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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
by and among
ROCK-TENN COMPANY
and
THE SHAREHOLDERS OF WABASH CORPORATION
Dated January 21, 1997
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TABLE OF CONTENTS
PAGE
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STOCK ..................................................................................7
Section 1. Purchase of Shares............................................2
1.1 Transfer of Shares............................................2
1.2 Purchase Price................................................2
Section 2. Instruments of Conveyance and Closing.........................3
2.1 Transfer of Shares............................................3
2.2 Parent Transfer...............................................3
2.3 Further Assurances............................................3
2.4 Closing.......................................................3
Section 3. Representations and Warranties of Nonprofit Shareholders......4
3.1 Execution and Enforceability..................................4
3.2 Absence of Restrictions and Conflicts.........................4
3.3 Ownership of Shares...........................................4
3.4 Consents and Approvals........................................4
3.5 Legal Proceedings.............................................4
3.6 Brokers, Finders and Investment Bankers.......................5
Section 4. Representations and Warranties of the ▇▇▇▇ Shareholders.......5
4.1 Organization..................................................5
4.2 Execution and Enforceability..................................5
4.3 Absence of Restrictions and Conflicts.........................5
4.4 Capitalization of Waldorf Entities; Ownership of Shares.......6
4.5 Ownership of Assets and Related Matters.......................7
4.6 Financial Statements.........................................10
4.7 No Undisclosed Liabilities...................................11
4.8 Absence of Certain Changes...................................12
4.9 Legal Proceedings............................................14
4.10 Licenses, Permits and Compliance with Law....................14
4.11 Material Contracts...........................................15
4.12 Tax Returns; Taxes...........................................17
4.13 Officers, Directors and Employees............................19
4.14 Employee Benefit Plans.......................................19
4.15 Labor Relations..............................................22
4.16 Insurance....................................................23
4.17 Environmental Matters........................................23
4.18 Intellectual Property........................................24
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4.19 Transactions with Affiliates. ..............................25
4.20 Customer Relations. .........................................25
4.21 Nondisclosed Payments. .....................................26
4.22 Brokers, Finders and Investment Bankers. ...................26
4.23 Disclosure. ................................................26
4.24 Waldorf Canada Advances. ...................................26
4.25 HEI Development..............................................26
Section 5. Representations and Warranties of Purchaser..................27
5.1 Organization. ..............................................27
5.2 Execution and Enforceability. ..............................27
5.3 Absence of Restrictions and Conflicts. .....................27
5.4 Brokers, Finders and Investment Bankers. ...................27
5.5 Disclosure. ................................................28
Section 6. Covenants ...................................................28
6.1 Sale of Waldorf Canada.......................................28
6.2 Sale of Wabash Assets. .....................................29
6.3 Conduct of Business Prior to Closing Date. .................29
6.4 No Solicitation; Acquisition Proposals. ....................31
6.5 Executive Payments. ........................................32
6.6 Fees and Expenses. .........................................32
6.7 Reasonable Efforts; Further Assurances; Cooperation. .......33
6.8 Access. ....................................................33
6.9 Confidentiality. ...........................................34
6.10 Public Announcements. ......................................34
6.11 Financial Statements and Other Information. .................34
6.12 Environmental-Related Work. ................................34
6.13 Interest Amount..............................................35
6.14 HEI Development. ...........................................35
6.15 Shareholder Net GECC Payment. ..............................35
Section 7. Conditions to Obligations of All Parties.....................36
7.1 No Injunction. .............................................36
7.2 HSR Act. ...................................................36
Section 8. Conditions to Obligations of Purchaser.......................36
8.1 Representations and Warranties. ............................36
8.2 No Material Adverse Effects. ...............................36
8.3 Performance of Obligations of Waldorf Entities
and Shareholders. ..........................................36
8.4 Consents. ..................................................36
8.5 Compliance Certificates. ...................................37
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8.6 Material Contracts. ........................................37
8.7 Canada Sale. ...............................................37
8.8 Executive Rights. ..........................................37
8.9 Certain Agreements. .........................................37
8.10 Resignation Letters. .......................................37
8.11 Stock Certificates. ........................................37
8.12 Canadian Deficit. ..........................................37
8.13 Legal Opinion. .............................................37
8.14 Payment of Wabash Notes. ...................................37
8.15 Assumption Agreement. ......................................38
8.16 Guaranty. ..................................................38
Section 9. Conditions to Obligations of Shareholders....................38
9.1 Representations and Warranties. ............................38
9.2 Performance of Obligations of Purchaser. ...................38
9.3 Consents. ..................................................38
9.4 Certificates. ..............................................38
9.5 Consulting Agreement. ......................................38
9.6 Parent Transfer. ...........................................38
9.7 Legal Opinion. .............................................38
9.8 Canadian Deficit.............................................39
Section 10. Indemnification. ............................................39
10.1 Indemnification Obligations of the ▇▇▇▇ Shareholders. ......39
10.2 Indemnification Obligations of Purchaser. ..................41
10.3 Indemnification Procedure....................................42
10.4 Claims Period................................................44
10.5 Liability Limits.............................................45
10.6 Investigations...............................................47
Section 11. Termination..................................................47
11.1 Termination..................................................47
11.2 Specific Performance and Other Remedies......................48
11.3 Effect of Termination........................................48
Section 12. Shareholder Representative...................................48
Section 13. Miscellaneous................................................50
13.1 Notices......................................................50
13.2 Attachments..................................................51
13.3 Assignment; Successors in Interest...........................51
13.4 Number; Gender...............................................51
13.5 Captions.....................................................51
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13.6 Controlling Law; Integration; Amendment......................52
13.7 Severability.................................................52
13.8 Counterparts.................................................52
13.9 Enforcement of Certain Rights................................52
13.10 Waiver.......................................................52
13.11 Material and Knowledge Defined...............................52
13.12 Arbitration; Legal Proceedings...............................53
EXHIBITS
Exhibit A - Parent Transfer Agreement
Exhibit B - Stock Transfer Agreement
Exhibit C - Consulting Agreement
Exhibit D-1 - Noncompetition Agreement for ▇▇▇▇▇▇ ▇. ▇▇▇▇
Exhibit D-2 - Noncompetition Agreement for ▇▇▇▇ ▇. ▇▇▇▇
Exhibit E - Opinion of ▇▇▇▇▇▇▇, Street and Deinard
Exhibit F - Assumption Agreement
Exhibit G - Guaranty
Exhibit H - Opinion of King & Spalding
Exhibit I - Form of Affidavit
ANNEX
Annex I - Environmental Reports
Annex II - List of Annexes, Schedules and Exhibits
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT, dated as of the 21st day of January, 1997, by and
among ROCK-TENN COMPANY, a Georgia corporation ("Purchaser"); ▇▇▇▇▇▇ ▇. ▇▇▇▇, an
individual resident of the State of Florida (the "Individual Shareholder");
▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇, as Trustees of The ▇▇▇▇▇ ▇.
▇▇▇▇▇ 1987 Trust U/A dated December 30, 1987; ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇, as Trustees of The ▇▇▇▇▇ ▇. ▇▇▇▇ 1987 Trust U/A dated December
30, 1987; ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇, as Trustees of the ▇▇▇▇
▇. ▇▇▇▇ Trust U/A dated December 30, 1987; and Norwest Bank South Dakota, N.A.,
as Trustee of The Alternate Distributions Trust for ▇▇▇▇▇ ▇. ▇▇▇▇, The Alternate
Distributions Trust for ▇▇▇▇ ▇. ▇▇▇▇ and The Alternate Distributions Trust for
▇▇▇▇▇ ▇. ▇▇▇▇▇ created under The ▇▇▇▇ ▇. ▇▇▇▇ Family Trust U/A dated July 2,
1985, with ▇▇▇▇ ▇. ▇▇▇▇ as Donor (collectively the "Trusts" and together with
the Individual Shareholder being hereinafter referred to individually as a "▇▇▇▇
Shareholder" and collectively as the "▇▇▇▇ Shareholders"); THE ARCHDIOCESE OF
SAINT ▇▇▇▇ AND MINNEAPOLIS CATHOLIC COMMUNITY FOUNDATION and THE SAINT ▇▇▇▇
FOUNDATION (each individually a "Nonprofit Shareholder" and collectively the
"Nonprofit Shareholders") (the Individual Shareholder, the Trusts and the
Nonprofit Shareholders sometimes being hereinafter referred to as a
"Shareholder" and collectively as "Shareholders");
W I T N E S S E T H:
WHEREAS, Shareholders own all of the issued and outstanding shares of
capital stock of Wabash Corporation, a Delaware corporation ("Wabash");
WHEREAS, Wabash owns all of the issued and outstanding shares of
capital stock of Waldorf Corporation, a Delaware corporation ("Waldorf");
WHEREAS, Waldorf owns all of the issued and outstanding shares of
capital stock of Waldorf Inc., a corporation formed under the laws of Ontario
("Waldorf Canada"), and Best Recycling, Inc., an Iowa corporation ("Best"), and,
with Wabash, owns all of the issued and outstanding shares of capital stock of
Waldorf Realty, Inc., a Delaware corporation ("Waldorf Realty") (Wabash,
Waldorf, Best and Waldorf Realty are hereinafter sometimes referred to
individually as a "Waldorf Entity" and collectively as "Waldorf Entities"); and
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WHEREAS, subject to the terms and conditions of this Agreement,
Shareholders desire to sell, and Purchaser desires to purchase, all of the
issued and outstanding shares of capital stock of Wabash.
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:
Section 1. Purchase of Shares.
1.1 Transfer of Shares. On the terms and subject to the conditions set
forth in this Agreement, Shareholders hereby agree to sell, assign, transfer and
deliver to Purchaser on the "Closing Date" (as hereinafter defined), and
Purchaser hereby agrees to purchase from Shareholders on the Closing Date, the
number of shares of common stock of Wabash set forth on Schedule 1.1 hereto (all
of such shares being sold hereunder being hereinafter referred to collectively
as the "Shares"), which Shares constitute all of the issued and outstanding
shares of capital stock of Wabash.
1.2 Purchase Price. On the terms and subject to the conditions set
forth in this Agreement, in consideration for all of the Shares:
(a) On the Closing Date, Purchaser shall pay to Shareholders, by wire
transfer of immediately available funds to the respective accounts
specified in Schedule 1.2(a) hereto, an amount (the "Cash Payment") equal
to (i) the sum of (A) Two Hundred Thirty-Eight Million, Nine Hundred
Forty-Two Thousand, Two Hundred Eighty Dollars ($238,942,280), (B) the
combined amounts of the "Wabash Cash" and "Wabash Notes" (as hereinafter
defined), (C) any payments (the "Canadian Proceeds") received by Waldorf on
the disposition of its shares in, and receivables from, Waldorf Canada and
(D) the amount of the "Tax Benefit" (as defined in Section 6.1(e)), less
(ii) an amount equal to the sum of (A) the "Canadian Deficit" (as
hereinafter defined), (B) the "Parent Transfer Taxes" (as defined in
Section 6.2), (C) the "Excess Amount" (as defined in Section 6.5) and (D)
the "Shareholder Net GECC Payment" (as defined in Section 6.15). The amount
to be received by each Shareholder shall be an amount equal to (1) the Cash
Payment multiplied by (2) the respective "Percentage Interest" of such
Shareholder specified in Schedule 1.1 hereto. As used herein, the term
"Canadian Deficit" shall mean an amount equal to (A) the sum of all funds,
if any (the "Advances"), advanced to Waldorf Canada by the Waldorf Entities
after October 31, 1996 (irrespective of whether such funds were advanced as
loans, contributions, accounts receivable, payments to third parties on
behalf of Waldorf Canada (including, without limitation, payments to
suppliers and employees), or otherwise) less (B) all repayments, if any,
made by Waldorf Canada to the Waldorf Entities after October 31, 1996 but
prior to the Closing Date of the Advances and other amounts advanced to or
invested in Waldorf Canada by the Waldorf Entities. If the Canadian Deficit
is a negative number (i.e., it is a surplus) it shall act as an increase to
the
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purchase price rather than as a reduction thereof. As used herein, the
term "Wabash Cash" shall mean any and all cash (exclusive of the Canadian
Proceeds) held by Wabash as of the Closing Date, and the term "Wabash
Notes" shall mean any and all notes or other receivables outstanding as of
the Closing Date which are payable by the Shareholders to Wabash and not
otherwise transferred to the "Shareholder Representative" (as hereinafter
defined) pursuant to Section 1.2(b).
(b) On or prior to the Closing Date, the parties shall cause Wabash to
transfer, convey and assign to the Shareholder Representative for the
benefit of the ▇▇▇▇ Shareholders (or, at the written election of the ▇▇▇▇
Shareholders, to a third party designated by the ▇▇▇▇ Shareholders) the
assets of Wabash identified in Schedule 1.2(b) (which will not include (i)
the Wabash Cash, (ii) the Wabash Notes, if any, (iii) the Canadian
Proceeds, (iv) the capital stock of Waldorf Realty, (v) the capital stock
of Waldorf, (vi) Wabash's rights pursuant to the "Champion Agreement" (as
hereinafter defined), the "Trident Agreement" (as hereinafter defined), and
the "Tax Escrow Agreement" (as hereinafter defined), (vii) the books and
records of Wabash and (viii) except as provided in Section 6.14, Wabash's
ownership interest in HEI Development, Inc., a Delaware corporation ("HEI
Development")) (all such assets identified in Schedule 1.2(b) being
hereinafter referred to as the "Ancillary Assets") (collectively, the
"Parent Transfer"), as more particularly described in the Transfer
Agreement attached hereto as Exhibit A (the "Parent Transfer Agreement").
Section 2. Instruments of Conveyance and Closing.
2.1 Transfer of Shares. On the Closing Date, Shareholders shall
deliver all stock certificates representing the Shares to Purchaser, duly
endorsed in blank.
2.2 Parent Transfer. On or prior to the Closing Date, Wabash and the
▇▇▇▇ Shareholders (or their designee) shall execute and deliver the Parent
Transfer Agreement to effect the transactions contemplated thereby.
2.3 Further Assurances. Each party hereto shall on the Closing Date
and from time to time thereafter at any other party's reasonable request and
without further consideration execute and deliver to such other party such
instruments of transfer, conveyance and assignment in addition to those
delivered pursuant to Section 2.1 or 2.2 as shall be reasonably requested to
transfer, convey and assign more effectively the Shares to Purchaser or the
Ancillary Assets to the Shareholder Representative.
2.4 Closing. The actions to be taken pursuant to Sections 2 and 6.1
hereof and the delivery of the other instruments, certificates and legal
opinions required under Sections 8 and 9 hereof (collectively, the "Closing"),
shall take place at the offices of King & Spalding, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. Subject to the satisfaction (or waiver) of all of the
conditions set forth in Sections 7, 8 and 9 and provided that this Agreement has
not otherwise
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been terminated in accordance with Section 11.1, the Closing shall occur on the
later of January 21, 1997 or the date which is three business days after the
date as of which all of the conditions set forth in Sections 7, 8, and 9 have
been satisfied (or waived) (the date and time of the closing hereunder being
referred to herein as the "Closing Date").
Section 3. Representations and Warranties of Nonprofit Shareholders
Each Nonprofit Shareholder, individually and not jointly (and only
with respect to that Nonprofit Shareholder), hereby represents and warrants to
Purchaser as follows:
3.1 Execution and Enforceability. This Agreement has been, and each
other certificate or instrument to be executed and delivered by the Nonprofit
Shareholders in connection with the transactions contemplated by this Agreement
will be as of the Closing Date, duly executed and delivered by the Nonprofit
Shareholders and this Agreement constitutes the valid and legally binding
agreement of the Nonprofit Shareholders, enforceable against each Nonprofit
Shareholder in accordance with its terms.
3.2 Absence of Restrictions and Conflicts. The execution, delivery and
performance of this Agreement, the consummation of the transactions contemplated
by this Agreement and the fulfillment of and compliance with the terms and
conditions of this Agreement do not, with or without the passing of time or the
giving of notice or both, violate or conflict with, constitute a breach of or
default under, result in the loss of any benefit under, or permit the
acceleration of any obligation under, (a) any term or provision of the charter
documents or bylaws of the Nonprofit Shareholders, (b) any judgment, decree or
order of any court or governmental authority or agency to which any of the
Nonprofit Shareholders is a party or by which any of the Nonprofit Shareholders
or any of their respective properties is bound or (c) any statute, law, rule or
regulation applicable to the Nonprofit Shareholders.
3.3 Ownership of Shares. Each Nonprofit Shareholder owns, beneficially
and of record, and has the right to transfer to Purchaser, all the shares set
forth opposite the Nonprofit Shareholders' name as set forth in Schedule 1.1,
free and clear of any liens (the shares transferred by the Nonprofit
Shareholders being referred to as the "Nonprofit Shares"). At the Closing the
Nonprofit Shareholders will transfer and convey, and Purchaser will acquire,
good, valid and marketable title to the Nonprofit Shares, free and clear of any
liens.
3.4 Consents and Approvals. Except as set forth on Schedule 3.4
hereto, wit respect to the sale of the Nonprofit Shares hereunder, no filing
with, and no permit, authorization, consent or approval of any authority or any
other person is necessary for the consummation by the Nonprofit Shareholders of
the transactions contemplated by this Agreement.
3.5 Legal Proceedings. With respect to the sale of the Nonprofit
Shares hereunder, there are no suits, actions, claims, proceedings or
investigations pending or, to the
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best knowledge of the Nonprofit Shareholders, threatened against, relating to or
involving the Nonprofit Shareholders or any of their officers, directors or
trustees, before any court, arbitrator or administrative or governmental body
affecting the sale of the Nonprofit Shares hereunder. None of the Nonprofit
Shareholders is subject to any judgment, decree, injunction, rule or order of
any court, arbitrator or administrative or governmental body affecting the sale
of the Nonprofit Shares hereunder. No action or proceeding has been instituted
against any of the Nonprofit Shareholders before any court or other governmental
body by any person or public authority seeking to restrain or prohibit the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
3.6 Brokers, Finders and Investment Bankers. None of the Nonprofit
Shareholders has employed any broker, finder, investment banker or other
intermediary or incurred any liability for any investment banking fees,
financial advisory fees, brokerage fees, finders' fees or other similar fees in
connection with the transactions contemplated herein.
Section 4. Representations and Warranties of the ▇▇▇▇ Shareholders.
