STOCK PURCHASE AGREEMENT
By and among
McNEILUS COMPANIES, INC.,
THE SHAREHOLDERS OF McNEILUS COMPANIES, INC.,
And
OSHKOSH TRUCK CORPORATION
Dated December 8, 1997
STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
1. PURCHASE AND SALE OF SHARES . . . . . . . . . . . . . . . 1
2. PURCHASE PRICE - PAYMENT . . . . . . . . . . . . . . . . . 1
2.1. Purchase Price . . . . . . . . . . . . . . . . . . 1
2.2. Payment of Purchase Price . . . . . . . . . . . . 1
3. REPRESENTATIONS AND WARRANTIES OF COMPANY
AND SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . 2
3.1. Corporate. . . . . . . . . . . . . . . . . . . . . 2
3.2. Shareholders. . . . . . . . . . . . . . . . . . . 3
3.3. No Violation . . . . . . . . . . . . . . . . . . . 4
3.4. Financial Statements . . . . . . . . . . . . . . . 4
3.5. Tax Matters. . . . . . . . . . . . . . . . . . . . 5
3.6. Receivables. . . . . . . . . . . . . . . . . . . . 6
3.7. Inventory . . . . . . . . . . . . . . . . . . . . 7
3.8. Absence of Certain Changes . . . . . . . . . . . . 8
3.9. Absence of Undisclosed Liabilities . . . . . . . . 9
3.10. No Litigation . . . . . . . . . . . . . . . . . . 9
3.11. Compliance With Laws and Orders. . . . . . . . . 10
3.12. Title to and Condition of Properties. . . . . . 10
3.13. Insurance . . . . . . . . . . . . . . . . . . . 12
3.14. Contracts and Commitments . . . . . . . . . . . 12
3.15. Labor Matters . . . . . . . . . . . . . . . . . 14
3.16. Employee Benefit Plans. . . . . . . . . . . . . 14
3.17. Environmental Matters. . . . . . . . . . . . . . 16
3.18. Trade Rights . . . . . . . . . . . . . . . . . . 17
3.19. Major Customers and Suppliers. . . . . . . . . . 18
3.20. Product Warranty and Product Liability . . . . . 18
3.21. Employment Compensation . . . . . . . . . . . . 19
3.22. Affiliates' Relationships to Company. . . . . . 19
3.23. Assets Necessary to Business . . . . . . . . . . 19
3.24. No Brokers or Finders . . . . . . . . . . . . . 19
3.25. Effect of Disclosure . . . . . . . . . . . . . . 19
4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . 20
4.1. Corporate. . . . . . . . . . . . . . . . . . . . 20
4.2. Authority . . . . . . . . . . . . . . . . . . . 20
4.3. No Brokers or Finders . . . . . . . . . . . . . 20
4.4. Investment Intent . . . . . . . . . . . . . . . 20
4.5. No Litigation . . . . . . . . . . . . . . . . . 21
4.6. Financial Information . . . . . . . . . . . . . 21
4.7. No Violations . . . . . . . . . . . . . . . . . 21
5. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 21
5.1. Certain Matters. . . . . . . . . . . . . . . . . 21
5.2. Title Insurance . . . . . . . . . . . . . . . . 21
5.3. Surveys . . . . . . . . . . . . . . . . . . . . 22
5.4. Escrow Agreement . . . . . . . . . . . . . . . . 22
5.5. Employment Agreements. . . . . . . . . . . . . . 22
5.6. Noncompetition Agreements . . . . . . . . . . . 22
5.7. General Releases . . . . . . . . . . . . . . . . 22
5.8. Incentive Compensation Plan . . . . . . . . . . 23
5.9. HSR Act Filings . . . . . . . . . . . . . . . . 23
5.10. Assistance With Financing. . . . . . . . . . . . 23
5.11. Access to Information and Records . . . . . . . 24
5.12. Conduct of Business Pending the Closing . . . . 24
5.13. Consents . . . . . . . . . . . . . . . . . . . . 26
5.14. Opinion of Counsel . . . . . . . . . . . . . . . 26
5.15. Disclosure Schedule Updates . . . . . . . . . . 26
5.16. Environmental Matters . . . . . . . . . . . . . 26
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS . . . . . . 27
6.1. Representations and Warranties True as of
the Closing Date . . . . . . . . . . . . . . . . 27
6.2. Compliance With Agreement . . . . . . . . . . . 27
6.3. Absence of Litigation . . . . . . . . . . . . . 27
6.4. Consents and Approvals . . . . . . . . . . . . . 28
6.5. Xxxx-Xxxxx-Xxxxxx Waiting Period . . . . . . . . 28
6.6. Shareholders' Equity . . . . . . . . . . . . . . 28
7. CONDITIONS PRECEDENT TO SHAREHOLDERS' OBLIGATIONS . . . 28
7.1. Compliance With Agreement . . . . . . . . . . . 28
7.2. Absence of Litigation . . . . . . . . . . . . . 28
7.3. Xxxx-Xxxxx-Xxxxxx Waiting Period . . . . . . . . 29
8. INDEMNIFICATION AND RELATED MATTERS. . . . . . . . . . . 29
8.1. Indemnification By Indemnifying Shareholders . . 29
8.2. Indemnification By Buyer . . . . . . . . . . . . 29
8.3. Indemnification By Company . . . . . . . . . . . 30
8.4. Limitation on Indemnification Liabilities . . . 30
8.5. Survival Of Representations, Warranties
And Covenants . . . . . . . . . . . . . . . . . 30
8.6. Notice of Indemnification . . . . . . . . . . . 31
8.7. Indemnification Procedure for Third-Party Claims 31
8.8. Exclusive Remedy . . . . . . . . . . . . . . . . 32
8.9. Computation of Claims for Damages Subject
to Indemnification . . . . . . . . . . . . . . . 32
8.10. Minibasket . . . . . . . . . . . . . . . . . . . 32
8.11. Commencement of Arbitration . . . . . . . . . . 32
8.12. Waiver . . . . . . . . . . . . . . . . . . . . . 33
8.13. Payment . . . . . . . . . . . . . . . . . . . . 33
9. CLOSING . . . . . . . . . . . . . . . . . . . . . . . 33
10. TERMINATION . . . . . . . . . . . . . . . . . . . . . . 33
10.1. Right of Termination Without Breach . . . . . . 33
10.2. Termination for Breach. . . . . . . . . . . . . 33
10.3. Termination Fees. . . . . . . . . . . . . . . . 34
10.4. Confidentiality Upon Termination. . . . . . . . 34
11. RESOLUTION OF DISPUTES . . . . . . . . . . . . . . . . . 36
11.1. Arbitration . . . . . . . . . . . . . . . . . . 36
11.2. Arbitrators . . . . . . . . . . . . . . . . . . 36
11.3. No Appeal . . . . . . . . . . . . . . . . . . . 36
11.4. Authority . . . . . . . . . . . . . . . . . . . 36
11.5. Entry of Judgment . . . . . . . . . . . . . . . 36
11.6. Confidentiality . . . . . . . . . . . . . . . . 36
11.7. Continued Performance . . . . . . . . . . . . . 37
11.8. Discovery . . . . . . . . . . . . . . . . . . . 37
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 37
12.1. Knowledge . . . . . . . . . . . . . . . . . . . 37
12.2. Further Assurance . . . . . . . . . . . . . . . 37
12.3. Disclosures and Announcements . . . . . . . . . 37
12.4. Assignment; Parties in Interest. . . . . . . . . 37
12.5. Law Governing Agreement . . . . . . . . . . . . 38
12.6. Amendment and Modification . . . . . . . . . . . 38
12.7. Notice . . . . . . . . . . . . . . . . . . . . . 38
12.8. Expenses . . . . . . . . . . . . . . . . . . . . 40
12.9. Costs of Litigation or Arbitration . . . . . . . 41
12.10. Transfer Taxes . . . . . . . . . . . . . . . . . 41
12.11. Entire Agreement . . . . . . . . . . . . . . . . 41
12.12. Counterparts . . . . . . . . . . . . . . . . . . 41
12.13. Headings . . . . . . . . . . . . . . . . . . . . 41
12.14. No Negotiations by Buyer. . . . . . . . . . . . 41
[The following schedules and exhibits to this agreement are not filed
herewith. The Registrant agrees to furnish supplementally a copy of any
omitted schedule or exhibit to the Securities and Exchange Commission upon
request.]
Schedules
Schedule 3.1.(c) - Foreign Corporation Qualification
Schedule 3.1.(d) - Subsidiaries
Schedule 3.1.(e) - Directors and Officers
Schedule 3.1.(f) - Shareholder List
Schedule 3.3 - Violation, Conflict, Default
Schedule 3.4 - Financial Statements
Schedule 3.5.(b) - Tax Matters
Schedule 3.6.(a) - Accounts Receivable (Aged Schedule)
Schedule 3.6.(b) - Leases
Schedule 3.7 - Inventory Off Premises
Schedule 3.8 - Certain Changes
Schedule 3.9 - Off-Balance Sheet Liabilities
Schedule 3.10 - Litigation Matters
Schedule 3.11.(a) - Non-Compliance with Laws
Schedule 3.11.(b) - Licenses and Permits
Schedule 3.12.(a) - Liens
Schedule 3.12.(c) - Owned and Leased Real Property
Schedule 3.12.(e) - Year 2000 Compliance
Schedule 3.13 - Insurance
Schedule 3.14.(b) - Personal Property Leases
Schedule 3.14.(c) - Purchase Commitments
Schedule 3.14.(d) - Sales Contracts
Schedule 3.14.(h) - Loan Agreements, etc.
Schedule 3.14.(i) - Guarantees
Schedule 3.14.(l) - Material Contracts
Schedule 3.15 - Labor Matters
Schedule 3.16 - Employee Matters
Schedule 3.17 - Environmental Matters
Schedule 3.18 - Trade Rights
Schedule 3.19.(a) - Major Customers
Schedule 3.19.(b) - Major Suppliers
Schedule 3.19.(c) - Dealers and Distributors
Schedule 3.20 - Product Warranty, Warranty Expense and
Liability Claims
Schedule 3.21 - Compensation
Schedule 3.22.(a) - Contracts with Affiliates
Schedule 3.22.(b) - Obligations of and to Affiliates
Schedule 4.7 - Violation, Conflict, Default
Schedule 5.1. - Disposition of Certain Assets and Matters
Schedule 5.5.(b) - Employees Subject to Form Employment Agreements
Schedule 5.8 - Key Executives
Schedule 5.12.(e) - Approved Corporate Changes
Schedule 6.4 - Material Consents, Approvals or Waivers
Schedule 8.1 - Indemnification Obligations
Exhibits
A - Form of Escrow Agreement
B - Form of Employment Agreements
C - Form of Noncompetition Agreement
D - Form of Shareholders' Counsel Opinion
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of December 8, 1997,
by and among McNeilus Companies, Inc., a Minnesota corporation (the
"Company"), all of the Shareholders of the Company listed on the signature
page (individually a "Shareholder"; collectively, the "Shareholders") and
Oshkosh Truck Corporation, a Wisconsin corporation (the "Buyer").
RECITALS
A. Company is engaged in, among other things, the design,
manufacture, distribution and sale of refuse packer systems, rear-
discharge concrete mixer systems and ready-mix concrete batch plants,
including the arrangement of financing for such sales (the "Business").
Shareholders own all of the issued and outstanding shares (the "Shares")
of capital stock of Company.
B. Buyer desires to purchase the Shares from Shareholders
and Shareholders desire to sell the Shares to Buyer, upon the terms and
conditions herein set forth.
NOW THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and
conditions hereinafter set forth, and intending to be legally bound
hereby, the parties hereto agree as follows.
1. PURCHASE AND SALE OF SHARES
Subject to the terms and conditions of this Agreement, on the
Closing Date (as hereinafter defined) Shareholders shall sell to Buyer and
Buyer shall purchase from Shareholders all the Shares.
2. PURCHASE PRICE - PAYMENT
2.1. Purchase Price. The purchase price (the "Purchase Price")
payable for the Shares shall be Two Hundred Twelve Million Dollars
($212,000,000).
2.2. Payment of Purchase Price. The Purchase Price shall be paid by
Buyer as follows:
2.2.(a) Cash to Escrow Agent. At the Closing, Buyer shall
deliver to the Escrow Agent, under the Escrow Agreement (as defined
in Section 5.5), the sum of Seven Million Dollars ($7,000,000).
2.2.(b) Cash to Shareholders. At the Closing, Buyer shall
deliver to the Shareholders the sum of Two Hundred Twelve Million
Dollars ($212,000,000), less the amount paid to the Escrow Agent
pursuant to Subsection 2.2.(a) above.
2.2.(c) Method of Payment. All payments under this Section
2.2 shall be made by wire transfer of immediately available funds to
an account designated by the Shareholders, which account shall be
designated not less than 48 hours prior to the time for payment
specified herein.
