UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 30, 1999
THE ZIEGLER COMPANIES, INC.
(Exact name of registrant in its charter)
Wisconsin 1-10854 39-1148883
(State of incorporation) (Commission File No.) (I.R.S. Employer Id No.)
215 North Main Street
West Bend, Wisconsin 53095-3317
(Address of principal executive offices)(Zip Code)
(262) 334-5521
(Registrant's telephone number, including area code)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On December 30, 1999, The Ziegler Companies, Inc. sold all of its
interest in the capital stock of WRR Environmental Services Co., Inc. ("WRR")
and its wholly-owned subsidiary, WRR Northwest Enterprises, Inc., to Caribou
Corporation (the "Buyer"). The Buyer, which includes former executive
officers of WRR, who are now officers, directors, and certain shareholders of
Caribou is otherwise unaffiliated with The Ziegler Companies, Inc. The total
sale price was $6.023 million. The Ziegler Companies, Inc. also received
additional funds from WRR by means of a payment in satisfaction of certain
intercompany tax payables due from WRR to The Ziegler Companies, Inc. The
Ziegler Companies, Inc. will also receive additional funds from WRR by means
of a dividend relating to earnings from the fourth quarter of 1999 and
certain additional intercompany tax obligations will be settled upon final
determination of 1999 tax liabilities.
A copy of the Stock Purchase Agreement is filed as Exhibit 99.1. The
foregoing description is qualified in its entirety by reference to the Stock
Purchase Agreement.
The Ziegler Companies, Inc.'s intention to sell the business was
previously announced. The terms of the transaction were determined by arms-
length negotiations between The Ziegler Companies, Inc. and the Buyer after
evaluating other offers.
On October 29, 1999, Ziegler Thrift Trading, Inc. ("ZTT") sold
substantially all of its assets and liabilities to Strong Investments, Inc.
The total sale price was $7.4 million plus Ziegler Thrift Trading, Inc.'s
1999 income through closing. Prior to the sale, Ziegler Thrift Trading, Inc.
declared and paid dividends in an amount equal to approximately $1.8 million
to its sole shareholder, The Ziegler Companies, Inc. A copy of the Asset
Purchase Agreement was filed as Exhibit 99.2 to the Form 8-K dated August 12,
1999 and pro forma financial statements were filed in the Form 8-K dated
October 29, 1999. Reference is made to the sale of ZTT because the ZTT sale
is also reflected in the following pro forma financial information.
Item 7. Pro Forma Financial Information
The following pro forma unaudited financial statements of The Ziegler
Companies, Inc. (the "Company" or "ZCO") reflecting the foregoing
transactions are included.
Pro Forma Consolidated Balance sheet
at September 30, 1999 (unaudited).........................F-1
Pro Forma Consolidated Statements of Operations
Year Ended December 31, 1998 (unaudited)..................F-3
Nine Months Ended September 30, 1999 (unaudited)..........F-4
Notes to Pro Forma Consolidated Financial Statements...........F-5
The exhibits to this Report are listed in the Exhibit Index set forth
elsewhere herein.
The following unaudited pro forma financial statements of the Company
give effect to the sale of capital stock of WRR and the sale of substantially
all of the assets and liabilities of ZTT. The statements reflect the
application of the net proceeds of both sale transactions as described in The
Notes to Pro Forma Consolidated Financial Statements. The amounts are
estimated and subject to further closing adjustments which are expected to be
insignificant. The pro forma consolidated balance sheet as of September 30,
1999 is based on the historical balance sheet of the Company and is presented
as if the sale had occurred on that date. The pro forma consolidated
statements of operations for the year ended December 31, 1998 and for the
nine months ended September 30, 1999 assume that the sale occurred at the
beginning of 1998.
The condensed pro forma statement of consolidated operations is not
necessarily indicative of the financial results that would have occurred had
the sale of WRR and ZTT been consummated on the indicated dates, nor is it
necessarily indicative of future financial results. See the Notes to Pro
Forma Consolidated Financial Statements for the assumptions used in the
statements presented. The pro forma consolidated financial statements should
be read in conjunction with the historical financial statements and related
notes of the Company.
<PAGE>
<TABLE>
<CAPTION>
THE ZIEGLER COMPANIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999
(Unaudited)
Historical
ZCO ZTT WRR
As Previously Pro Forma Pro Forma Pro Forma
Reported Adjustments Adjustments Statement
ASSETS
<S> <C> <C> <C> <C>
Cash $ 8,608,749 $ - $ (180,109) (6) $ 8,428,640
Short-term investments 6,530,241 4,800,000 (1) 5,603,037 (4) 16,933,278
Total cash and cash equivalents 15,138,990 4,800,000 5,422,928 25,361,918
Securities inventory 39,625,668 - - 39,625,668
Securities purchased under agreements to resell 4,483,125 - - 4,483,125
Accounts receivable 7,073,304 (517,581) (2) (1,697,332) (6) 4,858,391
Accrued income taxes receivable 2,470,708 (17,805) (5) 2,452,903
Investment in and receivables from Affiliates 1,678,651 - - 1,678,651
Notes receivable 4,654,390 - - 4,654,390
Other investments 27,055,377 - - 27,055,377
Land, buildings and equipment, net 12,565,291 (192,255) (2) (3,951,067) (6) 8,421,969
Deferred income tax benefit 2,783,390 - (689,268) (6) 2,094,122
Goodwill 12,641,421 - - 12,641,421
Other assets 5,480,045 (224,092) (2) (1,729,926) (6) 3,526,027
TOTAL ASSETS $135,650,360 $3,866,072 $(2,662,470) $136,853,962
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES:
Short-term notes payable $ 8,898,200 $ - - $ 8,898,200
Securities sold under agreements to repurchase 29,470,000 - - 29,470,000
Payable to broker-dealers and clearing
organizations 24,736,257 - - 24,736,257
Accounts payable 1,820,537 - (422,881) (6) 1,397,656
Securities sold, not yet purchased 4,438,125 - - 4,438,125
Notes payable to banks 657,342 - (657,342) (6) -
Bonds payable 4,595,124 - (325,124) (6) 4,270,000
Other liabilities and deferred items 12,779,695 214,318 (2) (1,557,123) (6) 11,436,890
TOTAL LIABILITIES 87,395,280 214,318 (2,962,470) 84,647,128
STOCKHOLDERS' EQUITY:
Common stock 3,544,030 - - 3,544,030
Additional paid-in capital 6,220,888 - - 6,220,888
Retained earnings 55,799,750 3,651,754 (3) 300,000 (7) 59,751,504
Treasury stock, at cost (17,172,432) - - (17,172,432)
Unearned compensation (137,156) - - (137,156)
TOTAL STOCKHOLDERS' EQUITY 48,255,080 3,651,754 300,000 52,206,834
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $135,650,360 $3,866,072 $(2,662,470) $136,853,962
F-1
</TABLE>
<PAGE>
ZTT Pro Forma Adjustments
(1) Represents an estimate of $7,235,000 of cash received net of applicable
tax expense. Estimated tax expense is assumed to be paid at the date
of the transaction.
(2) Represents the estimated assets purchased and the liabilities assumed
by Strong Investments, Inc.
(3) Represents the estimated net gain to be recorded on the transaction.
WRR Pro Forma Adjustments
(4) Represents an estimate of $6,720,000 net of applicable tax and related
transaction expenses of approximately $429,000 and the related
reduction for the asset sold in the sale of the capital stock of WRR.
(5) Represents the adjustment of the tax liability after consideration of
the payment by WRR to ZCO of intercompany tax payments due of $697,000
net of $679,000 included on the September 30, 1999 balance sheet of
WRR.
(6) Represents the related reductions for the assets sold and liabilities
assumed in the sale of the capital stock of WRR.
(7) Represents the estimated net gain to be recorded on the transaction.
F-2
<PAGE>
<TABLE>
<CAPTION>
THE ZIEGLER COMPANIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For the year ended December 31, 1998
Historical
ZCO Historical ZTT Historical WRR
As Previously 1998 Transaction 1998 Transaction Pro Forma
Reported ZTT Adjustments WRR Adjustments Statement
REVENUES
<S> <C> <C> <C> <C> <C> <C>
Investment banking income $32,140,627 $ - $ - $ - $ - $32,140,627
Commission income 21,696,458 (4,679,475) - - - 17,016,983
Investment management and
advisory fees 6,841,618 - - - - 6,841,618
Interest and dividends 8,556,919 (124,223) 327,888 (24,227) 375,000 9,111,357
Gross profit on chemical products 3,410,869 - - (3,410,869) - -
Other 3,136,641 (271,337) 58,930 (88,195) - 2,836,039
TOTAL REVENUES 75,783,132 (5,075,035) 386,818 (3,523,291) 375,000 67,946,624
EXPENSES
Employee compensation and benefits 43,702,807 (2,002,184) - - - 41,700,623
Commissions and clearing fees 6,757,124 (1,039,296) 11,323 - - 5,729,151
Communications 3,651,630 (311,772) - - - 3,339,858
Occupancy and equipment 6,735,450 (571,753) - (46,100) (5,500) 6,112,097
Promotional 4,672,791 (200,761) - - - 4,472,030
Professional and regulatory 1,582,927 (69,190) - - - 1,513,737
Interest 6,577,250 (41,831) - (98,823) (2,022) 6,434,574
Goodwill 136,740 - - - (24,060) 112,680
Other operating expenses 6,532,101 (284,704) - (2,786,561) - 3,460,836
TOTAL EXPENSES 80,348,820 (4,521,491) 11,323 (2,931,484) (31,582) 72,875,586
Income (loss) before income taxes (4,565,688) (553,544) 375,495 (591,807) 406,582 (4,928,962)
Provision for (benefit from)
income taxes (1,724,900) (208 000) 146,400 (230,400) 150,000 (1,866,900)
NET INCOME (LOSS) $(2,840,788) $ (345,544) $229,095 $ (361,407) $256,582 $(3,062,062)
Net loss per share of common stock:
Basic and diluted loss per share (1.20) (1.29)
Average number of shares outstanding
Basic 2,368,560 2,368,560
Diluted 2,437,507 2,437,507
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE ZIEGLER COMPANIES, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
For the nine months ended September 30, 1999
Historical
ZCO Historical ZTT Historical WRR
As Previously 1999 Transaction 1999 Transaction Pro Forma
Reported ZTT Adjustments WRR Adjustments Statement
REVENUES
<S> <C> <C> <C> <C> <C> <C>
Investment banking income $20,450,020 $(4,129,717) $ - $ - $ - $16,320,303
Commission income 18,447,498 - - - - 18,447,498
Investment management and
advisory fees 19,674,327 - - - - 19,674,327
Interest and dividends 4,831,800 (111,380) 253,000 (18,120) 285,000 5,240,300
Gross profit on chemical products 2,163,940 - - (2,163,940) -
Other 2,831,868 (156,743) 7,785 (265,997) 2,416,913
TOTAL REVENUES 68,399,453 (4,397,840) 260,785 (2,448,057) 285,000 62,099,341
EXPENSES
Employee compensation and benefits 33,138,153 (1,652,073) - - - 31,486,080
Commissions and clearing fees 12,817,770 (1,108,346) - - - 11,709,424
Communications 2,753,315 (180,228) - - - 2,573,087
Occupancy and equipment 7,042,607 (395,989) - (39,975) (4,125) 6,602,518
Promotional 3,149,061 (133,793) - - - 3,015,268
Professional and regulatory 1,654,886 (65,004) - - - 1,589,882
Interest 3,105,236 - - (58,865) (1,327) 3,045,044
Goodwill 705,577 - - - 18,045 723,622
Other operating expenses 3,975,232 (120,150) - (1,802,098) 2,052,984
TOTAL EXPENSES 68,341,837 (3,655,583) - (1,900,938) 12,593 62,797,909
Income (loss) before income taxes 57,616 (742,257) 260,785 (547,119) 272,407 (698,568)
Provision for (benefit from)
income taxes 172,582 (235,000) 101,700 (201,382) 114,000 (48,100)
NET INCOME (LOSS) $ (114,966) $ (507,257) $159,085 $ (345,737) $158,407 $ (650,468)
Net loss per share of common stock:
Basic and diluted loss per share (0.05) (0.27)
Average number of shares outstanding
Basic 2,427,415 2,427,415
Diluted 2,454,576 2,454,576
F-4
</TABLE>
<PAGE>
THE ZIEGLER COMPANIES, INC.
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Related to the ZTT Transaction
(A) Except as otherwise described, the pro forma adjustments reflect the
removal of ZTT balances from the historical, consolidated balances.
ZTT is a separate corporation whose balances can be directly
identified. Intercompany transactions were infrequent and
insignificant. In 1998 such transactions included occasional lending
to ZTT, occasional brokerage transactions executed by ZTT on behalf of
the Company, and a charge for management information systems services
to ZTT. In 1999 such transactions included only those for management
information systems services.
(B) Pro forma adjustments to the consolidated balance sheet as of September
30, 1999, reflect the investment of the proceeds in short-term
investments. Also reflected is the sale of specified assets and the
assumption of specified liabilities. The net assets retained
approximated $925,000 which consisted primarily of cash and deposits
offset by liabilities primarily related to compensation accruals.
Additionally, a dividend of approximately $1,370,000 was received from
ZTT by the Company after the date of the balance sheet and prior to the
closing of the transaction. This was in addition to a dividend of
$495,000 received prior to September 30, 1999.
(C) Pro forma adjustments to the consolidated statements of operations for
the year ended December 31, 1998 and for the nine month period ended
September 30, 1999 reflect adjustments primarily to interest income.
The proceeds from the transaction were assumed to be invested in short-
term investments whose yield is 6% in both 1998 and 1999. Adjustments
for intercompany transactions as discussed in Note A are also included.
Related to the WRR Transaction
(D) Except as otherwise described, the pro forma adjustments reflect the
removal of WRR balances from the historical, consolidated balances.
WRR is a separate corporation whose balances can be directly
identified. Intercompany transactions were infrequent and
insignificant. In both 1998 and 1999 such transactions included
occasional reimbursement to the Company for audit, legal, and tax
expenses.
(E) Pro forma adjustments to the consolidated balance sheet as of September
30, 1999, reflect the investment of the proceeds in short-term
investments. Also reflected is the exclusion of assets and liabilities
as the result of the sale of the capital stock of WRR and the
elimination of purchase adjustments including goodwill on ZCO's books
related to the original purchase of WRR.
(F) Pro forma adjustments to the consolidated statements of operations for
the year ended December 31, 1998 and for the nine month period ended
September 30, 1999 reflect adjustments primarily to interest income.
The proceeds from the transaction were assumed to be invested in short-
term investments whose yield is 6% in both 1998 and 1999. Purchase
adjustment items as discussed in Note E were also included as
adjustments to the pro forma amounts.
F-5
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE ZIEGLER COMPANIES, INC.
Date: January 14, 2000 By: /s/ Gary P. Engle
Gary P. Engle
Senior Vice President and
Chief Financial Officer
<PAGE>
THE ZIEGLER COMPANIES, INC.
Exhibit Index to Current Report on Form 8-K
Dated December 30, 1999
Exhibit Number Exhibit
99.1 Stock Purchase Agreement, dated December 30, 1999, with
The Ziegler Companies, Inc., WRR Environmental Services
Co., Inc., and Caribou Corporation.
99.2 Press release, dated December 30, 1999 of The Ziegler
Companies, Inc.
<PAGE>
Exhibit 99.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT dated as of this 28th day of December,
1999, by and among Caribou Corporation, a Wisconsin corporation having its
principal executive offices at 5200 State Road 93, Eau Claire, Wisconsin (the
"Purchaser"), The Ziegler Companies, Inc., a Wisconsin corporation having its
principal executive office at 215 North Main Street, West Bend, Wisconsin
(the "Seller"), and WRR Environmental Services Co., Inc., a Wisconsin
corporation having its principal executive office in Eau Claire, Wisconsin
(the "Company"). The Company joins in this Agreement to the extent this
Agreement affects the interests of, or imposes obligations on, the Company
Background Statement
A. The Company is in the business of generally providing pollution
abatement services, blending virgin chemicals on a contract basis for
manufacturing firms, and recycling, reclaiming and disposing of
chemical wastes. The Company's wholly-owned subsidiary, WRR Northwest
Enterprises, Inc. ("WRR SUB"), is generally engaged in the sale,
installation and servicing of truck equipment. These activities are
collectively referred to as the "Business" herein.
B. The Company's capital stock consists of 45,000 shares of common stock,
$1.67 par value per share, of which 5,785 shares are issued and
outstanding. All of the Company's outstanding shares are owned by the
Seller (the "Shares").
C. The Purchaser desires to purchase and the Seller desires to sell,
transfer, convey and assign to Purchaser, all of the Shares for the
Purchase Price (as defined below) and upon the terms and subject to the
conditions set forth in this Agreement. The President and Chief
Executive Officer of the Company is Mr. James L. Hager, who under the
securities laws is an affiliate and controlling person of the Purchaser
and knowledgeable about the Company and its operations. Mr. James L.
Hager is currently the President and Chief Executive Officer of the
Company and is also a shareholder and an executive officer of the
Purchaser. Additionally, Mr. Don Reali is currently an officer of the
Company and is also a shareholder and executive officer of the
Purchaser. The representations, warranties and disclosures in this
Agreement were negotiated taking into account Messrs. Hager's and
Reali's knowledge, experience and access to information about the
Company, its assets and liabilities and the Purchaser's ability to rely
thereon.
D. The Seller has considered other offers for the Company and has selected
Purchaser's offer for the Company as set forth in this Agreement.
Statement of Agreement
In consideration of the representations, warranties, covenants and
agreements set forth in this Agreement, the parties intending to be legally
bound hereto agree as follows:
1.0 PURCHASE AND SALE OF SHARES.
1.1 Shares Transferred. The Seller hereby agrees to sell, transfer,
convey, assign and deliver to the Purchaser, and the Purchaser agrees
to acquire the Shares from the Seller, at the Closing (as defined
below) for the Purchase Price, free and clear of any and all liens,
pledges, security interests, encumbrances, charges and claims of any
kind thereon.
1.2 Transfer at Closing. Certificates evidencing the Shares shall be
delivered by the Seller to the Purchaser at Closing and shall be duly
endorsed in blank for transfer or accompanied by appropriate stock
powers duly endorsed in blank for transfer.
1.3 Closing. The closing of the sale of the Shares (the "Closing") shall
take place at 10:00 a.m. (local time), on the 30th day of December, 1999
(the "Closing Date"), at the office of the Purchaser or Weld, Riley,
Prenn & Ricci, S.C., in Eau Claire, Wisconsin or at such other time and
place as the parties may agree.
2.0 PRECLOSING AND CLOSING TRANSACTIONS.
(a) Preclosing Transactions. Prior to or at the Closing:
(1) the Company shall declare and thereafter promptly pay
dividends to the Seller in cash in an aggregate amount equal to
the net after tax profits (if any) determined in accordance with
generally accepted accounting principles of the Company and WRR
SUB from and including October 1, 1999, through the Closing Date;
(2) the Company or the Purchaser shall pay to the Seller in cash
$532,070 representing reimbursement to Seller of taxes paid by it
on behalf of the Company for tax years prior to 1999. The Seller
acknowledges that a Wisconsin 1998 overpayment of $38,741 may
have occurred on WRR's and WRR SUB's separate Wisconsin tax
returns, and that any refund is the exclusive property of WRR and
WRR SUB respectively;
(3) the Company shall pay to the Seller, or the Seller shall pay
to the Company, as appropriate, an amount equal to the liability
or benefit related to current taxes realized on the Seller's
combined and consolidated federal and state 1999 income tax
returns on account of the operations of the Company for 1999. By
way of clarification and subject to change by reason of review
procedures, if closing of this transaction occurs as of December
31, 1999, the Company would be obligated to settle an estimated
intercompany payable to Seller under this subparagraph in the
amount of $165,000. Seller and Purchaser acknowledge that this
intercompany payable (the estimated income tax liability for
calendar year 1999, based on income as of October 31, 1999, which
was then annualized for the entire calendar year of 1999) will be
applied to actual 1999 income tax results of the Company, with
any deficiency or excess paid or refunded when final tax balances
are known. Seller will promptly file its 1999 consolidated and
combined income tax returns, on or before September 15, 2000;
and,
(4) the Company shall pay to the Seller, or the Seller pay to the
Company as appropriate, the net amount owing on the Closing Date
in the intercompany account for amounts charged or credited the
Company by the Seller, consistent with past practice.
The parties further agree that Arthur Andersen LLP will review
the Company's financial records as of and for the period ending
on the Closing Date. Unless objection is made by the Seller or
Purchaser within Thirty (30) days, after receipt of notification
of such adjustments by Arthur Andersen LLP, the determination by
Arthur Andersen LLP of the amount or any adjustments to the
amount of the foregoing payments shall be binding upon the
parties, and that any net adjustment amount shall be settled by
means of a payment by the appropriate party within ten days after
the written determination of the adjustment amount. Arthur
Andersen LLP will review any matters raised by a party in writing
within such 30 days after the notification of the determination,
and will use generally accepted accounting principles consistent
with past practice to resolve any disputes. The fees and
expenses of Arthur Andersen LLP shall be paid 50% by the Seller
and 50% by the Purchaser, said fees currently estimated as not
exceeding $15,000 total. All parties agree to cooperate and aid
Arthur Andersen LLP.
(b) Payment of Purchase Price. At the Closing, the Purchaser shall
pay to the Seller via wire transfer to an account designated by
Seller an amount equal to $6,023,000(the "Purchase Price").
(c) Payment and Settlement Not Remedy for Breach. The payment and
settlement provisions provided in this Article 2.0 are intended
to provide for payment and settlement of the preclosing and
closing transactions assuming compliance by both parties with the
representations, warranties, covenants and agreements contained
in this Agreement. Any breach of a representation, warranty,
covenant or agreement shall be remedied by application of the
indemnification provisions set forth in Article 10.0 of this
Agreement.
(d) Execution of Power of Attorney. At closing, the Company and WRR
SUB shall execute (and covenant not to revoke) a Wisconsin and
IRS power of attorney to Seller consistent with Section 6.3
hereof.
(e) Legal Opinion. At closing, each of Seller, on one hand, and
Purchaser, on the other hand, shall deliver legal opinions
substantially in the form attached as Schedule 2(e).
3.0 REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents
and warrants to the Purchaser that:
3.1 Corporate Organization. The Company and WRR SUB are each corporations
that are validly existing and in good standing (or equivalent status)
under the laws of their respective states of incorporation. The
Company and WRR SUB are each duly qualified, licensed or domesticated
and in good standing (or equivalent status) in each jurisdiction where
the nature of its activities conducted in connection with the Business,
or the character of the properties owned, leased or operated by it in
connection with the Business, require such qualification, licensing or
domestication, except where such failure to qualify or retain its good
standing (or equivalent status) will not have a Material Adverse Effect
on the Condition of the Business (as defined herein). The articles of
incorporation and bylaws of the Company and WRR SUB, copies of which
have been made available to Purchaser.
3.2 Authorization, Certain Actions, No Conflicts. The Seller has all
requisite power and authority to execute and deliver this Agreement and
all necessary proceedings have been taken to authorize the execution,
delivery and performance of this Agreement by the Seller. This
Agreement is the legal, valid and binding obligation of the Seller, and
is enforceable against the Seller in accordance with its terms, except
as such validity, binding effect or enforcement may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights or
by equitable principles relating to the availability of remedies.
3.3 Shares. The entire authorized capital stock of the Company consists of
45,000 shares of common stock, par value $1.67 per share, of which
5,785 shares (i.e., the Shares) are issued and outstanding. No other
classes of capital stock or securities of the Company or, to Seller's
Knowledge, other rights with respect to the Company's capital stock
exist. The Seller is the record, legal and beneficial owner of all of
the Shares and the Seller has good, valid and legal title to the Shares
free and clear of all liens, pledges, security interests or other
claims whatsoever. All of the Shares are duly authorized and validly
issued, fully paid and non-assessable, except as provided in Section
180.0622(2)(b) of the Wisconsin Statutes, as judicially interpreted.
To Seller's Knowledge, there are no outstanding agreements, in writing
or orally, to issue any securities convertible or exchangeable for any
shares of Company stock. To Seller's Knowledge, the Company is not
subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire its capital stock, except as set forth in
this Agreement.
3.4 Litigation; Orders. Except as disclosed on Schedule 3.4, to the
Seller's Knowledge there is no judgment or outstanding order,
injunction, decree, stipulation or award (whether rendered by a court
or administrative agency, or by arbitration) against the Company, WRR
SUB, the Seller or any of their affiliates that would prohibit the
consummation of the transaction contemplated by this Agreement.
3.5 Consents, Approvals, etc. Except as set forth on Schedule 3.5, to the
Seller's Knowledge there are no filings required to be made by the
Company or WRR SUB with, and there are no consents, approvals, permits
or authorizations required to be obtained by the Company or WRR SUB
from, governmental and regulatory authorities of the United States or
the several states or any other jurisdiction in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby.
3.6 Brokers. Except as set forth on Schedule 3.6, the Seller (either
directly or at Seller's direction through the Company) has not entered
into any arrangement for the provision of services in connection with
this Agreement or the transactions contemplated hereby that may give
rise to an obligation to pay any brokers' or finders' fees or other
commissions.
3.7 Certain Defined Items. References in Sections 3.1 through 3.6 and
elsewhere in this Agreement to (i) "Seller's Knowledge" or similar
expressions shall refer to the facts and circumstances that executives
of the Seller actively working on this transaction actually knew or
should have known after appropriate inquiry; (ii) "Person" shall mean
any individual, corporation, limited liability company, partnership,
proprietorship, trust or other entity of any kind; (iii) "Condition of
the Business" shall mean the business, assets, properties, financial
condition, results of operations and/or prospects of the Business; and
(iv) "Material Adverse Effect on the Condition of the Business" means
events or conditions likely to have an adverse effect in excess of
$1,000,000.
3.8 Power of Attorney. To Seller's Knowledge, except as contemplated by
this Agreement, no power of attorney by the Company to another person
is presently in effect.
3.9 Lawsuits and Environmental Claims. Except as set forth in Schedule
3.9, to the Seller's Knowledge there are no actual or threatened
lawsuits, administrative proceedings or environmental claims against
the Company or WRR SUB.
4.0 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
represents and warrants to the Seller that:
4.1 Corporate Organization. The Purchaser is a corporation validly
existing and in good standing (or equivalent status) under the laws of
the State of Wisconsin and has all requisite power and authority to
own, lease, license and operate its properties and assets and to
conduct the businesses now owned, leased, licensed and operated by it.
The Purchaser is duly qualified, licensed or domesticated and in good
standing (or equivalent status) in each jurisdiction where the nature
of its activities or the character of its properties require such
qualification, licensing or domestication.
4.2 Authorization, Certain Actions, No Conflicts. The Purchaser has all
requisite power and authority to execute and deliver this Agreement and
all necessary corporate proceedings have been taken to authorize the
execution, delivery and performance of this Agreement by the Purchaser.
This Agreement is the legal, valid and binding obligation of the
Purchaser and is enforceable as to the Purchaser in accordance with its
terms, except as such validity, binding effect or enforcement may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights or by equitable principles relating to the availability of
remedies.
4.3 Litigation; Orders. There is no judgment or outstanding order,
injunction, decree, stipulation or award (whether rendered by a court
or administrative agency, or by arbitration) against the Purchaser or
any of its affiliates that would prohibit the consummation of the
transaction contemplated by this Agreement.
4.4 Consents, Approvals, Etc. Except as set forth on Schedule 4.4, there
are no filings required to be made by the Purchaser with, and there are
no consents, approvals, permits or authorizations required to be
obtained by the Purchaser from, governmental and regulatory authorities
of the United States or the several states in connection with the
execution and delivery of this Agreement by the Purchaser and the
consummation by the Purchaser of the transaction contemplated hereby.
4.5 Suitability of Investment; Information. The Purchaser is an accredited
investor under the securities laws that, through Messrs. Hager and
Reali or otherwise, has substantial knowledge and experience, and
access to all material information, with respect to the Company and WRR
SUB. The Purchaser has in fact received and reviewed all information
concerning the Company and the Business that it considers important to
its investment decision, and it has had the opportunity to ask
questions of, and receive answers from, the Seller and the Seller's
agents in that regard. The Purchaser has carefully evaluated its
financial resources and the risks associated with purchasing the Shares
and has determined that it is able to bear the economic risks of its
investment in the Shares.
4.6 Financial Viability. Immediately after the Closing, on a consolidated
basis the Purchaser, the Company and WRR SUB will have a capital
structure that includes at least $2,000,000 of equity in the form of
cash and not more than $5,500,000 in total debt. Immediately after the
Closing, the Purchaser's consolidated assets will exceed its
consolidated liabilities. At Closing the Purchaser reasonably expects
to have sufficient financial resources to enable it to own and operate
the business and meet its obligations as they become due. Schedule 4.6
hereto contains the Purchaser's reasonable, good faith projections of
its consolidated earnings and cash flows for a period of two years
after the Closing.
4.7 Brokers. Except as set forth on Schedule 4.7, the Purchaser (either
directly or at Purchaser's direction through the Company) has not
entered into any arrangement for the provision of any services in
connection with this Agreement or the transactions contemplated hereby
that may give rise to an obligation to pay brokers' or finders' fees or
other commissions.
4.8 Environmental Disclosure. Except as set forth on Schedule 4.8, to the
Purchaser's Knowledge there are no actual or threatened lawsuits,
administrative proceedings or environmental claims against the Company
or WRR SUB.
5.0 CONDUCT OF BUSINESS PRIOR TO CLOSING.
(a) Prior to the Closing, except as otherwise expressly provided
herein, the Purchaser and the Seller shall use commercially
reasonable efforts to cause Company to conduct its business and
affairs and the business and affairs of the Business only in the
ordinary course and consistent with prior practice and shall
maintain, keep and preserve the assets and properties of the
Company and the Business in good condition and repair and
maintain insurance thereon in accordance with past practices.
(b) The Seller shall give the Purchaser prompt written notice of any
change in any of the information concerning Seller contained in
the representations and warranties made by Seller in Article 3.0
or elsewhere in this Agreement or the schedules or exhibits
referred to herein that occurs prior to the Closing. The
Purchaser shall give the Seller prompt written notice of any
change in any of the information by Purchaser, the Company or WRR
SUB contained in the representations and warranties made in
Article 4.0 or elsewhere in this Agreement or the schedules or
exhibits referred to herein that occurs prior to the Closing.
(c) If prior to the Closing either the Purchaser or the Seller shall
become aware of any breach of a representation, warranty or
covenant by another Party hereto, then the Party who becomes
aware shall immediately notify the other Parties of the breach
and breaching Party shall be afforded a reasonable period of
time, not to exceed ten (10) days ("Cure Period"), in which to
cure the breach or take appropriate action to correct the
circumstances giving rise to the breach. If prior to the Closing
either the Purchaser or the Seller shall become aware of its own
breach of a representation, warranty or covenant, then it shall
immediately notify the other Parties hereto of the breach and the
breaching Party shall have a reasonable period of time, not to
exceed the Cure Period, in which to cure the breach or take
appropriate action to correct the circumstances giving rise to
the breach. If any breach described above in this Section 5.0(c)
is cured within the earlier of the expiration of the applicable
Cure Period or the Closing Date, then the affected
representation, warranty or covenant shall be deemed not
violated.
6.0 ACCESS TO INFORMATION AND DOCUMENTS.
6.1 Access Prior to Closing. Upon reasonable notice and during regular
business hours, the Company will, between the date hereof and December
31, 1999, give the Purchaser and Seller and their attorneys,
accountants and other representatives full access to its personnel,
properties, documents, contracts, books and records. The Company will
furnish both the Purchaser and Seller with copies of such documents
(certified by Company's officers if so requested) and with such
information with respect to the affairs of the Business as the
Purchaser or Seller may from time to time reasonably request and the
Purchaser will not improperly disclose the same prior to the Closing.
The Company shall consult with Seller concerning any material matter,
contracts, or significant events.
6.2 Access After Closing. Each party agrees that it will (i) cooperate
with and make available to the other party, during normal business
hours, all books and records, information and employees (without
substantial disruption of employment or normal business activities)
retained and remaining in existence after the Closing which are
necessary or useful in connection with any investigation, dispute,
litigation, inquiry or compliance with applicable securities, tax,
environmental or other laws and regulations, or any other matter
requiring any such books and records, information or employees for any
reasonable business purpose; (ii) use reasonable efforts to keep all
such books and records and information in existence and in good order
for the longer of seven (7) years from its date or two (2) years after
the Closing Date; and (iii) cooperate with and make available to the
other party any employees employed by such party after the Closing in
order to provide statements, participate in depositions, provide
testimony or otherwise assist (including serving as experts or other
witnesses) in connection with the matters described in this Section
6.2 The party requesting any such books and records, information or
employees shall bear reasonable out-of-pocket costs and expenses
(excluding reimbursement for salaries and employee benefits) reasonably
incurred in connection with providing such books and records,
information or employees.
6.3 Power of Attorney for Tax Returns. The Company and the Purchaser
hereby grant (and agree not to revoke) to the Seller an irrevocable
power of attorney to take such actions, including filing such
amendments and other papers, as the Seller may determine are necessary
or appropriate with respect to the tax returns of the Company and WRR
SUB originally filed prior to the Closing. The parties agree that the
Seller shall be entitled to retain any refunds or tax benefits that may
be obtained with respect to such state and/or federal tax returns.
Seller shall attend and control any meeting with representatives of a
government taxing authority concerning the taxes of the Company or WRR
SUB.
In addition to the terms of Section 6.2, above, such cooperation shall
include, but not by way of limitation:
(i) preparing responses to information requests by any
government taxing authority;
(ii) making available books, records and other documentation
(including, but not by way of limitation, working papers and schedules)
relevant to such proceeding; and systems support for documentation
furnished in electronic form;
(iii) making directors, officers or employees available to appear
in person for interview or for testimony;
(iv) making employees available on a mutually convenient basis
to provide additional information and explanation of materials provided
hereunder;
(v) executing powers of attorney, tax information
authorizations and any other necessary or appropriate authorizations;
(vi) executing agreements with the government taxing authority
or other documents reasonably necessary or appropriate for the
settlement or pursuit of the contest of such issue so long as the
executing does not create any material obligation or liability (after
consideration of Section 10 herein) on the part of the Company or the
Purchaser; and
(vii) doing whatever is reasonable in the circumstances to assist
the other party.
The parties agree to retain all books, records, returns, schedules,
documents and all material papers or relevant items of information for
periods ending on or prior to the Closing Date for the later of (i)
seven (7) years or (ii) the full period of the applicable statute of
limitations, including any extensions thereof. Seller agrees to
provide copies of all filings of amended tax returns to the Purchaser.
7.0 AUTHORIZATIONS. The Company, the Seller, and the Purchaser, as
promptly as practicable prior to or after the date hereof, shall (a)
make, or cause to be made, all filings and submissions under laws,
rules and regulations applicable to it and its affiliates, as may be
required for it to consummate the transaction contemplated hereby in
accordance with the terms of this Agreement, (b) use best efforts to
obtain, or cause to be obtained, all authorizations, approvals,
consents and waivers from all Persons, employee groups and governmental
authorities necessary to be obtained by it or its affiliates in order
for it to consummate this transaction, and (c) use best efforts to
take, or cause to be taken, all other actions necessary, proper or
advisable in order to fulfill its obligations hereunder and to carry
out the intentions of the parties expressed herein. The parties will
coordinate and cooperate with one another in exchanging such
information and supplying such reasonable assistance as may be
reasonably requested by each in connection with the foregoing.
8.0 OTHER PROPOSALS. Between the date of this Agreement and the earlier of
December 31, 1999, or the Closing, the Seller and the Company will not
(and will use their respective best efforts to ensure that none of
their respective officers, directors, employees, representatives or
advisers) institute, pursue, or enter into any discussions,
negotiations or agreements (preliminary or definitive) contemplating or
providing for any merger, acquisition, purchase or sale involving any
of the Shares or any business that is part of the Business, or other
business combination or change in control of the Company that would in
any way affect a sale of the Company's stock, with any Person or entity
other than the Purchaser or its affiliates.
9.0 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PARTIES.
9.1 Conditions Precedent to Obligations of Each Party. The respective
obligations of the Purchaser and the Seller to consummate the
transactions contemplated by this Agreement are subject to the
conditions that: (a) there shall be no decision by any court or
administrative body restraining, enjoining or otherwise preventing the
consummation of the transactions contemplated hereby; and (b) the
parties will have received all necessary regulatory and governmental
approvals and clearances for the transfer of material license and
permits (if any) required in order to consummate the transactions
hereby.
9.2 Conditions Precedent to the Purchaser's Obligations. All obligations
of the Purchaser at the Closing are subject, at the option of the
Purchaser, to the fulfillment of each of the following conditions at or
prior to the Closing, and the Seller shall exert its best efforts to
cause each condition to be fulfilled:
(a) All representations and warranties of the Seller contained herein
or in any document delivered pursuant hereto shall be true and
correct in all material respects when made and shall be deemed to
have been made again at and as of the Closing Date, and shall
then be true and correct in all material respects except for
changes in the ordinary course of business after the date hereof
in conformity with the covenants and agreements contained herein;
(b) All covenants, agreements and obligations required by the terms
of this Agreement to be performed by the Seller at or before the
Closing Date shall have been duly and properly performed in all
material respects;
(c) Since the date of this Agreement, there shall not have occurred
any Material Adverse Effect in the Condition of the Business;
(d) All corporate and other proceedings of the Company and the Seller
in connection with the transactions contemplated by this
Agreement, and all documents and instruments incident to such
proceedings, shall be reasonably satisfactory in form and
substance to the Purchaser and its counsel, and the Purchaser and
its counsel shall have received all such documents and
instruments, or copies thereof (certified if requested) as may be
reasonably requested; and
(e) The Seller shall have delivered to Purchaser certificates
evidencing the Shares duly endorsed in blank for transfer or
accompanied by appropriate stock powers duly endorsed in blank
for transfer.
9.3 Conditions Precedent to the Seller's Obligations. All obligations of
the Seller at the Closing are subject, at the option of the Seller, to
the fulfillment of each of the following conditions at or prior to the
Closing, and the Purchaser shall exert its best efforts to cause each
condition to be fulfilled:
(a) All representations and warranties of the Purchaser contained
herein or in any document delivered pursuant hereto shall be true
and correct in all material respects when made and shall be
deemed to have been made again at and as of the Closing Date, and
shall then be true and correct in all material respects except
for changes in the ordinary course of business after the date
hereof in conformity with the covenants and agreements contained
herein;
(b) All covenants, agreements and obligations required by the terms
of this Agreement to be performed by the Purchaser at or before
the Closing shall have been duly and properly performed in all
material respects;
(c) All corporate and other proceedings by the Purchaser in
connection with the transactions contemplated by this Agreement,
and all documents and instruments incident to such proceedings,
shall be reasonably satisfactory in form and substance to the
Seller and its counsel, and the Seller and its counsel shall have
received all such documents and instruments, or copies thereof
(certified if requested) as may reasonably be requested;
The Seller shall have received a complete and irrevocable release of all
guarantees or contracts relating to the Business for which the Seller is a
co-obligor, guarantor, surety or other party;
The transaction contemplated by this Agreement shall have been approved by
the Seller's Board of Directors as soon as practicable after the execution of
this Purchase Agreement.
10.0 INDEMNIFICATION.
10.1 The Seller's Indemnification. The Seller hereby agrees to defend,
indemnify and hold the Purchaser harmless from, against and in respect
of (and shall on demand reimburse the Purchaser for):
(a) any and all loss, liability, or damage, including reasonable
attorneys' fees and expenses (collectively "Damages") suffered or
incurred by the Purchaser by reason of any untrue representation,
breach of warranty or non-fulfillment or non-performance of any
covenant or agreement of the Seller contained herein or in any
certificate, document or instrument delivered to the Purchaser
pursuant hereto or in connection herewith;
(b) any and all Damages suffered or incurred by the Purchaser or the
Company or WRR SUB by reason of or in connection with any claim
for any finder's fee or broker's or other commission arising by
reason of any services alleged to have been rendered to or at the
instance of the Seller with respect to this Agreement or any of
the transactions contemplated hereby;
(c) notwithstanding Section 10.3(a) and (c), any and all Damages
suffered by the Purchaser or the Company with regard to income
taxes solely in connection with the pending amendment to its tax
returns by Seller or adjustments by a governmental tax authority
to the income tax liability amount of the Company set forth in
Section 2.0(a) or any other action by Seller under the Power of
Attorney described in Section 6.3, above, provided that the
amount of Damages will be limited solely to income taxes, and
interest and penalties owing on such income tax and as set forth
in subparagraph 10.1(d), below. that No Damages will be owed by
Seller for false or incorrect information provided in writing by
Mr. Hager, Mr. Reali, or at their direction or with their
knowledge to the Seller. For purposes of calculating Damages,
the parties also agree to consider the tax benefits available to
Purchaser or the Company from any Damage amount, including the
present value of Damages which will give rise to deductions in
later years, in which case Seller shall solely owe Damages for
the time value of the different tax years deductibility; and
(d) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including, without
limitation, legal fees and expenses, incident to any of the
foregoing or incurred in investigating or attempting to avoid the
same or to oppose the imposition thereof, or in enforcing this
indemnity.
10.2 The Purchaser's Indemnification. The Purchaser hereby agrees to defend,
indemnify and hold the Seller harmless from, against, and in respect of
(and shall on demand reimburse the Seller for):
(a) any and all Damages suffered or incurred by the Seller by reason
of any untrue representation, breach of warranty or non-
fulfillment or non-performance of any covenant or agreement of
the Purchaser contained herein or in any certificate, document or
instrument delivered to the Seller hereunder pursuant hereto or
in connection herewith;
(b) any and all Damages suffered or incurred by the Seller by reason
of or in connection with any claim for any finder's fee or
broker's or other commission arising by reason of any services
alleged to have been rendered to or at the instance of the
Purchaser with respect to this Agreement or any of the
transactions contemplated hereby;
(c) any and all Damages suffered or incurred by the Seller by reason
of or in connection with any and all expenses, costs, liabilities
or obligations of the Company or WRR SUB or relating to the
Business, whether arising prior to or after the Closing,
including any environmental liability or obligation relating to
the Business; and
(d) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including, without
limitation, reasonable attorneys' fees and expenses, incident to
any of the foregoing or incurred in investigating or attempting
to avoid the same or oppose the imposition thereof, or in
enforcing this indemnity.
10.3 Limitations on Indemnification.
(a) Except as set forth in Section 10.3(b), the Seller shall not be
liable to indemnify the Purchaser or the Company for the
Purchaser's and the Company's Damages, and the Purchaser and the
Company shall not be liable to indemnify the Seller for the
Seller's Damages, arising from or relating to a breach of
representation or warranty set forth in this Agreement unless the
indemnified Party notifies the indemnifying Party in writing of
its claim or potential claim for indemnification not later than
March 31, 2001, and except as set forth in subsection (b) below.
(b) The limitations in Section 10.3(a) shall not apply to any claim
by the Seller with respect to environmental liabilities or
obligations of the Company or WRR SUB or relating to the
Business, which liability for indemnification shall in each case
survive for six (6) years following Closing. The limitations in
Section 10.3(a) shall not apply with respect to any claim by the
Company or Purchaser relating to the amended tax returns prepared
by the Seller as described in Section 6.3. The indemnification
for any claim under Section 10.1(c) will expire when the
applicable statute of limitation for all amended returns has
expired.
(c) Neither the Seller nor the Purchaser shall be liable to indemnify
the other for its damages for breaches of representations and
warranties, except with respect to insurance recoveries and tax
benefits, until such time as the aggregate amount of otherwise
indemnifiable Damages exceeds $75,000 in the aggregate for all
claims, and then only to the extent of the excess thereof.
10.4 Procedure.
(a) In order for a party (the "indemnified party"), to be entitled to
any indemnification provided under this, Agreement in respect of,
arising out of or involving a claim made by any Person (other
than another party to this Agreement -- to which this Section
10.4 shall not apply) against the indemnified party where the
amount in dispute exceeds Ten Thousand Dollars (U.S. $10,000) (a
"Third Party Claim"), such indemnified party must notify the
other party (the "indemnifying party") in writing of the Third
Party Claim within fifteen (15) business days after receipt by
such indemnified party of written notice of the Third Party
Claim; provided, however, that failure to give such notification
shall not affect the indemnification provided hereunder except to
the extent the indemnifying party can demonstrate actual monetary
prejudice as a direct or indirect result of such failure.
Thereafter, the indemnified party shall deliver to the
indemnifying party, within five (5) business days after the
indemnified party's receipt thereof, copies of all notices and
documents (including court papers) received by the indemnified
party relating to the Third Party Claim.
(b) If a Third Party Claim is made against an indemnified party, the
indemnifying party will be entitled to participate in the defense
thereof and, if it acknowledges in writing its obligations to
indemnify the party seeking indemnification and so chooses to
assume the defense thereof with counsel selected by the
indemnifying party, provided, that the indemnifying party has
sufficient funds, assets and equity in the reasonable opinion of
the other party to support such indemnification claim. Should
the indemnifying party (with sufficient funds, assets and equity)
so elect to assume the defense of a Third Party Claim, the
indemnifying party will not be liable to the indemnified party
for any legal expenses subsequently incurred by the indemnified
party in connection with the defense thereof. If the
indemnifying party (with sufficient funds, assets, and equity)
assumes such defense, the indemnified party shall have the right
to participate in the defense thereof and to employ counsel, at
its own expense, separate from the counsel employed by the
indemnifying party, it being understood that the indemnifying
party shall control such defense. The indemnifying party shall
be liable for the fees and expenses of counsel employed by the
indemnified party for any period during which the indemnifying
party has not assumed the defense thereof (other than after the
15-day period described in Section 10.4(a) if the indemnified
party shall have failed to give notice of the Third Party Claim)
or if the party has insufficient funds to support such
indemnifications. If the indemnifying party chooses to defend or
prosecute a Third Party Claim, the parties hereto shall cooperate
in the defense or prosecution thereof. Such cooperation shall
include the retention and (upon the indemnifying party's request)
the provision to the indemnifying party of records and
information that are reasonably relevant to such Third Party
Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any
material provided hereunder. If the indemnifying party chooses
to defend or prosecute any Third Party Claim, the indemnified
party will consent to any settlement, compromise or discharge of
such Third Party Claim that the indemnifying party may recommend
and that by its terms involves the payment of money only and
which the indemnifying party will pay in full in connection with
such Third Party Claim. If the indemnifying party shall have
assumed the defense of a Third Party Claim, the indemnified party
shall not admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim without the
indemnifying party's prior written consent, which shall not be
unreasonably withheld.
(c) With respect to any claim by any Person against an indemnified
party where the amount in dispute is equal to or less than Ten
Thousand Dollars (U.S. $10,000) (a "Small Claim"), then the
foregoing provisions of this Section 10.4 shall not apply, and
the indemnified party may investigate and defend such Small Claim
without the assistance of the indemnifying party; provided that
the indemnifying party shall have no liability for
indemnification under this Article 10.0 with respect to the
settlement of Small Claims unless the indemnifying party shall
have consented in writing to the settlement, which consent shall
not be unreasonably withheld or delayed. Failure by the
indemnifying party to consent or object to the proposed
settlement of a Small Claim within seven (7) business days after
being requested for its consent by the indemnified party shall be
deemed to constitute its consent to such settlement.
10.5 SOLE REMEDY. The parties agree indemnification shall be the sole and
exclusive remedy, except for fraud.
11.0 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except asset forth in
Section 10.3(b), all statements, representations and warranties made by
each of the Parties hereto shall survive the Closing until March 31,
2001. All indemnities, covenants and agreements made herein shall
survive for the period expressly indicated herein, or, if not so
indicated, until March 31, 2001.
12.0 ARBITRATION. Any dispute, controversy or claim arising out of or in
connection with or relating to this Agreement or the transactions
contemplated hereby, including but not limited to any breach or alleged
breach hereof, shall be determined and settled by arbitration in
Milwaukee, Wisconsin, pursuant to the rules then in effect of the
American Arbitration Association. The expense of arbitration shall be
borne by the parties to the arbitration, and each Party shall bear and
pay for the cost of its own experts, witnesses, evidence, counsel and
other costs in connection with the preparation and presentation of its
case unless the arbitrator finds in his or her discretion that a party
has brought or is defending such action in bad faith or that such
action or defense is frivolous or has no basis in fact in which case
the arbitrator shall make an award of costs and attorney's fees
accordingly and further provided that the arbitrator may otherwise
award such costs and fees in his discretion. The resolution of such
arbitration shall be final and binding on the parties hereto and
enforceable in a court of competent jurisdiction. Any arbitration
pursuant to this Article 12.0 above shall be governed by the rules of
discovery then in effect in the United States District Court located in
Milwaukee, Wisconsin and the parties hereby irrevocably submit to the
nonexclusive jurisdiction of such United States District Court for the
purpose of enforcing any arbitration award.
13.0 NOTICES. Any and all notices or other communications required or
permitted to be given under any of the provisions of this Agreement
shall be in writing and shall be deemed to have been duly given when
personally delivered, sent by express mail, or overnight courier
service or first class registered mail, return receipt requested, or
faxed (with a copy also sent by express mail or overnight courier
services) addressed to the appropriate parties at the addresses set
forth below or at such other address as any party may specify by notice
to the other parties, or, in the case of a telefax, to the telefax
number indicated:
If to the Purchaser: Caribou Corporation
5200 State Road 93
Eau Claire, WI 54701
Attn.: Mr. James L. Hager
Fax: 715-836-6721
With a copy to: G. Scott Nicastro, Esq.
Weld, Riley, Prenn & Ricci
4330 Golf Terrace, Suite 205
P.O. Box 1030
Eau Claire, WI 54702-1030
Fax: 715-839-8609
If to the Seller: The Ziegler Companies, Inc
215 N. Main Street
West Bend, WI 53095-3317
Attn.: S. Charles O'Meara, General Counsel
Fax: 262-334-2471
With a copy to: Quarles & Brady LLP
411 East Wisconsin Avenue
Milwaukee, WI 53202
Attn: Conrad G. Goodkind, Esq.
Fax: 414-271-3552
If to the Company: WRR Environmental Services Co., Inc.
5200 State Road 93
Eau Claire, WI 54701-9808
Attn.: Mr. James L. Hager
Fax: 715-836-6721
14.0 TERMINATION. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the transaction
provided for herein abandoned at any time prior to the Closing Date
(unless otherwise agreed to by the parties hereto):
(a) by mutual consent of the Purchaser and the Seller or at either
party's election on or after January 1, 2000 provided such party
terminating the Agreement is not in material breach of its
obligations hereunder; or
(b) by the Purchaser if any of the conditions set forth in Section
9.1 or 9.2 hereof (i) shall not have been fulfilled on or prior
to the Closing Date (unless otherwise extended by the Parties
hereto), or (ii) shall have become incapable of fulfillment, and
shall not have been waived; or
(c) by the Seller, if any of the conditions set forth in Section 9.1
or 9.3 hereof (i) shall not have been fulfilled on or prior to
the Closing Date (unless otherwise extended by the parties
hereto), or (ii) shall have become incapable of fulfillment, and
shall not have been waived; provided, however, that the party
seeking termination pursuant to (b) or (c) above is not in breach
of any of its representations, warranties, covenants or
agreements contained in this Agreement.
Upon termination of this Agreement pursuant to this Article 14.0,
this Agreement shall become null and void and of no further force
and effect; provided, however, that nothing in this Article 14.0
(b) or (c) shall be deemed to release any party from any
liability for any breach by such party of the terms of this
Agreement and each party hereto shall have all rights and
remedies available to them whether at law or in equity.
15.0 MISCELLANEOUS.
15.1 Entire Agreement, Modification. This writing, together with those
agreements specifically referenced herein, constitutes the entire
agreement of the parties with respect to the subject matter and
supersedes any prior agreements, oral or written, hereof and may not be
modified, amended or terminated except by written agreement
specifically referring to this Agreement and signed by each affected
party.
15.2 Waiver. No waiver of any breach or default hereunder shall be
considered valid unless in writing and signed by party giving such
waiver, and no such waiver shall be deemed a waiver of any subsequent
breach or default of the same or similar nature.
15.3 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of each party hereto, and their respective successors, assigns,
heirs and personal representatives.
15.4 Construction. The article, section and paragraph numbers and headings
contained herein are for the purposes of reference and convenience only
and are not intended to define or limit the contents of said paragraphs
or sections. This Agreement has been negotiated between and among the
parties, and shall not be construed more favorably or unfavorably
toward any party by reason of its participation in the drafting of this
Agreement.
15.5 Exhibits and Schedules. The Exhibits and Schedules referred to herein
are hereby incorporated by reference as if set out in full and form an
integral part of this Agreement.
15.6 Further Actions. Each party hereto shall cooperate and shall take such
further action and shall execute and deliver such further documents as
may be reasonably requested by the other party in order to carry out
the provisions and purposes of this Agreement.
15.7 Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed one original.
15.8 Expenses. Each party shall bear its own expenses, costs and fees
incurred by it, including the fees of its counsel, brokers, attorneys,
accountants and experts incident to the negotiation and preparation of
the letter of intent and this Agreement. The Company and WRR SUB shall
not pay any costs of the Purchaser (including attorneys' fees or other
expense relating to the negotiation and execution of any documents
relating to this Agreement), regardless of when incurred.
15.9 Validity of Provisions. If any provision of this Agreement or any
agreement referenced herein shall be held or deemed to be or shall, in
fact, be inoperative or unenforceable as applied in any particular case
because it conflicts with any other provision or provisions hereof or
any constitution, statute, rule of public policy, or for any other
reason, such circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative or unenforceable to any extent
whatsoever. The invalidity of any one or more phrases, sentences,
clauses, sections, or subsections of this Agreement or any other
agreements referenced herein shall not affect the remaining portions
thereof.
15.10 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin applicable to
contracts made and to be performed therein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PURCHASER:
CARIBOU CORPORATION
By: /S/ James L. Hager
Its: President & CEO
SELLER:
THE ZIEGLER COMPANIES, INC.
By: /s/ Peter D. Ziegler
Its: President & CEO
COMPANY:
WRR ENVIRONMENTAL SERVICES CO. INC.
By: /s/ James L. Hager
Its: President & CEO
<PAGE>
Exhibit 99.2
FOR RELEASE AFTER 4 P.M.CST CONTACT: Peter D. Ziegler
December 30, 1999 President and CEO
262-334-5521
The Ziegler Companies, Inc. Closes Sale
of WRR Environmental Services Co., Inc.
WEST BEND, WIS. - The Ziegler Companies, Inc. [AMEX: ZCO], a financial
services holding company based in West Bend, Wis., announced today that it
has closed the sale of its WRR Environmental Services Co., Inc. subsidiary to
Caribou Corporation, Eau Claire, Wis.
WRR Environmental Services Co, Inc. (WRR) is the only non-financial
business of The Ziegler Companies, Inc. and is located in Eau Claire. The
company's services include pollution abatement and chemical blending, as well
as the recycling, reclaiming and disposing of chemical wastes. The sale price
was approximately $6 million. The terms of the stock sale include that
Caribou will assume any environmental liabilities incurred in the conduct of
WRR's business.
James L. Hager, WRR chief executive officer, is leading the purchase
group. Caribou Corporation, a newly organized corporation consisting of
senior management of WRR and private investors, has indicated that WRR will
continue to operate from its Eau Claire offices and plant. WRR serves
corporations and businesses throughout the Midwest.
In 1998, WRR posted revenues of approximately $13.5 million and net
income after taxes of $361,000. The unaudited nine-month 1999 results of WRR
for the period ended September 30, 1999 were revenues of approximately $8.8
million, and net income after taxes of $346,000. WRR has 93 employees. The
sale will generate an after-tax gain to The Ziegler Companies, Inc. of
approximately $300,000, or 12 cents per share.
"WRR has been an important contributor to our corporation over the past
19 years. Its reputation and capabilities in environmental services are
highly regarded," said Peter D. Ziegler, Chairman and CEO of The Ziegler
Companies, Inc. "In the past three years the strategic focus of The Ziegler
Companies, Inc. has narrowed. Our direction is to concentrate on our core
financial services businesses of investment banking and capital markets, and
investment services and consulting."
The Ziegler Companies, Inc. currently advises, holds or manages more
than $10.5 billion in individual and institutional assets.