The ▇▇▇▇ Shareholders hereby, jointly and severally, represent and
warrant to Purchaser as follows:
4.1 Organization. Except as disclosed in Schedule 4.1, each of the
Waldorf Entities is a corporation duly organized, validly existing and in good
standing under the laws under which it was formed and has all requisite power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted. Except as disclosed in Schedule 4.1, each of
the Waldorf Entities is duly qualified to transact business and is in good
standing as a foreign corporation in each jurisdiction where the character of
its activities requires such qualification. Waldorf has heretofore made
available to Purchaser correct and complete copies of the charter documents and
bylaws as currently in effect and the minute books and stock records of the
Waldorf Entities. Schedule 4.1 contains a correct and complete list of the
locations of incorporation and the jurisdictions in which the Waldorf Entities
are qualified to do business as foreign corporations.
4.2 Execution and Enforceability. This Agreement has been, and each
other certificate, agreement, document or instrument to be executed and
delivered by Shareholders, any Shareholder or Shareholder Representative (on
behalf of any Shareholder) in connection with the transactions contemplated by
this Agreement (the "Waldorf Ancillary Documents") will be as of the Closing
Date, duly executed and delivered by Shareholders, any Shareholder or
Shareholder Representative (on behalf of any Shareholder) and constitutes or
will constitute (as the case may be) the valid and legally binding agreement(s)
of such Shareholder, enforceable against each such Shareholder in accordance
with their respective terms.
4.3 Absence of Restrictions and Conflicts. Except as set forth in
Schedule 4.3, the execution, delivery and performance of this Agreement and the
Waldorf Ancillary
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Documents, the consummation of the transactions contemplated by this Agreement
and the Waldorf Ancillary Documents and the fulfillment of and compliance with
the terms and conditions of this Agreement and the Waldorf Ancillary Documents
do not and will not (as the case may be), with or without the passing of time or
the giving of notice or both, violate or conflict with, constitute a breach of
or default under, result in the loss of any benefit under, or permit the
acceleration of any obligation under, (a) any term or provision of the charter
documents or bylaws of the Waldorf Entities or Waldorf Canada, (b) any "Waldorf
Contract", "Real Property Lease" or "Personal Property Lease" (all as
hereinafter defined), (c) any judgment, decree or order of any court or
governmental authority or agency to which any of the Waldorf Entities is a party
or by which any of the Waldorf Entities or any of their respective properties is
bound or (d) any statute, law, rule or regulation applicable to the Waldorf
Entities. Except for compliance with the applicable requirements of the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), no consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental agency or public or regulatory
unit, agency, body or authority with respect to the Waldorf Entities is required
in connection with the execution, delivery or performance of this Agreement or
the Waldorf Ancillary Documents by Shareholders or the consummation of the
transactions contemplated by this Agreement or the Waldorf Ancillary Documents
by Shareholders.
4.4 Capitalization of Waldorf Entities; Ownership of Shares.
(a) The authorized capital stock of Wabash consists of 2,500 shares of
common stock, $1 par value per share ("Wabash Common Stock"). As of the
date hereof, there are 796.24 shares of Wabash Common Stock issued and
outstanding. Each share of Wabash Common Stock outstanding as of the date
hereof is duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights and is owned by Shareholders as set forth in
Schedule 1.1, and no such shares have been issued in violation of any
federal or state securities law. The authorized capital stock of Waldorf
consists of 12,500 shares of common stock, $1 par value per share ("Waldorf
Common Stock"). As of the date hereof, there are 10,000 shares of Waldorf
Common Stock issued and outstanding. Each share of Waldorf Common Stock
outstanding as of the date hereof is duly authorized, validly issued, fully
paid, nonassessable and free of preemptive rights, and is owned by Wabash,
and no such shares have been issued in violation of any federal or state
securities law. The authorized capital stock of Best consists of 100,000
shares of common stock, $10 par value per share ("Best Common Stock"). As
of the date hereof, there are 200 shares of Best Common Stock issued and
outstanding. Each share of Best Common Stock outstanding as of the date
hereof is duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights, and is owned by Waldorf, and no such shares have
been issued in violation of any federal or state securities law. The
authorized capital stock of Waldorf Realty consists of 2,500 shares of
common stock, $1 par value per share ("Waldorf Realty Common Stock"). As of
the date hereof, there are 1,000 shares of Waldorf Realty Common Stock
issued and outstanding. Each share of Waldorf Realty Common Stock
outstanding as of the date hereof is duly authorized, validly issued,
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fully paid, nonassessable and free of preemptive rights, and is owned
by Wabash and Waldorf as set forth in Schedule 4.4, and no such shares have
been issued in violation of any federal or state securities law. Except as
set forth in this Section 4.4 or in Schedule 4.4, there are no shares of
capital stock of the Waldorf Entities outstanding, and there are no
subscriptions, options, convertible securities, calls, puts, rights,
warrants or other agreements, claims or commitments of any nature
whatsoever obligating any of the Waldorf Entities to purchase, redeem,
issue, transfer, deliver or sell, or cause to be purchased, redeemed,
issued, transferred, delivered or sold, additional shares of the capital
stock or other securities of the Waldorf Entities or obligating the Waldorf
Entities to grant, extend or enter into any such agreement or commitment.
No prior offer, issue, redemption, call, purchase, sale, transfer,
negotiation or other transaction of any nature with respect to the capital
stock or equity interests of the Waldorf Entities has given or may give
rise to any claim or action by any person and no fact or circumstance
exists which could give rise to any such right, claim or action on behalf
of any person. Except as set forth in Schedule 4.4, no corporation or other
organization has been merged with or into any of the Waldorf Entities.
There are no dividends which have accrued or been declared but are unpaid
on the capital stock of any of the Waldorf Entities, and, except as set
forth on Schedule 4.4, there are no stock appreciation, phantom stock or
similar rights with respect to any of the Waldorf Entities. Except as set
forth in this Section 4.4 or in Schedule 4.4, none of the Waldorf Entities
has any direct or indirect equity interest (by stock ownership, partnership
interest, joint venture interest or otherwise) in any other corporation,
partnership, joint venture, firm, association or business enterprise.
(b) Each ▇▇▇▇ Shareholder owns, beneficially and of record, and has
the right to transfer to Purchaser, all shares set forth opposite the ▇▇▇▇
Shareholder's name as set forth in Schedule 1.1, free and clear of any
liens. At the Closing the Shareholders will transfer and convey, and
Purchaser will acquire, good, valid and marketable title to the Shares,
free and clear of any liens.
4.5 Ownership of Assets and Related Matters.
(a) Real Property. Schedule 4.5(a) sets forth a true, correct and
complete list and legal description of all of the real property owned by
Waldorf or Waldorf Realty (the "Real Property"). Except as set forth in
Schedule 4.5(a), Waldorf or Waldorf Realty has good, marketable and
insurable title to the Real Property free and clear of all liens, pledges,
security interests, charges, claims, leasehold interests, tenancies,
restrictions and encumbrances of any nature whatsoever other than (i) liens
for taxes not yet due and payable, (ii) statutory liens of landlords and
liens of carriers, warehousemen, mechanics, materialmen and repairmen
incurred in the ordinary course of business and not yet delinquent, and
(iii) zoning, building or other restrictions, variances, covenants,
rights-of-way, encumbrances, encroachments, easements and other minor
irregularities in title, none of which, individually or in the aggregate,
(1) interfere with the present use or occupancy of any of the Real Property
by Waldorf or Waldorf Realty, (2) materially
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decrease the value thereof, or (3) would impair the ability of Waldorf
or Waldorf Realty to sell any such Real Property (the foregoing, together
with any matters identified in Schedule 4.5(a), are hereinafter referred to
collectively as "Permitted Liens"). Waldorf or Waldorf Realty is in
peaceful and undisturbed possession of all of the Real Property and all
buildings, structures, fixtures and improvements located thereon, and
Waldorf or Waldorf Realty has adequate rights of ingress and egress with
respect to such Real Property and the buildings, structures, fixtures and
improvements located thereon. Best owns no real property.
Waldorf has heretofore delivered to Purchaser correct and complete
copies of all deeds, mortgages, deeds of trust, title insurance policies,
surveys and similar documents (including all amendments thereof) in the
possession of the Waldorf Entities relating to the Real Property.
Except for Permitted Liens, no Real Property is subject to any
material rights-of way, building use restrictions, exceptions, variances,
reservations or limitations of any nature whatsoever, not of record.
(b) Leases. Schedule 4.5(b) sets forth a true, correct and complete
list of all leases and agreements granting Waldorf and Best possession of
or rights to real property (the "Real Property Leases") and all material
leases and agreements granting Waldorf and Best possession of or rights to
personal property (excluding leases for office equipment, telephones, fax
machines and copiers) (the "Personal Property Leases"). Waldorf has
heretofore delivered to Purchaser correct and complete copies of all of the
Real Property Leases and the Personal Property Leases. All of the Real
Property Leases and the Personal Property Leases are valid and enforceable
in accordance with their respective terms with respect to Waldorf and Best
and, to the best knowledge of Shareholders, each other party thereto
(except as enforcement may be limited by principles of equity, including
reasonableness, fair dealing and limitations on self-help). There are no
existing defaults of Waldorf Entities with respect to any Real Property
Leases or Personal Property Leases or, to the best knowledge of
Shareholders, of any of the other parties thereto (or events or conditions
which, with or without notice or lapse of time or both would constitute a
default). Except for matters set forth on Schedule 4.5(b) regarding Best,
Waldorf and Best have peaceful and undisturbed physical possession of all
real property, equipment and other assets which are covered by the Real
Property Leases and Personal Property Leases. Except for matters set forth
on Schedule 4.5(b) regarding Best, with respect to the real property
covered by the Real Property Leases and all buildings, structures, fixtures
and improvements located thereon, Waldorf and Best have adequate rights of
ingress and egress for the operation of the Business in the ordinary course
consistent with past practice. Except as set forth on Schedule 4.5(b), none
of the Real Property Leases or the Personal Property Leases is carried as
an asset on the books of the Waldorf Entities.
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(c) Personal Property. Except as disclosed in Schedule 4.5(c) and
except for personal property leased pursuant to the Personal Property
Leases and inventory disposed of in the ordinary course of business since
June 30, 1996, Waldorf or Best, as the case may be, has good and marketable
title to, and physical possession of, all of the tangible personal property
which is reflected on the June 30, 1996 balance sheet of Waldorf (the
"Waldorf Audited Balance Sheet") which is included in the "Audited
Financial Statements" (as hereinafter defined), free and clear of all
liens, pledges, security interests, charges, claims, restrictions and
encumbrances of any nature whatsoever. Waldorf or Best, as the case may be,
has physical possession of all personal property included in Schedule
4.5(c).
(d) Inventories. Except as disclosed in Schedule 4.5(d), the
inventories of Waldorf (i) are sufficient for the operation of Waldorf in
the ordinary course of business consistent with past practice, (ii) consist
of items which are good and merchantable within normal trade tolerances
(subject to reserves for such items shown on the Waldorf Audited Balance
Sheet), (iii) are of a quality and quantity presently usable or saleable in
the ordinary course of business of Waldorf (subject to reserves for such
items shown on the Waldorf Audited Balance Sheet), (iv) are valued on the
books and records of Waldorf at the lower of cost or market, with the cost
determined under FIFO inventory valuation method consistent with past
practice (except the LIFO inventory valuation method consistent with past
practice is used for all audited financial statement reporting purposes),
and (v) are free and clear of all liens, pledges, security interests,
charges, claims, restrictions and encumbrances of any nature whatsoever. No
previously sold inventory is subject to returns in excess of those
historically experienced by Waldorf.
(e) Accounts Receivable. Except as disclosed in Schedule 4.5(e), the
accounts receivable of Waldorf and Best arose from bona fide transactions
in the ordinary course of business, have been executed on terms consistent
with the past practice of Waldorf and Best, and, to the best knowledge of
Shareholders, except for the amount of any applicable existing reserves for
uncollectibility, counterclaims or setoffs shown on the Waldorf Audited
Balance Sheet, (i) are good and collectible at the recorded amounts
thereof, (ii) are not subject to any counterclaims or setoffs and (iii) are
not otherwise in dispute. Except as set forth in Schedule 4.5(e), no
accounts receivable have been factored, pledged, turned over for
collection, or assigned to any person or third party.
(f) No Third Party Options. Except as disclosed in Schedule 4.5(f) and
except for sales of inventory in the ordinary course of business, there are
no existing agreements, options, commitments or rights with, of or to any
person to acquire any assets, properties or rights of the Waldorf Entities
or any interest therein.
(g) Ownership. Except as disclosed in Schedule 4.5(g) and except for
assets leased under the Real Property Leases and the Personal Property
Leases, all assets used in the operation of the business of Waldorf and
Best (the "Business") are owned by Waldorf,
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Best and Waldorf Realty. Except as disclosed in Schedule 4.5(g), the
assets owned and leased by Waldorf, Best and Waldorf Realty constitute all
the assets and properties necessary to permit Waldorf and Best to conduct
the Business in the same manner as Waldorf and Best have conducted the
Business in the past.
(h) Condition of Certain Assets. Except as otherwise disclosed in
Schedule 4.5(h), the machinery, equipment and other tangible property owned
or leased by Waldorf, Waldorf Realty and Best and, to the best knowledge of
Shareholders, the buildings owned or leased by Waldorf and Best are in good
operating condition and good state of repair, subject to ordinary wear and
tear. Those public utilities (including water, gas, electricity, and storm
and sanitary sewage) required to operate the facilities of Waldorf and Best
are available to such facilities.
(i) No Condemnation or Expropriation. Neither the whole nor any
portion of the "Waldorf Property" (as hereinafter defined) is subject to
any governmental decree or order to be sold or is being condemned,
expropriated or otherwise taken by any public authority with or without
payment or compensation therefor. To the best knowledge of Shareholders, no
such condemnation, expropriation or taking has been proposed. The term
"Waldorf Property" means all real property owned or used by Waldorf, Best
or Waldorf Realty in any manner, including, without limitation, the Real
Property and the property leased pursuant to the Real Property Leases.
(j) Third Party Leases. Except as otherwise disclosed in Schedule
4.5(j) hereto, there are no leases, subleases, licenses, concessions,
options or other agreements, written or oral, under which any of the
Waldorf Entities grants to any other party or parties the right of use or
occupancy of any portion of the parcels of the Waldorf Property.
(k) List of Accounts. Schedule 4.5(k) contains a list of all bank and
securities accounts, and all safe deposit boxes, maintained by the Waldorf
Entities and a listing of the persons authorized to draw thereon or make
withdrawals therefrom or, in the case of safe deposit boxes, with access
thereto.
(l) Wabash Assets. Schedule 4.5(l) contains a current list of all
assets owned or leased by Wabash.
(m) Waldorf Realty. Except for the ownership of Real Property, Waldorf
Realty conducts no business activities, and Waldorf Realty neither owns nor
leases any assets (personal or real).
4.6 Financial Statements. Waldorf has delivered to Purchaser the
following:
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(a) the consolidated balance sheets and related consolidated annual
statements of income, shareholders' equity and cash flows of Waldorf,
Waldorf Canada, Best (for the year ended June 30, 1996) and Waldorf Realty
as of June 30, 1994, June 30, 1995 and June 30, 1996 and for the respective
twelve months then ended, which have been audited by Price Waterhouse (the
"Audited Financial Statements");
(b) the unaudited consolidated balance sheet of Waldorf, Best, Waldorf
Canada and Waldorf Realty as of September 30, 1996 (the "Interim Balance
Sheet") and the related consolidated unaudited statements of income,
shareholders' equity and cash flows for the three month period ended
September 30, 1996 (together with the Interim Balance Sheet, the "Interim
Financial Statements"); and
(c) the audited balance sheets and related audited statements of
income, shareholders' equity and cash flows as of June 30, 1995 and June
30, 1996 of Wabash, and the unaudited balance sheet and statement of income
of Wabash as of September 30, 1996 (the "Wabash Financial Statements") (the
Wabash Financial Statements, together with the Interim Financial Statements
and the Audited Financial Statements, being referred to collectively as the
"Financial Statements").
Copies of the Financial Statements are attached as Schedule 4.6. The
Financial Statements have been prepared from, and are in accordance with, the
books and records of the Waldorf Entities and Waldorf Canada, which books and
records are maintained in accordance with generally accepted accounting
principles, consistently applied. Each of the balance sheets included in the
Financial Statements (including any related notes and schedules) fairly presents
the financial position of the applicable Waldorf Entities and Waldorf Canada, as
of the date thereof, and each of the statements of income, shareholders' equity
and cash flows included in the Financial Statements (including any related notes
and schedules) fairly presents the results of operations and changes in
shareholders' equity and cash flows, as the case may be, of the applicable
Waldorf Entities and Waldorf Canada, for the periods set forth therein, in each
case in accordance with generally accepted accounting principles, consistently
applied during the periods involved.
4.7 No Undisclosed Liabilities.
(a) Except as disclosed in Schedule 4.7(a), Wabash does not have any
liabilities or obligations, whether accrued, absolute, contingent or
otherwise. Except as disclosed in Schedule 4.7(b), none of the Waldorf
Entities has any liabilities or obligations, whether accrued, absolute,
contingent or otherwise, of a type required to be reflected or provided for
in financial statements prepared in accordance with generally accepted
accounting principles, which are not adequately reflected or provided for
in the Financial Statements, except liabilities and obligations incurred
since the date of the Interim Financial Statements in the ordinary course
of business that will not have a "Material Adverse Effect". As used in this
Agreement, the term "Material Adverse
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Effect" means an adverse effect on the assets, liabilities, results of
operations, financial condition or business of the Waldorf Entities, taken
as a whole, which represents an amount that exceeds $500,000, excluding
matters reflected in the Interim Financial Statements and matters that have
occurred or may occur after September 30, 1996 as a result of general
industry conditions.
(b) Without limiting the foregoing, with respect to the "Loan and
Security Agreement," the "Settlement Agreement," and the other agreements,
documents and matters referred to in the Substitute Contingent Interest
Agreement, dated February 1, 1994 (the "GECC Agreement"), among Wabash,
Waldorf, the ▇▇▇▇ Shareholders, General Electric Capital Corporation
("GECC") and certain other parties, prior to giving effect to the "Waldorf
Settlement Document" (as hereinafter defined), there is no liability or
obligation of any of the Waldorf Entities to GECC other than as expressly
provided for in the GECC Agreement.
(c) Except as disclosed in Schedule 4.11 with specific reference to
Waldorf Foundation, Waldorf Foundation does not have any liabilities or
obligations, whether accrued, absolute, contingent or otherwise.