3. REPRESENTATIONS AND WARRANTIES OF COMPANY AND SHAREHOLDERS
Company and Shareholders make the following representations and
warranties to Buyer, each of which is true and correct on the date hereof,
shall remain true and correct to and including the Closing Date, and shall
survive the Closing of the transactions provided for herein. Regardless
of the foregoing the Church (defined hereinafter) only makes the
representations and warranties set forth in Section 3.2.
3.1. Corporate.
3.1.(a) Organization. Company is a corporation duly
organized, validly existing and in good standing under the laws of
the State of Minnesota.
3.1.(b) Corporate Power. Company has all requisite corporate
power and authority to own, operate and lease its properties and to
carry on its business as and where such is now being conducted.
3.1.(c) Qualification. Except as set forth on Schedule
3.1.(c), Company is duly licensed or qualified to do business as a
foreign corporation, and is in good standing, in each jurisdiction
wherein the character of the properties owned or leased by it, or the
nature of its business, makes such licensing or qualification
necessary. The states in which Company is licensed or qualified to
do business and states in which it is not qualified or licensed but
is doing business are listed in Schedule 3.1.(c).
3.1.(d) Subsidiaries. Schedule 3.1.(d) sets forth the name,
jurisdiction of incorporation, capitalization, ownership and officers
and directors of each corporation in which the Company has a direct
or indirect equity interest ("Subsidiary") and the jurisdictions in
which each Subsidiary is qualified or licensed to do business as a
foreign corporation. Except as listed in Schedule 3.1.(d), the
Company does not own, directly or indirectly, any capital stock or
other equity securities of any corporation or have any direct or
indirect equity or other ownership interest in any entity or
business. All of the outstanding shares of capital stock of each
Subsidiary owned by the Company are free and clear of any security
interest, restriction, option, voting trust or agreement, proxy,
encumbrance, claim or charge of any kind whatsoever, and are validly
issued, fully paid and nonassessable. Each Subsidiary is a
corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation, has full corporate
power and authority to carry on its business as it is now being
conducted and to own and lease the properties and assets it now owns
and leases, and, except as set forth on Schedule 3.1.(d), is in good
standing and is duly qualified or licensed to do business as a
foreign corporation in each of the jurisdictions listed opposite the
name of such Subsidiary in Schedule 3.1.(d). The states in which
each subsidiary is licensed and/or qualified to do business and
states in which each is not qualified and/or licensed but is doing
business, are listed on Schedule 3.1.(d).
3.1(e) The term "Company" as used hereinafter means the
Company and each Subsidiary, except where the specific provisions
provide otherwise.
3.1(f) Corporate Documents, etc. The copies of the Articles
of Incorporation and By-Laws of the Company, including any amendments
thereto, which have been delivered by Shareholders to Buyer are true,
correct and complete copies of such instruments as presently in
effect. The corporate minute book and stock records of the Company
which have been furnished to Buyer for inspection are true, correct
and complete. The directors and officers of the Company are listed
in Schedule 3.1.(e).
3.1(g) Capitalization of the Company. The authorized capital
stock of the Company (not including Subsidiaries) consists entirely
of 10,000,000 shares of common stock, no par value, of which 100,000
shares are designated as Class A voting common stock and 9,900,000
shares are designated as Class B nonvoting common stock. No shares
of such capital stock are issued or outstanding except for 76,061
shares of Class A voting common stock and 7,380,264 shares of Class B
nonvoting common stock of the Company (not including Subsidiaries)
which are owned of record and beneficially by Shareholders in the
respective numbers set forth in Schedule 3.1.(f). All such shares of
capital stock of the Company are validly issued, fully paid and
nonassessable. There are no (a) securities convertible into or
exchangeable for any of the Company's capital stock or other
securities, (b) options, warrants or other rights to purchase or
subscribe to capital stock or other securities of the Company or
securities which are convertible into or exchangeable for capital
stock or other securities of the Company, or (c) contracts,
commitments, agreements, understandings or arrangements of any kind
relating to the issuance, sale or transfer of any capital stock or
other equity securities of the Company, any such convertible or
exchangeable securities or any such options, warrants or other
rights.
3.2. Shareholders.
3.2.(a) Power. Each Shareholder has full power, legal right
and authority to enter into, execute and deliver this Agreement and
the other agreements, instruments and documents to be executed and
delivered pursuant to this Agreement (such other documents sometimes
referred to herein as "Ancillary Instruments") and to carry out the
transactions contemplated hereby.
3.2.(b) Authorization. The execution and delivery of this
Agreement and the Ancillary Instruments, and full performance
thereunder, have been duly authorized by the respective boards of
directors and the shareholders of each Shareholder which is a
corporation, and no other or further corporate act on the part of any
such Shareholder is necessary therefor.
3.2.(c) Validity. This Agreement has been duly and validly
executed and delivered by each Shareholder and when executed by each
other party thereto is, and when executed and delivered the other
documents and instruments to be executed and delivered by Company and
Shareholders pursuant hereto, will constitute valid and binding
agreements of Company and Shareholders, enforceable in accordance
with their respective terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, and by general equitable principles.
3.2.(d) Title. At Closing Buyer will receive, good and
marketable title to the Shares to be sold by such Shareholder
hereunder, free and clear of all Liens (as defined in Section 3.12)
including, without limitation, voting trusts or agreements, proxies,
marital or community property interests.
3.3. No Violation. Except as set forth on Schedule 3.3, neither the
execution and delivery of this Agreement or the Ancillary Instruments nor
the consummation by Company and Shareholders of the transactions
contemplated hereby and thereby (a) will violate any statute, law,
ordinance, rule or regulation (collectively, "Laws") or any order, writ,
injunction, judgment, plan or decree (collectively, "Orders") of any
court, arbitrator, department, commission, board, bureau, agency,
authority, instrumentality or other body, whether federal, state,
municipal, foreign or other (collectively, "Government Entities"), (b)
except for applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 0000 (xxx "XXX Xxx"), will require any authorization,
consent, approval, exemption or other action by or notice to any
Government Entity (including, without limitation, under any "plant-
closing" or similar law), or (c) subject to obtaining the consents
referred to in Schedule 3.3, will violate or conflict with, or constitute
a default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or will result in the termination of, or
accelerate the performance required by, or result in the creation of any
Lien upon any of the assets of Company (or the Shares) under, any term or
provision of the Articles of Incorporation or By-Laws of Company or of any
contract, commitment, understanding, arrangement, agreement or restriction
of any kind or character to which Company or any Shareholder is a party or
by which Company or any Shareholder or any of its or their assets or
properties may be bound or affected.
3.4. Financial Statements. Included as Schedule 3.4 are complete and
correct copies of the audited consolidated financial statements of the
Company consisting of (i) consolidated balance sheets as of February 28,
1993, 1994, 1995, 1996 and 1997, and the related consolidated statements
of income, stockholders' equity and cash flows for each of the years then
ended (including the accompanying notes), which financial statements are
accompanied by unqualified opinions of Xxxxxx Xxxxx Weishair & Co., LLP,
independent auditors for the Company for such years, and (ii) a
consolidated unaudited balance sheet of the Company as of August 31, 1997
(the "Recent Balance Sheet"), and the related unaudited consolidated
statement of income for the six (6) months then ended and for the
corresponding period of the prior year, and (iii) unaudited consolidated
statements of income and balance sheets for the eight (8) months ended
October 31, 1997. With the exception of those financial statements
referred to in Section 3.4.(ii), all of such consolidated financial
statements, along with the unaudited interim consolidated financial
statements or other financial data provided or to be provided pursuant to
Section 5.10, have been or shall have been prepared in accordance with
generally accepted accounting principles ("GAAP") (except, in the case of
unaudited interim financial statements, for the absence of footnote
disclosure and statements of cash flows) applied on a consistent basis and
Regulation S-X for financial statements required under Section 5.10, have
been or shall have been prepared from and agree with the books and records
of Company, and fairly present or shall fairly present, in accordance with
GAAP, the financial position, results of operations and cash flows of the
Company as of the dates and for the years and interim periods indicated.
Schedule 3.4 sets forth the comparative backlog of Company sales by
product line as of November 17, 1997 and November 30, 1996.
3.5. Tax Matters.
3.5.(a) The term "Tax" shall mean any federal, state, local or
foreign income, alternative, minimum, accumulated earnings, personal
holding company, franchise, capital stock, profits, windfall profits,
gross receipts, sales, use, value added, transfer, registration,
stamp, premium, excise, customs duties, severance, environmental
(including taxes under section 59A of the Internal Revenue Code of
1986, as amended ("Code")), real property, personal property, ad
valorem, occupancy, license, occupation, employment, payroll, social
security, disability, unemployment, workers' compensation,
withholding, estimated or other similar tax, duty, fee, assessment or
other governmental charge or deficiencies thereof (including all
interest and penalties thereon and additions thereto). The term "Tax
Return" shall mean any tax return, report, information, return,
schedule or other document (including any related or supporting
information) filed or required to be filed with respect to Taxes.
3.5.(b) Except as set forth on Schedule 3.5.(b):
(i) (A) all Tax Returns relating to the Company and the
business or assets thereof that were required to be filed on or
before the Closing Date have been filed, (B) the Company has paid or
made adequate provision for all Taxes that are due or claimed to be
due by any taxing authority and (C) the Company is not currently the
beneficiary of any extension of time within which to file any Tax
Return;
(ii) to the knowledge of the Company, there has been no claim or
issue (other than a claim or issue that has been finally settled)
concerning any liability for Taxes of the Company asserted, raised or
threatened by any taxing authority and no written notice of such
claim or issue has been received;
(iii) the Company has not (A) waived any statute of
limitations or (B) agreed to any extension of the period for
assessment or collection;
(iv) there are no liens for Taxes upon any assets of the Company
except for statutory liens for current Taxes not yet due;
(v) except as set forth on Schedule 3.5.(b), no power of
attorney has been executed by the Company with respect to any matter
relating to Taxes that is currently in force;
(vi) the Company is not a party to any agreement, contract, or
other arrangement that would result, separately or in the aggregate,
in the requirement to pay any "excess parachute payment" within the
meaning of Section 280G of the Code; and
(vii) all Taxes that the Company is required by law to
withhold or to collect for payment have been duly withheld and
collected, and have been paid or accrued, reserved against and
entered on the books of the Company.
3.6 Receivables.
3.6.(a) Accounts. Except as set forth on Schedule 3.6.(a),
all accounts receivable of Company reflected on the Recent Balance
Sheet, and as incurred in the normal course of business since the
date thereof, represent arm's length sales actually made in the
ordinary course of business; are collectible (net of the reserve
shown on the Recent Balance Sheet for doubtful accounts) in the
ordinary course of business are subject to no valid counterclaim or
setoff; and to the knowledge of the Company are not in dispute.
Schedule 3.6.(a) contains an aged schedule of accounts receivable
included in the Recent Balance Sheet. All accounts receivable of
Company incurred prior to the Closing Date will represent arm's
length sales actually made in the ordinary course of business and
will be collected (net of the reserve shown on the balance sheet as
of the Closing Date for doubtful accounts) in the ordinary course of
business and will be subject to no valid counterclaim or set-off.
3.6.(b) Leases. Set forth in Schedule 3.6.(b)(i) is a
complete and accurate list of each lease entered by McNeilus
Financial Services, Inc. ("MFSI") (the "Lease Agreements"), including
a description of the lessee, principal amount, implicit interest
rate, and payment schedule. Each Lease Agreement and any credit,
financing, title and security documents, including related exhibits,
associated with each Lease Agreement are collectively referred to
herein as the "Lease Documents". Each Lease Document represents the
valid and binding obligations of the parties thereto; was entered
into by such parties in the normal course of their respective
business (and are complete and accurate in all material respects);
and represents an arm's length transaction between or among such
parties. Each Lease Agreement is enforceable against the lessee
thereunder in accordance with its terms and any amounts due
thereunder are collectible (net of the reserve shown on the Recent
Balance Sheet for doubtful accounts) in the ordinary course of
business without the necessity of commencing legal proceedings, are
not subject to counterclaim or set off and are not in dispute. No
Lease Document has had its payment terms restructured, extended or
modified; no amounts due thereunder are past due; and to the
knowledge of the Company, lessee is not in default under any of the
Lease Documents except for defaults of non-payments. Company has no
knowledge that any lessee under a Lease Agreement is insolvent or
otherwise unable to pay its debts as they become due. In each case,
the lessee under each Lease Agreement has accepted the goods leased
under such Lease Agreement. Company has performed all of its
obligations and is not in default under any of the Lease Documents.
