Exhibit 2.1
Asset Purchase Agreement, dated March 27, 1998, by and among Allied Products
Corporation, Great Bend Manufacturing Company, and Owosso Corporation.
ASSET PURCHASE AGREEMENT
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This Asset Purchase Agreement (the "Agreement") is made and entered
into as of the close of business on this 27th day of March, 1998, by and among
Allied Products Corporation, a Delaware corporation ("Buyer"), Great Bend
Manufacturing Company, Inc., a Kansas corporation ("Seller"), and Owosso
Corporation, being the sole shareholder of Seller (the "Shareholder").
In consideration of the mutual representations, warranties, covenants
and agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I.
ACQUISITION OF ASSETS
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1.1. Purchased Assets. Upon the terms and subject to the conditions
of this Agreement, on the Closing Date (as defined in Section 1.7 hereof),
Seller shall sell, transfer, assign, convey and deliver to Buyer, and Buyer
shall acquire from Seller, free and clear of all liens, claims, charges,
encumbrances and security interests except for the Assumed Liabilities (as
defined in Section 1.3), all of the assets of the Seller used in the Seller's
Business (the "Business"), including without limitation, those set forth in
the Closing Balance Sheet (as defined in Section 1.5(d), excluding Excluded
Assets as defined in Section 1.2, but including, without limitation, the
following assets of Seller, wherever located, existing as of that date:"
(a) All accounts and notes receivable (the "Receivables") of
Seller;
(b) All raw materials, work-in-process and finished goods
inventory (the "Inventory") located on Seller's premises at Great
Bend, Kansas (the "Premises") and at all other locations, or in
transit thereto, or in transit therefrom including in transit from
suppliers;
(c) All fixed and moveable assets (the "Fixed Assets")
including, without limitation, machinery, equipment, fork lifts, xxx
cats, trucks, automobiles, furniture and fixtures, supplies, tools,
dies, spare and replacement parts, hardware, racks, accessories and
similar assets, including, without limitation, those Fixed Assets set
forth on Exhibit 1.1(c) hereof;
(d) All rights under contracts, leases and agreements of
Seller which are specifically identified on Schedule 2.18, are not
required to be identified in Schedule 2.18, or are entered into by
Seller in the ordinary course of business between the date hereof and
Closing Date (the "Contracts");
(e) The real property located in Great Bend, Kansas, more
specifically identified on Exhibit 1.1(e) hereof (the "Owned Real
Property");
(f) All intellectual property, including all trade secrets,
patents, copyrights, business methods, trade names, trademarks,
service marks, corporate names, inventions, specifications, research
and development, improvements, processes, mailing lists, know-how and
proprietary and confidential information (the "Intellectual
Property");
(g) All transferable permits, licenses, approvals, waivers,
variances, registrations, certifications, and authorizations issued
to Seller or used in connection with the Business (the "Permits");
(h) The deferred tax assets of Seller in the amounts
reflected on the books and records of the Company relating to the
vacation pay accrual, the bad debt reserve and the warranty reserve
("Deferred Tax Assets"); and
(i) Seller's corporate name, trade names, trademarks,
prepaid expenses and deposits, goodwill, and all originals or copies
of books and records associated with the Purchased Assets other than
the Excluded Assets (collectively the "Other Assets"). (All
Receivables, Inventory, Fixed Assets, Contracts, Owned Real Property,
Deferred Tax Assets, Intellectual Property, Permits and Other Assets
shall constitute the "Purchased Assets.").
1.2. Excluded Assets. Notwithstanding anything herein to the
contrary, the Purchased Assets shall not include, and Seller shall retain, the
following assets of Seller (collectively, the "Excluded Assets"):
(a) Any amounts owing from Shareholder to Seller or any
Affiliate ("Affiliate" shall have the same meaning as defined in the
Securities Act of 1934, as amended) of Seller, other than Receivables
for products purchased in the ordinary course of business.
(b) Minute books and other corporate records.
(c) cash and cash equivalents, including cash in bank
accounts;
(d) all deferred tax assets of Seller to the extent not
included in 1.1(h); and
(e) any refund received arising from the Seller's pending
appeal of county property taxes.
1.3. Assumed Liabilities. Buyer agrees to assume and be obligated to
pay and perform as of the Closing Date solely and only (a) liabilities set
forth in the Closing Balance Sheet except Excluded Liabilities as defined in
Section 1.4, (b) the liabilities and obligations under the Contracts to the
extent relating to periods after the Closing, (c) liabilities and obligations
relating to dealer returns and warranty obligations (but not including
warranty claims under product liability claims) and (d) Seller's obligations
to its employees for holiday pay and vacation pay (the "Assumed Employee
Liabilities") (collectively, the "Assumed Liabilities").
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1.4. Excluded Liabilities. Except for the Assumed Liabilities which
shall be assumed by Buyer in Section 1.3 above, Buyer shall not assume or be
obligated for any other liability, obligation or commitment of Seller, direct
or indirect, known or unknown, absolute or contingent whenever arising, and,
by way of illustration but not limitation, for any of the following
liabilities, obligations or commitments of Seller (the "Excluded
Liabilities"):
(a) Any foreign, federal, state, county or local income tax
applicable to the Seller (the "Income Taxes");
(b) Any liability of Seller to any of its Affiliates except
for those arising from the purchase of products in the ordinary
course of business at fair market value;
(c) Any liabilities in respect of injury to or death of any
person or damage to or destruction of any property, whether based on
negligence, strict liability, enterprise liability or any other legal
or equitable theory, arising in respect of any products manufactured
or sold by Seller or any of Seller's predecessors on or prior to the
Closing Date, whether or not such liabilities are described, listed
or referred to on any schedule hereto;
(d) Any liability, obligation, or commitment of Seller to
any of its employees (other than the Assumed Employee Liabilities)
including compensation, medical and workers' compensation and benefit
payments and any liability, obligation, or commitment of Seller under
any Employee Plan as defined in Section 2.17, including, but not
limited to, any Employee Plan listed on Schedule 2.17;
(e) Any cost, broker's or finder's fee or expense incurred
by Seller incident to its negotiation and preparation of this
Agreement and its performance and compliance with the agreements and
conditions contained herein;
(f) Any liability for any sales or transfer taxes incident
to the transactions contemplated hereby;
(g) Any liability, obligation or commitment incurred by
Seller after the Closing Date;
(h) Any liability for that certain Employment Agreement by
and between the Seller and Xxx Xxxxxxx (the "Xxxxxxx Agreement"); and
(i) Any other liability, obligation or commitment not
expressly assumed by Buyer hereunder, whether arising prior to, on,
or after the Closing except to the extent such liability, obligation
or commitment is an Assumed Liability.
1.5. Purchase Price Computation, Payment and Post-Closing
Adjustments.
(a) Purchase Price. The purchase price (the "Purchase
Price") shall be the sum of (i) the Net Asset Book Value (as defined
below), and (b) Three Million Dollars
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($3,000,000). The Net Asset Book Value shall equal the Purchased Assets
less the Assumed Liabilities, as reflected on the Closing Balance Sheet
established pursuant to Section 1.5(d). The Closing Balance Sheet will
contain reasonably adequate reserves for bad debt, inventory, and
warranties.
(b) Estimated Purchase Price. Seller shall prepare an
estimated balance sheet (the "Estimated Balance Sheet") on the basis
of the most recent monthly income statement and balance sheet
(collectively, the "Financial Statements"), but shall include only
the Purchased Assets and the Assumed Liabilities and shall reflect
the Seller's estimate of the Net Asset Book Value. Seller shall
prepare each item and the Estimated Balance Sheet in accordance with
generally accepted accounting principles and consistent with Seller's
prior practices in preparing the Financial Statements. The Estimated
Purchase Price shall equal the Seller's estimate of the Net Asset
Book Value plus Three Million Dollars ($3,000,000). Seller shall
provide Buyer with the Estimated Balance Sheet not fewer than five
(5) business days prior to the Closing Date.
(c) Payment. At the Closing, Buyer shall pay to Seller by
wire transfer of immediately available funds to an account or
accounts designated in writing by Seller an amount equal to the
Estimated Purchase Price.
(d) Preparation of Draft Closing Balance Sheet. Within 45
days after the Closing Date, the Seller will prepare and deliver to
the Buyer a balance sheet (the "Draft Closing Balance Sheet") as of
the close of business on the Closing Date determined on a pro forma
basis as though the parties had not consummated the transactions
contemplated by this Agreement. The Draft Closing Balance Sheet shall
include only the Purchased Assets and the Assumed Liabilities and
shall reflect the Net Asset Book Value. The Seller will prepare each
item on the Draft Closing Balance Sheet in accordance with generally
accepted accounting principles and consistent with Seller's prior
practices in the preparation of the Financial Statements. The
Inventory shall be determined by the parties in accordance with the
principles set forth on Exhibit 1.5(d) based on a physical inventory
in which Buyer may participate. The "Adjusted Purchase Price" shall
be the sum of the Net Asset Book Value as set forth in the Draft
Closing Balance Sheet and Three Million Dollars ($3,000,000).
(e) Adjustment Dispute Resolution. If Buyer advises Seller
that it has no objections to Seller's determination of the Draft
Closing Balance Sheet and the Adjusted Purchase Price, the Draft
Closing Balance Sheet shall be the Closing Balance Sheet and Seller's
determination of the Adjusted Purchase Price shall become the
Purchase Price. If Buyer has objections, Buyer will deliver a
detailed statement describing its objections to the Seller within 45
days after receiving the Draft Closing Balance Sheet. The Buyer and
Seller will use reasonable efforts to resolve any such objections
themselves. If the parties do not obtain a final resolution within 45
days after the Seller has received the statement of objections,
however, the disputes shall be submitted to an independent public
accounting firm of national recognition mutually selected by Seller
and Buyer (the "Accountants"). Promptly, but not later than thirty
(30) days after the acceptance of its
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appointment, the Accountants will determine (based solely on
presentations by the Seller and Buyer to the Accountants and not by
independent review) only those items in dispute and will render a
report as to its resolution of such items and the resulting calculation
of the items which are reflected in the determination of the Closing
Balance Sheet and the Purchase Price. The written decision of the
Accountants shall be determinative of the Closing Balance Sheet and the
Purchase Price and shall be final and binding on the parties hereto and
shall not be subject to dispute or review. Any fees or expenses payable
to the Accountants shall be shared equally between Seller and Buyer.
(f) Payment of Purchase Price. If the Purchase Price as
reflected in the Closing Balance Sheet is less or more than the
Estimated Purchase Price, Seller or Buyer, as applicable, shall pay
the amount of the difference immediately to the other (or, if subject
to dispute in accordance with this subsection, immediately upon the
resolution of such dispute) and interest shall accrue at the rate of
9% per annum on any such payments from the date of delivery of the
Draft Closing Balance Sheet by Seller to Buyer to the date of
payment.
1.6. Closing Date. The completion of the purchase of the Purchased
Assets shall be on April 30, 1998 at 10:00 a.m. or, if earlier, three (3) days
following the satisfaction or waiver of all conditions to the obligations of
the parties to consummate the transactions contemplated hereby, unless such
time is extended or shortened as may be agreed upon by the Buyer and Seller
after the conditions set forth in Articles VI and VII have been satisfied, at
the offices of Xxxxxxx, Carton & Xxxxxxx, 000 Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, or at such other place or at such other time as shall be agreed upon by
the Buyer and Seller (such date and time being hereafter called the "Closing"
or "Closing Date").
1.7. Closing Date Deliveries.
(a) Seller's Deliveries. On the Closing Date, Seller shall
deliver to Buyer the following: (i) a warranty deed in a form
customary for warranty deeds in the State of Kansas and a xxxx of
sale in the form of Exhibit 1.7(a)(i), (ii) an assignment of
Contracts, together with any necessary consents and estoppel letters
in order to transfer the Contracts to Buyer, (iii) assignments of
Intellectual Property trade names or trademarks of Seller, (iv) a
good standing certificate of Seller from the Secretary of State and a
copy of Seller's Articles of Incorporation certified by the Secretary
of State, both dated not more than two (2) weeks prior to the Closing
Date, (v) all of the documents, instruments and opinions required to
be delivered by Seller pursuant to Article VI, (vi) an amendment to
Seller's Articles of Incorporation, changing Seller's corporate name
to a name not similar to "Great Bend," (vii) a purchase price
allocation schedule in the form attached hereto as Schedule 1.7
(a)(vii) which schedule shall be agreed upon by Buyer and Seller
prior to Closing, (viii) the ALTA Form B-1992 Owner's Title Insurance
Policy or marked up unconditional binder for such insurance,
including all required endorsements, dated as of the Closing Date and
showing title to the Owned Real Property in the name of Buyer, all as
provided in Section 4.6 hereof; (ix) all required real estate
transfer declaration or exemption certificate and any other documents
as may be otherwise necessary to transfer
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title to the Owned Real Property to Buyer; (x) all affidavits and
other statements of Seller as may be required by the title insurance
company in order to issue the title insurance policy contemplated by
Section 4.6 hereof, (xi) such other bills of sale, assignments, and
other instruments of transfer or conveyance as Buyer may reasonably
request or as may be otherwise necessary to evidence and effect the
sale and delivery of the Purchased Assets to Buyer, (xii) a written
receipt acknowledging Seller's receipt of the Estimated Purchase
Price, and (xiii) all Schedules to this Agreement updated through the
Closing Date. All deliverables by Seller to Buyer hereunder shall be
consistent with this Agreement, customary with transactions of this
nature, and in form and substance reasonably satisfactory to counsel
for Seller and Buyer in good faith.
(b) Buyer's Deliveries. On the Closing Date, Buyer shall
deliver to Seller (i) immediately available funds equal to the
Estimated Purchase Price, (ii) an assumption of the Assumed
Liabilities, and (iii) all of the documents, instruments and opinions
required to be delivered by Buyer pursuant to Article VII. All
deliverables by Buyer to Seller shall be consistent with this
Agreement, customary with transactions of this nature, and in form
and substance reasonably satisfactory to Buyer and Seller in good
faith.
1.8. Further Assurances. On the Closing Date, Seller shall (i)
deliver to the Buyer such other bills of sale, endorsements, assignments and
other good and sufficient instruments of conveyance and transfer, in form
reasonably satisfactory to the Buyer and its counsel, as the Buyer may
reasonably request or as may be otherwise reasonably necessary to vest in the
Buyer all the right, title and interest of Seller in, to or under any or all
of the Purchased Assets and (ii) take all steps as may be reasonably necessary
to put the Buyer in actual possession and control of all the Purchased Assets.
From time to time following the Closing, Seller shall execute and deliver, or
cause to be executed and delivered, to the Buyer such other instruments of
conveyance and transfer as the Buyer may reasonably request or as may be
otherwise necessary to more effectively convey and transfer to, and vest in,
the Buyer and put the Buyer in possession of, any part of the Purchased
Assets, and, in the case of licenses, certificates, approvals, authorizations,
agreements, contracts, leases, easements and other commitments included in the
Purchased Assets which cannot be transferred or assigned effectively without
the consent of third parties which consent has not been obtained prior to the
Closing, to cooperate with the Buyer at its request in endeavoring to obtain
such consent promptly.
1.9. Books and Records. Buyer agrees to afford to Seller reasonable
access, during normal business operations, to all of Seller's books and
records transferred to Buyer under this Agreement. Seller may, at its own cost
and expense, make copies of such books and records. Buyer shall notify Seller
prior to removing or destroying said books and records at no cost. Seller
shall give Buyer similar rights and access to the books and records which are
not transferred to Buyer hereunder.
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ARTICLE II.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF
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SELLER AND SHAREHOLDER
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As an inducement to the Buyer to enter into this Agreement, and to
consummate the transactions contemplated hereby, Seller and the Shareholder,
jointly and severally, represent, warrant and covenant to Buyer and agree as
follows, except as set forth in the Schedules attached to this Agreement and
any additional Schedules delivered to Buyer within ten (10) business days
after the execution of this Agreement:
2.1. Organization of Seller. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Kansas
and is duly qualified to transact business as a foreign corporation and is in
good standing in each of the jurisdictions requiring such qualification and in
which the ownership or leasing of the Purchased Assets or the conduct or
nature of the Business requires such qualification, each of which
jurisdictions is listed in Schedule 2.1, except where such qualification would
not have a material adverse effect, individually or in the aggregate, on
Seller's assets, business, operations or financial condition ("Material
Adverse Effect"). Seller has full corporate power and authority to own, lease
or otherwise hold and to operate and use the Purchased Assets and to carry on
the Business as now conducted. The Shareholder constitutes the only person who
owns, beneficially or of record, any shares of capital stock of Seller.
2.2. Subsidiaries and Investments. Seller has no subsidiaries or
interests in any corporation, partnership, joint venture or other association.
2.3. Authority. The Seller and the Shareholder have full corporate
power and authority to enter into this Agreement, to consummate the
transactions contemplated hereby and to comply with the terms, conditions and
provisions hereof.
The execution, delivery and performance of this Agreement by Seller
and Shareholder, including, without limitation, the deliveries and other
agreements of Seller contemplated hereby, have been duly authorized and
approved by the Boards of Directors of Seller and of the Shareholder and do
not require any further authorization or consent of any third party. This
Agreement is, and each other agreement or instrument of Seller or Shareholder
contemplated hereby will be, the legal, valid and binding agreement of Seller
and Shareholder, enforceable in accordance with their respective terms, except
as enforceability may be limited by creditors' rights and the discretion of
the courts (the "Enforceability Exception").
Except as set forth on Schedule 2.3, neither the execution nor the
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will conflict with or result in any violation of or
constitute a default under any term of the Articles of Incorporation or
By-Laws of Seller or Shareholder, or any agreement, mortgage, debt instrument,
indenture, franchise, license, permit, authorization, lease or other
instrument, judgment, decree, order, or to Seller's knowledge, any law or
regulation by which Seller or Shareholder is bound, or result in the creation
of any lien, security interest, charge or encumbrance upon any of the
Purchased Assets
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except where such violation, default or creation would not have a Material
Adverse Effect.
2.4. Financial Statements. Seller has heretofore delivered the
following financial statements (collectively, the "Financial Statements") to
Buyer: unaudited balance sheets and statements of income for the fiscal years
ended October 28, 1995, October 27, 1996 and October 26, 1997 and (ii)
unaudited balance sheets and statements of income as of and for the four
months ended February 28, 1998. The Financial Statements have been prepared in
conformity with generally accepted accounting principles consistently applied
and present fairly in all material respects the assets, liabilities, financial
position and results of operations of Seller as of their respective dates and
for the respective periods covered thereby.
2.5. Operations Since October 26, 1997.
(a) Since October 26, 1997, there has been (i) no material
adverse change in the Purchased Assets (in the aggregate) or the
Business, and no related fact or related condition exists or, to
Seller's knowledge, is contemplated or threatened which might
reasonably be expected to cause such a change in the future other
than Buyer's purchase and use of the Purchased Assets and (ii) no
damage, destruction, loss or claim, whether or not covered by
insurance, or condemnation or other taking adversely affecting in any
material respect the Purchased Assets (taken as a whole) or the
Business.
(b) Except as set forth on Schedule 2.5(b), since October
26, 1997, Seller has conducted the Business in all material respects
in the ordinary course consistent with past practice. Without
limiting the generality of the foregoing, since October 26, 1997,
Seller has not:
(i) sold, leased, transferred or otherwise disposed
of (except in the ordinary course of business), or mortgaged
or pledged, or imposed or suffered to be imposed any lien,
charge or encumbrance on, any of the Purchased Assets;
(ii) canceled any debts owed to, or claims held by,
Seller (including the settlement of any claims or
litigation) other than in the ordinary course of the
Business consistent with past practice;
(iii) canceled or terminated any material contract,
relationship, lease or agreement (except to the extent
terminated by lapse of time and not by default) or entered
into and become bound by any material contract,
relationship, lease or agreement except for customer
contracts entered into in the ordinary course of business;
(iv) delayed payment of any account payable or
other liability of the Business beyond the date when such
liability would have been paid in the ordinary course of the
Business consistent with the past practice; or
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(v) made any agreements, written or oral, to
perform any of the above, other than as contemplated or set
forth in this Agreement.
2.6. No Undisclosed Liabilities. Seller is not subject to any
liability (including, without limitation, unasserted claims whether known or
unknown), whether absolute, contingent, accrued or otherwise of a nature
required to be set forth on financial statements prepared in accordance with
generally accepted accounting principles, except for (i) liabilities set forth
in the balance sheet included in the Financial Statements as of October 26,
1997 and (ii) liabilities incurred in the ordinary course of business since
the date thereof, of the same general type and amount as those reflected on
the Financial Statements as of October 26, 1997, and entered on Seller's books
and records.
2.7. Taxes. Seller and Shareholder (with respect to the Business)
have filed or will timely file all required federal, state, county and local
income, excise, withholding, property, franchise and other tax returns,
declarations and reports which are required to be filed on or before the date
hereof and the Closing, and have paid or reserved for all taxes which have
become due pursuant to such returns or pursuant to any assessment which has
become payable. All monies required to be withheld by Seller from employees of
Seller for income taxes, social security and other payroll taxes have been
collected or withheld, and either paid to the respective governmental
agencies, set aside in accounts for such purpose, or accrued, reserved against
and entered upon the books of Seller. The returns, declarations and reports
referred to in the previous sentences of this Section are or will be true and
correct and, to Seller's and Shareholder's knowledge, reflect or will reflect
accurately all taxable income or tax liabilities for the periods covered
thereby. Seller has not received a notice that any examination of, or
proceeding with respect to, any tax return or report has been scheduled or
conducted. There are no outstanding agreements or waivers extending the
statutory period of limitations applicable to any tax return of Seller.
2.8. Availability of Assets and Legality of Use. With respect to the
tangible Purchased Assets, no notice of any violation of any applicable laws,
regulations, rules, ordinances, codes, licenses, franchises and permits
(including, without limitation, electrical, building, zoning, environmental
and occupational safety and health requirements) has been received by Seller.
The Purchased Assets constitute all of the assets used in and necessary for
the operation of the Business in the manner conducted by Seller.
2.9. Inventory. Subject to all applicable reserves, the Inventory is
of good, merchantable and usable quality, is salable in the ordinary course of
business of Seller and is reflected on the Financial Statements at the lower
of cost (on a first-in, first-out basis) or market value. The inventory
obsolescence policies of the Seller are appropriate to the nature of the
products sold and marketing methods used by the Seller and the reserve for
inventory obsolescence contained in the Financial Statements fairly reflects
the amount of excess, obsolete, defective, damaged, used, overstock and slow
moving inventory in accordance with the principles set forth on Exhibit
1.5(d). All Inventory which is work-in-process: (i) has been subjected to and
has passed all appropriate tests and inspections; (ii) (with respect to those
products which will be completed before Closing) may be sold in conformance
with
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specifications and industry standards; and (iii) to Seller's knowledge, in the
aggregate will be convertible (or has been converted) into Receivables.
2.10. Real and Personal Property Leases. Schedule 2.10 lists each
lease or other agreement or right which is contained in the Contracts, whether
written or oral, under which Seller is lessee of, or hold or operates, any
real estate (including the Premises), machinery, equipment, vehicle or other
real or personal property owned by a third party (including any of the
Shareholder or affiliates thereof) and which asset is used by the Seller.
2.11. Real Property. (a) Seller has good, valid and marketable title
to the Owned Real Property, free and clear of all liens, claims and
encumbrances, except for the lien for current taxes not yet due and payable
and except for those liens, claims, restrictions of record and other
encumbrances appearing in the Title Commitment, none of which materially
interfere with the use, access on ownership of the Owned Real Estate as it is
currently used ("Permitted Liens"). The Owned Real Property is not subject to
any leases or tenancies. To Seller's knowledge, none of the buildings,
structures, improvements, or parcels of real estate comprising the Owned Real
Property is in material violation of, or is the subject of any complaint or
notice of violation of, any applicable zoning ordinance, building code or
restrictive covenant.
(b) All violations of law or municipal ordinances, orders,
requirements or regulations currently existing of record noted in or
issued by the departments of buildings, fire, labor, health or other
federal, state, county, municipal and other governmental departments
and agencies having jurisdiction against or affecting the Owned Real
Property as of the Closing, and any outstanding work orders and
requirements of any company now or then insuring the Owned Real
Property against casualty loss, which work orders or requirements, if
not performed or satisfied, would have a material adverse effect on
the Business or the use of the Owned Real Property, shall be remedied
by Seller, at its sole cost and expense, prior to the Closing, Seller
shall furnish Buyer with an authorization to make the necessary
violation searches, and Buyer and its authorized representatives
shall have the right to enter upon and inspect the Owned Real
Property from time to time on and before the date of the Closing.
Seller shall not be required to remedy any violation caused by Buyer.
(c) Seller has no ground leases, space leases, licenses, or
agreements permitting others to utilize or occupy the Owned Real
Property.
(d) Except for the Permitted Liens, the Owned Real Property
is not affected by any special or other assessment for public
improvements or otherwise.
(e) Except for the Permitted Liens, the occupation and
condition of the Owned Real Property and its use in the Business do
not, and will not, violate any applicable deed restrictions,
easements or other covenants, restriction, agreements or urban
redevelopment plans of record or known to Seller, or any site plan
approvals or zoning or subdivision regulations as they exist at the
Closing, and Seller has received no notice of any such violation,
except as set forth in the Title Commitment.
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(f) No written notices of violation of law or ordinances,
orders, requirements or regulations of any federal, state, county,
municipal or other governmental or quasi-governmental department,
agency or authority relating to the Owned Real Property have been
received by Seller.
(g) The Owned Real Property is served by water, septic
system, gas, electricity, and telephone services.
(h) Seller has provided Buyer with copies of all
construction, service or maintenance contracts, or management
agreements (any such contracts and agreements being hereinafter
collectively referred to as the "Service Contracts"), and will cause
any Service Contracts to be terminated at Closing, at Buyer's request
upon 10 days' prior notice provided that no penalty is involved.
(i) Seller shall remove or satisfy any and all liens of
record any and all liens affecting the Owned Real Property prior to
the Closing, except for Permitted Liens.
(j) Prior to Closing, Seller will deliver true copies of any
certificates of occupancy, licenses and permits required for the use,
operation and occupancy of the Owned Real Property. The use of the
Owned Real Property is permitted by and is in substantial compliance
with such certificates of occupancy, licenses and permits.
(k) Seller has not received any written notice that the
Owned Real Property, or any interest therein, is or will be subject
to or affected by any condemnation, eminent domain or similar
proceeding.
(l) Seller has no knowledge and has received no notice of
any material structural defects in the improvements which are a part
of the Owned Real Property. To Seller's knowledge no latent effects
exist in any such improvements.
2.12. Intellectual Property. Seller owns, licenses or otherwise has
rights to use all of the Intellectual Property required for the operation of
the Business listed on Schedule 2.12 free and clear of all liens, claims,
security interests, encumbrances and restrictions and has not been licensed to
any person. Seller has not, to its knowledge, infringed on any Intellectual
Property of another. There is no claim pending, or to the knowledge of Seller
and the Shareholder, threatened against the Seller with respect to alleged
infringement of any Intellectual Property owned by another nor, to the
knowledge of Seller and the Shareholder, does the operation of the Business in
the manner in which it has been operated give rise to any such claim.
2.13. Receivables. All Receivables have arisen from bona fide
transactions by Seller in the ordinary course of Business, and, to Seller's
knowledge, except to the extent not in excess of the reserve for doubtful
accounts reflected on the Financial Statements, is in dispute, and to Seller's
knowledge, there is no basis for any of the foregoing or for any account
debtor to return any goods shipped by Seller. All Receivables (net of reserves
for uncollectible receivables set forth on the Closing Balance Sheet) are
collectable within one hundred twenty (120) days of Closing.
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2.14. Fixed Assets. To Seller's knowledge, all Fixed Assets are free
from material defects have been maintained in accordance with Seller's
historical practices which are appropriate under the circumstances and are
sufficient for the conduct of the Business, as it is currently conducted.
2.15. Title to Property. Except as set forth on Schedule 2.15, Seller
has good and marketable title to all of the Purchased Assets free and clear of
all liens, claims, charges, encumbrances, security interests, mortgages,
pledges, easements, defects in title, covenants and other restrictions of any
kind, which would materially adversely affect Seller's use of such assets
other than the Assumed Liabilities or the Permitted Encumbrances (defined
below). Delivery to the Buyer on the Closing Date of the instruments of
transfer contemplated hereunder will thereby transfer to the Buyer good and
marketable title to the Purchased Assets, subject to no liens, claims,
charges, encumbrances, security interests, mortgages, pledges, easements,
defects in title, covenants or other restrictions of any kind, other than
Permitted Encumbrances. "Permitted Encumbrances" as used herein means those
encumbrances, liens, charges, assessments, imperfections and exceptions set
forth on Schedules 2.15. Any items set forth on the form of title commitment
attached to Schedule 2.15 which cannot be identified as a permitted
encumbrance without the survey contemplated in Section 4.6 below, shall only
be deemed a Permitted Encumbrance if, after delivery of such survey it is
determined by Buyer that such item would not materially adversely affect
Buyer's use of the Owned Real Property.
2.16. Employee Relations. Seller is not a party and has never been a
party to any collective bargaining agreements. Seller has complied in all
material respects with all applicable laws, rules and regulations which relate
to prices, wages, hours, discrimination in employment and collective
bargaining and to the operation of the Business and is not liable for any
arrears of wages or any taxes or penalties for failure to comply with any of
the foregoing. To the of Seller's knowledge, there has been no union
organizing effort within the last five (5) years. There have been no strikes,
lockouts, slowdowns or similar work stoppages affecting Seller's employees and
none is pending or to Seller's knowledge, threatened. Schedule 2.16 lists all
employment agreements, policy manuals and other written understandings with
employees (including covenants not to compete). Seller has previously
delivered to Buyer a true and complete list setting forth the name, job title,
years of employment, salary and other cash compensation for fiscal 1997 for
all salaried employees. Schedule 2.16 sets forth all worker's compensation
claims outstanding against the Seller.
2.17. Employee Benefit Plans
(a) Except as described in Schedule 2.17, (i) the Seller
(either directly or indirectly through any other person or entity)
does not sponsor, maintain, contribute to or is not obligated under
any Employee Plan (as defined in paragraph (b) below) on behalf of
its employees; and (ii) each Employee Plan that is intended to be
qualified under Section 401(a) of the Internal Revenue Code of 1986,
as amended (the "Code"), has received a favorable determination
letter from the Internal Revenue Service stating that the plan is so
qualified and that the trust associated with the plan is tax-exempt
under Section 501(a) of the Code.
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(b) The term "Employee Plan" includes any pension,
retirement, savings, disability, medical, dental, health, life
(including, without limitation, any individual life insurance policy
under which an employee of the Seller is the named insured and as to
which the Seller makes premium payments, whether or not the Seller is
the owner, beneficiary or both of such policy), death benefit, group
insurance, profit-sharing, deferred compensation, stock option, stock
purchase, bonus, incentive, vacation pay, severance pay, or other
employee benefit plan, trust, arrangement, contract, agreement,
policy or commitment (including, without limitation, any pension plan
as defined in Section 3(2) of ERISA ("Pension Plan"), and any welfare
plan as defined in Section 3(1) of ERISA ("Welfare Plan"), whether or
not any of the foregoing is funded or insured and whether written or
oral, which is intended to provide or does in fact provide benefits
to any employees of the Seller, and to which the Seller is a party or
by which the Seller (or any of the rights, properties or assets of
the Seller) is bound. "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
(c) Each Welfare Plan which is a group health plan (within
the meaning of Section 5000(b)(1) of the Code) complies with, and has
been maintained and operated in accordance with, each of the health
care continuation requirements of Section 162(k) of the Code as in
effect for years beginning prior to 1989, Section 4980B of the Code
for years beginning after December 31, 1988, and Part 6 of Title I,
Subtitle B of ERISA, except for any noncompliance which does not have
and will not have a material adverse effect.
(d) Except as disclosed in Schedule 2.17, the Seller has no
liabilities for postretirement welfare benefits, including retiree
medical benefits, except for continuation coverage as may be required
by Section 4980B of the Code or similar state laws.
(e) No lawsuits, claims (other than routine claims for
benefits) or complaints to, or by, any person or governmental entity
have been filed, are pending or, to the knowledge of the Seller have
been threatened, and no facts or contemplated events exist that
reasonably could be expected to give rise to any such lawsuit, claim
(other than a routine claim for benefits) or complaint, with respect
to any Employee Plan.
(f) Except as disclosed on Schedule 2.17 (i) each Employee
Plan, the administrator and fiduciaries of each Employee Plan, and
Seller have at all times complied in all material respects with the
applicable requirements of ERISA (including, but not limited to, the
fiduciary responsibilities imposed by Part 4 of Title I, Subtitle B
of ERISA), the Code and any other applicable legal requirements
(including regulations and rulings thereunder) governing each
Employee Plan, and (ii) each Employee Plan has at all times been
properly administered in all material respects in accordance with all
such legal requirements, and in accordance with its terms to the
extent consistent with all such legal requirements.
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(g) Except as disclosed on Schedule 2.17, the Seller is not
delinquent as to contributions or payments to or in respect of any
Employee Plan as to which it is in any way obligated to make
contributions.
2.18. Status of Contracts. Schedule 2.18 is a true and complete list
of every Contract and agreement to which Seller is a party, or by which it is
bound, obligating Seller to make annual expenditures in excess of $50,000.00
or, if less, are otherwise material to the Business, individually or in the
aggregate, including, without limitation, all agreements relating to the
borrowing of money (unless otherwise set forth on the Financial Statements),
employment and collective bargaining, the purchase of materials, supplies,
equipment, machinery, parts, products or services (other than purchase orders
in the ordinary course of business) enabling a third party to distribute
Seller's products whether or not such contracts and agreements include items
besides the Contracts (said contracts, agreements, etc. are hereinafter
referred to as the "Seller Agreements"). Each of the Seller Agreements
constitutes a legal, valid and binding obligation of the Seller and, to
Seller's knowledge, the other party thereto, subject to the Enforceability
Exception, and is in full force and effect, may be transferred to the Buyer
(if Buyer so desires) pursuant to this Agreement and will continue in full
force and effect thereafter, in each case without breaching the terms thereof
or resulting in the forfeiture or impairment of any rights thereunder and
without the consent, approval or act of, or the making of any filing with, any
other party. Seller is not in, or alleged to be in, breach or default under,
nor is there or is there alleged to be any basis for termination of, any of
the Seller Agreements and, to the knowledge of Seller, no other party to any
of the Seller Agreements has breached or defaulted thereunder, and no event
has occurred and no condition or state of facts exists which, with the passage
of time or the giving of notice or both, would constitute such a default or
breach by Seller or, to the of the knowledge of Seller, by any such other
party. Seller is not currently renegotiating any of the Seller Agreements and
is not paying liquidated damages in lieu of the performance thereunder. Seller
will use its reasonable efforts to deliver true and complete copies of each of
the Seller Agreements to Buyer and will deliver each of the Seller Agreements
specifically requested by Buyer.
2.19. No Violations, Litigation or Regulatory Action.
(a) Except as disclosed on Schedule 2.20, to Seller's
knowledge, Seller has complied in all respects with all laws,
regulations, rules, writs, injunctions, ordinances, franchises,
decrees or orders of any court or of any foreign, federal, state,
municipal or other government, governmental department, commission,
board, bureau, agency or instrumentality which are applicable to the
Purchased Assets, Seller Agreements, or the Business;
(b) there are no lawsuits, claims, suits, proceedings or
investigations pending or, to Seller's knowledge, threatened against
or affecting Seller and the Shareholder, and there are no lawsuits,
claims, suits or proceedings pending in which Seller is the plaintiff
or claimant; and
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(c) there is no action, suit or proceeding pending or, to
Seller's knowledge, threatened which questions the legality or
propriety of the transactions contemplated by this Agreement.
2.20. Environmental Matters. Except as disclosed on Schedule 2.20:
the Seller is conducting (and has conducted) the Business in compliance with
all Environmental Legal Requirements (as defined below) and there is no
pending or, to the knowledge of the Seller or the Shareholder, threatened,
civil or criminal litigation, notice of violation, notice as a "potentially
responsible party" (as such term is defined under the United States
Comprehensive Environmental Response, Compensation and Liability Act, as
amended) or lien, or administrative proceeding relating to Environmental Legal
Requirements involving the Seller; Seller has delivered to Buyer a true and
correct copy of a Phase I environmental site assessment of the Owned Real
Property conducted upon Seller's acquisition of the property; since the Phase
I environmental site assessment, dated April 14, 1995, by Groundwater
Technology, Seller has not materially changed the operation of its Business;
the Seller has not transported, either on-site or off-site, Hazardous
Substances (as defined below) or arranged for the transportation of such
Hazardous Substances to any location which is the subject of Federal, state or
local enforcement, removal or remedial actions, inquiries or other
investigations; the Seller has not treated, stored or disposed of in material
violation of any applicable Environmental Legal Requirement, Hazardous
Substances on any property now or previously owned or leased by the Seller,
nor, to its knowledge, has anyone else treated, stored or disposed of in
material violation of any applicable environmental Legal Requirement,
Hazardous Substances on any property now or previously owned or leased by the
Seller. The term "Environmental Legal Requirement" shall mean any applicable
federal, state or local law, statute, rule, regulation or ordinance relating
to public health, safety or the environment, including, without limitation,
relating to releases, discharges or emissions to air, water, land or
groundwater, to the withdrawal or use of groundwater, to the use and handling
of polychlorinated biphenyls or asbestos, to the disposal, treatment, storage
or management of solid or Hazardous Substances or to exposure to toxic or
Hazardous Substances, or to the handling, transportation, discharge or release
of gaseous or liquid substances. The term "Hazardous Substance" shall mean any
hazardous or toxic material, substance or waste, including petroleum or any
fraction thereof, which is defined by those or similar terms or is regulated
as such under any federal, state or local authority having jurisdiction over
the Premises or its use. Notwithstanding anything herein to the contrary, any
representations or warranties by Seller in this Agreement relating to the
Business' compliance with Environmental Legal Requirements shall be deemed to
be made to the knowledge of Seller and Shareholder to the extent such
representation or warranty relates to the Business prior to Shareholder's
ownership of Seller.
2.21. Insurance. Schedule 2.21 sets forth a list and brief
description (including policy numbers, insurers, nature of coverage, limits,
deductibles, premiums, carriers, claims pending under any other insurance
policy, and effective and termination dates) of all policies of insurance
maintained, owned or held by Seller on the Purchased Assets on the date
hereof. Seller shall use commercially reasonable efforts to keep such
insurance or comparable insurance in full force and effect through the Closing
Date. Seller has complied in all respects with each of such insurance
policies, and has not failed to give any notice or present any claim
thereunder in a due and timely
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manner. Seller has delivered to the Buyer true and complete copies of each such
insurance policy or the certificates with respect thereto.
2.22. Broker or Finder. Except as set forth on Schedule 2.22, neither
Seller nor any party acting on its behalf has paid or become obligated to pay
any fee or commission to any broker, finder or intermediary for or on account
of the transactions contemplated by this Agreement. Notwithstanding
disclosure, Seller shall remain liable for the fees and commissions set forth
on Schedule 2.22.
2.23. Dealers and Original Equipment Manufacturer Customers. Schedule
2.23 contains a list of names of all dealers and original equipment
manufacturer ("OEM") customers (measured by dollar volume of business) of
Seller and the percentage of Seller's business which each such dealer and/or
OEM customer represented during the fiscal year 1997 and the top twenty (20)
customers measured by dollar volume for fiscal year 1996. Except as set forth
on Schedule 2.23, there exists no actual or, to Seller's and Shareholder's
knowledge, threatened termination, cancellation or litigation of, or any
significant adverse modification or change (other than seasonal or cyclical
business changes) in the business relationship of Seller with any dealer or
OEM customer listed in Schedule 2.23 and, to Seller's knowledge, there exists
no present condition or state of facts or circumstances, involving dealers or
any OEM customer which would materially adversely affect the Business or
prevent the Buyer from conducting the business after the consummation of the
transactions contemplated by this Agreement in essentially the same manner in
which it has heretofore been conducted by Seller, except as affected by the
transactions contemplated hereby or by Buyer's express actions.
2.24. Suppliers. Schedule 2.24 is a true and complete list by dollar
volume of purchases made during the 1997 fiscal year from the fifteen (15)
largest suppliers to Seller, exclusive of insurance and utilities. In the last
twelve (12) months, no such supplier has canceled or otherwise terminated, or
threatened in writing to cancel or otherwise terminate, its relationship with
the Seller. The Seller or the Shareholder has not received any written notice
and is not aware that any such supplier intends to cancel or otherwise modify
its relationship with the Seller, which cancellation or modification would
have a material adverse effect on the Seller.
2.25. Permits. Except as disclosed on Schedule 2.20, Seller and the
Business possess all Permits to conduct the Business except to the extent that
the failure to obtain or maintain any such Permits would not have a Material
Adverse Effect. The Permits are listed on Schedule 2.25 and those which are
not transferable are also designated in said Schedule. The Permits are in full
force and effect and, to Seller's knowledge, there are no defaults or
breaches, or events which but for notice or lapse of time or both would
constitute a breach or default under the Permits and all Permits are
transferable without obtaining the consent of the issuing body.
2.26. Product Warranties. To Seller's knowledge, the products
manufactured, sold, leased, and delivered by Seller have conformed in all
material respects with all applicable contractual commitments and all express
and implied warranties and, to Seller's knowledge, the warranty reserve on its
Financial Statements fairly reflects all obligations of Seller for replacement
or repair thereof or other damages in connection therewith. Substantially all
of the
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products manufactured, sold, leased, and delivered by Seller are subject to
standard terms and conditions of sale or lease. Schedule 2.26 generally
describes the warranty experience of the Business for the past nine years.
2.27. Product Liability. Seller has no liability (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated, and whether
due or to become due) arising out of any injury to individuals or property as
a result of the ownership, possession, or use of any product manufactured,
sold, leased, or delivered by Seller. Schedule 2.27 contains a true and
complete schedule of all product liability claims currently outstanding and
all such claims asserted against Seller during the fiscal years 1995-1997.
2.28. Sales by Product and by State. Schedule 2.28 is a complete list
by dollar volume of sales by product and by state made during the fiscal years
1996 and 1997.
2.29. Representations and Warranties at Closing. The representations
and warranties of Seller set forth in this Agreement shall be true on and as
of the Closing Date as though such representations and warranties were made on
and as of such date.
2.30. Disclosure. None of the representations or warranties of Seller
contained herein, and none of the information contained in the Schedules and
Exhibits referred to in Article II, is false or misleading in any material
respect or omits to state a fact here or therein necessary to make the
statements herein or therein not misleading in any material respect.
ARTICLE III.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYER
------------------------------------------------------
As an inducement to Seller and the Shareholder to enter into this
Agreement and to consummate the transactions contemplated hereby, the Buyer
hereby represents, warrants and covenants to Seller and agrees as follows:
3.1. Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware and has full corporate power and authority to own, lease or
otherwise hold its properties and assets and to carry on its business as now
conducted.
3.2. Authority of the Buyer. The Buyer has full power and authority
to enter into this Agreement, to consummate the transactions contemplated
hereby and to comply with the terms, conditions and provisions hereof.
The execution, delivery and performance of this Agreement by the
Buyer, including, without limitation, the deliveries and other agreements of
the Buyer contemplated hereby, have been duly authorized and approved by its
Board of Directors and do not require any further authorization or consent of
the Buyer or its shareholders. This Agreement is, and each other agreement or
instrument of the Buyer contemplated hereby will be, the legal, valid and
binding agreement of the Buyer, enforceable in accordance with its terms.
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Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will conflict with or
result in any violation of or constitute a default under any term of the
Articles of Incorporation of Buyer, or any material agreement, mortgage, debt
instrument, indenture, franchise, license, permit, authorization, lease or
other instrument, judgment, decree, order, law or regulation by which Buyer is
bound.
3.3. No Broker or Finder. Neither the Buyer nor any party acting on
its behalf has paid or become obligated to pay any fee or commission to any
broker, finder or intermediary for or on account of the transactions
contemplated by this Agreement.
3.4. Financial Capability. Buyer has the financial resources to
consummate the transactions contemplated hereby.
ARTICLE IV.
ACTIONS PRIOR TO THE CLOSING DATE
---------------------------------
The respective parties hereto covenant and agree to take the
following actions between the date hereof and the Closing Date:
4.1. Investigation of Seller by the Buyer. Seller shall afford the
officers, employees and authorized representatives (including, without
limitation, independent public accountants and attorneys) (collectively,
"Agents") of the Buyer and its financing sources reasonable access during
normal business hours and opportunity to complete an acquisition review,
including, without limitation, a review of Seller's books and records, leases,
contracts and other agreements, income tax returns, physical inspection of the
Purchased Assets, and the right to contact and communicate with Seller's
employees, customers, vendors, suppliers, independent contractors,
representatives and others having a business relationship with Seller
(provided that Buyer shall discuss these contacts with Seller prior to any
such contacts and will allow Seller to participate in such contacts and
communications). Seller and the Shareholder shall furnish to the Buyer and its
Agents such additional information concerning the Purchased Assets and the
Business as shall be reasonably requested, including all such information as
shall be necessary to enable the Buyer and its Agents to verify the accuracy
of the representations and warranties contained in Article II, and to
determine whether the conditions set forth in Article IV have been satisfied.
4.2. Preserve Accuracy of Representations and Warranties. Each of the
parties hereto shall use commercially reasonable efforts to refrain from
taking any action which would render any representation, warranty or covenant
contained in this Agreement inaccurate as of the Closing Date. Each party
shall promptly notify the other of any (a) event or condition which would
render any representation or warranty set forth in Article II or III to be
untrue or in breach or would cause any covenant in Article II or III to be
unfulfilled or (b) any action, suit or proceeding that shall be instituted or
threatened against such party to restrain, prohibit or otherwise challenge the
legality of any transaction contemplated by this Agreement. Not in limitation
of the foregoing, between the date of execution of this Agreement and the
Closing
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Date, Seller shall conduct the Business in the ordinary course and shall not,
without the prior written consent of the Buyer which will not be unreasonably
withheld and subject to applicable law, in connection with the Business, (a)
move its offices, warehouses or plant facilities or enter into any purchase
contract or lease for any site, (b) significantly change billing practices or
rates, (c) increase salaries, bonuses or compensation structure of any employee
(or contracted for employee) other than in the ordinary course of business and
consistent with past practices, (d) terminate or move any employee to another of
Seller's operations, except for cause, or (e) commit to make or make capital
expenditures in excess of $10,000 in the aggregate except as listed on Schedule
4.2. Between the date hereof and the Closing Date, Seller will update monthly
and provide updated balance sheets and statements of income and loss to the
Buyer, and such updates and current statements shall be subject to the same
representations and warranties as contained in Section 2.4.
4.3. Consents and Approvals. Seller shall use commercially reasonable
efforts promptly to obtain all consents and amendments from parties to
Contracts and all consents, amendments or Permits from governmental
authorities which are required by the terms thereof, this Agreement or
otherwise for the due and punctual consummation of the transactions
contemplated by this Agreement, provided that Seller shall not be required to
pay any sums to obtain such consents. Seller shall also cooperate with and
assist the Buyer and its authorized representatives through the Closing in
order to provide an efficient transfer of the control and management of the
Business and to avoid any undue interruption in the activities and operations
of the Business following the Closing Date except for the transactions
contemplated hereby.
4.4. No Public Announcements. Neither of the parties hereto shall,
without the approval of the other party (which may not be unreasonably
withheld), make any press release or other public announcement concerning the
transactions contemplated by this Agreement, except as and to the extent that
such party shall be so obligated by law, in which case the other party shall
be advised and the parties shall use their best efforts to cause a mutually
agreeable release or announcement to be issued.
4.5. Exclusive Dealing. Seller and its Affiliates shall deal
exclusively with the Buyer with respect to the sale of Seller and shall not
solicit, encourage or entertain offers or inquiries (nor shall Seller or any
of its Affiliates authorize or permit any director, officer, employee,
attorney, accountant or other representative or agent to solicit, encourage or
entertain offers or inquiries) from other possible acquiring companies,
persons or entities, provide information to or participate in any discussions
or negotiations with any companies, persons or entities with a view to an
acquisition of all or substantially all of Seller's assets or stock or any
interest therein.
4.6. Conveyance and Transfer of Owned Real Property. At the Closing,
Seller shall deliver a warranty deed to the Owned Real Property in the form
attached hereto as Exhibit 4.6 with good and marketable title, free and clear
of all Encumbrances, except for Permitted Encumbrances and Permitted Liens.
Five (5) days prior to Closing, Seller shall furnish to Buyer, at Seller's
expense, a commitment for title insurance from a title insurance company
reasonably acceptable to Buyer showing title to the Owned Real Property to be
conveyed to be good,
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indefeasible and vested in Seller free and clear of all liens, claims and
encumbrances, exceptions, reservations, or restrictions except as Permitted
Liens and Permitted Encumbrances.
Five (5) days prior to the Closing Date, Seller shall furnish to
Buyer and to the title insurance company, at the joint expense of Seller and
Buyer, a survey dated not more than thirty (30) days prior to the Closing Date
prepared by a licensed or registered public surveyor acceptable to the title
company. The survey shall be prepared in accordance with American Land Title
Association standards or applicable state standards and shall include but not
be limited to: (a) a metes and bounds or a lot and block legal description of
the subject property including a calculation and certification by the surveyor
of the number of gross square feet contained within the boundaries and a
certification by the surveyor that the legal description of the property
closes; (b) location of all improvements on the property; (c) the location of
all utility and other easements of record on the date of the survey and a
reference to their recording; (d) all applicable building setback lines, if
any, and setback requirements and a certificate by the surveyor that no
buildings encroach beyond said setback lines except as indicated thereon; (e)
the surveyor's certificate identifying any encroachments upon the subject
property by adjoining property owners and any encroachments of the subject
improvements upon other property not to be conveyed hereunder; (f) explanation
of discrepancies between the survey and the recorded legal description; (g) an
identification of any portion of the property within a 100 year flood plain or
flood hazardous area designated by governmental authority; and (h)
identification of all underground storage tanks that the surveyor can locate
by an on-the-ground inspection of the property.
ARTICLE V.
OTHER AGREEMENTS
----------------
5.1. Supply Agreement. At the Closing, Buyer and DewEze
Manufacturing, Inc., a wholly-owned subsidiary of Shareholder ("DewEze") shall
enter into a Supply Agreement in the form attached hereto as Exhibit 5.1
providing for the manufacture and sale by Buyer for a period of twelve months
of running gear for the Xxxxxx division of DewEze.
5.2. Non-Competition Agreement. At the Closing, Buyer shall enter
into a Non-Competition Agreement with Shareholder and Seller, in the form
attached as Exhibit 5.2 (the "Non-Competition Agreement"). In addition, Seller
and Shareholder agree to timely make all payments under the Xxxxxxx Agreement.
5.3. Seller's Employees. On and as of the Closing Date, Seller will
take all action necessary to terminate the employees of the Business and to
terminate all Employee Plans as they apply to such employees. Buyer shall
offer employment to at least two-thirds of the employees of the Business on
terms substantially similar to those offered by Seller and waive insurance
waiting periods to the extent allowed by the Buyer's insurer. Neither the
Seller or Shareholder shall directly or indirectly, for itself or on behalf of
any other entity, hire any current employee of Seller, or induce or attempt to
induce any such employee to leave his or her employment with Buyer, at any
time within five years from the Closing Date. Seller shall at or prior to
Closing, terminate its Incentive Bonus Plan.
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5.4. Environmental Site Assessment. Buyer shall, at its sole cost and
expense, engage an environmental consulting firm to conduct an environmental
site assessment of the Premises (the "Environmental Review") to determine what
remedial actions, if any, are reasonably necessary to cause Seller to be in
compliance with the Environmental Legal Requirements. Buyer shall promptly
furnish copies of all drafts and final Environmental Review reports to Seller.
If such Environmental Review indicates that any remedial actions are
reasonably necessary to comply with the Environmental Legal Requirements, (a)
Buyer shall notify Seller in writing of the actions required and the estimated
costs of such actions ("Remediation Costs"), (b) Buyer shall promptly engage,
at its sole cost and expense, reputable and recognized environmental engineers
to conduct all requisite or desired testing to determine whether Seller is in
compliance with all Environmental Legal Requirements, and (c) Seller shall pay
all reasonable and necessary Remediation Costs required to comply with all
applicable Environmental Legal Requirements; provided, however, that if the
total Remediation Costs exceed $75,000 and the remediation associated
therewith cannot be completed in all material respects by the Closing, Seller
may terminate this Agreement and its obligations hereunder without any
liability, cost or penalty whatsoever.
5.5. Software. Shareholder agrees to provide to Buyer the right to
use for six months after Closing, the software currently used by the Seller.
Such usage shall be free for thirty (30) days and $7,000 per month for five
months thereafter.
5.6. Cooperation. Seller agrees to cooperate with and to assist Buyer
in its efforts to obtain any permits or to install any pollution control
equipment required by law for the continued operations of the Owned Real
Property or to comply with applicable environmental standards, including but
not limited to assisting Buyer in the preparation and submission of a full and
complete permit application for a Class I or Class II, as applicable, air
operating permit pursuant to the requirements of Title 28, Article 19 of the
Kansas Administrative Regulations, and assisting any subsequent actions
necessary to obtain the issuance of said air operating permit with terms and
conditions acceptable to Buyer. Without limiting the generality of the
undertakings pursuant to this Section, Seller agrees to take or cause to be
taken the following actions: (i) provide promptly any relevant information and
documents requested by Buyer or by any Government Entity; (ii) provide Buyer
or its representatives access to the Owned Real Property during normal
business hours; (iii) allow Buyer or its representatives access to and
cooperation from any employee of Seller having relevant knowledge; and (iv) if
requested by Buyer or any government entity, to attend any meetings with any
government entity. The obligations under this Section 5.6 shall not be
included in calculating the $75,000 threshold contemplated in Section 5.4.
Buyer agrees to (a) use its best efforts to file any necessary air permit
applications written ninety (90) days of Closing, (ii) allow Seller to attend
and participate in any meetings with any governmental entity with respect
thereto and (iii) provide notice of any governmental or enforcement
proceedings with respect thereto. Seller and Buyer agree to use commercially
reasonable efforts to obtain the air permits contemplated herein in order to
reasonably minimize any indemnifiable damages arising under Section 8.1(c)
below so that the Business may operate in a manner consistent with its current
operation.
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ARTICLE VI.
CONDITIONS PRECEDENT TO OBLIGATION OF BUYER
-------------------------------------------
The obligations of the Buyer under this Agreement shall be subject to
the satisfaction, on or prior to the Closing Date, of the conditions set forth
below.
6.1. No Misrepresentation or Breach of Covenants and Warranties. All
of Seller's or Shareholder's covenants and agreements contained herein shall
have been performed or fulfilled in all material respects; each of the
representations and warranties of Seller or Shareholder contained or
referenced herein shall be true and correct in all materials respects on the
Closing Date as though made on the Closing Date, except for (a) those
representations and warranties set forth in Section 2.1, 2.2, 2.3 and 2.15
which shall be true and correct in all respects and (b) those representations
and warranties already qualified by materiality, and except for changes
therein specifically permitted by this Agreement or resulting from any
transaction expressly consented to in writing by the Buyer and; and there
shall have been delivered to the Buyer a certificate or certificates to that
effect, dated the Closing Date, signed on behalf of the Shareholder by its
President and, on behalf of Seller, by its President.
6.2. Corporate Action. Seller and Shareholder shall have taken all
corporate action necessary to approve the transactions contemplated by this
Agreement, and Seller shall have furnished the Buyer with certified copies of
the resolutions adopted by the Boards of Directors of Seller and Shareholder,
in form and substance reasonably satisfactory to counsel for the Buyer, in
connection with such transactions. Buyer's Board of Directors shall have
approved such transactions at their meeting on February 4, 1998.
6.3. No Restraint or Litigation. No action, suit, investigation or
proceeding shall have been instituted or threatened by any third party,
governmental or regulatory agency to restrain, prohibit or otherwise challenge
the legality or validity of the transactions contemplated hereby which, in the
reasonable opinion of Buyer's Board of Directors based on advice of counsel,
has a substantial likelihood of success.
6.4. Necessary Consents and Permits. Seller shall have received
consents and estoppel certificates, in form and substance reasonably
satisfactory to the Buyer, to the transactions contemplated hereby from all
appropriate governmental authorities and any requisite third parties under the
Contracts being transferred to Buyer, including without limitation, consents
required under that certain lease for the Owned Real Property, by and between
the City of Great Bend, Kansas and Seller dated as of March 1, 1994. Buyer
shall also have obtained any Permits required to conduct the Business in its
own name, the absence of which would not have a Material Adverse Effect.
6.5. Legal Opinions. Buyer shall have received (i) a satisfactory
opinion from Xxxxxx Xxxxxxxx LLP, counsel to Seller and Shareholder and (ii)
an opinion of bond counsel reasonably satisfactory to Buyer, to the effect
that the consummation of the transactions contemplated herein will not result
in an Event of Taxability, as such term is defined in that certain Indenture
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governing the Industrial Revenue Refunding and Improvement Bonds Series A,
1994 and Series B, 1994.
6.6. Other Documentation. Buyer shall have received all of the
executed agreements, documents and showings required to be delivered by (a)
the Seller at the Closing pursuant to Sections 1.7 and 1.8 hereof and (b) the
Shareholder as set forth in Sections 5.1 and 5.2 hereof.
ARTICLE VII.
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
---------------------------------------------
The obligations of Seller and Shareholder under this Agreement shall
be subject to the satisfaction, on or prior to the Closing Date, of the
conditions set forth below.
7.1. No Misrepresentation or Breach of Covenants and Warranties. All
of Buyer's covenants and agreements contained herein shall have been performed
or fulfilled in all material respects; each of the representations and
warranties of the Buyer contained or referred to herein shall be true and
correct on the Closing Date as though made on the Closing Date except for
changes therein specifically permitted by this Agreement or resulting from any
transaction expressly consented to in writing by Seller or any transaction
contemplated by this Agreement; and there shall have been delivered to Seller
a certificate or certificates to such effect, dated the Closing Date, and
signed on behalf of the Buyer.
7.2. Corporate Action. The Buyer shall have taken all corporate
action necessary to approve the transactions contemplated by this Agreement,
and the Buyer shall have furnished Seller with certified copies of resolutions
adopted by the Board of Directors of the Buyer, in form and substance
reasonably satisfactory to counsel for Seller, in connection with such
transactions.
7.3. No Restraint or Litigation. No action, suit or proceeding shall
have been instituted or threatened by any third party or governmental agency
to restrain, prohibit or otherwise challenge the legality or validity of the
transaction contemplated hereby which, in the reasonable judgment of
Shareholder's Board of Directors based on advice of counsel, has a substantial
likelihood of success.
7.4. Legal Opinion. Seller shall have received a satisfactory opinion
from Xxxxxxx, Carton & Xxxxxxx, counsel to Buyer.
7.5. Other Documentation. (a) Seller shall have received the payment
of the Purchase Price, (b) Shareholder shall have received the executed Supply
Agreement referred to in Section 5.1, and (c) Seller and Shareholder shall
have received the executed the Non-Competition Agreement.
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ARTICLE VIII.
INDEMNIFICATION
---------------
8.1. Indemnification by Seller and Shareholder. Seller and
Shareholder, jointly and severally, together with their respective successors
and assigns, shall indemnify and hold Buyer harmless from, against or in
respect of the aggregate of all indemnifiable damages of Buyer. For this
purpose, the term "indemnifiable damages" of Buyer means the aggregate, of any
and all damage, loss, deficiency, liability, expense (including, but not
limited to, any reasonable expert witness fees, reasonable attorney's fees,
court costs and expenses), action, suit, proceedings, demand, assessment or
judgment to or against Buyer arising out of or in connection with:
(a) The Excluded Liabilities;
(b) Any inaccuracy, breach or violation of, or
non-performance by, Seller of any of its representations, warranties,
covenants or agreements contained in this Agreement or in any
documents, certificates or Schedules required to be furnished
pursuant to this Agreement (in each case without regard to the
applicability of the Enforceability Exception);
(c) (i) all fines, penalties, civil suits and costs of
government mandated shut down of the Owned Real Property arising from
the failure to obtain, and (ii) all costs, expenses and fees,
including reasonable permitting, attorneys and consultant fees
incurred by Buyer in order to obtain, any air permit currently
required by law for Seller's operations, including a full and
complete application for the appropriate air operating permit
pursuant to the requirements of Title 28, Article 19 of the Kansas
Administrative Regulations, and any subsequent actions necessary to
obtain the issuance of said air operating permit with terms and
conditions acceptable to Buyer provided however that all such costs,
expenses and fees shall be approved by Seller, prior to authorization
to incur such costs, fees or expenses, such approval not to be
unreasonably withheld;
(d) Any liability with respect to the Business resulting
from the failure to comply with any Environmental Legal Requirement
to the extent such failure (i) occurred during Shareholder's
ownership of the Seller or (ii) occurred prior to Shareholder's
ownership of Seller to the extent Seller or Shareholder had knowledge
thereof; and
(e) Notwithstanding anything to the contrary herein to the
extent any liability for a violation of any Environmental Legal
Requirement is a continuing violation (other than a violation
contemplated in Section 8.1(c) for which Seller shall be responsible)
to which both Buyer and Seller have contributed, the Buyer and Seller
shall cooperate to apportion such liability between them based on
their relative culpability.
8.2. Indemnification by the Buyer. Buyer and its successors and
assigns shall indemnify and hold harmless Seller from and with respect to all
indemnifiable damages suffered by Seller, together with its successors and
assigns, arising out of or in connection with:
(a) Any Assumed Liability;
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(b) Any breach or violation of, or non-performance by, Buyer
of any of its representations, warranties, covenants or agreements
contained in this Agreement or in any document, certificate or
schedule required to be furnished pursuant to this Agreement (in each
case without regard to the applicability of the Enforceability
Exception); and
(c) Buyer's operation of the Business after Closing,
including without limitation, any violations of Environmental Legal
Requirements by Buyer.
8.3. Notice of Claims. If any claim is made against a party which, if
sustained, would give rise to a liability of the other hereunder, the party
seeking indemnification (the "claiming party") shall promptly (but no later
than 10 business days from receipt, or sooner if urgent action is required by
the claim) cause notice of the claim to be delivered to the other party (the
"non-claiming party") and shall afford the non-claiming party and its counsel,
at its sole expense, the opportunity to defend or settle the claim (provided
that the claiming party and its counsel may participate at their sole cost and
expense). Any notice of a claim shall state specifically the representations,
warranty, covenant or agreement with the alleged basis for the claim, and the
amount of liability asserted against the other party by reason of the claim.
If such notice and opportunity are not given, or if any claim is compromised
or settled without notice to and consent of the non-claiming party, no
liability shall be imposed on the non-claiming party by reason of such claim;
but if notice is given and the non-claiming party receiving the notice fails
to assume the defense of the claim or fails to admit in writing its liability
with respect to such claim, the claim may be defended, compromised or settled
by the claiming party without its consent and the non-claiming party shall
remain liable under this Article VIII. If and to the extent the non-claiming
party assumes control, the non-claiming party has no further obligation to pay
the costs incurred by the claiming party after such assumption in connection
with the defense of such claim. Notwithstanding anything contained herein to
the contrary, the claiming party may retain control over the defense of any
claim hereunder if such claim is non-monetary or is for injunctive or other
equitable relief. In the event that the parties cannot resolve their
differences and settle any claim brought by one party against another, the
claiming party shall file suit within one hundred and twenty (120) days of the
expiration of the survival period, or such claim shall forever be barred.
8.4. Limitation of Damages. The foregoing obligations described in
Sections 8.1 and 8.2 shall be subject to and limited by the following principles
and limitations:
(a) All representations and warranties contained in Articles
II and III of this Agreement shall survive the consummation of the
transactions contemplated by this Agreement from the Closing Date
through the date that is eighteen (18) months following the Closing
Date, and shall thereafter terminate; provided, however, that,
notwithstanding the foregoing, the representations and warranties
contained in (i) Sections 2.1, 2.3, 2.15 and 2.20 shall be of
unlimited duration; and (ii) Section 2.7 shall terminate thirty (30)
days after the expiration of the applicable statute of limitations.
Claims first asserted within a thirty (30) day period after the
period referred to above shall not be barred and shall survive
indefinitely until such claims are resolved.
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(b) Seller and Shareholder shall not be responsible to Buyer
under Section 8.1(a) with respect to breaches of representations and
warranties unless and until the aggregate of all indemnifiable
damages with respect to breaches of representations and warranties
suffered by Buyer under this Agreement exceeds in the aggregate
$150,000 and then Seller and Shareholder shall be responsible to
fully indemnify Buyer for all indemnifiable damages in excess of such
threshold, provided, however, that this provision shall not apply to
breaches of the representations and warranties contained in Sections
2.1, 2.3, 2.7, 2.15 (on an absolute basis, without regard to any
exceptions set forth on Schedule 2.15), 2.20 and 2.22 for which Buyer
shall be fully indemnified notwithstanding the amount of
indemnifiable damages. The indemnifiable damages required to be paid
by Seller pursuant to this Article VIII shall in no event exceed the
amount of the Purchase Price; provided, that Seller and Shareholder
shall be fully responsible for Excluded Liabilities without regard to
any limitations herein. Buyer agrees to first seek recovery against
the title insurance company in the event of claims under Sections
2.11(a) and 2.15 prior to seeking recourse against Seller or
Shareholder. Seller and Shareholder shall not be responsible to Buyer
under Section 8.1(b) with respect to Excluded Liabilities which are
not known to Seller or Shareholder which are asserted against Buyer
unless and until the aggregate of such unknown Excluded Liabilities
suffered by Buyer exceeds in the aggregate $50,000 and then Seller
and Shareholder shall be responsible to fully indemnify Buyer for all
indemnifiable damages in excess of such threshold.
(c) Prior to the Closing Date, Buyer and Seller shall give,
or cause the appropriate party to give the other party prompt written
notice of any development affecting Seller or Buyer which might cause
the representations and warranties of the Buyer or Seller, as the
case may be, to be inaccurate or the covenants and agreements of
Buyer or Seller, as the case may be, to be unfulfilled. The party
receiving such notice shall have the shorter of the number of days to
Closing or twenty (20) days after receipt of any such notice to
exercise any rights it may have to terminate this Agreement without
penalty. Unless this Agreement is terminated in the aforementioned
period, the written notice of such development will be deemed to have
qualified the representations and warranties contained herein, and to
have cured any misrepresentation or breach of warranty that otherwise
might have existed hereunder by reason of the material development.
(d) After the Closing, Buyer's sole remedy against Seller
and Shareholder shall be the right to seek indemnifiable damages
pursuant to this Article VIII, which shall not include consequential,
punitive or special damages.
(e) Whenever the term "knowledge" or words of similar import
have been used throughout this Agreement, this shall mean the
knowledge of such items as a reasonably prudent controlling
shareholder or officer of a corporation would have based on
reasonable due diligence.
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ARTICLE IX.
TERMINATION
-----------
9.1. Termination. Anything contained in this Agreement to the
contrary notwithstanding, this Agreement may be terminated at any time prior
to the Closing Date:
(a) By the mutual written consent of the Buyer and Seller;
(b) By the Buyer upon the material breach by Seller or
Shareholder of any of its covenants, agreements, representations or
warranties contained in Article II or Article IV (i) after 30 days'
notice and opportunity to cure and (ii) provided that the terminating
party is also not in material breach;
(c) By Seller upon the material breach by the Buyer of any
of its covenants, agreements or representations or warranties
contained in Article III or Article IV (i) after 30 days' notice and
opportunity to cure and (ii) provided that the terminating party is
also not in material breach;
(d) By the Buyer, if any of the conditions set forth in
Article VI of this Agreement have not been satisfied on or before May
30, 1998 (subject to the right to extend the Closing), and such
condition or conditions have not been waived in writing by the Buyer;
and
(e) By Seller, if any of the conditions set forth in Article
VII of this Agreement have not been satisfied on or before May 30,
1998 (subject to the right to extend the Closing), and such condition
or conditions have not been waived in writing by Seller.
9.2. Remedies.
(a) By Seller. In the event of the existence of Seller's
right to terminate pursuant to Section 9.1(c) or (e) hereof, Seller
may at its sole election (i) waive such right and close, (ii)
terminate the Agreement and/or (iii) seek all remedies entitled by
law.
(b) By Buyer. If Buyer terminates this Agreement pursuant to
Sections 9.1(b) or 9.1(d), Buyer shall at its election either (i)
waive such right and close, (ii) terminate the Agreement and/or (iii)
seek all remedies entitled by law, including the remedy of specific
performance, it being acknowledged that the Purchased Assets and the
Business are unique and monetary damages would not be wholly
adequate.
(c) Other. In the event that this Agreement shall be
terminated pursuant to Section 9.1(a) or the failure of the
conditions set forth in Sections 6.4 or 7.3 all further obligations
of the parties under this Agreement (other than Sections 10.2 an
10.9) shall be terminated without further liability of any party to
the other, provided that nothing herein shall relieve any party from
liability for its willful breach of this Agreement.
-27-
9.3. Risk of Loss. The risk of any loss to the Purchased Assets and
all liability with respect to injury and damage occurring in connection
therewith shall be the sole responsibility of Seller until the completion of
the Closing. If any material part of such properties shall be damaged by fire
or other casualty prior to the completion of the Closing hereunder and such
properties were material to the operations of the Business and its present
capacity needs, Buyer shall have the right and option:
(a) to terminate this Agreement, without liability to Seller
or Buyer; or
(b) to proceed with the Closing hereunder, in which event
such casualty shall not constitute a breach by Seller of any
representation, warranty or covenant in this Agreement, and Buyer
shall be entitled to receive and retain the insurance proceeds
arising from such casualty; or
(c) delay the Closing, while the affected Purchased Assets
are being restored or repaired, not to exceed three (3) months;
provided, however, if Buyer elects option (c) and the cost of such
restoration or repair exceeds the insurance proceeds payable with
respect thereto, or would be reasonably expected to exceed three
months, then Seller may terminate this Agreement under Section
9.3(a).
ARTICLE X.
GENERAL PROVISIONS
------------------
10.1. Survival of Obligations. All representations, warranties,
covenants and agreements contained in this Agreement shall survive the
consummation of the transactions contemplated by this Agreement subject to the
limitations set forth in Section 8.4.
10.2. Confidential Nature of Information. Each party hereto agrees
that it will treat and will cause its Agents to treat in confidence all
documents, materials and other information which it shall have obtained
regarding any other party during the course of the negotiations leading to the
consummation of the transactions contemplated hereby, the investigation
provided for herein and the preparation of this Agreement and other related
documents, and, in the event the transactions contemplated hereby shall not be
consummated, all copies of nonpublic documents and materials which have been
furnished in connection therewith shall be promptly returned to the party
furnishing the same, shall continue to be treated as confidential information
and shall not be used for the benefit of the party who returned such
confidential information. Each party is responsible for changes caused by its
Agents.
10.3. Governing Law. This Agreement shall be governed by and construed
in accordance with laws of the State of Kansas.
10.4. Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be delivered personally, by
overnight courier, fare prepaid, by legible facsimile transmission (with
regular mail follow-up), or by registered or certified mail, postage prepaid,
addressed as follows:
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If to the Seller and Shareholder, to:
Owosso Corporation
The Triad Building
0000 Xxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx xx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Xx., President
Fax: 000-000-0000
with a copy to:
Pepper, Xxxxxxxx LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, III, Esquire
Fax: 000-000-0000
If to the Buyer, to:
Allied Products Corporation
00 Xxxxx Xxxxxxxxx Xxxxx - Xxxxx 000
Xxxxxxx, XX 00000
Attn: Vice President and General Counsel
Fax: 000-000-0000
with a copy to:
Xxxxxxx, Carton & Xxxxxxx
Suite 3400 - Quaker Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Fax No.: 000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx
or to such address as such party may indicate by a notice delivered to the
other parties hereto. Notices shall be deemed given and delivered hereunder on
the date of receipt thereof, which is deemed to be the same day (in the case
of personal delivery), the next business day (in the case of overnight
delivery or legible facsimile transmission), or three (3) days later (in the
case of certified or registered mail).
10.5. Successors and Assigns.
(a) The rights of the parties under this Agreement shall not
be assignable.
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(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors, and permitted
assigns. Nothing in this Agreement, expressed or implied, is intended
or shall be construed to confer upon any person other than the
parties and their successors.
10.6. Entire Agreement; Amendments. This Agreement and the Exhibits
and Schedules referred to herein and the documents delivered pursuant hereto,
contain the entire understanding of the parties hereto with regard to the
subject matter contained herein or therein, and supersede all prior
agreements, understanding, or intent between or among any of the parties
hereto, but excluding any correspondence between the parties regarding Buyer's
due diligence investigation. The parties hereto, by mutual agreement in
writing, may amend, modify and supplement this Agreement.
10.7. Interpretation. Article titles and headings to Sections herein
are inserted for convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement. The
Exhibits and Schedules referred to herein shall be construed with and as an
integral part of this Agreement to the same extent as if they were set forth
verbatim herein.
10.8. Waivers. Any term or provision of this Agreement may be waived,
or the time for its performance may be extended, by the party or parties
entitled to the benefit thereof. The failure of any party hereto to enforce at
any time any provision of this Agreement shall not be construed to be a waiver
of such provision, nor in any way to affect the validity of this Agreement or
any part hereof or the right of any party thereafter to enforce each and every
such provision. No waiver of any breach of this Agreement shall be held to
constitute a waiver of any other or subsequent breach. The respective
representations and warranties of Buyer, Seller and Shareholder contained
herein or in any certificates or other documents delivered prior to or as of
the Closing Date shall not be deemed waived or otherwise affected by any
investigation made by any party hereto.
10.9. Expenses. Each party hereto will pay all costs and expenses
incident to its negotiation and preparation of this Agreement and to its
performance and compliance with all agreements and conditions contained herein
on its part to be performed or complied with, including the fees, expenses and
disbursements of its counsel and accountants.
10.10. Partial Invalidity. Wherever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision or provisions had never
been contained herein unless the deletion of such provision or provisions
would result in such a material change as to cause completion of the
transactions contemplated hereby to be unreasonable.
10.11. Execution of Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be
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considered an original instrument, but all of which shall be considered one and
the same agreement, and shall become binding when one or more counterparts have
been agreed upon by each of the parties and delivered to Seller and the Buyer.
-31-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first written above.
SELLER:
------
GREAT BEND MANUFACTURING
COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Its: President
SHAREHOLDER:
-----------
OWOSSO CORPORATION
By: /s/ Xxxxx Holiday III
---------------------------------------
Name: Xxxxx Holiday III
Its: Chief Operating Officer
BUYER:
-----
ALLIED PRODUCTS CORPORATION
By: /s/ Xxxxxx Xxxxx
---------------------------------------
Name: Xxxxxx Xxxxx
Its: VP Accounting, Chief Accounting
and Administrative Officer
-32-
EXHIBITS AND SCHEDULES
EXHIBITS
--------
Exhibit 1.1(c) Fixed Assets
Exhibit 1.1(e) Owned Real Property
Exhibit 1.5(d) Inventory Policy
Exhibit 1.7(a)(i) Xxxx of Sale
Exhibit 4.6 Warranty Deed
Exhibit 5.1 Supply Agreement
Exhibit 5.2 Non-Competition Agreement
SCHEDULES
---------
Schedule 1.7(a)(vii) Purchase Price Allocation
Schedule 2.1 Jurisdictions
Schedule 2.3 Authority
Schedule 2.10 Real and Personal Property Leases
Schedule 2.12 Intellectual Property
Schedule 2.15 Title to Property
Schedule 2.16 Employee Relations
Schedule 2.17 Employee Benefit Plan
Schedule 2.18 Status of Contracts
Schedule 2.20 Environmental
Schedule 2.21 Insurance
Schedule 2.22 Broker or Finder
Schedule 2.23 Dealers and Original Equipment Manufacturer Customers
Schedule 2.24 Suppliers
Schedule 2.25 Permits
Schedule 2.26 Product Warranty Claims
Schedule 2.27 Product Liability Claims
Schedule 2.28 Sales by Product and by State
Schedule 2.5(b) Operations since October 26, 1997
Schedule 4.2 Capital Expenditures
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Schedule 1.7(a)(vii)
Purchase Price Allocation
The Purchase Price shall be allocated to the Purchased Assets and Assumed
Liabilities based on the figures set forth on the Closing Balance Sheet;
provided, however, that to the extent a third party appraisal of any of the
Fixed Assets or Owned Real Property reflects a valuation materially different
from the figures reflected on the Closing Balance Sheet, the allocation of the
Purchase Price shall reflect such appraised valuation. Valuation of
Intellectual Property will initially be based on net book value which will be
assessed as to whether there has been a permanent impairment in the value of
such property. Such assessment will include obsolescence, demand, new
technology, competition and other pertinent economic factors and trends that
may have an impact on the value of the remaining useful life of the
Intellectual Property
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