EXHIBIT 10.11
ASSET PURCHASE AGREEMENT
Dated as of December 11, 1997
Between
CASE CORPORATION
And
WESTERN POWER & EQUIPMENT CORP.
And
XXXXXX-XXXXX REALTY COMPANY III, L.L.C.
TABLE OF CONTENTS
Page
Article Description No.
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ARTICLE 1 DEFINITIONS 1
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ARTICLE 2 PURCHASE AND SALE 4
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Section 2.01 Purchase and Sale of Assets. 4
Section 2.02 Purchase and Sale of Real Property. 5
Section 2.03 Excluded Assets. 5
Section 2.04 Assumed Liabilities. 6
Section 2.05 Purchase Price. 7
Section 2.06 Allocation of Purchase Price. 9
Section 2.07 Severance Expenses; Sales and Expense Adjustment. 9
ARTICLE 3 THE CLOSING 9
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Section 3.01 Time and Place of Closing. 9
Section 3.02 Deliveries by Seller. 10
Section 3.03 Deliveries by Buyers. 10
Section 3.04 Delivery by Both Parties. 11
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER 12
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Section 4.01 Organization and Qualification. 12
Section 4.02 Authority Relative to this Agreement. 12
Section 4.03 Consents and Approvals. 12
Section 4.04 No Violation. 13
Section 4.05 Litigation. 13
Section 4.06 Ownership of Purchased Assets and Real Property. 13
Section 4.07 Labor Matters. 13
Section 4.08 Environmental Compliance. 14
Section 4.09 Accuracy of Information. 14
Section 4.10 Brokers Or Finders. 14
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYERS 14
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Section 5.01 Organization and Qualification. 14
Section 5.02 Authority Relative to this Agreement. 15
Section 5.03 Consents and Approvals. 15
Section 5.04 No Violation. 15
Section 5.05 Litigation. 16
Section 5.06 Financing. 16
Section 5.07 Capitalization. 16
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Section 5.08 Inspection of Assets and Real Property. 16
Section 5.09 Bankruptcy. 17
Section 5.10 Employer Identification Number. 17
Section 5.11 Organization and Qualification. 17
Section 5.12 Authority Relative to this Agreement. 17
Section 5.13 Consents and Approvals. 17
Section 5.14 No Violation. 18
Section 5.15 Litigation. 18
Section 5.16 Financing. 18
Section 5.17 Capitalization. 18
Section 5.18 Inspection of Assets and Real Property. 19
Section 5.19 Bankruptcy. 19
Section 5.20 Employer Identification Number. 19
Section 5.21 No Brokers or Finders. 19
ARTICLE 6 ADDITIONAL AGREEMENTS AND COVENANTS--BUYERS 19
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Section 6.01 Insurance to be Procured by Buyers. 19
Section 6.02 Product Warranties. 20
Section 6.03 Relationship of Parties. 20
Section 6.04 Results of Operations. 20
Section 6.05 Distribution System. 20
ARTICLE 7 ADDITIONAL COVENANTS OF THE PARTIES 21
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Section 7.01 Taxes. 21
Section 7.02 Public Announcements. 21
Section 7.03 Further Assurances. 21
Section 7.04 Nonassignable Contracts. 21
Section 7.05 Preservation of Records. 22
Section 7.06 Environmental Matters. 22
Section 7.07 Bulk Sales. 23
Section 7.08 Risk of Loss. 23
Section 7.09 Case Parts Return and Case Parts Reorder. 23
Section 7.10 Certain Personnel Matters. 24
Section 7.11 Liens; Encumbrances. 24
Section 7.12 Business Cutoff. 24
Section 7.13 Conduct of Business Pending the Closing. 25
ARTICLE 8 CONDITIONS PRECEDENT TO BUYERS' OBLIGATIONS 25
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ARTICLE 9 CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS 25
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ARTICLE 10 TERMINATION 25
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ARTICLE 11 INDEMNIFICATION AND LIMITATIONS ON LIABILITY 25
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Section 11.01 Definitions. 25
Section 11.02 Indemnity by Seller. 27
Section 11.03 Indemnity by Buyer. 28
Section 11.04 Notification of Third-Party Claims. 28
Section 11.05 Defense of Claims. 28
Section 11.06 Notice of Other Claims. 29
Section 11.07 Access and Cooperation. 29
Section 11.08 No Insurance. 29
Section 11.09 Indemnification Matters Related to Taxes. 30
Section 11.10 Limitations on Liabilities. 30
ARTICLE 12 EXTENT AND SURVIVAL OF REPRESENTATIONS,
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WARRANTIES, COVENANTS AND AGREEMENTS 32
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Section 12.01 Scope of Representations. 32
Section 12.02 Survival. 33
ARTICLE 13 BROKERS 33
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ARTICLE 14 EXPENSES 33
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ARTICLE 15 NOTICES; MISCELLANEOUS 33
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Section 15.01 Notices. 33
Section 15.02 Miscellaneous. 34
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EXHIBITS
Exhibit Description
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Exhibit A List of Purchased Assets
(to be delivered at Closing)
Exhibit B Real Property
Exhibit C-1A Promissory Note--Used Equipment-Tractors
Exhibit C-1B Promissory Note--Used Equipment-Seasonal
Exhibit C-2 Promissory Note--Case Parts
Exhibit C-3 Promissory Note--Accounts Receivable
Exhibit C-4 Promissory Note--Shop Tools
Exhibit C-5 Promissory Note--Furniture & Fixtures
Exhibit C-6 Promissory Note--Real Property
Exhibit D-1 Xxxx of Sale
Exhibit D-2 Assignment and Assumption Agreement
Exhibit E Grant Deed
Exhibit F Security Agreement
Exhibit G Deed to Secure Trust
Exhibit H-1 Guarantee Agreement
Exhibit H-2 Guarantee Agreement
Exhibit I Sublease Agreement [Omitted]
Exhibit J Lease [Omitted]
Exhibit K Required Consents--Seller
Exhibit L Required Consents--Buyer
Exhibit M Capitalization of Buyer
Exhibit N Tax Matters
Exhibit O Seller's Closing Certificate
Exhibit P Buyer's Closing Certificate
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ASSET PURCHASE AGREEMENT
------------------------
ASSET PURCHASE AGREEMENT is dated as of December 11, 1997, by and between
CASE CORPORATION, a Delaware corporation ("Case" or "Seller") and WESTERN POWER
& EQUIPMENT CORP. ("Western"), an Oregon corporation and XXXXXX-XXXXX REALTY
COMPANY III, L.L.C. ("LLC"), a Delaware limited liability company ("collectively
Buyers").
RECITALS
--------
WHEREAS, Seller is the owner and operator of agricultural equipment sales,
service and leasing operations transacting business under the trade name of
"Case Power and Equipment" in Yuba City, California (the "Retail Operations");
and
WHEREAS, Buyers desire to purchase from Seller certain of the properties
and assets relating to the Retail Operations, and Seller is willing to sell such
assets and properties to Buyers.
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1.
DEFINITIONS
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"Affiliate" shall mean any Person that directly, or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control
with the Person specified.
"Agreement" shall mean this Asset Purchase Agreement, including the
exhibits attached hereto.
"Assumed Liabilities" shall have the meaning set forth in Section 2.04
"Closing" shall have the meaning set forth in Section 3.01.
"Closing Date" shall have the meaning set forth in Section 3.01.
"Cutoff Date" shall mean December 3, 1997.
"Environmental Laws" shall mean any applicable federal, state or local law,
rule or regulation in effect on the date hereof: (a) relating to releases or
threatened releases of Hazardous Materials; (b) relating to the manufacture,
handling, transport, use, treatment,
1
storage or disposal of Hazardous Materials or materials containing Hazardous
Materials; or (c) otherwise relating to pollution of the environment or the
protection of human health.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" shall have the meaning set forth in Section 2.03.
"Hazardous Materials" shall mean materials that contain substances defined
as hazardous or toxic substances under the following statutes, as well as such
statutes' implementing regulations as in effect on the date hereof: the
Hazardous Materials Transportation Act, the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response, Compensation and Liability Act,
the Clean Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the
Toxic Substances Control Act, the Federal Insecticide, Fungicide, and
Rodenticide Act, and the Clean Air Act, and any other materials that a federal,
state or local agency requires to be remediated pursuant to any Environmental
Law.
"Knowledge" with respect to Seller shall mean the best knowledge of Xxx
Xxxxxxx, Vice President - North American Retail Stores, and Xxxxxx Xxx Xxxx,
Case Environmental Manager.
"Lien" shall mean any mortgage, pledge, security interest, lease, lien or
other encumbrance of any kind, including without limitation any conditional sale
contract, title retention contract or similar arrangement.
"Notes" shall mean all promissory notes delivered pursuant to Section 2.05
or Section 2.07 of this Agreement.
"Permitted Exceptions" shall mean:
(a) Liens for taxes not yet due and payable or being contested in good
faith.