Company has good and marketable title to, or a valid and perfected
security interest in, the goods leased under any of the Lease
Agreements and such goods are free and clear of any Liens other than
the interests of the lessees under the Lease Agreements and the Liens
set forth in Schedule 3.6.(b)(ii). Neither Company nor any of its
agents or dealers has participated in any fraudulent act or omission
in connection with entering into any Lease Document. Each Lease
Document conforms with all applicable Laws and Company has full
power, right and authority under and, except as otherwise disclosed
in Schedule 3.1.(c) and 3.1.(d), is fully licensed under all
applicable Laws to enter into and enforce each of the Lease
Documents. Any and all Tax(es) which are incurred, assessed or
imposed prior to Closing with respect to the Lease Documents shall
have been paid to the proper taxing authority or accrued properly
prior to Closing, and all such Lease Documents have been accounted
for on the books and records of Company in accordance with GAAP. The
execution, delivery and performance of this Agreement by Company and
the consummation of the transactions contemplated thereby will not
violate any of the Lease Documents and will not cause any default or
event of default thereunder. Schedule 3.6.(b)(iii) sets forth any
support or guaranty letters or documents in favor of MFSI issued by
Company or an Affiliate. Except as set forth on Schedule
3.6.(b)(iii), Company has not guaranteed the payment or performance
of any of MFSI's obligations under the Lease Documents.
3.7. Inventory. Except as set forth on Schedule 3.7 of slow moving
inventory, all inventory of Company reflected on the Recent Balance Sheet
consists of a quality and quantity useable and saleable in the ordinary
course of business and is valued in accordance with GAAP at the lower of
cost (on a LIFO basis) or market. All inventory purchased since the date
of such balance sheet consists of a quality and quantity useable and
saleable in the ordinary course of business. Except as set forth in
Schedule 3.7, all inventory of Company is located on premises owned or
leased by Company as reflected in this Agreement.
3.8. Absence of Certain Changes. Except as and to the extent set
forth in Schedule 3.8, since the date of the Recent Balance Sheet there
has not been:
3.8.(a) No Adverse Change. Any material adverse change in the
financial condition, assets, liabilities, business, prospects or
operations of Company;
3.8.(b) No Damage. Any loss, damage or destruction, whether
covered by insurance or not, materially affecting Company's business
or properties on Schedule 3.8.(b);
3.8.(c) No Increase in Compensation. Any increase in the
compensation, salaries or wages payable or to become payable to any
employee or agent of Company (including, without limitation, any
increase or change pursuant to any bonus, pension, profit sharing,
retirement or other plan or commitment), or any bonus or other
employee benefit granted, made or accrued, except such increases made
in the ordinary course of business;
3.8.(d) No Labor Disputes. Any labor dispute or disturbance,
other than routine individual grievances which are not material to
the business.
3.8.(e) No Commitments. Any commitment or transaction by
Company (including, without limitation, any borrowing or capital
expenditure) for consideration in excess of $100,000 or obligating
the Company to perform over a 12 month period other than in the
ordinary course of business consistent with past practice;
3.8.(f) No Dividends. Except as may be required to comply
with Section 5.1., any declaration, setting aside, or payment of any
dividend or any other distribution in respect of Company's capital
stock; any redemption, purchase or other acquisition by Company of
any capital stock of Company, or any security relating thereto; or
any other payment to any shareholder of Company as such a
shareholder;
3.8.(g) No Disposition of Property. Any sale, lease or other
transfer or disposition of any properties or assets of Company,
except as may be required to comply with Section 5.1 and except for
the sale of inventory items and other assets in the ordinary course
of business;
3.8.(h) No Indebtedness. Any indebtedness for borrowed money
incurred, assumed or guaranteed by Company, other than in the
ordinary course of business;
3.8.(i) No Liens. Any mortgage, pledge, lien or encumbrance
made on any of the properties or assets of Company except for liens
on inventory acquired in the ordinary course;
3.8.(j) No Amendment of Contracts. Any entering into,
amendment or termination by Company of any contract, or any waiver of
material rights thereunder, other than in the ordinary course of
business;
3.8.(k) Loans and Advances. Any loan or advance (other than
advances to employees in the ordinary course of business for travel
and entertainment in accordance with past practice) to any person
including, but not limited to, any Affiliate (for purposes of this
Agreement, the term "Affiliate" shall mean and include all
Shareholders, directors and officers of Company; the spouse of any
such person; any person who would be the heir or descendant of any
such person if he or she were not living; and any entity in which any
of the foregoing has a direct or indirect interest, except through
ownership of less than 5% of the outstanding shares of any entity
whose securities are listed on a national securities exchange or
traded in the national over-the-counter market); or
3.8.(l) Credit. Any grant of credit to any customer or
distributor on terms or in amounts not in compliance with Company's
policies or practices with respect to the granting of credit, nor any
change in any practices or policies.
3.9. Absence of Undisclosed Liabilities. Except as and to the extent
specifically disclosed in the Recent Balance Sheet, or in Schedule 3.9,
Company does not have any liabilities, commitments or obligations (secured
or unsecured, and whether accrued, absolute, contingent, direct, indirect
or otherwise), other than commercial liabilities and obligations incurred
since the date of the Recent Balance Sheet in the ordinary course of
business and consistent with past practice and none of which has or will
have a material adverse effect on the business, financial condition or
results of operations of Company. Except as and to the extent described
in the Recent Balance Sheet or in Schedule 3.9, the Company has no
knowledge of any basis for the assertion against Company of any liability
and there are no circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may give rise to
liabilities, except commercial liabilities and obligations incurred in the
ordinary course of Company's business and consistent with past practice.
3.10. No Litigation. Except as set forth in Schedule 3.10 there
is no action, suit, arbitration, proceeding, investigation or inquiry,
whether civil, criminal or administrative ("Litigation") pending or, to
the knowledge of the Company, threatened against Company, its directors
(in such capacity), its business or any of its assets, nor does Company
know, or have grounds to know, of any basis for any Litigation. Schedule
3.10 also identifies all Litigation to which Company or any of its
directors (in such capacity) have been parties since 1992, except for
product liability suits which shall be set forth on Schedule 3.20. Except
as set forth in Schedule 3.10, neither Company nor its business or assets
is subject to any Order of any Government Entity. Company has disclosed
to Buyer all matters that have been the subject of Litigation against the
Company and that were settled or compromised within the last six years
upon payment by the Company of a sum in excess of $25,000.
3.11. Compliance With Laws and Orders.
3.11.(a) Compliance. Except as set forth in Schedule 3.11.(a),
to the best of Company's knowledge (including each and all of its
operations, practices, properties and assets) it is in compliance in
all material respects with all applicable Laws and Orders, including,
without limitation, those applicable to discrimination in employment,
occupational safety and health, trade practices, competition and
pricing, product warranties, zoning, building and sanitation,
employment, retirement and labor relations, product advertising and
the Environmental Laws as hereinafter defined. Except as set forth
in Schedule 3.11.(a), to the knowledge of the Company, Company has
not received notice of any violation or alleged violation of, and is
subject to no liability for past or continuing violation of, any Laws
or Orders. All reports and returns required to be filed by Company
with any Government Entity have been filed, and were accurate and
complete when filed. Shareholders shall not be liable for any
assertion by Governmental Entity that this transaction gives rise to
a right to apply regulations or ordinances to the assets or business
which were not previously applied because of a "grandfather" right
applied to the Company.
3.11.(b) Licenses and Permits. To the knowledge of the Company
and except as disclosed in Schedule 3.1.(c) and 3.1.(d), it has all
licenses, permits, approvals, authorizations and consents of all
Government Entities and all certification organizations required for
the conduct of the Business (as presently conducted and as proposed
to be conducted) and operation of its facilities. To the knowledge
of the Company, all such licenses, permits, approvals, authorizations
and consents are described in Schedule 3.11.(b), are in full force
and effect. Except as set forth in Schedule 3.11.(b), Company
(including its operations, properties and assets) is and has been in
material compliance with all such permits and licenses, approvals,
authorizations and consents.
3.12. Title to and Condition of Properties.
3.12.(a) Marketable Title. At Closing, Company shall have good
and marketable title to all of Company's assets, business and
properties, free and clear of all mortgages, liens, (statutory or
otherwise) security interests, claims, pledges, licenses, equities,
options, conditional sales contracts, assessments, levies, easements,
covenants, reservations, restrictions, rights-of-way, exceptions,
limitations, charges or encumbrances of any nature whatsoever
(collectively, "Liens") except (i) those described in Schedule
3.12.(a), (ii) in the case of real property, Liens for taxes not yet
due or which are being contested in good faith by appropriate
proceedings (and which have been sufficiently accrued or reserved
against in the Recent Balance Sheet), (iii) municipal and zoning
ordinances and easements for public utilities, and (iv) Liens or
imperfections in title which individually or in the aggregate do not
materially detract from the value, or impair in any significant
manner the use, of the property subject thereto or the operations of
the Company. None of Company's assets, business or properties are
subject to any restrictions with respect to the transferability
thereof; and the Company's title thereto will not be affected in any
way by the transactions contemplated hereby.
3.12.(b) Condition. All property and assets owned or utilized
by Company are in adequate operating condition and repair, free from
any material defects (except such minor defects as do not interfere
with the use thereof in the conduct of the normal operations of
Company). All buildings, plants and other structures owned or
otherwise utilized by Company are in good condition and repair
(except such minor defects as do not interfere with the use thereof
in the conduct of the normal operations of Company) and, to the
knowledge of the Company, have no structural defects or defects
affecting the plumbing, electrical, sewerage, or heating, ventilating
or air conditioning systems which would interfere with the use
thereof in the conduct of the normal operations.
3.12.(c) Real Property. Schedule 3.12.(c) sets forth all real
property owned, used or occupied by Company (the "Real Property"),
including a description of all land (or, if not of record, of which
Company has notice or knowledge). Schedule 3.12.(c) also sets forth,
with respect to each parcel of Real Property which is leased, the
material terms of such lease. To the knowledge of the Company, all
of the Real Property has permanent rights of access to dedicated
public highways; no fact or condition exists which would prohibit or
adversely affect the ordinary rights of access to and from the Real
Property from and to the existing highways and roads and there is no
pending or threatened restriction or denial, governmental or
otherwise, upon such ingress and egress. To the knowledge of the
Company, there is not (i) any claim of adverse possession or
prescriptive rights involving any of the Real Property, (ii) any
structure located on any Real Property which encroaches on or over
the boundaries of neighboring or adjacent properties or (iii) any
structure of any other party which encroaches on or over the
boundaries of any of such Real Property. None of the Real Property
is located in a flood plain, flood hazard area, wetland or lakeshore
erosion area within the meaning of any Law, regulation or ordinance.
To the knowledge of the Company, no public improvements have been
commenced and none are planned which in either case may result in
special assessments against or otherwise materially adversely affect
any Real Property. Except as set forth on Schedule 3.12.(c), no
portion of any of the Real Property has been used as a landfill or
for storage or landfill of hazardous or toxic materials.
3.12.(d) No Condemnation or Expropriation. Neither the whole
nor any portion of the property or any other assets of Company is
subject to any Order to be sold or is being condemned, expropriated
or otherwise taken by any Government Entity with or without payment
of compensation therefor.
3.12.(e) Year 2000 Compliance. Except as identified on
Schedule 3.12.(e), none of the personal property, equipment or assets
owned or utilized by the Company, including but not limited to
computer software, databases, hardware, controls and peripherals,
contains any defect related to the occurrence of the year 2000 or the
use of any date after December 31, 1999 in connection with such
property or asset (a "Year 2000 Defect"). Except as identified on
Schedule 3.12.(e), none of the property or assets owned or utilized
by the Company will fail to perform in any material respect or
require any repair, rewrite, conversion or other adaptation because
of, or due in any way to, a Year 2000 Defect.
3.13. Insurance. Set forth in Schedule 3.13 is a complete and
accurate list and description of all policies of fire, liability, product
liability, workers compensation, health and other forms of insurance
presently in effect with respect to the business and properties of
Company, true and correct copies of which have heretofore been delivered
to Buyer. No notice of cancellation or termination has been received with
respect to any such policy currently in effect, and Company has no
knowledge of any act or omission of Company which could result in
cancellation of any such policy currently in effect prior to its scheduled
expiration date. There is no claim by Company pending under any such
policies as to which coverage has been questioned, denied or disputed by
the underwriters of such policies, and Company knows of no basis for
denial of any claim under any such policy.
3.14. Contracts and Commitments. Except as otherwise previously
disclosed in the Disclosure Schedules:
3.14.(a) Real Property Leases. Except as set forth in Schedule
3.12.(c), Company has no leases of real property.
3.14.(b) Personal Property Leases. Except as set forth in
Schedule 3.14.(b), Company has no leases of personal property as
Lessee involving consideration or other expenditure in excess of
$75,000 or involving performance over a period of more than 12
months.
3.14.(c) Purchase Commitments. Except as set forth on Schedule
3.14.(c), Company has no purchase commitments for inventory items or
supplies which aggregate in excess of $1,000,000 from any one
supplier, or together with amounts on hand, constitute in excess of
12 months' normal usage.
3.14.(d) Sales Commitments. Except as set forth on Schedule
3.14.(c), Company has no sales contracts or commitments to customers
or distributors which aggregate in excess of $1,000,000 to any one
customer or distributor (or group of affiliated customers or
distributors). Company has no sales contracts or commitments except
those made in the ordinary course of business, at arm's length, and
no such contracts or commitments are for a sales price which would
result in a loss to the Company.