4.8 Absence of Certain Changes.
(a) Except as set forth on Schedule 4.8(a), since June 30, 1996,
except for the "Canada Sale" (as hereinafter defined), there has not been
(i) any Material Adverse Effect, other than as reflected in the Interim
Financial Statements and other than as may occur after September 30, 1996
as a result of general industry conditions, (ii) any damage, destruction,
loss or casualty to property or assets of Waldorf or Best, whether or not
covered by insurance, which property or assets are material to the
Business, or any material deterioration in the condition of the property or
assets of Waldorf or Best, (iii) any declaration, setting aside or payment
of any dividend or distribution (whether in cash, stock or property) in
respect of the capital stock of any of the Waldorf Entities, any redemption
or other acquisition by any of the Waldorf Entities of any of the capital
stock of any of the Waldorf Entities or any split, combination or
reclassification of shares of capital stock declared or made by any of the
Waldorf Entities, (iv) any sale of assets, loan or contribution, or other
intercompany transaction, between or among the Waldorf Entities, other than
loans by Waldorf to Waldorf Canada or Best, repayments thereof and the sale
of wastepaper from Best to Waldorf or (v) any agreement to do any of the
foregoing. Since June 30, 1996, Waldorf and Best have (1) maintained
supplies and inventories at levels that are in the ordinary course of
business consistent with past practice, (2) extended credit to customers,
collected accounts receivable and paid accounts payable and similar
obligations in the ordinary course of business consistent with past
practice and (3) conducted the business in the ordinary course on a basis
consistent with past practice and not engaged in any new line of business
or entered into
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any agreement, transaction or activity or made any commitment except
those in the ordinary course of business.
(b) Except as set forth in Schedule 4.8(b) and in connection with the
Canada Sale, with respect to the Waldorf Entities, since June 30, 1996,
there have not been (i) any extraordinary losses suffered, (ii) any
incurrance, assumption or guarantee by any of the Waldorf Entities of any
indebtedness for borrowed money except in the ordinary course of business
consistent with past practice, (iii) any assets mortgaged, pledged or made
subject to any lien, charge or other encumbrance, (iv) any liability or
obligation (absolute, accrued or contingent) incurred except in the
ordinary course of business and consistent with past practice, (v) any
claims, liabilities or obligations (absolute, accrued or contingent) paid,
discharged or satisfied, other than in the ordinary course of business and
consistent with past practice, (vi) any notes, guaranteed checks or
accounts receivable which have been written off as uncollectible, except
write-offs in the ordinary course of business consistent with past
practice, (vii) any write-down of the value of any asset or investment on
the Waldorf Entities' books or records, except for depreciation and
amortization taken in the ordinary course of business consistent with past
practice and the Canada Sale, (viii) any cancellation of any debts or
waiver of any claims or rights of substantial value, or sale, transfer or
other disposition of any properties or assets (real, personal or mixed,
tangible or intangible) (exclusive, however, of inventory) of substantial
value, except, in each such case, in transactions in the ordinary course of
business consistent with past practice and which in any event do not exceed
$200,000 in the aggregate based on net book value, (ix) any increase in the
compensation of officers, directors or employees, whether now or hereafter
payable, other than in the ordinary course of business consistent with past
practice, (x) any change in the Waldorf Entities' relations with their
employees, suppliers or customers which individually or in the aggregate
have a Material Adverse Effect, (xi) any increase of any reserves for
contingent liabilities (excluding any adjustment to bad debt, workers
compensation or group insurance reserves in the ordinary course of business
consistent with past practice), (xii) any transactions entered into other
than in the ordinary course of business, (xiii) any agreements to do any of
the foregoing, (xiv) any change by the Waldorf Entities in any method of
accounting or keeping their books of account or accounting practices, or
(xv) any other events, developments or conditions of any character that
have had or are reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect.
(c) Schedule 4.8(c) sets forth a complete and correct list of all
capital expenditures in excess of $10,000 per project made from July 1,
1996 through December 31, 1996 and sets forth a complete and correct list
of all capital expenditures and commitments approved for fiscal year ending
June 30, 1997.
(d) Schedule 4.8(d) sets forth (i) the average price per ton for
boxboard manufactured by each Waldorf Entity by plant for each month from
July, 1996 through November, 1996, (ii) the average price per ton of medium
for Waldorf for each month
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from July, 1996 through November, 1996 and (iii) the average price per
ton and mechanism currently used to establish price changes for folding
cartons for Waldorf's top ten customers by dollar volume for each month
from July, 1996 through November, 1996 and the amount of any price
reductions for such customers from July, 1996 through November, 1996.
4.9 Legal Proceedings. Except as set forth in Schedule 4.9, and except
for collection actions pending in the ordinary course of business which do not
exceed, in any individual case, $250,000, there are no suits, actions, claims,
proceedings or investigations pending or, to the best knowledge of Shareholders,
threatened against, relating to or involving the Business or the Waldorf
Entities or any of their officers or directors, before any court, arbitrator or
administrative or governmental body. Except as set forth in Schedule 4.9, none
of such suits, actions, claims, proceedings or investigations, if finally
determined adversely, are reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect. None of the Waldorf Entities is subject to
any judgment, decree, injunction, rule or order of any court, arbitrator or
administrative or governmental body. Except as set forth in Schedule 4.9, none
of the Waldorf Entities is subject to any governmental restriction which is
reasonably likely (a) to have a Material Adverse Effect or (b) to cause a
material limitation on Waldorf's or Best's ability to operate the Business after
the Closing in the same manner as heretofore conducted by the Waldorf Entities.
No action or proceeding has been instituted against any of the Shareholders or
the Waldorf Entities before any court or other governmental body by any person
or public authority seeking to restrain or prohibit the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby.
Without limiting the foregoing, Schedule 4.9 describes all claims, whether in
the past or currently pending, in respect of any rights to indemnification or
any breach of any covenant, representation or warranty involving a certain
Purchase and Sale Agreement, dated July 15, 1985, between Champion International
Corporation and Waldorf (the "Champion Agreement").
4.10 Licenses, Permits and Compliance with Law. The Waldorf Entities
have all material authorizations, approvals, licenses, permits and orders of and
from all governmental and regulatory offices and bodies necessary to carry on
the Business as it is currently being conducted, to own or hold under lease the
properties and assets it owns or holds under lease and to perform all of its
obligations under the agreements to which it is a party (collectively, the
"Licenses"). Except as set forth in Schedule 4.10, each Waldorf Entity is (and
has been during the past five years) in compliance in all material respects with
all applicable laws, regulations and administrative orders (including, without
limitation, laws relating to employment of labor or use or occupancy of
properties or any part thereof) of any country, state, province or municipality
or of any subdivision thereof to which it is subject. Schedule 4.10 sets forth a
correct and complete list of all Licenses. Except as set forth in Schedule 4.10,
none of the Waldorf Entities is presently charged with, has received any notice
(whether written or oral) of, or, to the best knowledge of Shareholders, is
under governmental investigation with respect to any actual or alleged violation
of any statute, ordinance, rule or regulation; and none of the Waldorf Entities
is presently a party in an adverse proceeding or has received any notice
(whether written or oral) of
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any threatened adverse proceeding, in either case by any regulatory authority
having jurisdiction over the Waldorf Entities or the Business. Waldorf has
previously delivered to Purchaser copies of all reports and filings made or
filed by the Waldorf Entities during the past five years pursuant to the
Occupational Safety and Health Act. Except as set forth in Schedule 4.10, the
Waldorf Entities are not presently in violation of or subject to any allegation
that any of them is in violation of or is failing to comply with, the
Occupational Safety and Health Act.
4.11 Material Contracts. Schedule 4.11 sets forth (a) a correct and
complete list of all "Material Contracts" (as hereinafter defined) (which,
together with the Waldorf Benefit Plans, but excluding the Real Property Leases
and the Personal Property Leases, are herein referred to as the "Waldorf
Contracts") and (b) a list of all consents or notices required to be obtained or
given under such Waldorf Contracts, the Real Property Leases and the Personal
Property Leases in connection with this Agreement. Except for Klicklok
Corporation leases entered into in the ordinary course of business, which leases
have been made available to Purchaser, correct and complete copies of all
Waldorf Contracts have been delivered to Purchaser. The Waldorf Contracts are
valid and enforceable in accordance with their respective terms with respect to
Waldorf Entities and, to the best knowledge of Shareholders, each other party
thereto. There are no existing defaults of the Waldorf Entities under any
Waldorf Contract or, to the best knowledge of Shareholders, of any of the other
parties thereto (or events or conditions which with or without notice or lapse
of time or both would constitute a default). For purposes of this Section 4.11,
Material Contracts include the following contracts, agreements, commitments,
arrangements, understandings, or other instruments (in each case whether oral or
written, but only to the extent legally binding) relating to the Business or of
which one or more of the Waldorf Entities is a party (including every amendment,
modification or supplement to the foregoing):
(a) Indentures, security agreements or other agreements and
instruments relating to the borrowing of money, the extension of credit or
the granting of liens or encumbrances;
(b) Management, employment or consulting agreements, or arrangements
or agreements related to temporary services of any kind that require
payments greater than $50,000 annually;
(c) Union or other collective bargaining agreements;
(d) Powers of attorney;
(e) Sales agency, manufacturer's representative and distributorship
agreements or other distribution or commission arrangements;
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(f) Licenses of patent, trademark, software (excluding software with
annual license payments less than $10,000), copyrights, know how and other
intellectual property rights;
(g) Agreements, orders or commitments, not made in the ordinary course
of business, for the purchase of services, raw materials, supplies or
finished products from any one supplier for an amount in excess of
$500,000;
(h) Agreements, orders or commitments, not made in the ordinary course
of business, for the sale of products or services for more than $500,000 to
any single purchaser;
(i) Any contract or option relating to the sale by any of the Waldorf
Entities of any asset, other than sales of inventory in the ordinary course
of business;
(j) Agreements for capital expenditures in excess of $1,000,000 for
any single project;
(k) Joint venture agreements;
(l) Agreements requiring the consent of any party thereto to the
consummation of the transactions contemplated by this Agreement;
(m) Lease agreements under which any of the Waldorf Entities is
lessor;
(n) Agreements, contracts or commitments for any charitable or
political contribution, including, without limitation, agreements,
contracts or commitments obligating any Waldorf Entity in any manner
relating to the ▇▇▇▇ Family Foundation, a Minnesota nonprofit corporation,
or the Waldorf Foundation, a Minnesota nonprofit corporation;
(o) Agreements prohibiting, partially restricting, or otherwise
limiting any Waldorf Entity's ability to compete, solicit customers or
otherwise conduct any business anywhere in the world;
(p) Agreements between Waldorf Canada and one or more of the Waldorf
Entities or in which both Waldorf Canada and one or more of the Waldorf
Entities are parties;
(q) Agreements to which Waldorf Realty is a party;
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(r) Agreements relating to the acquisition or sale of any company,
business, division or other enterprise, whether in the form of stock
purchase, asset acquisition or otherwise;
(s) Agreements, contracts or commitments for the purchase or sale of
any goods or services at other than generally available rates or terms,
including, by way of example and not limitation, purchase or sale
commitments entered into in settlement of claims or prior obligations; or
(t) Other than as covered above, other agreements, contracts and
commitments that involve payments or receipts of more than $250,000 in any
single year, or that were entered into other than in the ordinary course of
business.
4.12 Tax Returns; Taxes.
(a) For purposes of this Agreement, "Tax" means any federal, state,
provincial, local or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental, customs duty, capital stock, franchise, profits,
withholding, social security, unemployment, disability, real property,
personal property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty or addition thereto, whether
disputed or not; "Tax Return" means any return, declaration, report, claim
for refund, or information return or statement relating to Taxes, including
any schedule or attachment thereto and any amendment thereof; and "Code"
means the Internal Revenue Code of 1986, as amended from time to time, and
any regulations or published ruling promulgated or issued thereunder.
(b) Each of the Waldorf Entities has filed all Tax Returns that it was
required to file and all such Tax Returns were correct and complete in all
respects. All Taxes owed by any of the Waldorf Entities and Waldorf
Foundation (whether or not shown on any Tax Return) which are due and
payable have been paid. Except as set forth on Schedule 4.12(b), none of
the Waldorf Entities currently is the beneficiary of any extension of time
within which to file any Tax Return. Except as set forth on Schedule
4.12(b), no taxing authority in a jurisdiction where a Waldorf Entity does
not file Tax Returns has claimed in writing that such Waldorf Entity is or
may be subject to taxation by that jurisdiction.
(c) Each of the Waldorf Entities has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or
owing to any employee, independent contractor, creditor, stockholder, or
other third party.
(d) Except as set forth on Schedule 4.12(d), there is no dispute or
claim concerning any Tax liability of any of the Waldorf Entities either
(i) claimed or raised by
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any taxing authority in writing or (ii) as to which any of the
Shareholders or any employee responsible for Tax matters of such Waldorf
Entity has knowledge based upon personal contact with any agent of such
authority. Schedule 4.12(d) lists all Tax Returns filed with respect to any
of the Waldorf Entities for taxable periods ended after December 31, 1990,
indicates those Tax Returns that have been audited, and indicates those Tax
Returns that currently are the subject of audit. The Waldorf Entities have
delivered or made available to Purchaser correct and complete copies of all
federal income Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by any of the Waldorf Entities
for taxable years ended on or after June 30, 1989.
(e) Except as set forth in Schedule 4.12(e), none of the Waldorf
Entities has waived any statute of limitations with respect to Taxes or
agreed to any extension of time with respect to the assessment of Taxes.
(f) All accounting periods and methods used by the Waldorf Entities
for Tax purposes are permissible periods and methods, and no Waldorf Entity
is or will be required to make any adjustment to its income under Section
481 of the Code in connection with a change in accounting method used in
taxable years for which Tax Returns have been filed prior to the date
hereof. None of the Waldorf Entities has filed a consent under Section
341(f) of the Code concerning collapsible corporations. None of the Waldorf
Entities has made any payments, is obligated to make any payments, or is a
party to any agreement that under certain circumstances could obligate it
to make any payments that will not be deductible under Section 280G of the
Code. Except as set forth in Schedule 4.12(f), none of the Waldorf Entities
is a party to any Tax allocation or sharing agreement. None of the Waldorf
Entities (i) has been a member of an affiliated group filing a consolidated
federal income Tax return (other than the group the common parent of which
is Wabash) in any taxable year ending after December 31, 1985 or (ii) has
any liability for the Taxes of any person other than one of the Waldorf
Entities under Treasury Regulation Section 1.1502-6 or any similar
provision of state, local or foreign law, as a transferee or successor, by
contract, or otherwise.
(g) Schedule 4.12(g) sets forth the following information with respect
to each of the Waldorf Entities: (i) the tax basis of such Waldorf Entity
in its assets as of June 30, 1996; (ii) the tax basis of Wabash in the
stock of Waldorf, the tax basis of Waldorf in the stock of Waldorf Canada
and Best, and the tax basis of Wabash and Waldorf in the stock of Waldorf
Realty; (iii) the amount of any net operating loss, net capital loss,
unused investment credit or other Tax credit, or excess charitable
contribution allocable to such Waldorf Entity; and (iv) the amount of any
deferred gain or loss allocable to the Waldorf Entity arising out of any
"deferred intercompany transaction" under the Treasury Regulations relating
to consolidated federal income tax returns.
(h) The unpaid Taxes of the Waldorf Entities did not, as of June 30,
1996, exceed the reserve for Taxes (excluding any reserve for deferred
taxes attributable to
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differences between the timing of income or deductions for tax and
financial accounting purposes) set forth on the balance sheet (excluding
any notes thereto) contained in the Financial Statements.
4.13 Officers, Directors and Employees. Schedule 4.13 contains a
correct and complete list of (a) all of the officers of the Waldorf Entities
specifying their office and current annual rate of compensation, (b) all of the
officers and employees of the Waldorf Entities earning more than $100,000 on an
annual basis together with their current salary or hourly wage and an
appropriate notation next to the name of each officer and employee on such list
to whom any of the Waldorf Entities has made verbal or other commitments which
are binding on any of the Waldorf Entities, and (c) all former officers and all
former employees of any of the Waldorf Entities entitled to post-retirement
benefits or any other compensation or benefits from one or more of the Waldorf
Entities.
