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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report July 31, 1996
(Date of Earliest Event Reported)
_______________________________________
Precision Castparts Corp.
(Exact name of registrant as specified in its charter)
Oregon 1-10348 93-0460598
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation of File No.) Identification No.)
organization)
4600 S.E. Harney Drive
Portland, Oregon 97206-0898
Registrant's telephone number,
including area code: Telephone: (503) 777-3881
No Change
(Former name or address, if changed since last report)
_______________________________________
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Item 2.
On July 31, 1996, Precision Castparts Corp. ("PCC")
purchased 100% of the outstanding capital stock of the
NEWFLO Corporation ("NEWFLO") from its shareholders, who
consisted of individual and institutional investors.
NEWFLO, which will be operated as PCC Flow Technologies,
Inc., is a designer and manufacturer of high quality, niche-
oriented industrial fluid management products. The
transaction, valued at $300 million was financed from $200
million borrowed under a Credit Agreement with Bank of
America Trust & Savings Association, as Agent. In addition,
$100 million of subordinated debt registered under the
Securities Act of 1933 was retained.
Item 7.
Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Financial Statements.
Pursuant to Item 7(a)(4) of Form 8-K, the
following financial statements are incorporated by reference
from the NEWFLO Corporation Annual Report on Form 10K for
the year ended December 31, 1995. (File Number 33-56256):
Item 8 - Financial Statements and Supplemental
Data including the following:
Report of Independent Auditors
Consolidated Balance Sheets - December 31, 1995 and
1994
Consolidated Statements of Operations - Years Ended
December 31, 1995, 1994 and 1993
Consolidated Statements of Common Stockholders' Equity
(Deficit) - Years Ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows - Years Ended
December 31, 1995, 1994 and 1993
Notes to the Consolidated Financial Statements
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It is currently impracticable to file the required
financial statements copies; therefore, these financial
statements will be filed as soon as practicable, but not
later than October 16, 1996.
(b) Pro Forma Financial Information
Pursuant to Item 7(b)(2) of Form 8-K, it is
currently impracticable to file the pro forma financial
information; therefore, the pro forma financial information
will be filed under cover of Form 8 as soon as practicable,
but not later than October 16, 1996.
(c) Exhibits.
(1) Stock Purchase Agreement among NEWFLO Corporation
the Selling Stockholders listed on Schedule I and
Precision Castparts Corp., Dated as of June 28,
1996. Schedules that have been omitted will be
furnished supplementally to the Commission upon
request.
(23) Consent of Ernst & Young LLP.
SIGNATURES
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 hereunto duly
authorized.
PRECISION CASTPARTS CORP.
Registrant
Dated: August 15, 1996 /s/ W.D. LARSSON
______________________________
W. D. Larsson
Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
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STOCK PURCHASE AGREEMENT
among
NEWFLO CORPORATION,
THE SELLING STOCKHOLDERS
LISTED ON SCHEDULE I
and
PRECISION CASTPARTS CORP.
Dated as of June 28, 1996
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1 Definitions 1
ARTICLE II
SALE AND PURCHASE OF SHARES
2.1 Purchase of Shares 9
2.2 Closing 10
2.3 Payment of Purchase Price 10
2.4 Redemption, Conversion and Exercise 13
2.5 Letters of Credit 14
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF EACH SELLER
3.1 Title to Shares 15
3.2 Due Authorization 15
3.3 Consents and Approvals; Authority
Relative to this Agreement 16
3.4 Brokers Fees 16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.1 Due Incorporation; Capitalization 16
4.2 Financial Statements 17
4.3 Reports 18
4.4 Title to Properties 19
4.5 Patents and Trademarks 19
4.6 Contracts 19
4.7 Insurance 20
4.8 Employee Benefit Plans 21
4.9 Taxes 22
4.10 No Defaults or Violations 23
4.11 Litigation 23
4.12 Brokers 24
4.13 Due Authorization 24
4.14 Consents and Approvals; Authority
Relative to This Agreement 24
4.15 Environmental Matters 25
4.16 Absence of Changes 26
4.17 Employment Matters 26
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4.18 Customer and Distributor Relationships 26
4.19 Product Warranty 26
4.20 Disclaimer of Other Representations
and Warranties; Disclosure; Bring-Down 26
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
5.1 Due Incorporation 27
5.2 Due Authorization 28
5.3 Consents and Approvals; Authority Relative
to This Agreement 28
5.4 Knowledge of Inaccuracies 28
5.5 Purchaser's Examination 29
5.6 Broker 29
5.7 Investment 29
5.8 Funding 29
ARTICLE VI
COVENANTS
6.1 Access to Information and Facilities 29
6.2 Preservation of Business 30
6.3 Exclusivity 31
6.4 Efforts 31
6.5 Subordinated Notes 33
6.6 Maintenance of Insurance 33
6.7 Supplemental Information 33
6.8 Post-Closing Access and Cooperation 34
6.9 Resignation of Officers and Directors 34
6.10 Employees and Benefits 34
6.11 Public Announcements 36
6.12 Indemnification; Directors and Officers
Insurance 36
6.13 Stub Tax Period 36
6.14 Filing of Tax Return 37
6.15 Capital Changes; Dividends 37
6.16 Payment of Ownership Percentage 37
6.17 Environmental Matters 38
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS
OF PURCHASER
7.1 Warranties True as of Both Present Date
and Closing Date 38
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7.2 Compliance with Agreements and Covenants 38
7.3 Expiration of HSR Waiting Period 39
7.4 No Prohibition 39
7.5 No Material Adverse Change 39
7.6 Termination of TJC Agreement 39
7.7 Repayment of Indebtedness 39
7.8 Capitalization 39
7.9 Escrow Agreement 39
7.10 Documents 40
7.11 Adverse Change in Capital Markets 41
7.12 Required Consents 41
7.13 Exercise of Lender Warrants 41
7.14 Termination of SAR Agreements 41
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS
8.1 Warranties True as of Both Present
Date and Closing Date 42
8.2 Compliance with Agreements and Covenants 42
8.3 Expiration of HSR Waiting Period 42
8.4 No Prohibition 42
8.5 Repayment of Indebtedness 42
8.6 Documents 42
8.7 Letters of Credit 43
ARTICLE IX
TERMINATION
9.1 Termination 43
9.2 Effect of Termination 44
ARTICLE X
SURVIVAL AND REMEDY; INDEMNIFICATION
10.1 Survival 45
10.2 Indemnification by Sellers 45
10.3 Indemnification by Purchaser 46
10.4 Indemnification Exclusive Remedy 46
10.5 Third-Party Claims 47
10.6 Purchaser-Seller Claims 49
10.7 Indemnification Limits 50
ARTICLE XI
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MISCELLANEOUS
11.1 Expenses 53
11.2 Limitation of Best Efforts 53
11.3 Amendment 53
11.4 Notices 53
11.5 Waivers 54
11.6 Counterparts 54
11.7 Interpretation 54
11.8 APPLICABLE LAW 55
11.9 Binding Agreement 55
11.10 No Third Party Beneficiaries 55
11.11 Publicity 55
11.12 Further Assurances 55
11.13 Entire Understanding 56
11.14 Limitation on Warranties 56
11.15 Disclosure Schedule 57
11.16 Representative 57
11.17 JURISDICTION OF DISPUTES;
WAIVER OF JURY TRIAL 59
11.18 Severability 60
11.19 Construction 60
EXHIBITS
Exhibit A -Escrow Agreement
Exhibit B -Temporary Escrow Agreement
SCHEDULES
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 28th day of June,
1996, by and among NEWFLO Corporation, a Delaware
corporation ("Company"), the persons listed on Schedule I
hereto (each, a "Seller" and collectively, the "Sellers"),
and Precision Castparts Corp., an Oregon corporation
("Purchaser"). Certain capitalized terms used herein are
defined in Article .
W I T N E S S E T H:
WHEREAS, Purchaser desires to purchase from the Sellers
and the Sellers desire to sell to Purchaser, all of the
Shares;
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants, agreements and warranties herein
contained, the parties agree as follows:
I. ARTICLE
DEFINITIONS
1.1 Definitions. The following terms shall have the
following meanings for the purposes of this Agreement:
"Affiliate" shall mean, with respect to any specified
Person, any other Person which, directly or indirectly,
controls, is under common control with, or is controlled by,
such specified Person.
"Agreement" shall mean this Agreement, including the
Disclosure Schedule and all other exhibits and schedules
hereto, as it and they may be amended from time to time.
"Authority" means any U.S. state or local governmental,
regulatory or administrative body, agency or authority, any
court or judicial authority, any public, private or industry
regulatory authority, whether national, Federal, state or
local or otherwise, or any Person lawfully empowered by any
of the foregoing to enforce or seek compliance with any
applicable law, statute, regulation, order or decree.
"Assumed Plan" shall have the meaning set forth in
Section 6.10(c).
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"Assumed Plan Required Filings" shall have the meaning
set forth in Section 6.10(c).
"Benefit Plans" shall have the meaning set forth in
Section 4.8.
"Business Day" shall mean any day other than a
Saturday, Sunday or other day on which banking institutions
in the States of Texas or New York are authorized or
required by law or other governmental action to close.
"Class A Common Stock" shall have the meaning set forth
in Section 4.1(b).
"Class A Preferred Stock" shall have the meaning set
forth in Section 4.1(b).
"Class B Common Stock" shall have the meaning set forth
in Section 4.1(b).
"Class B Preferred Stock" shall have the meaning set
forth in Section 4.1(b).
"Closing" shall mean the consummation of the
transactions contemplated herein.
"Closing Date" shall have the meaning set forth in
Section 2.2.
"Closing Seller Proceeds" shall have the meaning set
forth in Section 2.3(d).
"Code" means the Internal Revenue Code of 1986, as
amended.
"Common Stock" has the meaning set forth in
Section 4.1(b).
"Company" means NEWFLO Corporation, a Delaware
corporation.
"Company Closing Certificate" shall have the meaning
set forth in Section 7.10.
"Confidentiality Agreement" shall mean the
Confidentiality Agreement between the Company and Purchaser
relating to the transactions contemplated hereby.
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"Contamination" (or "Contaminated") means the presence
of Hazardous Substances in, on or under the soil,
groundwater, surface water or other environmental media or
any structure or improvement, if any investigatory,
remedial, removal or other response action is legally
required by an Authority under any Environmental Law with
respect to such presence of Hazardous Substances or if such
response action would likely be legally required by an
Authority under Environmental Law and is reasonable and
appropriate in accordance with Purchaser's past practices to
avoid an order by an Authority or to minimize liability to a
third party.
"Continued Debt" shall have the meaning set forth in
Section 2.3(a).
"Continued Debt Certificate" shall have the meaning set
forth in Section 2.3(a).
"Contract" shall mean any written or oral contract,
lease, agreement, indenture, mortgage, note, bond or
instrument.
"Credit Agreement" means the Amended and Restated
Credit Agreement, dated October 16, 1991, and as amended
through the date hereof (the "Agreement"), among the
Company, Newman's Incorporated, PACO Pumps, Inc., Water
Specialties Corporation, Newman's Valve Limited, FB, Inc.
(formerly known as Flo-Bend, Inc.), Johnston Pump/General
Valve, Inc. (formerly known as JPG Holdings, Inc.), Flow
Technologies, Inc., Penberthy, Inc., Techno Corporation,
Penberthy Canada Products, Inc., Newman's International,
Inc. and General Valve Company, Inc. (the "Borrowers"),
GiroCredit Bank, Arab Banking Corporation, Banque Nationale
de Paris, Pilgrim Prime Rate Trust, and Heller Financial,
Inc.
"Director Indemnification Agreements" shall mean the
Director Indemnification Agreements, each dated March 23,
1993, between the Company and each of Edmund H. Damon,
Caroline Merison, Jonathan F. Boucher, David W. Zalaznick,
John W. Jordan, Richard D. Morton, and J. Jack Watson.
"Disclosure Schedule" means the Disclosure Schedule
delivered by the Company to Purchaser on the date of this
Agreement, as amended, modified or supplemented pursuant to
this Agreement.
"Dollars" or numbers preceded by the symbol "$" shall
mean amounts in United States Dollars.
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"D&O Insurance" shall have the meaning set forth in
Section 6.11.
"Employee" shall have the meaning set forth in Section
6.10.
"Employment and Severance Agreements" means,
collectively, the Employment, Non-Competition, Non-
Interference and Severance Agreements listed in Schedule 1.1
hereto
"ENSR Reports" shall mean the ENSR Reports listed on
Schedule 4.15.
"Environmental Law" means any federal, state or local
statute, regulation or ordinance pertaining to the
protection of the environment and any applicable orders,
judgments, decrees, permits, licenses or other
authorizations or mandates under such laws, each as in
existence on the date hereof.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
"Escrow Agent" means Republic Bank, N.A. or another
financial institution designated by the Representative.
"Escrow Agreement" means the Escrow Agreement, dated
the Closing Date among the Sellers, the Escrow Agent, and
the Purchaser, substantially in the form of Exhibit A
hereto.
"Escrow Amount" shall have the meaning given such term
in the Section 2.3(f).
"Financial Statements" shall mean the following:
(a) the audited consolidated financial statements
of the Company as of December 31, 1995 (including all
notes thereto) which are included in the Disclosure
Schedule consisting of the consolidated balance sheet
at such date and the related consolidated statements of
earnings and cash flows for the twelve month period
then ended; and
(b) the unaudited consolidated financial
statements of the Company as of March 31, 1996, which
are included in the Disclosure Schedule, consisting of
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the consolidated balance sheet at such date and the
related consolidated statement of earnings for the
three month period then ended.
"GAAP" shall mean U.S. generally accepted accounting
principles.
"Hazardous Substance" means any hazardous, toxic or
radioactive substance, material or waste as defined, listed
or regulated under any Environmental Law.
"Hired Employee" shall have the meaning set forth in
Section 6.10.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Indemnification Period" shall have the meaning set
forth in Section 10.1.
"Indemnitee" shall mean the Person entitled to, or
claiming a right to, indemnification under Article X.
"Indemnitor" shall mean the Person claimed by the
Indemnified Person to be obligated to provide
indemnification under Article X.
"Indenture" means the Indenture, dated as of March 29,
1993, between the Company and First Bank National
Association, as Trustee, relating to the Subordinated Notes.
"Knowledge of the Company" shall mean actual knowledge,
after diligent and reasonable inquiry and after performance
of the duties reasonably within the scope of each such
person's responsibility in the position held, by reference,
in part, to the company they manage, of Richard D. Morton,
J. Jack Watson, John D. Lilla, Kathleen Mathews, with
respect to the Company, and Robert K. Elders, Brian W.
Warren, Raymond R. Baker, G. Gary Pollock, John M. Secrest,
Normand M. Simard and Steven H. Huth with respect to the
Subsidiary or Subsidiaries of the Company with which such
person is an officer.
"Latest Balance Sheet" shall mean the unaudited
consolidated balance sheet of the Company dated as of March
31, 1996 set forth in the Disclosure Schedule.
"Leased Premises" means the premises leased by the
Company and the Subsidiaries listed on Schedule 4.4 hereto.
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"Lender Warrant Proceeds" shall have the meaning set
forth in Section 2.4(c).
"Lender Warrants" means, collectively, the Warrant of
the Company, dated as of March 19, 1990, as amended
October 16, 1991 and November 24, 1992, issued to Heller
Financial, Inc., the Warrant of the Company, dated as of
October 16, 1991, as amended November 24, 1992, issued to
Arab Banking Corporation, and the Warrant of the Company,
dated as of October 16, 1991, as amended November 24, 1992
issued to Girocredit Bank.
"Lien" means any security interest, lien, charge,
mortgage, deed, assignment, pledge, hypothecation,
encumbrance, easement, restriction, judgment, right of first
refusal or interest of another Person of any kind or nature.
"Loss" or "Losses" shall mean any and all actual losses
(including actual losses in value), liabilities, costs,
damages, penalties and expenses (including attorneys' fees
and expenses and litigations costs), and any legal or other
expenses reasonably incurred in connection with
investigating or defending any claims or actions, whether or
not resulting in any liability, but not including indirect
losses, liabilities, damages or expenses incurred due to the
interruption of the Indemnitee's business or punitive
damages, except where such damages are incurred by or
awarded to a third party making a claim against an
indemnitee.
"Material Adverse Effect" shall mean an effect on the
operations, results of operations or condition of the
Company and its Subsidiaries, taken as a whole, which is or
would be materially adverse; provided, however, that (i) in
any event, a Rating Decline (as defined in the Indenture)
shall not constitute a Material Adverse Effect for purposes
of Section 7.1; (ii) with respect to representations and
warranties set forth in Sections 4.2(b) (Financial
Statements), 4.11 (Litigation) and 4.15 (Environmental
Matters), if the matter, or matters in the aggregate, would
have a monetary effect of at least $750,000, such matter(s)
shall be nonexclusively deemed to constitute a Material
Adverse Effect; and (iii) with respect to the matters and
conditions set forth in Sections 7.1, 7.2, 7.5 and
Article IX, if the condition or matters in the aggregate,
would have a monetary effect of at least $10,000,000, it
shall be nonexclusively deemed to constitute a Material
Adverse Effect, provided, however, that for purposes of
determining such $10,000,000 monetary effect, supplemental
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information pursuant to Section 6.7 with a financial effect
in excess of $100,000 will be applied against such
$10,000,000 level.
"Material Contracts" shall have the meaning set forth
in Section 4.6.
"NEWFLO Letters of Credit" shall have the meaning set
forth in Section 2.5.
"NEWFLO Other Debt" shall have the meaning set forth in
Section 2.3(a).
"Other Debt" shall have the meaning set forth in
Section 2.3(c).
"Other Debt Pay-Off Letters" shall have the meaning set
forth in Section 2.3(c).
"Ownership Percentage" shall mean the percentage set
forth opposite each Seller's name on Schedule I hereto.
"Paco IAM Plan" means the IAM National Pension Fund,
National Pension Fund.
"Permitted Liens" shall have the meaning set forth in
Section 4.5.
"Person" shall mean any individual, corporation,
proprietorship, firm, partnership, limited partnership,
limited liability company, trust, association, governmental
authority or other entity.
"Phase I" shall have the meaning set forth in
Section 6.17.
"Purchase Price" shall mean have the meaning set forth
in Section 2.3(a).
"Purchaser" shall have the meaning set forth in the
Preamble.
"Purchaser Closing Certificate" shall have the meaning
set forth in Section 8.6.
"Real Estate" means the real property of the Company
and the Subsidiaries listed on Schedule 4.4 hereto.
"Related Agreement" shall mean the Escrow Agreement,
the Temporary Escrow Agreement and any other Contract which
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is or is to be entered into by the Company and/or the
Sellers at the Closing or otherwise pursuant to this
Agreement or in connection with the transactions
contemplated hereby. The Related Agreements executed by a
specified Person shall be referred to as "such Person's
Related Agreements," "its Related Agreements" or another
similar expression.
"Representative" shall have the meaning set forth in
Section 11.16.
"Representative Replacement Instrument" shall have the
meaning set forth in Section 11.16(b).
"Restated Certificate of Incorporation" shall mean the
Restated Certificate of Incorporated of the Company, as
filed with the Secretary of State of the State of Delaware,
as amended from time to time.
"SAR Agreements" shall mean, collectively, the Stock
Appreciation Rights Agreements between the Company or any of
its Subsidiaries and any employee, all of which are listed
on Schedule 1.2 hereto.
"SAR Pay-Off Letters" shall have the meaning set forth
in Section 2.3(c).
"SEC" shall mean the Securities and Exchange
Commission.
"Seller" and "Sellers" shall have the meanings set
forth in Preamble.
"Seller Closing Certificate" shall have the meaning set
forth in Section 7.10.
"Senior Lender Pay-Off Letter" shall have the meaning
set forth in Section 2.3(c)(i).
"Senior Lenders" means the banks party to the Credit
Agreement.
"Shares" shall mean (i) the 196,638.3051 shares of
Class A Common Stock issued and outstanding, (ii) the
51,796.4129 shares of Class A Common Stock issuable upon
conversion of the 7,000 shares of Class B Preferred Stock
issued and outstanding, and (iii) the 16,833.8342 shares of
Class B Common Stock issuable upon exercise of the Lender
Warrants.
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"Stockholders Agreement" means the Amended and Restated
Stockholders Agreement, dated as of October 16, 1991, among
the Company and its stockholders, as amended through the
date of this Agreement.
"Stub Tax Period" shall have the meaning set forth in
Section 6.13(a).
"Subsidiaries" shall have the meaning set forth in
Section 4.1.
"Taxes" means all taxes, charges, fees, duties, levies
or other assessments which are imposed by the United States,
or any state, local or foreign government or subdivision or
agency thereof, and such term shall include any interest,
penalties or additions to tax attributable to such Taxes.
"Temporary Escrow Agreement" means the Temporary Escrow
Agreement, dated the Closing Date among the Sellers and the
Representative, as escrow agent, in the form and the
Representative, of Exhibit B hereto.
"Temporary Escrow Amount" shall have the meaning set
forth in Section 2.3(c).
"TJC Consulting Agreement" means the Management
Consulting Agreement, dated as of March 19, 1990, among The
Jordan Company and the Company, as amended.
"TJC Pay-Off Letter" shall have the meaning set forth
in Section 2.3(c).
II. ARTICLE
SALE AND PURCHASE OF SHARES
2.1 Purchase of Shares. Subject to the terms and
conditions of this Agreement, at the Closing, each Seller
shall sell, assign, convey, transfer and deliver to
Purchaser, and Purchaser shall purchase, acquire and take
assignment and delivery of, all of each such Seller's right,
title and interest in and to those Shares set forth opposite
the name of each such Seller on Schedule I. The amount of
Shares held by each Seller shall be after the redemptions,
conversions and exercises referred to in Section 2.4.
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2.2 Closing. The Closing shall take place at the
offices of Mayer, Brown & Platt, 1675 Broadway, New York,
New York 10019, at 10:00 A.M. on the latest of: (i) July
31, 1996 (ii) five Business Days after the satisfaction or
waiver of the conditions precedent set forth in Sections 7.3
and 8.3 or (iii) such other date, time and place as may be
agreed by Purchaser, the Company and the Representative;
provided, however, that the date of the Closing shall be
automatically extended from time to time for so long as any
of the conditions set forth in Articles VII and VIII shall
not be satisfied or waived, subject, however, to the
provisions of Section 9.1. The date on which the Closing
occurs in accordance with the preceding sentence is referred
to in this Agreement as the "Closing Date".
2.3 Payment of Purchase Price. As consideration for
the transfer of the Shares, Purchaser shall (i) by virtue of
the purchase of the Shares be deemed to have assumed, the
Company's obligations with respect to the Subordinated Notes
(the "Continued Debt") and (ii) pay to the Representative,
on behalf of the Company and the Sellers, an aggregate
amount equal to (A) $300,000,000 less (B) the difference of
(1) the aggregate principal amount of the Continued Debt as
of the close of business on the day immediately preceding
the Closing Date and (2) the aggregate amount of the
Company's cash, cash equivalents, marketable securities and
instruments and deposits of the foregoing, in each case, as
of the close of business on the day immediately preceding
the Closing Date, less (C) $15 million (the "Escrow Amount")
which Escrow Amount shall remain in escrow pursuant to the
Escrow Agreement for a period of two years following the
Closing Date. The amounts referred to in clause (ii)(B)
above will be set forth in a certificate of the Company's
Chief Financial Officer and delivered to the Purchaser and
the Sellers at the Closing (the "Continued Debt
Certificate"). (The difference of the amounts referred to
in clause (ii)(A), (B) and (C) above is referred to as the
"Purchase Price".)
(b) At the Closing, the following steps will occur and
the Purchaser shall pay to the Representative, on behalf of
the Sellers and the Company, an amount in cash equal to the
Purchase Price by wire transfer of immediately available
funds to an account or accounts designated by the
Representative.
(c) At the Closing, the Representative shall apply the
Purchase Price proceeds, together with the Lender Warrant
Proceeds, as follows:
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(i) to pay all principal of, interest on, premium, if
any, expenses and other amounts owing to the Senior Lenders
in respect of the Credit Agreement (except for NEWFLO
Letters of Credit pursuant to Section 2.5) as such amounts
are set forth in the pay-off and discharge letter by the
Senior Lenders and delivered to the Company and the
Purchaser at the Closing (the "Senior Lender Pay-off
Letter");
(ii) to pay the redemption price, including all accrued
and unpaid dividends through the Closing Date, in respect of
the Company's Class A Preferred Stock and to pay all accrued
dividends in respect of the Company's Class B Preferred
Stock;
(iii) to pay and deposit $1,000,000 ("Temporary Escrow
Amount") to the escrow account established by the
Representative, on behalf of the Sellers, under the
Temporary Escrow Agreement;
(iv) to pay (A) all accrued and unpaid management and
consulting fees and expenses, and (B) $3,000,000 to The
Jordan Company as investment banking and financial advisory
fees in connection with this Agreement and the transactions
contemplated hereby under the TJC Consulting Agreement as
such amounts are set forth in the pay-off and discharge
letter by TJC Management Corp. and delivered to the Company
and the Purchaser at the Closing (the "TJC Pay-Off Letter");
(v) to pay transaction fees and expenses incurred or
payable by or on behalf of the Company in connection with
this Agreement and the transactions contemplated hereby in
accordance with this Agreement, including those of Goldman
Sachs & Co. and all attorneys, accountants, actuaries,
consultants, experts or other professionals, if any, engaged
by or on behalf of the Company in connection with this
Agreement and the transactions contemplated hereby;
(vi) to pay all payments provided by the SAR Agreements
giving effect to full vesting and exercise of the SARs by
the holders thereof assuming a sale of the Company and its
Subsidiaries and the termination of the SAR Agreements at
the Closing as all such amounts are set forth in pay-off and
discharge letters from each holder of SARs and delivered to
the Company and the Purchaser at Closing (the "SAR Pay-Off
Letters"); and
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(vii) to pay all principal of, interest on, premium,
if any, expenses and other amounts owing in respect of
certain other indebtedness of the Company listed on Schedule
2.3 hereto (except for the NEWFLO Letters of Credit pursuant
to Section 2.5) (the "Other Debt") as such amounts are set
forth in the pay-off and discharge letters by the holders of
such Other Debt and delivered to the Company and Purchaser
at the Closing (the "Other Debt Pay-Off Letters"), subject
to the last paragraph of this Section 2.3(c).
Each of the foregoing payments (other than pursuant to
(c)(iii) above) by the Representative are, and for all
purposes will be considered, payments on behalf of the
Company and in respect of obligations and liabilities of the
Company. The Purchase Price proceeds less the amounts paid
pursuant to this Section 2.3(c) are referred to as the "Net
Purchase Price."
Notwithstanding the foregoing, Purchaser may elect to
pay at the Closing the amounts payable by the
Representatives under (c)(i) above directly to the Senior
Lenders, in which case the amount payable to the
Representative under Section 2.3(a) shall be reduced by an
equivalent amount.
Notwithstanding clause (vii) above, the Company shall
use reasonable efforts to cause the Other Debt to be repaid
pursuant to clause (vii) above; provided, however, that if
any Other Debt is not so repaid, or cannot be repaid by its
terms, the aggregate principal amount of the Other Debt as
of the close of business on the day preceding the Closing
Date shall reduce the Purchase Price for purposes of
Section 2.3(a).
(d) At the Closing, the Representative shall apply the
Net Purchase Price and Lender Warrant Proceeds (such net
proceeds are referred to as the "Closing Seller Proceeds"),
after paying or making arrangements, on behalf of the
Company, for paying the amounts set forth in Section 2.3(c),
to pay to each Seller such Seller's Ownership Percentage of
such net proceeds.
(e) The Representative will deliver to the Sellers a
certificate setting forth (x) the Purchase Price and its
determination, (y) each of the amounts paid by the
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Representative pursuant to Section 2.3(c), together with
copies of the relevant Pay-Off Letters, and (z) each of the
amounts paid to the Sellers pursuant to Section 2.3(d).
(f) The Purchaser shall deposit $15 million ("Escrow
Amount") to the escrow account established by the Escrow
Agent under the Escrow Agreement.
(g) Purchaser shall, by virtue of the purchase of the
Shares, be deemed to have fully assumed all of the Company's
obligations and liabilities in respect of the Continued
Debt, the NEWFLO Letters of Credit pursuant to Section 2.5
and the Other Debt to the extent not repaid at Closing
pursuant to Section 2.3(c).
2.4 Redemption, Conversion and Exercise. At the
Closing, the Company will redeem in full the Company's
Class A Preferred Stock, and each Seller who is a holder of
the Company's Class A Preferred Stock shall, in connection
with its redemption in full, deliver to the Company the
stock certificates evidencing their Class A Preferred Stock,
and the Company shall cancel such stock certificates upon
such redemption in full. Each Seller who is a holder of
Class A Preferred Stock agrees that such redemption,
including the concurrent payment of all accrued and unpaid
dividends, constitutes full performance of all obligations
of the Company in respect of the Class A Preferred Stock.
(b) At the Closing, each Seller who is a holder of
Class B Preferred Stock shall deliver all stock certificates
evidencing shares of Class B Preferred Stock and the Company
shall convert such Class B Preferred Stock into shares of
Class A Common Stock, through the Representative, in
accordance with Section 2.3(c)(ii), and pay all accrued
dividends thereon in accordance with its terms, issue and
deliver to each such Seller stock certificates evidencing
the shares of Class A Common Stock issued upon such
conversion and cancel the stock certificates evidencing the
Class B Preferred Stock. Each Seller who is a holder of
Class B Preferred Stock hereby waives its optional
redemption rights with respect to the Class B Preferred
Stock contained in the Restated Certificate of
Incorporation; provided, however, that the foregoing waiver
is conditioned upon the conversion of all shares of Class B
Preferred Stock into shares of Class A Common Stock by the
Company on the Closing Date and the consummation of the
transactions contemplated by this Agreement.
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(c) At the Closing, each Seller who is a holder of Lender
Warrants shall exercise such Lender Warrants for Class B
Common Stock in accordance with its terms, and in connection
with such exercise, each such Seller shall deliver to the
Company their Lender Warrants together with exercise
instructions and certified checks representing the exercise
price (the "Lender Warrant Proceeds"), and the Company shall
issue and deliver to each such Seller stock certificates
evidencing the Class B Common Stock issued upon such
exercise and shall cancel the Lender Warrants. The Lender
Warrant Proceeds are hereby assigned, transferred and
delivered by the Company to the Representative for purposes
of being paid and distributed pursuant to Section 2.3(c).
Each Seller who is a holder of Lender Warrants agrees that
the issuance of the Class B Common Stock constitutes full
performance of all obligations of the Company in respect of
the Lender Warrants.
(d) For purposes of this Agreement, the amount of Shares
held by each Seller and the Ownership Percentage of each
Seller shall assume the consummation of the redemption,
conversion and exercise of all capital stock and warrants
contemplated by this Section 2.4.
2.5 Letters of Credit. With regard to letters of
credit or similar financial guaranties issued under the
Credit Agreement and outstanding at the Closing Date
(collectively, the "NEWFLO Letters of Credit"), the
Purchaser will either, at the Closing, (a) arrange for the
issuance of replacement letters of credit therefor that are
satisfactory in form and substance to the beneficiaries of
the NEWFLO Letters of Credit so that such beneficiaries
fully release and discharge the NEWFLO Letters of Credit to
the satisfaction of the Senior Lenders under the Credit
Agreement, or (b) arrange for the issuance of additional
letters of credit to support and back-up the NEWFLO Letters
of Credit to the satisfaction of the Senior Lenders under
the Credit Agreement, in either case, such that the Senior
Lenders under the Credit Agreement will release and
discharge the Company and its Subsidiaries under the Credit
Agreement even though the NEWFLO Letters of Credit remain
outstanding. The NEWFLO Letters of Credit or any such
replacement letters of credit or supporting and back-up
letters of credit will not be included in Continuing Debt.
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III. ARTICLE
REPRESENTATIONS AND WARRANTIES OF EACH SELLER
Each Seller (severally and on behalf of himself,
herself or itself only) hereby represents and warrants to
the Purchaser that as to such Seller, except as set forth in
the Disclosure Schedule:
3.1 Title to Shares. The shares of Common Stock as
set forth opposite each Seller's name on Schedule I are
(i) owned respectively by such Seller, free and clear of any
and all Liens, (other than restrictions on transfer arising
under applicable securities law) or (ii) are issuable to
such Seller upon conversion of shares of Class B Preferred
Stock or upon exercise of Lender Warrants as set forth
opposite each Seller's name on Schedule I, which are owned
by each Seller, free and clear of all Liens (other than
restrictions on transfer arising under applicable securities
law), and, as of the Closing, will be owned respectively by
such Seller, free and clear of any and all Liens (other than
restrictions on transfer arising under applicable securities
law). In the aggregate, the Sellers will immediately prior
to Closing be the holders of record of all of the
outstanding capital stock of the Company.
(b) There are no options, warrants, rights, convertible
securities or other agreements or commitments obligating
such Seller with respect to the shares of capital stock of
the Company or the Lender Warrants owned by such Seller to
transfer or sell, or cause the issuance, transfer or sale
of, any shares of capital stock the Company or to transfer
or sell the Lender Warrants.
3.2 Due Authorization. Each Seller has duly and
validly executed and delivered this Agreement and has duly
and validly executed and delivered (or prior to or at the
Closing will duly and validly execute and deliver) the
Related Agreements to which it is a party. This Agreement
constitutes the legal, valid and binding obligation of each
Seller and the Related Agreements of such Seller upon
execution and delivery by such Seller will constitute legal,
valid and binding obligations of such Seller, in each case,
enforceable against such Seller in accordance with their
respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect which affect the
enforcement of creditors' rights generally and by equitable
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principles. Each Seller hereby ratifies and confirms its
consent to the SAR Agreements between the Company and the
parties thereto listed on Schedule 1.2.
3.3 Consents and Approvals; Authority Relative to this
Agreement. Except for filings under the HSR Act or as set
forth in the Disclosure Schedule, the execution, delivery
and performance by each Seller of this Agreement and such
Seller's respective Related Agreements to which it is a
party will not (a) violate any law, regulation or order of
any governmental authority applicable to such Seller,
(b) require any filing or registration by such Seller with,
or consent or approval with respect to such Seller of, any
governmental authority, or (c) violate or conflict with or
result in a breach or default under, any Contract to which
such Seller is a party or by which any of such Seller's
respective assets or properties are bound, except where any
such filing, registration, consent or approval, if not made
or obtained, or any such violation, conflict, breach or
default, would not have a Material Adverse Effect.
3.4 Brokers Fees. The Sellers have no liability or
obligation to pay any fees or commissions to any broker,
finder or financial agent in connection with the
transactions contemplated hereby.
IV ARTICLE
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser
that, except as set forth in the Disclosure Schedule:
4.1 Due Incorporation; Capitalization. The Company is
a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and each of
the Company's direct and indirect subsidiaries listed on
Schedule 4.1 hereto (the "Subsidiaries") is a corporation
duly organized, validly existing and in good standing under
the laws of the state or jurisdiction of its incorporation,
with all requisite power and authority to own and operate
its respective assets and properties as they are now being
owned and operated. The jurisdictions in which the Company
is qualified to do business as a foreign corporation are set
forth in the Disclosure Schedule, and constitute all of the
jurisdictions where qualification is necessary, except where
the failure to qualify would not have a Material Adverse
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Effect. Except as disclosed in the Disclosure Schedule,
each of the Subsidiaries is wholly-owned by the Company,
either directly or indirectly.
(b) The entire authorized capital stock of the Company
consists of (A) 302,000 shares of Common Stock, $.01 par
value per share (the "Common Stock"), consisting of (i)
285,000 shares of Class A Common Stock ("Class A Common
Stock") and (ii) 17,000 shares of Class B Common Stock
("Class B Common Stock"), and (B) 7,450 shares of Preferred
Stock, par value $.01 per share, consisting of (i) 450
shares of Class A Preferred Stock ("Class A Preferred
Stock") and (ii) 7,000 shares of Class B Preferred Stock
("Class B Preferred Stock"). Of such authorized shares,
(A) (i) 196,638.3051 shares of Class A Common Stock are
outstanding and 51,796.4129 shares of Class A Common Stock
are issuable upon conversion of Class B Preferred Stock and
(ii) no shares of Class B Common Stock are outstanding, and
16,833.8342 shares of Class B Common Stock are issuable upon
exercise of the Lender Warrants (B) (i) 112.5 shares of
Class A Preferred Stock are outstanding and 337.5 shares of
Class A Preferred Stock have been redeemed by the Company in
accordance with their terms and (ii) 7,000 shares of Class B
Preferred Stock are outstanding. All of the outstanding
shares of the Company's capital stock are validly issued,
fully paid and nonassessable, and no shares were issued in
violation of the preemptive rights of any shareholder. The
aggregate number of Shares represent all of the outstanding
shares of the Company's capital stock and shares of the
Company's capital stock issuable upon exercise of all
capital stock and warrants contemplated by Section 2.4.
(c) Except as set forth above or in the Disclosure
Schedule, there are no options, warrants, rights,
convertible securities or other agreements or commitments
obligating any Seller, the Company or any of the
Subsidiaries to issue, transfer or sell, or cause the
issuance, transfer or sale of, any shares of capital stock
the Company or any of the Subsidiaries or to make any
payments in respect of the value of any shares of the
Company or any Subsidiary.
4.2 Financial Statements. (a) The Financial Statements
have been prepared in accordance with GAAP consistently
applied and present fairly the consolidated financial
position of the Company and the Subsidiaries as of the dates
thereof and the results of operations and cash flows of the
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Company and the Subsidiaries for the periods covered
thereby, except that interim financial statements omit
footnotes and are subject to customary year-end adjustments
and accruals.
(b) Except as set forth in the Disclosure Schedule or in
the Financial Statements, to the best knowledge of the
Company, the Company has no liabilities, debts, claims or
obligations of any nature on the date of this Agreement,
whether accrued, absolute, direct or indirect, contingent or
otherwise, whether due or to become due, that would be
required to be included on a balance sheet prepared in
accordance with GAAP, consistently applied (the
"Liabilities"), except (i) Liabilities disclosed in the
Disclosure Schedules, (ii) Liabilities incurred in the
ordinary and usual course of business and consistent with
past practice since the date of the Latest Balance Sheet
which individually and in the aggregate are not materially
adverse, (iii) Liabilities incurred in connection with or as
a result of the transactions contemplated by this Agreement
and the Related Agreements that are to be paid by the
Representative pursuant to Section 2.3 (c), and
(iv) Liabilities that, individually or in the aggregate,
would not have a Material Adverse Effect.
(c) Except for (i) the NEWFLO Letters of Credit as
contemplated by Section 2.5, (ii) the Other Debt and
Continued Debt, and (iii) indebtedness incurred by Purchaser
in connection with the transactions contemplated by this
Agreement, the Company will not be subject to any
indebtedness for borrowed money, as of the Closing, and
after giving effect to the transactions contemplated by this
Agreement.
4.3 Reports. The Company has furnished to Purchaser
copies of all forms, reports, statements (including without
limitation any financial statements and schedules) and
documents filed with the SEC (the "SEC Documents"), all of
which have complied in all material respects with all
applicable requirements of the Securities Act and the
Exchange Act, as applicable, and the laws, regulations and
rules relating thereto. As of their respective dates, the
SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as
the case may be, and none of the SEC Documents, at the time
of their filing, contained any untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which
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they were made, not misleading. The Company has timely
filed all registration statements, reports and other filings
required to be filed with the Securities and Exchange
Commission under its rules and regulations.
4.4 Title to Properties. The Disclosure Schedule
contains a true and complete list as of the date of this
Agreement of all material real property with a value in
excess of $100,000 owned by the Company and the Subsidiaries
("Real Estate"). Except as disclosed in the Disclosure
Schedule, the Company and its Subsidiaries have good title
to, and is the lawful owner of, all of its assets reflected
in the Financial Statements, of the Real Estate and all
assets and properties that are material to the Company's
business, free and clear of any Lien, except (a) Liens,
which shall be removed prior to or at the Closing,
(b) assets which are leased and intellectual property which
is licensed, (c) mechanics', carriers', worker's and other
similar Liens arising in the ordinary course of business,
(d) Liens and encumbrances which would not have a Material
Adverse Effect, (e) Liens for taxes not yet due and payable,
and (f) other Liens permitted by the Credit Agreement
(collectively, the "Permitted Liens").
4.5 Patents and Trademarks. The Disclosure Schedule
contains a true and complete list as of the date of this
Agreement of all of the material patents and trademarks and
other intellectual property (including any pending patent or
trademark applications) used in the operation of the
Company's business, and accurately sets forth the nature of
ownership or right to use of such patent or trademark or
other intellectual property. Except as disclosed in the
Disclosure Schedule: (a) none of such patents or trademarks
are licensed by a third party to the Company as licensee,
and the Company has not granted any license to a third party
or agreed to pay to or receive from a third party any
royalty in respect of any of such patents or trademarks;
(b) to the Sellers' knowledge, the conduct of the Company's
business does not infringe any patent or trademark rights of
another, except where the consequences of such infringement
would not have a Material Adverse Effect.
4.6 Contracts. The Disclosure Schedule contains an
accurate list as of the date of this Agreement of all the
Contracts of the following types to which the Company or any
of the Subsidiaries is a party or to which any of its assets
or properties is subject (the "Material Contracts"):
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(a) any collective bargaining agreement with
respect to its employees;
(b) any employment agreement with any officer
or employee;
(c) any Contract entered into in the
ordinary course of business which involves the payment or
receipt of an amount in excess of $500,000 or any Contract
entered into outside of the ordinary course of business
which involves the payment or receipt of an amount in excess
of $500,000;
(d) any credit agreement, loan agreement,
indenture, note, mortgage, security agreement, loan
commitment, or evidence of indebtedness, or any other
Contract relating to the borrowing of a material amount of
funds by the Company or the Subsidiaries outside the
ordinary course of business;
(e) any lease of real property that is material
to the Company or any of the Subsidiaries; or
(f) any Contract granting to any Person a right
of first refusal or option to purchase or acquire any assets
valued at more than $500,000.
The Company has made available to Purchaser true and
complete copies of each Material Contract. Except as
disclosed on the Disclosure Schedule, with respect to
Contracts and purchase orders for the manufacture of
products for Newmans Incorporated outside the United States
(the "Foreign Manufacturing Contracts"), such Foreign
Manufacturing Contracts do not require Newmans to maintain
any specified level of manufacture. Except as disclosed on
the Disclosure Schedule, with respect to Contracts for the
distribution of products of the Company and its Subsidiaries
("Distribution Contracts"), the distributors thereunder have
no right to return products purchased pursuant to the
Distribution Contracts.
4.7 Insurance. The Disclosure Schedule contains an
accurate and complete list as of the date of this Agreement
of all policies of fire, liability, workmen's compensation
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and other forms of insurance owned by the Company or the
Subsidiaries. The insurance currently in effect is adequate
in kind and amount to insure such risks which are commonly
insured by companies in the industries in which the Company
and the Subsidiaries are engaged.
4.8 Employee Benefit Plans.
(a) General. Except as listed in the Disclosure Schedule,
neither the Company nor any of the Subsidiaries maintains:
(i) Any "employee welfare benefit plan" or
"employee pension benefit plan" (as those terms are
respectively defined in sections 3(1) and 3(2) of ERISA),
referred to collectively hereinafter as "plans"; or
(ii) Any retirement or deferred compensation
plan, incentive compensation plan, stock plan, unemployment
compensation plan, vacation pay, severance pay, bonus
arrangement, health benefit plan, profit sharing plan, death
or disability plan or any other fringe benefit arrangements
(referred to collectively hereinafter as "fringe benefit
arrangements") for any employee, director, consultant or
agent.
(b) Plan Documents and Reports. A true and correct copy of
each of the material documents embodying the plans and
fringe benefit arrangements listed in the Disclosure
Schedule (collectively, the "Benefit Plans") has been
supplied to Purchaser. A true and correct copy of the most
recent annual report, summary plan description and Internal
Revenue Service determination letter with respect to each
Benefit Plan, to the extent applicable, has been supplied to
Purchaser by the Company.
(c) Compliance With Laws; Liabilities. As to all single
employer Benefit Plans that are subject to the provisions of
Section 401(a) of the Code, such Benefit Plan meets the
requirements for qualification under Section 401(a) and
related provisions of the Code in all material respects and
the Company has obtained (or has timely applied for) a
favorable determination letter from the Internal Revenue
Service with respect to such plan. As to all single
employer Benefit Plans, except as disclosed in the
Disclosure Schedule, (i) all Benefit Plans comply in all
material respects with the requirements of law applicable
thereto; (ii) there are no actions, suits or claims (other
than
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routine claims for benefits) pending involving such Benefit
Plans; (iii) except as set forth in the Disclosure Schedule,
the Company has no liability under any plan for providing
post-retirement medical benefits, other than statutory
liability for providing group health plan continuation
coverage under Part 6 of Subtitle B of Title I of ERISA and
section 4980B of the Code; (iv) there has been no act or
omission that would impair the right or ability of the
Company to unilaterally amend or terminate any Benefit Plan
and (v) the Company and the Subsidiaries have not engaged in
any non-exempt transaction prohibited by ERISA or by Section
4975 of the Code which could reasonably be expected to
result in a Material Adverse Effect. All contributions,
reimbursements, premium payments and other payments required
to have been made under or with respect to each Benefit Plan
as of or prior to the date hereof have been made on a timely
basis in accordance with applicable law.
(d) Multiemployer Plans. Except as listed in the
Disclosure Schedule, none of the Benefit Plans, other than
the Paco IAM Plan, is a multiemployer plan (within the
meaning of Section 3(37) of ERISA). With respect to the
Paco IAM Plan, the Company and the Subsidiaries would have
incurred no withdrawal liability if participation in such
plan had been ceased as of December 31, 1995.
4.9 Taxes. Except as set forth in the Disclosure
Schedule, (a) all Federal, state, local and foreign income
and other tax returns regarding the Company or the
Subsidiaries required by law to be filed prior to the date
of this Agreement have been accurately, correctly and duly
filed, (b) the Company and the Subsidiaries have no
liability that is due and payable for Federal, state, local
or foreign income and other taxes (other than taxes that are
being contested in good faith) that has not been paid or
reserved for, (c) no tax return of the Company or the
Subsidiaries is currently under audit by any taxing
authority, (d) there are currently no outstanding waivers of
statutes of limitations with any taxing authority by the
Company or the Subsidiaries, (e) the Company is not a party
to a tax sharing agreement with any other entity outside of
the current consolidated group, (f) the Company has not
filed a consent to the application of Section 341(f) of the
Code or agreed to have Section 341(f)(2) of the Code apply
to any disposition of a "subsection (f) asset" (as such term
is defined in Section 341(f)(4) of the Code), (g) the
Company has not been a personal holding company within the
meaning of Section 542 of the Code during the five-year
period preceding the date hereof, (h) the Company has not at
any time filed a consolidated or combined Tax Return as
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a member of an affiliated group (within the meaning of
Section 1504 of the Code) other than as a group of which the
Company was the parent, and (i) the Company and the
Subsidiaries have no liability for Taxes of any other person
under Treas. Reg. Section 1.1502-6 (or any similar provision
of state or local law), as a transferee or successor, by
contract or otherwise, (j) the Company has not agreed to and
is not required to make any adjustment pursuant to Section
481(a) of the Code, and does not have any application
pending with any taxing authority requesting permission for
any change in accounting method, (k) there is no arrangement
covering any Person that, individually or collectively, as a
consequence of the transactions consummated pursuant to this
Agreement could give rise to the payment of any amount that
would not be deductible by the Company by reason of Section
280G of the Code and (l) there have been no transactions
between the Company or any Subsidiary and the shareholders
of the Company that would result in a deferral or
disallowance of a loss or deduction under Section 267 of the
Code.
4.10 No Defaults or Violations. Except as disclosed in
the Disclosure Schedule, as of the date of this Agreement,
and to the knowledge of the Company, (a) the Company and the
Subsidiaries are not in breach or default under the terms of
any Material Contract except where any such breach or
default would not have a Material Adverse Effect, (b) the
Company and the Subsidiaries are in compliance with all laws
and governmental regulations and orders applicable to the
Company's business except where any such noncompliance would
not have a Material Adverse Effect, and (c) each of the
Company and the Subsidiaries is not in default under or in
violation of their respective certificate of incorporation
or by laws.
4.11 Litigation. The Disclosure Schedule sets forth
each instance in which any of the Company and its
Subsidiaries (a) is subject to any material unsatisfied
judgment, order, decree, stipulation, injunction, or charge
or (b) is a party to any charge, complaint, action, suit,
proceeding, hearing, or investigation of or in any court or
quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction, or to the knowledge
of the Company, is threatened to be a party to any such
action, except where the judgment, order, decree,
stipulation, injunction, charge, complaint, action, suit,
proceeding, hearing, or investigation would not have a
Material Adverse Effect.
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4.12 Brokers. The Company has not used any broker or
finder in connection with the transactions contemplated
hereby other than The Jordan Company and Goldman Sachs &
Co., whose fees and expenses shall be paid pursuant to
Section 2.3.
4.13 Due Authorization. The Company has full power and
authority to enter into this Agreement and its Related
Agreements and to consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance
by the Company of this Agreement and its Related Agreements
have been duly and validly approved by the board of
directors of the Company and no other corporate actions or
proceedings on the part of the Company are necessary to
authorize this Agreement, its Related Agreements and the
transactions contemplated hereby and thereby. The Company
has duly and validly executed and delivered this Agreement
and has duly and validly executed and delivered (or prior to
or at the Closing will duly and validly execute and deliver)
its Related Agreements. This Agreement constitutes the
legal, valid and binding obligation of the Company and the
Company's Related Agreements, upon execution and delivery by
the Company, will constitute legal, valid and binding
obligations of the Company, in each case, enforceable in
accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors' rights
generally and by equitable principles.
4.14 Consents and Approvals; Authority Relative to This
Agreement. Except for filings under the HSR Act, the
execution, delivery and performance by the Company of this
Agreement and its Related Agreements will not (i) violate
any law, regulation or order of any governmental authority
applicable to the Company; (ii) require any filing or
registration by the Company with, or consent or approval
with respect to the Company of, any governmental authority;
(iii) violate or conflict with or result in a breach or
default under any Contract to which the Company is a party
or by which the Company or any of its assets or properties
are bound; or (iv) violate or conflict with the Certificate
of Incorporation or by-laws of the Company, except where any
such filing, registration, consent or approval, if not made
or obtained, or any such violation, conflict, breach or
default, would not have a Material Adverse Effect on the
Company or its ability to perform its obligations under this
Agreement and its Related Agreements.
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4.15 Environmental Matters. Except as described in
Section 4.15 of the Disclosure Schedule, the Phase I, and
the ENSR Reports described therein:
(a) to the Company's knowledge, the Company and
its Subsidiaries are in compliance with all applicable
Environmental Laws, including without limitation, the
possession of all permits, licenses and authorizations
required under applicable Environmental Laws; and compliance
with their terms and conditions, except to the extent such
noncompliance individually or collectively would not have a
Material Adverse Effect;
(b) neither the Company nor any of its
Subsidiaries has received notice of a civil, criminal or
administrative suit, claim, action, proceeding or
investigation under any Environmental Law relating to any
property or facility owned, operated or leased, by any of
them, except to the extent such matters individually or
collectively would not have a Material Adverse Effect;
(c) neither the Company nor any of its
Subsidiaries has received from any Authority notice that it
has been named or may be named as a responsible or
potentially responsible party under any Environmental Law
for any site contaminated by Hazardous Substances;
(d) except to the extent Contamination
individually or in the aggregate would not have a Material
Adverse Effect, to the Company's knowledge, no portion of
any property currently owned, leased or occupied by the
Company or any Subsidiary is Contaminated; and
(e) to the best of the Company's knowledge,
neither the Company nor any of its Subsidiaries is liable
under the Comprehensive Environmental Response, Compensation
and Liability Act or any comparable Environmental Law for
investigation, remedial, removal or other response costs,
natural resources damages or other claims (including
administrative orders) arising out of the release or
threatened release of any Hazardous Substance, except to the
extent such liability individually or in the aggregate would
not have a Material Adverse Effect.
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4.16 Absence of Changes. Except as disclosed on the
Disclosure Schedule, since March 31, 1996, (a) the Company
and its Subsidiaries have not sustained any material loss or
interference with their respective businesses from fire,
explosion, flood, or other calamity, whether or not covered
by insurance, or from any labor dispute or court or
governmental action, order or decree which loss or
interference would have a Material Adverse Effect; and (b)
there has not been any material adverse change in or
affecting the business, properties, financial position,
operations or results of operation of the Company and its
Subsidiaries.
4.17 Employment Matters. Except as disclosed in the
Disclosure Schedule, there are no material controversies
pending or, to the knowledge of the Company, threatened
against the Company or any of its Subsidiaries, or any of
its officers, directors, employees or representatives of
employees, and to the knowledge of the Company, there are no
material organizational efforts presently being made
involving unorganized employees, which would have a Material
Adverse Effect.
4.18 Customer and Distributor Relationships. Except as
disclosed in the Disclosure Schedule or in accordance with
past experience of the Company, to the Company's knowledge,
the commercial relationships between the Company and its
Subsidiaries and their customers and distributors are good,
and no such customer or distributor has indicated an intent
to discontinue or materially change its commercial
relationship with the Company or the Subsidiary which would
have a Material Adverse Effect.
4.19 Product Warranty. To the knowledge of the
Company, there exist no defects in the products of the
Company or the Subsidiaries that are covered by product
warranty which, individually, or in the aggregate, would
reasonably be expected to result in a Material Adverse
Effect.
4.20 Disclaimer of Other Representations and
Warranties; Disclosure; Bring-Down. Neither the Sellers nor
the Company make, and they have not made, any
representations or warranties relating to the Company or any
Subsidiaries in connection with the transactions
contemplated hereby other than those expressly set forth in
this Article IV. It is understood that Purchaser has fully
reviewed the Disclosure Schedule, the materials referenced
therein and in the "data room" relating to the
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transactions contemplated by this Agreement. It is also
understood that any cost estimates, projections or other
productions, any data, any financial information or any
memoranda or presentations are not and shall not be deemed
to be or to include representations or warranties of the
Sellers and the Company, except to the extent otherwise
expressly covered by the representations and warranties of
the Sellers and the Company hereunder. No person has been
authorized by the Sellers or the Company to make any
representation or warranty relating to the Company or any
Subsidiary, the businesses of the Company or any Subsidiary
or otherwise in connection with the transactions
contemplated hereby except as set forth in this Article IV
and, if made, such representation or warranty must not be
relied upon as having been authorized by the Company, any
Subsidiary or any of the Sellers and the Company.
(b) Notwithstanding anything to the contrary contained in
this Agreement or in any of the Exhibits or Disclosure
Schedules, any information disclosed in one Exhibit or
Disclosure Schedule shall be deemed to be disclosed for
purposes of this Agreement. Certain information set forth
in the Disclosure Schedules are included solely for
informational purposes and may not be required to be
disclosed pursuant to this Agreement. The disclosure of any
information shall not be deemed to constitute an
acknowledgment that such information is required to be
disclosed in connection with the representations and
warranties made by the Sellers or the Company in this
Agreement or that it is material, nor shall such information
be deemed to establish a standard of materiality (and the
actual standard of materiality may be higher or lower than
the matters disclosed by such information).
V. ARTICLE
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Sellers that:
5.1 Due Incorporation. Purchaser is a corporation
duly organized, validly existing and in good standing under
the laws of the State of Oregon with all requisite power and
authority to own and operate its assets and properties as
they are now being owned and operated.
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5.2 Due Authorization. Purchaser has full power and
authority to enter into this Agreement and its Related
Agreements and to consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance
by Purchaser of this Agreement and its Related Agreements
have been duly and validly approved by the board of
directors of Purchaser and no other corporate actions or
proceedings on the part of Purchaser are necessary to
authorize this Agreement, its Related Agreements and the
transactions contemplated hereby and thereby. Purchaser has
duly and validly executed and delivered this Agreement and
has duly and validly executed and delivered (or prior to or
at the Closing will duly and validly execute and deliver)
its Related Agreements. This Agreement constitutes the
legal, valid and binding obligation of Purchaser and
Purchaser's Related Agreements, upon execution and delivery
by Purchaser, will constitute legal, valid and binding
obligations of Purchaser, in each case, enforceable in
accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws in
effect which affect the enforcement of creditors' rights
generally and by equitable principles.
5.3 Consents and Approvals; Authority Relative to This
Agreement. Except for filings under the HSR Act, the
execution, delivery and performance by Purchaser of this
Agreement and its Related Agreements will not (i) violate
any law, regulation or order of any governmental authority
applicable to Purchaser; (ii) require any filing or
registration by Purchaser with, or consent or approval with
respect to Purchaser of, any governmental authority;
(iii) violate or conflict with or result in a breach or
default under any Contract to which Purchaser is a party or
by which Purchaser or any of its assets or properties are
bound; or (iv) violate or conflict with the Certificate of
Incorporation or by-laws of Purchaser, except where any such
filing, registration, consent or approval, if not made or
obtained, or any such violation, conflict, breach or
default, would not have a material adverse effect on
Purchaser or its ability to perform its obligations under
this Agreement and its Related Agreements.
5.4 Knowledge of Inaccuracies. Purchaser has no
actual knowledge that any of the representations or
warranties of the Company or the Sellers in this Agreement
are inaccurate or that any of the Company or the Sellers are
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in breach of any agreement or covenant in this Agreement;
provided, that this representation will not apply to any
such inaccuracies or breaches as to which the Company is
aware.
5.5 Purchaser's Examination. Purchaser and its
representatives have received or been given access to all of
the information described or referred to in this Agreement
and all other information requested by them. Purchaser and
its representatives have been afforded the opportunity to
meet with, ask questions of and receive answers from the
Sellers and the management of the Company in connection with
the determination by Purchaser to enter into this Agreement
and the Related Agreements and consummate the transactions
contemplated hereby and thereby, and all such questions have
been answered to the full satisfaction of Purchaser.
5.6 Broker. Purchaser has used no broker or finder in
connection with the transactions contemplated hereby other
than Bushkin & Associates, and neither any Seller, the
Company nor any Affiliate of any Seller or the Company has
or shall have any liability or otherwise suffer or incur any
Loss as a result of or in connection with any brokerage or
finder's fee or other commission of any Person retained by
Purchaser in connection with any of the transactions
contemplated by this Agreement.
5.7 Investment. The Purchaser is not acquiring the
Shares with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities
Act.
5.8 Funding. Purchaser has delivered a copy of a
commitment letter from Bank of America committing to provide
the Purchaser loans in an amount, together with Purchaser's
cash or capital on hand, sufficient to pay the Purchase
Price and otherwise fully perform its obligations under this
Agreement, which is in a form and substance reasonably
satisfactory to the Company and Sellers.
VI. ARTICLE
COVENANTS
6.1 Access to Information and Facilities. From
the date of this Agreement to the Closing Date, subject to
the
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Confidentiality Agreement, the Company shall give
Purchaser and Purchaser's representatives reasonable access
during normal business hours to the offices, facilities,
books and records of the Company and the Subsidiaries, and
shall make the officers and employees of the Company and the
Subsidiaries available to Purchaser and its representatives
as Purchaser and its representatives shall from time to time
reasonably request, in each case to the extent that such
access and disclosure would not obligate the Company or the
Subsidiaries to take any actions that would unreasonably
disrupt the normal course of their businesses or violate the
terms of any Contract to which the Company or the
Subsidiaries is bound or any applicable law or regulation.
Notwithstanding anything to the contrary in this Agreement,
in no event shall any access to the facilities of the
Company and the Subsidiaries include the right to conduct
any intrusive drillings, testing or sampling in connection
with any environmental investigation, assessment or due
diligence conducted by Purchaser, the terms and extent of
any environmental assessment to be governed exclusively by
Section 6.17 hereof.
(b) The Purchaser and Purchaser's
representatives shall treat and hold strictly confidential
any Confidential Information it receives from any of the
Sellers, the Company, and the Subsidiaries in the course of
the reviews contemplated by this Section 6.1, will not use
any of the Confidential Information except in connection
with this Agreement, and, if this Agreement is terminated
for any reason whatsoever, will return to the Company all
tangible embodiments (and all summaries and copies) of the
Confidential Information which are in its possession;
provided, however, that this sentence shall not apply to any
information (i) which, at the time of disclosure, is
available publicly, through no fault of Purchaser
(ii) which, after disclosure, becomes available publicly
through no fault of the Purchaser, or (iii) which the
Purchaser knew or to which the Purchaser had access prior to
disclosure. Purchaser shall be liable for any breach of the
obligations and restrictions set forth in this Section 6.1
by any of its employees, agents or representatives.
6.2 Preservation of Business. From the date of this
Agreement until the Closing Date, the Company shall be
operated in the ordinary and usual course of business and
consistent with past practice, and the Company shall use
commercially reasonable efforts to preserve intact the
present business organization and personnel of the Company
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and the Subsidiaries and the business relationships of the
Company and the Subsidiaries with other Persons material to
the operation of the Company or the Subsidiaries. Without
limiting the generality of the foregoing, the Company and
its Subsidiaries shall not other than as specifically
contemplated by this Agreement (a) amend their respective
articles of incorporation or bylaws, (b) enter into any new
employment or severance arrangements or increase the
compensation or benefits payable to officers or employees,
except in connection with the SAR Pay-Off Letters, (c) merge
into or consolidate with any other corporation or permit any
other corporation to merge into or consolidate with it, or
liquidate or sell or dispose of any material assets other
than in the ordinary course of business; (d) except for
short-term indebtedness and letters of credit incurred in
the ordinary course of business, incur, assume or guarantee
any indebtedness, or repay any existing indebtedness except
in the ordinary course of business or as required by the
terms of such indebtedness; (e) enter into any material
transaction or make any material commitment, except as
otherwise contemplated as permitted by this Agreement, or
take or omit to take any action which would be reasonably
anticipated to have a Material Adverse Effect, (f) change in
any respect any of its accounting principles, policies or
procedures other than as required by GAAP, or (g) enter
into, adopt or amend or terminate any Benefit Plan.
6.3 Exclusivity. None of the Sellers, the Company or
the Subsidiaries shall solicit, initiate, or encourage the
submission of any proposal or offer from any Person relating
to any (a) liquidation, dissolution, or recapitalization,
(b) merger or consolidation, (c) acquisition or purchase of
all, substantially all or a material amount of securities or
assets (other than inventories and other assets in the
ordinary and usual course of business and consistent with
past practices), or (d) similar transaction or business
combination involving any of the Company and the
Subsidiaries. The Company, the Sellers and all Persons
acting on behalf of either of them shall immediately cease
any existing activities, discussions, negotiations with any
Persons with respect to any of the foregoing.
6.4 Efforts. (a) Subject to the terms and conditions
hereof, each party hereto shall use all best efforts to
consummate the transactions contemplated hereby as promptly
as practicable.
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(b) The Company and the Purchaser will as promptly as
practicable file with the Federal Trade Commission and the
Department of Justice the notification and report forms
required for the transactions contemplated hereby and any
supplemental information that may be reasonably requested in
connection therewith pursuant to the HSR Act, which
notification and report forms and supplemental information
will comply in all material respects with the requirements
of the HSR Act. Purchaser shall pay all filing fees
required with respect to the notification, report and other
requirements of the HSR Act.
(c) The Sellers, the Company and Purchaser will, as
promptly as practicable (i) make the required filings with,
and take all reasonable steps to obtain the required
authorizations, approvals, consents and other actions of,
governmental authorities and (ii) take all reasonable steps
(not including the expenditure of money or the payment or
delivery of other consideration) to obtain the required
consents of other Persons with respect to the transactions
contemplated hereby.
(d) The Company, the Sellers which have executed this
Agreement as of the date hereof who in the aggregate hold a
majority of the issued and outstanding shares of capital
stock of the Company, and the Representative agree to use
their collective best efforts to cause each Seller which has
not executed this Agreement as of the date hereof to deliver
a counterpart signature page to this Agreement to the
Company and the Purchaser within seven (7) business days
hereof; provided, that if all such Sellers do not execute a
counterpart signature page to this Agreement within such
time, the Company, the Sellers signatories hereto and the
Representative hereby agree, upon the request of the
Purchaser, to execute any documents required or necessary in
order to effect the sale of the Shares pursuant to a merger
whereby the Company would be merged with and into the
Purchaser and to obtain all consents necessary in connection
with such merger; provided, further that the economic,
financial, and tax effects to the Sellers and the Purchaser
upon such merger are substantially equivalent to the
economic, financial and tax effects to the Sellers and the
Purchaser upon the sale of the Shares as contemplated
hereby. If the sale of the Shares is to be effected
pursuant to a merger, the Company and the Representative
shall use their best efforts to cause each holder of Shares
not a signatory hereto to tender their Shares pursuant to
the terms of this Agreement for the consideration set forth
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herein, together with a letter of transmittal in a form
satisfactory to the Purchaser setting forth, among other
things, the representations and warranties contained in
Article III and the agreements contained in Sections 6.9,
6.11, 6.14 and Article X.
6.5 Subordinated Notes. The Purchaser shall comply in
all respects with the Indenture and the Subordinated Notes,
including executing and delivering any supplemental
indentures or other instruments, certificates or opinions
requested by the trustee under the Indenture to avoid any
default or event of default under the Indenture in
connection with the transactions contemplated by this
Agreement. The Purchaser shall use its best efforts to
avoid a Rating Decline (as defined in and pursuant to the
Indenture) in respect of the Subordinated Notes, provided
that Purchaser shall not be required by this provision to
take actions that are not permitted by any agreements to
which it is currently a party or pursuant to the credit
agreement contemplated by the commitment letter referenced
in Section 5.8.
6.6 Maintenance of Insurance. The Company and the
Subsidiaries will continue to carry its existing insurance
through the Closing Date, and shall not allow any breach,
default or cancellation (other than expiration and
replacement of policies in the ordinary cause of business)
of such insurance policies or agreements to occur or exist
that would have a Material Adverse Effect.
6.7 Supplemental Information. The Company and the
Representative may, from time to time prior to or at the
Closing, by notice in accordance with the terms of this
Agreement, supplement or amend the Disclosure Schedule,
including one or more supplements or amendments to correct
any matter which would constitute a breach of any
representation, warranty, agreement or covenant contained
herein. From time to time prior to the Closing, Purchaser
will promptly disclose in writing to Sellers any matter
hereafter arising which, if existing, occurring or known at
the date of this Agreement would have been required to be
disclosed to Sellers or which would render inaccurate any of
the representations, warranties or statements set forth in
Article V hereof. Any such supplement or amendment will be
effective to cure and correct for all purposes any breach of
any representation, warranty, agreement or covenant which
would have existed if the Company or the Representative had
not made such supplement or amendment, and all references to
the Disclosure Schedule shall for all purposes after the
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Closing be deemed to be a reference to the Disclosure
Schedule as so supplemented or amended. Notwithstanding any
supplemental information or amendment provided pursuant to
this Section 6.7, the indemnification rights of Purchaser
will not be effected or limited in any respect, except as
expressly provided in Section 10.7.
6.8 Post-Closing Access and Cooperation. Purchaser
will, after the Closing Date, afford promptly to the Sellers
and their representatives reasonable access during normal
business hours to the offices, facilities, books, records,
officers and employees of the Company to the extent and for
a purpose reasonably requested by any Seller. Without
limiting the generality of the foregoing, Purchaser will,
and will cause the Company to, cooperate with the Sellers in
the defense of any litigation (including, but not limited
to, making personnel available for purposes of trial
preparation and testimony) and providing information
requested by any Seller for the preparation of any Seller's
tax returns.
6.9 Resignation of Officers and Directors. Sellers
and the Company shall cause each officer and member of the
Board of Directors of, and each trustee or fiduciary of any
plan or arrangement involving employee benefits of, the
Company and the Subsidiaries, if so requested by Purchaser,
to tender his or her resignation from such position
effective as of the Closing Date. No such requested
resignation of an officer of the Company or its Subsidiaries
shall be deemed a voluntary resignation for purposes of any
Employment Agreement, and will not terminate, reduce or
modify their severance or other rights thereunder. The
Company and the Subsidiaries shall, as of the Closing Date,
release each director and officer of the Company and the
Subsidiaries from all claims and liabilities to or in
respect of the Company and the Subsidiaries arising in
connection with their service as directors and officers of
the Company other than claims and liabilities arising out of
malfeasance, intentional misconduct or a knowing violation
of law.
6.10 Employees and Benefits. (a) Purchaser shall
continue to employ all Employees who are employed by the
Company and the Subsidiaries as of the Closing Date
(including, without limitation, those on temporary layoffs
or approved leaves of absence) ("Employees") on terms and
conditions substantially equivalent to (or superior to) the
terms and conditions of employment then provided by the
Company and the Subsidiaries, including, without limitation,
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job responsibilities, wages, compensation and employee
benefits no less favorable than that applicable to each such
Employee immediately before the Closing Date. Purchaser
shall assume (or by virtue of the purchase of the Shares, be
deemed to have assumed) all liabilities and obligations with
respect to the Employment and Severance Agreements.
Effective as of the Closing Date, all Employees will become
employees of Purchaser ("Hired Employees"). Purchaser shall
not modify or amend the terms and conditions of employment
of any Hired Employees in any material respect for a period
of (i) six (6) months after the Closing Date or (ii) with
respect to Employees party to Employment and Severance
Agreements, for the duration of the term of employment
specified therein.
(b) In any termination or layoff of (i) any employee on
the Closing Date as a result of the transactions
contemplated by this Agreement or (ii) any Hired Employee by
Purchaser after the Closing, Purchaser will comply fully, if
applicable, with the Worker Adjustment and Retraining
Notification Act of 1988 ("WARN") and all other applicable
foreign, Federal state and local laws, including those
prohibiting discrimination and requiring notice to
employees. The Purchaser shall not, and shall cause the
Company and its Subsidiaries not to, at any time prior to 60
days after the Closing date, effectuate a "plant closing" or
"mass layoff" as those terms are defined in WARN affecting
in whole or in part any facility, site of employment,
operating unit or employee of the Company or any Subsidiary
without complying fully with the requirements of WARN.
Purchaser will bear the cost of compliance with (or failure
to comply with) any such laws.
(c) Purchaser shall, by virtue of the purchase of the
Shares, adopt and assume, as of the Closing Date, all
Benefit Plans and all of the obligations and liabilities of
the Company and the Subsidiaries thereunder, with respect to
all persons entitled to benefits under the provisions of
each such Benefit Plan, including, without limitation, the
obligation to provide or make available welfare benefits to
retired employees of the Company and the Subsidiaries.
(Each such Benefit Plan assumed and adopted by Purchaser
hereunder is referred to herein as an "Assumed Plan"). With
respect to each Assumed Plan, Purchaser will become the plan
sponsor under each such Assumed Plan and Purchaser shall
have all rights of the Company and the Subsidiaries.
Sellers shall cooperate in and take all necessary actions
and use its best efforts to effect the transfer of the
Assumed Plans to Purchaser, including without limitation,
assigning or transferring to Purchaser the (A) ownership of
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any applicable funding arrangements under each Assumed Plan,
including any insurance contracts issued by an insurance
carrier with respect to the Assumed Plan, and (B) any
administrative services contract relating to the Assumed
Plan.
6.11 Public Announcements. Sellers, the Company and
Purchaser will consult with each other before issuing any
press release or otherwise making any public statements with
respect to the transactions contemplated by this Agreement
and no party shall, without the prior written consent of the
other, issue any such press release or make any such public
statement, except as may be required by applicable law,
including the public reporting obligations of the Company,
the Sellers and the Purchaser under the Securities Exchange
Act of 1934.
6.12 Indemnification; Directors and Officers Insurance.
For six years from and after the Closing Date, Purchaser
agrees to indemnify and hold harmless all past and present
officers and directors of the Company and of its
Subsidiaries to the same extent such persons are currently
indemnified by the Company pursuant to the Company's
Restated Certificate of Incorporation, By-Laws and Director
Indemnification Agreements for acts or omissions occurring
at or prior to the Closing Date.
6.13 Stub Tax Period. (a) For purposes of this
Agreement, "Stub Tax Period" means the period (including all
prior taxable years) ending on and including the Closing
Date. For any taxable year of the Company that does not end
on, and would otherwise extend beyond, the Closing Date,
there shall be a deemed short taxable year ending on and
including such date and a second deemed short taxable year
beginning on and including the day after such date. For
purposes of allocating gross income and deductions between
deemed short taxable years, the books of the Company shall
be closed as of the close of business of the Closing Date,
and all amounts of income, gain, loss and deduction shall be
reflected in the period in which such items accrued under
the Company's normal tax accounting methods.
(b) The reserves and accruals set forth in the Financial
Statements are sufficient to pay all Taxes that have become
due and payable during, or which have accrued with respect
to the Company for periods including the Stub Tax Period and
that have not been paid prior to the Closing Date (which
reserves shall not take into account any liability for
deferred taxes).
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6.14 Filing of Tax Return. The Sellers shall cause the
Company to prepare and file in a timely manner, all tax
returns required to be filed by the Company after the date
hereof and before the Closing Date with respect to any Tax.
All such Tax returns will be subject to Purchaser's review
prior to filing; provided, however, that Purchaser's review
shall not delay the timely filing of such returns. The
Purchaser shall prepare and file in a timely manner, all Tax
returns to be filed for the Stub Tax Period required to be
filed on or after the Closing Date with respect to any Tax.
All such Tax returns will be subject to Sellers' review
prior to filing; provided, however, that Sellers' review
shall not delay the timely filing of such returns. All such
Tax returns shall be accurate and complete in all material
respects, and shall be prepared, and any elections relating
thereto made, in a manner consistent with the prior practice
of the Company to the extent permitted by law.
6.15 Capital Changes; Dividends. The Company and the
Subsidiaries shall not issue or sell options, warrants to
purchase or rights to subscribe to, or enter into any
arrangement or Contract with respect to any of its capital
stock or any of its other securities, or make any other
changes in the capital structure of the Company and the
Subsidiaries. No dividend or other distribution of any
nature will be declared, made, set aside or paid on or in
respect of any of the capital stock of the Company, other
than scheduled quarterly dividends on the Class A and
Class B Preferred Stock, nor will the Company, directly or
indirectly, issue, redeem, retire, purchase or otherwise
acquire any of its capital stock, except in each such case,
as contemplated by this Agreement.
6.16 Payment of Ownership Percentage. (a) The
Representative shall pay to each Seller on the Closing Date
by certified or cashiers check or wire transfer of funds its
respective Ownership Percentage of the Closing Seller
Proceeds.
(b) If there are any funds remaining in the
Temporary Escrow Account after the termination or release of
the escrowed proceeds thereunder, the Representative shall
deliver to each Seller its Ownership Percentage of such
remaining escrowed proceeds.
(c) If there are any funds remaining in the Escrow
Account after the termination or release of the escrowed
proceeds thereunder, the Purchaser shall direct the Escrow
Agent to deliver to the Representative on behalf of the
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Seller, such remaining escrowed proceeds and the
Representative shall deliver to each Seller its Ownership
Percentage of such remaining escrowed proceeds.
6.17 Environmental Matters. The Company has engaged
ENSR Environmental Engineering and Consulting to undertake a
Phase I environmental assessment of certain real property
and facilities owned, leased or operated by the Company and
its Subsidiaries in accordance with the standards for the
conduct of Phase I environmental assessments generally
followed by nationally recognized environmental consulting
firms (the "Phase I"). In no event shall the Phase I
include any intrusive testing or sampling. A report has
been prepared by ENSR Environmental Engineering and
Consulting, and copies thereof shall be provided to
Purchaser and Sellers.
VII. ARTICLE
CONDITIONS PRECEDENT TO OBLIGATIONS
OF PURCHASER
The obligations of Purchaser at Closing under this
Agreement are subject to the satisfaction or waiver by
Purchaser of the following conditions precedent on or before
the Closing Date:
7.1 Warranties True as of Both Present Date and
Closing Date. The representations and warranties of each
Seller contained in Article III and of the Company in
Article IV herein shall have been accurate, true and correct
on and as of the date of this Agreement and as of the
Closing Date, in all material respects and taken as a whole,
except as would not have a Material Adverse Effect.
7.2 Compliance with Agreements and Covenants. Each
Seller and the Company shall have performed and complied
with all of the covenants, obligations and agreements
contained in this Agreement to be performed and complied
with by him, her or it on or prior to the Closing Date, in
all material respects, except as otherwise permitted or
contemplated by this Agreement and except as would not have
a Material Adverse Effect.
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7.3 Expiration of HSR Waiting Period. The applicable
waiting period under the HSR Act shall have expired or been
earlier terminated without action by the Department of
Justice or the Federal Trade Commission to prevent
consummation of the transactions contemplated by this
Agreement.
7.4 No Prohibition. No law or injunction shall have
been adopted, promulgated or entered by any governmental
authority which prohibits the consummation of the
transactions contemplated hereby.
7.5 No Material Adverse Change. Except as
contemplated by the Disclosure Schedule, there shall not
have occurred any material adverse change (taken together
with all other developments) since the date of this
Agreement in the business, operations, assets, results and
condition (financial and other) of the Company and its
Subsidiaries taken as a whole and which would have a
Material Adverse Effect.
7.6 Termination of TJC Agreement. The TJC Consulting
Agreement shall have been terminated and discharged, and the
Company and the Subsidiaries and the Purchaser shall have
been released from all obligations and liabilities under the
TJC Consulting Agreement pursuant to the TJC Pay-off Letter.
7.7 Repayment of Indebtedness. The indebtedness,
obligations and liabilities under the Credit Agreement shall
have been paid in full (except for the NEWFLO Letters of
Credit, as contemplated by Section 2.5) and the Company and
its Subsidiaries and the Purchaser shall have been released
from all obligations and liabilities under the Credit
Agreement in accordance with the Senior Lender Pay-off
Letter.
7.8 Capitalization. The Company shall have caused all
shares of Class B Preferred Stock to be converted into
shares of Class A Common Stock and shall have paid all
accrued dividends thereon pursuant to the Restated
Certificate of Incorporation and in accordance with Section
2.4. The Company shall have redeemed all outstanding shares
of Class A Preferred Stock in accordance with the Restated
Certificate of Incorporation with the proceeds of the
Purchase Price and in accordance with Section 2.4.
7.9 Escrow Agreement. The Representative shall have
entered into the Escrow Agreement, and the Escrow Agreement
(assuming execution and delivery by Purchaser) shall be in
full force and effect.
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7.10 Documents. Purchaser shall have received:
(a) the Continued Debt Certificate;
(b) the Senior Lender Pay-off Letter;
(c) the TJC Pay-off Letter;
(d) the SAR Pay-Off Letters;
(e) the Other Debt Pay-Off Letters;
(f) certificates evidencing all of the Shares,
which certificates shall be duly endorsed in blank or
accompanied by duly executed stock powers assigning them to
Purchaser;
(g) the resignations of directors and officers
of the Company and the Subsidiaries pursuant to Section 6.9;
(h) a certificate, dated the Closing Date, of
each Seller substantially to the effect set forth in
Sections 7.1 and 7.2 with respect to representations,
warranties, agreements and covenants of such Seller (each, a
"Seller Closing Certificate") and a certificate of the
Company substantially to the effect set forth in Sections
7.1 and 7.2 with respect to the representations, warranties,
agreements and covenants of the Company (the "Company
Closing Certificate"), and a certificate of the Company,
dated the Closing Date, certifying that it is not a
United States Real Property Holding Corporation as defined
in Section 897(c)(2) of the Code in form reasonably
satisfactory to the Purchaser;
(i) the Restated Certificate of Incorporation
of the Company certified by the Secretary of State of the
State of Delaware and the By-laws of the Company certified
by the secretary, assistant secretary or equivalent Person
of the Company and a certificate of the secretary, assistant
secretary or equivalent Person of the Company certifying
resolutions of the Company approving and authorizing the
execution, delivery and performance of this Agreement and
its Related Agreements and the consummation of the
transactions contemplated hereby and thereby (together with
an incumbency and signature certificate regarding the
officer(s) signing on behalf of Company); and
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(j) Certificate of Good Standing for the
Company from the Secretary of State of the State of
Delaware.
7.11 Adverse Change in Capital Markets. The lender
which provided the commitment letter to Purchaser related to
the credit facility by which Purchaser intends to fund
payment of the Purchase Price shall not have failed to fund
its commitment by reason of (i) a generally recognized
capital market crisis as evidenced by a 20% decline in the
Dow Jones Industrial Average over a period of five
consecutive trading days or a virtual cessation in bank and
other private debt financings, (ii) a declaration of a
banking moratorium or any suspension of payments in respect
of banks in the United States, (iii) any limitation by the
United States or any U.S. governmental, administrative or
regulatory authority or agency on the extension of credit by
banks or other lending institutions, or (iv) a commencement
of a war or armed hostilities or other national or
international calamity directly or indirectly involving the
United States, which, in any such case, materially and
adversely affects loan syndication or capital markets
conditions for loans of the type and amount contemplated by
such commitment letter.
7.12 Required Consents. The Purchaser shall have
received satisfactory evidence of the receipt or the
anticipated receipt of the required consents specified in
Schedule 3.3 and Section 4.14.
7.13 Exercise of Lender Warrants. The Lender Warrants
shall have been exercised in full pursuant to the Senior Pay-
Off Letters.
7.14 Termination of SAR Agreements. The SAR Agreements
shall have been terminated pursuant to the SAR Pay-Off
Letters.
VIII ARTICLE
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS
The obligations of the Sellers at Closing under Article
II of this Agreement are subject to the satisfaction or
waiver by the Representative of the following conditions
precedent on or before the Closing Date:
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8.1 Warranties True as of Both Present Date and
Closing Date. The representations and warranties of
Purchaser contained in Article V herein shall have been
accurate, true and correct on and as of the date of this
Agreement and as of the Closing Date, in all material
respects.
8.2 Compliance with Agreements and Covenants.
Purchaser shall have performed and complied with all of its
covenants, obligations and agreements contained in this
Agreement to be performed and complied with by it on or
prior to the Closing Date, in all material respects and
taken as a whole except as otherwise permitted or
contemplated by this Agreement.
8.3 Expiration of HSR Waiting Period. The applicable
waiting period under the HSR Act shall have expired or been
earlier terminated without action by the Department of
Justice or the Federal Trade Commission to prevent
consummation of the transactions contemplated by this
Agreement.
8.4 No Prohibition. No law or injunction shall have
been adopted, promulgated or entered by any governmental
authority which prohibits the consummation of the
transactions contemplated hereby.
8.5 Repayment of Indebtedness. If the Purchaser
elects to pay at the Closing the amounts payable by the
Representative by Section 2.3(c)(i), the indebtedness,
obligations and liabilities under the Credit Agreement shall
have been paid in full (except for the NEWFLO Letters of
Credit, as contemplated by Section 2.5) and the Company and
its Subsidiaries and the Purchaser shall have been released
from all obligations and liabilities under the Credit
Agreement in accordance with the Senior Lender Pay-off
Letter.
8.6 Documents. The Representative shall have
received, in form and substance satisfactory to him:
(a) A certificate, dated the Closing Date, of
an officer of Purchaser substantially to the effect set
forth in Sections 8.1 and 8.2 (the "Purchaser Closing
Certificate");
(b) A certificate of the secretary, assistant
secretary or equivalent Person of Purchaser certifying
resolutions of the board of directors of Purchaser approving
and authorizing the execution, delivery and
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performance of this Agreement and its Related
Agreements and the consummation of the transactions
contemplated hereby and thereby (together with an
incumbency and signature certificate regarding the
officer(s) signing on behalf of Purchaser);
(c) The Certificate of Incorporation of
Purchaser certified by the Secretary of State of the State
of Oregon and the By-laws of the Purchaser certified by the
secretary, assistant secretary or equivalent Person of
Purchaser;
(d) Certificate of Good Standing for the
Purchaser from the Secretary of State of the State of
Oregon;
(e) The Senior Lender Pay-Off Letter;
(f) The TJC Pay-Off Letter;
(g) The SAR Pay-Off Letters; and
(h) The Other Debt Pay-Off Letters.
8.7 Letters of Credit. Purchaser shall have delivered
replacement or additional letters of credit to replace or
back-up the NEWFLO Letters of Credit pursuant to Section 2.5
in form satisfactory to the representative, the Senior
Lenders and the beneficiaries of the NEWFLO Letters of
Credit. NEWFLO and the Subsidiaries shall have been fully
released and discharged from all obligations under the
NEWFLO Letters of Credit.
IX ARTICLE
TERMINATION
9.1 Termination. This Agreement may be terminated at
any time on or prior to the Closing Date:
(a) With the mutual consent of the Company, the
Representative and Purchaser;
(b) By written notice from the Representative
or Purchaser to the other, if the Closing shall not have
taken place on or before August 31, 1996 or, if the Closing
has not occurred solely due to the failure of the conditions
set forth in Sections 7.3 and 8.3, then on or before
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September 30, 1996; provided, however, that the right to
terminate this Agreement under this Section 9.1(a) shall not
be available to any party whose failure to perform any
obligation under this Agreement has been the cause of or
resulted in the failure of the Closing to occur on or before
such date, or
(c) By the Purchaser if there has been a breach
on the part of a Seller or the Company in the
representations, warranties or covenants set forth herein,
or any failure on the part of a Seller or the Company to
comply with its obligations hereunder which breach or
failure would result in a Material Adverse Effect, such
that, in any such case, any of the conditions to the Closing
set forth in Article VII hereof could not be satisfied prior
to August 31, 1996 or, if the Closing has not occurred
solely due to the failure of the conditions set forth in
Sections 7.3 and 8.3, then on or before September 30, 1996;
(d) By the Representative if there has been a
breach of the Purchaser in its representations, warranties
or covenants set forth herein, or any failure on the part of
the Purchaser to comply with its obligations hereunder, such
that, in any such case, any of the conditions to the Closing
set forth in Article VIII hereof could not be satisfied on
or prior to August 31, 1996 or, if the Closing has not
occurred solely due to the failure of the conditions set
forth in Sections 7.3 and 8.3, then on or before September
30, 1996; or
(e) By written notice from the Representative
or Purchaser to the other, if any court of competent
jurisdiction or other governmental body shall have issued an
order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated hereby and such order, decree,
ruling or other action shall have become final and
nonappealable.
9.2 Effect of Termination. If this Agreement is
terminated pursuant to Section 9.1, all obligations of the
parties hereunder (except for the obligations set forth in
Sections 9.2 and 11.1, which shall survive the termination
of this Agreement) shall terminate without liability of any
party (or any stockholder, Affiliate, director, officer,
employee, agent, consultant or representative of such party)
to any other party, except that no such termination shall
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relieve any party from liability for any willful breach of
this Agreement prior to such termination, and the willfully
breaching party shall be fully liable for any and all Losses
sustained or incurred by any other party from such breach.
X ARTICLE
SURVIVAL AND REMEDY; INDEMNIFICATION
10.1 Survival. All of the terms and conditions of this
Agreement, together with the warranties, representations,
agreements and covenants contained herein or in any
instrument or document delivered or to be delivered pursuant
to this Agreement, shall survive the execution of this
Agreement and the Closing Date, notwithstanding any
investigation heretofore or hereafter made by or on behalf
of any party hereto; provided, however, that (a) the
foregoing shall be subject to Section 6.7, (b) the
agreements and covenants (other than the indemnification
provisions set forth in this Article X, which will survive
as provided below) set forth in this Agreement shall survive
and continue until all obligations set forth therein shall
have been performed and satisfied and the applicable statute
of limitations for breaches or defaults of such agreements
and covenants has expired; and (c) all representations and
warranties, and the related agreements of the Sellers and
Purchaser to indemnify each other set forth in this
Article X, shall survive and continue for, and all
indemnification claims with respect thereto shall be made
prior to the end of two years from the Closing Date, except
for representations, warranties and related indemnities for
which an indemnification claim shall be pending as of the
end of the applicable period referred to above, in which
event such indemnities shall survive with respect to such
indemnification claim until the final disposition thereof
(the "Indemnification Period"), and (iv) representations and
warranties set forth in Section 3.1(a) and indemnities
related thereto, which will survive indefinitely.
Thereafter, no party shall be under any obligation or
liability whatsoever with respect to any such
representation, warranty, covenant or agreement or any
certificate in respect thereto.
10.2 Indemnification by Sellers. Subject to
Section 10.7, Sellers agree to indemnify Purchaser and the
Company and each of their respective Affiliates, and their
respective officers, directors, employees, stockholders,
representatives and agents, against, and agree to hold it
and them harmless from, any and all Losses incurred or
suffered by Purchaser or any of the foregoing persons (or
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any combination thereof) arising out of any of the
following: (a) any breach of or any inaccuracy in any
representation or warranty made by Sellers pursuant to
Article III of this Agreement or any Related Agreement and
(b) any breach of or failure by Sellers to perform any
covenant, agreement or obligation of Sellers in this
Agreement. Subject to Section 10.7, the Sellers agree to
indemnify Purchaser and each of its Affiliates, and their
respective officers, directors, employees, stockholders,
representatives and agents, against, and agree to hold it
and them harmless from, any and all Losses incurred or
suffered by Purchaser or any of the foregoing persons (or
any combination thereof) arising out of any of the
following: (a) any breach or inaccuracy in any
representation or warranty made by the Company pursuant to
Article IV of this Agreement, (b) any breach of or failure
by the Company to perform any covenant, agreement or
obligation of the Company in this Agreement, and (c) any
matter described in Section 4.15 of the Disclosure Schedule,
the Phase I or the ENSR Reports described herein that has a
Material Adverse Effect.
10.3 Indemnification by Purchaser. Purchaser agrees to
indemnify the Sellers and each of their respective officers,
directors, partners, trustees, employees, stockholders
representatives and agents, against, and agrees to hold them
harmless from, any and all Losses incurred or suffered by
Sellers or any of the foregoing persons (or any combination
thereof) arising out of (i) any breach of or any inaccuracy
in any representation or warranty made by Purchaser pursuant
to Article V of this Agreement or any Related Agreement;
(ii) any breach of or failure by Purchaser to perform any
agreement, covenant or obligation of Purchaser set out in
this Agreement or any Related Agreement, any agreement, or
instrument contemplated hereby, any document relating hereto
or thereto or contained in any Exhibit to this Agreement;
and (iii) any acts or omissions by Purchaser or the Company
and any obligations and liabilities in respect of the
Company from and after the Closing Date.
10.4 Indemnification Exclusive Remedy. The sole
recourse and exclusive remedy of Purchaser, Sellers, and the
Company after the Closing Date for the breach of any
representations and warranties contained in this Agreement,
the Related Agreements, any agreement, or instrument
contemplated hereby, any document relating hereto or thereto
contained in any Schedules or Exhibit to this Agreement, or
otherwise arising from Purchaser's acquisition of the
Shares, shall be to assert a claim for indemnification under
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the indemnification provisions of Sections 10.2 and 10.3.
The only legal action which may be asserted by any party
hereto against any other party hereto with respect to any
matter which is the subject of this Article X shall be a
contract action to enforce, or to recover Losses for the
breach of, this Agreement. Without limiting the generality
of the foregoing, no legal action based upon predecessor or
successor liability, contribution, tort or strict liability
may be maintained by any party hereto against any other
party hereto with respect to any matter that is the subject
of this Article X.
10.5 Third-Party Claims. Except as otherwise provided in
this Agreement, the following procedures shall be applicable
with respect to indemnification pursuant to this Article X
relating to or arising out of claims, actions or omissions
by Authorities, or other third parties. Promptly after
receipt by the party seeking indemnification hereunder
(hereinafter the "indemnitee") of notice of the commencement
of any (a) tax audit or proceeding for the assessment of any
Tax by any taxing authority or any other proceeding likely
to result in the imposition of a liability or obligation for
Taxes or (b) any action or the assertion of any claim,
liability or obligation by an authority or a third party
(whether by legal process or otherwise), against which
claim, liability or obligation a party under this Article X
(hereinafter the "indemnitor") that is, or may be, required
under this Agreement to indemnify such indemnitee, the
indemnitee will, if a claim thereon is to be, or may be,
made against the indemnitor pursuant to this Article X,
notify the indemnitor in writing of the commencement or
assertion thereof and give the indemnitor a copy of such
claim, process and all legal pleadings and other written
evidence thereof. The indemnitor shall have, in all
instances the right to participate in the defense of such
action with counsel of reputable standing. The indemnitor
shall have the right to assume the defense of such action
unless such action (a) may result in orders, injunctions or
other equitable remedies in respect of the indemnitee or its
business; or (b) may result in liabilities which, taken with
other then existing claims under this Article X, would not
be fully indemnified hereunder. The indemnitor shall have
10 days, after receipt of notice of such claim, process,
legal proceeding and other written notice, to assume the
defense thereof. If the indemnitor does assume such
defense, it will, within such 10 days, so notify the
indemnitee. If the indemnitor does not assume such defense
and so notify the indemnitee, or if the
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indemnitor is barred from assuming such defense pursuant to
this Section 10.5, then the indemnitee shall assume such
defense, subject to the participation of the indemnitor, as
provided in this Section 10.5, and the indemnitee's fees and
expenses (including fees and expenses of counsel) in
connection with such defense will be borne by the
indemnitor. In any case, the indemnitor and indemnitee
shall cooperate and assist each other in such defense, and
shall make available to the other all records, documents and
information (written or otherwise) relevant to such defense.
If the indemnitee shall be required by judgment or a
settlement agreement to pay any amount in respect of any
obligation or liability against which the indemnitor has
agreed to indemnify the indemnitee under this Agreement, the
indemnitee shall make a claim with the Escrow Agent for such
amount (which shall include all reasonable legal fees and
documented expenses related thereto) to be withdrawn from
the Escrow Account in accordance with the terms and
provisions of the Escrow Agreement, subject to this Article
X. Prior to paying any claim against which an indemnitor
is, or may be, obligated under this Agreement to indemnify
an indemnitee, the indemnitee must first supply the
indemnitor with a copy of a final court judgment or decree,
or evidence of assessment of Taxes or a similar final action
by a taxing authority, holding the indemnitee liable on such
claim or failing such judgment or decree, must first receive
the written approval of the terms and conditions of such
settlement from the indemnitor which consent shall not be
unreasonably withheld. Indemnitor's consent shall not be
required for settlements (a) which consist principally of
equitable remedies in respect of the indemnitee or its
Business, or (b) that result in payments by the indemnitee
which, taken with other then existing claims under this
Article X, would not be fully indemnified hereunder. An
indemnitor or indemnitee shall have the authority to settle
or compromise any claim for which it has assumed or
conducted the defense pursuant to this Section 10.5;
provided, that an indemnitor shall not settle or compromise
any such claim if such settlement or compromise would result
in an order, injunction or other equitable remedy in respect
of the indemnitee, or would result in liabilities which,
taken together with other existing claims under this Article
X, would not be fully indemnified hereunder; in each case,
without the prior written consent of the indemnitee, which
consent will not be unreasonably withheld. An indemnitee
shall have the right to employ its own counsel in any case,
but the fees and expenses of such counsel shall be at the
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expense of the indemnitee, unless (x) the employment of such
counsel shall have been authorized in writing by the
indemnitor in connection with the defense of such action or
claim, (y) the indemnitor shall not have assumed the
defense, or shall be barred from assuming the defense, of
such action or claim pursuant to this Section 10.5, or (z)
such indemnitee shall have reasonably concluded that there
may be defenses available to it which are contrary to, or
inconsistent with, those available to the indemnitor, in any
of which events such reasonable fees and expenses of counsel
for the indemnified parties shall be borne by the
indemnitor, in accordance with the following paragraph.
In the event that the Sellers are the indemnitor, or in
the event that the indemnitor shall have the right to assume
defense of a claim pursuant this Section or is required to
pay the legal fees and expenses of the indemnitee, all such
reasonable fees and expenses in connection with the defense
of such claim shall be advanced from the Escrow Account in
accordance with the Escrow Agreement, and Purchaser and
Seller shall execute any joint written notice to the Escrow
Agent and otherwise to cooperate with the other in obtaining
such advance or advances of funds.
10.6 Purchaser-Seller Claims. In the event that any
indemnitee believes that it is entitled to claim
indemnification from an indemnitor under this Article X, the
indemnitee shall notify the indemnitor of such claim, the
amount or estimated amount thereof and the basis for such
claim (which will be described in reasonable detail). The
indemnitor, on the one hand, and Purchaser, or Sellers, as
the case may be, which is not the indemnitor, on the other
hand, will proceed, in good faith, and using reasonable
efforts, to agree on the amount of such indemnification
claim. If they are unable to agree on the amount of such
indemnification claim within 30 days after such notice, then
the indemnification claim will be submitted to arbitration
conducted pursuant to the rules and procedures of the
American Arbitration Association. The determination of the
amount of any indemnification claim pursuant to this Section
10.6 will be final, binding and conclusive, and the
indemnitee, upon final determination of the amount of the
indemnification claim will be paid, by the indemnitor or the
Escrow Agent, as the case may be, within 10 days of such
final determination, the full amount, in cash, of such
indemnification claim, as finally determined, and will be
entitled to apply to any court or authority of competent
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jurisdiction to enforce such payment (the fees and expenses
of such enforcement, if necessary, to be borne by the
indemnitor subject to the provisions of this Article X, if
applicable).
10.7 Indemnification Limits. (a) From and after the
Closing, Purchaser shall maintain customary and property,
casualty, business interruption and other insurance in
respect of the Company in accordance with Purchaser's
general practices provided, that such insurance coverage
will be at least as favorable to the Company as the
Company's insurance coverage prior to Closing.
Indemnification claims shall be reduced, by and to the
extent, that an indemnitee shall have received or reasonably
expects to receive proceeds under insurance policies, risk
sharing pools, or similar arrangements specifically as a
result of, and in compensation for, the subject matter of an
indemnification claim by such indemnitee.
(b) Purchaser shall not be entitled to
indemnification pursuant to Section 10.2 and Sellers will
not be entitled to indemnification pursuant to Section 10.3
with respect to any breach or misrepresentation of any
representation or warranty until such time as its respective
aggregate right to such indemnification exceeds $2,000,000
after which, Purchaser or Sellers will be entitled to such
indemnification in excess of $750,000 when indemnification
exceeds $2,000,000. Purchaser shall not be entitled to
indemnification pursuant to Section 10.2 for amounts which,
in the aggregate, exceed a $15,000,000 ceiling, except for
indemnification claims in respect of a breach by any Seller
of its representations and warranties set forth in Section
3.1(a), as to which Purchaser shall not be entitled to
indemnification pursuant to Section 10.2 for amounts which,
in the aggregate, exceed a ceiling equal to such Seller's
Ownership Percentage of the Closing Seller Proceeds.
Purchaser releases and discharges the Seller from any
further claims, obligations or liabilities for any losses,
or claims in excess of such ceiling amounts.
(c) Purchaser shall only be entitled to
indemnification pursuant to Section 10.2(a) or (b) from the
particular Seller whose breach gives rise to such
indemnification and only for such Seller's Ownership
Percentage of the Escrow Account, except as provided in
Section 10.7(b) with respect to a breach of Section 3.1(a),
and the other Sellers shall not be obligated to provide
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indemnification or otherwise be obligated or liable therefor
and the remaining portion of the Escrow Account will not be
available to Purchaser in respect of such breach.
(d) Purchaser will not be entitled to
indemnification pursuant to this Article X:
(i) with respect to consequential damages
consisting of business interruption or lost profits, or with
respect to punitive damages, except where such damages are
incurred by or awarded to a third party making a claim
against such an indemnitee;
(ii) with respect to a breach by the Sellers or
the Company of a representation or warranty before the
Closing Date if the Company supplemented the Disclosure
Schedule pursuant to Section 6.7 to provide new information
or correct such misrepresentation and the result of such
supplement results in a Loss not in excess of $100,000;
(iii) with respect to any claim by or
liability to any employee employed by the Company and the
Subsidiaries arising as the result of the termination of
such employee's employment with the Company or the
Subsidiaries or any action by Purchaser subsequent to the
Closing Date;
(iv) to the extent of any reserves, accruals or
amounts recorded as of the Closing Date with respect to any
obligation, liability or matter for which reserves or
accruals are reflected in the Company's financial statements
and $436,000 in the ENSR Report, dated November 1995, on the
acquisition of Barber Industries, Ltd. titled NEWFLO
Corporation, Environmental Due Diligence Examination of
Barber Industries, Ltd., without duplication;
(v) with respect to any obligation, liability
or matter, including environmental remediation and clean-up,
arising under laws, regulations or statutes that arise or
are promulgated or announced after the Closing Date; and
(vi) any obligation, liability or matter arising
out of information Purchaser discloses to any Authority
which disclosure is not required by Environmental Law or for
which disclosure would not otherwise be reasonable business
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practice in accordance with Purchaser's past practices,
without consideration of indemnification under this
Article X.
(e) Any indemnification of or recovery by
Purchaser for Losses under this Agreement, any agreement, or
instrument contemplated hereby, any document relating hereto
or thereto or contained in any Exhibit or Schedule to this
Agreement arising after the Closing Date shall be limited
solely to funds in the Escrow Account with the Escrow Agent
under the Escrow Agreement, except as provided in Section
10.7(b) with respect to a breach of Section 3.1(a).
(f) The Sellers shall not be obligated or
liable for any Taxes or Tax-related indemnities, obligations
or liabilities if and to the extent arising from any tax
determinations, allocations or positions of the Purchaser or
the Company after the Closing that are different from those
of the Company prior to the Closing.
(g) The indemnified party shall utilize all
reasonable efforts, consistent with normal practices and
policies and good commercial practice, to mitigate such
Losses, including reasonably pursuing other available
indemnity rights.
(h) Any amounts payable under Section 10.2 or
Section 10.3 shall be treated by Purchaser, Sellers and the
Company as an adjustment to the purchase price of the
Shares, and shall be calculated after giving effect to (i)
any proceeds received from insurance policies covering the
damage, loss, liability or expense that is the subject to
the claim for indemnity and (ii) the actual recognized tax
benefit to the indemnitee resulting from the damage, loss,
liability or expense that is the subject of the indemnity;
provided that to the extent that any tax benefit is
recognized in a tax year other than the year in which the
indemnity is paid, the indemnitee shall make a payment to
the indemnitor in the amount of such recognized tax benefit
in the year in which it is realized. For purposes of this
Section 10.7, an actual recognized tax benefit is an actual
reduction in taxes payable or a refund of taxes previously
paid. Without limiting clause (ii), the taking of a Tax
deduction in connection with any such damage, loss,
liability or expense that is subject to a claim for
indemnification shall be at the discretion of Purchaser.
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XI ARTICLE
MISCELLANEOUS
11.1 Expenses. Each party hereto shall bear its own
expenses (including legal fees and expenses) with respect to
this Agreement and the transactions contemplated hereby,
except that such expenses of the Company and the Sellers
shall be paid by the Representative, on behalf of the
Company and the Sellers, in accordance with Section 2.3.
11.2 Limitation of Best Efforts. For purposes of this
Agreement, when an obligation is imposed upon the Purchaser,
Company or the Sellers to use its or their "best efforts"
and/or "best efforts to cause", or words of similar import
are used, they shall not be required to pay or transfer any
money, property or other thing of value to any other party
except nominal and routine charges for filing or recording
fees, and courier and other communication services.
11.3 Amendment. This Agreement may be amended,
modified or supplemented but only in writing signed by the
Purchaser, the Company and the Representative.
11.4 Notices. Any notice, request, instruction or
other document to be given hereunder by a party hereto shall
be in writing and shall be deemed to have been given,
(a) when received if given in person or by courier or a
courier service, (b) on the date of transmission if sent by
telex, facsimile or other wire transmission or (c) five
Business Days after being deposited in the U.S. mail,
certified or registered mail, postage prepaid:
(a) If to any Seller, addressed as follows:
c/o Jonathan F. Boucher
The Jordan Company
9 West 57th Street
Suite 4000
New York, New York
Facsimile No.: (212) 755-5263
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with a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: James B. Carlson
Facsimile No.: (212) 262-1910
(b) If to Purchaser, addressed as follows:
Precision Castparts Corp.
4600 SE Harney Drive
Portland, Oregon 97206
Attention: President and Chief Executive Officer
Facsimile No.: (503) 653-4817
with a copy to:
Stoel Rives LLP
900 SW Fifth Avenue, Suite 2300
Portland, Oregon 97204
Attention: Ruth A. Beyer
Facsimile No.: (503) 220-2480
or to such other individual or address as a party hereto may
designate for itself by notice given as herein provided.
11.5 Waivers. The failure of a party hereto at any
time or times to require performance of any provision hereof
shall in no manner affect its right at a later time to
enforce the same, except as provided in Section 6.7. No
waiver by a party of any condition or of any breach of any
term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no
waiver in any one or more instances shall be deemed to be a
further or continuing waiver of any such condition or breach
in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or
warranty.
11.6 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
11.7 Interpretation. The headings preceding the text
of Articles and Sections included in this Agreement and the
headings to Sections of the Disclosure Schedule are for
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<PAGE>
convenience only and shall not be deemed part of this
Agreement or the Disclosure Schedule or be given any effect
in interpreting this Agreement or the Disclosure Schedule.
The use of the masculine, feminine or neuter gender herein
shall not limit any provision of this Agreement. The use of
the terms "including" or "include" shall in all cases herein
mean "including, without limitation" or "include, without
limitation," respectively. Underscored references to
Articles, Sections, Paragraphs, Subsections, Exhibits or
Schedules shall refer to those portions of this Agreement.
Time is of the essence of each and every covenant, agreement
and obligation in this Agreement.
11.8 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
11.9 Binding Agreement. This Agreement and the Related
Agreements shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and
assigns. No party may assign its rights or obligations
under this Agreement without the prior written consent of
the other parties.
11.10 No Third Party Beneficiaries. This Agreement is
solely for the benefit of the parties hereto and no
provision of this Agreement shall be deemed to confer upon
third parties any remedy, claim, liability, reimbursement,
cause of action or other right.
11.11 Publicity. Prior to the Closing Date, except as
required by law or the rules of any stock exchange, no
public announcement or other publicity regarding this
Agreement or the transactions referred to herein shall be
made by either party hereto or any of their respective
Affiliates, officers, directors, employees, representatives
or agents, without the prior consent of the other party, in
any case, as to form, content, timing and manner of
distribution or publication; provided, however, that nothing
in this Section shall prevent such parties from discussing
such transactions with those Persons whose approval,
agreement or opinion, as the case may be, is required for
consummation of such transactions.
11.12 Further Assurances. Upon the reasonable request
of Purchaser or the Representative, each party will on and
after the Closing Date execute and deliver to the other
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parties such other documents, assignments and other
instruments as may be required to effectuate completely the
transfer and assignment to Purchaser of, and to vest fully
in Purchaser title to, the Shares, and to effect and
evidence the provisions of this Agreement and the Related
Agreements and the transactions contemplated hereby.
11.13 Entire Understanding. The Exhibits and Schedules
identified in this Agreement are incorporated herein by
reference and made a part hereof. This Agreement and the
Related Agreements set forth the entire agreement and
understanding of the parties hereto and supersede any and
all prior agreements, arrangements and understandings among
the parties.
11.14 Limitation on Warranties. The Sellers make no
representations or warranties with respect to any
projections, forecasts or forward-looking information
provided to Purchaser. There is no assurance that any
projected or forecasted results will be achieved. EXCEPT AS
TO THOSE MATTERS COVERED BY THE REPRESENTATIONS AND
WARRANTIES IN ARTICLES III AND IV, THE COMPANY AND THE
SELLERS DISCLAIM ALL REPRESENTATIONS AND WARRANTIES, WHETHER
EXPRESS OR IMPLIED, AS TO ANY OTHER INFORMATION OR MATTERS.
Purchaser acknowledges that neither the Company, any
Subsidiary nor any Seller or any other Person has made any
representation or warranty, express or implied, as to the
accuracy or completeness of any information which is not
included in this Agreement or the Disclosure Schedule, and
neither the Company, any Subsidiary, any Seller nor any
other Person will have or be subject to any liability to
Purchaser, any Affiliate thereof or any other Person
resulting from the distribution of any such information to,
or use of any such information by, Purchaser, any Affiliate
thereof or any of their agents, consultants, accountants,
counsel or other representatives. Without limitation of the
foregoing, to the extent that any memoranda or summaries
prepared by any Seller, the Company, any Subsidiary or by
any of their respective advisors or representatives
regarding the Company, the Subsidiaries, or their respective
businesses are or have been provided to Purchaser, Purchaser
acknowledges and agrees that no representation or warranty
is made to Purchaser or any Affiliate thereof or any other
Person as to the completeness or accuracy of such memoranda
or summaries.
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<PAGE>
11.15 Disclosure Schedule. Any fact or item in any
portion of the Disclosure Schedule shall be deemed to be
disclosed with respect to any other relevant portion,
whether or not an explicit cross-reference appears. No
representation or warranty hereunder shall be deemed to be
inaccurate if the actual situation is disclosed in the
Disclosure Schedule. Neither the specification of any
dollar amount in any representation, warranty or covenant
contained in this Agreement nor the inclusion of any
specific item in the Disclosure Schedule hereto is intended
to imply that such amount, or higher or lower amounts, or
the item so included or other items, are or are not
material, and no party shall use the fact of the setting
forth of any such amount or the inclusion of any such item
in any dispute or controversy between the parties as to
whether any obligation, item or matter not described herein
or included in the Disclosure Schedule is or is not material
for purposes of this Agreement.
11.16 Representative. (a) Notwithstanding any statement
to the contrary contained herein, the Company and each
Seller hereby irrevocably authorizes and appoints TJC
Management Corp. or their successor appointed pursuant to
this Section (the "Representative") as its true and lawful
attorney and representative with full power and authority to
take any and all actions and execute any and all documents
and agreements in the Company or such Seller's name, place
and stead, with the same effect as if such action were taken
or such document or agreement were executed by the Company
or such Seller, in connection with any matter or thing
relating to this Agreement, any Related Agreement or any of
the transactions contemplated hereby or thereby, including
(without limitation) (i) to negotiate and settle any claim
for indemnification by Purchaser against the Company or any
Seller, (ii) to accept any funds on behalf of the Company or
such Seller, (iii) to enter into amendments of this
Agreement and the Related Agreements, and (iv) to make the
determinations and payments described in Article II. TJC
Management Corp. hereby accepts their appointment as the
Representative and agrees to perform all of the duties of
the Representative hereunder. The appointment shall
terminate with respect to the Company at the Closing.
(b) The Representative cannot resign or be removed by the
Sellers or the Company, respectively, except upon delivery
to Purchaser of a written instrument signed by the successor
Representative and by the Company or by Sellers
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<PAGE>
(or their successors in interest) having a majority of the
Ownership Percentage, as the case may be, in which the
successor Representative agrees to serve as Representative
and the Company or said Sellers consent thereto (such
instrument being referred to as a "Representative
Replacement Instrument").
(c) The signature of the Representative on behalf of the
Company or Sellers shall be deemed to be the signature of
the Company or each of the Sellers, as the case may be, and
they shall be bound by the terms of any documents and
agreements executed and delivered by the Representative
pursuant to this Agreement as though they were actual
signatories thereto. Purchaser shall be entitled to rely,
without any investigation or inquiry by Purchaser, upon all
action by the Representative as having been taken upon the
authority of the Company or the Sellers. Any action by the
Representative taken on behalf of the Company or a Seller
shall be conclusively deemed to be the action of the Company
or such Seller, and Purchaser shall not have any liability
or responsibility to the Company or any Seller for any
action taken in reliance thereon.
(d) The Sellers hereby agree to bear the reasonable
charges of the Representative, including reimbursement for
out-of-pocket expenses and other costs, and such attorneys'
fees, expenses and other costs as may be incurred by
Representative in connection with the administration of the
provisions of this Agreement.
(e) Notwithstanding anything herein to the contrary, the
Representative shall not be obligated to inquire as to the
form, execution, sufficiency or validity of any such
instruments or agreements or the identity or authority or
offices of the persons executing and delivering the same.
The Representative shall not be liable to any party hereto
for any act which he may do or omit to do hereunder in good
faith, and the Sellers hereby covenant and agree, severally,
forever to save, hold and keep the Representative harmless
from any liability or claims (including attorneys' fees,
court costs and arbitration costs) suffered or incurred,
directly or indirectly, in connection with this Agreement;
provided, however, that the Representative shall be fully
responsible for any and all acts of willful misconduct or
fraud on the part of the Representative.
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11.17 JURISDICTION OF DISPUTES; WAIVER OF JURY TRIAL.
IN THE EVENT ANY PARTY TO THIS AGREEMENT COMMENCES ANY LIT
IGATION, PROCEEDING OR OTHER LEGAL ACTION IN CONNECTION WITH
OR RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY
MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, WITH
RESPECT TO ANY OF THE MATTERS DESCRIBED OR CONTEMPLATED
HEREIN OR THEREIN, THE PARTIES TO THIS AGREEMENT HEREBY
(A) AGREE UNDER ALL CIRCUMSTANCES ABSOLUTELY AND IRREVOCABLY
TO INSTITUTE ANY LITIGATION, PROCEEDING OR OTHER LEGAL
ACTION IN A COURT OF COMPETENT JURISDICTION LOCATED WITHIN
THE CITY OF NEW YORK, NEW YORK, WHETHER A STATE OR FEDERAL
COURT; (B) AGREE THAT IN THE EVENT OF ANY SUCH LITIGATION,
PROCEEDING OR ACTION, SUCH PARTIES WILL CONSENT AND SUBMIT
TO PERSONAL JURISDICTION IN ANY SUCH COURT DESCRIBED IN
CLAUSE (A) OF THIS SECTION AND TO SERVICE OF PROCESS UPON
THEM IN ACCORDANCE WITH THE RULES AND STATUTES GOVERNING
SERVICE OF PROCESS (IT BEING UNDERSTOOD THAT NOTHING IN THIS
SECTION SHALL BE DEEMED TO PREVENT ANY PARTY FROM SEEKING TO
REMOVE ANY ACTION TO A FEDERAL COURT IN NEW YORK, NEW YORK);
(C) AGREE TO WAIVE TO THE FULL EXTENT PERMITTED BY LAW ANY
OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE
OF ANY SUCH LITIGATION, PROCEEDING OR ACTION IN ANY SUCH
COURT OR THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS
BROUGHT IN AN INCONVENIENT FORUM; (D) DESIGNATE, APPOINT AND
DIRECT CT CORPORATION SYSTEM AS ITS AUTHORIZED AGENT TO
RECEIVE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS AND
DOCUMENTS IN ANY LEGAL PROCEEDING IN THE STATE OF NEW YORK;
(E) AGREE TO NOTIFY THE OTHER PARTIES TO THIS AGREEMENT
IMMEDIATELY IF SUCH AGENT SHALL REFUSE TO ACT, OR BE
PREVENTED FROM ACTING, AS AGENT AND, IN SUCH EVENT, PROMPTLY
TO DESIGNATE ANOTHER AGENT IN THE CITY OF NEW YORK,
SATISFACTORY TO SELLERS AND PURCHASER, TO SERVE IN PLACE OF
SUCH AGENT AND DELIVER TO THE OTHER PARTY WRITTEN EVIDENCE
OF SUCH SUBSTITUTE AGENT'S ACCEPTANCE OF SUCH DESIGNATION;
(F) AGREE AS AN ALTERNATIVE METHOD OF SERVICE TO SERVICE OF
PROCESS IN ANY LEGAL PROCEEDING BY MAILING OF COPIES THEREOF
TO SUCH PARTY AT ITS ADDRESS SET FORTH IN SECTION 11.4 FOR
COMMUNICATIONS TO SUCH PARTY; (G) AGREE THAT ANY SERVICE
MADE AS PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; AND (H) AGREE THAT NOTHING HEREIN
SHALL AFFECT THE RIGHTS OF ANY PARTY TO EFFECT SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH PARTY
HERETO WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY DISPUTE IN
CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY RELATED
AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN OR
THEREIN, AND AGREE TO TAKE ANY AND ALL ACTION NECESSARY OR
APPROPRIATE TO EFFECT SUCH WAIVER.
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11.18 Severability. Any term or provision of this
Agreement that is invalid or unenforceable in any situation
in any jurisdiction shall not affect the validity of
enforceability of the remaining terms and provisions hereof
or the validity or enforceability of the offending term or
provision in any other situation or in any other situation
or in any other jurisdiction. If the final judgement of a
court of competent jurisdiction declares that any term or
provision hereof is invalid or unenforceable, the Parties
agree that the court making the determination of invalidity
or unenforceability shall have the power to reduce the
scope, duration, or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision
that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable
as so modified after the expiration of the time within which
the judgment may be appealed.
11.19 Construction. The language used in this Agreement
will be deemed to be the language chosen by the Parties to
express their mutual intent, and no rule of strict
construction shall be applied against any Party. Any
reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context
requires otherwise.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date first
above written.
NEWFLO CORPORATION
By: /s/JONATHAN F. BOUCHER
______________________________
Name: Jonathan F. Boucher
Title: Vice President
PRECISION CASTPARTS CORP.
By: /s/ WILLIAM D. LARSSON
______________________________
Name: William D. Larsson
Title: Vice President and
Chief Financial Officer
SELLERS:
MCIT PLC
By: /s/ DAVID W. ZALAZNICK
______________________________
Name: David W. Zalaznick
Title: President
Jordan/Zalaznick
Investment Advisors
EQUITY-LINKED INVESTORS, L.P.
By: /s/ FRANK J. PADOS, JR.
______________________________
Name: Frank J. Pados, Jr.
Title: Attorney-in-Fact
EQUITY-LINKED INVESTORS-II
By: /s/ FRANK J. PADOS, JR.
______________________________
Name: Frank J. Pados, Jr.
Title: Attorney-in-Fact
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<PAGE>
WHITE RIVER CORPORATION
By: /s/ ROBERT T. MARTO
______________________________
Name: Robert T. Marto
Title: President and
Chief Executive Officer
THE KB MEZZANINE FUND, L.P.
By: /s/ CAROLINE J. MERISON
______________________________
Name: Caroline J. Merison
Title: Attorney-in-Fact
ALLSOP VENTURE PARTNERS III L.P.
by: Mark Venture Partners L.P.,
General Partner
By: /s/ PAUL D. RHINES
______________________________
Name: Paul D. Rhines
Title: General Partner
/s/ EDMUND DAMON
___________________________________
Name: Edmund Damon
/s/ ESTATE OF ROBERT DAVIS
___________________________________
Name: Estate of Robert Davis
/s/ J. JACK WATSON
___________________________________
Name: J. Jack Watson
/s/ RICHARD D. MORTON
___________________________________
Name: Richard D. Morton
/s/ JOHN W. JORDAN, II REVOCABLE TRUST
___________________________________
Name: John W. Jordan, II
Revocable Trust
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<PAGE>
/s/ DAVID W. ZALAZNICK
__________________________________
Name: David W. Zalaznick
/s/ JONATHAN F. BOUCHER
__________________________________
Name: Jonathan F. Boucher
/s/ JOHN R. LOWDEN
__________________________________
Name: John R. Lowden
/s/ PAUL RODZEVICK
__________________________________
Name: Paul Rodzevick
/s/ JOHN CAMP
__________________________________
Name: John Camp
/s/ JAMES E. JORDAN
__________________________________
Name: James E. Jordan
/s/ STEPHEN B. MCDONALD
__________________________________
Name: Stephen B. McDonald
/s/ ADAM E. MAX
__________________________________
Name: Adam E. Max
LEUCADIA INVESTORS, INC.
By:
/s/ RUTH KLINDTWORTH
__________________________________
Name: Ruth Klindtworth
Title: Vice President
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<PAGE>
HELLER FINANCIAL, INC.
By:
/s/ PATRICIA WEITZMAN
__________________________________
Name: Patricia Weitzman
Title: Senior Vice President
GIRO CREDIT BANK
/s/GIRO CREDIT BANK
__________________________________
Name:
Title:
ARAB BANKING CORPORATION
/s/ SHELDON TILNEY
__________________________________
Name: Sheldon Tilney
Title: Deputy General Manager
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<PAGE>
Exhibit 23
Exhibit (23)
We consent to the incorporation by reference in the
Precision Castparts Corp. Current Report on Form 8-K of our
report dated February 23, 1996, with respect to the
consolidated financial statements of NEWFLO
Corporation included in its Annual Report (Form 10-K) for
the year ended December 31, 1995, filed with the Securities
and Exchange Commission.
/s/ ERNST & YOUNG LLP
__________________________________________
Ernst & Young LLP
Austin, Texas
August 15, 1996
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