3.14.(e) Contracts With Affiliates and Certain Others. Except
as set forth on Schedule 3.22.(a), Company has no agreement,
understanding, contract or commitment (written or oral) with any
Affiliate that is not cancelable by Company on notice of not longer
than 30 days without liability, penalty or premium of any nature or
kind whatsoever.
3.14.(f) Powers of Attorney. The Company has not given a power
of attorney, which is currently in effect, to any person, firm or
corporation for any purpose whatsoever, except such powers granted to
lessees of the Leases for purposes of registering vehicle title and
for tax matters disclosed on Schedule 3.5.(b).
3.14.(g)Collective Bargaining Agreements. Company is not a
party to any collective bargaining agreements with any unions,
guilds, shop committees or other collective bargaining groups.
3.14.(h) Loan Agreements. Except as set forth in Schedule
3.14.(h), Company is not obligated under any loan agreement,
promissory note, letter of credit, or other evidence of indebtedness
as a signatory, guarantor or otherwise for an amount in excess of
$75,000.
3.14.(i) Guarantees. Except for the guarantees and other
support documents set forth in Schedule 3.14.(i), which amount of
guarantees and support documents shall not exceed Seventy Million
Dollars ($70,000,000), Company has not guaranteed the payment or
performance of any person, firm or corporation, agreed to indemnify
any person or act as a surety, or otherwise agreed to be contingently
or secondarily liable for the obligations of any person.
3.14.(j) Contracts Subject to Renegotiation. Company is not a
party to any contract with any governmental body which is subject to
renegotiation.
3.14.(k) Restrictive Agreements. Company is not a party to nor
is it bound by any agreement requiring Company to assign any interest
in any trade secret or proprietary information, or prohibiting or
restricting Company from competing in any business or geographical
area or soliciting customers or otherwise restricting it from
carrying on its business anywhere in the world.
3.14.(l) Other Material Contracts. Company has no lease,
contract or commitment of any nature involving consideration or other
expenditure in excess of $100,000, or involving performance over a
period of more than 12 months, or which is otherwise individually
material to the operations of Company, except as explicitly described
in Schedule 3.14.(l) or in any other Schedule.
3.14.(m) No Default. Company is not in default under any
lease, contract or commitment, nor has any event or omission occurred
which through the passage of time or the giving of notice, or both,
would constitute a default thereunder or cause the acceleration of
any of Company's obligations or result in the creation of any Lien on
any of the assets owned, used or occupied by Company. To the
knowledge of the Company, no third party is in default under any
lease, contract or commitment to which Company is a party, nor has
any event or omission occurred which, through the passage of time or
the giving of notice, or both, would constitute a default thereunder
or give rise to an automatic termination, or the right of
discretionary termination, thereof.
3.15. Labor Matters. Except as set forth in Schedule 3.15,
within the last two (2) years Company has not experienced any labor
disputes, union organization attempts or any work stoppage due to labor
disagreements in connection with its business. Except to the extent set
forth in Schedule 3.15, (a) Company is in compliance with all applicable
laws respecting employment and employment practices, terms and conditions
of employment and wages and hours, and is not engaged in any unfair labor
practice; (b) Company has not received written notice, nor does the
Company have knowledge of an unfair labor practice charge or complaint
against Company pending or threatened; (c) Company has not received
written notice, nor does the Company have knowledge of a labor strike,
dispute, request for representation, slowdown or stoppage actually pending
or threatened against or affecting Company nor any secondary boycott with
respect to products of Company; (d) no question concerning representation
has been raised or, to the Company's knowledge, is threatened respecting
the employees of Company; (e) no grievance which might have a material
adverse effect on Company, nor any arbitration proceeding arising out of
or under collective bargaining agreements, is pending and no such claim
therefor exists; and (f) Company has not received written notice, nor does
the Company have knowledge of any administrative charges or court
complaints against Company concerning alleged employment discrimination or
other employment related matters pending or threatened before the U.S.
Equal Employment Opportunity Commission or any Government Entity.
3.16. Employee Benefit Plans.
3.16.(a) Schedule 3.16.(a) contains a complete list of each
pension, retirement, profit-sharing, deferred compensation, bonus or
other incentive, medical, health, life insurance, disability or other
welfare or severance plan, agreement or arrangement sponsored or
contributed to by the Company or by any trade or business, whether or
not incorporated (an "ERISA Affiliate"), that together with the
Company would be deemed a "single employer within the meaning of
section 4001 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), for the benefit of any employee or terminated
employee of the Company or any ERISA Affiliate (individually a "Plan"
and collectively, the "Plans"). All Plans comply with the applicable
requirements of law, including but not limited to ERISA and the Code,
except for failures to comply that, either individually or in the
aggregate, would not reasonably be expected to have a Material
Adverse Effect. No Plan which is subject to Part 3 of Subtitle B of
Title I of ERISA has incurred any "accumulated funding deficiency,"
whether or not waived, within the meaning of section 302 of ERISA or
section 412 of the Code and all contributions required to be made
with respect thereto on or prior to the Closing Date have been timely
made. Neither the Company nor any ERISA Affiliate has incurred any
material liability pursuant to Title IV of ERISA with respect to any
Plan and no condition exists that presents a material risk to the
Company or any ERISA Affiliate of incurring liability under such
Title. Neither the Company nor any ERISA Affiliate, nor any Plan,
trust created thereunder or trustee or administrator thereof has
engaged in a transaction in connection with which the Company or any
ERISA Affiliate, any Plan, any such trust, or any trustee or
administrator thereof, or any party dealing with any Plan or any such
trust could be subject to either a material civil penalty assessed
pursuant to section 409 or 502(i) or ERISA or a material tax imposed
pursuant to section 4975 or 4976 of the Code.
3.16.9(b) Except as provided on Schedule 3.16.(b), no plan is a
"multiemployer pension plan," as defined in section 3(37) of ERISA,
nor is any Plan a plan described in section 4063(a) of ERISA. With
respect to any ERISA Plan that is a "multiemployer pension plan," as
such term is defined in section 3(37) of ERISA, covering employees of
the Company or any ERISA Affiliate, (i) neither the Company nor any
ERISA Affiliate has, since September 26, 1980, made or suffered a
"complete withdrawal" or a "partial withdrawal," as such terms are
respectively defined in sections 4203 and 4205 of ERISA, (ii) no
event has occurred that presents a material risk of a partial
withdrawal, (iii) neither the Company nor any ERISA Affiliate has any
contingent liability under section 4204 of ERISA, and (iv) the
aggregate withdrawal liability of the Company and the ERISA
Affiliates, computed as if a complete withdrawal by the Company and
the ERISA Affiliates had occurred under each such Plan on the date
hereof, would not exceed $25,000. Each Plan intended to be
"qualified" within the meaning of section 401(a) of the Code is so
qualified and the trusts maintained thereunder are exempt from
taxation under section 501(a) of the Code. No amounts payable under
the Plans or under any employment, severance or other agreements or
arrangements maintained by the Company will fail to be deductible for
federal income tax purposes by virtue of section 280G of the Code.
3.16.(c) Except as provided on Schedule 3.16.(c), no plan
provides benefits, including without limitation death or medical
benefits (whether or not insured), with respect to current or former
employees of the Company or any ERISA Affiliate beyond their
retirement or other termination of service (other than (i) coverage
mandated by applicable law or (ii) death benefits or retirement
benefits under any "employee pension plan," as that term is defined
in section 3(2) of ERISA). To the Knowledge of the Company, there
are no pending, threatened or anticipated claims by or on behalf of
any Plan, by any employee or beneficiary covered under any such Plan,
or otherwise involving any such Plan (other than routine claims for
benefits).
3.17. Environmental Matters.
3.17.(a) Definitions. For purposes of this Paragraph 3.17 the
following terms shall have the following meanings:
"Environmental Claim" shall mean any investigation, notice,
violation, demand, suit, injunction, order, consent decree, penalty, fine,
lien, proceeding, or claim (whether administrative, judicial, or private
in nature) arising (a) pursuant to, or in connection with, a violation by
the Company of any Environmental Law, (b) in connection with any Hazardous
Material, (c) from any abatement, removal, remedial, corrective, or other
response action by the Companies or any of their Subsidiaries in
connection with a Hazardous Material, Environmental Law or order of a
Governmental Authority or (d) from any damage, injury, threat, or harm to
the environment by the Companies or any of their Subsidiaries.
"Environmental Law" shall mean any past or current Legal
Requirement pertaining to the protection of the environment, including
without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 USC 9601 et seq., the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 USC 6901
et seq. ("RCRA"), and any implementing law, and any amendment, rule, or
regulation issued thereunder.
"Hazardous Material" shall mean any material which is hazardous
or toxic to the environment and/or which is subject to regulation, control
or remediation under Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyl ("PCBs") and petroleum (including crude
oil and any fraction thereof).
"Legal Requirement" shall mean any treaty, convention, statute,
law, regulation, ordinance, Governmental Approval, injunction, judgment,
order, consent decree, or other requirement of any Governmental Authority
relating to health, safety, natural resources and the environment.
"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injection, escaping, leaching, dumping,
or disposing into the indoor or outdoor environment including, without
limitation, the abandonment or discarding of barrels, drums, containers,
tanks, and other receptacles containing or previously containing any
Hazardous Material.
3.17.(b) Warranties and Representations. Except as described
in Schedule 3.17, to the knowledge of the Company:
(i) The Company and each of the Facilities of the Company
(the "Facilities") comply in all material respects with any and
all applicable Environmental Laws.
(ii) The Company has obtained all necessary Governmental
Approvals necessary for the operations of their businesses and
properties.
(iii) The Company (a) has not caused any Release or
disposal of any Hazardous Material at the Real Property or (b)
caused any Release of any Hazardous Material at any third party
property.
(iv) The Company has not received any written notification
of, nor does it have knowledge of, any actual or potential
responsibility for any Release at any third party property.
(v) The Real Property does not contain any: (a)
underground storage tank, (b) asbestos containing building
material, PCBS, radon, or urea formaldehyde foam, (c) landfill
or dump, or (d) hazardous waste management facility as defined
pursuant to RCRA or any comparable state law.
(vi) There is no Environmental Claim involving the Real
Property or other property formerly owned, leased or operated by
the Company or to the knowledge of the Company threatened
against the Company.
(vii) There are no conditions on, under or in any way
affecting the Real Property which would impose liability to the
Company under any Environmental Law.
3.18. Trade Rights. Schedule 3.18 lists all Trade Rights (as
defined below) in which Company now has any interest, specifying whether
such Trade Rights are owned, controlled, used or held (under license or
otherwise) by Company, and also indicating which of such Trade Rights are
registered. All Trade Rights shown as registered in Schedule 3.18 have
been properly registered, all pending registrations and applications have
been properly made and filed and all annuity, maintenance, renewal and
other fees relating to registrations or applications are current. In
order to conduct the business of Company, as such is currently being
conducted or proposed to be conducted, Company does not require any Trade
Rights that it does not already have. Except as set forth on Schedule
3.18, Company has received no written notice, nor does it have knowledge,
that it is infringing and has infringed any Trade Rights of another in the
operation of the business of Company, nor, to the Company's knowledge, is
any other person infringing the Trade Rights of Company. Company has not
granted any license or made any assignment of any Trade Right listed on
Schedule 3.18, nor does Company pay any royalties or other consideration
for the right to use any Trade Rights of others. There is no Litigation
pending or, to the knowledge of the Company, threatened to challenge
Company's right, title and interest with respect to its continued use and
right to preclude others from using any Trade Rights of Company. All
Trade Rights of Company are valid, enforceable and in good standing, and
there are no equitable defenses to enforcement based on any act or
omission of Company. As used herein, the term "Trade Rights" shall mean
and include: (i) all trademark rights, business identifiers, trade dress,
service marks, trade names and brand names, all registrations thereof and
applications therefor and all goodwill associated with the foregoing; (ii)
all copyrights, copyright registrations and copyright applications, and
all other rights associated with the foregoing and the underlying works of
authorship; (iii) all patents and patent applications, and all
international proprietary rights associated therewith; (iv) all contracts
or agreements granting any right, title, license or privilege under the
intellectual property rights of any third party; (v) all inventions, mask
works and mask work registrations, know-how, discoveries, improvements,
designs, trade secrets, shop and royalty rights, employee covenants and
agreements respecting intellectual property and non-competition and all
other types of intellectual property; and (vi) all claims for infringement
or breach of any of the foregoing.
3.19. Major Customers and Suppliers.
3.19.(a) Major Customers. Schedule 3.19.(a) contains a list of
the 20 largest customers, including distributors, of Company for each
of the two (2) most recent fiscal years (determined on the basis of
the total dollar amount of net sales) showing the total dollar amount
of net sales to each such customer during each such year. Company
has no knowledge or information of any facts indicating, nor any
other reason to believe, that any of the customers listed on Schedule
3.19.(a) will not continue to be customers of the business of Company
after the Closing.