(b) Materialmen's, mechanics', workers', repairman's, employees' or other
similar Liens arising in the ordinary course of the operation of the
Retail Operations.
(c) Liens to be released at Closing.
(d) All rights to consent by, required notices to, filings with, or other
actions by governmental entities if the same are customarily obtained
or made subsequent to sale or conveyance.
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(e) Rights reserved to or vested in any local, state or federal
governmental bodies, authorities or agencies to control or regulate
any of the Real Property in any manner, and all laws, rules,
regulations, ordinances and orders of any such bodies, authorities or
agencies.
(f) The state of facts that would be disclosed by an accurate survey of
the Real Property dated as of the Closing Date, including but not
limited to all encroachments, overlaps, overhangs and unrecorded
easements.
(g) All reservations and conveyances of minerals of whatever kind and
character (including, without limitation, all coal, iron ore, oil,
gas, sulfur, methane gas in coal seams, limestone and other minerals,
metals and ores) located on, in or under the Real Property and all
rights with respect to the mining, extraction and removal of the
minerals so located, that have been granted or leased to, or excepted
or reserved by, persons other than Seller, its Affiliates and its
corporate predecessors by merger.
(h) Any other Liens that would not reasonably be expected to have a
material adverse effect on the conduct of the Retail Operations as
currently conducted by Seller.
"Person" shall mean any natural person, corporation, general partnership,
limited partnership, limited liability company, limited liability partnership,
union, association, court, agency, government, tribunal, instrumentality,
commission, arbitrator, board, bureau, or other entity or authority.
"Purchased Assets" shall have the meaning set forth in Section 2.01.
"Real Property" shall have the meaning set forth in Section 2.02.
"Records" shall mean and include all agreements, documents, maps, books,
records and files in the possession of the Seller or any of its Affiliates
relating primarily to the ownership of the Purchased Assets or the Real Property
or conduct of the Retail Operations.
"Secured Parties" shall mean Seller and Case Credit Corporation, a Delaware
corporation.
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ARTICLE 2.
PURCHASE AND SALE
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Section 1.021 Purchase and Sale of Assets.
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At the Closing, Western shall purchase from Seller, and Seller shall sell
to Western, all of the right, title and interest of Seller in the following
assets, properties and rights associated with the Retail Operations (the
"Purchased Assets"), which Purchased Assets will be more particularly described
in "Exhibit A", a document that shall be delivered at the Closing:
(a) New Case Equipment. All items of new Case agricultural equipment and
attachments set forth on Exhibit A ("New Case Equipment").
(b) Allied Equipment. All items of allied equipment and attachments set
forth on Exhibit A ("Allied Equipment").
(c) Used Equipment. All items of used agricultural equipment and
attachments set forth on Exhibit A ("Used Equipment").
(d) Case Parts. All Case parts set forth on Exhibit A ("Case Parts").
(e) Allied Parts. All allied parts set forth on Exhibit A ("Allied
Parts").
(f) Accounts Receivable. All accounts receivable set forth on Exhibit A
("Accounts Receivable").
(g) Vehicles. All vehicles set forth on Exhibit A ("Vehicles").
(h) Furniture and Fixtures. All furniture and fixtures set forth on
Exhibit A ("Furniture and Fixtures"); provided, that such Furniture
and Fixtures shall exclude (i) the Case computers, software (other
than certain computer tapes identified in Section 2.01(j)) and related
computer equipment used in connection with the Retail Operations and
located at the Retail Operations (the "Computer Equipment") and (ii)
the "Case Power and Equipment" letters affixed to the buildings at the
Retail Operations.
(i) Shop Tools. All shop tools and equipment set forth on Exhibit A ("Shop
Tools").
(j) Manuals. All service libraries, technical publications, parts books,
warranty cards, computer tapes (containing parts inventory, sales
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history, and customer master list) and customer lists set forth on
Exhibit A ("Manuals").
(k) Supplies. All office and shop supplies set forth on Exhibit A
(collectively, the "Supplies"); provided, that such Supplies shall
exclude all items imprinted with the names "Case Power & Equipment",
"J.I. Case" or any other designation of Seller or "Tenneco Inc."
(l) Forklifts. [Intentionally left blank.]
(m) Work-In-Process. All parts and labor expended by Seller on service
orders in-process set forth on Exhibit A ("Work-In-Process").
(n) Office Equipment Leases. All leases for radios, copiers, facsimile
machines, telephones and telephone lines and other items of office
equipment set forth on Exhibit A ("Office Equipment Leases").
(o) Xxxxx Cash. All xxxxx cash set forth on Exhibit A ("Xxxxx Cash").
(p) Customer Orders. All customer orders set forth on Exhibit A (the
"Customer Orders").
(q) Store Obligations. (i) All maintenance contracts between Seller and
certain municipalities and utility companies listed on Exhibit A, (ii)
all leases of equipment listed on Exhibit A financed by Case or its
Affiliates, and (iii) all equipment contracts between Seller and
governmental agencies pursuant to which Seller is obligated to
repurchase equipment listed on Exhibit A (collectively, "Store
Obligations").
Section 1.022 Purchase and Sale of Real Property.
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At the Closing, LLC shall purchase from Seller, and Seller shall sell to
LLC, all of the right, title and interest of Seller in the real estate and
improvements used in connection with the Retail Operations at Yuba City,
California, as more particularly described in Exhibit B (collectively, the "Real
Property").
Section 1.023 Excluded Assets.
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The assets of Seller to be sold, transferred, assigned and delivered to
Western shall include only those Purchased Assets described in Section 2.01,
which Purchased Assets will be more specifically described in Exhibit A, and the
Real Property described in Section 2.02, which Real Property is more
specifically described in Exhibit B. Such Purchased
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Assets and Real Property shall not, however, include any of the following
assets or properties of Seller:
(a) Utility and other security deposits paid by Seller prior to the
Closing.
(b) Seller's "dealer reserves" as of the Closing Date.
(c) Trademarks, trade names and the like of Seller and its Affiliates.
(d) Cash and cash equivalents on hand or in banks, except for Xxxxx Cash.
(e) Contracts entered into and proceeds of contracts entered into on or
before the Closing Date for the sale of any item, not constituting
part of the Purchased Assets, whether or not delivered or to be
delivered subsequent to the Closing Date.
(f) The Computer Equipment and computer software in connection therewith.
(g) Business records and printed business forms pertaining solely to the
Retail Operations.
(h) Prepaid taxes, insurance and other expenses and credits, refunds and
receivables of such items.
(i) Any other assets not specifically described in Section 2.01 or Section
2.02.
For purposes of this Agreement, all of the property, assets and rights to be
retained by Seller under this Section 2.03 are collectively referred to as the
"Excluded Assets".
Section 1.024 Assumed Liabilities.
-------------------
As of the Closing Date, Western shall assume and thereafter pay, perform or
otherwise discharge all obligations of Seller or any of its Affiliates under the
contracts and contract rights included in the Purchased Assets (including, but
not limited to, the Store Obligations) to the extent that such obligations
relate to the operation of Retail Operations from and after the Cutoff Date (the
"Assumed Liabilities"), it being understood and agreed that Western is
purchasing the Purchased Assets specified under this Agreement only and is not
purchasing any business or the Retail Operations as a going concern. Except as
otherwise specified in this Agreement, Western is not assuming any debt,
liability, contract, undertaking or commitment of, or claim against, Seller, the
Retail Operations or the Purchased Assets, of any nature, known or unknown,
fixed or contingent, or whether pertaining to the Purchased Assets or otherwise,
that occurred prior to the Cutoff Date.
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Section 1.025 Purchase Price.
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(a) The purchase price for the Purchased Assets ("Purchase Price") shall
be set forth in Exhibit A, and shall be calculated as follows:
(b) The Purchase Price shall be equal to the sum of the purchase prices
for each of the assets, properties and rights making up the Purchased
Assets, as follows:
(1) New Case Equipment. The purchase price for the New Case Equipment
as set forth on Exhibit A attached hereto.
(2) Allied Equipment. The purchase price for the Allied Equipment as
set forth on Schedule A hereto.
(3) Used Equipment. The purchase price for the Used Equipment as set
forth on Schedule A hereto.
(4) Case Parts. The purchase price for the Case Parts shall be
Seller's current "dealer net" or "ship direct level one" value,
whichever is less.
(5) Allied Parts. The purchase price for the Allied Parts shall be
Seller's invoice price.
(6) Accounts Receivable. The purchase price for the Accounts
Receivable shall be as follows: Current accounts and those for
the prior month and the second prior month shall be sold for 100%
of face value. Accounts for the third prior month and the fourth
prior month shall be sold for 75% of face value.
(7) Vehicles. The purchase price for the Vehicles shall be $13,500.
(8) Furniture and Fixtures. The purchase price for the Furniture and
Fixtures shall be $15,000.
(9) Shop Tools. The purchase price for the Shop Tools shall be
$20,000.
(10) Manuals. The purchase price for the Manuals shall be $1,000.
