Financing. Unless J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall
have waived this condition, Buyer shall have completed arrangements, on terms
and conditions no less favorable to Buyer than the terms and conditions set
forth in the commitment letter attached hereto as Exhibit 4.1(d) (or
alternative arrangements
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with a financial institution reasonably acceptable to Buyer and J. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ on terms and conditions reasonably available in the commercial lending
market for transactions of this nature), for the financing of a portion of the
purchase price and the ongoing working capital requirements of the Company.
ARTICLE V
TERMINATION
5.1 Termination. This Agreement may be terminated by:
(1) By mutual action of the Selling Shareholders
and Buyer;
(2) By the Selling Shareholders, if any of the
conditions set forth in Section 4.2 shall not have been complied with
or performed and such noncompliance or nonperformance shall not have
been cured or eliminated (or by its nature cannot be cured or
eliminated) by Buyer on or before the Closing Date; or
(3) By Buyer, if any of the conditions set forth in
Section 4.1 shall not have been complied with or performed and such
noncompliance or nonperformance shall not have been cured or eliminated
(or by its nature cannot be cured or eliminated) by the Company and the
Selling Shareholders on or before the Closing Date.
5.2. Effects of Termination. In the event of the termination
of this Agreement, this Agreement shall thereafter become void and have no
effect, and no party hereto shall have any liability to the other parties hereto
or their respective stockholders or directors or officers in respect thereof,
except for the obligations of the parties hereto in the last two sentences of
Section 3.3, and except that nothing herein will relieve any party from
liability for any breach of this Agreement prior to such termination.
ARTICLE VI
INDEMNITY
6.1 Survival of Representations and Warranties Indemnity. The
representations, warranties, covenants and agreements by the Selling
Shareholders shall survive until one month after the Company's audit of the year
ended December 31, 1996 is completed, except that the representations,
warranties, covenants and agreements of the Company and the Selling
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Shareholders contained in (i) Sections 2.2(ak) and 6.2(ii) shall survive until
June 30, 2000 and (ii) Section 2.2(i) shall survive indefinitely.
6.2 Indemnity. Within said applicable survival periods, the
Selling Shareholders agree to indemnify Buyer, Parent and/or the Company for any
and all claims, demands, losses, costs, charges, expenses, obligations,
liabilities, actions, suits, damages, judgments, and deficiencies, including
interest and penalties, reasonable counsels' fees and all reasonable amounts
paid in settlement of any claim, action, or suit (collectively referred to as
"Claims") which may be sustained, suffered or incurred by Buyer, Parent, the
Company and/or their affiliates and arising out of or by reason of (i) any
breaches of the representations, warranties, covenants and agreements of the
Company or the Selling Shareholders contained herein or (ii) any Materials of
Environmental Concern arising before the Closing Date (whether or not disclosed
in the Disclosure Schedule); provided, that, the Buyer, Parent and/or the
Company shall not be entitled to recover under any Claim under this Section 6.2
until the total amount of all Claims exceeds $200,000 and then only for the
amount by which all Claims exceed such amount; provided, further, that the
obligations of the Selling Shareholders under this Section (other than
obligations relating to Sections 2.2(i), 2.2(ak) and 6.2(ii)) shall be limited
to the Escrowed Funds. Notwithstanding anything to the contrary in the foregoing
sentence, regardless of whether or not the Escrow Agreement is then in effect or
the amount of Escrowed Funds are then sufficient, the parties hereto agree that
there shall be no limit (subject to the first proviso of the preceding sentence)
as to the Selling Shareholders' obligations with respect to Claims relating to
Sections 2.2(i), 2.2(ak) and 6.2(ii); provided, however, that, the Buyer, Parent
and/or the Company shall not be entitled to recover under any Claim under this
Section 6.2 relating to Sections 2.2(i), 2.2(ak) and 6.2(ii) in excess of the
amount of Escrowed Funds then available until the total amount of such Claims in
excess of the amount of Escrowed Funds then available exceeds $300,000 and then
only for the amount by which such Claims in excess of the amount of Escrowed
Funds then available exceed $100,000. The Escrow Agreement shall in all respects
be subject to this Section 6.2 and the threshold amounts herein stated.
6.3 Cooperation. The term "Claims" as used in this Article is
not limited to matters asserted by third parties against Buyer and/or the
Company. Claims does not include any damages for which the Company receives
insurance reimbursement. In the event a Claim is asserted by any third party
against Buyer and/or the Company, it shall notify Shareholders of such Claim by
giving to Shareholders written notice, and shall give Shareholders and their
counsel access to any and all such files, records and other documents as may be
necessary to enable
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Shareholders to investigate or participate in the defense against such Claim
(but at the cost and expense of such Shareholders) and Buyer shall otherwise
cooperate in connection therewith and shall not unreasonably assume a position
contrary to that of Shareholders with respect to all such third party Claims.
ARTICLE VII
CERTAIN POST-CLOSING AGREEMENTS
7.1 Noncompete. Each of the Selling Shareholders who is an
adult member of the Chocola or Brembeck family agrees on behalf of himself or
herself and his or her Affiliates that he or she will not at any time for five
years after the date hereof, except with the express prior written consent of
Parent: (a) directly or indirectly, engage in any Competitive Business (meaning,
any business engaged in the businesses of the Company as of the Closing Date),
whether such engagement shall be as an owner, partner, agent, consultant or
shareholder (except as the holder of not more than five percent (5%) of the
outstanding shares of a corporation whose stock is listed on any national or
regional securities exchange or reported by the National Association of
Securities Dealers Automated Quotations System or any successor thereto); (b)
directly or indirectly solicit, divert or accept business from or otherwise take
away or interfere with any customer of Parent, Buyer, the Company or their
Affiliates engaged in any Competitive Business, including without limitation any
person who was a customer or whose business was being pursued by Parent, Buyer,
the Company or their Affiliates prior to the date hereof; or (c) directly or
indirectly, accept employment with, be employed by or be a principal of any
business or enterprise operating within the United States of America which then
employs or has as a principal or holder of any interest therein (except as the
holder of not more than one percent (1%) of the outstanding shares of a
corporation whose shares are publicly traded) any individual who was previously
employed in a managerial or consultant position with Parent, Buyer, the Company
or any of their Affiliates, provided however, that this prohibition shall not be
applicable if such business or enterprise is not a Competitive Business.
7.2 Nondisclosure. Each of the Selling Shareholders, agree
that, at all times from and after the date hereof, except as required by law or
by the order of any court or government agency or in the performance of his
duties as an employee of the Company or its Subsidiaries, he shall keep secret
and retain in strictest confidence and shall not, except with the express prior
written consent of Buyer, directly or indirectly disclose, communicate or
divulge to any person, or use for the benefit of any person, any Proprietary
Information (meaning, all information or data with respect to the conduct or
details of the business of
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the Company including, without limitation, methods of operation, customers and
customer lists, details of contracts with customers, consultants, suppliers or
employees, products, proposed products, former products, proposed, pending or
completed acquisitions of any company, division, product line or other business
unit, prices and pricing policies, fees, costs, plans, designs, technology,
inventions, trade secrets, know-how, software, marketing methods, policies,
plans, personnel, suppliers, competitors, markets or other specialized
information or proprietary matters of the business of the Company). The
restriction contained in the preceding sentence shall not apply to any
Proprietary Information that (i) is a matter of public knowledge on the date of
this Agreement or (ii) becomes a matter of public knowledge after the date of
this Agreement from another source which is under no known obligation of
confidentiality to Buyer or its Affiliates.
ARTICLE VIII
MISCELLANEOUS
8.1 Notices. Any notice or other communication required or
permitted hereunder shall be sufficiently given if delivered personally or sent
by telecopy (receipt confirmed by telephone) or by registered or certified mail,
postage prepaid, addressed:
if to Buyer or Parent:
CTB Holdings, Inc.
c/o American Securities Capital Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company or the Selling Shareholders:
CTB, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇
▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Yoder, Ainlay, ▇▇▇▇▇ & Buckingham
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or such other person or address as shall be furnished in writing by any party to
the other parties prior to the giving of the applicable notice or communication,
and such notice or communication shall be deemed to have been given ten (10)
days after mailed, or in the case of personal delivery or telecopy, upon receipt
of transmission.
8.2 Financial Advisors and Brokers. Other than Price
Waterhouse L.L.P., the Company and the Selling Shareholders represent and
warrant, jointly and severally, that no investment banker, broker or finder is
entitled to any financial advisory, brokerage or finder's fee or other similar
payment from the Company based on agreements, arrangements or undertakings made
by it or any of its respective directors, officers or employees in connection
with the transactions contemplated hereby.
8.3 Counterparts. This Agreement shall be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.4 Exhibits, Schedules and Disclosure Schedule. The
Exhibits, Schedules and Disclosure Schedule are integral parts of
this Agreement.
8.5 Headings and Table of Definitions. The headings herein and
the Table of Definition are for convenience only, do not constitute a part of
this Agreement, and shall not be deemed to limit or affect any of the provisions
hereof.
8.6 Power of Attorney. Each of the undersigned Selling
Shareholders hereby irrevocably makes, constitutes and appoints J. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ as his, her or its attorney-in-fact (the "Shareholders Representative")
with full power to act in his, her or its place and stead to compromise any
claim or take any other action, including without limitation pursuant to Section
6.3, with respect to this Agreement.
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8.7 Miscellaneous. This Agreement (including the Schedule and
Exhibits hereto and the Disclosure Schedule) (a) constitutes the entire
Agreement and understanding and supersedes all prior agreements and
understandings, both written and oral, among the parties hereto with respect to
the subject matter hereof, (b) is not intended to confer upon any other person
any rights or remedies hereunder, (c) shall not be assigned, by operation of law
or otherwise, and (d) shall be governed in all respects, including validity,
interpretation and effect, by the internal laws of the State of Indiana.
8.8 Arbitration. Any party shall have the right to submit any
dispute, controversy or claim arising out of this Agreement (including, without
limitation, Sections 1.5 and 1.6) to neutral binding arbitration in the City of
Chicago, by a partner of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ & ▇▇▇▇▇ or KPMG or Coopers
▇▇▇▇▇▇▇. In the event of arbitration, the matter shall be heard before a single
arbitrator. Any party requesting arbitration shall give notice to the other
party stating the issue to be resolved. The decision of the arbitrator shall be
based solely upon the written submissions to such partner and shall be final and
binding on both parties, with the non-prevailing party (who shall be determined
by the arbitrator) bearing all costs and expenses of each of the parties with
respect to the dispute. Each party hereby consents to the entry of a judgment in
any court of competent jurisdiction enforcing any arbitration decision made in
accordance herewith.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written:
CTB HOLDINGS, INC.
Attest /s/▇▇▇▇▇ ▇▇▇▇▇▇ By /s/
-------------------------- ----------------------------------
Name:
Title:
CTB VENTURES, INC.
Attest /s/▇▇▇▇▇ ▇▇▇▇▇▇ By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- ----------------------------------
Name:
Title:
CTB, INC.
Attest By /s/ J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------- ----------------------------------
Name: J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Witness /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Witness /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Witness /s/J. Byrib Chocola
-----------------------------
Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Witness /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Witness /s/J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
40
Witness s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Key Trust Co. of Indiana
Witness /s/▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice
President
for ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Trust
Key Trust Co. of Indiana
Witness /s/▇▇▇▇ ▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice
President
for J. ▇▇▇▇▇ ▇▇▇▇▇▇▇ Trust
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Key Trust co. of Indiana
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice
President
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Witness /s/▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇
Witness /s/▇▇▇▇▇▇▇ ▇. Frocheur
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Name: ▇▇▇▇▇▇▇ ▇. Frocheur
Witness /s/▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
41
Witness /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Witness /s/▇▇▇▇▇ ▇▇▇▇
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Witness /s/▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Witness /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Witness /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Witness /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Witness /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Witness /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Witness /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Witness /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
Witness /s/▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Witness /s/▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Witness /s/▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇
Witness /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Witness /s/▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Witness /s/▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇
42
Witness /s/▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Witness /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
MENNONITE BOARD OF MENNONITE BOARD OF EDUCATION, INC.
EDUCATION, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President Title: Goshen College,
President
UNITED METHODIST FOUNDATION FOR
ADULT CHRISTIAN MINISTRIES, INC.
By: /s/▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer
FOURTH FREEDOM FORUM
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President