3.19.(b) Major Suppliers. Schedule 3.19.(b) contains a list of
the 20 largest suppliers to Company for each of the two (2) most
recent fiscal years (determined on the basis of the total dollar
amount of purchases) showing the total dollar amount of purchases
from each such supplier during each such year. Company has no
knowledge or information of any facts indicating, nor any other
reason to believe, that any of the suppliers listed on Schedule
3.19.(b) will not continue to be suppliers to the business of Company
after the Closing.
3.19.(c) Dealers and Distributors. Schedule 3.19.(c) contains
a list of all sales representatives, dealers and/or distributors of
Company, together with representative copies of all sales
representative, dealer and/or distributor contracts and policy
statements, and a description of all substantial modifications or
exceptions.
3.20. Product Warranty and Product Liability. Schedule 3.20
contains a true, correct and complete copy of Company's standard warranty
or warranties for sales of Products (as defined below) and, except as
stated therein, there are no warranties, commitments or obligations with
respect to the return, repair or replacement of Products. Schedule 3.20
contains a description of all product liability claims and similar
Litigation relating to products manufactured or sold, or services
rendered, which are presently pending or which to Company's knowledge are
threatened, or which have been asserted or commenced against Company
within the last three (3) years, in which a party thereto either requests
injunctive relief or alleges damages in excess of $25,000 (whether or not
covered by insurance). Since 1985, there has been no adverse judgment or
other final adjudicated claim or suit against the Company alleging a
defect in design, construction or manufacture of Products. Schedule 3.20
contains a description of all campaigns and programs of replacement, field
fix, retrofit, modification or recall by Company currently pending and, to
Company's knowledge, no facts or conditions exist which could reasonably
be expected to result in such a campaign or program. The Products have
been designed and manufactured so as to meet and comply with all
applicable governmental standards and specifications in effect when the
Products were sold, (or in the case of chasis, in effect when
manufactured) including all National Highway Safety and Traffic
Administration acts, rules or regulations. Such products have received
all applicable governmental approvals necessary to allow their sale and
use. As used in this Section 3.20, the term "Products" means any and all
products currently or at any time previously manufactured, distributed or
sold by Company, or by any predecessor of Company under any brand name or
xxxx under which products are or have been manufactured, distributed or
sold by Company, specifically excluding products similar to current
Products that have not been manufactured, distributed or sold by the
Company.
3.21. Employment Compensation. Schedule 3.21 contains a true and
correct list of all employees to whom Company is paying compensation,
including bonuses and incentives, at an annual rate in excess of One
Hundred Thousand Dollars ($100,000) for services rendered or otherwise,
and such list identifies the current annual rate of compensation for each
employee.
3.22. Affiliates' Relationships to Company.
3.22.(a). No Adverse Interests. Except as set forth on Schedule
3.22.(a), no Affiliate has any direct or indirect interest in (i) any
entity which does business with Company or is competitive with
Company's business, or (ii) any property, asset or right which is
used by Company in the conduct of its business.
3.22.(b). Obligations. All obligations of any Affiliate to
Company, and all obligations of Company to any Affiliate, are listed
on Schedule 3.22.(b).
3.23. Assets Necessary to Business. To the knowledge of the
Company, Company presently has and at the Closing will have good, valid
and marketable title to all property and assets, tangible and intangible,
and all leases, licenses and other agreements, necessary to permit Buyer
to carry on the business of Company as presently conducted.
3.24. No Brokers or Finders. Neither Company nor any of its
directors, officers, employees, Shareholders or agents have retained,
employed or used any broker or finder in connection with the transaction
provided for herein or in connection with the negotiation thereof.
3.25. Effect of Disclosure. For purposes of this Agreement any
information contained on any Disclosure Schedule shall be deemed a
disclosure for all purposes and on any other Disclosure Schedule relevant
thereto.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and warranties to the
Shareholders, each of which is true and correct on the date hereof, shall
remain true and correct to and including the Closing Date, and shall
survive the Closing of the transactions provided for herein.
4.1. Corporate.
4.1.(a) Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Wisconsin.
4.1.(b) Corporate Power. Buyer has all requisite corporate
power to enter into this Agreement and the other documents and
instruments to be executed and delivered by Buyer and to carry out
the transactions contemplated hereby and thereby.
4.2. Authority. The execution and delivery of this Agreement and the
other documents and instruments to be executed and delivered by Buyer
pursuant hereto and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by the Board of Directors of
Buyer. No other corporate act or proceeding on the part of Buyer or its
shareholders is necessary to authorize this Agreement or the other
documents and instruments to be executed and delivered by Buyer pursuant
hereto or the consummation of the transactions contemplated hereby and
thereby. This Agreement constitutes, and when executed and delivered, the
other documents and instruments to be executed and delivered by Buyer
pursuant hereto will constitute, valid and binding agreements of Buyer,
enforceable in accordance with their respective terms, except as such may
be limited by bankruptcy, insolvency, reorganization or other laws
affecting creditors' rights generally, and by general equitable
principles.
4.3. No Brokers or Finders. Except for Credit Suisse First Boston,
neither Buyer nor any of its directors, officers, employees or agents have
retained, employed or used any broker or finder in connection with the
transaction provided for herein or in connection with the negotiation
thereof.
4.4. Investment Intent. The Shares are being acquired by Buyer for
investment only and not with the view to resale or other distribution.
4.5. No Litigation. There is no action, suit, arbitration,
proceeding, investigation or inquiry, whether civil, criminal or
administrative ("Litigation") pending, or to the knowledge of the Buyer,
threatened against Buyer, its directors (in such capacity), its business
or any of its assets, nor does Buyer know, or have grounds to know, of any
basis for any Litigation which would have a material adverse impact on the
Buyer or Buyer's ability to obtain the financing necessary to complete the
transactions contemplated by this Agreement.
4.6. Financial Information. Buyer has delivered to the Company a
copy of its financial statements for the year ending September 30, 1996
which fairly presents the financial condition and assets and liabilities
of the Buyer as of said date. Buyer is not aware, other than reasonable
underwriting risks beyond Buyer's reasonable control, of any material
financial reason to believe that Buyer is not able to secure the financing
necessary to effectuate the consummation of the transactions contemplated
by this Agreement.
4.7. No Violations. Except as set forth on Schedule 4.7, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated by this Agreement violates or conflicts or
constitutes a default under any term or provision of its articles of
incorporation or by-laws or of any contract, or indenture to which it is a
party.
5. COVENANTS
5.1. Certain Matters.
5.1.(a) Disposition of Certain Subsidiaries and Assets. At or
prior to the Closing, the Company shall dispose of the subsidiaries
or assets identified in Schedule 5.1 in the manner and as provided in
such schedule, provided Shareholders (and the buyers of such assets)
shall be responsible for, and shall indemnify Buyer and the Company
against, any and all Tax(es) imposed on the Company or Buyer with
respect to such transactions, including any interest or penalties
related thereto.
5.1.(b) Termination of Certain Matters. At or prior to
Closing, the Company shall terminate, release or discharge the
obligations or matters described in Schedule 5.1 in the manner and as
provided in such Schedule.
5.2 Title Insurance. Not less than five (5) days prior to the
Closing, Company, at its expense, shall provide to Buyer title insurance
commitments, issued by a title insurance company reasonably satisfactory
to Buyer, agreeing to issue to Company standard form owner's (or lessee's,
as the case may be) policies of title insurance with respect to all Real
Property, together with a copy of each document to which reference is made
in such commitments. In the case of owned Real Property, such policies
shall be standard ALTA Form 1990 owner's policies in the full fair market
value thereof, insuring good and marketable title thereto (expressly
including all easements and other appurtenances). In the case of leased
Real Property, such policies shall be upon standard ALTA Form 1990
leasehold owner's policies and in such amounts as such shall be reasonably
acceptable to Buyer.
5.3. Surveys. At Buyer's option, Buyer may obtain prior to Closing
at its expense surveys of all Real Property, prepared in accordance with
ALTA/ASCM standards, provided such shall not delay the Closing under
Article 9 of this Agreement.
5.4. Escrow Agreement. At the Closing, Shareholders and Buyer (other
than the Church) shall execute and deliver an Escrow Agreement (the
"Escrow Agreement") in the form of Exhibit A hereto.
5.5. Employment Agreements.
5.5.(a) At or prior to the Closing, Shareholders shall cause
to be delivered to Buyer an Employment Agreement, substantially in
the form of Exhibit B hereto, duly executed by each of Xxxxxx
XxXxxxxx, Xxxxxx XxXxxxxx, Xxxxxxx XxXxxxxx and Xxxxxx Xxxxxxx and
the Company.
5.5.(b) At or prior to Closing, Shareholders shall cause to be
delivered to Buyer employment and non-competition agreements
currently in effect at the Company as of the date of this Agreement
duly executed by Company and the employees listed on Schedule
5.5.(b).
5.6. Noncompetition Agreements. At the Closing, Shareholders shall
cause to be delivered to Company a Noncompetition Agreement, substantially
in the form of Exhibit C hereto, duly executed by Xxxxxx Xxxxxxx and each
Shareholder other than the General Conference of the Seventh Day Adventist
Church (the "Church"). In addition to the consideration paid under this
Agreement, Buyer shall cause the Company or Buyer to pay Sixteen Million
Dollars ($16,000,000) each to Xxxxxx and Xxxxxxx XxXxxxxx, Three Million
Dollars ($3,000,000) to Xxxxxx XxXxxxxx, and Three Million Dollars
($3,000,000) to Xxxxxx Xxxxxxx in consideration for the non-competition
agreements. Xxxxxx and Xxxxxxx XxXxxxxx' non-competition period shall be
fifteen (15) years. Xxxxxx XxXxxxxx' non-competition period shall be ten
(10) years. Xxxxxx Xxxxxxx' non-competition period shall be fifteen (15)
years.
5.7. General Releases. At the Closing, each Shareholder shall
deliver, and shall cause Xxxxxx Xxxxxxx, to deliver, general releases to
Buyer, in form and substance reasonably satisfactory to Buyer and its
counsel (and containing appropriate waiver procedures), releasing Company
and the directors, officers, agents and employees of Company from all
claims to the Closing Date, except (i) as may be described in written
contracts disclosed in the Disclosure Schedule and expressly described and
excepted from such releases, (ii) in the case of persons who are employees
of the Company, compensation for current periods expressly described and
excepted from such releases, (iii) workers' compensation claims and (iv)
this Agreement and Ancillary Documents. Such releases shall also contain
waivers of any right of contribution or other recourse against Company
with respect to representations, warranties or covenants made herein by
Company.
5.8. Incentive Compensation Plan. Within sixty (60) days of Closing,
Buyer shall cause Company to implement an incentive compensation plan
pursuant to which the key employees listed on Schedule 5.8 shall be
eligible for incentive compensation in the form of actual or phantom stock
of the Company or Buyer (or such other form of consideration as Buyer
deems appropriate), such compensation not to exceed Two Million Dollars
($2,000,000), of which fifty percent (50%) shall be provided by Xxxxxx
XxXxxxxx through contribution or other payment to the Company.
5.9. HSR Act Filings. Each party shall, in cooperation with the
other parties, file or cause to be filed any reports or notifications that
may be required to be filed by it under the HSR Act, with the Federal
Trade Commission and the Antitrust Division of the Department of Justice,
and shall furnish to the others all such information in its possession as
may be necessary for the completion of the reports or notifications to be
filed by the other and as requested by a Government Authority.
5.10. Assistance With Financing.
5.10.(a) From the date hereof until the Closing, Shareholders
(except for the Church) shall cause Company and/or the Company's
financial, accounting or legal advisors to (i) provide such
information to Buyer for its preparation of information memoranda and
financial materials required to complete the documentation associated
with financing this transaction, (ii) assist in discussions to
finance this transaction and finance or refinance the lease debt and
retitle (if necessary) the leased assets associated with the Lease
Agreements; and (iii) permit the inclusion of audited consolidated
financial statements and unaudited interim financial statements, and
opinions and comfort letters of Company's independent auditors in a
bank financing offering or an offering memorandum for the placement
of debt securities.
5.10.(b) Shareholders (except for the Church) and Company shall
provide to Buyer by no later than January 15, 1998: (i) audited
consolidated financial statements of the Company consisting of
consolidated balance sheets as of February 28, 1995, 1996 and 1997
and the related consolidated statements of income, stockholders'
equity and cash flows for each of the years then ended prepared in
accordance with GAAP and in accordance with Regulation S-X of the
Securities and Exchange Commission; (ii) unaudited interim,
comparative, consolidated balance sheets as of November 30, 1996 and
1997 and the related consolidated statements of income, stockholders'
equity and cash flows for the nine-month periods then ended in
accordance with GAAP and in accordance with Regulation S-X of the
Securities and Exchange Commission applied on a consistent basis with
that of the preceding year; and (iii) interim financial data and
other data needed to prepare pro forma disclosures in accordance with
Regulation S-X and GAAP with respect to the financing of this
transaction. In the event the Closing has not occurred by February
28, 1998, at the request of Buyer, Shareholders and Company shall
cause its independent auditors to provide, on an expedited basis,
audited consolidated financial statements at and for the year ended
February 28, 1998 in accordance with Regulations S-X and GAAP and
other appropriate pro forma data. Company shall also provide interim
financial statements and other management reports as and when they
are available and as may be required to complete this transaction and
the financing thereof.