(11) Supplies. The purchase price for the Supplies shall be $1,000.
(12) Forklifts. [intentionally omitted].
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(13) Work-in-Process. The purchase price for the Work-in-Process shall
be 80% of the customer hourly rate based upon the number of hours
involved.
(14) Office Equipment Leases. The purchase price for the Office
Equipment Leases shall be as mutually agreed upon by the parties.
(15) Xxxxx Cash. The purchase price for the Xxxxx Cash shall be as
mutually agreed upon by the parties.
(16) Customer Orders. The purchase price for the Customer Orders shall
be as mutually agreed upon by the parties.
(17) Store Obligations. The purchase price for the Store Obligations
shall be as mutually agreed upon by the parties.
(c) The Purchase Price shall be payable in cash at Closing, except as
follows:
(1) New Case Equipment. The purchase and sale of the items of New
Case Equipment listed on Exhibit A shall be governed by Seller's
standard terms for new equipment as reflected in Seller's
Schedule of Discounts and Terms for the particular item involved.
(2) Used Equipment. The purchase price for the Used Equipment shall
be paid in accordance with the terms of a promissory notes
substantially in the form attached hereto as Exhibits C-1A and
C-1B.
(3) Case Parts. 15% of the purchase price for the Case Parts shall be
paid in cash at Closing and 85% shall be paid in accordance with
the terms of a promissory note substantially in the form attached
hereto as Exhibit C-2.
(4) Accounts Receivable. The purchase price for the Accounts
Receivable shall be paid in accordance with the terms of a
promissory note substantially in the form attached hereto as
Exhibit C-3.
(5) Shop Tools. The purchase price for the Shop Tools shall be 25%
cash down at Closing with the remaining balance being
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paid in accordance with the terms of a promissory note
substantially in the form attached hereto as Exhibit C-4.
(6) Furniture and Fixtures. The purchase price for Furniture and
Fixtures shall be paid with 25% cash down at closing with the
remaining balance being paid in accordance with the terms of a
promissory note substantially in the form attached hereto as
Exhibit C-5.
(d) The purchase price for the Real Property shall be in the amount set
forth in Exhibit A and shall be paid in accordance with the terms of a
promissory note substantially in the form attached hereto as Exhibit
C-6.
(e) Seller shall conduct an inventory of the Purchased Assets prior to the
Closing, which inventory may be reviewed by Western.
Section 1.026 Allocation of Purchase Price.
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The Purchase Price shall be allocated in the manner set forth in Exhibit N.
Section 1.027 Severance Expenses; Sales and Expense Adjustment.
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In addition to the payment of the Purchase Price and the purchase price for
the Real Property, Buyers shall compensate Seller for a prorated portion of
expenses attributable to the conduct of Retail Operations between the Cutoff
Date and the Closing Date in the amount of $11,809, which amount shall be
payable in cash at Closing.
ARTICLE 3.
THE CLOSING
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Section 1.031 Time and Place of Closing.
-------------------------
The closing of the transactions contemplated by this Agreement (the
"Closing") shall be held at the offices of Xxxxx Xxxxxxx Xxxxxxxxx & Xxxxxxx,
One Maritime Plaza in San Francisco, California, commencing at 10:00 a.m. (local
time) on December 11, 1997 (the "Closing Date").
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Section 1.032 Deliveries by Seller.
--------------------
At the Closing Seller will deliver or cause to be delivered the following:
(a) To Western, an executed and acknowledged xxxx of sale and assignment
and assumption agreement substantially in the forms attached hereto as
Exhibits D-1 and D-2, respectively, each in form and substance as
necessary to transfer to Western all of Seller's right, title and
interest in and to the Purchased Assets.
(b) To LLC, a grant deed substantially in the form attached hereto as
Exhibit E in form and substance necessary to transfer to LLC all of
Seller's right, title and interest in and to the Real Property.
(c) To Western, a certificate in the form attached hereto as Exhibit O
signed by Seller certifying that each of the representations and
warranties made by Seller in this Agreement is true and correct in all
material respects on and as of the Closing Date with the same effect
as though such representations and warranties had been made or given
on and as of the Closing Date (except for any changes permitted by the
terms of this Agreement or consented to in writing by Buyer) and that
Seller has performed and complied with all of its obligations under
this Agreement that are to be performed or complied with on or prior
to the Closing Date.
(d) To Western, the other documents, instruments and writings required to
be delivered by Seller at the Closing pursuant to this Agreement or
otherwise required in connection herewith.
Section 1.033 Deliveries by Buyers.
--------------------
At the Closing Buyers will deliver or cause to be delivered the following:
(a) The amount of the Purchase Price and any other amounts due on the
Closing Date by confirmed wire transfer in immediately available funds
to a bank account that shall be designated by Seller, or by such other
means as agreed upon by Seller and Buyers.
(b) To Seller, certified copies of a good standing certificate from the
office of the Secretary of State of Oregon confirming that Western is
in good standing in the State of Oregon and dated not earlier than
five days before the Closing Date.
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(c) To Seller, a copy of the Bylaws of Western certified by the Secretary
of Buyer and dated not earlier than five days before the Closing Date.
(d) To Seller, a copy of the Certificate of Incorporation of Western
certified by the Secretary of State of Oregon and dated not earlier
than five days before the Closing Date.
(e) To Seller, a copy of the resolutions of the Board of Directors of
Western authorizing and approving this Agreement and the transactions
contemplated by this Agreement certified by the Secretary of Western.
(f) To Seller, a copy of the LLC Partnership Agreement.
(g) To Seller, a Security Agreement substantially in the form of Exhibit F
(the "Security Agreement").
(h) To Seller, a Deed of Trust substantially in the form of Exhibit G (the
"Deed of Trust").
(i) To Seller, Guarantee Agreements executed and delivered by C. Xxxx
XxXxxx and Xxxxxx X. Xxxxx guaranteeing the obligations of LLC under
the Promissory Note--Real Property.
(j) To Seller, certificates of insurance and proofs of payment of premium
to the extent such are required under Section 6.01.
(k) To Seller, a certificate in the form attached hereto as Exhibit P
signed by Buyer certifying that each of the representations and
warranties made by Buyer in this Agreement is true and correct on and
as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of the
Closing Date (except for any changes permitted by the terms of this
Agreement or consented to in writing by Seller) and that Buyer has
performed and complied with all of Buyer's obligations under this
Agreement that are to be performed or complied with on or prior to the
Closing Date.
(l) To Seller, the other documents, instruments and writings required to
be delivered by Buyer at the Closing pursuant to this Agreement or
otherwise required in connection herewith.
Section 1.034 Delivery by Both Parties.
------------------------
At the Closing Seller and Buyer will deliver a duly executed assignment and
assumption agreement substantially in the form attached hereto as Exhibit D-2 as
necessary
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for Seller to sell and assign to Western its interests in the Office Equipment
Leases and for Western to assume the Assumed Liabilities.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller represents and warrants to Buyers as set forth below:
Section 1.041 Organization and Qualification.
------------------------------
Seller is a corporation validly existing and in good standing under the
laws of the State of Delaware and is duly qualified to conduct business in the
State of California as a foreign corporation.
Section 1.042 Authority Relative to this Agreement.
------------------------------------
Seller has the requisite corporate power to execute and deliver this
Agreement and the related agreements contemplated hereby to which it is a party
and to consummate the transactions contemplated thereby. The execution and
delivery by Seller of this Agreement and the related agreements contemplated
hereby to which Seller is a party and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary corporate action
on the part of Seller. This Agreement and the related agreements contemplated
hereby to which Seller is a party have been duly executed and delivered by
Seller and constitute legal, valid and binding obligations of Seller and are
enforceable against Seller in accordance with their terms subject to the effect
of any applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws affecting creditors' rights and remedies generally
and to the effect of general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or in equity).
Section 1.043 Consents and Approvals.
----------------------
The execution and delivery by Seller of this Agreement and the related
agreements contemplated hereby to which it is a party do not, and compliance by
Seller with the terms thereof and consummation by Seller of the transactions
contemplated thereby will not, require Seller to obtain any consent, approval,
exemption, authorization or other action of, or make any filing with or give any
notice to, any court, administrative agency or other governmental authority or
any other Person, except as disclosed on Exhibit K, or except where failure to
obtain such consents, approvals, exemptions, authorizations or actions, make
such filings or give such notices would not reasonably be expected to have a
material adverse effect on the Retail Operations as currently conducted by
Seller or would not reasonably be expected to materially adversely affect the
ability of Seller to perform any of its material obligations hereunder.
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Section 1.044 No Violation.