4.14 Employee Benefit Plans. Except as disclosed in Schedule 4.14:
(a) There are no plans, programs, policies or arrangements providing
compensation or benefits of any kind or description whatsoever (whether
current or deferred and whether paid in cash or in kind) to, or on behalf
of, any current or former officer, employee or director of any of the
Waldorf Entities or Waldorf Canada or any of their dependents under which
any of the Waldorf Entities has any liability, duty or obligation of any
kind or description to any such officer, employee or director of any
Waldorf Entity or Waldorf Canada or any of their dependents, including, but
not limited to, any such plan, program, practice, policy or arrangement
subject to ERISA (individually a "Waldorf Benefit Plan" and collectively
the "Waldorf Benefit Plans");
(b) None of the Waldorf Entities nor any ERISA Affiliate makes or has
any obligation to make, or has made or had any obligation to make, either
directly or indirectly (whether by reimbursing another employer or
otherwise), contributions to any plan, program or arrangement, including a
multiemployer plan, that is subject to Title IV of ERISA (a "Title IV
Plan");
(c) None of the Waldorf Entities is a party to or has any obligation
whatsoever under any oral or written contract or other arrangement under
which any of the Waldorf Entities have agreed to employ any person or to
compensate any person on a termination of employment (individually an
"Employment Contract" and collectively the "Employment Contracts");
(d) Waldorf has furnished or made available to Purchaser: (i) a
correct, complete and current copy of (A) each written Waldorf Benefit Plan
and Employment Contract and any amendments thereto together with any trust
agreements or other contracts or agreements which are a part of each such
plan or contract and (B) with respect to each Waldorf Benefit Plan, all
Internal Revenue Service, Department of Labor
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or Pension Benefit Guaranty Corporation rulings or determinations,
annual reports, summary plan descriptions, actuarial and other financial
reports for all periods ending on or after December 31, 1993; and (ii) such
other documentation with respect to any Waldorf Benefit Plan or Employment
Contract as is reasonably requested by Purchaser (there being no unwritten
Waldorf Benefit Plans or unwritten Employment Contracts);
(e) No assets have been set aside in any trust or account (other than
an account which is part of a Waldorf Entity's general assets) to satisfy
any obligations under any Waldorf Benefit Plan, Employment Contract or
Title IV Plan;
(f) All of the assets which have been set aside in a trust or account
(other than an account which is part of a Waldorf Entity's general assets)
to satisfy any obligations under any Waldorf Benefit Plan, Employment
Contract or Title IV Plan are shown on the books and records of each such
trust and each such account at their current fair market value, and such
current fair market value as of June 30, 1996 is equal to or exceeds the
present value of any obligation under any Waldorf Benefit Plan, Employment
Contract or Title IV Plan;
(g) Each Waldorf Benefit Plan, Employment Contract and Title IV Plan
has been established, maintained and administered in material compliance
with all applicable laws;
(h) None of the Waldorf Entities has any obligation to indemnify or
hold harmless any person or entity in connection with any liability
attributable to any acts or omissions by such person or entity with respect
to any Waldorf Benefit Plan, Employment Contract or Title IV Plan;
(i) None of the Waldorf Entities has incurred (and no facts exist
which are reasonably likely to subject any of the Waldorf Entities to) any
liability for any tax, fine or penalty or funding or contribution
obligation as a result of a violation of the Code, ERISA or other
applicable law with respect to any Waldorf Benefit Plan, Employment
Contract, Title IV Plan or any plan of an ERISA Affiliate;
(j) None of the Waldorf Entities nor any ERISA Affiliate has (within
the last six years) terminated or withdrawn from or sought a funding waiver
for, and no facts exist which could reasonably be expected to result in a
termination or withdrawal from or a request for a funding waiver for, any
Title IV Plan;
(k) None of the Waldorf Entities has incurred, and no facts exist
which are reasonably likely to subject any of the Waldorf Entities to, any
liability as a result of a termination or withdrawal from or a funding
waiver for any Title IV Plan maintained by an ERISA Affiliate;
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(l) There are no pending or threatened claims with respect to a
Waldorf Benefit Plan, Employment Contract or Title IV Plan (other than
routine and reasonable claims made in the ordinary course of plan or
contract operations) or with respect to the terms and conditions of
employment or termination of employment of any employee or former employee
of any of the Waldorf Entities, which claims could reasonably be expected
to result in liability to any of the Waldorf Entities, and no audit or
investigation by any domestic or foreign governmental or other law
enforcement agency is pending or has been proposed with respect to any
Waldorf Benefit Plan, Employment Contract or Title IV Plan;
(m) Each of the Waldorf Entities has the right pursuant to the terms
of each Waldorf Benefit Plan and all agreements related to such plan
unilaterally to terminate such plan (or its participation in such plan) or
to amend the terms of such plan at any time without triggering a penalty or
an obligation to make any additional contributions to such plan, and
Purchaser immediately after the Closing shall have exactly the same rights
as the Waldorf Entities unilaterally to take such action without triggering
any penalty or any obligation to make any additional contributions to such
plan;
(n) The transactions contemplated by this Agreement will not result in
any additional payments to, or increase the vested interest of, any current
or former officer, employee or director or their dependents under any
Waldorf Benefit Plan or Employment Contract;
(o) The transactions contemplated by this Agreement will not result in
any payments to any current or former officer, employee or director of any
of the Waldorf Entities which will be subject to Section 280G of the Code;
and
(p) Waldorf and Best have provided Purchaser with a copy of Waldorf's
and Best's policies for providing leaves of absence under the Family and
Medical Leave Act ("FMLA") and maintain records which have been made
available to Purchaser which identify (i) each employee who is eligible to
request FMLA leave; (ii) the amount of FMLA leave utilized by each such
employee during the current leave year; (iii) each employee who currently
is on FMLA leave and his or her job title and description, salary and
benefits; (iv) each employee who has requested FMLA leave to begin after
the date of this Agreement and a description of the leave requested; and
(v) a copy of all notices provided to such employee regarding such leave.
For purposes of this Section 4.14, "ERISA" means the Employee
Retirement Income Security Act of 1974, as amended from time to time, and any
regulations or published rulings promulgated or issued thereunder; and "ERISA
Affiliate" means any trade or business (whether incorporated or unincorporated)
which is a member of a group described in Section 414(b), (c), (m) or (o) of the
Code, of which any Waldorf Entity is also a member.
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4.15 Labor Relations. Except as set forth in Schedule 4.15, (a) none
of the Waldorf Entities' employees are represented by a labor organization which
was either National Labor Relations Board ("NLRB") certified or voluntarily
recognized or recognized under foreign law; (b) none of the Waldorf Entities is
a signatory to a collective bargaining agreement with any labor organization;
(c) none of the Waldorf Entities is obligated, by any collective bargaining
agreement or other agreement, to contribute to any multiemployer pension or
welfare benefit plan covering employees, retirees and/or beneficiaries; (d) the
Waldorf Entities have not conducted negotiations with respect to any future
contract with or commitment to any labor union or association and, to the best
knowledge of Shareholders, there are no current or threatened attempts to
organize or establish any labor union or association, (e) no representation
election petition filed by employees of any of the Waldorf Entities is pending
with the NLRB and, to the best knowledge of Shareholders, no union organizing
campaign involving employees of any of the Waldorf Entities is in progress; (f)
no NLRB unfair labor practice claims are presently pending against any of the
Waldorf Entities or any labor organization representing their employees; (g) no
material grievance or arbitration demand, whether or not filed pursuant to a
collective bargaining agreement, is pending against any of the Waldorf Entities;
(h) no labor dispute, walkout, strike, slowdown, handbilling, picketing, work
stoppage (sympathetic or otherwise), or other "concerted action" involving the
employees of any of the Waldorf Entities is in progress; (i) no breach of
contract and/or denial of fair representation claim is pending against any of
the Waldorf Entities and/or, to the best knowledge of Shareholders, any labor
organization representing their employees; (j) no material claim for unpaid
wages or overtime or for child labor or record keeping violations is pending
under the Fair Labor Standards Act, ▇▇▇▇▇-▇▇▇▇▇ Act, ▇▇▇▇▇-▇▇▇▇▇▇ Act, or
Service Contract Act or any other Federal, state, local or foreign law,
regulation, or ordinance; (k) no discrimination and/or retaliation claim is
pending or, to the best knowledge of Shareholders, threatened against any of the
Waldorf Entities under the 1866, 1877, 1964 or 1991 Civil Rights Acts, the Equal
Pay Act, the Age Discrimination in Employment Act, as amended, the Americans
with Disabilities Act, the Family and Medical Leave Act, the Fair Labor
Standards Act, ERISA or any other Federal law or any comparable state fair
employment practices act or foreign law regulating discrimination in the
workplace and no wrongful discharge, liable, slander or other claim under any
state law is pending or threatened which arises out of the employment
relationship with respect to any person or the termination of any such
relationship; (l) if any Waldorf Entity is a Federal, state or provincial
contractor obligated to develop and maintain an affirmative action plan, no
discrimination claim, show cause notice, conciliation proceeding, sanctions or
debarment proceeding is pending with the Office of Federal Contract Compliance
Programs ("OFCCP") or any other Federal agency or any comparable state or
foreign agency or court and no desk audit or on-site review is in progress; (m)
no citation is pending before the Occupational Safety and Health Administration
("OSHA") against any of the Waldorf Entities, and no notice of contest or OSHA
administrative enforcement proceeding involving any of the Waldorf Entities is
pending; (n) no workers' compensation or retaliation claim is pending against
any of the Waldorf Entities in excess of $10,000; (o) no citation of any of the
Waldorf Entities is outstanding and no enforcement proceeding is pending under
Federal or foreign immigration law; (p) none of the Waldorf Entities has taken
any action that would constitute a "mass layoff" or "plant closing" within the
meaning of the Worker Adjustment and
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Retraining Notification ("WARN") Act or would otherwise trigger notice
requirements or liability under any state, provincial, local or foreign plant
closing notice law, regulation or ordinance. The Waldorf Entities are in
material compliance with all federal, state, provincial, local and foreign laws
respecting employment and employment practices, terms and conditions of
employment, wages and hours, and are not engaged in any unfair labor or unlawful
employment practice.
4.16 Insurance. Schedule 4.16 sets forth a correct and complete list
of the Waldorf Entities' current insurance policies and coverages, including
names of carriers, amounts of coverage and premiums therefor. Waldorf has
heretofore made available to Purchaser correct and complete copies of all such
insurance policies. All such policies are in full force and effect and all
premiums due and payable in respect thereof have been paid. Since the respective
dates of such policies, no notice of cancellation or non-renewal with respect to
any such policy has been received by the Waldorf Entities. Schedule 4.16 sets
forth a list of all material pending claims with respect to all such policies.
The Waldorf Entities will maintain their current insurance policies and
coverages at least through the Closing Date.
4.17 Environmental Matters. Except as expressly set forth in the
Conestoga-Rovers & Associates Phase I and Phase II Environmental Site
Assessments, dated December 17, 1996 (the "Environmental Reports")(which are
listed in Annex I) and in Schedule 4.17:
(a) To the best knowledge of Shareholders, the Waldorf Entities
possess, and are in material compliance with, all permits, licenses and
government authorizations and have filed all material notices that are
required under local, state and federal laws and regulations currently in
effect relating to protection of the environment, pollution control,
product registration or hazardous materials (as defined below)
("Environmental Laws"), and the Waldorf Entities are in material compliance
with all applicable limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained
in those laws or contained in any law, regulation, code, plan, order,
decree, judgment, notice, permit or demand letter issued, entered,
promulgated or approved thereunder;
(b) None of the Waldorf Entities have received notice of actual or
threatened liability under "CERCLA" (as hereinafter defined) or any similar
state or local statute or ordinance from any governmental agency or any
third party, and, to the best knowledge of Shareholders, there are no facts
or circumstances which would reasonably be expected to form the basis for
the assertion of any claim against any of the Waldorf Entities under any
Environmental Laws including, without limitation, the Federal Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") or any
similar local, state or foreign law with respect to any on-site or off-site
location;
(c) None of the Waldorf Entities have entered into, agreed to or
contemplates entering into any consent decree or order, and none of the
Waldorf Entities are subject to
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any judgment, decree or judicial or administrative order relating to
compliance with, or the cleanup of hazardous materials under, any
applicable Environmental Laws;
(d) To the best knowledge of Shareholders, none of the Waldorf
Entities is subject to any, and none of the Waldorf Entities is alleged to
be in violation of any, administrative or judicial proceeding pursuant to
applicable Environmental Laws or regulations;
(e) To the best knowledge of Shareholders, none of the Waldorf
Entities are subject to any material claim, obligation, liability, loss,
damage or expense of whatever kind or nature, contingent or otherwise,
incurred or imposed or based upon any provision of any Environmental Law
and arising out of any act or omission of any of the Waldorf Entities or
their respective employees, agents or representatives or arising out of the
ownership, use, control or operation by any of the Waldorf Entities of any
plant, facility, site, area or property (including, without limitation, any
plant, facility, site, area or property currently or previously owned or
leased by any of the Waldorf Entities) from which any hazardous materials
were released into the environment (the term "release" meaning any
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing into the environment,
and the term "environment" meaning any surface or ground water, drinking
water supply, soil, surface or subsurface strata or medium, or the ambient
air);
(f) The Waldorf Entities heretofore provided or made available to
Purchaser correct and complete copies of all files of the Waldorf Entities
relating to environmental matters (or an opportunity to review such files),
and Schedule 4.17(f) sets forth the amount of all fines, penalties or
assessments paid within the last five years by the Waldorf Entities with
respect to environmental matters, including the date of payment and the
basis for the assertions of liability; and
(g) To the best knowledge of Shareholders, neither the real property,
improvements or equipment included within the assets owned by the Waldorf
Entities contain any friable asbestos, PCBs or underground storage tanks.
As used in this Agreement, the term "hazardous materials" means any
waste, pollutant, substance, by-product or other material regulated under
CERCLA, Resource Conservation and Recovery Act or other federal environmental
law, rule or regulation (or similar state or local law, rule or regulation) as
well as any petroleum or petroleum-derived substance or waste.
4.18 Intellectual Property. Schedule 4.18 sets forth a correct and
complete list of: (a) all patents, technical documentation, trade secrets,
trademarks and trade names (including all federal, state and foreign
registrations pertaining thereto) and all copyright registrations owned by any
of the Waldorf Entities (collectively, the "Proprietary Intellectual Property");
and (b) all patents, trademarks, trade names, copyrights, technology and
processes (except for
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licenses of software requiring payments less than $10,000 per year) used by any
of the Waldorf Entities that are used pursuant to a license or other right
granted by a third party (collectively, the "Licensed Intellectual Property",
and together with the Proprietary Intellectual Property is referred to as
"Intellectual Property"). To the best knowledge of Shareholders, Waldorf owns,
or has the right to use pursuant to valid and enforceable agreements identified
in Schedule 4.18, all Intellectual Property and all software used in the
Business. No claims are pending against any of the Waldorf Entities by any
person with respect to the use of any Intellectual Property or any software or
challenging or questioning the validity or enforceability of any license or
agreement relating to the same, and, to the best knowledge of Shareholders, the
current use by the Waldorf Entities of the Intellectual Property and all
software used in the Business does not infringe on the rights of any third
party. Schedule 4.18 sets forth a list of all jurisdictions in which any of the
Waldorf Entities is operating the business under a trade name, and each
jurisdiction in which any such trade name is registered.
4.19 Transactions with Affiliates. Except as set forth in Schedule
4.19, no shareholder, officer or director of any of the Waldorf Entities, or any
person with whom any such shareholder, officer or director has any direct or
indirect relation by blood, marriage or adoption, or any entity in which any
such person, owns any beneficial interest (other than a publicly held
corporation whose stock is traded on a national securities exchange or in the
over-the-counter market and less than 5% of the stock of which is beneficially
owned by all such persons) or any Affiliate of any of the foregoing or any
current or former Affiliate of any of the Waldorf Entities has any interest in:
(a) any contract, arrangement or understanding with any of the Waldorf Entities
or relating to the Business (b) any loan, arrangement, understanding, agreement
or contract (hereinafter referred to as "Affiliate Debt") for or relating to
indebtedness of any of the Waldorf Entities; (c) any property (real, personal or
mixed), tangible or intangible, used or currently intended to be used in the
Business; or (d) any claim against any of the Waldorf Entities. Any accounts due
and payable from any of the Waldorf Entities to any Affiliate of any of the
Waldorf Entities are recorded on the books and records of the business at the
fair market value thereof. Since June 30, 1996, there has been no repayment,
forgiveness or other release of Affiliate Debt except as set forth in Schedule
4.19. For purposes of this Section 4.19, "Affiliate" of any specified Person
means any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified Person. For purposes
of this Agreement, (i) "control", when used with respect to any specified
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, (ii) "controlling" and "controlled" have meanings
correlative to the foregoing, and (iii) "Person" means any individual,
corporation, partnership, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
4.20 Customer Relations. Except as disclosed in Schedule 4.20, to the
best knowledge of Shareholders, none of the Waldorf Entities has received any
notice that (a) any single customer of the Waldorf Entities which accounted for
more than 5% of the total net sales of any of the Waldorf Entities for the
twelve-month period ending on June 30, 1996 or (b) any
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current raw materials supplier of the Waldorf Entities that had total net sales
to any of the Waldorf Entities in excess of $500,000 for the twelve month period
ending June 30, 1996 is reasonably expected to terminate its business relations
with any of the Waldorf Entities.
4.21 Nondisclosed Payments. None of the Waldorf Entities nor any of
their officers or directors, nor anyone acting on behalf of any of them, has
made or received any material payments not correctly categorized and fully
disclosed in the books and records of the Waldorf Entities in connection with or
in any way relating to or affecting the Waldorf Entities or the Business.
4.22 Brokers, Finders and Investment Bankers. Except as disclosed in
Schedule 4.22, none of the Waldorf Entities nor any of the Shareholders has
employed any broker, finder, investment banker or other intermediary or incurred
any liability for any investment banking fees, financial advisory fees,
brokerage fees, finders' fees or other similar fees in connection with the
transactions contemplated herein.
4.23 Disclosure. No representation, warranty or covenant made by
Shareholders in this Agreement (including the Schedules hereto) contains an
untrue statement of a material fact or omits to state a material fact required
to be stated herein or therein or necessary to make the statements contained
herein or therein not misleading.
4.24 Waldorf Canada Advances. Schedule 4.24 sets forth a ledger of all
amounts advanced by the Waldorf Entities to Waldorf Canada since June 30, 1996
and on or before October 31, 1996, (irrespective of whether such funds were
advanced as loans, contributions, accounts receivable, payments to third parties
on behalf of Waldorf Canada (including, without limitation, payments to
suppliers and employees), or otherwise) and all repayments, if any, of such
advanced amounts made by Waldorf Canada since June 30, 1996 and on or before
October 31, 1996.
4.25 HEI Development. Schedule 4.25 sets forth a description of all
property held by HEI Development and a description of all matters that would be
set forth in Schedule 4.17 if HEI Development were included in the Waldorf
Entities for purposes of Section 4.17.
4.26 Waldorf Canada. Schedule 4.26 identifies all liabilities,
contracts or other obligations of the Waldorf Entities arising out of the
business of Waldorf Canada that are payable after the Closing Date.
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Section 5. Representations and Warranties of Purchaser.
Purchaser hereby represents and warrants to Shareholders as follows:
5.1 Organization. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws under which it was formed and has
all requisite power and authority to own, lease and operate its properties and
to carry on its business as now being conducted. Purchaser is duly qualified to
transact business and is in good standing as a foreign corporation in each
jurisdiction where the character of its activities requires such qualification.
5.2 Execution and Enforceability. This Agreement has been, and any
other certificate, agreement, document or other instrument to be executed and
delivered by Purchaser in connection with the transactions contemplated by this
Agreement (the "Purchaser Ancillary Documents") will be as of the Closing Date,
duly executed and delivered by Purchaser and do or will (as the case may be)
constitute the valid and legally binding agreements of Purchaser, enforceable
against Purchaser in accordance with their respective terms.
5.3 Absence of Restrictions and Conflicts. The execution, delivery and
performance of this Agreement and the Purchaser Ancillary Documents, the
consummation of the transactions contemplated by this Agreement and the
Purchaser Ancillary Documents and the fulfillment of and compliance with the
terms and conditions of this Agreement and the Purchaser Ancillary Documents do
not or will not (as the case may be), with or without the passing of time or the
giving of notice or both, violate or conflict with, or constitute a breach of or
default under, (a) any term or provision of the articles of incorporation or
bylaws of Purchaser, (b) any judgment, decree or order of any court or
governmental authority or agency to which Purchaser is a party or by which
Purchaser or any of its properties is bound or (c) any statute, law, rule or
regulation applicable to Purchaser or the business engaged in by Purchaser.
Except for compliance with the applicable requirements of the HSR Act, the
Securities Exchange Act of 1934, and Nasdaq National Market and New York Stock
Exchange rules and requirements, no consent, approval, order or authorization
of, or registration, declaration or filing with, any governmental agency or
public or regulatory unit, agency, body or authority with respect to Purchaser
is required in connection with the execution, delivery or performance of this
Agreement or the Purchaser Ancillary Documents by Purchaser or the consummation
of the transactions contemplated by this Agreement or the Purchaser Ancillary
Documents by Purchaser.
5.4 Brokers, Finders and Investment Bankers. Except as disclosed in
Schedule 5.4, Purchaser has not employed any broker, finder, investment banker
or other intermediary or incurred any liability for any investment banking fees,
financial advisory fees, brokerage fees, finders' fees or other similar fees in
connection with the transactions contem plated herein.
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5.5 Disclosure. No representation, warranty or covenant made by
Purchaser in this Agreement (including the Schedules hereto) contains an untrue
statement of a material fact or omits to state a material fact required to be
stated herein or therein or necessary to make the statements contained herein or
therein not misleading.
Section 6. Covenants
Each of the parties hereto shall, and the ▇▇▇▇ Shareholders shall
cause Waldorf Entities and Waldorf Canada to, comply with the following
covenants to the extent applicable to such party (or in the case of
Shareholders, to the extent applicable to Shareholders or to any of the Waldorf
Entities or Waldorf Canada) (unless compliance is waived in advance in
accordance with this Agreement):
6.1 Sale of Waldorf Canada.
(a) Waldorf Canada shall take all action necessary or appropriate to
terminate all of Waldorf Canada's business, including the disposition of
all assets and properties of Waldorf Canada and the termination of all
operations related thereto, and payment and satisfaction of all liabilities
and obligations of Waldorf Canada. To the extent the foregoing actions have
not been completed prior to the Closing, the ▇▇▇▇ Shareholders shall be
responsible for causing Waldorf Canada to complete such actions after the
Closing.
(b) On or before the Closing Waldorf shall sell all of the outstanding
capital stock and other securities of Waldorf Canada to an entity
designated by the ▇▇▇▇ Shareholders, of which Shareholders hold less than
50% of the outstanding equity securities (the "Designee"), pursuant to and
in accordance with the stock transfer agreement attached as Exhibit B
hereto (the "Stock Transfer Agreement") (the transactions contemplated by
this Section 6.1 are hereinafter referred to collectively as the "Canada
Sale").
(c) Pursuant to the Stock Transfer Agreement, the Waldorf Entities
shall assign to the Designee all of the Waldorf Entities' receivables for
all loans or advances made by them to Waldorf Canada on or before October
31, 1996. Shareholders shall reimburse Waldorf Entities for an amount equal
to the Canadian Deficit. To the extent the Canadian Deficit has been
ascertained as of the Closing, it will reduce the Cash Payment otherwise
payable to Shareholders on the Closing Date as provided for in Section 1.2
hereof. To the extent any amount of the Canadian Deficit is not deducted
from the Cash Payment otherwise payable to Shareholders on the Closing
Date, the ▇▇▇▇ Shareholders hereby jointly and severally agree to pay such
remaining balance within ten (10) days after receipt of a written request
for such payment from Purchaser or any of the Waldorf Entities.
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(d) The ▇▇▇▇ Shareholders shall use, and shall cause the Waldorf
Entities and Waldorf Canada to use, their respective best efforts to induce
the customers of Waldorf Canada to establish (or continue, as the case may
be) business relationships with Waldorf similar in character and scope to
such customers' previous relationships with Waldorf Canada.
(e) If and to the extent any of the Waldorf Entities realize for U.S.
federal income tax purposes a loss resulting from the Canada Sale, and such
loss is utilized or utilizable to reduce the amount of U.S. federal and
state income Tax otherwise payable by any of the Waldorf Entities (whether
by carryback, carryforward or otherwise), then Purchaser shall pay to
Shareholders in cash as a part of the Cash Payment payable pursuant to
Section 1.2(a) hereof, an aggregate amount equal to the amount of such Tax
reduction (the "Tax Benefit"). The Tax Benefit shall be estimated as of the
Closing Date and paid to Shareholders as a part of the Cash Payment at that
time; and the ▇▇▇▇ Shareholders, jointly and severally, agree to indemnify
Purchaser, in the manner prescribed in and subject to the requirements of
Section 10 hereof, from, against and in respect of any liability, costs and
expenses arising from any determination that any portion of the Tax Benefit
is not allowable to the Waldorf Entities.
6.2 Sale of Wabash Assets. On or prior to the Closing Date,
Shareholders shall cause Wabash to sell Ancillary Assets of Wabash pursuant to
the Parent Transfer Agreement. Shareholders shall be responsible for any
liability for Taxes of any Waldorf Entity arising from or relating to the Parent
Transfer (the "Parent Transfer Taxes"). The Parent Transfer Taxes shall, to the
full extent determinable, be estimated as of the Closing Date and shall reduce
the Cash Payment otherwise payable to Shareholders on the Closing Date; and the
▇▇▇▇ Shareholders, jointly and severally, agree to indemnify Purchaser, in the
manner prescribed in and subject to the requirements of Section 10 hereof, from,
against and in respect of any liability, costs and expenses arising from any
determination that the Parent Transfer Taxes exceed the amount thereof estimated
as of the Closing Date.
6.3 Conduct of Business Prior to Closing Date. From the date hereof
until and including the Closing Date, except as otherwise contemplated by the
terms of this Agreement or as shall hereafter be consented to in writing by
Purchaser, ▇▇▇▇ Shareholders, jointly and severally, agree that each Waldorf
Entity shall:
(a) Carry on its respective businesses in the ordinary course in
substantially the same manner as heretofore conducted and not engage in any
new line of business or enter into any agreement, transaction or activity
or make any commitment except those in the ordinary course of business
which are not otherwise prohibited under this Section 6.3;
(b) Neither change nor amend its articles of incorporation or bylaws;
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(c) Not issue, sell or grant options, warrants or rights to purchase
or subscribe to, or enter into any arrangement or contract with respect to
the issuance or sale of any of the capital stock of any Waldorf Entity or
rights or obligations convertible into or exchangeable for any shares of
the capital stock of any Waldorf Entity and not make any changes (by
split-up, combination, reorganization or otherwise) in the capital
structure of any Waldorf Entity;
(d) Not declare, pay or set aside for payment any dividend or other
distribution in respect of the capital stock or other equity securities of
any Waldorf Entity and not redeem, purchase or otherwise acquire any shares
of the capital stock or other securities of any Waldorf Entity or rights or
obligations convertible into or exchangeable for any shares of the capital
stock or other securities of any Waldorf Entity or obligations convertible
into such, or any options, warrants or other rights to purchase or
subscribe to any of the foregoing;
(e) Not acquire or enter into an agreement to acquire, by merger,
consolidation or purchase of stock or assets, any business;
(f) Use its reasonable efforts to preserve intact its corporate
existence, goodwill and business organization, to keep its officers and
employees available to Purchaser and to preserve its relationships with
customers, suppliers and others having business relations with it;
(g) Except borrowings made in the ordinary course of business under
the current revolving credit facility of Waldorf, not (i) create, incur or
assume any long-term debt (including obligations in respect of capital
leases) which individually involve annual payments in excess of $25,000 or,
except in the ordinary course of business under existing lines of credit,
create, incur or assume any short-term debt for borrowed money, (ii)
assume, guarantee, endorse or otherwise become liable or responsible
(whether directly, contingently or otherwise) for the obligations of any
other Person (as hereinafter defined), except in the ordinary course of
business and consistent with past practice, (iii) make any loans or
advances to any other Person, except in the ordinary course of business and
consistent with past practice, (iv) make any capital contributions to, or
investments in, any Person, except in the ordinary course of business and
consistent with past practices with respect to investments, or (v) make any
capital expenditure involving in excess of $25,000 in the case of any
single expenditure or $100,000 in the case of all capital expenditures
(other than capital expenditures for items already approved and in
progress);
(h) Not enter into, modify or extend in any manner the terms of any
Waldorf Benefit Plan or Employment Contract nor grant any increase in the
compensation of officers, directors or employees, whether now or hereafter
payable, including any such
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increase pursuant to any option, bonus, stock purchase, pension,
profit-sharing, deferred compensation, retirement or other plan,
arrangement, contract or commitment;
(i) Not terminate any officer or employee if such termination would
result in the payment of any amounts pursuant to "change in control"
provisions of any employment agreement or arrangement;
(j) Perform in all material respects all of its obligations under all
of its contracts (except those being contested in good faith) and not enter
into, assume, amend or terminate any contract or commitment other than in
the ordinary course of business;
(k) Maintain in full force and effect and in the same amounts policies
of insurance comparable in amount and scope of coverage to that now
maintained by it or on its behalf;
(l) Use its reasonable efforts to continue to collect its accounts
receivable and pay its accounts payable in the ordinary course of business
and consistent with past practices;
(m) Prepare and file all Tax Returns and other Tax reports, filings
and amendments thereto required to be filed by it, and allow Purchaser, at
its request, to review all such Tax Returns at the offices of such Waldorf
Entity prior to the filing thereof, which review shall not interfere with
the timely filing of such returns; and
(n) Use its best efforts without the unreasonable expenditure of funds
to obtain the waiver, consent and approval of all Persons whose waiver,
consent or approval is required in order to permit such Waldorf Entity to
consummate the transactions contemplated hereby, including the Canada Sale
and the Parent Transfer.
In connection with the continued operation of the business of the
Waldorf Entities between the date hereof and the Closing Date, the ▇▇▇▇
Shareholders shall cause the Waldorf Entities to confer in good faith on a
regular and frequent basis with one or more representatives of Purchaser
designated in writing to report operational matters of materiality and the
general status of ongoing operations. Shareholders acknowledge that Purchaser
does not and will not waive any rights it may have under this Agreement as a
result of such consultations.
6.4 No Solicitation; Acquisition Proposals. Shareholders agree that
from the date hereof through the Closing Date or the date of termination of this
Agreement in accordance with Section 11.1, as the case may be, no Shareholder
will, directly or indirectly, through any officer, director, employee, partner,
stockholder, agent or affiliate or otherwise, except in furtherance of the
transactions contemplated by this Agreement (a) solicit, initiate or encourage
submission of proposals or offers from any person relating to any transactions
contemplated herein or to the direct or indirect purchase of a material amount
of the assets of, or any equity
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interest in, or any merger, consolidation or business combination with, either
Waldorf Entity (collectively, an "Acquisition Proposal"), (b) participate in any
discussions or negotiations regarding, or furnish to any other person any
information with respect to, or otherwise cooperate in any way with or assist,
facilitate or encourage, any Acquisition Proposal by any person, (c) enter into
any agreement, arrangement or understanding with respect to an Acquisition
Proposal, or (d) sell, transfer, or otherwise dispose of, or enter into any
agreement, arrangement or understanding with respect to, any interest in the
assets, capital stock or other equity interests of any Waldorf Entity.
6.5 Executive Payments. Schedule 6.5 hereto lists all stock option
rights, stock appreciation rights, phantom stock rights, equity-based bonus
rights or similar rights outstanding with respect to Waldorf Entities
(collectively, the "Executive Rights"). On or prior to the Closing Date, ▇▇▇▇
Shareholders shall cause Waldorf Entities to make all payments and to take all
other actions necessary to satisfy and to terminate in full all of the Executive
Rights. To the extent that the total amount of such payments exceeds Seven
Million Four Hundred Fifteen Thousand Five Hundred Twelve Dollars and Sixty-Two
Cents ($7,415,512.62), ▇▇▇▇ Shareholders agree, jointly and severally, to (i)
reimburse Purchaser for such excess amount (the "Excess Amount"), and the cash
payment otherwise payable to Shareholders pursuant to Section 1.2 hereof shall
be reduced by the Excess Amount and (ii) indemnify Purchaser, in the manner
prescribed in and subject to the requirements of Section 10 hereof, from,
against and in respect of any liability, costs and expenses arising from (aa)
any failure to so satisfy and terminate in full the Executive Rights, (bb) any
claim based on securities law violations including, without limitation,
violations in connection with the Executive Rights or (cc) any claim based on
the redemption of stock by the Waldorf Entities including, without limitation,
the January, 1995 redemption of common stock disclosed in Schedule 4.4
(excluding payment of the promissory notes identified in Item 4.4.1).
6.6 Fees and Expenses. Schedule 6.6 sets forth all brokerage,
investment banking and similar costs and expenses incurred by Waldorf Entities
in connection with the transactions contemplated hereby (excluding, without
limitation, attorneys' and accountants' fees) on or before October 31, 1996.
Waldorf Entities will pay all costs and expenses incurred in connection with the
transactions contemplated hereby (including, without limitation, attorneys',
accountants' and investment banking fees and expenses) on or before October 31,
1996. ▇▇▇▇ Shareholders shall pay all such costs and expenses incurred by
Waldorf Entities and Shareholders in connection with the transactions
contemplated hereby (including, without limitation, fees and expenses of
attorneys, accountants and investment bankers) after October 31, 1996, and ▇▇▇▇
Shareholders agree, jointly and severally, to reimburse Waldorf Entities upon
written demand for all such costs and expenses incurred by Waldorf Entities
after such date. Purchaser shall bear all such costs and expenses incurred by it
in connection with the transactions contemplated hereby. Notwithstanding the
foregoing, Waldorf Entities (and not Shareholders) shall pay all salaries and
other expenses of personnel of Waldorf Entities involved in the transactions
contemplated hereby and costs of Waldorf Entities in complying with Section 6.11
hereof and in providing information and access to Purchaser in connection with
its due diligence review. The ▇▇▇▇
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Shareholders hereby confirm to Purchaser that the total amount of attorneys'
and accountants' fees and expenses incurred by Waldorf Entities on or before
October 31, 1996 in connection with the transactions contemplated herein did
not exceed, in the aggregate, $75,000.
6.7 Reasonable Efforts; Further Assurances; Cooperation. Subject to
the other provisions of this Agreement, each party hereto shall each use such
party's reasonable, good faith efforts to perform such party's obligations
hereunder and to take, or cause to be taken or do, or cause to be done, all
things necessary, proper or advisable under applicable law to obtain all
regulatory approvals and satisfy all conditions to the obligations of the
parties under this Agreement and to cause the transactions contemplated hereby
to be effected on or prior to February 10, 1997 in accordance with the terms
hereof and shall cooperate fully with each other party and their respective
officers, directors, employees, agents, counsel, accountants and other designees
in connection with any steps required to be taken as a part of their respective
obligations under this Agreement, including without limitation:
(a) Each of the parties shall promptly make their respective filings
and submissions and shall take, or cause to be taken, all actions and do,
or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to obtain any required approval of any
federal, state, local or foreign governmental agency or regulatory body
with jurisdiction over the transactions contemplated hereby, including all
filings, submissions and other actions required by the HSR Act;
(b) In the event any claim, action, suit, investigation or other
proceeding by any governmental body or other Person is commenced which
questions the validity or legality of the transactions contemplated hereby
or seeks damages in connection therewith, the parties agree to cooperate
and use all reasonable efforts to defend against such claim, action, suit,
investigation or other proceeding and, if an injunction or other order is
issued in any such action, suit or other proceeding, to use all reasonable
efforts to have such injunction or other order lifted, and to cooperate
reasonably regarding any other impediment to the consummation of the
transactions contemplated hereby; and
(c) Each party shall give prompt written notice to the others of (i)
the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty of such
party contained in this Agreement or any agreement or document contemplated
hereby to be untrue or inaccurate at any time from the date hereof until
the Closing or that will or may result in the failure to satisfy any of the
conditions specified in Sections 7, 8 and 9 and (ii) any failure of any
party hereto or any Waldorf Entity, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder.
6.8 Access. Between the date hereof and the Closing, the ▇▇▇▇
Shareholders shall cause each Waldorf Entity to provide the Purchaser and its
accountants, counsel and other authorized representatives full access, during
reasonable business hours and under reasonable
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circumstances to any and all of the premises, properties, contracts,
commitments, books, records, accountants' work papers and other information
(including tax returns filed and those in preparation) of each Waldorf Entity
and to Price Waterhouse (as the accountants of the Waldorf Entities), and the
▇▇▇▇ Shareholders shall cause the respective officers of each Waldorf Entity to
furnish to the Purchaser and its authorized representatives any and all
financial, technical and operating data and other information pertaining to each
Waldorf Entity, as Purchaser shall from time to time reasonably request.
6.9 Confidentiality. Unless consented to by the other party, which
consent will not be withheld unreasonably, information obtained by any party
hereto or any of their representatives pursuant to this Agreement shall be
subject to the provisions of the Confidentiality Agreement between Purchaser and
Wabash dated September 17, 1996, which agreement remains in full force and
effect.
6.10 Public Announcements. The timing and content of all announcements
regarding any aspect of this Agreement or the transactions contemplated hereby
to the financial community, government agencies, employees or the general public
shall be mutually agreed upon in advance by Purchaser and Wabash (unless
Purchaser or Wabash is advised by counsel in writing that any such announcement
or other disclosure not mutually agreed upon in advance is required to be made
by law or applicable rule of the Nasdaq National Market or the New York Stock
Exchange and then only after consulting the other party and making a reasonable
attempt to comply with the provisions of this Section).
6.11 Financial Statements and Other Information. Prior to the Closing,
the ▇▇▇▇ Shareholders shall cause Wabash to deliver to Purchaser, as soon as
available but in no event later than thirty (30) days after the end of each
month beginning October 1996, all monthly financial and operating reports that
are prepared in the ordinary course of business for review by Waldorf's senior
management, including, without limitation, balance sheets and statements of
income and cash flows on a plant-by-plant basis. Prior to the Closing, the ▇▇▇▇
Shareholders shall cause the Waldorf Entities to provide to Purchaser such
financial statements and other information relating to the Waldorf Entities as
Purchaser shall reasonably request in connection with any filings made by
Purchaser under the Securities Act (including any Registration Statements on
Form S-1 or S-3, Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K or
Current Reports on Form 8-K). Any such financial statements shall be prepared in
accordance with Regulation S-X under the Securities Act, and, to the extent such
financial statements are unaudited interim financial statements, shall have been
reviewed by Price Waterhouse, the independent auditors for the Waldorf Entities,
in accordance with SAS No. 71, Interim Financial Information.
6.12 Environmental-Related Work. Schedule 6.12 sets forth a list of
environmental-related matters for which Waldorf will have the right to conduct
and complete any work (the "Scheduled Work") required to comply with or satisfy
obligations arising under Environmental Laws and to be indemnified therefor in
accordance with Section 10.
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6.13 Interest Amount. [INTENTIONALLY OMITTED]
6.14 HEI Development. The ▇▇▇▇ Shareholders will use commercially
reasonable efforts to cause the other persons having an ownership interest in
HEI Development to consent on or prior to the Closing Date to the transfer of
Wabash's ownership interest in HEI Development to the Shareholder
Representative, in which case Wabash's ownership interest in HEI Development
will be so transferred notwithstanding Section 1.2(b)(viii) to the contrary. In
the event Wabash retains its ownership interest in HEI Development, Purchaser
shall cause Wabash (i) to pay to the Shareholder Representative as additional
purchase price hereunder, all distributions received by Wabash in respect of its
ownership interest in HEI Development net of all Taxes or other costs paid or
incurred by Wabash in respect of such distributions and (ii) to vote and take
actions with respect to Wabash's interest in HEI Development only in accordance
with the consent and instructions of the Shareholder Representative. The ▇▇▇▇
Shareholders agree, jointly and severally, to reimburse Purchaser for all costs
and expenses of Purchaser incurred as a result of (i) Wabash's ownership
interest in HEI Development and to indemnify Purchaser, in the manner prescribed
in and subject to the requirements of Section 10 hereof, from, against and in
respect of any liability, costs and expenses arising in any manner in connection
with Wabash's ownership interest in HEI Development or (ii) complying with or
satisfying obligations arising under Environmental Laws in any way related to
property owned by HEI Development.
6.15 Shareholder Net GECC Payment. The "Shareholder Net GECC Payment"
shall be an amount equal to Seven Million Five Hundred Thousand Dollars
($7,500,000) (the "Shareholder Gross GECC Payment") less the aggregate amount of
the U.S. federal and state income tax benefits realized by the Waldorf Entities
(whether by carryback, carryforward or otherwise) (the "Shareholder GECC Tax
Benefit") which are attributable to Waldorf's deduction of an amount equal to
the Shareholder Gross GECC Payment under the GECC Agreement, as modified by the
Settlement Agreement (the "Waldorf Settlement Document"), dated December 18,
1996, among GECC, Wabash, Waldorf and Purchaser. The Shareholder GECC Tax
Benefit shall be estimated as of the Closing Date and such estimate shall be
used in calculating the Shareholder Net GECC Payment at that time. The ▇▇▇▇
Shareholders, jointly and severally, agree to indemnify Purchaser in the manner
described in and subject to the requirements of Section 10 hereof, from, against
and in respect of thirty percent (30%) of any liability (exclusive of costs and
expenses) arising from any determination that any portion of Waldorf's deduction
arising from the payment to GECC pursuant to the GECC Agreement, as modified by
the Waldorf Settlement Document, is not allowable for federal or state income
tax purposes; provided that the indemnification responsibility of the ▇▇▇▇
Shareholders under this Section 6.15 shall not exceed the Shareholder GECC Tax
Benefit.
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Section 7. Conditions to Obligations of All Parties.
The obligations of each party to consummate the Closing shall be
subject to the satisfaction (or waiver by such party) at or prior to the Closing
of each of the following conditions:
7.1 No Injunction. There shall be no injunction, writ or preliminary
restraining order or any order of any nature in effect, which has been issued by
a court or governmental agency of competent jurisdiction, to the effect that the
transactions contemplated hereby may not be consummated as herein provided; no
proceeding or lawsuit shall have been commenced by any governmental or
regulatory agency for the purpose of obtaining any such injunction, writ or
preliminary restraining order; and no written notice shall have been received
from any such agency indicating an intent to restrain, prevent, materially delay
or restructure the transactions contemplated by this Agreement.
7.2 HSR Act. All applicable waiting periods under the HSR Act shall
have expired or terminated.
Section 8. Conditions to Obligations of Purchaser
The obligations of Purchaser to consummate the Closing shall be
subject to the satisfaction (or waiver by Purchaser) at or prior to the Closing
of each of the following additional conditions:
8.1 Representations and Warranties. The representations and warranties
of Shareholders set forth in Sections 3 and 4 shall be true and correct as of
the date of this Agreement and as of the Closing Date (other than to the extent
that any facts giving rise to any inaccuracy would not have, individually or in
the aggregate, a Material Adverse Effect) as though made on and as of the
Closing Date.
8.2 No Material Adverse Effects. Without limiting the generality of
Section 8.1, none of the Waldorf Entities shall have suffered a Material Adverse
Effect from the date of this Agreement through the Closing Date.
8.3 Performance of Obligations of Waldorf Entities and Shareholders.
Each of the Waldorf Entities and Shareholders shall have performed in all
material respects all covenants and agreements required to be performed by any
one or more of them under this Agreement on or prior to Closing.
8.4 Consents. All consents, authorizations, orders and approvals of
(or filings or registrations with) any governmental commission, board or other
regulatory body required in connection with the execution, delivery and
performance of this Agreement and the transactions contemplated hereby by any
Waldorf Entity or Shareholder shall have been obtained or made.
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8.5 Compliance Certificates. The Shareholders and Wabash shall furnish
Purchaser with appropriate certificates as to compliance with the conditions set
forth in Sections 8.1 through 8.4.
8.6 Material Contracts. Purchaser shall have received the consents as
set forth in Schedule 8.6.
8.7 Canada Sale. The Canada Sale shall have occurred or shall occur
simultaneously with the Closing.
8.8 Executive Rights. The Executive Rights shall have been satisfied
and terminated in full, and all amounts payable by Waldorf Entities in
connection therewith shall have been paid in full. The ▇▇▇▇ Shareholders shall
deliver a certificate to Purchaser at Closing detailing all amounts paid by
Waldorf Entities to satisfy and terminate in full the Executive Rights.
8.9 Certain Agreements. ▇▇▇▇▇▇ ▇. ▇▇▇▇ shall have executed and
delivered to Purchaser a Consulting Agreement (the "Consulting Agreement") in
the form of Exhibit C attached, and ▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇ shall have
executed and delivered to Purchaser, respectively, Noncompetition Agreements in
the form of Exhibits D-1 and D-2 attached.
8.10 Resignation Letters. Each of the elected officers and directors
of the Waldorf Entities shall have tendered to Purchaser letters of resignation
from such elected positions (but not as employees of Waldorf Entities) in form
and substance reasonably acceptable to Purchaser on or prior to the Closing
Date, such resignations to be effective immediately following the Closing.
8.11 Stock Certificates. Shareholders shall have delivered to
Purchaser certificates representing the Shares, endorsed in blank.
8.12 Canadian Deficit. The ▇▇▇▇ Shareholders shall sign and deliver a
certificate which calculates the Canadian Deficit in reasonable detail (the
"Canadian Deficit Certificate").
8.13 Legal Opinion. Purchaser shall have received an opinion of
▇▇▇▇▇▇▇, Street & Deinard, dated the Closing Date, substantially in the form
attached hereto as Exhibit E.
8.14 Payment of Wabash Notes. The ▇▇▇▇ Shareholders shall cause the
obligors under the Wabash Notes to pay the full amounts of the Wabash Notes by
wire transfer of immediately available funds to an account of Wabash designated
by Purchaser.
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8.15 Assumption Agreement. The ▇▇▇▇ Shareholders shall have executed
and delivered an Assumption Agreement, dated the Closing Date, substantially in
the form of Exhibit F (pursuant to which the ▇▇▇▇ Shareholders will assume any
and all liabilities of Wabash, including, without limitation, all tax
liabilities arising as a result of the Parent Transfer).
8.16 Guaranty. ▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇ ▇.
▇▇▇▇ shall have executed and delivered a Guaranty, dated the Closing Date,
substantially in the form of Exhibit G (pursuant to which such persons will
guarantee the obligations of the ▇▇▇▇ Shareholders under Section 10 hereof to
the extent any proceeds of the Purchase Price are hereafter transferred to
them).
Section 9. Conditions to Obligations of Shareholders.
The obligations of Shareholders to consummate the Closing shall be
subject to the satisfaction (or waiver by the Shareholder Representative) at or
prior to the Closing of each of the following additional conditions:
9.1 Representations and Warranties. The representations and warranties
of the Purchaser set forth in Section 5 shall be true and correct in all
material respects as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date.
9.2 Performance of Obligations of Purchaser. Purchaser shall have
performed in all material respects all covenants and agreements required to be
performed by it under this Agreement on or prior to the Closing.
9.3 Consents. All consents, authorizations, orders and approvals of
(or filings or registrations with) any governmental commission, board or other
regulatory body required in connection with the execution, delivery and
performance of this Agreement by Purchaser shall have been obtained or made.
9.4 Certificates. Purchaser shall furnish Shareholders with a
certificate of appropriate Purchaser officers as to compliance with the
conditions set forth in Sections 9.1, 9.2 and 9.3.
9.5 Consulting Agreement. Purchaser shall have executed and delivered
to ▇▇▇▇▇▇ ▇. ▇▇▇▇ the Consulting Agreement.
9.6 Parent Transfer. The Parent Transfer shall have occurred or shall
occur simultaneously with the Closing.
9.7 Legal Opinion. Shareholders shall have received an opinion of King
& Spalding, dated the Closing Date, substantially in the form attached hereto as
Exhibit H.
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9.8 Canadian Deficit. Purchaser shall sign and deliver the Canadian
Deficit Certificate.
Section 10. Indemnification.
10.1 Indemnification Obligations of the ▇▇▇▇ Shareholders. The ▇▇▇▇
Shareholders shall, jointly and severally, indemnify, defend and hold harmless
Purchaser and Waldorf Entities, each of their respective officers, directors,
employees, affiliates, agents and representatives and each of the heirs,
beneficiaries, executors, successors and assigns of any of the foregoing
(collectively, the "Purchaser Indemnified Parties") from, against and in respect
of any and all claims, liabilities, obligations, losses, costs, expenses,
penalties, fines and other judgments (at equity or at law) and damages whenever
arising or incurred (including, without limitation, amounts paid in settlement,
costs of investigation and reasonable attorneys' fees and expenses), net of any
insurance proceeds actually received by the Waldorf Entities after the Closing
Date with respect thereto pursuant to any general casualty insurance policy or
title insurance policy maintained by the Waldorf Entities on or prior to the
Closing Date, arising out of or relating to:
(i) any breach or inaccuracy of any representation or warranty made
by any Shareholder in Sections 3 or 4 hereof;
(ii) any breach of any covenant, agreement or undertaking made by any
Shareholder or Waldorf Entity in Sections 6.1(a), 6.1(b), 6.1(c), 6.1(e),
6.2, 6.3(c), 6.3(d), 6.5 or 6.6 hereof (except for liabilities for Taxes
addressed in subsections 10.1(vi) hereof), provided that, in the case of a
breach by a Waldorf Entity, such breach shall have occurred at or prior to
the Closing;
(iii) any breach of any covenant, agreement or undertaking made by any
Shareholder or Waldorf Entity in this Agreement, any Schedule or Exhibit or
any other document contemplated hereby (other than in Sections 3 or 4
hereof or in any Schedule referred to therein and other than in the
Sections listed in Section 10.1(ii) hereof), provided that, in the case of
a breach by a Waldorf Entity, such breach shall have occurred at or prior
to the Closing;
(iv) (w) any violation of or noncompliance with, or alleged violation
of or noncompliance with, any Environmental Laws (including, without
limitation, with respect to any alleged nuisance or trespass or alleged
exposure to hazardous materials in the workplace) arising out of or
relating to the operation of any Waldorf Entity on or prior to the Closing
Date, (x) any claim arising under any Environmental Law resulting from the
ownership, use, control or operation at any time on or prior to the Closing
Date of any plant, facility, site, area or property now or previously used
in the business of the Waldorf Entities (whether currently or previously
owned, leased or used by the Waldorf Entities or by any prior owner, lessee
or user of such plant, facility, site, area or property), including,
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without limitation, arising from any release of any hazardous materials or
off-site shipment of any hazardous materials at or from any such plant,
facility, site, area or property (whether by any of the Waldorf Entities
or by any prior owner, lessee or user of such plant, facility, site, area
or property), (y) the cost of conducting and completing any Scheduled Work
(exclusive, however, of wages and salaries of employees of the Waldorf
Entities and Rock-Tenn related to their involvement with Scheduled Work)
or (z) any cost, expense, or liability arising out of the three No. 6 Fuel
Oil Tanks abandoned by Champion and filled with sand prior to July 15,
1985 and referenced at point D.1 of Schedule A to the Limited Release
between Waldorf Corporation and Champion International Corporation dated
August 9, 1990;
(v) other than matters subject to the Canadian Deficit Certificate,
any and all aspects of the existence, operations, assets, liabilities,
properties and business of Waldorf Canada, whether arising out of or
relating to the Canada Sale or other events or circumstances occurring or
existing prior to, at or after the Closing, including, without limitation,
any violation of or noncompliance with, or alleged violation of or
noncompliance with, local, provincial or federal laws and regulations in
Canada relating to protection of the environment, pollution control,
product registration or hazardous materials (including, without limitation,
with respect to any alleged nuisance or trespass or alleged exposure to
hazardous or toxic substances in the workplace), and all costs and expenses
incurred by the Waldorf Entities in connection with the Canada Sale, but
excluding all amounts invested by Waldorf Entities in Waldorf Canada prior
to October 31, 1996, whether by way of loan, capital contribution or
otherwise (the net amount of such investment being shown in Attachment A to
the Stock Transfer Agreement);
(vi) (w) any liability or obligation of Wabash existing as of the
Closing Date or arising thereafter as a result of matters in existence on
or prior to the Closing Date including, without limitation, any liability
arising from or relating to (a) the Parent Transfer Taxes to the extent not
accounted for in the determination of the Cash Payment under Section 1.2,
(b) any actual or proposed disallowance of the Tax Benefit, or (c) the
matters in issue in the pending litigation between Wabash and the U.S.
Internal Revenue Service (the "Wabash Tax Litigation"), but excluding any
intercompany liability owed by Wabash to a Waldorf Entity for Taxes
previously paid; (x) any failure of the ▇▇▇▇ Shareholders to make any
payments required to be made by the ▇▇▇▇ Shareholders under Section 6.15;
(y) any liability or obligation of any of the Waldorf Entities or HEI
Development existing as of the Closing Date or arising thereafter arising
from or relating to HEI Development including, without limitation,
Waldorf's ownership of its interest in HEI Development, any Taxes relating
to HEI Development, any actions taken by Waldorf in respect of HEI
Development, or any other matter set forth in Section 6.14; and (z) any
liability or obligation of the Waldorf Entities arising under (aa) the
agreements disclosed in Schedule 4.7(a) (which are identified therein as
being in the closing binder titled "Shareholder Agreement and Plan of
Reorganization by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇ and
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various ▇▇▇▇ Family Trusts, ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, H Enterprises International, Inc. and Trident Enterprises
International, Inc."), (bb) any other claim against any of the Waldorf
Entities by ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇, Trident Enterprises International, Inc. or any
entity controlled by either or both of them arising out of any facts or
circumstances existing on or before the Closing Date, (cc) one-half of any
environmental indemnification obligation of Waldorf Realty relating to the
parcel located at West ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ disclosed to Purchaser as being sold to develop a Burger King
restaurant or (dd) any obligation to pay any Taxes or to reimburse anyone
for the payment of any Taxes attributable to the taxable status of any
trust which is a part of any Waldorf Benefit Plan ; and
(vii) any fraud, willful misconduct, bad faith or knowing breach of
any representation or warranty, covenant, agreement or undertaking made by
any Shareholder in this Agreement, any Schedule or Exhibit hereto or any
other document contemplated hereby (to the extent such breach is not
otherwise disclosed in writing to Purchaser pursuant to this Agreement
prior to the Closing).
The claims, liabilities, obligations, losses, costs, expenses, penalties, fines
and damages of the Purchaser Indemnified Parties described in this Section 10.1
as to which the Purchaser Indemnified Parties are entitled to indemnification
are hereinafter collectively referred to as "Purchaser Losses".
10.2 Indemnification Obligations of Purchaser. Purchaser shall
indemnify and hold harmless each Shareholder and trustee thereof, and each of
their respective heirs, beneficiaries, executors, successors and assigns
(collectively, the "Shareholder Indemnified Parties") from, against and in
respect of any and all claims, liabilities, obligations, losses, costs,
expenses, penalties, fines and other judgments (at equity or at law) and damages
whenever arising or incurred (including, without limitation, amounts paid in
settlement, costs of investigation and reasonable attorneys' fees and expenses)
arising out of or relating to:
(i) any breach or inaccuracy of any representation or warranty
made by Purchaser in Section 5;
(ii) any breach of any covenant, agreement or undertaking made
by Purchaser in this Agreement, any Exhibit or any other document
contemplated hereby; and
(iii) any fraud, willful misconduct, bad faith or knowing breach
of any representation, warranty, covenant, agreement or undertaking
made by Purchaser in this Agreement, any Schedule or Exhibit hereto or
any other document contemplated hereby (to the extent such breach is
not otherwise disclosed in writing to the Shareholder Indemnified
Parties pursuant to this Agreement prior to the Closing).
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The claims, liabilities, obligations, losses, costs, expenses, penalties, fines
and damages of the Shareholder Indemnified Parties described in this Section
10.2 as to which the Shareholder Indemnified Parties are entitled to
indemnification are hereinafter collectively referred to as "Shareholder
Losses."
10.3 Indemnification Procedure.
(a) Promptly after receipt by a Purchaser Indemnified Party or a
Shareholder Indemnified Party (hereinafter collectively referred to as an
"Indemnified Party") of notice by a third party of any complaint or the
commencement of any action or proceeding with respect to which such
Indemnified Party may be entitled to receive payment from the other party
for any Purchaser Losses or Shareholder Losses (as the case may be), such
Indemnified Party shall, within ten (10) days, notify Purchaser or the
Shareholder Representative, as the appropriate indemnifying party or
representative thereof (the "Indemnifying Party"), of such complaint or of
the commencement of such action or proceeding; provided, however, that the
failure to so notify the Indemnifying Party shall not relieve the
Indemnifying Party from liability for such claim arising otherwise than
under this Agreement and such failure to so notify the Indemnifying Party
shall relieve the Indemnifying Party from liability under this Agreement
with respect to such claim only if, and only to the extent that, such
failure to notify the Indemnifying Party results in the forfeiture by the
Indemnifying Party of material rights and defenses otherwise available to
the Indemnifying Party with respect to such claim. The Indemnifying Party
shall have the right, upon written notice delivered to the Indemnified
Party within twenty (20) days thereafter, to assume the defense of such
action or proceeding, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of the fees and
disbursements of such counsel. In the event, however, that the Indemnifying
Party declines or fails to assume the defense of the action or proceeding
or to employ counsel reasonably satisfactory to the Indemnified Party, in
either case within such 20-day period, then such Indemnified Party may
employ counsel to represent or defend it in any such action or proceeding
and the Indemnifying Party shall pay the reasonable fees and disbursements
of such counsel as incurred; provided, however, that the Indemnifying Party
shall not be required to pay the fees and disbursements of more than one
counsel for all Indemnified Parties in any jurisdiction in any single
action or proceeding. In any action or proceeding with respect to which
indemnification is being sought hereunder, the Indemnified Party or the
Indemnifying Party, whichever is not assuming the defense of such action,
shall have the right to participate in such litigation and to retain its
own counsel at such party's own expense. The Indemnifying Party or the
Indemnified Party, as the case may be, shall at all times use reasonable
efforts to keep the Indemnifying Party or the Indemnified Party, as the
case may be, reasonably apprised of the status of the defense of any action
the defense of which it is maintaining and to cooperate in good faith with
each other with respect to the defense of any such action.
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(b) No Indemnified Party may settle or compromise any claim or consent
to the entry of any judgment with respect to which indemnification is being
sought hereunder without the prior written consent of the Indemnifying
Party, unless such settlement, compromise or consent includes an
unconditional release of the Indemnifying Party from all liability arising
out of such claim. An Indemnifying Party may not, without the prior written
consent of the Indemnified Party, settle or compromise any claim or consent
to the entry of any judgment with respect to which indemnification is being
sought hereunder unless (i) the Indemnifying Party shall pay or cause to be
paid all amounts arising out of such settlement or judgment concurrently
with the effectiveness thereof; (ii) the terms or effect of the settlement
shall not encumber any of the assets of any Indemnified Party or any
affiliate thereof, or contain or result in any restriction, interference or
condition that would apply to such Indemnified Party or its affiliates or
to the conduct of any of their respective businesses; and (iii) the
Indemnifying Party shall obtain, as a condition of such settlement, a
complete unconditional release of each Indemnified Party.
(c) In the event an Indemnified Party shall claim a right to payment
pursuant to this Agreement, such Indemnified Party shall send written
notice of such claim to the appropriate Indemnifying Party. Such notice
shall specify the basis for such claim. As promptly as possible after the
Indemnified Party has given such notice, such Indemnified Party and the
appropriate Indemnifying Party shall establish the merits and amount of
such claim (by mutual agreement, litigation, arbitration or otherwise) and,
within 5 business days of the final determination of the merits and amount
of such claim, the Indemnifying Party shall pay to the Indemnified Party
immediately available funds in an amount equal to such claim as determined
hereunder.
(d) Consistent with the foregoing, it is understood that the ▇▇▇▇
Shareholders shall, at their sole expense on behalf of Purchaser and the
Waldorf Entities, monitor and, to the extent necessary or desirable, take
such actions as the ▇▇▇▇ Shareholders deem appropriate with respect to the
Wabash Tax Litigation in the manner provided in this Section 10.3. After
payment in full by the ▇▇▇▇ Shareholders to Purchaser of all Purchaser
Losses arising with respect to the Wabash Tax Litigation, the ▇▇▇▇
Shareholders shall be entitled to pursue, on behalf of the Waldorf
Entities, any right of the Waldorf Entities to recover payments with
respect to such Purchaser Losses under the Trident Agreement and the Tax
Escrow Agreement. Purchaser will cooperate and will cause the Waldorf
Entities to cooperate with the ▇▇▇▇ Shareholders in the ▇▇▇▇ Shareholders'
pursuit of rights under the Trident Agreement and the Tax Escrow Agreement.
To the extent that any Waldorf Entity recovers from the ▇▇▇▇ Shareholders
for any such Purchaser Losses and Purchaser or any Waldorf Entity
thereafter receives a payment for such Purchaser Losses under the Trident
Agreement or the Tax Escrow Agreement, Purchaser shall refund an amount
equal to such payment to the ▇▇▇▇ Shareholders. As used herein, the
"Trident Agreement" means the Shareholder Agreement and Plan of
Reorganization, dated February 1, 1994, by and among the ▇▇▇▇
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Shareholders, ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, H
Enterprises International, Inc. (now Wabash), and Trident Enterprises
International, Inc., and the "Tax Escrow Agreement" means the Tax Escrow-
Split-Off, dated March 9, 1994, by and among the ▇▇▇▇ Shareholders, ▇▇▇▇▇▇▇
▇. ▇'▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, H Enterprises International,
Inc. (now Wabash) and First Trust National Association.
10.4 Claims Period. For purposes of this Agreement, a "Claims Period"
shall be the period during which a claim for indemnification may be asserted
under this Agreement by an Indemnified Party, which period shall (i) begin on
the earlier of the Closing Date or the date of any termination of this Agreement
pursuant to Section 11, and (ii) terminate as follows:
(a) with respect to Purchaser Losses arising under Section 10.1(i) as
a result of a breach or inaccuracy of any representation or warranty
contained in Sections 3.1, 3.2(a), 3.2(b), 3.3, 4.1, 4.2, 4.3(a), 4.3(c),
4.4, 4.7(b), 4.12 or 4.22 hereof and under Sections 10.1(ii), (iv), (v),
(vi) and (vii) (collectively, the "Shareholder Surviving Matters"), the
Claims Period shall continue (1) until the expiration of the applicable
statute of limitations under federal and state Tax laws, in the case of
Purchaser Losses arising under Section 10.1(i) as a result of a breach or
inaccuracy of any representation or warranty contained in Section 4.12
hereof or arising under Section 10.1(ii) as a result of any Tax-related
indemnification obligation contained in Section 6 hereof; (2) until the
third anniversary of the Closing Date, in the case of other Purchaser
Losses arising under Section 10.1(ii), (3) until the fifth anniversary of
the Closing Date, in the case of Purchaser Losses arising under Section
10.1(iv) and (4) until the twentieth anniversary of the Closing Date in the
case of all other Shareholder Surviving Matters;
(b) with respect to all other Purchaser Losses, the Claims Period
shall terminate on the third anniversary of the Closing Date;
(c) with respect to Shareholder Losses arising under (i) Sections
10.2(i) as a result of a breach or inaccuracy of any representation or
warranty contained in Sections 5.1, 5.2, 5.3 or 5.4 hereof or (ii) Section
10.2(iii), the Claims Period shall terminate on the twentieth anniversary
of the Closing Date; and
(d) with respect to all other Shareholder Losses, the Claims Period
shall terminate on the third anniversary of the Closing Date.
Notwithstanding the foregoing, if prior to the close of business on
the last day of the applicable Claims Period, an Indemnifying Party shall have
been properly notified of a claim for indemnity hereunder and such claim shall
not have been finally resolved or disposed of at such date, such claim shall
continue to survive and shall remain a basis for indemnity hereunder until such
claim is finally resolved or disposed of in accordance with the terms hereof.
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10.5 Liability Limits. Notwithstanding anything to the contrary
set forth herein,
(a) The ▇▇▇▇ Shareholders shall only be liable for Purchaser
Losses arising hereunder to the extent that any such Purchaser Losses
exceed, in the aggregate, One Million Dollars ($1,000,000) (the
"Shareholder Basket Amount") and such liability shall be only for
amounts which, in the aggregate, are in excess of the Shareholder
Basket Amount; provided, however, that Purchaser Losses arising under
or pursuant to any Shareholder Surviving Matters shall not be subject
to the Shareholder Basket Amount and there shall be no "threshold
amount" on the indemnification obligations of the ▇▇▇▇ Shareholders
with respect to such Purchaser Losses;
(b) The ▇▇▇▇ Shareholders' aggregate liability for all Purchaser
Losses shall not exceed One Hundred Million Dollars ($100,000,000)
(the "Shareholder Maximum Amount") provided, however, that Purchaser
Losses arising under or pursuant to Section 10.1(v), 10.1(vi) or
10.1(vii) shall not be subject to or considered in calculating the
Shareholder Maximum Amount;
(c) Purchaser Losses arising under or pursuant to Section
10.1(i) as a result of a breach or inaccuracy of any representation or
warranty contained in Section 4.17 hereof or under or pursuant to
Section 10.1(iv) shall be subject to the following provisions:
(i) In calculating such Purchaser Losses, such Purchaser
Losses shall be net of any reimbursements from governmental
entities received by any Waldorf Entity for performing work the
cost of which is otherwise included as Purchaser Losses
hereunder;
(ii) The first One Million Eight Hundred Fifty Thousand
Five Hundred Dollars ($1,850,500) of such Purchaser Losses shall
be paid by Purchaser without, any contribution from the ▇▇▇▇
Shareholders (the "Environmental Basket");
(iii) To the extent such Purchaser Losses, in total, exceed
One Million, Eight Hundred Fifty Thousand Five Hundred Dollars
($1,850,500) but are equal to or less than Twenty-One Million,
Eight Hundred Fifty Thousand Five Hundred Dollars ($21,850,500),
such Losses shall be paid one-half by the ▇▇▇▇ Shareholders and
one-half by Purchaser;
(iv) To the extent such Purchaser Losses, in total, exceed
Twenty-One Million Eight Hundred Fifty Thousand Five Hundred
Dollars ($21,850,500), such Purchaser Losses shall be paid by
Purchaser without any contribution by the ▇▇▇▇ Shareholders;
(v) Except for a claim, if any, under Section 10.1(vii)
hereof, the ▇▇▇▇ Shareholders' maximum liability for Purchaser
Losses arising under or pursuant to
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Section 10.1(i) as a result of a breach or inaccuracy of any
representation or warranty contained in Section 4.17 hereof or
under or pursuant toSection 10.1(iv) shall be Ten Million Dollars
($10,000,000) as provided for in this Section 10.5(c);
(d) The ▇▇▇▇ Shareholders shall not have any liability with
respect to Purchaser Losses to the extent that any Waldorf Entity
actually recovers from Champion International Corporation ("Champion")
pursuant to the Purchase and Sale Agreement (the "Champion
Agreement"), dated July 5, 1985, among Champion and Waldorf
Corporation, based on the matters giving rise to such Purchaser
Losses. To the extent of such recovery, such Purchaser Losses shall
not be considered as Purchaser Losses. Purchaser shall cause Wabash or
Waldorf to use commercially reasonable efforts to seek recovery from
Champion for any Purchaser Losses for which, in the opinion of
Purchaser's counsel, a Waldorf Entity is reasonably likely to be
entitled to recovery under the Champion Agreement. If Purchaser does
not seek recovery from Champion under the Champion Agreement with
respect to any Purchaser Losses for which the ▇▇▇▇ Shareholders have
paid Purchaser, the ▇▇▇▇ Shareholders shall be subrogated to any right
of Purchaser or the Waldorf Entities to seek recovery from Champion
under the Champion Agreement with respect to such Purchaser Losses. To
the extent that any Waldorf Entity recovers from the ▇▇▇▇ Shareholders
for any Purchaser Losses and Purchaser thereafter receives a payment
for such Purchaser Losses from Champion with respect to such Purchaser
Losses, Purchaser shall refund an amount equal to such payment for
such Purchaser Losses to the ▇▇▇▇ Shareholders;
(e) It is understood that the purchase price payable hereunder
has been determined, in part, based upon the past earnings of the
Waldorf Entities as reflected in the Financial Statements (the
"Reported Earnings"). If the Reported Earnings were in fact overstated
above the actual earnings of the Waldorf Entities, it is understood
that, subject to the terms of this Section 10, Purchaser might
otherwise have a claim under Section 10.1 for either or both of (i)
for the amount of assets which are not otherwise owned by the Waldorf
Entities (thus, for example, if the Reported Earnings for the year
ended June 30, 1996 were $10 million and the actual earnings were $9
million, Purchaser might have a claim for $1 million to reflect the
shortfall in earnings) and (ii) for some multiple of the shortfall in
earnings to reflect a diminution in value of the Waldorf Entities
(where value was determined, in part, as a multiple of Reported
Earnings) (a claim based upon a multiple of earnings being hereinafter
referred to as a "Earnings Multiple Claim"). The parties agree that,
with the exception of a claim under or pursuant to Section 10.1 (vii),
Purchaser Losses shall not be deemed to include an Earnings Multiple
Claim; and
(f) In calculating Purchaser Losses arising under or pursuant to
Section 10.1(i) as a result of a breach or inaccuracy of any
representation or warranty contained in Section 4.12 hereof, such
Purchaser Losses shall be net of any Tax refunds received by the
Waldorf Entities after the Closing Date with respect to taxable
periods ended on or before the Closing Date, excluding (i) any Tax
refunds which are treated as assets of
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the Waldorf Entities (or which reduce the amount of any liability for
Taxes) on the Financial Statements and (ii) any Tax refunds attributable to
or resulting from the Canada Sale or the payment to GECC pursuant to the
GECC Agreement, as modified by the Waldorf Settlement Document.
10.6 Investigations. The respective representations and warranties of
parties hereto contained herein, in any Schedule or Exhibit hereto or in any
other document contemplated hereby and the rights to indemnification set forth
in this Section 10 shall not be deemed waived or otherwise affected by any
investigation made by a party hereto. As of the date of this Agreement, and,
unless otherwise disclosed in writing to Shareholders, as of the Closing Date,
to the knowledge of Purchaser, no facts or circumstances exist (that are not
otherwise disclosed in this Agreement or the schedules and items attached
hereto) that would cause the representations and warranties of Shareholders set
forth in Sections 3 or 4 to be incorrect in any respect which would result in a
Material Adverse Effect. Notwithstanding anything contained in this Section 10.6
to the contrary, in the event Purchaser has knowledge of any facts or
circumstances that cause the representations and warranties of Shareholders set
forth in Sections 3 or 4 to be incorrect in any respect (to the extent not
otherwise disclosed in this Agreement or the schedules and items attached
hereto), and thereafter Purchaser proceeds with the Closing, Purchaser shall be
deemed to have waived its rights under this Agreement to the extent of Purchaser
Losses arising as a result of the breach of such representations and warranties
caused by such known facts or circumstances. As used herein, the terms
"knowledge of Purchaser" shall mean the knowledge of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇., Chief
Executive Officer of Purchaser, ▇▇▇ ▇▇▇▇▇▇▇, President of Purchaser, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, Chief Financial Officer of Purchaser and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General
Counsel of Purchaser.
Section 11. Termination.
11.1 Termination. This Agreement may be terminated at any time prior
to the Closing Date:
(i) by mutual agreement of the Shareholder Representative and
Purchaser;
(ii) by the Shareholder Representative, if the conditions set forth in
Sections 7 and 9 hereof (to the extent compliance or performance thereunder
is not within the control of Shareholders) 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 Purchaser on or before February 28, 1997; and
(iii) by Purchaser, if the conditions set forth in Sections 7 and 8
hereof (to the extent compliance or performance thereunder is not within
the control of Purchaser) 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 Shareholders
on or before February 28, 1997.
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11.2 Specific Performance and Other Remedies. The parties hereto each
acknowledge that the rights of each party to consummate the transactions
contemplated hereby are special, unique and of extraordinary character, and
that, in the event that any party violates or fails or refuses to perform any
covenant or agreement made by it herein, the non-breaching party may be without
an adequate remedy at law. The parties each agree, therefore, that in the event
that either party violates or fails or refuses to perform any covenant or
agreement made by such party herein, the non-breaching party or parties may,
subject to the terms of this Agreement and in addition to any remedies at law
for damages or other relief, institute and prosecute an action in any court of
competent jurisdiction to enforce specific performance of such covenant or
agreement or seek any other equitable relief.
11.3 Effect of Termination. In the event of termination of this
Agreement pursuant to this Section 11, this Agreement shall forthwith become
void and there shall be no liability on the part of any party or its respective
officers, directors or shareholders. Notwithstanding the foregoing, nothing
contained herein shall relieve any party from liability for any breach of any
covenant or agreement in this Agreement.
Section 12. Shareholder Representative.
By the execution and delivery of this Agreement, including
counterparts hereof, each Shareholder hereby irrevocably constitutes and
appoints ▇▇▇▇▇▇ ▇. ▇▇▇▇ (the "Shareholder Representative"), as the true and
lawful agent and attorney-in-fact of such Shareholder with full powers of
substitution to act in the name, place and stead of such Shareholder with
respect to the transfer of such Shareholder's Shares to Purchaser in accordance
with the terms and provisions of this Agreement, as the same may be from time to
time amended, and to do or refrain from doing all such further acts and things,
and to execute all such documents, as the Shareholder Representative shall deem
necessary or appropriate in connection with any of the transactions contemplated
hereby, including the power:
(i) to receive, hold, and deliver to Purchaser the certificates
evidencing the Shares accompanied by executed stock powers, signature
guarantees, and any other documents relating thereto on behalf of
Shareholders, including the power to endorse and present any such
certificate or stock power on behalf of any Shareholder;
(ii) to execute and deliver all ancillary agreements, certificates,
and documents which the Shareholder Representative deems necessary or
appropriate in connection with the consummation of the transactions
contemplated hereby;
(iii) to receive and receipt for all payments made by Purchaser to
Shareholders under this Agreement;
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(iv) to act for Shareholders with respect to all indemnification
matters referred to in this Agreement, including the right to compromise on
behalf of Shareholders any indemnification claim made by or against
Shareholders;
(v) to terminate, amend, or waive any provision of this Agreement;
provided that any such action, if material to the rights and obligations of
Shareholders in the reasonable judgment of the Shareholder Representative,
shall be taken in the same manner with respect to all Shareholders, unless
otherwise agreed by each Shareholder who is subject to any disparate
treatment of a potentially adverse nature;
(vi) to employ and obtain the advice of legal counsel, accountants
and other professional advisors as the Shareholder Representative, in his
sole discretion, deems necessary or advisable in the performance of his
duties as Shareholder Representative and to rely on their advice and
counsel;
(vii) to incur expenses of sale, including fees of brokers, attorneys
and accountants incurred pursuant to the transfer of the Shares, and any
other fees and expenses allocable or in any way relating to such
transaction or any indemnification claim, whether incurred prior or
subsequent to Closing (all of which are hereinafter referred to as
"Transaction Expenses"), to withhold from funds received on behalf of
Shareholders prior to their distribution to Shareholders any amount which
the Shareholder Representative deems necessary for payment of or as a
reserve against Transaction Expenses, and to pay such fees and expenses or
to deposit the same in a bank account established for such purpose;
(viii) to pay from funds received on behalf of Shareholders, prior to
their distribution, the Transaction Expenses; and
(ix) to do or refrain from doing any further act or deed on behalf
of Shareholders which the Shareholder Representative deems necessary or
appropriate in his sole discretion relating to the subject matter of this
Agreement as fully and completely as any of the Shareholders could do if
personally present and acting.
The appointment of the Shareholder Representative shall be deemed
coupled with an interest and shall be irrevocable, and the Purchaser and any
other Person may conclusively and absolutely rely, without inquiry, upon any
action of the Shareholder Representative as the act of Shareholders in all
matters referred to in this Agreement or any other document contemplated hereby.
Each of Shareholders hereby ratifies and confirms all that the Shareholder
Representative shall do or cause to be done by virtue of his appointment as
Shareholder Representative of such Shareholder. The Shareholder Representative
shall act for Shareholders on all of the matters set forth in this Agreement in
the manner the Shareholder Representative believes to be in the best interest
of Shareholders and consistent with their obligations under this Agreement and
the Waldorf Ancillary Documents, but the Shareholder Representative shall not
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be responsible to any Shareholder for any loss or damage any Shareholder may
suffer by reason of the performance by the Shareholder Representative of his
duties under this Agreement, other than loss or damage arising from willful
violation of law or gross negligence in the performance of his duties under
this Agreement.
Section 13. Miscellaneous.
13.1 Notices. All notices, communications and deliveries hereunder
shall be made in writing signed by the party making the same, shall specify the
Section hereunder pursuant to which it is given or being made, and shall be
delivered personally or by telecopy transmission or sent by registered or
certified mail or by any express mail or courier delivery service (with postage
and other fees prepaid) as follows:
To Purchaser:
Rock-Tenn Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Rock-Tenn Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
To Shareholders:
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇. ▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, Street and Deinard
Suite 2300
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other representative or at such other address of a party as such
party hereto may furnish to the other parties in writing. Such notice shall be
effective upon the date of delivery or refusal of delivery, if sent by personal
delivery, registered, certified or express mail or courier delivery, or upon
transmission by telecopy transmission, if immediately confirmed by telephone or
electronic means.
13.2 Attachments. Annex II hereto lists all Annex(es), Schedules and
Exhibits attached hereto, all of which are hereby incorporated into this
Agreement and are hereby made a part hereof as if set out in full in this
Agreement.
13.3 Assignment; Successors in Interest. No assignment or transfer by
any party of their respective rights and obligations hereunder prior to the
Closing shall be made except with the prior written consent of the other parties
hereto, which consent may be given by the Shareholder Representative on behalf
of Shareholders. In the case of any person who executes this Agreement or any
other agreement or document contemplated hereby in a fiduciary capacity,
including, but not limited to, as trustee, on behalf of any Shareholder, the
terms, conditions and obligations of this Agreement shall inure to the benefit
of and be binding upon such Shareholder and, if a trust, the trust estate and
beneficiaries thereof. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and in the case of Purchaser, its successors
and assigns and, in the case of Shareholders, their respective heirs,
beneficiaries and assigns, and any reference hereto shall also be a reference to
a permitted successor or assign.
13.4 Number; Gender. Whenever the context so requires, the singular
number shall include the plural and the plural shall include the singular, and
the gender of any pronoun shall include the other genders.
13.5 Captions. The titles, captions and table of contents contained in
this Agreement are inserted herein only as a matter of convenience and for
reference and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provision hereof. Unless otherwise specified to
the contrary, all references to Articles and Sections are references to Articles
and Sections of this Agreement and all references to Exhibits are references to
Exhibits to this Agreement.
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13.6 Controlling Law; Integration; Amendment. This Agreement shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Minnesota without reference to Minnesota choice of law rules and
the parties hereto hereby agree; provided, however, that the right, power and
capacity of any Shareholder who is a fiduciary to execute, deliver and perform
this Agreement or any Exhibit and to consummate the contemplated transactions
shall be determined in accordance with and governed by the laws of the State
where the will, trust agreement or other document that established or created
the authority of such fiduciary to act was executed. This Agreement (and the
related written agreements to be entered into in connection with this Agreement)
supersedes all negotiations, agreements and understandings among the parties
with respect to the subject matter hereof and constitutes the entire agreement
among the parties hereto. This Agreement may not be amended, modified or
supplemented except by written agreement of Purchaser and the Shareholder
Representative.
13.7 Severability. Any provision hereof which is prohibited or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction will not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by law, the parties hereto waive any
provision of law which renders any such provision prohibited or unenforceable in
any respect.
13.8 Counterparts. This Agreement may be executed in counterparts,
including the Shareholder Counterpart Signature Pages, each of which shall be
deemed an original and all of which together shall constitute one and the same
agreement.
13.9 Enforcement of Certain Rights. Except as otherwise provided in
Section 10, nothing expressed or implied in this Agreement is intended, or shall
be construed, to confer upon or give any person, firm or corporation other than
the parties hereto, and their successors or assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement, or result in
such person, firm or corporation being deemed a third party beneficiary of this
Agreement.
13.10 Waiver. Any agreement on the part of a party hereto to any
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party, or as to any Shareholder, by the Shareholder
Representative. A waiver by one party of the performance of any covenant,
agreement, obligation, condition, representation or warranty shall not be
construed as a waiver of any other covenant, agreement, obligation, condition,
representation or warranty. A waiver by any party of the performance of any act
shall not constitute a waiver of the performance of any other act or an
identical act required to be performed at a later time.
13.11 Material and Knowledge Defined. The term "material" as used in
this Agreement with respect to any matter relating to any Waldorf Entity refers
to any circumstance
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or condition that individually or in the aggregate would result in a cost,
penalty, reduction in value or other loss of any kind to the Waldorf Entities in
excess of $50,000. The terms "to the best knowledge of Shareholders" or any
similar phrase as used in any particular provision of this Agreement means the
knowledge of the ▇▇▇▇ Shareholders after making appropriate inquiries of the
officers of the Waldorf Entities identified on Schedule 13.11 and based on
affidavits of such officers addressed to the ▇▇▇▇ Shareholders and Purchaser in
the form of Exhibit I.
13.12 Arbitration; Legal Proceedings.
(a) The parties shall attempt in good faith to resolve any dispute
arising out of or relating to this Agreement, the breach, termination or
validity thereof (including, without limitation, any claim for
indemnification pursuant to Section 10 hereof) promptly by negotiation
between the Shareholder Representative and a representative of Purchaser
who has authority to settle the controversy. Either the Shareholder
Representative or Purchaser may give the other written notice that a
dispute exists (a "Notice of Dispute"). The Notice of Dispute shall include
a statement of such party's position and, in the case of Purchaser, the
name and title of the representative who will represent the Purchaser.
Within ten (10) days of the delivery of the Notice of Dispute, the
Shareholder Representative and the executive representing Purchaser shall
meet at a mutually acceptable time and place, and thereafter as long as
they reasonably deem necessary, to attempt to resolve the dispute. All
documents and other information or data on which each party relies
concerning the dispute shall be furnished or made available on reasonable
terms to the other party at or before the first meeting of the parties as
provided by this paragraph.
(b) Any controversy or claim arising out of or relating to this
Agreement, the breach, termination or validity thereof, or the transactions
contemplated herein (including, without limitation, any claims for
indemnification pursuant to Section 10 hereof), if not settled by
negotiation as provided in paragraph (a) of this Section 13.12, shall be
settled by arbitration in New York, New York, in accordance with the CPR
Rules for Non-Administered Arbitration of Business Disputes, by three
arbitrators. Either party may initiate arbitration twenty (20) days
following the delivery of a Notice of Dispute if the dispute has not then
been settled by negotiation, or sooner if the other party fails to
participate in negotiation in accordance with paragraph (a) above. The
three arbitrators shall be appointed as provided by CPR Rule 5, Selection
of Arbitrators by the parties. The arbitration procedure shall be governed
by the United States Arbitration Act, 9 U.S.C. ss.1-16, and the award
rendered by the arbitrator shall be final and binding on the parties and
may be entered in any court having jurisdiction thereof.
(c) Each party shall have discovery rights as provided by the Federal
Rules of Civil Procedure; provided, however, that all such discovery shall
be commenced and concluded within sixty (60) days of the initiation of
arbitration.
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(d) It is the intent of the parties that any arbitration shall be
concluded as quickly as reasonably practicable. Unless the parties
otherwise agree, once commenced, the hearing on the disputed matters shall
be held four days a week until concluded, with each hearing date to begin
at 9:00 a.m. and to conclude at 5:00 p.m. The arbitrators shall use all
reasonable efforts to issue the final award or awards within a period of
five business days after closure of the proceedings. Failure of the
arbitrators to meet the time limits of this Section 13.12(d) shall not be a
basis for challenging the award.
(e) The arbitrators shall instruct the non-prevailing party to pay all
costs of the proceedings, including the fees and expenses of the
arbitrators and the reasonable attorneys' fees and expenses of the
prevailing party. If the arbitrators determine that there is not a
prevailing party, each party shall be instructed to bear its own costs and
to pay one-half of the fees and expenses of the arbitrators.
(f) Each party hereto hereby agrees that any legal proceeding
instituted to enforce an arbitration award hereunder will be brought in the
U.S. federal or state courts situated in New York, New York, and hereby
submits to personal jurisdiction therein and irrevocably waives any
objection as to venue therein, and further agrees not to plead or claim in
any such court that any such proceeding has been brought in an inconvenient
forum. Each Shareholder hereby designates, appoints and empowers ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, presently having offices at ▇▇▇▇▇▇▇, Street and Deinard, Suite
2300, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as such
Person's true and lawful agent for service of process to receive and accept
on Shareholder's behalf service of process in any such proceeding brought
in any such courts. Purchaser hereby designates, appoints and empowers
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Counsel, presently having offices at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, as such Purchaser's true and
lawful agent for service of process to receive and accept on Purchaser's
behalf service of process in any such proceeding brought in any such
courts. Each of the foregoing Persons agrees that the failure of the
process agent appointed by such Person to give notice of process to such
Person shall not impair or affect the validity of service upon such agent
or of any judgment based thereon, and each such Person irrevocably consents
to the service of process in any such proceeding by the mailing of copies
thereof by certified mail, postage prepaid, to such Person's address for
notices under this Agreement. Nothing herein shall preclude any of the
parties hereto from serving process in any other manner or in any other
jurisdiction in connection with enforcing an arbitration award hereunder.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date and year first above written.
ROCK-TENN COMPANY
By:________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
Chief Executive Officer
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THIS IS A SHAREHOLDER COUNTERPART SIGNATURE PAGE TO THE STOCK PURCHASE AGREEMENT
MADE AMONG ROCK-TENN COMPANY AND CERTAIN OTHER PARTIES DATED AS OF JANUARY 21,
1997.
SHAREHOLDERS:
______________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇
THE ▇▇▇▇▇ ▇. ▇▇▇▇▇ 1987 TRUST U/A
dated December 30, 1987
By: __________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇, Trustee
By: __________________________________
▇▇▇▇ ▇. ▇▇▇▇, Trustee
By: __________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇, Trustee
THE ▇▇▇▇▇ ▇. ▇▇▇▇ 1987 TRUST U/A
dated December 30, 1987
By: __________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇, Trustee
By: __________________________________
▇▇▇▇ ▇. ▇▇▇▇, Trustee
By: __________________________________
▇▇▇▇▇ ▇. ▇▇▇▇, Trustee
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THE ▇▇▇▇ ▇. ▇▇▇▇ 1987 TRUST U/A
dated December 30, 1987
By: __________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇, Trustee
By: __________________________________
▇▇▇▇ ▇. ▇▇▇▇, Trustee
By: __________________________________
▇▇▇▇ ▇. ▇▇▇▇, Trustee
NORWEST BANK SOUTH DAKOTA, N.A. as Trustee of
THE ▇▇▇▇▇ ▇. ▇▇▇▇ ALTERNATE DISTRIBUTIONS
TRUST created under the ▇▇▇▇ ▇. ▇▇▇▇ Family Trust u/a
dated July 2, 1985, with ▇▇▇▇ ▇. ▇▇▇▇ as Donor
By: __________________________________
[_________________________]
Title:______________________________
NORWEST BANK SOUTH DAKOTA, N.A. as Trustee of
THE ▇▇▇▇ ▇. ▇▇▇▇ ALTERNATE DISTRIBUTIONS
TRUST created under the ▇▇▇▇ ▇. ▇▇▇▇ Family Trust u/a
dated July 2, 1985, with ▇▇▇▇ ▇. ▇▇▇▇ as Donor
By: __________________________________
[_________________________]
Title:______________________________
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NORWEST BANK SOUTH DAKOTA, N.A. as Trustee of
THE ▇▇▇▇▇ ▇. ▇▇▇▇▇ ALTERNATE
DISTRIBUTIONS TRUST created under the ▇▇▇▇ ▇. ▇▇▇▇
Family Trust u/a dated July 2, 1985, with ▇▇▇▇ ▇. ▇▇▇▇ as
Donor
By: __________________________________
[________________________]
Title:______________________________
THE ARCHDIOCESE OF SAINT ▇▇▇▇
AND MINNEAPOLIS CATHOLIC COMMUNITY
FOUNDATION
By: __________________________________
[______________________]
Title: _________________________________
THE SAINT ▇▇▇▇ FOUNDATION
By: __________________________________
[______________________]
Title: _________________________________
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ANNEX II
Schedules
Schedule 1.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Issued and Outstanding Shares of Wabash
Capital Stock
Schedule 1.2(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shareholders' Accounts for Wire Transfer
Schedule 1.2(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ancillary Assets
Schedule 3.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nonprofit Shareholders' Required Consents
and Approvals
Schedule 4.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Waldorf Entities Locations of
Incorporation and Where Qualified as
Foreign Corporations
Schedule 4.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Restrictions and Conflicts
Schedule 4.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Waldorf Entities Capital Stock
Outstanding
Schedule 4.5 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . List and Legal Descriptions of all Real
Property Owned by Waldorf or Waldorf
Realty
Schedule 4.5 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Real and Personal Property Leases and
Agreements
Schedule 4.5 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Personal Property
Schedule 4.5 (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inventories
Schedule 4.5 (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounts Receivable
Schedule 4.5 (f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Party Options or Agreements to
Acquire Assets, Properties or Rights of
Waldorf
Schedule 4.5 (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assets Owned by the Waldorf Entities
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Schedule 4.5 (h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Condition of Certain Assets
Schedule 4.5 (j) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Party Leases of the Waldorf Property
Schedule 4.5 (k) . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Waldorf Entities Bank and Securities
Accounts
Schedule 4.5 (l) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assets Owned or Leased by Wabash
Schedule 4.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial Statements
Schedule 4.7 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities and Obligations of Wabash
Schedule 4.7 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities and Obligations of the Waldorf
Entities
Schedule 4.7(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Liabilities and Obligations of Waldorf
Foundation
Schedule 4.8 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certain Changes in the Waldorf Entities
since June 30, 1996
Schedule 4.8 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Certain Changes in the Waldorf Entities
since June 30, 1996
Schedule 4.8 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital Expenditures Made From July 1,
1996 through December 15, 1996; Capital
Expenditures approved through June 30,
1997
Schedule 4.8 (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Average Price Per Ton For Boxboard,
Medium and Folding Cartons Including
Mechanism Used to Establish Price Changes
Schedule 4.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Legal Proceedings
Schedule 4.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Licenses and Permits
Schedule 4.11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Material Contracts
Schedule 4.12(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . Extensions of Time to File Tax Returns;
Claims by Taxing Authorities
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Schedule 4.12(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax Returns Filed and Disputes Concerning
Tax Liabilities
Schedule 4.12(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . Waiver of Statutes of Limitation and
Extensions for Tax Assessments
Schedule 4.12(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . The Waldorf Entities Tax Allocation or Tax
Sharing Agreements
Schedule 4.12(g). . . . . . . . . . . . . . . . . . . . . . . . . . . . Certain Tax Information
Schedule 4.1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Officers and Employees of the Waldorf
Entities
Schedule 4.14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employee Benefit Plans
Schedule 4.15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Labor Relations
Schedule 4.16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Insurance Policies, Coverages and Material
Pending Claims
Schedule 4.17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Environmental Matters
Schedule 4.17(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . Environmental Fines, Penalties and
Assessments Paid Within the Last Five
Years
Schedule 4.18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Intellectual Property
Schedule 4.19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transactions with Affiliates
Schedule 4.20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Significant Customers or Suppliers
Expected to Terminate Business Relations
with the Waldorf Entities
Schedule 4.22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brokers, Finders, Investment Bankers or
Other Intermediaries Employed by the
Waldorf Entities
Schedule 4.24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Waldorf Canada Advances
Schedule 4.25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HEI Development
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Schedule 4.26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contracts or Other Obligations to
Waldorf Canada
Schedule 5.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brokers, Finders, Investment Bankers or
Other Intermediaries Employed by Purchaser
Schedule 6.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Executive Rights Outstanding
Schedule 6.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fees and Expenses Incurred by the Waldorf
Entities in Connection with this Transaction
Schedule 6.12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Environmental-Related Work to be
Conducted and Completed by Waldorf
Schedule 8.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Required Consents for Material Contracts
Schedule 13.11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Officers of the Waldorf Entities Providing
Affidavits Regarding Shareholder
Representations and Warranties
Exhibits
Exhibit A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Parent Transfer Agreement
Exhibit B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stock Transfer Agreement
Exhibit C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Consulting Agreement
Exhibit D-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Noncompetition Agreement for ▇▇▇▇▇▇ ▇. ▇▇▇▇
Exhibit D-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Noncompetition Agreement for ▇▇▇▇ ▇. ▇▇▇▇
Exhibit E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Opinion of ▇▇▇▇▇▇▇, Street & Deinard
Exhibit F . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assumption Agreement
Exhibit G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Guaranty
Exhibit H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Opinion of King & Spalding
Exhibit I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Form of Affidavit
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Annex
Annex I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Environmental Reports
Annex II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . List of Annexes, Schedules and Exhibits
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SCHEDULE 13.11
OFFICERS OF THE WALDORF ENTITIES PROVIDING
AFFIDAVITS REGARDING
SHAREHOLDER REPRESENTATIONS AND WARRANTIES
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ Vice President G/M
▇▇▇▇▇▇▇ ▇▇▇▇▇ Vice President G/M
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Group Vice President
▇▇▇▇▇ ▇▇▇▇▇▇ Group Vice President
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Vice President G/M
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Vice President G/M
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Vice President Quality & Tech
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Chief Operating Officer
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Chief Financial Officer
▇▇▇▇▇ ▇▇▇▇▇▇ Vice President Human Resources
▇▇▇▇ ▇▇▇▇▇ Vice President Sales & Marketing
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Senior Vice President Mill
▇▇▇▇▇▇ ▇▇▇▇▇▇ Vice President - Battle Creek
▇▇▇▇ Kaziukewicz Manager - Regulatory Compliance
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ General Manager - Best Recycling
▇▇▇▇ ▇▇▇▇▇▇▇ Assistant Treasurer