5.11. Access to Information and Records. During the period prior
to the Closing, Shareholders shall cause Company to give Buyer, its
counsel, accountants, bankers, investment bankers and other
representatives (i) access during normal business hours to all of the
facilities, properties, books, records, contracts and documents of Company
for the purpose of such inspection, investigation and testing as Buyer
deems appropriate (and Company shall furnish or cause to be furnished to
Buyer and its representatives all information with respect to the business
and affairs of Company as Buyer may request); (ii) with the prior consent
of the Company in each instance, which consent Company shall not
unreasonable withhold or delay access to employees, agents and
representatives for the purposes of such meetings and communications as
Buyer reasonably desires; and (iii) with the prior consent of Company in
each instance (which consent shall not be unreasonably withheld), access
to vendors, customers, manufacturers of its machinery and equipment, and
others having business dealings with Company.
5.12. Conduct of Business Pending the Closing. From the date
hereof until the Closing, and except as otherwise expressly provided for
herein or approved in writing by the Buyer, Company covenants as follows,
and Shareholders shall cause each of the following to occur:
5.12.(a). No Changes. Company will carry on its business
diligently and in the same manner as heretofore and will not make or
institute any changes in its methods of purchase, sale, management,
accounting or operation.
5.12.(b). Maintain Organization. Company will take such action
as may be necessary to maintain, preserve, renew and keep in favor
and effect the existence, rights and franchises of Company and will
use its best efforts to preserve the business organization of Company
intact, to keep available to Company the present officers and
employees, and to preserve for Company its present relationships with
suppliers and customers and others having business relationships with
Company.
5.12.(c) No Breach. Company and Shareholders will not do or
omit any act, or permit any omission to act, which may cause a breach
of any material contract, commitment or obligation, or any breach of
any representation, warranty, covenant or agreement made by Company
and/or the Shareholders herein, or which would have required
disclosure on Schedule 3.8 had it occurred after the date of the
Recent Balance Sheet and prior to the date of this Agreement.
5.12.(d) No Material Contracts. No contract or commitment will
be entered into, and no purchase of raw materials or supplies and no
sale of goods or services (real, personal, or mixed, tangible or
intangible) will be made, by or on behalf of Company, except
contracts, commitments, purchases or sales which are in the ordinary
course of business and consistent with past practice, are not
material to the Company (individually or in the aggregate), and would
not have been required to be disclosed in the Disclosure Schedule had
they been in existence on the date of this Agreement, provided
however, no contract or commitment will be entered into on behalf of
the Company for trucks except in the ordinary course of business.
5.12.(e) No Corporate Changes. Except as set forth on Schedule
5.12.(e), Company shall not amend its Articles of Incorporation or
By-Laws or make any changes in authorized or issued capital stock.
5.12.(f) Maintenance of Insurance. Company shall maintain all
of the insurance in effect as of the date hereof.
5.12.(g) Maintenance of Property. Company shall use, operate,
maintain and repair all property of Company in a normal business
manner.
5.12.(h) No Negotiations. Neither Company nor any Shareholder
will directly or indirectly (through a representative or otherwise)
solicit or furnish any information to any prospective buyer,
commence, or conduct presently ongoing, negotiations with any other
party or enter into any agreement with any other party concerning the
sale of Company, Company's assets or business or any part thereof or
any equity securities of Company (an "acquisition proposal"), and
Company and Shareholders shall immediately advise Buyer of the
receipt of any acquisition proposal.
5.12.(i) No Transfer of Shares. No Shareholder shall transfer
or attempt to transfer any of the Shares except to Buyer pursuant
hereto; and Company shall refuse to accept any certificates for
Shares to be transferred or otherwise to allow such transfers to
occur upon its books, provided, however, Shareholders may transfer
Shares to another Shareholder or to a public charity, private
foundation, or an immediate member of Shareholder's family or trust
for the benefit of the same so long as such transferee executes a
power of attorney in form and substance reasonably satisfactory to
Buyer's counsel appointing the transferor his/her/its agent and
attorney-in-fact with authority to act on their behalf in connection
with the transaction contemplated hereby, including transferring the
Shares to Buyer pursuant to the terms of this Agreement.
5.12.(j) No Dividends. Except as provided in this Agreement,
Company shall not declare, set aside or pay any dividend or make any
other distribution in respect of Company's or any Subsidiary's
capital stock other than inter-company dividends to entities other
than those entities described in Section 5.1 and neither Company nor
any Subsidiary shall redeem, purchase or otherwise acquire any
capital stock of Company or any Subsidiary.
5.13. Consents. Company and Shareholders will use their best
efforts prior to Closing to obtain all consents necessary for the
consummation of the transactions contemplated hereby.
5.14. Opinion of Counsel. At Closing, Company shall cause its
counsel to deliver to Buyer an opinion of counsel in a form substantially
similar to Exhibit D hereto, duly executed by such counsel.
5.15. Disclosure Schedule Updates. After the delivery on the
date hereof of the Disclosure Schedules required by this Agreement by
Company and Shareholders to Buyer, Company and Shareholders shall have a
continuing obligation to promptly notify Buyer, in writing, and Buyer
shall have the continuing obligation to promptly notify the Company and
Shareholders of any matter hereafter arising or hereafter discovered which
if known by Company on the date hereof would have been required to be set
forth or described in the Disclosure Schedules. Any such Disclosure
Schedule updates shall not constitute a breach of Company and Shareholders
representation and warranties subject to indemnification pursuant to
Article 8 hereof but can be considered by Buyer as claims for damages for
purposes of Section 6.1. However, no such disclosure subsequent to the
date hereof shall be allowed to cure a breach by Company or Shareholders
of any representation or warranty contained in the Disclosure Schedules on
the date hereof.
5.16. Environmental Matters. The Company will investigate,
comply, remove, close and clean up the environmental matters disclosed in
Schedule 3.17.(b). Following the Closing, Buyer shall cause the Company
to investigate, comply, remove, close and/or clean up the environmental
matters disclosed in Schedule 3.17.(b) that have not been investigated or
remediated before Closing, and all such matters discovered during the
investigation or remediation of the same, but shall consult with
Shareholders as investigation and remediation plans or reports are
developed. Buyer agrees to obtain competitive bids for any investigation
and remediation. The Escrow Funds (as defined in the Escrow Agreement)
shall be available to reimburse Buyer and Company for such investigations
and remediations occurring after Closing, upon presentation to the Escrow
Agent of proper documentation. The limitations of Sections 8.4 and 8.10
shall not apply to the post-closing obligations under this Section 5.16.
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Each and every obligation of Buyer to be performed on the
Closing Date shall be subject to the satisfaction prior to or at the
Closing of each of the following conditions:
6.1 Representations and Warranties True as of the Closing Date. No
breach of any of the representations and warranties made by Shareholders
and Company in this Agreement (including supplemental disclosures of
matters arising after the date of this Agreement) shall have occurred or
be alleged, which, in the reasonable judgment of Buyer, would result in
Claims (as defined in Article 8) in excess of $5,000,000. If any such
breaches shall occur, the parties to this Agreement shall meet and confer
regarding such breaches. After such meeting, Buyer shall have the option
of terminating this Agreement as provided in Article 10. If Buyer elects
to waive this condition and close, any such Claims (other than Claims
resulting from the supplemental disclosure of matters arising after the
date hereof pursuant to Section 5.15 for which Buyer shall not be entitled
to indemnification) shall be subject to indemnification in accordance with
Article 8.
6.2. Compliance With Agreement. Shareholders and Company shall have
in all material respects performed and complied with all of their
agreements and obligations under Sections 5.1, 5.4, 5.5.(a), 5.6, 5.9-
5.12, 5.14 and 5.15 of this Agreement which are to be performed or
complied with by them prior to or on the Closing Date, including the
delivery of the closing documents specified in such Sections. If Buyer,
in its reasonable belief determines that Shareholders or Company are in
breach of their obligations under this Section 6.2, Buyer shall promptly
notify Shareholders and Company of their alleged breach in writing,
specifying with particularity, the nature of the alleged breach and the
steps Buyer believes must be taken to cure the breach. Thereafter,
Shareholders and Company shall have thirty (30) days to cure the breach,
or to set forth in writing an explanation of why they believe that no such
breach has occurred. If Buyer rejects Shareholders' or Company's
explanation and a breach then exists, Buyer may declare a condition
precedent to closing has not occurred or, if Buyer elects to waive this
condition and close, any Claim (other than Claims resulting from the
supplementary disclosure of matters arising after the date hereof pursuant
to Section 5.15 for which Buyer shall not be entitled to indemnification)
shall be subject to indemnification in accordance with Article 8.
6.3. Absence of Litigation. No Litigation or investigation shall
have been commenced or threatened by any Government Entity, against Buyer,
Company or any of the affiliates, officers or directors of any of them,
with respect to the transactions contemplated hereby.
6.4. Consents and Approvals. All material approvals, consents and
waivers set forth on Schedule 6.4 that are required to effect the
transactions contemplated hereby shall have been received, and executed
counterparts thereof shall have been delivered to Buyer not less than two
business days prior to the Closing.
6.5. Xxxx-Xxxxx-Xxxxxx Waiting Period. All applicable waiting
periods related to the HSR Act shall have expired.
6.6. Shareholders' Equity. Combined Shareholders' Equity as of the
last day of the month not more than 45 days immediately preceding the
Closing Date after giving effect to the transactions in Section 5.1 shall
be not less than Eighty-Three Million Two Hundred Thousand Dollars
($83,200,000), determined in accordance with GAAP, applied on a consistent
basis and prepared in accordance with the books and records of the
Company.
7. CONDITIONS PRECEDENT TO SHAREHOLDERS' OBLIGATIONS
Each and every obligation of Shareholders to be performed on the
Closing Date shall be subject to the satisfaction prior to or at the
Closing of the following conditions:
7.1. Compliance With Agreement. Buyer shall have in all material
respects performed and complied with all of Buyer's agreements and
obligations under this Agreement which are to be performed or complied
with by Buyer prior to or on the Closing Date. If Shareholders in their
reasonable belief determine that Buyer is in breach of its obligations
under this Section 7.1, Shareholders shall promptly notify Buyer of its
alleged breach in writing, specifying with particularity, the nature of
the alleged breach and the steps Shareholders believe must be taken to
cure the breach. Thereafter, Buyer shall have thirty (30) days to cure
the breach, or to set forth in writing, an explanation of why it believes
that no such breach has occurred. If Shareholders reject Buyer's
explanation, and a breach then exists, Shareholders may declare a
condition precedent to closing has not occurred or, if Shareholders elect
to waive this condition and close, any Claims for damages resulting from
the supplementary disclosure of matters arising after the date hereof
pursuant to shall be subject to indemnification in accordance with Article
8.
7.2. Absence of Litigation. No Litigation or investigation shall
have been commenced or threatened by any Government Entity, against Buyer,
Company or any of the affiliates, officers or directors of any of them,
with respect to the transactions contemplated hereby.
7.3. Xxxx-Xxxxx-Xxxxxx Waiting Period. All applicable waiting
periods related to the HSR Act shall have expired.
8. INDEMNIFICATION AND RELATED MATTERS.
8.1. Indemnification By Indemnifying Shareholders. Subject to the
provisions of this Article 8 and after the Closing, each of Xxxxxxx
XxXxxxxx, Xxxxxx XxXxxxxx and Xxxxxx XxXxxxxx (the "Indemnifying
Shareholders"), severally in accordance with the percentages listed on
Schedule 8.1 hereby agrees to indemnify and hold the Buyer, its directors,
officers, employees and controlled and controlling persons (hereinafter
"Buyer's Affiliates") and the Company harmless from and against all Claims
asserted against, resulting to or imposed upon, or incurred by Buyer,
Buyer's Affiliates or the Company including without limitation, those
arising from third-party claims, which result from or arise out of:
8.1.(a) The breach of any of the representations or warranties
contained in Article 3 of this Agreement, it being understood that to
the extent that any of such representations and warranties were made
as of a specified date the same shall apply only to the breach of
such representations or warranties as of such specified date; or
8.1.(b) The failure of the Company or Shareholders to comply
with any of the covenants and agreements contained in this Agreement
which were required to be performed by the Company or any
Shareholder;
8.1.(c) Any Tax or other liability incurred, assessed or
imposed on Company or Buyer arising out of the sale or disposition of
assets pursuant to Section 5.1 hereto, or the remediations set forth
pursuant to Section 5.16.