------------
Assuming all consents, approvals, exemptions, authorizations and other
actions described in Exhibit K have been obtained, the execution and delivery by
Seller of this Agreement and the related agreements contemplated hereby to which
Seller is a party do not, and the performance by Seller of this Agreement and
the related agreements contemplated hereby to which Seller is a party will not,
(i) conflict with or result in a breach of the Certificate of Incorporation or
bylaws of Seller, or (ii) violate, or conflict with, or constitute a default
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation or imposition of any Lien upon the
Purchased Assets or the Real Property under, any mortgage, indenture, agreement,
judgment, decree or court order to which Seller is a party or by which any of
the Purchased Assets or the Real Property are bound, which violation, conflict,
default or Lien would reasonably be expected to have a material adverse effect
on the Retail Operations as currently conducted by Seller.
Section 1.045 Litigation.
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At the date of this Agreement (i) there are no actions, suits, claims,
arbitration proceedings or governmental investigations or inquiries pending, or
to the Knowledge of Seller threatened, against Seller, or its properties,
assets, operations or businesses (A) seeking to prevent the consummation of the
transactions contemplated hereby or (B) that would reasonably be expected to
have a material adverse effect on the Retail Operations as currently conducted
by Seller, and (ii) there are no judgments, decrees, injunctions, orders or
consent orders of any court, governmental authority or arbitrator issued in any
proceeding to which Seller or any of its Affiliates is or was a party that,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the Retail Operations as currently conducted by
Seller.
Section 1.046 Ownership of Purchased Assets and Real Property.
-----------------------------------------------
Seller has title to (i) the tangible personal property included in the
Purchased Assets and (ii) the Real Property, sufficient (with the exception of
certain leased vehicles) for the conduct of the Retail Operations as currently
conducted by Seller, free and clear of any Liens other than Permitted
Exceptions. Seller makes no representations regarding computer software,
including Western's right to use same, its appropriateness for Western's
business, its future availability, Western's status with the software provider,
the cost to use same or the availability of updates.
Section 1.047 Labor Matters.
-------------
Seller is not a party to any collective bargaining agreement relating to
employees who are employed at the Retail Operations. There are no labor
controversies pending or, to the Knowledge of Seller, threatened with respect to
the Retail Operations that could reasonably be expected to have, individually or
in the aggregate, a material adverse
13
effect on the ownership or operation of the Purchased Assets, the Real Property
or the Retail Operations, and there are no grievances outstanding, or unfair
labor practice complaints pending before the National Labor Relations Board,
against Seller in respect of employees who are employed at the Retail Operations
that would reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the Retail Operations as currently conducted by
Seller.
Section 1.048 Environmental Compliance.
------------------------
The Retail Operations have, to the Knowledge of Seller, been conducted in
accordance with applicable Environmental Laws, except (a) as may be set forth in
the environmental audits to be performed pursuant to Section 7.06, (b) as
otherwise disclosed to Buyer, or (c) where the failure to so conduct would not
reasonably be expected to have a material adverse effect on the Retail
Operations as currently conducted by Seller.
Section 1.049 Accuracy of Information.
-----------------------
To the Knowledge of Xxxxxx X. Xxxxxx and Seller, all information contained
in Exhibit A, including descriptions of the Purchased Assets, price information
and information on the schedules to such, including descriptions of the
Purchased Assets, price information and information on the schedules to such
Exhibit A and to the Agreement, is true and correct.
Section 4.10 Brokers Or Finders.
------------------
Neither Seller nor any of its directors, officers, employees, or agents
have retained, employed or used any broker or finder in connection with the
transaction provided for herein or in connection with the negotiation thereof.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF BUYERS
----------------------------------------
Western represents and warrants to Seller as set forth in Sections
5.01-5.10 below.
Section 1.051 Organization and Qualification.
------------------------------
Western is a corporation validly existing and in good standing under the
laws of the State of Oregon.
14
Section 1.052 Authority Relative to this Agreement.
------------------------------------
Western has the requisite corporate power to execute and deliver this
Agreement and the related agreements contemplated hereby to which it is a party
and to consummate the transactions contemplated thereby. The execution and
delivery by Western of this Agreement and the related agreements contemplated
hereby to which Western is a party and the consummation of the transactions
contemplated thereby have been duly authorized by all necessary corporate action
on the part of Western. This Agreement and the related agreements contemplated
hereby to which Western is a party have been duly executed and delivered by
Western and constitute legal, valid and binding obligations of Western and are
enforceable against Western in accordance with their terms subject to the effect
of any applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors' rights and remedies generally
and to the effect of general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or in equity).
Section 1.053 Consents and Approvals.
----------------------
The execution and delivery by Western of this Agreement and the related
agreements contemplated hereby to which Western is a party do not, and
compliance by Western with the terms thereof and consummation by Western of the
transactions contemplated thereby will not, require Western to obtain any
consent, approval, exemption, authorization or other action of, or make any
filing with or give any notice to, any court, administrative agency or other
governmental authority or any other Person, except as set forth on Exhibit L, or
except where failure to obtain such consents, approvals, exemptions,
authorizations or actions, make such filings or give such notices would not
materially adversely affect the ability of Western to perform any of its
material obligations hereunder.
Section 1.054 No Violation.
------------
Assuming all consents, approvals, exemptions, authorizations and other
actions described in Exhibit L have been obtained, the execution and delivery by
Western of this Agreement and the related agreements contemplated hereby to
which Western is a party do not, and the performance by Western of this
Agreement and the related agreements contemplated hereby to which Western is a
party will not, (i) conflict with or result in a breach of Western's Certificate
of Incorporation or bylaws, (ii) violate, or conflict with, or constitute a
default under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation or imposition of any
Lien upon the properties or assets of Western under, any mortgage, indenture,
agreement, judgment, decree or court order to which Western is a party or by
which any of the properties or assets of Western is bound, which violation,
conflict, default or Lien would adversely affect the ability of Western to
perform its obligations under this Agreement or the related agreements
contemplated hereby to which Western is a party.
15
Section 1.055 Litigation.
----------
At the date of this Agreement to the best knowledge of Western, (i) there
are no actions, suits, claims, arbitration proceedings or governmental
investigations or inquiries pending, or to the knowledge of Western threatened,
against Western or its properties, assets, operations or businesses (A) seeking
to prevent the consummation of the transactions contemplated hereby, or (B)
that, individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the ability of Western to perform its obligations
under this Agreement or the transactions contemplated hereby, and (ii) there are
no judgments, decrees, injunctions, orders or consent orders of any court,
governmental authority or arbitrator issued in any proceeding to which Western
or any of its Affiliates is or was a party that, individually or in the
aggregate, could reasonably be expected to have a material adverse effect on the
ability of Western to perform its obligations under this Agreement or the
transactions contemplated hereby.
Section 1.056 Financing.
---------
Western has sufficient funds or committed lines of credit to consummate the
transactions contemplated by this Agreement.
Section 1.057 Capitalization.
--------------
(a) The entire authorized capital stock of Western and the issued and
outstanding shares of capital stock of Western are as set forth on
Exhibit M hereto.
(b) Western does not have any outstanding subscriptions, options, warrants
or other rights for the issuance or purchase of any stock or other
securities, or any securities convertible into or exchangeable for any
stock or other securities, or any understandings or commitments of any
kind for the issuance of stock or securities convertible into or
exchangeable for stock or other securities amounting to more than 33%
of the outstanding shares of Western.
Section 1.058 Inspection of Assets and Real Property.
--------------------------------------
Western has inspected to its complete satisfaction the physical condition
of the Purchased Assets and the Real Property; provided, that the provisions of
this Section 5.08 shall not constitute a waiver by Western of any of Seller's
warranty obligations with respect to New Case Equipment or new Case Parts.
16
Section 1.059 Bankruptcy.
----------
Western is not, and has not within the past six years been, the subject of
a bankruptcy or insolvency proceeding, nor is Western subject to any Lien that
might adversely affect Western's ability to perform its obligations as
contemplated by this Agreement.
Section 5.10 Employer Identification Number.
------------------------------
Western's federal employer identification number is 00-0000000.
LLC represents and warrants to Seller as set forth in Sections 5.11-5.21
below.
Section 5.11 Organization and Qualification.
------------------------------
LLC is a limited liability company validly existing and in good standing
under the laws of the State of Delaware.
Section 5.12 Authority Relative to this Agreement.
------------------------------------
LLC has the requisite organizational power to execute and deliver this
Agreement and the related agreements contemplated hereby to which it is a party
and to consummate the transactions contemplated thereby. The execution and
delivery by LLC of this Agreement and the related agreements contemplated hereby
to which LLC is a party and the consummation of the transactions contemplated
thereby have been duly authorized by all necessary organizational action on the
part of LLC. This Agreement and the related agreements contemplated hereby to
which LLC is a party have been duly executed and delivered by LLC and constitute
legal, valid and binding obligations of LLC and are enforceable against LLC in
accordance with their terms subject to the effect of any applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws
affecting creditors' rights and remedies generally and to the effect of general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity).
Section 5.13 Consents and Approvals.
----------------------
The execution and delivery by LLC of this Agreement and the related
agreements contemplated hereby to which LLC is a party do not, and compliance by
LLC with the terms thereof and consummation by LLC of the transactions
contemplated thereby will not, require LLC to obtain any consent, approval,
exemption, authorization or other action of, or make any filing with or give any
notice to, any court, administrative agency or other governmental authority or
any other Person, except as set forth on Exhibit L, or except where failure to
obtain such consents, approvals, exemptions, authorizations or actions, make
such filings or give such notices would not materially adversely affect the
ability of LLC to perform any of its material obligations hereunder.
17
Section 5.14 No Violation.
------------
Assuming all consents, approvals, exemptions, authorizations and other
actions described in Exhibit L have been obtained, the execution and delivery by
LLC of this Agreement and the related agreements contemplated hereby to which
LLC is a party to the best knowledge of LLC do not, and the performance by LLC
of this Agreement and the related agreements contemplated hereby to which LLC is
a party will not, (i) conflict with or result in a breach of LLC's Articles of
Organization or bylaws, (ii) violate, or conflict with, or constitute a default
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation or imposition of any Lien upon the
properties or assets of LLC under, any mortgage, indenture, agreement, judgment,
decree or court order to which LLC is a party or by which any of the properties
or assets of LLC is bound, which violation, conflict, default or Lien would
adversely affect the ability of LLC to perform its obligations under this
Agreement or the related agreements contemplated hereby to which LLC is a party.
Section 5.15 Litigation.
----------
At the date of this Agreement to the best knowledge of LLC, (i) there are
no actions, suits, claims, arbitration proceedings or governmental
investigations or inquiries pending, or to the knowledge of LLC threatened,
against LLC or its properties, assets, operations or businesses (A) seeking to
prevent the consummation of the transactions contemplated hereby, or (B) that,
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the ability of LLC to perform its obligations under
this Agreement or the transactions contemplated hereby, and (ii) there are no
judgments, decrees, injunctions, orders or consent orders of any court,
governmental authority or arbitrator issued in any proceeding to which LLC or
any of its Affiliates is or was a party that, individually or in the aggregate,
could reasonably be expected to have a material adverse effect on the ability of
LLC to perform its obligations under this Agreement or the transactions
contemplated hereby.
Section 5.16 Financing.
---------
LLC has sufficient funds or committed lines of credit to consummate the
transactions contemplated by this Agreement.
Section 5.17 Capitalization.
--------------
(a) The issued and outstanding membership interests of LLC are as set
forth on Exhibit M hereto.
(b) LLC does not have any outstanding subscriptions, options, warrants or
other rights for the issuance or purchase of any interest or other
securities, or any securities convertible into or exchangeable for any
18
interest or other securities, or any understandings or commitments of
any kind for the issuance of interest or securities convertible into
or exchangeable for interest or other securities that would
substantially affect the capitalization LLC as set forth on Exhibit M.
Section 5.18 Inspection of Assets and Real Property.
--------------------------------------
LLC has inspected to its complete satisfaction the physical condition of
the Real Property.
Section 5.19 Bankruptcy.
----------
LLC is not, and has not within the past six years been, the subject of a
bankruptcy or insolvency proceeding, nor is LLC subject to any Lien that might
adversely affect LLC's ability to perform its obligations as contemplated by
this Agreement.
Section 5.20 Employer Identification Number.
------------------------------
LLC's federal employer identification number is _____________.
Section 5.21 No Brokers or Finders.
---------------------
Neither LLC nor any of its members, employees, or agents have retained,
employed or used any broker or finder in connection with the transaction
provided for herein or in connection with the negotiation thereof.
ARTICLE 6.
ADDITIONAL AGREEMENTS AND COVENANTS--BUYERS
-------------------------------------------
Buyers covenant and agree with Seller as follows:
Section 1.061 Insurance to be Procured by Buyers.
----------------------------------
Buyers shall keep all the Purchased Assets and Real Property, as
applicable, in which Secured Parties have a security interest, and that are
under Buyers' direct or indirect control, insured against all risk of physical
loss or damage, in an amount that shall be sufficient in Seller's opinion to
prevent Secured Parties from sustaining any financial loss in accordance with
Buyer's obligations under the standard Case Corporation Dealer Agreement. The
insurance policy or policies obtained for such purpose shall name Secured
Parties as additional insureds and provide that, in the event of loss, the
insurer will pay the proceeds of such policy or policies to the insureds as
their respective interests may appear. Such insurance policy or policies shall
be written by insurance companies licensed to do business in the state(s) in
which the Retail Operations are located and acceptable to Secured Parties
19
and shall contain an endorsement thereon requiring the insurer to give Secured
Parties not less than thirty (30) days' written notice prior to any proposed
cancellation, modification or expiration thereof. Buyers shall deliver at the
Closing certificates of such insurance together with proof of payment of the
premium thereof to Secured Parties. Western may become an insured under the
insurance plan provided by Seller for its authorized dealers, in which event the
assets so covered under such plan shall be exempted from the foregoing
provisions of this Section 6.01.
Section 1.062 Product Warranties.
------------------
Western shall perform all warranty work required on all products sold by
Seller at the Retail Operations on or prior to the Closing Date in accordance
with Seller's currently applicable published warranty policies and procedures.
Seller shall pay Western in full for such work in accordance with Seller's
currently applicable published warranty policies and procedures.
Section 1.063 Relationship of Parties.
-----------------------
Western acknowledges that any payments by it for items held out for sale
(inventory) are bona fide wholesale prices for reasonable amounts of merchandise
to be held for resale. Western acknowledges that it is an independent operation
controlling its own business, that Seller has not suggested or prescribed in
substantial part a marketing plan and that Seller neither has significant
control of Western, nor has offered significant assistance to Western in
operating its business. Western specifically acknowledges that the relationship
between Seller and Western is not a franchise or franchisor/franchisee
relationship.
Section 1.064 Results of Operations.
---------------------
Western understands that the past results of Seller's operations may not be
indicative of results that Western might obtain from its own operations as an
independent dealer of Seller in the state(s) in which the Retail Operations are
located and acknowledges that Seller has made no promises, warranties and/or
guarantees to Buyers concerning possible future sales volume, gross profits, net
income, profits or losses that might be realized from the purchase of the
Purchased Assets and the Real Property and operation as an independent Case
dealer.
Section 1.065 Distribution System.
-------------------
Buyers are completely aware of, agree to and accept Seller's distribution
system and the assignment of areas of responsibility for other authorized
dealers of Seller.
20
ARTICLE 7.
ADDITIONAL COVENANTS OF THE PARTIES
-----------------------------------
Section 1.071 Taxes.
-----
The agreement of the parties with respect to tax matters is set forth in
Exhibit N.
Section 1.072 Public Announcements.
--------------------
Each party will consult with each other before either of them or any of
their respective Affiliates issues any press releases or otherwise makes any
public statements with respect to this Agreement and the transactions
contemplated hereby, and neither of them nor any such Affiliate shall issue any
such press release or make any such public statement prior to such consultation
except, in each case, as may be required by law or by obligations pursuant to
any listing agreement with any securities exchange on which any of its or their
securities may be listed.
Section 1.073 Further Assurances.
------------------
Each party will use reasonable efforts to take, or cause to be taken, all
action, and to do, or cause to be done, all things necessary, proper or
advisable to carry out all of its respective obligations under this Agreement
and to consummate and make effective the purchase and sale of the Purchased
Assets and the Real Property pursuant to this Agreement. Each party shall, and
shall cause its Affiliates to, execute, acknowledge and deliver all such further
conveyances, notices, assumptions, releases and acquittances and such other
instruments, and shall take such further actions, as may be necessary or
appropriate more fully to assure to Buyers and their successors or permitted
assigns, all of the properties, rights, titles, interests, estates, remedies,
powers and privileges intended to be conveyed to Buyers pursuant to this
Agreement and more fully to assure to Seller and its Affiliates and their
successors and assigns the assumption of the liabilities and obligations
intended to be assumed by Buyers pursuant to this Agreement, respectively.
Buyers shall execute and deliver to Secured Parties such other documentation,
including, but not limited to, all necessary Uniform Commercial Code financing
statements and such other documentation (including without limitation lists of
secured creditors) as may be reasonably required by Secured Parties to complete,
perfect or continue the security interest granted pursuant to this Agreement to
secure the payment for the Purchased Assets and the Real Property.
Section 1.074 Nonassignable Contracts.
-----------------------
(a) To the extent any lease, contract, right or commitment included in the
Purchased Assets is not capable of being assigned, transferred,
subleased or sublicensed without the consent or waiver of the issuer
21
thereof or the other party thereto or any third party (including a
government or governmental unit), or if such assignment, transfer,
sublease or sublicense or attempted assignment, transfer, sublease or
sublicense would constitute a breach thereof or a violation of any
law, decree, order, regulation or other governmental edict, this
Agreement shall not constitute an assignment, transfer, sublease or
sublicense thereof, or an attempted assignment, transfer, sublease or
sublicense of any such lease, contract, right or commitment.
(b) Anything in this Agreement to the contrary notwithstanding, Seller is
not obligated to transfer to Western any of its rights and obligations
in and to any such contract, lease, right or commitment without first
having obtained all necessary consents and waivers. For a reasonable
period of time after the Closing Date, Seller shall use all reasonable
efforts, and Western shall cooperate with Seller, to obtain the
consents and waivers referred to in Section 7.04(a).
(c) To the extent that such consents and waivers are not obtained by
Seller, Seller shall use all reasonable efforts to establish
alternative arrangements that are reasonable and lawful as to both
Seller and Western and that provide the benefits, risks and burdens of
the relevant contract, lease, right or commitment for the remaining
term.
Section 1.075 Preservation of Records.
-----------------------
Except for tax Records, Western shall preserve and keep (or cause to be
preserved and kept) the books and records conveyed pursuant to this Agreement,
and Seller shall preserve and keep (or cause to be preserved and kept) such
books and records as it or any of its Affiliates shall retain with respect to
the Purchased Assets, for a period of seven years after the Closing Date, and
Western and Seller shall each grant to the other reasonable access to such books
and records retained by them during such period. In the event either Western or
Seller wishes to destroy such records after such period, it shall first give
written notice to the other party and the other party shall have the right at
its option, upon prior written notice given to the party providing the initial
notice, to take possession of said records as promptly as practicable, but in
any event within 180 days after the date of its notice requesting the same. The
agreement between Western and Seller with respect to tax Records is set forth in
Exhibit N.
Section 1.076 Environmental Matters.
---------------------
(a) Buyers acknowledge receipt of copies of certain Environmental Site
Assessments dated January, 1997 and updated on December 3, 1997,
prepared by RMT, Inc., which assessments relate to environmental
matters associated with the Retail Operations (the "Environmental
22
Reports"). Seller shall promptly, at its sole cost and expense,
perform, or cause to be performed, the remedial action described in
the "Summary of Recommendations" section of the Environmental Reports.
Such remedial action shall be performed in such a manner so that the
conditions being addressed by such remedial action will not materially
violate any applicable Environmental Laws.
(b) Buyers shall provide Seller and its agents and representatives
access to the Retail Operations and Real Property for purposes of
performing the remedial action described in Section 7.06(a).
(c) After such remedial work has been performed, Buyers agree to
accept the Retail Operations and the Real Property "AS IS, WHERE IS".
Seller shall have no further liability with respect to environmental
matters, except as may arise from the breach of its representations
and warranties contained in Section 4.08.
Section 1.077 Bulk Sales.
----------
Each party hereby waives compliance with the applicable provisions of the
Uniform Commercial Code, Article 6 (Bulk Sales or Bulk Transfers), as adopted in
the state(s) in which the Retail Operations are located as such provisions may
apply to the transactions contemplated by this Agreement.
Section 1.078 Risk of Loss.
------------
Buyers assume all risk of loss from all causes with respect to the Real
Property and Purchased Assets from and after the Closing.
Section 1.079 Case Parts Return and Case Parts Reorder.
----------------------------------------
(a) Western shall have a onetime right to return those Case Parts
purchased hereunder that are eligible for return under Seller's "Parts
Inventory Transfer" policy at the price originally paid by Western for
such Case Parts. Western shall receive a credit for the Case Parts
returned under this Section 7.09. Such credit shall be applied pro
rata first to the payments remaining under the promissory note
relating to Case Parts, then to any other indebtedness due hereunder
in respect of promissory notes of Western relating to Purchased Assets
purchased on the Closing Date other than New Case Equipment purchased
pursuant to Section 2.01(a).
(b) Seller also hereby agrees to permit Western to place an order for Case
parts for purposes of allowing Western to restock its Case parts
23
inventory. The terms for Case parts so ordered shall be in accordance
with Seller's "New Dealer Initial Parts Order" policy.
Section 7.10 Certain Personnel Matters.
-------------------------
(c) Compensation of, and bonuses for, all employees of the Retail
Operations owed for all periods of employment of such employees
through and including the Closing Date shall be borne and paid for by
Seller, except for Seller's obligations for commissions to employees
of the Retail Operations, which shall be borne and paid for by Seller
through and including the Cutoff Date. Compensation of and any bonuses
for all employees hired by Western for all periods of employment
subsequent to the Closing Date shall be borne and paid for by Western.
All vacation, sick day and holiday pay of all employees of the Retail
Operations that have accrued or were earned prior to the Closing Date
shall be the sole responsibility of Seller and shall be paid in full
prior to the Closing Date or accrued on the books of Seller and
remitted to the employee at the time of his or her vacation or
holiday.
(d) Seller shall be solely liable and responsible for obligations under
any and all deferred compensation, pension, profit sharing,
retirement, group insurance, or other employee benefit or welfare
plans, written or oral, relating to employees of the Retail
Operations, whether or not constituting an "employee benefit plan"
under ERISA, that have accrued through and including the Cutoff Date.
Western shall be solely liable and responsible for such obligations
from the Cutoff Date through the Closing Date, but shall not be
obligated to assume or adopt such obligations after the Closing Date.
Section 7.11 Liens; Encumbrances.
-------------------
So long as Western or LLC are indebted to Secured Parties pursuant to this
Agreement, neither Western nor LLC shall create, assume or permit to exist any
Lien in favor of any Person that is superior in priority to the security
interest of Secured Parties upon any of the Purchased Assets or the Real
Property without the prior written consent of Seller; provided, that Western may
permit to exist Liens in favor of one or more Persons that are superior in
priority to the security interest of Secured Parties upon Vehicles, and Manuals
(collectively, the "Permitted Liens").
Section 7.12 Business Cutoff.
---------------
Commencing as of the day following the Cutoff Date (i) all sales of new,
used and allied machinery and attachments, parts and service shall be deemed to
have been conducted for the account of Western and (ii) all obligations for the
following shall be
24
deemed to have been for the account of Western: sales commissions, travel and
entertainment expenses, purchases of allied parts, allied machinery and
attachments and shop and office supplies, shipping costs and costs of outside
labor and materials incurred in connection with the Retail Operations.
Section 7.13 Conduct of Business Pending the Closing.
---------------------------------------
From the date hereof until the Closing, Seller covenants as follows:
(e) Seller will carry on the Retail Operations diligently and, except as
required in connection with the Closing, in the same manner as
heretofore, and
(f) Seller shall use and operate all property of Seller in connection with
the Retail Operations in a normal business manner.
ARTICLE 8.
CONDITIONS PRECEDENT TO BUYERS' OBLIGATIONS
-------------------------------------------
[Intentionally Left Blank]
ARTICLE 9.
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
--------------------------------------------
[Intentionally Left Blank]
ARTICLE 10.
TERMINATION
-----------
[Intentionally Left Blank]
ARTICLE 11.
INDEMNIFICATION AND LIMITATIONS ON LIABILITY
--------------------------------------------
Section 1.111 Definitions.
-----------
As used in this Article XI, the following terms shall have the meanings set
forth below:
25
(a) Losses. The term "Loss" or "Losses" shall mean any and all direct or
indirect payments, assessments, liabilities, costs and expenses paid
or incurred (whether or not known or asserted prior to the date
hereof, fixed or unfixed, conditional or unconditional, xxxxxx or
inchoate, liquidated or unliquidated, secured or unsecured, accrued,
absolute, contingent or otherwise), including without limitation
penalties, interest on any amount payable to an unaffiliated party as
a result of the foregoing and, subject to Section 11.05 hereof, any
legal or other expenses reasonably incurred in connection with
investigating or defending any Third-Party Claims, whether or not
resulting in any liability, and all amounts paid in respect of claims
or actions in accordance with Section 11.05 hereof; provided, however,
that Losses shall not include any loss of profit or anticipated profit
and shall be net of any insurance proceeds received by an Indemnitee
from a nonaffiliated insurance company on account of such Losses
(after deducting any direct costs incurred in obtaining such
proceeds); provided, further, however, that nothing in this Article XI
shall require an Indemnitee to proceed against its insurance carrier.
(b) Third-Party Claims. The term "Third-Party Claims" shall mean any
claims, actions or rights asserted against an Indemnitee by a party
that is not the Indemnitor and is not an Affiliate of the Indemnitee,
including without limitation, claims by governmental authorities.
(c) Indemnitee. The term "Indemnitee" shall mean any Person that may be
entitled to seek indemnification pursuant to the provisions of Section
11.02 or Section 11.03 hereof.
(d) Indemnitor. The term "Indemnitor" shall mean any Person that may be
obligated to provide indemnification pursuant to Section 11.02 or
Section 11.03 hereof.
(e) Specified Officer. With respect to any particular matter, the term
"Specified Officer", as applied to any corporation, shall mean the
chairman, president, general counsel, any vice president, or secretary
of such corporation, or the manager of any plant or other facility of
such corporation, or any other employee or agent of such corporation
(who may report, directly or indirectly, to such person) having
responsibility for an operational or staff function who in the normal
course of such officer's, manager's or other person's responsibility
would reasonably be expected to have knowledge of such matter.
(f) Notice Period--Third-Party Claims. The term "Notice Period", as
applied to any Third-Party Claim for which an Indemnitee seeks to be
26
indemnified pursuant to this Article XI, shall mean the period ending
the earlier of the following:
(1) Three months after the time at which any Specified Officer of the
Indemnitee (or the Indemnitee, if the Indemnitee is an
individual) has received actual notice of such Third-Party Claim.
(2) With respect to any Third-Party Claim that has become the subject
of proceedings before any court or tribunal, such time as would
allow the Indemnitor sufficient time to contest, on the
assumption that there is an arguable defense to such Third-Party
Claim, such proceeding prior to any judgment or decision thereon.
(3) With respect to any Third-Party Claim that the Indemnitee
proposes to pay or settle, such time as would provide the
Indemnitor sufficient time prior to such payment or settlement to
determine whether to contest such claim and assume the defense
pursuant to Section 11.05.
(4) The time period under which a Claim Notice must be given as set
forth in Section 11.10.
(g) Claim Notice. The term "Claim Notice" shall have the meaning set forth
in Section 11.04.
Section 1.112 Indemnity by Seller.
-------------------
Subject to Section 11.10, Seller shall, to the fullest extent permitted by
law, defend and hold harmless Buyers and their Affiliates, including the
directors, officers, employees, agents and representatives of each of them (each
of whom may be an Indemnitee pursuant to this Section 11.02), from and against
the following:
(a) Bulk Sales or Transfers Law. All Third-Party Claims to the extent that
such Third-Party Claims arise out of, result from, or relate to any
Losses resulting from Seller's failure to comply with the requirements
of any Bulk Sales or Transfers or similar legislation applicable to
the transaction provided for in this Agreement.
(b) Breach. All Losses arising from the breach by Seller in any material
respect of any of its covenants or representations set forth in this
Agreement other than those set forth in Exhibit N.
27
(c) Liabilities. Other than Losses pertaining to Environmental Loss
(specifically sections 4.08, 7.06 and 11.10(a)) all Losses relating to
the ownership or operation of the Retail Operations prior to the
Closing Date.
Section 1.113 Indemnity by Buyer.
------------------
Buyers shall, to the fullest extent permitted by law, defend and hold
harmless Seller and its Affiliates, including the current and former directors,
officers, employees, agents and representatives of each of them (each of whom
may be an Indemnitee pursuant to this Section 11.03), from and against the
following:
(a) Liabilities. All Losses (other than Losses for which Seller is
obligated to indemnify Buyers pursuant to Section 11.02) relating to
or arising from the ownership, operation, occupancy, construction,
condition (including without limitation environmental conditions) or
use of the Purchased Assets or the Real Property or operation of a
dealership, to the extent such Losses relate to, arise from or are
associated with any period after the Closing Date and whether arising
from the negligence or gross negligence of Seller or any of its
Affiliates or otherwise.
(b) Breach. All Losses arising from the breach by Buyers in any material
respect of any of their covenants or representations set forth in this
Agreement other than those set forth in Exhibit N.
Section 1.114 Notification of Third-Party Claims.
----------------------------------
In no case shall any Indemnitor under this Agreement be liable with respect
to any Third-Party Claim against any Indemnitee unless the Indemnitee shall have
delivered to the Indemnitor within the Notice Period a notice ("Claim Notice")
describing in reasonable detail the facts giving rise to such Third-Party Claim
and stating that the Indemnitee intends to seek indemnification for such
Third-Party Claim from the Indemnitor pursuant to this Article XI.
Section 1.115 Defense of Claims.
-----------------
Upon receipt of a Claim Notice from an Indemnitee with respect to any
Third-Party Claim, the Indemnitor may assume the defense thereof with counsel
reasonably satisfactory to such Indemnitee and the Indemnitee shall cooperate in
all reasonable respects in such defense. The Indemnitee shall have the right to
employ separate counsel in any action or claim and to participate in the defense
thereof, provided that the fees and expenses of counsel employed by the
Indemnitee shall be at the expense of the Indemnitor only if such counsel is
retained pursuant to the second succeeding sentence or if the employment of such
counsel has been specifically authorized by the Indemnitor. The Indemnitor may
conduct
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such defense in the name of or on behalf of the Indemnitee or Indemnitor and
shall have full authority and control with respect thereto, including the
settlement thereof. If the Indemnitor does not notify the Indemnitee within 60
days after receipt of the Claim Notice that it elects to undertake the defense
thereof, the Indemnitee shall have the right to defend at the expense of the
Indemnitor the claim with counsel of its choosing, subject to the right of the
Indemnitor to assume the defense of any claim at any time prior to settlement or
final determination thereof. In such event, the Indemnitee shall send a written
notice to the Indemnitor of any proposed settlement of any claim, which
settlement the Indemnitor may reject, in its reasonable judgment, within 30 days
after receipt of such notice. Failure to reject such settlement within such
30-day period shall be deemed an acceptance of such settlement. In the event the
Indemnitor rejects such settlement, the Indemnitee shall have the right to
settle the claim over the objection of the Indemnitor, unless the Indemnitor
assumes the defense from the Indemnitee upon rejecting the settlement.
Section 1.116 Notice of Other Claims.
----------------------
In the event any Indemnitee should have a claim against any Indemnitor
under or in connection with this Agreement that does not involve a Third-Party
Claim, the Indemnitee shall notify the Indemnitor of such claim, specifying the
nature of and specific basis for such claim and the amount of such claim, with
reasonable promptness, but in no event later than when notice thereof is
required to be made pursuant to Section 11.10. The Indemnitor shall remit
payment for the amount of such claim upon receipt of an invoice therefor, or in
the event of a dispute, the Indemnitee and the Indemnitor shall proceed in good
faith to negotiate a resolution of such dispute, and if not resolved through
negotiations, such dispute will be resolved by litigation in an appropriate
court of competent jurisdiction.
Section 1.117 Access and Cooperation.
----------------------
After the Closing Date, Seller and Buyers shall each cooperate fully with
the other as to all claims made under this Agreement, shall make available to
the other as reasonably requested all information, records and documents
relating to all such claims and shall preserve all such information, records and
documents until the termination of any such claim. Seller and Buyers also shall
each make available to the other, as reasonably requested, its personnel
(including technical and scientific), agents and other representatives who are
responsible for preparing or maintaining information, records or other
documents, or who may have particular knowledge with respect to any such claim.
Section 1.118 No Insurance.
------------
The indemnifications provided for in this Article XI shall not be construed
as a form of insurance and shall be binding upon and inure to the benefit of
Seller and Buyers and their respective Affiliates, successors and permitted
assigns. Seller and Buyers hereby waive for themselves, their Affiliates,
successors and permitted assigns, including without limitation any insurers, any
rights to subrogation for Losses arising from claims for which each of
29
them is respectively liable or against which each respectively indemnifies the
other, and, if necessary, Seller and Buyers shall obtain waiver of such
subrogation from their respective insurers.
Section 1.119 Indemnification Matters Related to Taxes.
----------------------------------------
Notwithstanding any other provisions of Article XI to the contrary, the
agreement of the parties with respect to tax matters, the representations and
warranties of the parties with respect to tax matters, and indemnification
obligations, limitations and procedures related to Taxes (as defined in Exhibit
N) shall be governed by and are set forth in Exhibit N.
Section 11.10 Limitations on Liabilities.
--------------------------
(a) Limitation on Liability.
(1) No claim for indemnification under Section 11.02 (the
"Indemnifiable Claims") shall be made by either of the Buyers for
individual Losses of $15,000 or less (an Indemnifiable Claim in
excess of $15,000 is referred to as an "Indemnifiable Loss").
(2) No Indemnifiable Claim shall be made by either of the Buyers
unless and until the Indemnifiable Losses for which Buyers are
entitled to indemnification hereunder exceed $100,000 in the
aggregate, and thereafter may be made only to the extent the
Indemnifiable Losses exceed such amount in the aggregate.
(3) Seller's obligations for any claim relating to any Environmental
Law, Hazardous Materials or other environmental matter shall
arise only under Section 11.02(b) for breaches of (A) the
representations and warranties contained in Section 4.08 or (B)
Seller's obligations under Section 7.06.
(4) The Seller shall have no obligation for Losses with respect to
claims relating to any Environmental Law, Hazardous Materials or
other environmental matters (A) to the extent they exceed the
amount that would be expended with respect thereto by a
reasonable and prudent owner and operator for its own account
under the same or similar circumstances, or (B) that are
attributable to any change in land use unrelated to the Retail
Operations as currently conducted by Seller, which use is subject
to more stringent investigation, monitoring, remediation or
cleanup requirements under any Environmental Law.
30
(5) Seller shall have no liability for any Indemnifiable Loss, and
Buyers shall have no liability for any claim for indemnification
under Section 11.03, unless a Claim Notice or other notice has
been delivered to the other as required by Section 11.04 or
Section 11.06. In addition, and anything herein to the contrary
notwithstanding, Seller shall have no liability for any
Indemnifiable Loss, and Buyers shall have no liability for any
claim for indemnification under Section 11.03, for any breaches
of covenants hereunder, unless a Claim Notice or other notice has
been delivered to the other within one year after performance of
the covenant giving rise to such Indemnifiable Loss or claim for
indemnification, as the case may be, is required under this
Agreement. In addition, and anything herein to the contrary
notwithstanding, Seller shall have no liability for any
Indemnifiable Loss for any breaches of representations hereunder
unless a Claim Notice or other notice has been delivered to it
within the period that the representation giving rise to such
Indemnifiable Loss survives as set forth in Section 12.02.
(b) No Incidental or Consequential Damages. Neither Buyers nor Seller
shall be entitled to recover from the other for any Losses any amount
in excess of the actual damages suffered by such party. Buyers and
Seller waive any right to recover punitive, special, exemplary,
incidental and consequential damages.
(c) Maximum Liability. Neither Seller nor any of its Affiliates shall be
liable for aggregate Losses (i) in excess of the Purchase Price, or
(ii) for any Losses pertaining to the Real Property arising from its
obligations under Sections 4.08 and 7.06 in excess of $450,000.
(d) Exclusive Remedy. Seller and Buyers each hereby acknowledges and
agrees that its sole and exclusive remedy with respect to any and all
claims relating to the representations, warranties, covenants and
agreements contained in this Agreement or other claims pursuant to or
in connection with this Agreement shall be pursuant to the
indemnification provisions set forth in this Article XI or, with
respect to tax matters set forth in Exhibit N, pursuant to Exhibit N,
and, in furtherance of the foregoing, Seller and Buyers each hereby
waives, to the fullest extent permitted under applicable law, any and
all rights, claims and causes of action it may have against the other
arising under or based upon any federal, state or local statute, law,
ordinance, rule or regulation (including, without limitation, any such
rights, claims or
31
causes of action arising under or based upon common law or otherwise).
(e) No Rescission. Anything herein to the contrary notwithstanding, no
breach of any representation, warranty, covenant or agreement
contained herein shall give rise to any right on the part of Buyers or
Seller, as the case may be, after the consummation of the purchase and
sale contemplated hereby, to rescind this Agreement or any of the
transactions contemplated hereby.
(f) Mitigation. Buyers and Seller shall take all reasonable steps to
mitigate all Losses upon and after becoming aware of any event that
could reasonably be expected to give rise to any Losses that are
indemnifiable hereunder.
ARTICLE 12.
EXTENT AND SURVIVAL OF REPRESENTATIONS,
---------------------------------------
WARRANTIES, COVENANTS AND AGREEMENTS
------------------------------------
Section 1.121 Scope of Representations.
------------------------
Except as and to the extent expressly set forth in this Agreement, Seller
disclaims all liability and responsibility for any other representation,
warranty, statement or information made or communicated (orally or in writing)
to Buyers (including, but not limited to, any opinion, information or advice
that may have been provided to Buyers by any officer, stockholder, director,
employee, agent, consultant or representative of Seller or any of its
Affiliates, including Seller, or any other agent, consultant or representative).
Buyers acknowledge and affirm that (i) they have had access to the officers,
professional advisors, employees, assets and operations of Seller; and (ii) in
making the decision to enter into this Agreement and to consummate the
transactions contemplated hereby, Buyers have relied solely on the basis of
their own independent investigation of the Purchased Assets, the Real Property
and the Retail Operations and on the express representations, warranties and
covenants in this Agreement. Buyers also acknowledge that neither Seller nor any
of its agents, consultants or representatives makes any warranties, express or
implied, with respect to the quality, design, physical condition or fitness for
a particular purpose of any of the property, equipment and fixtures included in
the Purchased Assets, the Real Property or the Retail Operations and that all
such property, equipment and fixtures are being transferred to the Buyers "AS
IS" AND "WITH ALL FAULTS" IN THE CONDITION EXISTING ON THE CLOSING DATE, EXCEPT
FOR (i) REPRESENTATIONS AND WARRANTIES MADE BY SELLER REGARDING TITLE AND
OWNERSHIP OF THE PURCHASED ASSETS OR THE REAL PROPERTY IN THIS AGREEMENT AND
(ii) THOSE WARRANTIES SET FORTH IN SELLER'S CURRENTLY APPLICABLE PUBLISHED
WARRANTY POLICIES AND PROCEDURES, AND SELLER EXPRESSLY DISCLAIMS
32
AND NEGATES TO BUYERS AND ALL THIRD PARTIES ANY AND ALL WARRANTIES CONCERNING
THE CONDITION OF THE PURCHASED ASSETS OR THE REAL PROPERTY, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION (A) ANY IMPLIED OR EXPRESS WARRANTY OF QUALITY,
CONDITION OR MERCHANTABILITY, AND (B) ANY IMPLIED OR EXPRESS WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE.
Section 1.122 Survival.
--------
The representations and warranties of Seller set forth in this Agreement
and in any certificate or instrument delivered in connection herewith shall
survive for a period of one year following the Closing Date.
ARTICLE 13.
BROKERS
-------
Each of the Buyers and Seller represent to the other that, neither of the
Buyers nor Seller has, directly or indirectly, employed any broker, finder or
intermediary in connection with this Agreement or the transactions contemplated
hereby who might be entitled to a fee or commission upon the execution of this
Agreement or consummation of the transactions contemplated hereby.
ARTICLE 14.
EXPENSES
--------
Except as otherwise specifically provided herein, each party will bear all
legal and other costs and expenses incurred by it.
ARTICLE 15.
NOTICES; MISCELLANEOUS
----------------------
Section 1.151 Notices.
-------
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by facsimile transmission or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice; provided, that notices of a change
of address shall be effective only upon receipt thereof):
33
(a) To Seller, as follows:
By Mail By Hand Delivery
------- ----------------
Case Corporation Case Corporation
000 Xxxxx Xxxxxx 000 Xxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Attn: Xxx Xxxxxxx Attn: Xxx Xxxxxxx
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
with a copy to: with a copy to:
Case Law Department Case Law Department
000 Xxxxx Xxxxxx 000 Xxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Xx. Attn: Xxxxxxx X. Xxxxx, Xx.
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
(b) To Buyer, as follows:
By Mail By Hand Delivery
------- ----------------
Western Power & Equipment Corp. Western Power & Equipment Corp.
0000 X.X. 00xx Xxxxxx, Xxxxx 000 4601 X.X. 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attn: President Attn: President
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
(c) To LLC, as follows:
By Mail By Hand Delivery
------- ----------------
C. Xxxx XxXxxx C. Xxxx XxXxxx
00000 X.X. Xxxxxx Xxxx 00000 X.X. Xxxxxx Xxxx
Xxxxxx, XX 00000 Yacolt, XX 00000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Section 1.152 Miscellaneous.
-------------
(a) Entire Agreement. This Agreement supersedes all prior agreements
between the parties (written or oral) and, except as aforesaid, is
intended as a complete and exclusive statement of the terms of the
Agreement between the parties. This Agreement may be amended only by a
written instrument duly executed by the parties.
34
(b) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to
the principles of conflicts of laws of such state.
(c) Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) Assignability. Buyers may not transfer, assign or encumber any of
their rights, duties or obligations under this Agreement or any part
hereof without the prior written consent of Seller. Seller may, at any
time, transfer, assign or encumber any of its rights, duties or
obligations under this Agreement, without the consent of Buyers.
Except as otherwise provided herein, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
(e) No Third-Party Beneficiaries. Except as otherwise expressly provided
herein, nothing in this Agreement shall entitle any Person (other than
Seller, Buyers or their respective successors and assigns permitted
hereby) to any claim, cause of action, remedy or right of any kind.
(f) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability,
but this shall not affect the validity or enforceability of any of the
terms and provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable,
such provision shall be interpreted to be only so broad as is
enforceable.
(g) Equitable Relief. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were
otherwise breached. Accordingly, it is agreed that the parties shall
be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
(h) Counterparts. This Agreement may be executed in any number of
counterparts, no one of which needs to be executed by all the parties,
and this Agreement shall be binding upon all the parties with the same
force and effect as if all the parties had signed the same document,
and each such signed counterpart shall constitute an original of this
Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
CASE CORPORATION ("Seller")
By /s/ XXXXXX X. XXXXXX
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Authorized Agent
WESTERN POWER & EQUIPMENT CORP.
("Buyer")
By /s/ C. XXXX XxXXXX
------------------
Name: C. Xxxx XxXxxx
Title: President and CEO
XxXXXX-XXXXX REALTY COMPANY III,
L.L.C.
("Buyer")
By /s/ C. XXXX XxXXXX
------------------
C. Xxxx XxXxxx, Manager
36
(Exhibits omitted)
37