8.2. Indemnification By Buyer. Subject to the terms and conditions
of this Article 8, Buyer agrees to indemnify and hold the Shareholders
harmless from and against all Claims asserted against, resulting to or
imposed upon or incurred by Shareholders including, without limitation,
those arising from third-party claims, which result from or arise out of:
8.2.(a) The breach of any of the representations or warranties
contained in Article 4 of this Agreement, it being understood that to
the extent that any of such representations and warranties were made
as of a specified date the same shall apply only to the breach of
such representations or warranties as of such specified date;
8.2.(b) The failure of the Buyer to comply with any of the
covenants and agreements contained in this Agreement which are
required to be performed by the Buyer;
8.2.(c) The operation of the Company on or after the date of
closing; or
8.2.(d) The Buyer agrees to indemnify and hold the Company and
the Shareholders (including the Church) harmless from and against any
Claims arising out of the Buyer's actions in seeking financing for or
equity investment in Buyer and/or Company, excluding advisory fees
and expenses (which shall be subject to Section 12.8), save and
except for any claims or damages arising out of the breach by Company
or Shareholders of any representation, warranty or covenant contained
in this Agreement or any fraud or misrepresentation by Company or any
Shareholder.
8.3. Indemnification By Company. Subject to the terms and conditions
of this Article 8 and until the Closing, the Company hereby agrees to
indemnify, defend and hold harmless Buyer and Buyer's Affiliates from and
against all Claims asserted against, resulting to, imposed upon or
incurred by Buyer or Buyer's Affiliates, arising out of or resulting from
(a) the breach of any of the representations or warranties contained in
Article 3 of this Agreement, it being understood that to the extent that
any of such representations and warranties were made as of a specified
date the same shall apply only to the breach of such representations or
warranties as of such specified, or (b) the failure of the Company or
Shareholders to comply with any of the covenants and agreements contained
in this Agreement which were required to be performed by the Company or
any Shareholder.
8.4. Limitation on Indemnification Liabilities. Notwithstanding any
of the provisions herein contained, the Indemnifying Shareholders and
Company shall not have any indemnification obligation with respect to
Claims unless and until such Claims shall total Four Million Dollars
($4,000,000.00) in the aggregate and then only to the extent such claims
exceed Four Million Dollars ($4,000,000.00) in the aggregate, and (ii) the
cumulative indemnification obligation of the Indemnifying Shareholders and
Company shall terminate once the dollar amount of all such Claims
indemnified against under Article 8 hereof aggregates Twenty-Four Million
($24,000,000); provided, however, that the limitations contained in
clauses (i) and (ii) above shall not apply to indemnification obligations
relating to:
8.4.(a) any breach of the Shareholders' representations and
warranties regarding ownership of Shares under Section 3.2.;
8.4.(b) any claims under Section 8.1.(c); and
8.4.(c) any break-up fee under Article 10.
8.5 Survival Of Representations, Warranties And Covenants.
Notwithstanding anything herein to the contrary, the Indemnifying
Shareholders shall have no obligation to the Buyer or Company under
Section 8.1 with respect to any Claim for which Buyer gives notice to the
Indemnifying Shareholders later than eighteen (18) months following the
Closing, except with respect to (i) a breach of a representation or
warranty with respect to Taxes in Section 3.5 where the applicable statute
of limitation extends beyond such date, in which case notice must be given
not later than sixty (60) days following the expiration of the relevant
statute of limitations, (ii) Claims relating to the ownership of the
shares, with respect to which notice of such claims must be given not
later than sixty (60) days following the expiration of relevant statute of
limitations, (iii) breaches of the Shareholders' and Company's
representations and warranties regarding environmental matters, with
respect to which notice of claims must be given not later than sixty (60)
days following the fifth (5th) anniversary of the Closing.
8.6. Notice of Indemnification. In the event any legal proceeding
shall be threatened or instituted or any claim or demand shall be asserted
by any person in respect of which payment may be sought by one party
hereto from the other party under the provisions of this Article 8 or upon
the discovery of any facts which one party believes may give rise to a
claim for indemnification under this Article 8, the party seeking
indemnification (the "Indemnitee") shall promptly cause written notice of
such claims which it reasonably believes to be covered by this indemnity
to be forwarded to the other party (the "Indemnitor"); provided, however,
that except for the notice required by Section 8.6, the failure to give
such notice shall not effect the indemnification provided hereunder except
to the extent the Indemnitor has actually been prejudiced as a result of
such failure. Any notice of a Claim by reason of any of the
representations, warranties or covenants contained in this Agreement shall
state specifically the representation, warranty or covenant with respect
to which the claim is made, the facts giving rise to an alleged basis for
the claim, and the amount of liability asserted against the Indemnitor by
reason of the claim.
8.7. Indemnification Procedure for Third-Party Claims. Except as
otherwise provided herein, in the event of the initiation of any legal
proceedings against an Indemnitee by a third-party, the Indemnitor shall
have the absolute right after the receipt of notice, at its option and at
its own expense, to be represented by counsel, which counsel shall be
reasonably satisfactory to the Indemnitee and to defend against,
negotiate, settle or otherwise deal with any proceeding, claim, or demand
which relates to any Claims indemnified against hereunder; provided,
however, (i) that the Indemnitor exercises such option in writing within
thirty (30) days of receipt of notice; (ii) that the Indemnitee may
participate in any such proceeding with counsel of its choice and at its
expense; (iii) that in the case of any Claims seeking equitable relief or
requiring remedial action in respect of the Shares, the Buyer shall have
the right to defend (using counsel reasonably satisfactory to the
Indemnifying Shareholders) or settle such claim, regardless of whether the
Buyer is the Indemnitor or the Indemnitee; and (iv) that the Indemnitor
shall not settle any proceeding, claim or demand which imposes any
liability or obligation on the Indemnitee without the Indemnitor's
consent, which consent shall not be unreasonably withheld. The parties
hereto agree to cooperate fully with each other in connection with the
defense, negotiation or settlement of any such legal proceeding, claim or
demand. To the extent the Indemnitor elects not to defend such
proceeding, claim or demand, and the Indemnitee defends against or
otherwise deals with any such proceeding, claim or demand, the Indemnitee
may retain counsel (reasonably satisfactory to the Indemnitor), at the
expense of the Indemnitor, the Indemnitor shall nevertheless indemnify the
Indemnitee for the full amount of the Claims relating to such proceeding,
claim or demand and the Indemnitee shall control the defense in settlement
of such proceedings; provided, that the Indemnitee shall give the
Indemnitor ten (10) days written notice prior to entering into any such
settlement and shall not settle any such claim without the consent of the
Indemnitor, which consent shall not be unreasonably withheld or delayed.
8.8. Exclusive Remedy. The exclusive remedy available to any party
to this Agreement in respect of the transactions contemplated hereby shall
be to proceed in the manner and subject to the limitations contained in
this Article 8.
8.9. Computation of Claims for Damages Subject to Indemnification.
As used in this Article 8, the term "Claims" shall include (i) all valid
debts, liabilities and obligations; (ii) all losses, damages, judgments,
awards, settlements, costs and expenses (including, without limitation,
interest (including prejudgment interest in any litigation matter),
penalties, court costs and attorney fees and expenses); and (iii) all
demands, claims, suits, actions, costs of investigation, causes of action,
proceeding and assessments, provided, further however, that the amount of
any Claims for which indemnification is provided under this Article 8
shall (i) be computed net of any insurance proceeds from insurance
companies, (ii) there shall be disregarded any tax liabilities arising by
reason of (A) any reduction or disallowance of deductions from taxable
income in one taxable year, to the extent such reduction or disallowance
would result in a corresponding increase in allowable deductions from
income in another taxable year, (B) the shifting of items of income from
one taxable year to another, or (C) the capitalization of amounts which
were expensed, but only if such capitalized amounts are subject to
amortization or depreciation or recovery in costs of goods sold, inventory
or materials, except insofar as such reduction, disallowance, shifting or
capitalization would only result in the increase of any unutilized net
operating loss, capital loss or credit carryover, and (iii) exclude lost
profits and lost business opportunities.
8.10. Minibasket. Except with respect to Claims under Section
8.1.(c) and for breaches of representations or warranties contained in
Section 3.2, any inaccuracy or breach of a representation or warranty
shall not constitute a Claim unless the amount for a particular inaccuracy
or breach of a representation or warranty exceeds Ten Thousand Dollars
($10,000.00), and in such event, the Indemnitee shall be entitled to
indemnification in full for such breach.
8.11. Commencement of Arbitration. Any claim made by a party
hereunder by a demand for arbitration in accordance with Article 11 hereof
for breach of a representation or warranty prior to the termination of the
survival period for such claim shall be preserved despite the subsequent
termination of such survival.
8.12. Waiver. The Closing of the transaction contemplated by
this Agreement shall not constitute a waiver by any party of its right to
indemnification hereunder.
8.13. Payment. The Indemnitor shall promptly pay the Indemnitee
any amount due under this Article 8.
9. CLOSING
The closing of this transaction ("xxx Xxxxxxx") shall take place
within two (2) days following Buyer's ability to obtain the financing
necessary to complete this transaction and all other conditions of
Articles 6 and 7 have been fulfilled or at such other time as the parties
hereto shall agree upon. Such date is referred to in this Agreement as
the "Closing Date". The Closing shall take place in a city and offices to
be agreed upon by the parties.
10. TERMINATION
10.1. Right of Termination Without Breach. This Agreement may be
terminated without further liability of any party at any time prior to the
Closing:
10.1.(a) by mutual written agreement of Buyer and Shareholders,
or
10.1.(b) by either Buyer or Shareholders if the Closing shall
not have occurred on or before June 1, 1998, provided the terminating
party has not, through breach of a representation, warranty or
covenant, prevented the Closing from occurring on or before such
date.
10.1.(c) by either Buyer or Shareholders if Buyer is unable
after reasonable efforts to obtain financing for this transaction
within 60 days after the later of (i) delivery of financials
statements required by Section 5.10.(b); and (ii) the expiration of
the applicable waiting periods related to HSR.
10.2. Termination for Breach.
10.2.(a) Termination by Buyer. If (i) there has been a
material violation or breach by any Shareholder or Company of any of
the agreements or representations or warranties contained in Section
3.2 or Section 3.3 (as it relates to Shareholders) of this Agreement
which has not been waived in writing by Buyer, or (ii) there has been
a failure of satisfaction of a condition to the obligations of Buyer
which has not been so waived, or (iii) Company or any Shareholder
shall have attempted to terminate this Agreement for any reason other
than those specified in Sections 10.1 and 10.2.(b), then Buyer may,
by written notice to Shareholder at any time prior to the Closing
that such violation, breach, failure or wrongful termination attempt
is continuing, terminate this Agreement with the effect set forth in
Section 10.3 hereof.
10.2.(b) Termination by Shareholders. If (i) there has been a
material violation or breach by Buyer of any of the agreements,
representations or warranties contained in this Agreement which has
not been waived in writing by Shareholders, or (ii) there has been a
failure of satisfaction of a condition to the obligations of
Shareholders which has not been so waived, or (iii) Buyer shall have
attempted to terminate this Agreement for any reason other than those
specified in Sections 10.1 and 10.2.(a), then Shareholders may, by
written notice to Buyer at any time prior to the Closing that such
violation, breach, failure or wrongful termination attempt is
continuing, terminate this Agreement with the effect set forth in
Section 10.3 hereof.
10.3. Termination Fees.
10.3.(a) If this Agreement is terminated by Buyer pursuant to
Section 10.2.(a) (other than for a failure of the satisfaction of
closing conditions in Sections 6.1, 6.3, 6.4, 6.5 and 6.6), then
Company shall pay Buyer a fee of Ten Million Dollars ($10,000,000)
upon such termination; payable in immediately available funds on the
third business day following termination under Section 10.2.(a). In
such event, there shall be no further liability on the part of
Company or Shareholders to Buyer.
10.3.(b) If this Agreement is terminated by Shareholders or
Buyer pursuant to Section 10.1.(c) (provided all other closing
conditions have been met) or by Shareholders pursuant to Section
10.2.(b) (other than for a failure of satisfaction of closing
conditions set forth in Sections 7.2 and 7.3) then Buyer shall pay to
Company a fee of Ten Million Dollars ($10,000,000), upon such
termination; payable in immediately available funds on the third
business day following termination under Section 10.1.(c) or Section
10.2.(b). In such event, there shall be no further liability on the
part of Buyer to Company or Shareholders.
10.3.(c) In the event this Agreement is terminated by any party
for any reason other than those set forth in Sections 10.3.(a) or (b)
above, there shall be no further liability on the part of the Company
or Shareholders to Buyer or Buyer to the Company or Shareholders.
10.4. Confidentiality Upon Termination.
10.4.(a) In the event this Agreement is terminated by any party
for any reason, each party agrees to treat confidentially any
information received from another party, its representatives or
agents, whether furnished before or after the date of this Agreement,
and whether disclosed in writing or orally or obtained through
observation of facilities, and all notes, analysis, compilations,
studies and other documents which contain or otherwise reflect such
information disclosed ("Confidential Information"). The term
"Confidential Information" does not include information which (i)
becomes generally available to the public other than as a result of a
disclosure by the recipient, its affiliates, or their directors,
officers, employees, agents or representatives; (ii) was rightfully
available and disclosed to the recipient on a non-confidential basis
prior to its disclosure to the recipient by the disclosing party, or
(iii) prior to disclosure by a disclosing party became rightfully
available and disclosed to recipient on a non-confidential basis from
a source other than the disclosing party, provided that such source
is not to recipient's knowledge, after reasonable inquiry, bound by a
confidentiality agreement with the disclosing party or otherwise
prohibited from transmitting the information to recipient by a
contractual, legal or fiduciary obligation.
10.4.(b) Without the prior written consent of the disclosing
party, the recipient will not, and will direct its affiliates and
their directors, agents, representatives and employees who have
knowledge of any circumstances concerning the transactions
contemplated hereby not to disclose or divulge to any third person
any Confidential Information or use any of the Confidential
Information for any reason or purpose.
10.4.(c) In the event that the recipient, any affiliates or
their directors, officers, employees, agents or representatives are
requested or required (by oral questions, interrogatories, requests
for information or documents, subpeona, civil investigative demand or
similar process) to disclose the transactions contemplated by this
Agreement or any Confidential Information supplied to recipient prior
to or after the execution of this Agreement, the recipient agrees to
provide the disclosing party with prompt notice of such request(s) so
that the disclosing party may seek an appropriate protective order
and/or waive compliance with the provisions of this Section, except
that approval of the Shareholders or Company shall not be required as
to any statements and other information which Buyer may be required
to make pursuant to any rule or regulation of the Securities and
Exchange Commission or The Nasdaq Stock Market, Inc. If failing the
entry of a protective order or the receipt of a waiver hereunder, the
recipient is, in the opinion of its counsel, compelled to disclose
Confidential Information or otherwise be liable for contempt or other
censure or penalty, recipient may disclose that portion of the
Confidential Information which its counsel shall have advised it is
compelled to disclose. In any event, recipient will not oppose
action by the disclosing party to obtain an appropriate protective
order or other reliable assurance that confidential treatment will be
accorded the Confidential Information, and will take all reasonable
efforts to cooperate in the same and to maintain confidentiality of
the transactions contemplated by this Agreement and Confidential
Information.
10.4.(d) In the event of termination, each party will promptly
upon request deliver to the requesting party all documents or other
matters furnished to it by another party constituting Confidential
Information, without retaining any copy thereof.
11. RESOLUTION OF DISPUTES
11.1. Arbitration. Any dispute, controversy or claim arising out
of or relating to this Agreement or any contract or agreement entered into
pursuant hereto or the performance by the parties of its or their terms
shall be settled by binding arbitration held in Chicago, Illinois in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect, except as specifically otherwise
provided in this Article 11. Notwithstanding the foregoing, Buyer may, in
its discretion, apply to a court of competent jurisdiction for equitable
relief from any violation or threatened violation of the covenants or any
covenants not to compete contained in any Employment Agreement or Non-
Competition Agreement delivered pursuant to Section 5.5 or Section 5.6
hereof.
11.2. Arbitrators. If the matter in controversy (exclusive of
attorney fees and expenses) shall appear, as at the time of the demand for
arbitration, to exceed $200,000, then the panel to be appointed shall
consist of three neutral arbitrators; otherwise, one neutral arbitrator.
11.3. No Appeal. The decision of the arbitrator(s) shall be
final, binding, and nonappealable with respect to all persons, including
(without limitation) persons who have failed or refused to participate in
the arbitration process.
11.4. Authority. The arbitrator(s) shall have authority to award
relief under legal or equitable principles, including interim or
preliminary relief, and to allocate responsibility for the costs of the
arbitration and to award recovery of attorneys fees and expenses in such
manner as is determined to be appropriate by the arbitrator(s).
11.5. Entry of Judgment. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having in personam and subject
matter jurisdiction. Buyer and each Shareholder hereby submit to the in
personam jurisdiction of the Federal and State courts in the Northern
District of Illinois, for the purpose of confirming any such award and
entering judgment thereon.
11.6. Confidentiality. All proceedings under this Article 11,
and all evidence given or discovered pursuant hereto, shall be maintained
in confidence by all parties.
11.7. Continued Performance. The fact that the dispute
resolution procedures specified in this Article 11 shall have been or may
be invoked shall not excuse any party from performing its obligations
under this Agreement and during the pendency of any such procedure all
parties shall continue to perform their respective obligations in good
faith, subject to any rights to terminate this Agreement that may be
available to any party.
11.8. Discovery. In any arbitration, either party shall be
entitled to conduct discovery in accordance with applicable rules of civil
procedure during the course of such arbitration.
12. MISCELLANEOUS
12.1. Knowledge. For each of those warranties and
representations made in Article 3 that are subject to the qualification of
Company "to the knowledge of the Company," "to the best of Company's
knowledge," "to the Company's knowledge," or similar words or phrases,
such warranties and representations shall be deemed limited to those
matters of which any of the following officers of the Company has actual
knowledge: Xxxxxx XxXxxxxx, Xxxxxx XxXxxxxx, Xxxxxxx XxXxxxxx, and Xxxxxx
Xxxxxxx.
12.2. Further Assurance. From time to time, at Buyer's request
and without further consideration, Company and Shareholders will execute
and deliver to Buyer such documents and take such other action as Buyer
may reasonably request in order to consummate more effectively the
transactions contemplated hereby.
12.3. Disclosures and Announcements. Announcements concerning
the transactions provided for in this Agreement by Buyer, Company or
Shareholders shall be subject to the approval of the other parties in all
essential respects or that is otherwise required by law. Following
execution of this Agreement and the filing of a Xxxx-Xxxxx-Xxxxxx notice,
the Shareholders and Buyer agree to jointly prepare a statement regarding
this transaction for public disclosure.
12.4. Assignment; Parties in Interest.
12.4.(a) Assignment. Except as expressly provided herein, the
rights and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of the
other parties. Notwithstanding the foregoing, Buyer may, without
consent of any other party, cause one or more subsidiaries of Buyer
to carry out all or part of the transactions contemplated hereby;
provided, however, that Buyer shall, nevertheless, remain liable for
all of its obligations, and those of any such subsidiary, to
Shareholders hereunder.
12.4.(b) Parties in Interest. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the respective
successors and permitted assigns of the parties hereto. Nothing
contained herein shall be deemed to confer upon any other person any
right or remedy under or by reason of this Agreement.
12.5. Law Governing Agreement. This Agreement may not be
modified or terminated orally, and shall be construed and interpreted
according to the internal laws of the State of Minnesota, excluding any
choice of law rules that may direct the application of the laws of another
jurisdiction.
12.6. Amendment and Modification. Buyer and Shareholders may
amend, modify and supplement this Agreement in such manner as may be
agreed upon in writing between Buyer and Shareholders.
12.7. Notice. All notices, requests, demands and other
communications hereunder shall be given in writing and shall be: (a)
personally delivered; (b) sent by telecopier, facsimile transmission or
other electronic means of transmitting written documents; or (c) sent to
the parties at their respective addresses indicated herein by registered
or certified U.S. mail, return receipt requested and postage prepaid, or
by private overnight mail courier service. The respective addresses to be
used for all such notices, demands or requests are as follows:
(a) If to Buyer, to:
Oshkosh Truck Corporation
0000 Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xxxxxx Xxxx
Chief Executive Officer
Facsimile: (000) 000-0000
(with a copy to)
Xxxxxxx X. Xxxxxxx, Esq.
Oshkosh Truck Corporation
0000 Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
(and an additional copy to)
Xxxxxxxx X. Xxxxxx, III
Xxxxx & Lardner
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
or to such other person or address as Buyer shall furnish to Shareholders
in writing.
(b) If to Shareholders:
Xxxxxx XxXxxxxx
Xxxxx 0, Xxx 000
Xxxxx Xxxxxx, XX 00000
(000) 000-0000
(with a copy to)
Xxxxxx XxXxxxxx
Xxxxx 0, Xxx 00
Xxxxx Xxxxxx, XX 00000
(000) 000-0000
(with a copy to)
Xxxxxxx XxXxxxxx
Xxxxx 0, Xxx 00
Xxxxx Xxxxxx, XX 00000
(000) 000-0000
(with a copy to)
Xxxxxx X. Xxxxx
SIEGEL, BRILL, GREUPNER, XXXXX & XXXXXX, P.A.
0000 Xxxxxxxxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000
(000) 000-0000
Facsimile: (000) 000-0000
or to such other person or address as Shareholders shall designate in
accordance with this Agreement.
(c) If to Company, to:
McNeilus Companies, Inc.
X.X. Xxx 00, 000 Xxxxxxx Xxxxxx X.X.
Xxxxx Xxxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
(with a copy to)
Xxxxxx X. Xxxxx
SIEGEL, BRILL, GREUPNER, XXXXX & XXXXXX, P.A.
0000 Xxxxxxxxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000
(000) 000-0000
Facsimile: (000) 000-0000
In addition, any notice to Company given prior to Closing shall also be
given in the same manner to Shareholders; and any notice to Company given
after Closing shall also be given in the same manner to Buyer.
If personally delivered, such communication shall be deemed
delivered upon actual receipt; if electronically transmitted pursuant to
this paragraph, such communication shall be deemed delivered the next
business day after transmission (and sender shall bear the burden of proof
of delivery); if sent by overnight courier pursuant to this paragraph,
such communication shall be deemed delivered upon receipt; and if sent by
U.S. mail pursuant to this paragraph, such communication shall be deemed
delivered as of the date of delivery indicated on the receipt issued by
the relevant postal service, or, if the addressee fails or refuses to
accept delivery, as of the date of such failure or refusal. Any party to
this Agreement may change its address for the purposes of this Agreement
by giving notice thereof in accordance with this Section.
12.8. Expenses. Except as may otherwise be specifically provided
herein, the parties hereto shall pay their own legal fees and expenses
incurred in connection with the negotiation and consummation of the
transactions contemplated by this Agreement, provided that the Company
shall pay the reasonable and verifiable fees and expenses incurred by the
Company or Shareholders, including the fees and expenses of Siegel, Brill,
Greupner, Xxxxx & Xxxxxx, P.A. ("SBGD&F") and Xxxxxx Xxxxx Weishair & Co.,
LLP ("LAW"), related to this transaction. Set forth on Schedule 12.8 are
the actual fees and expenses to date and good faith estimates of fees and
expenses to complete the transaction contemplated hereby of SBGD&F and
LAW. Buyer shall be furnished with copies of itemized statements for all
such fees in such form as Buyer may request and upon Buyer's request,
SBGD&F and LAW shall provide information to support the reasonableness and
accuracy of such fees and expenses. The Buyer shall be responsible for
any fees paid to any brokers, consultants, or other agents retained by
Buyer in connection with the transactions contemplated hereby.
12.9. Costs of Litigation or Arbitration. The parties agree that
(subject to the discretion, in an arbitration proceeding, of the
arbitrator as set forth in Section 11.4) the prevailing party in any
action brought with respect to or to enforce any right or remedy under
this Agreement shall be entitled to recover from the other party or
parties all reasonable costs and expenses of any nature whatsoever
incurred by the prevailing party in connection with such action, including
without limitation attorneys' fees and prejudgment interest.
12.10. Transfer Taxes. Any sales, use, excise, transfer or other
similar tax imposed with respect to the transactions provided for in this
Agreement, any interest or penalties related thereto, shall be paid by the
party who customarily bears such expenses under Minnesota law customer
practice.
12.11. Entire Agreement. This instrument embodies the entire
agreement between the parties hereto with respect to the transactions
contemplated herein, and there have been and are no agreements,
representations or warranties between the parties other than those set
forth or provided for herein.
12.12. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
12.13. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.
12.14. No Negotiations by Buyer. From the date hereof to the date
of closing, Buyer will not directly or indirectly (through a
representative or otherwise) solicit or furnish any information about
Company to any prospective buyer, commence or conduct presently ongoing
negotiations with any other party or enter into any agreement with any
other party concerning the sale of Company, Company's assets or business
or any part thereof or any equity securities of Company (an "acquisition
proposal").
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date and year first above written.
OSHKOSH TRUCK CORPORATION McNEILUS COMPANIES, INC.
("Buyer") ("Company")
By: /s/ Xxxxxx Xxxx By: /s/ Xxxxxx XxXxxxxx
Xxxxxx Xxxx Xxxxxx XxXxxxxx
Chief Executive Officer President
SHAREHOLDERS
/s/ Xxxxxx XxXxxxxx
Xxxxxx XxXxxxxx
/s/ Xxxxxxx XxXxxxxx
Xxxxxxx XxXxxxxx
/s/ Xxxxxx XxXxxxxx
Xxxxxx XxXxxxxx
/s/ Xxxxxxx XxXxxxxx
Xxxxxxx XxXxxxxx
General Conference of the
Seventh Day Adventist Church
By: /s/
Name:
Title: