AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT is made and entered into effective as of May 8, 1998, by and
among Featherlite Mfg., Inc., a Minnesota corporation ("Featherlite"), Xxxxxxxx
Motorcoach Sales, Inc., a Florida corporation ("Xxxxxxxx Motorcoach"), Xxxxxx X.
Xxxxxxxx and Xxxxxxxx X. Xxxxxxxx (jointly referred to herein as the
"Mitchells"), Xxxxxx X. Xxxxxxx ("Xxxxxxx") and Xxxx Xxxxxx ("Molder") (the
Mitchells, Xxxxxxx and Xxxxxx are collectively referred to herein as the
"Shareholders").
RECITALS:
X. Xxxxxxxx Motorcoach is engaged in the business of manufacturing and
marketing luxury custom coaches. The Shareholders own all of the outstanding
capital stock of Xxxxxxxx Motorcoach.
X. Xxxxxxxx Motorcoach desires to transfer substantially all of its assets
to Featherlite in exchange for shares of capital stock of Featherlite and the
assumption by Featherlite only of certain of its specified liabilities, upon the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein, and for other valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the parties mutually
agree as follows:
ARTICLE 1
DEFINITIONS
In this Agreement the following terms shall have the meanings assigned to
them below:
1.1 "Affiliate" of a specified person or entity means a person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person specified.
1.2 "Assets" means the assets of Xxxxxxxx Motorcoach associated with the
Business and being acquired by Featherlite as described in and limited by
section 2.2 hereof.
1.3 "Average Market Price" means the average of the closing sale prices of
Featherlite Common Stock on the Nasdaq National Market for the 20 consecutive
trading days ending on the trading day immediately preceding the applicable
date, as reported by Nasdaq.
1.4 "Business" means the business of Xxxxxxxx Motorcoach, which consists of
manufacturing and marketing luxury custom coaches and includes the business of
Xxxxxxxx Coach Manufacturing, Inc., an affiliated Florida corporation which has
been acquired by Xxxxxxxx Motorcoach prior to the date of this Agreement.
1.5 "Closing" means the meeting of the parties at which the transactions
contemplated herein to occur are completed, which meeting shall be held
commencing at 9:00 a.m., local time, at the offices of Xxxxxxxx Motorcoach in
Pryor, Oklahoma 74362 on the Closing Date, or at such other time or place as may
be mutually agreed upon by the parties.
1.6 "Closing Balance Sheet" has the meaning given to such term in section
2.6 hereof.
1.7 "Closing Date" means May 8, 1998, or such other date as may be mutually
agreed upon by the parties.
1.8 "Code" means the Internal Revenue Code of 1986, as amended.
1.9 "Contested Assets" has the meaning given to such term in section 2.3
hereof.
1.10 "Contracts" means the contracts and agreements of Xxxxxxxx Motorcoach
described in section 2.2.3.
1.11 "Earnout Period" has the meaning given the term in section 2.7 hereof.
1.12 "Earnout Shares" has the meaning given the term in section 2.7 hereof.
1.13 "Effective Time" means the close of business on the Closing Date if
the Closing occurs.
1.14 "Employee Benefit Plan" means an employee benefit plan within the
meaning of ERISA section 3(3) maintained, sponsored or contributed to by
Xxxxxxxx Motorcoach.
1.15 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.16 "Exchange" means the exchange of the Assets for the Featherlite Shares
as described in section 2.1 hereof.
1.17 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
1.18 "Exchange Consideration" means the aggregate consideration payable to
Xxxxxxxx Motorcoach, consisting of the Featherlite Shares and the assumption of
the Permitted Liabilities, as described in section 2.4.
1.19 "Excluded Liabilities" has the meaning given to such term in section
2.5.3 hereof.
1.20 "Featherlite Common Stock" means shares of common stock of
Featherlite, without par value.
1.21 "Featherlite Vogue Division: has the meaning given to such term in
section 2.7 hereof.
1.22 "Featherlite Shares" means the Featherlite Common Stock issued
pursuant to the Exchange, as further described in section 2.4 hereof, but
subject to the adjustments described in section 2.7 hereof.
1.23 "GAAP" means generally accepted accounting principles applied on a
consistent basis consistent with such party's prior financial statements.
1.24 "Intellectual Property" means patents and patent applications,
copyrights and copyright applications, trademarks, service marks, trade names,
know-how, trade secrets, data, information, technology, processes, formulas,
drawings, designs, computer programs, and license rights to any of the
foregoing.
1.25 "Letter Agreement" means that certain letter of intent dated March 17,
1998, among Xxxxxxxx Motorcoach, the Shareholders and Featherlite.
1.26 "Liens" means any liens, mortgages, pledges, encumbrances, conditional
sales agreements, security interests, or title retention devices of any nature.
1.27 "Litigation Matters" has the meaning given such term in section 5.19
hereof.
1.28 "Multiemployer Plan" means a Pension Plan that is a multiemployer plan
as defined in ERISA section 4001 (a) (3).
1.29 "Negative Net Worth" has the meaning given such term in section 2.7
hereof.
1.30 "Operating Income Before Tax" has the meaning given the term in
section 2.7 hereof.
1.31 "Pension Plan" means, at any time, any Employee Benefit Plan
(including a Multiemployer Plan), the funding requirements of which (under ERISA
section 302 or Code section 412) are or, at any time within the six years
immediately preceding the time in question, were in whole or in part, the
responsibility of Xxxxxxxx Motorcoach.
1.32 "Permitted Liabilities" means the liabilities of Xxxxxxxx Motorcoach
described as "Permitted Liabilities" in section 2.5 hereof.
1.33 "Permitted Liens" means the Liens against the Assets transferred by
Xxxxxxxx Motorcoach to Featherlite listed on Schedule 1.33 hereof.
1.34 "Proportional Shares" has the meaning given such term in section 9.2
hereof.
1.35 "Records" means the documents described in section 2.2.4 hereof.
1.36 "SEC" means the Securities and Exchange Commission.
1.37 "SEC Reports" means all periodic and/or current reports, registration
statements and proxy statements filed with the SEC.
1.38 "Securities Act" means the Securities Act of 1933, as amended.
1.39 "Tax" means any tax or other primary, secondary or transferee
liability to any governmental entity, including without limitation, all federal,
state, county, local and foreign income, profits, gross receipts, real and
personal property, franchise, license, payroll, employment, sales, use, value
added, excise, custom, duty, and any other taxes, obligations, and assessments
of any kind whatsoever, together with all interest and penalties; the foregoing
shall include any liability arising as a result of being (or ceasing to be) a
member of any affiliated, consolidated, combined, or unitary group as well as
any liability under any Tax allocation, Tax sharing, Tax indemnity or similar
agreement.
1.40 "12-31-97 Balance Sheet" has the meaning given to such term in section
3.5 hereof.
1.41 "Unrecognized Retiree Welfare Liabilities" means with respect to any
Employee Benefit Plan that provides postretirement benefits other than pension
benefits, the amount of the transition obligation, as determined in accordance
with Statement of Financial Accounting Standards No. 106, "Employers' Accounting
for Postretirement Benefits Other than Pensions," as of the most recent
valuation date, that has not been recognized as an expense in the income
statement of Xxxxxxxx Motorcoach. Prior to the date such Statement is
applicable, such amount shall be based on an estimate made in good faith of the
transition obligation.
ARTICLE 2
EXCHANGE OF ASSETS FOR FEATHERLITE SHARES
2.1 Exchange. On the Closing Date, upon the terms and conditions of this
Agreement, Xxxxxxxx Motorcoach shall transfer to Featherlite all of the Assets
and shall receive in exchange therefor the Exchange Consideration, as described
in section 2.4 (the "Exchange"). Each of the parties intends that the Exchange
constitute and qualify as a tax-free reorganization pursuant to the provisions
of section 368(a)(1)(C) of the Code. All of the Assets shall be free and clear
of all Liens other than Permitted Liens. No consideration of any kind, other
than the Exchange Consideration described in section 2.4 hereof, shall be paid
or transferred by Featherlite to Xxxxxxxx Motorcoach, or to the Shareholders, in
connection with the Exchange.
2.2 Assets to Be Transferred. The Assets to be transferred to Featherlite
by Xxxxxxxx Motorcoach shall consist of all, except the "Excluded Assets" and,
at least until ownership is finally determined, the "Contested Assets" as set
forth on Schedule 2.3, of the business and assets, tangible and intangible, of
Xxxxxxxx Motorcoach (the "Assets"). The Assets comprise substantially all of the
assets and properties of Xxxxxxxx Motorcoach and include, but are not limited
to:
2.2.1 Real Property. All interests in real property, whether owned of
record or beneficially by, or leased by Xxxxxxxx Motorcoach, including all
buildings and structures located thereon as reflected on Schedule 3.9
attached hereto.
2.2.2 Tangible Personal Property. All of the tangible personal
property, inventory (including but not limited to inventory of new and used
buses and coaches, trade-ins received as customer deposits, consignment
inventory, work-in-progress inventory, and inventory ordered but not yet
received), other vehicles, machinery and equipment, and leasehold
improvements of Xxxxxxxx Motorcoach wherever located, including but not
limited to those listed on Schedule 3.9, together with any additions
thereto or replacements thereof made in the ordinary course of business
prior to the Closing Date, less any dispositions made in the ordinary
course of business of the Business prior to the Closing Date of items that
either (i) are replaced by items of comparable quality and function, or
otherwise (ii) have an aggregate original cost of not more than $25,000,
and except for increases and decreases of inventory and receivables in the
ordinary course of Xxxxxxxx Motorcoach's business under circumstances
consistent with past practice.
2.2.3 Contracts. The Contracts, and all rights, subject to all
obligations thereunder, of Xxxxxxxx Motorcoach relating to the Business
that (a) are listed on Schedule 3.14, including all renewals, extensions
and amendments; (b) are not required to be listed on such Schedule, have
been or shall have been entered into by Xxxxxxxx Motorcoach in the ordinary
course of the Business, and do not represent a breach by Xxxxxxxx
Motorcoach of this Agreement; or (c) are entered into between the date
hereof and the Closing Date in the ordinary course of business of the
Business and do not represent a breach by Xxxxxxxx Motorcoach of this
Agreement; provided that in no event shall any Contract be included
hereunder under clauses (b) or (c) above, if such Contract by its terms
involves or provides for the right to receive, or a liability or an
obligation valued at, or the payment of, more than $50,000 per year except
contracts for the purchase or sale of motorcoaches in the ordinary course
of business, copies of which have been delivered to Featherlite prior to
the Closing and identified in writing as being delivered pursuant to
section 2.2.3 and 3.8.2 of this Agreement. Featherlite will assume all of
the rights and obligations of Xxxxxxxx Motorcoach from and after the
Effective Time under the Contracts described above; provided, however, that
Schedule 2.2.3 indicates those contracts that are not to be assigned by
Xxxxxxxx Motorcoach or assumed by Featherlite pursuant hereto ("Excluded
Contracts"). Excluded Contracts will include, whether or not specifically
listed on Schedule 2.2.3, all contracts under which all work has been
completed by Xxxxxxxx Motorcoach prior to Closing and with respect to which
all payments have been received prior to Closing; all contracts and
agreements that are described (or for which their attendant liabilities or
obligations are described) as Excluded Liabilities; and all retention bonus
agreements, severance agreements and deferred compensation agreements.
2.2.4 Business Records. All engineering drawings, specifications and
computer records and files related thereto, customer lists, Vogue club
member ship lists, past sales histories by model type, records of coaches
under warranty, manuals, files, records, lists, schedules, accounts, logs
and other documents maintained by Xxxxxxxx Motorcoach pertaining to the
operation of the Business (the "Records"); provided, however, that the
Records shall not include corporate records of Xxxxxxxx Motorcoach,
meaning, without limitation, minute books, stock record books, corporate
archives and similar items not germane to the operation and conduct of the
Business following the Closing Date, and provided, further, that Xxxxxxxx
Motorcoach may retain copies of such of its Records as it determines it may
need following the Closing.
2.2.5 Intellectual Property; Licenses; Goodwill. All Intellectual
Property and licenses owned or held by Xxxxxxxx Motorcoach and used in the
operation of the Business, and all goodwill and going concern value
associated with the Business, including, but not limited to, the name
"Vogue" and all derivatives thereof and the intellectual property included
on Schedule 3.10.
2.2.6 Accounts Receivable and Prepaid Expenses. All trade and other
miscellaneous accounts receivable arising out of the Business through the
Effective Time and remaining uncollected at the Effective Time, except
accounts receivable from any Shareholder, but including all deposits on
coach shells held by Xxxxxxx Car Company and all prepaid expenses as of the
Effective Time that relate to and in the normal course of business of the
Business will be realizable by Featherlite in the operation of the
Business.
2.2.7 Cash, Etc. Xxxxxxxx Motorcoach's cash, cash equivalents,
short-term investments, and other securities, deposits in banks, and
investment contracts relating to the Business to the extent the aggregate
of such amounts exceeds the amount necessary to pay accrued salary and
related payroll and unemployment taxes and the estimated amount required
for distribution to Shareholders for the payment of Subchapter S taxes.
2.3 Excluded Assets. Notwithstanding anything to the contrary herein, the
assets designated on Schedule 2.3, including (i) accounts receivable from and
notes or other amounts due from any Shareholder, shall not be included in the
Assets, and shall not be transferred to Featherlite hereunder (the "Excluded
Assets"). In addition, there shall not be included in the Assets at the time of
Closing motorcoach #IM9AKXJ1V1379026, as to which ownership is legally
contested, and Xxxxxxxx Motorcoach's judgment deposit in the amount of $153,000
(collectively referred to herein as the "Contested Assets").
2.4 Exchange Consideration. Subject to the other provisions of this Article
2, the "Exchange Consideration" shall mean the Permitted Liabilities assumed by
Featherlite as described in section 2.5 and shares of Common Stock of
Featherlite with an aggregate Average Market Price as of the Closing Date of $6
million (collectively, the "Featherlite Shares"). If any adjustment is made
subsequent to the Closing pursuant to section 2.7 hereof to the aggregate number
of shares of Featherlite Common Stock issued in the Exchange, references herein
to the "Featherlite Shares" shall be deemed to reflect the aggregate number of
shares issued in the Exchange as finally adjusted pursuant to section 2.7
hereof. The Featherlite Shares shall, when issued, be duly issued, be duly
authorized, validly issued, and fully paid out and nonassessable and shall be
subject to no Liens (except securities laws restrictions, liens and restrictions
imposed by the terms of this Agreement, and any Liens caused by Xxxxxxxx
Motorcoach or the Shareholders). The certificates evidencing the Featherlite
Shares shall contain a legend restricting transfer under the Securities Act,
such legend to be substantially as follows:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933 or under applicable state securities or blue sky
laws. Such shares may not be sold, transferred, assigned, offered, pledged or
otherwise distributed for value in the absence of such registrations or unless
the Company receives an opinion of counsel acceptable to the company stating
that such sale, transfer, assignment, offer, pledge or other distribution is
exempt from the registration and the prospectus delivery requirements of such
Act and such laws."
2.5 Liabilities Assumed; Permitted Liabilities.
2.5.1 As partial consideration for the Assets, Featherlite shall
assume, and agrees with Xxxxxxxx Motorcoach to pay according to their terms
only: (i) liabilities (determined under GAAP) reflected on the Closing
Balance Sheet, which shall include normal, current payables incurred in the
regular course of the business of Xxxxxxxx Motorcoach, and (ii) liabilities
arising from and after the Effective Time under all assumed Contracts,
whether or not such liabilities under Contracts are reflected in the
Closing Balance Sheet, subject to the further qualifications of sections
2.5.2 and 2.5.3 hereof (collectively, "Permitted Liabilities").
2.5.2 For purposes of this Agreement, the Permitted Liabilities shall
mean and include (to the extent properly accrued on the Closing Balance
Sheet if required to be accrued under GAAP) but not be limited, to the
following debts, liabilities, and obligations of Xxxxxxxx Motorcoach: (i)
obligations for repayment of principal, accrued interest, deferred fees,
and prepayment premiums, if any, to any institutional and other lenders of
Xxxxxxxx Motorcoach set forth on Schedule 2.5.2(i); (ii) obligations
reflected as long-term debt (both the current and long-term portion) on the
Closing Balance Sheet, and all finance or capitalized lease obligations set
forth on Schedule 2.5.2(ii); (iii) obligations for vacation, or Employee
Benefits or non-ERISA employee benefits (under employment agreements or
otherwise), but not severance pay, accrued through the Effective Time as
set forth on Schedule 2.5.2(iii) and as reflected on the Closing Balance
Sheet with respect to any of Xxxxxxxx Motorcoach's current employees at the
Effective Time; and (iv) ordinary course of business payables and trade
accounts payable and other accrued liabilities (excluding Taxes) but only
to the extent set forth on Schedule 2.5.2(iv) and reflected on the Closing
Balance Sheet.
2.5.3 Notwithstanding anything in this Agreement (or in the schedules
attached hereto or in the documents to be delivered at Closing pursuant
hereto) to the contrary, Featherlite is not assuming, and shall not be
deemed to have assumed and shall not be obligated to perform or pay
liabilities or obligations of Xxxxxxxx Motorcoach not included in the
Permitted Liabilities and detailed in the supporting Schedules and, in
particular (but not by way of limitation), Featherlite shall not be deemed
to have assumed and shall not be obligated to pay any liabilities of
Xxxxxxxx Motorcoach with respect to the following (all of which are
acknowledged to be excluded from Permitted Liabilities): (A) any Taxes,
including, without limitation, any taxes that may be or become payable by
reason of, or in connection with, the transactions effected pursuant to
this Agreement (i) based upon or measured by gross receipts or net income
("Income Taxes") of the parties, whether or not incurred prior to the
Closing Date, and (ii) Taxes (including Income Taxes) attributable to or
incurred in connection with the Assets or the operation of the Assets prior
to the Closing Date, including, without limitation, any payroll, personal
or real property or other Taxes that are not due until after the Closing
Date, but which are attributable to any period prior to and including the
Closing Date; (B) any liabilities relating to assets of Xxxxxxxx Motorcoach
not being acquired by Featherlite pursuant to this Agreement; (C) any
contract or agreement that was not specifically assumed hereunder or that
was to be assigned to Featherlite under the terms of this Agreement but was
not validly assigned (except to the extent Featherlite has otherwise
received the benefits of any such contract); (D) any liabilities and
obligations incurred by Xxxxxxxx Motorcoach or the Shareholder as a result
of breach or violation of any provision of this Agreement or the other
agreements, documents and instruments delivered pursuant hereto; (E) any
liabilities of Xxxxxxxx Motorcoach that, as a result of either the
existence thereof or the failure of Xxxxxxxx Motorcoach or the Shareholders
to disclose such liabilities, cause any of the representations or
warranties of Xxxxxxxx Motorcoach or the Shareholders contained herein to
not be true and correct as of the Closing Date; (F) any liabilities or
obligations arising out of or related to the provision of any products or
services sold or performed by Xxxxxxxx Motorcoach prior to the Closing
Date, except normal warranty claims in an amount not to exceed the amount
of the accrual for warranty claims reflected in the Closing Balance Sheet
and except product liability claims but only to the extent the liability
and any defense or other related costs are fully covered by Featherlite's
insurance including the amounts of deductibles payable by the insured
pursuant to the terms of such insurance; (G) any liability or obligation
resulting from any breach of any Environmental Laws caused by or arising
from the operation of the Business; (H) any expense, liability or
obligation with respect to or arising out of any action, lawsuit, claim,
proceeding, or investigation described on Schedule 3.12 or any other such
matter now existing or subsequently arising which arises from or is related
to the conduct of the business of Xxxxxxxx Motorcoach prior to the Closing
Date and which has not been specifically assumed by Featherlite pursuant to
the terms of this Agreement; (I) any liability or obligation relating to or
arising in connection with any ERISA plan or non-ERISA employee benefits of
Xxxxxxxx Motorcoach relating to the period prior to Closing (if not accrued
on the Closing Balance Sheet) and any such liability or obligation relating
to any period following closing except to the extent consistent with the
assumption of certain of such plans by Featherlite as described in section
5.9 hereof; (J) any liabilities for wages, salary or other compensation for
services or claims arising out of the performance of services by others to
or for Xxxxxxxx Motorcoach; or (K) any liability for workers' compensation
claims or insurance premiums or premiums for other types of insurance
including product liability (or retroactive adjustment of such premiums to
the extent such adjustments relate to periods prior to the Closing Date);
(L) any payables or other obligations to any Shareholder except obligations
for vacation and employee benefits included as Permitted Liabilities
pursuant to section 2.5.2(iii) of this Agreement; or (M) any liability in
connection with consignment sales by Xxxxxxxx Motorcoach or any related
party; (N) any liability in connection with manufacture or sale of products
by Xxxxxxxx Motorcoach or its predecessors prior to the Closing Date
arising from failure of Xxxxxxxx Motorcoach or its predecessors to comply
with federal or state statutes or regulations relating to the manufacture
or certification of such products or compliance with applicable safety
provisions, including but not limited to liabilities such as fines and
penalties payable to government agencies, or tort, contract or other claims
by any person alleging injuries or damages arising out of or related to
such failures or lack of compliance; or (O) any liability in connection
with the termination of dealer, distributor or similar relationships or
contracts by Xxxxxxxx Motorcoach, whether such action occurs prior to or
after closing, and including terminations contemplated by section 7.3.7
hereof. The foregoing liabilities and obligations are referred to as the
"Excluded Liabilities" which also includes all liabilities and obligations
not explicitly specified as Permitted Liabilities.
2.6 Closing Balance Sheet. Within 30 calendar days after the Closing Date,
Xxxxxxxx Motorcoach shall prepare a balance sheet of Assets and Permitted
Liabilities as of the Effective Time (the "Closing Balance Sheet"). The Closing
Balance Sheet shall be prepared in all respects in accordance with GAAP,
including but not limited to reflecting all proper accruals for Permitted
Liabilities (excluding accruals for all Taxes that are not Permitted Liabilities
relating to the period up to the Effective Time) that have been incurred by
Xxxxxxxx Motorcoach, and shall present fairly the Assets and Permitted
Liabilities of Xxxxxxxx Motorcoach as of the Effective Time. Within 15 calendar
days after delivery to Xxxxxxxx Motorcoach of an audit of the Closing Balance
Sheet by McGladrey & Xxxxxx, LLP or other auditors acceptable to Featherlite,
Xxxxxxxx Motorcoach will notify Featherlite in writing of any objections that it
may have to the Closing Balance Sheet. The fees of McGladrey & Xxxxxx, LLP or
other auditor selected by Featherlite for such audit of the Closing Balance
Sheet shall be paid directly by Featherlite. If no such objections are made, the
Closing Balance Sheet will be deemed approved for all purposes, including the
determination of the amounts of the Permitted Liabilities and Negative Net
Worth. If any such objections are made and cannot be resolved within an
additional period of 10 calendar days, the dispute shall immediately be referred
to by a firm of independent accountants jointly selected by Xxxxxxxx Motorcoach
and Featherlite and if they cannot agree to such a firm designated by the chief
judge of the courts for the County of Tulsa, Oklahoma (the "Arbitration Firm").
The determination of such Arbitration Firm with respect to such dispute, shall
be conclusive and binding on Featherlite, Xxxxxxxx Motorcoach and the
Shareholders. The fees of such Arbitration Firm shall be paid one-half each by
Featherlite and Xxxxxxxx Motorcoach.
2.7 Issuances of Featherlite Shares and Adjustment to Exchange
Consideration. Featherlite Shares comprising the Exchange Consideration, as
described in section 2.4 hereof, shall be issuable to Xxxxxxxx Motorcoach only
as and to the extent described in this section 2.7. At the Closing there shall
be issued and delivered to Xxxxxxxx Motorcoach, Featherlite Shares with an
aggregate Average Market Price on the Closing Date of $2,500,000. Subsequently,
when the Closing Balance Sheet has been accepted or determined to be final
pursuant to section 2.6 hereof, a calculation shall be made to determine the
number of "Earnout Shares." The maximum number of Earnout Shares shall be the
number derived by dividing the amount of the Negative Net Worth by the Average
Market Price as of Closing. If the maximum number of Earnout Shares is less than
the number of Featherlite Shares derived by dividing $3,500,000 by the Average
Market Price as of Closing, Featherlite promptly shall deliver to Xxxxxxxx
Motorcoach the number of shares equal to such difference. If the number of
Earnout Shares is greater than the number of Featherlite Shares derived by
dividing $3,500,000 by the Average Market Price as of Closing, Xxxxxxxx
Motorcoach promptly shall deliver to Featherlite the number of shares equal to
such difference. Earnout Shares shall be issued to Xxxxxxxx Motorcoach when and
if earned during the period beginning January 1, 1999 and ending on December 31,
2001 (the "Earnout Period") in accordance with the following provisions of this
section 2.7.
The actual number of shares earned during the Earnout Period shall be
determined annually based on Operating Income Before Taxes (as defined below).
For calendar year 1999, Xxxxxxxx Motorcoach shall earn one-third of the Earnout
Shares if its Operating Income Before Tax for 1999 is not less than $2.4
million. For calendar year 2000, Xxxxxxxx Motorcoach shall earn one-third of the
Earnout Shares if its Operating Income Before Tax for 2000 is not less than $3.5
million. For calendar year 2001, Xxxxxxxx Motorcoach shall earn one-third of the
Earnout Shares of its Operating Income Before Tax for 2001 is not less than $4.8
million. If Shares have not been earned by Xxxxxxxx Motorcoach for any calendar
year and if in any subsequent year of the Earnout Period Operating Income Before
Tax exceeds the minimum Operating Income Before Tax required to earn Earnout
Shares for such subsequent year, then at the close of such subsequent year the
Operating Income Before Tax for the prior year(s) shall be recalculated with the
excess of Operating Income Before Tax earned in the subsequent year added to the
Operating Income Before Tax of the prior year(s). No shares shall be earned for
any Operating Income Before Tax earned after December 31, 2001. If 100% of the
Earnout Shares have not been earned by Xxxxxxxx Motorcoach by December 31, 2001
based on the annual calculations previously set forth, a look back calculation
shall be made based on the cumulative Operating Income Before Tax of the Earnout
Period and Xxxxxxxx Motorcoach shall earn a number of Earnout Shares equal to
the following: (i) the number of shares that bears the same ratio to the number
of Earnout Shares as aggregate Operating Income Before Tax for 1999, 2000 and
2001 (to a maximum of $10.7 million) bears to $10.7 million, minus (ii) the
cumulative number of Earnout Shares already earned; provided, however, that no
such shares shall be earned in such look back if the cumulative Operating Income
Before Tax for 1999, 2000 and 2001 is less than $5 million. No shares shall be
earned for any Operating Income Before Tax earned before January 1, 1999 or
after December 31, 2001.
"Net Sales" shall mean the gross revenues of the Featherlite Vogue Division
of Featherlite less returns, discounts and allowances.
"Operating Income Before Tax" shall mean the income of the Featherlite
Vogue Division of Featherlite as included in the Featherlite consolidated
financial statements for the applicable period including but not limited to
interest charges (at Featherlite's then current borrowing rate from its primary
bank lender) on debt of Featherlite Vogue Division books owed to the Featherlite
corporate account, compensation (including bonuses) of officers and employees of
the Featherlite Vogue Division, premiums paid on insurance on the life of Xxxxxx
X. Xxxxxxxx pursuant to Section 5.17 of this Agreement, compensation of
personnel assigned to the Featherlite Vogue Division but paid by the Featherlite
corporate account and a pro rata share of expenses such as insurance incurred
for the Featherlite Vogue Division but paid by the Featherlite corporate account
and other expenses directly attributable to the operations of the Featherlite
Vogue Division but without any allocation of general Featherlite corporate
overhead and excluding the amortization of goodwill and other intangibles
generated by the transactions contemplated by this Agreement. In calculating
Operating Income Before Tax, revenue from intracompany division sales of
products (e.g., Featherlite Vogue Division sales of Vantare coaches and Vantare
sales of Vogue coaches) shall be based on dealer price to be determined for each
model based upon its manufacturing cost and normal wholesale profit margin which
will achieve established earn-out goals, and revenue from sales of Vogue model
motorcoaches or used motorcoach inventory of the Featherlite Vogue Division by
executive officers of Featherlite to customers in the motorsports industry shall
be attributed entirely to the Featherlite Vogue Division. Any proceeds from
insurance on the life of Xxxxxx X. Xxxxxxxx received by Featherlite during the
Earnout Period shall be included in Operating Income Before Tax and the
calculation of Earnout Shares earned for the year in which such proceeds are
received by Featherlite. Any disputes concerning the calculation by the parties
of Operating Income Before Tax shall be resolved in the same manner as described
in section 10.6 hereof.
"Negative Net Worth" shall mean the excess of the dollar amount of
liabilities assumed by Featherlite from Xxxxxxxx Motorcoach over the fair market
value of tangible assets acquired by Featherlite from Xxxxxxxx Motorcoach with
inventories valued at the lower of cost or market, property and equipment valued
in accordance with appraisal and other assets valued at net realizable amounts.
"Featherlite Vogue Division" means the division of Featherlite that
operates the Business and Assets of Xxxxxxxx Motorcoach acquired by Featherlite
in the Exchange, from and after the Effective Time, and does not include any
other divisions or business segments of Featherlite.
If and when subsequent to the Closing, there is a final judicial
determination or settlement by the interested parties that all or part of the
Contested Assets as defined in section 2.3 hereof are rightfully owned by
Xxxxxxxx Motorcoach, and if the value of such Contested Assets determined to be
owned by Xxxxxxxx Motorcoach exceeds the amount of expenses (including legal
fees and costs, settlement amounts and judgments) incurred by Xxxxxxxx
Motorcoach subsequent to the Closing Date directly in connection with the
litigation disclosed on Schedule 3.12, then the net amount of such Contested
Assets shall be delivered promptly to Featherlite and there shall be issued to
Xxxxxxxx Motorcoach a number of the Featherlite Shares determined by dividing
the value of the Contested Assets at the time of delivery to Featherlite by the
Average Market Price as of the Closing. Such number of shares shall be
subtracted from and reduce the maximum number of Earnout Shares.
2.8 Distribution by Xxxxxxxx Motorcoach to Shareholders. Following the
Closing and receipt of the Closing Balance Sheet, it is understood and agreed
that Xxxxxxxx Motorcoach may distribute, in complete liquidation of Xxxxxxxx
Motorcoach, to the present holders of capital stock of Xxxxxxxx Motorcoach, the
Featherlite Shares in exchange for the surrender and cancellation of all of such
holders' existing Xxxxxxxx Motorcoach stock; and that, in connection therewith,
Xxxxxxxx Motorcoach shall distribute all of its remaining assets and provide for
the payment of any remaining liabilities, as required by law, and shall
thereupon dissolve, all subject to the indemnification provisions set forth in
this Agreement. Subsequent to the dissolution of Xxxxxxxx Motorcoach, all
Earnout Shares to be issued by Featherlite to Xxxxxxxx Motorcoach but for such
dissolution shall be issued to the Shareholders in proportion to their
respective shares in Xxxxxxxx Motorcoach as reflected in section 3.2 below
subject to all other provisions of this Agreement. At Closing, each of the
present Xxxxxxxx Motorcoach shareholders shall deliver to Featherlite their
written acknowledgement (in form reasonably satisfactory to Featherlite)
acknowledging the existence and effect of the indemnification provisions of
Article 9 and the provisions of this section 2.8 upon them and the Featherlite
Shares to which they will become entitled upon distribution thereof by Xxxxxxxx
Motorcoach in connection with Xxxxxxxx Motorcoach's dissolution and upon any
subsequent issuances of Earnout Shares. Nothing in this section 2.8 shall have
the effect of reducing or mitigating any obligations of Xxxxxxxx Motorcoach or
the Shareholders to Featherlite that it or they may otherwise have under or as a
result of this Agreement and the transactions contemplated hereby.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF XXXXXXXX MOTORCOACH AND THE SHAREHOLDERS
Xxxxxxxx Motorcoach and the Shareholders, hereby make the following
representations and warranties to Featherlite, all of which representations and
warranties are true and correct as of the date hereof and shall be true and
correct as of (and as though made at) the Closing.
3.1 Organization. Xxxxxxxx Motorcoach is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Florida.
Xxxxxxxx Motorcoach is duly qualified or registered to do business as a foreign
corporation and is in good standing in each other jurisdiction that requires
such qualification or registration, except where the failure so to qualify or
register would not have a material adverse effect on Xxxxxxxx Motorcoach or the
Assets. Schedule 3.1 attached hereto contains a true and accurate list of the
states in which Xxxxxxxx Motorcoach is duly qualified or registered to do
business as a foreign corporation. Xxxxxxxx Motorcoach has all necessary
corporate power to own its properties, conduct its business as presently
conducted or proposed to be conducted by it, and to do and perform all acts and
things required to be done by it under this Agreement.
3.2 Capitalization. Xxxxxxxx Motorcoach has duly authorized capital stock
consisting of (i) 7,500 shares of Xxxxxxxx Motorcoach Common Stock, of which
6,000 shares are issued and outstanding. Such shares are owned by the following
persons in the amounts indicated: Xxxxxx X. Xxxxxxxx and Xxxxxxxx X. Xxxxxxxx
(as tenants by the entirety) - 5,000, Xxxx Xxxxxx - 500 and Xxxxxx Xxxxxxx -
500. The acquisition of all of the assets and liabilities of Xxxxxxxx Coach
Manufacturing, Inc. by Xxxxxxxx Motorcoach has been completed and the entire
business formerly conducted by Xxxxxxxx Coach Manufacturing, Inc. is now being
conducted by Xxxxxxxx Motorcoach. All such outstanding shares of Xxxxxxxx
Motorcoach Common Stock are duly authorized, validly issued, fully paid and
nonassessable and were issued in compliance with, or pursuant to an exemption
from, all applicable federal and state securities laws. Copies of Xxxxxxxx
Motorcoach's Articles of Incorporation and Bylaws previously delivered by
Xxxxxxxx Motorcoach to Featherlite are complete and correct.
3.3 Subsidiaries. The Assets do not include any interest, direct or
indirect, in any other business, corporation, joint venture, partnership, or
proprietorship. The Business is not conducted through, and the Assets are not
owned by or through, any direct or indirect subsidiary or affiliate of Xxxxxxxx
Motorcoach.
3.4 Corporate Authority. The execution, delivery and performance by
Xxxxxxxx Motorcoach of this Agreement and the transactions contemplated hereby
have been duly and validly authorized and approved by all requisite corporate
action, and neither the execution and delivery of this Agreement by Xxxxxxxx
Motorcoach, nor the consummation of the transactions contemplated hereby, will
(i) except as specifically described in Schedule 3.4, conflict with or result in
a breach of the terms or provisions of or constitute a default under Xxxxxxxx
Motorcoach's Articles of Incorporation or Bylaws or any material instrument,
contract, agreement, judgment, order, decree, or other restriction to which
Xxxxxxxx Motorcoach is a party or by which any of its assets is bound or
affected, (ii) except as specifically described in Schedule 3.4, require any
affirmative approval, consent, or authorization of any person, court, or
governmental or regulatory authority, or (iii) except as specifically described
in Schedule 3.4, give any party with rights under any such material instrument,
contract, agreement, judgment, order, decree, or other restriction the right to
terminate, accelerate, modify or otherwise change the rights or obligations of
Xxxxxxxx Motorcoach thereunder. This Agreement constitutes, and all other
agreements and instruments contemplated hereby, when duly executed and delivered
by Xxxxxxxx Motorcoach, will constitute, valid and binding obligations of
Xxxxxxxx Motorcoach enforceable in accordance with their respective terms,
except as may be limited by laws affecting creditors' rights generally or by
judicial limitations on the right to specific performance.
3.5 Financial Statements. The pro forma consolidated balance sheets of
Xxxxxxxx Motorcoach and Xxxxxxxx Coach Manufacturing, Inc. as of December 31,
1997 (the "12-31-97 Balance Sheet") and as of March 31, 1998, and the related
statements of income and shareholders' equity for the periods then ended, true
and correct copies of which have been delivered to Featherlite, fairly present
the financial position of Xxxxxxxx Motorcoach as of their respective dates and
the results of operations for the applicable periods ended on such dates, all in
accordance with GAAP consistently applied in all material respects throughout
the periods covered thereby except for the absence of footnotes and the
accounting for capitalized lease obligations. Xxxxxxxx Motorcoach's books of
account reflect all of Xxxxxxxx Motorcoach's items of income and expense and all
assets and liabilities and accruals required to be reflected therein in
accordance with generally accepted accounting principles. All financial
statement accruals for liabilities and reserves for contingent liabilities have
been established and maintained as required to be established and maintained (a)
under GAAP and (b) in order for such financial statements to present fairly the
financial position of Xxxxxxxx Motorcoach as of their respective dates except
for the accounting for capitalized lease of obligations.
3.6 Taxes. Xxxxxxxx Motorcoach has not failed to file any reports or Tax
returns required by any law or regulation of any jurisdiction to be filed as of
the date hereof, and all such reports and returns are true and correct in all
material respects. Xxxxxxxx Motorcoach has duly paid, or accrued on its books of
account, all Taxes, duties, and charges pursuant to such reports and returns, or
assessed or to be assessed against Xxxxxxxx Motorcoach with respect to all
periods through the date hereof, or which Xxxxxxxx Motorcoach is obligated to
withhold from amounts owing to any employee or other person. Xxxxxxxx Motorcoach
will not be liable for any Taxes with respect to any periods up to the Effective
Time, except for Taxes paid or accrued at or before the Effective Time. Xxxxxxxx
Motorcoach has not received any notice of proposed adjustment, audit report,
deficiency notice, notice of assessment, or similar notification with respect to
any Tax that could become the obligation and liability of Featherlite.
3.7 Absence of Undisclosed Liabilities. There are no material debts,
liabilities, claims against or financial obligations of Xxxxxxxx Motorcoach, or
reasonable legal basis therefor, whether accrued, absolute, contingent, or
otherwise, except to the extent reflected on the 12-31-97 Balance Sheet, 3-31-98
Balance Sheet or on Schedule 3.7.
3.8 Absence of Certain Changes and Events. Except as contemplated by this
Agreement or as specifically described in Schedule 3.8, since March 31, 1998:
3.8.1 There has not been any material adverse change in the Assets,
the financial condition, business or operations of Xxxxxxxx Motorcoach.
3.8.2 Xxxxxxxx Motorcoach has not (except for contracts for the
purchase or sale of motorcoaches in the ordinary course of business, copies
of which have been delivered to Featherlite prior to the Closing and
identified in writing as being delivered pursuant to section 2.2.3 and
3.8.2 of this Agreement) (1) entered into any contract, license, franchise,
or commitment other than ones that either were entered into in the ordinary
course of business, none of which involves amounts to be paid or received
in excess of $50,000, or, if not entered into in the ordinary course of
business, involved amounts to be paid or received of less than $25,000, or
made any capital expenditures or commitment therefor except in the ordinary
course of business, none of which involves amounts to be paid or received
in excess of $50,000 or, if not incurred in the ordinary course of
business, in amounts in excess of $25,000, or waived any material rights,
or made, permitted, or suffered any amendment or termination of any
material contract, license, franchise or agreement; (2) altered or revised
its accounting procedures, methods, or practices except as required by law;
(3) incurred, assumed, discharged, or satisfied any material liability
(absolute or contingent), mortgage, lien, security interest, or
encumbrance, other than in the ordinary course of business, none of which
involves amounts to be paid or received in excess of $50,000 or, if not in
the ordinary course of business, involves amounts in excess of $25,000 (and
otherwise in compliance with this Agreement); (4) declared, set aside, or
paid any dividend or shareholder distributions in cash, securities, or
property or, except for shareholder loans or repayments thereof described
in section 2.5.2, otherwise made any payments to shareholders or related
parties other than normal base compensation and payments to offset taxes on
earnings of Xxxxxxxx Motorcoach through the Closing; (5) sold, transferred,
or leased any of its assets except in the ordinary course of business; (6)
suffered any physical damage, destruction, or loss (whether or not covered
by insurance) materially and adversely affecting the properties or business
of Xxxxxxxx Motorcoach; (7) entered into any material transaction other
than in the ordinary course of business, none of which involves amounts to
be paid or received in excess of an aggregate $50,000; or (8) agreed to do
any of the foregoing other than pursuant hereto.
3.9 Assets. Xxxxxxxx Motorcoach owns and has good (and, with respect to
real property, marketable) title to all of the Assets described on Schedule
3.9(i) (except for assets sold or otherwise disposed of in the ordinary course
of business and consistent with this Agreement since December 31, 1997), or, in
the cases of leases, valid and subsisting leasehold interests in the assets
leased thereby, in each case free and clear of all Liens, except for Permitted
Liens and except for other Liens described and reflected on the Closing Balance
Sheet and set forth on Schedule 3.9(ii), and has full power to transfer the
Assets to Featherlite on the Closing Date on the terms and conditions provided
for in this Agreement. Prior to the date hereof, Xxxxxxxx Motorcoach has
delivered or otherwise made available to Featherlite true and complete copies of
all purchase agreements, finance agreements, leases, options, title abstracts,
insurance, licenses, permits, tax abatement certificates, and other material
documents relating to any of the Assets that it has in its possession or
control. The real and personal properties to be included in the Assets acquired
by Featherlite pursuant to the Exchange include all the properties used in and
necessary to the operation of the Business and taken as a whole, to the best
knowledge of Xxxxxxxx Motorcoach and the Shareholders, are in a good state of
repair, ordinary wear and tear excepted. All Assets shall, at the Closing Date,
be located on the premises of Xxxxxxxx Motorcoach unless otherwise noted on
Schedule 3.9(iii).
3.10 Intellectual Property. (i) All Intellectual Property necessary to or
used in the conduct of the Business (all of which is described on Schedule 3.10)
is owned by Xxxxxxxx Motorcoach or licensed to Xxxxxxxx Motorcoach, in either
case free and clear of any Liens other than Permitted Liens, and Xxxxxxxx
Motorcoach's ownership of such Intellectual Property has not been challenged in
any judicial or administrative proceeding; (ii) Xxxxxxxx Motorcoach's present
and proposed operations do not infringe, misuse, or misappropriate any
intellectual property rights of others including rights of others to computer
software and programs (except as to the Autocad software litigation disclosed in
Schedule 3.12); (iii) no employees of Xxxxxxxx Motorcoach have any right in or
to the Intellectual Property necessary to or used in the conduct of Xxxxxxxx
Motorcoach's present or proposed operations, and no such employees are subject
to restrictive covenants with any person other than Xxxxxxxx Motorcoach with
respect to such employees' employment by Xxxxxxxx Motorcoach or use of
Intellectual Property in such employment; and (iv) to the knowledge of Xxxxxxxx
Motorcoach and the Shareholders, none of Xxxxxxxx Motorcoach's rights to
Intellectual Property is being infringed, misused, or misappropriated by others.
3.11 Licenses; Compliance with Laws. All material permits, licenses, and
other approvals and authorizations that are necessary to conduct the Business
are set forth on Schedule 3.11, and all of such licenses, permits, and other
approvals and authorizations are in full force and effect. Except as further set
forth on Schedule 3.11, Xxxxxxxx Motorcoach has complied, and is in compliance,
in all material respects with all applicable laws, statutes, orders, rules,
regulations and requirements promulgated by governmental or other authorities
relating to the conduct of Xxxxxxxx Motorcoach's businesses. Xxxxxxxx Motorcoach
is not in material default with respect to any order, writ, injunction, or
decree of any court or of any foreign, federal, state, municipal or other
governmental department, commission, board, bureau, agency, or instrumentality.
3.12 Litigation; Insolvency. Except as specifically described in Schedule
3.12, there is no action, lawsuit, claim or proceeding of any kind pending or,
to the best knowledge of Xxxxxxxx Motorcoach and the Shareholders, threatened
against, by, or affecting Xxxxxxxx Motorcoach or the Assets, or, to the best
knowledge of Xxxxxxxx Motorcoach and the Shareholders, any investigation of
Xxxxxxxx Motorcoach or the Assets pending or threatened. Xxxxxxxx Motorcoach (i)
has not voluntarily filed, or had filed against it involuntarily, a petition
under the United States Bankruptcy Code that, in the case of an involuntary
petition, shall not have been vacated or dismissed within 30 calendar days after
the filing thereof, and (ii) has not taken action or otherwise had proceedings
commenced to dissolve or liquidate it.
3.13 Environmental Matters. Xxxxxxxx Motorcoach has obtained, and is in
compliance in all material respects with, all permits, licenses, or other
approvals necessary under Environmental Laws (as defined below) with respect to
Xxxxxxxx Motorcoach and its business, operations, products, or properties. All
such required permits, licenses and approvals are set forth on Schedule 3.11.
Neither Xxxxxxxx Motorcoach nor its business, operations, products, or
properties, currently or formerly owned, operated, or leased (i) have violated
or violate or, to the knowledge of Xxxxxxxx Motorcoach and the Shareholders,
have been or are subject to any judicial or administrative investigations,
proceedings or other actions alleging the violation of, any federal, state,
local, or foreign environmental, clean air, superfund, conservation, health, or
safety statute, regulation, ordinance, common law, order, or decree
(collectively, "Environmental Laws") governing "Hazardous Substances," which for
purposes hereof means asbestos, urea formaldehyde, polychlorinated biphenyls,
nuclear fuel or materials, chemical waste, medical waste, radioactive materials,
explosives, known carcinogens, petroleum products, or substances defined as
hazardous or as a pollutant or contaminant in, or the generation, handling,
storage, release or disposal of which is regulated by, any Environmental Laws or
(ii) to the knowledge of Xxxxxxxx Motorcoach and the Shareholders, have been or
are the subject of any federal, state, local or foreign investigation,
proceeding or other action evaluating whether any remedial action is needed to
respond to a release of any Hazardous Substance or (iii) have taken any action
or failed to take any action that might reasonably result in violation of any
Environmental Laws. Prior to the execution of this Agreement, there has been
delivered by Xxxxxxxx Motorcoach to Featherlite in writing and identified as
delivered pursuant to this provision a chronological record of all testing
performed and compliance procedures followed by Xxxxxxxx Motorcoach in
connection with Environmental Laws. Neither Xxxxxxxx Motorcoach, nor, to the
knowledge of Xxxxxxxx Motorcoach and the Shareholders, any prior or current
lessee, owner, occupant, operator or other person has released, spilled or
disposed of any Hazardous Substance in or on the ground of any real property
currently or formerly owned, operated, or leased by Xxxxxxxx Motorcoach, and no
above-ground or underground storage tanks, other than six above-ground moveable
250 gallon tanks currently present at Xxxxxxxx Motorcoach's Xxxxx facility, and
an above-ground diesel storage tank which was removed prior to 1997, or
Hazardous Substances are or were present on such real property or any structures
thereon. Xxxxxxxx Motorcoach has no removal, restoration or similar obligation
under any Environmental Laws with respect to any property, and Xxxxxxxx
Motorcoach has not materially changed its storage or disposal practices with
respect to Hazardous Substances since January 1, 1994. Xxxxxxxx Motorcoach has
delivered to Featherlite true and complete copies of all reports, studies or
tests in the possession of or initiated by Xxxxxxxx Motorcoach pertaining to
Hazardous Substances or other environmental concerns regarding Xxxxxxxx
Motorcoach, its business, operations, products, or properties, whether currently
or formerly owned, operated, or leased.
3.14 Contracts; Leases. Schedule 3.14 attached hereto contains a list of
each of the following Contracts, including amendments thereto, to which Xxxxxxxx
Motorcoach is a party or by which any of the Assets are in any way bound or
obligated:
3.14.1 Written employment and compensation agreements and written
employment policies with employees or independent contractors, officers, or
directors and agreements that contain any severance pay liability or
obligation to any employee, former employee, director, former director, or
consultant;
3.14.2 Agreements of guarantee or indemnification;
3.14.3 Loan or credit agreements providing for any extension of credit
for borrowed money to or by Xxxxxxxx Motorcoach;
3.14.4 Noncompetition agreements;
3.14.5 Leases to or for any personal property that involve the payment
or receipt of annual rent of more than $10,000 individually or $20,000 in
the aggregate, and leases to or for any real property, regardless of the
dollar amount involved;
3.14.6 Contracts for products or services provided by Xxxxxxxx
Motorcoach that (i) involve the receipt of more than $25,000 individually
in any period of 12 consecutive months, or (ii) commit Xxxxxxxx Motorcoach
to provide technology or other products, the development of which has not
been completed as of the date hereof; and
3.14.7 Any other agreement, contract, commitment, or other arrangement
(oral or written) not otherwise described above unless it:
3.14.7.1 is of six-month or shorter duration or Xxxxxxxx
Motorcoach can terminate it, without liability to Xxxxxxxx Motorcoach,
on notice of 30 days or less; or
3.14.7.2 requires payment by Xxxxxxxx Motorcoach of less than
$20,000 per year; provided, however, that the aggregate amount of the
obligations under contracts excluded by reason of these sections
3.14.7.1 and 3.14.7.2 shall not represent obligations in excess of
$50,000 with respect to any period of 12 consecutive months.
Except as specified in Schedule 3.14, (i) all of the Contracts listed on
Schedule 3.14 or material to the Business are valid, binding and in full force
and effect in accordance with their terms and conditions (except as may be
limited by laws affecting creditors' rights generally or by judicial limitations
on the right to specific performance), and (ii) there is no existing material
default under, or failure by Xxxxxxxx Motorcoach to perform in substantial
compliance with the terms of, any of the Contracts listed on Schedule 3.14, and
no default under any other Contract which default is material to the Business.
Copies of all of the Contracts (or, in the case of oral Contracts, descriptions
of the material terms thereof) described in Schedule 3.14 have been delivered by
Xxxxxxxx Motorcoach to Featherlite.
3.15 Insurance. Listed on Schedule 3.15 attached hereto is a list of all of
the policies of fire, liability, life, health, product liability and other
insurance maintained by or on behalf of Xxxxxxxx Motorcoach, whether for its own
benefit or the benefit and protection of its employees, agents, lessors or
lenders, and copies of such policies have been delivered (or made available upon
request) by Xxxxxxxx Motorcoach to Featherlite. Xxxxxxxx Motorcoach's physical
assets are and will be through the Effective Time insured against loss by fire
and other insurable perils to which they may be subject at or above the levels
of coverage maintained by Xxxxxxxx Motorcoach as of December 31, 1997. Except as
set forth on Schedule 3.15, Xxxxxxxx Motorcoach currently maintains in effect
insurance coverage for all of its properties and assets.
3.16 Accounts Receivable. Except as listed on Schedule 3.16 attached
hereto, to the best knowledge of Xxxxxxxx and the Shareholders, all accounts
receivable of Xxxxxxxx Motorcoach reflected on the 12/31/97 Balance Sheet and
the Closing Balance Sheet (i) have arisen in the ordinary course of business,
and (ii) are collectible in the amounts at which they are carried on Xxxxxxxx
Motorcoach's books, except to the extent reflected in the reserve for doubtful
accounts reflected on the 12/31/97 Balance Sheet. Such reserve is adequate to
cover accounts not collectible in the ordinary course of business consistent
with standard and reasonable business practices.
3.17 ERISA Matters. Schedule 3.17 attached hereto contains a complete list
and description of all Employee Benefit Plans of Xxxxxxxx Motorcoach and any
Affiliate ("Scheduled Plans"). True and correct copies of all Scheduled Plans
have been delivered to Featherlite. Each Employee Benefit Plan of Xxxxxxxx
Motorcoach and any Affiliate is in compliance with ERISA and the Code, where
applicable, in all material respects. At the date hereof and during the six
years preceding the date hereof, neither Xxxxxxxx Motorcoach nor any Affiliate
has contributed to a Pension Plan. Neither Xxxxxxxx Motorcoach nor any Affiliate
has ever been required to contribute to a Multiemployer Plan. At the date
hereof, there is no amount of Unrecognized Retiree Welfare Liability under any
Employee Benefit Plan maintained or contributed to by Xxxxxxxx Motorcoach or any
Affiliate. Xxxxxxxx Motorcoach and/or any Affiliate has, as of the date hereof,
made all contributions or payments to or under each Scheduled Plan required by
law or by the terms of such Scheduled Plan or any contract or agreement, or
Xxxxxxxx Motorcoach and/or any Affiliate has made or accrued reserves adequate
for such purposes. All reports and disclosures relating to such Scheduled Plans
required to be filed or distributed under ERISA as of the Effective Time shall
have been filed or distributed. Each Scheduled Plan that is a group health plan
within the meaning of Code section 5000(b)(1) is in substantial compliance with
the continuation of health coverage requirements of Code section 4980B.
3.18 Employee Matters. Xxxxxxxx Motorcoach is not a party to any collective
bargaining agreement with any labor organization. Xxxxxxxx Motorcoach has
complied in all material respects with all applicable federal and state laws
relating to the employment of labor, including the provisions thereof relating
to wages, hours, collective bargaining, occupational health and safety, and the
payment of all payroll, withholding and social security taxes, and is not liable
for any wages, taxes or penalties for the failure to comply with any of the
foregoing. All amounts due to employees of Xxxxxxxx Motorcoach for commissions,
salaries, wages, bonuses, fringe benefits and vacation benefits accrued through
the Effective Time shall have been paid in the ordinary course or accrued, as
appropriate, before the Effective Time. Except for ERISA Plans disclosed in
Schedule 3.17, Xxxxxxxx Motorcoach has not (i) promulgated any policy or entered
into any written agreements relating to the payment of severance pay to
employees whose employment is terminated or suspended, voluntarily or
involuntarily, or otherwise, or (ii) entered into any written employment
agreements with any employee. Schedule 3.18 attached hereto contains (i) a true
and complete list of all full-time and part-time employees of Xxxxxxxx
Motorcoach and the current level of compensation payable to each and (ii) a true
and correct list of all former employees of Xxxxxxxx Motorcoach for whom
Featherlite is assuming responsibility for COBRA coverage pursuant to section
5.9.3 of this Agreement. There are no strikes, work stoppages, or controversies
pending or, to the knowledge of Xxxxxxxx Motorcoach or the Shareholders,
threatened, between Xxxxxxxx Motorcoach and any of its employees.
3.19 Miscellaneous Information. Schedule 3.19 attached hereto constitutes a
true and complete list of the name of each financial institution in which
Xxxxxxxx Motorcoach has an account or safety deposit box, the account numbers
with respect thereto, and the names of all persons authorized to draw thereon or
who have access thereto, with respect to all safe deposit boxes.
3.20 Investment Intent. The Featherlite Shares being acquired by Xxxxxxxx
Motorcoach pursuant to this Agreement are not being acquired with a view to, or
for resale in connection with, any distribution or public offering thereof
except in compliance with the Securities Act and any applicable state securities
laws, provided that Xxxxxxxx Motorcoach may make the distributions of the
Featherlite Shares to the Shareholders contemplated by section 2.8 of this
Agreement and Xxxxxx X. Xxxxxxxx may transfer some Featherlite Shares to Xxxxxxx
Xxxxxx in accordance with the provisions of section 6.11 of this Agreement.
Xxxxxxxx Motorcoach and the Shareholders understand that issuance of the
Featherlite Shares by Featherlite has not been registered under the Securities
Act or any state securities laws by reason of their contemplated issuance in
transactions exempt from the registration and prospectus delivery requirements
of the Securities Act and any applicable state securities laws, and that the
reliance of Featherlite upon this exemption is based in part upon the
representations, warranties and agreements made by Xxxxxxxx Motorcoach and the
Shareholders. Xxxxxxxx Motorcoach and the Shareholders further understand that
the Featherlite Shares may not be transferred or resold without (i) registration
under the Securities Act and any applicable state securities laws, or (ii) the
existence of an exemption from the registration requirements of the Securities
Act and such state securities laws.
3.21 U.S. Real Property Interest. No tax is required to be withheld or paid
pursuant to section 1445 of the Code as a result of the transfer of the Assets
to Featherlite in the transactions contemplated by this Agreement.
3.22 No Finders. No act of Xxxxxxxx Motorcoach or the Shareholders or their
representatives has given or will give rise to any valid claim against any of
the parties hereto for a brokerage commission, finder's fee or other like
payment.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF FEATHERLITE
Featherlite hereby makes the following representations and warranties to
Xxxxxxxx Motorcoach and the Shareholders, all of which representations and
warranties are true and correct as of the date hereof and shall be true and
correct as of (and as though made at) the Closing.
4.1 Organization. Featherlite is a corporation duly organized, validly
existing and in good standing under the laws of the State of Minnesota and is
duly qualified or registered to do business as a foreign corporation and is in
good standing in each jurisdiction that requires such qualification or
registration and in which it owns or leases any material properties or conducts
any material business, except where the failure so to qualify or register would
not have a material adverse effect on Featherlite. Featherlite has all necessary
corporate power to own its properties, conduct its businesses as presently
conducted or proposed to be conducted by it, and to do and perform all acts and
things required to be done by it under this Agreement.
4.2 Capitalization. Featherlite has 50,000,000 shares of duly authorized
capital stock consisting of (i) 40,000,000 shares of Featherlite Common Stock,
of which 6,255,000 shares were issued and outstanding as of March 31, 1997, and
no shares are held in treasury; and (ii) 10,000,000 undesignated shares, none of
which is outstanding or held in treasury. All such outstanding shares of
Featherlite Common Stock are duly authorized, validly issued, fully paid and
nonassessable and were issued in compliance with, or pursuant to an exemption
from, all applicable federal and state securities laws. In addition, as of March
31, 1997, 120,000 shares of Featherlite Common Stock have been reserved for
issuance under outstanding warrants and a total of 550,000 shares of Featherlite
Common Stock have been reserved for issuance under its stock option plan of
which 311,380 shares are subject to outstanding stock options granted under such
plan; a proposal to reserve an additional 1,100,000 shares for such plan is to
be submitted at the next meeting of Featherlite shareholders. Except as
described in this section 4.2 and footnotes to Featherlite's consolidated
financial statements for the year ended December 31, 1997, there is no other
outstanding Featherlite Common Stock or other outstanding rights to acquire such
stock, the holders of the outstanding shares of Featherlite Common Stock have no
preemptive rights, and there are no outstanding subscriptions, options,
warrants, calls, contracts, demands, commitments, conversion rights or other
agreements or arrangements of any character or nature whatsoever, under which
Featherlite is or may be obligated to issue any capital stock or other
securities of Featherlite; and Featherlite has no obligation for the repurchase
of any of its outstanding securities. Any and all preemptive or similar rights
to purchase any capital stock or securities of Featherlite to which any holders
of capital stock or any other security of Featherlite may have been entitled
with respect to prior issuances of Featherlite Common Stock or rights to acquire
Featherlite Common Stock shall have, on or before the Closing Date, been validly
and enforceably waived by all such holders or are otherwise no longer of any
force or effect. There are no shareholder agreements or other agreements,
understandings or commitments relating to or otherwise affecting the Featherlite
Common Stock. Copies of Featherlite's Articles of Incorporation and Bylaws
previously delivered by Featherlite to Xxxxxxxx Motorcoach are complete and
correct.
4.3 Corporate Authority. The execution, delivery and performance by
Featherlite of this Agreement and the transactions contemplated hereby have been
duly and validly authorized and approved by all requisite corporate action, and
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will conflict with or result in a breach of the
terms or provisions of or constitute a default under its Articles of
Incorporation or Bylaws or any material instrument, contract, agreement,
judgment, order, decree or other restriction to which Featherlite is a party or
by which any of its assets is bound or affected, or require any affirmative
approval, consent, or authorization of any person, court, or governmental or
regulatory authority. This Agreement constitutes, and the other agreements and
instruments contemplated hereby, when duly executed and delivered by
Featherlite, will constitute, valid and binding obligations of Featherlite
enforceable in accordance with their respective terms, except as may be limited
by laws affecting creditors' rights generally or by judicial limitations on the
right to specific performance.
4.4 SEC Filings and Financial Statements. Featherlite has heretofore
furnished to Xxxxxxxx Motorcoach and the Shareholders copies of all SEC Reports
filed by Featherlite with the SEC on or after January 1, 1998. Each of the SEC
Reports was complete and correct in all material respects as of its effective
date and, as of its effective date, did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
in which made, not misleading. The financial statements of Featherlite and the
notes thereto contained in the SEC Reports are correct and complete and fairly
present the combined financial position of Featherlite and its subsidiaries as
of the respective dates thereof and the results of operations for the periods
then ended, except as disclosed therein or in the notes thereto or in the
explanations thereof contained in the SEC Reports; and the balance sheets and
notes thereto contained therein show and properly reflect all material
liabilities of Featherlite and its combined subsidiaries on the respective dates
thereof, except for any claims and lawsuits against Featherlite and its combined
subsidiaries now pending, the total liability from which would not materially
adversely affect the business, properties, or financial condition of Featherlite
and its combined subsidiaries, taken as a whole. Each such financial statement
was prepared in conformity with generally accepted accounting principles
consistently applied (except, in the case of unaudited statements, as permitted
by the SEC for Quarterly Reports on Form 10-Q).
4.5 No Material Adverse Changes. Except as otherwise disclosed herein or in
the SEC Reports or press releases issued by Featherlite, since January 1, 1998,
there has not been any material adverse change in the financial condition or in
the business operations, properties, assets or liabilities of Featherlite and
its subsidiaries, taken as a whole, whether or not arising in the ordinary
course of business.
4.6 No Finders. No act of Featherlite or its representatives has given or
will give rise to any valid claim against any of the parties hereto for a
brokerage commission, finder's fee or other like payment with the exception of a
fee due to CIBC Xxxxxxxxxxx Corp., payment of which fee shall be the obligation
of Featherlite.
ARTICLE 5
COVENANTS
5.1 Access. Xxxxxxxx Motorcoach shall, during the period prior to the
Closing, give Featherlite and its representatives full access during regular
business hours to Xxxxxxxx Motorcoach's properties, records and personnel and
such other information of Xxxxxxxx Motorcoach as Featherlite may reasonably
request to analyze Xxxxxxxx Motorcoach and its business, assets, and prospects.
Featherlite agrees to maintain, and to cause its representatives to maintain,
the confidentiality of any information that they receive as a result of such
access and to obtain Xxxxxxxx Motorcoach's consent prior to disclosing any of
such information to any other person or entity.
5.2 Conduct of Business Until Effective Time. Except as Featherlite may
otherwise consent in writing or as otherwise contemplated by this Agreement,
from the date hereof until the Effective Time, Xxxxxxxx Motorcoach shall operate
the Business only in the usual, regular, and ordinary manner and Xxxxxxxx
Motorcoach shall not (i) amend its Articles of Incorporation; (ii) make or grant
any increase in the compensation payable to or to become payable to any officer,
employee, director, or consultant or any increase in any officer, employee,
director, or consultant benefit plan; (iii) merge with or enter into,
consolidate with or acquire all or substantially all of the stock or assets of
any other corporation, partnership, limited partnership, joint venture,
association, or other entity; (iv) issue, deliver or sell, or authorize or
propose the issuance, delivery, or sale of, any shares of its capital stock of
any class or series, any securities or debt convertible into, or any rights,
warrants, calls, subscriptions or options to acquire, any such shares,
convertible securities, or debt; (v) declare or pay any dividend or distribution
in cash, securities, or property; (vi) incur, assume, discharge or satisfy any
material liability (absolute or contingent), mortgage, lien, security interest
or encumbrance other than trade payables or other obligations in the ordinary
course of business (and in compliance with this Agreement); (vii) sell, assign,
lease, or otherwise transfer or dispose of any of its Assets without the
replacement thereof with a substantially equivalent asset of substantially
equivalent kind, condition, and value, except for sales, transfers and
assignments consistent with past practice, increases and decreases in supplies
and receivables in the ordinary course of business under circumstances
consistent with past practice; (viii) enter into any material transaction other
than in the ordinary course of business (subject to the exceptions stated
above); (ix) take any action that would cause the representations and warranties
of Xxxxxxxx Motorcoach contained in Article 3 hereof to be untrue in any
material respect as of the Closing; or (x) agree to any of the foregoing other
than pursuant hereto.
5.3 Approvals and Consents. As promptly as possible, Xxxxxxxx Motorcoach
and the Shareholders and Featherlite shall take all corporate and other actions,
make all filings with courts or governmental authorities, and use their best
efforts to obtain in writing all approvals and consents (including specifically
all required shareholder approvals) required to be taken, made, or obtained by
them in order to effectuate the Exchange and the transactions contemplated
hereby. The parties agree to cooperate jointly to use their best efforts in
taking actions so as to effect the transfer and assignment of the approvals,
permits, licenses and certifications set forth on Schedule 3.11 to Featherlite.
The parties shall cooperate with each other in effecting the foregoing; and
shall deliver promptly to the other copies of such filings, approvals, and
consents. The Shareholders agree to vote all shares of capital stock of Xxxxxxxx
Motorcoach that are owned by them or under their voting control in favor of this
Agreement and the Exchange and to take other necessary and appropriate actions
consistent therewith.
5.4 Exclusive Dealing. Xxxxxxxx Motorcoach and the Shareholders agree not
to (and to cause their affiliates and representatives not to) solicit,
negotiate, discuss or entertain any offers or acquisition or investment
inquiries or proposals, or otherwise provide information to any other person,
with regard to the businesses that are the subject of this Agreement from any
other person, or to furnish information to any other person for any such
purpose, during the period beginning on the date hereof and ending on the
Closing Date, unless this Agreement is terminated pursuant to Article 8.
Xxxxxxxx Motorcoach and the Shareholders hereby confirm and represent that they
have accepted no other offer regarding the purchase, sale, investment in, or
similar transaction with respect to all or any portion of its business or assets
that are the subject of this Agreement, nor has any letter of intent or other
agreement to do so been signed with any other party.
5.5 Risk of Loss. Prior to the Effective Time, the risk of loss or
destruction to any of the Assets shall be that of Xxxxxxxx Motorcoach. If the
Business is materially curtailed or interrupted prior to the Effective Time by
loss, destruction, or damage due to fire or any other casualty, Featherlite
shall have the right to terminate this Agreement by written notice delivered to
Xxxxxxxx Motorcoach.
5.6 Costs and Fees. Except as otherwise specifically provided in this
Agreement, whether or not the Exchange is consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby will be paid by the party incurring such costs and expenses. The
aggregate amount of all out-of-pocket expenses and fees incurred by Xxxxxxxx
Motorcoach in connection with the Exchange (including but not limited to fees
and expenses payable to all banks, investment banking firms, other financial
institutions and other persons and their respective agents and counsel and all
fees and expenses of Xxxxxxxx Motorcoach's counsel, accountants, experts and
consultants) and unpaid at the time of Closing shall constitute liabilities of
Xxxxxxxx Motorcoach and/or the Shareholders, as the case may be, and whether or
not such expenses and fees are reflected on the Closing Balance Sheet, they
shall constitute Excluded Liabilities.
5.7 Sales and Transfer Taxes. Notwithstanding anything to the contrary set
forth herein, any applicable sales, value added, transfer, documentary, use,
filing and other Taxes and fees (other than income Taxes) that may be levied in
connection with the Exchange shall be borne by Xxxxxxxx Motorcoach and the
Shareholders. Each of the parties shall use its best efforts, however, to obtain
all necessary exemptions from such Taxes.
5.8 Employment Agreement. At the Closing, Featherlite and Xxxxxx Xxxxxxxx
shall enter into an employment agreement providing for the employment of Xxxxxx
Xxxxxxxx by Featherlite following the Closing, in the form attached hereto as
Schedule 5.8.
5.9 Employment; Benefits.
5.9.1 Employment. As of the Effective Time, Featherlite shall offer to
each current employee of Xxxxxxxx Motorcoach (limited to those individuals
listed as current employees on Schedule 3.18 and such ordinary course of
business replacements as may be hired between the date hereof and the
Effective Time) a position of employment in Featherlite at pay and benefits
for the position offered no less favorable as a whole than those provided
by Xxxxxxxx Motorcoach to its employees in such positions immediately prior
to the Effective Time. Effective as of the Effective Time, Featherlite
shall become the employer of and employ each such employee who so accepts
such employment. Subject to the requirements of law and any employment
agreements to which such employees may be a party following the Closing
Date, the employment of all such employees will be at will, except for the
employment of Xxxxxx Xxxxxxxx which shall be governed by the terms and
conditions of the Employment Agreement attached hereto as Schedule 5.8.
From and after the Effective Time, Featherlite shall give each such
employee full credit for all vacation time accrued by such employee as of
the Effective Time to the extent of the dollar amounts accrued therefor on
the Closing Balance Sheet, and Featherlite agrees that to the extent
required by law it shall pay any employee for his or her accrued vacation
time to the extent reflected on the Closing Balance Sheet if such employee
terminates his or her employment. After the Effective Time, Featherlite
shall, for all seniority, eligibility, and vesting purposes, credit such
employees for their past service with Xxxxxxxx Motorcoach (and any past
service with a predecessor previously recognized by Xxxxxxxx Motorcoach);
provided, however, that with respect to calculation of benefits under
Featherlite severance policies, only past service with Xxxxxxxx Motorcoach
shall be credited to an employee of Featherlite, and not any past service
with any predecessor of Xxxxxxxx Motorcoach. Employees hired by Featherlite
shall be governed by, and shall be entitled to benefits under, Featherlite
severance pay policies with respect to termination of such employment by
Featherlite after Closing.
5.9.2 Benefits; General. As of the Effective Time, Featherlite shall
assume and become the sponsor of all health, dental and life insurance
plans, and the cafeteria plan, currently maintained by Xxxxxxxx Motorcoach
for its employees. Except as provided in this section 5.9, Featherlite
shall not assume any other Employee Benefit Plan or non-ERISA employee
benefit program sponsored by Xxxxxxxx Motorcoach. Xxxxxxxx Motorcoach will
appropriately deal with all employees engaged in the conduct of the
Business if such employees are not to be made an offer of employment by
Featherlite, at Xxxxxxxx Motorcoach's own cost and risk, except as
otherwise specifically provided in this Agreement. Xxxxxxxx Motorcoach will
be solely responsible for payment or satisfaction of all severance pay,
retention bonus, deferred compensation, unemployment compensation or any
other consequences or obligations, incurred as a result of any termination
of employment by Xxxxxxxx Motorcoach of any of its employees not reflected
on Schedule 5.9 (other than employees hired in the ordinary course of
business between the date hereof and Closing in accordance with the terms
of this Agreement, that otherwise would have been included on Schedule
5.9), whether such termination by the party occurs before,
contemporaneously with, or following the Effective Time.
5.9.3 Cobra Obligations. Featherlite assumes all responsibility and
liability for providing continued health, dental and life insurance
coverage ("COBRA coverage") to those employees of Xxxxxxxx Motorcoach, and
their spouses or dependents, who, before Closing, had elected or became
entitled to elect such COBRA coverage. Featherlite further assumes all
responsibility and liability for providing COBRA coverage to those
employees of Xxxxxxxx Motorcoach, and their spouses and dependents, who, at
or after Closing, have a "qualifying event" (within the meaning of Code
section 4980B(f)(3) or applicable state law) which entitles them to elect
such COBRA coverage. Such COBRA coverage will continue for the period
required by and shall, in all respects, comply with the requirements of
Code section 4980B and sections 601 through 609 of ERISA or applicable
state law.
5.10 Plant-Closing Notices. Xxxxxxxx Motorcoach shall provide, on a timely
basis, all notices required under the Worker Adjustment and Retraining
Notification Act and comparable state laws with respect to the employees
employed in the Business and such other notices as may be required by union
contracts to which Xxxxxxxx Motorcoach is a party with respect to the
transactions contemplated by this Agreement.
5.11 Prorations. Except as otherwise specifically provided herein, the
prorations and adjustments described in this section shall be made and fully
reflected on the Closing Balance Sheet. The Business operations of Xxxxxxxx
Motorcoach and the income and expenses attributable thereto through the
Effective Time shall be for the account of Xxxxxxxx Motorcoach and thereafter
shall be for the account of Featherlite, and all such items of income and
expense shall be reflected on the Closing Balance Sheet so as to reflect such
proration. Allocation of items under these proration provisions shall include
but not be limited to employee compensation, power and utilities charges, real
and personal property taxes, and rents and payments pertaining to the Contracts
being transferred to Featherlite pursuant hereto.
5.12 Reorganization Treatment. Xxxxxxxx Motorcoach and Featherlite shall
take all actions necessary to cause the Exchange and the other transactions
contemplated by this Agreement to be treated for tax purposes as a
reorganization under section 368(a)(1)(C) of the Code, including all actions
necessary to comply with the "continuity of business enterprise" and "continuity
of interest" requirements with respect thereto.
5.13 Shareholders' Letters. Each of the Shareholders shall deliver to
Featherlite on or prior to the Closing Date a written agreement, in the form
previously approved by the parties, that such Shareholder (a) will not offer to
sell, transfer or otherwise dispose of any Featherlite Common Stock issued
pursuant to the Exchange, except pursuant to an effective registration statement
or in compliance with Rule 145 or another exemption from the registration
requirements of the Securities Act (the availability of such other exemption to
be reasonably satisfactory to Featherlite's counsel), and (b) has no present
intention to sell, transfer or otherwise dispose of (and does not have any short
position in or agreement to sell) any of such Featherlite Common Stock except in
compliance with all applicable federal and state securities laws.
5.14 Purchase of Used Motorcoaches. If any of the used motorcoaches
included among the Assets purchased by Featherlite are offered for sale by
Featherlite through June 30, 1999, and during at least the three months
preceding such date are offered at prices not more than their respective values
on the Closing Balance Sheet, and (i) remain unsold on such date, the Mitchells
on June 30, 1999 will purchase all such unsold used motorcoaches at an amount
equal to (a) the aggregate value of all such unsold motorcoaches as reflected in
the detailed schedule supporting the Closing Balance Sheet, plus or minus (b)
the aggregate net amount by which net revenues from the sale of used
motorcoaches included among the Assets exceeds or is less than the aggregate
value of such motorcoaches as reflected in the detailed schedule supporting the
Closing Balance Sheet or (ii) all of such used motorcoaches have been sold and
if the net revenue from the sale of all such motorcoaches included in the Assets
is less than the aggregate value of such motorcoaches as reflected in the
detailed schedule supporting the Closing Date Balance Sheet, the Mitchells shall
immediately pay to Featherlite, such shortfall. In order to partially secure the
Mitchells' contingent obligation hereunder, Mitchells at Closing shall either
provide Featherlite with a letter of credit from a bank and in substantive form
acceptable to Featherlite in the amount of $300,000.
5.15 Payment of Excluded Liabilities. Xxxxxxxx Motorcoach and the
Shareholders shall make provision for and perform and pay all Excluded
Liabilities.
5.16 Provisions for Working Capital. During the period from the Closing
Date through December 31, 2001, Featherlite shall provide to the Featherlite
Vogue Division of Featherlite working capital of up to $3 million (including
payment of bank overdrafts as of the Closing Date), consistent with performance
and growth in the Net Sales and Operating Income Before Tax of such Division.
5.17 Xxxxxx Xxxxxxxx Life Insurance. Featherlite shall assume, maintain
ownership of and pay premiums on the insurance policy on the life of Xxxxxx X.
Xxxxxxxx currently owned by Xxxxxxxx Motorcoach until the earlier of December
31, 2001 or the termination of employment of Xxxxxx X. Xxxxxxxx by Featherlite.
Featherlite shall designate itself as beneficiary so long as it pays the
premiums on such policy. On the earlier of January 1, 2002 or the termination of
employment of Xxxxxx X. Xxxxxxxx by Featherlite, Featherlite shall allow Xxxxxx
X. Xxxxxxxx or his designee to assume ownership of the portion Featherlite is
discontinuing, to the extent permitted by and subject to the terms of the
insurance policy. In the event of the death of Xxxxxx X. Xxxxxxxx and the
receipt by Featherlite of insurance proceeds, the amount of such proceeds shall
be included in the Operating Income Before Tax of the Featherlite Vogue Division
and the calculation of Earnout Shares to the extent provided in section 2.7 of
this Agreement.
5.18 Product Liability Insurance. Featherlite shall use its commercially
reasonable best efforts to have the coverage of its product liability insurance
extended to cover motorcoaches manufactured and sold by Xxxxxxxx Motorcoach
prior to the Closing Date and to maintain such insurance through December 31,
2001, it being acknowledged by the parties that due to differences in
manufacturing operations between Featherlite and Xxxxxxxx Motorcoach and other
factors, identical coverage may not be available or may not be available at
commercially reasonable rates.
5.19 Pledge for Litigation Exposure. In order to partially secure the
obligation of Xxxxxxxx Motorcoach and the Shareholders to indemnify Featherlite
pursuant to section 9.2 of this Agreement as it applies to the litigation
matters identified in Schedule 3.12 hereto and any additional litigation
initiated against Featherlite subsequent to the Closing Date and arising from a
matter as to which Xxxxxxxx Motorcoach and the Shareholders are obligated to
indemnify Featherlite pursuant to section 9.2 (the "Litigation Matters"), until
such time as the Litigation Matters are resolved to the reasonable satisfaction
of Featherlite, Xxxxxxxx Motorcoach and the Shareholders shall pledge
Featherlite Shares with an aggregate Average Market Price as of the Closing Date
of $500,000 in accordance with the terms of the Litigation Pledge Agreement
attached to this Agreement as Appendix A which shall be executed at the Closing.
By way of non-exclusive example, the Litigation Matters shall be resolved to the
reasonable satisfaction of Featherlite if they become subject to a final
non-appealable judgment, or upon execution of binding settlement agreements in
full release of all claims. If Xxxxxxxx Motorcoach is required pursuant to
section 2.7 of this Agreement to deliver shares of Featherlite to Featherlite
upon acceptance of the Closing Balance Sheet, the number of pledged shares shall
be reduced for such purpose and Xxxxxxxx Motorcoach, Xxxxxx X. Xxxxxxxx and
Xxxxxxxx X. Xxxxxxxx shall maintain such pledge obligation with a bank letter of
credit in form and substance reasonably satisfactory to Featherlite in an amount
equal to the aggregate Average Market Price as of the Closing Date of the number
of shares withdrawn from the pledge to meet the delivery obligation to
Featherlite.
ARTICLE 6
REGISTRATION RIGHTS
6.1 Right to Demand Registration. If at any time following the adjustment
of the number of Featherlite Shares upon acceptance of the Closing Balance Sheet
in accordance with the first paragraph of section 2.7 of this Agreement, the
holders of a majority of the Featherlite Shares issued in the Exchange shall
request in writing to Featherlite that it register under the Securities Act the
sale by the Shareholders of all or any portion of the Featherlite Shares issued
in the Exchange and received by the Shareholders from Xxxxxxxx Motorcoach in
connection therewith, or shares of capital stock that are issued to the
Shareholders in respect of, or in exchange or in substitution for, any
Featherlite Shares by reason of any reorganization, recapitalization,
reclassification, merger, consolidation, spin-off, partial or complete
liquidation, stock dividend, stock split, sale of assets, distribution to
shareholders or combination of the shares of Featherlite Common Stock or any
other change in Featherlite's capital structure ("Registrable Shares"), then
Featherlite shall prepare and file with the SEC a registration statement on Form
S-3 (the "Registration Statement") covering the Shareholders' sale of the
Registrable Shares; provided, however, that the shares of Featherlite Common
Stock received in the Exchange shall cease to be Registrable Shares upon any
sale, to the extent they are sold, pursuant to a registration statement under
the Securities Act or upon such time as and to the extent that such shares in
the hands of the Shareholders are eligible for sale in a single transaction
under Rule 144 under the Securities Act. Featherlite shall use all reasonable
efforts to cause the Registration Statement to remain effective until the
earlier of (i) two years after the Effective Time, or (ii) such time as all
Registrable Shares in the hands of any single Shareholder can then be sold by
such Shareholder in a single transaction pursuant to Rule 144 under the
Securities Act, or (iii) such time as all Registrable Shares included therein
have been sold or cease to be Registrable Shares. Before filing the Registration
Statement or the prospectus contained therein, or any amendment or supplement
thereto, with the SEC, Featherlite will furnish to one counsel selected by the
Shareholders copies of all such documents proposed to be filed, which documents
will be subject to the review of such counsel. Featherlite will promptly notify
the Shareholders of any stop order issued or threatened by the SEC and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered. The Shareholders, with the consent of Featherlite (which consent
shall not be unreasonably withheld), shall have the right to select the
investment bankers and manager or co-managers that will administer an offering
of Registrable Shares pursuant to this section 6.1. Notwithstanding the
foregoing provisions of this section 6.1, the right given to the Shareholders to
demand registration hereunder shall continue in effect only so long as either
(i) Xxxxxx Xxxxxxxx continues to be employed by Featherlite at the time that
such right is exercised or (ii) if Xxxxxx Xxxxxxxx is not then employed by
Featherlite, Xxxxxx Xxxxxxxx'x termination of employment shall not have been
voluntary or based on termination for "cause," as such term is defined in the
employment agreement described in section 5.8.
6.2 Actions in Connection with Registration. Featherlite shall:
6.2.1 as expeditiously as possible prepare and file with the SEC any
amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective for the period(s) specified above;
6.2.2 as expeditiously as possible furnish to the Shareholders and
each underwriter, if any, such reasonable numbers of copies of the
Registration Statement and each amendment thereto (in each case including
all exhibits), the prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents as the Shareholders may
reasonably request in order to facilitate the public sale or other
disposition of the Registrable Shares owned by the Shareholders, the
Shareholders and their underwriters, if any, shall have the right to
comment upon any information provided by them for inclusion in the
Registration Statement;
6.2.3 as expeditiously as possible use all reasonable best efforts to
register or qualify the Registrable Shares covered by the Registration
Statement under the securities or Blue Sky laws of such states and the
District of Columbia as the Shareholders and their underwriters, if any,
shall reasonably request, and do any and all other acts and things that may
be reasonably necessary or desirable to enable the Shareholders and their
underwriters, if any, to consummate the public sale or other disposition of
the Registrable Shares owned by the Shareholders in such states and/or the
District of Columbia; provided, however, that Featherlite shall not be
required in connection with this paragraph to qualify as a foreign
corporation (where it would not otherwise be required to qualify but for
this paragraph) or execute a general consent to service of process in any
jurisdiction;
6.2.4 if Featherlite has delivered preliminary or final prospectuses
to the Shareholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, promptly notify the
Shareholders and, if requested, the Shareholders shall immediately cease
making offers of Registrable Shares and return all prospectuses to
Featherlite. Featherlite shall promptly provide the Shareholders with
revised prospectuses and, following receipt of the revised prospectuses,
the Shareholders shall be free to resume making offers of the Registrable
Shares;
6.2.5 immediately notify the Shareholders of the receipt by
Featherlite of any notification with respect to the suspension of the
qualification or registration of the Registrable Shares for sale in any
jurisdiction or the initiation or threat of any proceeding for such
purpose, or the occurrence of any event that comes to Featherlite's
attention if as a result of such event the prospectus included in the
Registration Statement contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading and, in each such case,
Featherlite will promptly prepare and furnish to the Shareholders a
supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of the Registrable Shares, such prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading;
6.2.6 enter into such customary agreements (including an underwriting
agreement) and take all such other actions as the Shareholders or the
underwriters, if any, retained by the Shareholders reasonably request in
order to expedite or facilitate the public sale or other disposition of the
Registrable Shares, including the provision of customary opinions and
indemnification; provided, however, that no shareholders other than the
Shareholders shall be required to sign a standstill agreement in connection
with the underwritten sale of securities;
6.2.7 make available for inspection by the Shareholders, any
underwriter participating in any public sale or other disposition pursuant
to the Registration Statement and any attorney, accountant or other agent
retained by the Shareholders or any underwriter (collectively, the
"Inspectors") all financial and other records, pertinent corporate
documents and properties of Featherlite and its subsidiaries as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the officers, directors and employees of
Featherlite and its subsidiaries to supply all information and respond to
all inquiries reasonably requested by any such Inspector in connection with
the Registration Statement; and
6.2.8 otherwise use its reasonable best efforts to comply in all
material respects with all applicable rules and regulations of the SEC, and
make available to its security holders, as soon as reasonably practical, an
earnings statement covering a period of at least 12 months, beginning with
the first month after the effective date of the registration statement and
the effective date of each post-effective amendment thereto (as the term
"effective date" is defined in Rule 158(c) under the Securities Act), which
earnings statement shall satisfy the provision of Section 11(a) of the
Securities Act and Rule 158 thereunder.
6.3 Delay in Registration. Notwithstanding the foregoing, if at the time
the Registration Statement is to be filed, Featherlite reasonably believes that
there are pending potential material developments or activities that would be
required to be disclosed in the Registration Statement, the disclosure of which,
in the good faith determination of Featherlite, may materially adversely affect
Featherlite, then Featherlite may delay the filing of the Registration Statement
subject to the period limitations set forth below. Furthermore, if an amendment
to the Registration Statement is required by virtue of the existence of an
undisclosed potential material development or activity the disclosure of which,
in the good faith determination of Featherlite, may materially adversely affect
Featherlite, then Featherlite shall notify the Shareholders that such material
development or activity exists (without disclosing the nature or specifics
thereof) and the Shareholders shall thereupon cease all sales of Registrable
Shares subject to the period limitations set forth below. The aggregate number
of days by which the filing of the Registration Statement is delayed or for
which the Shareholders are prevented from selling Registrable Shares pursuant to
this section 6.3 shall not exceed a cumulative 90 days in any 18-month period.
The Shareholders shall hold in confidence all information provided to them
pursuant to this section and shall not use such information in violation of any
applicable securities laws. Any such delay shall extend the registration period
otherwise provided in section 6.1 hereof.
6.4 Expenses. Featherlite will pay all of the registration expenses of and
incident to the Registration Statement filed pursuant to this Article 6 and
Featherlite's compliance with or performance of this Article 6, including,
without limitation, all registration and filing fees, exchange listing and other
fees, printing expenses, fees and disbursements of counsel for Featherlite (and
counsel for the underwriters in connection with Blue Sky qualification of the
Registrable Shares), state Blue Sky fees and expenses, the expense of any audits
and "cold comfort" letters incident to or required by any such registration, and
the fees and disbursements of underwriters customarily paid by issuers of
securities when no shares are being sold by the issuers, but excluding
underwriting discounts and selling commissions with respect to the Shareholders'
shares, and the fees and expenses of the Shareholders' own counsel, which shall
in all events be paid by the Shareholders.
6.5 Featherlite Obligations. So long as (i) any Featherlite Shares are
outstanding, owned by any of the Shareholders and not yet eligible for sale
pursuant to Rule 144(k) under the Securities Act, and (ii) Featherlite has a
class of securities registered under section 12 of the Exchange Act, Featherlite
agrees to:
(i) make and keep public information available, as those terms
are understood and defined in Rule 144(c) under the Securities Act;
(ii) use all reasonable efforts to file with the SEC in a timely
manner all reports and other documents required of Featherlite under
the Securities Act and the Exchange Act; and
(iii) furnish to the Shareholders upon request a written
statement by Featherlite as to its compliance with the reporting
requirements of Rule 144, and of the Securities Act and the Exchange
Act, a copy of the most recent annual or quarterly report of
Featherlite, and such other reports and documents of Featherlite as
the Shareholders may reasonably request to avail itself of any similar
rule or regulation of the SEC allowing him to sell any such securities
without registration and otherwise take such action as the
Shareholders may reasonably request in order to avail himself of any
such rule or regulation of the SEC.
6.6 Compliance with Securities Act. The Registration Statement and any
amendments or supplements thereto will comply in all material respects with the
Securities Act, and none of the information relating to Featherlite or its
affiliates (including, without limitation, the Exchange Act filings) included or
incorporated therein or in any amendments or supplements thereto, or any
schedules required to be filed with the SEC in connection therewith will, at the
time the Registration Statement becomes effective and during the effectiveness
thereof, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
6.7 Indemnification. Featherlite will, and it hereby does, indemnify and
hold harmless, to the full extent permitted by law, (i) the Shareholders and
(ii) each other person who participates as an underwriter or selling agent in
the offering or sale of Featherlite Shares and each other person, if any, who
controls, is controlled by or is under common control with the Shareholders or
any such underwriter or selling agent within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act (for purposes of this
paragraph, "Indemnified Person"), against any and all losses, claims, damages or
liabilities, joint or several, and expenses (including any amounts paid in any
settlement effected with Featherlite's consent) to which such Indemnified Person
may become subject under the Securities Act, the Exchange Act, state securities
or Blue Sky laws, common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) or
expenses arise out of or are based upon (A) any untrue statement or alleged
untrue statement of any material fact contained in the Registration Statement,
any preliminary, final or summary prospectus contained therein, or any amendment
or supplement thereto, (B) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (C) any violation by Featherlite of any federal,
state or common law, rule or regulation applicable to Featherlite in connection
with any such registration, and, in each case, Featherlite will reimburse such
Indemnified Person for any reasonable legal or any other expenses reasonably
incurred by him, her or it in connection with investigating or defending such
loss, claim, liability, action or proceeding; provided, however, that
Featherlite shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense is caused by any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement or amendment or
supplement thereto or in any such preliminary, final or summary prospectus in
reliance upon and in conformity with written information furnished to
Featherlite through an instrument duly executed by such Indemnified Person
specifically stating that it is for inclusion therein or if an underwriter fails
to deliver a final prospectus in accordance with the Securities Act and such
delivery would have cured the defect causing such loss, claim, damage or
liability. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Person and shall
survive the transfer of such securities by such Indemnified Person.
Featherlite may require, as a condition to including the Registrable Shares in
the Registration Statement, that Featherlite shall have received an undertaking
reasonably satisfactory to it from the Shareholders or any underwriter or
selling agent, to severally and not jointly indemnify and hold harmless (in the
same manner and to the same extent as set forth in the first paragraph of this
section 6.7), Featherlite and its directors, officers, controlling persons, any
underwriter or selling agent and all other prospective sellers and their
respective directors, officers, and partners, and their respective controlling
persons (for purposes of this paragraph, "Indemnified Persons") but only with
respect to (A) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement thereto, (B) any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case in reliance upon and in conformity with written information furnished
to Featherlite or its representatives through an instrument duly executed by or
on behalf of the Shareholders, other selling person or underwriter or selling
agent specifically stating that it is for inclusion therein, or (C) any
violation by the Shareholders or any underwriter or selling agent of any
federal, state or common law, rule or regulation applicable to any of them in
connection with any such registration, and, in each case, the indemnifying party
will reimburse such Indemnified Person for any reasonable legal or any other
expenses reasonably incurred by Featherlite in connection with investigating or
defending such loss, claim, liability, action or proceeding. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnified Persons and shall survive the transfer of such
securities by such indemnifying party; provided, however, that no such
indemnifying party shall be liable under this paragraph for any amounts
exceeding the product of the price per Registrable Share at which such
Registrable Shares are sold in the offering multiplied by the number of
Registrable Shares being sold pursuant to the Registration Statement or
prospectus by such indemnifying party.
Promptly after receipt by an indemnified party hereunder of written notice of
the commencement of any action or proceeding (including any governmental
investigation with respect to which a claim for indemnification may be made
pursuant to this section 6.7, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party, promptly give written
notice to the latter of the commencement of such action; provided, however, that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the preceding paragraphs
of this section 6.7, except to the extent that the indemnifying party is
actually materially prejudiced by such failure to give notice. In case any such
action is brought against an indemnified party, unless in such indemnified
party's reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, the indemnifying party
will be entitled to participate in and, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, to the extent that it
may wish, with counsel reasonably satisfactory to such indemnified party, and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties arises in respect of such claim after the
assumption of the defense thereof, and the indemnifying party will not be
subject to any liability for any settlement made without its consent (which
consent shall not be unreasonably withheld). No indemnifying party will consent
to entry of any judgment or enter into any settlement that does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of an unconditional release from all liability arising out of
such claim or litigation. An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel (and one local counsel) for all
parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event the indemnifying
party shall be obligated to pay the fees and expenses of such additional counsel
or counsels. All fees and expenses incurred by an indemnified person that are
covered by the indemnity will be paid on a current basis when billed.
6.8 Contribution. If the indemnification provided for in section 6.7 is
unavailable to the indemnified parties in respect of any losses, claims, damages
or liabilities referred to herein, then each such indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (i) as between Featherlite and the Shareholders on the one hand and
the underwriters on the other hand, in such proportion as is appropriate to
reflect the relative benefits received by Featherlite and the Shareholders on
the one hand and the underwriters on the other hand from the offering of all of
the securities sold in the offering or, if such allocation is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits but also the relative fault of Featherlite and the
Shareholders on the one hand and of the underwriters on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations and (ii) as between Featherlite on the one hand and the
Shareholders on the other hand, in such proportion as is appropriate to reflect
the relative fault of Featherlite and of the Shareholders in connection with
such statements or omissions, as well as any other relevant equitable
considerations. The relative benefits received by Featherlite and the
Shareholders on the one hand and the underwriters on the other hand shall be
deemed to be in the same proportion that the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting expenses)
received by Featherlite and the Shareholders bear to the total underwriting
discounts and commissions received by the underwriters, in each case as set
forth in the table on the cover page of the prospectus. The relative fault of
Featherlite and the Shareholders on the one hand and of the underwriters on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by Featherlite
and the Shareholders or by the underwriters. The relative fault of Featherlite
on the one hand and of the Shareholders on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
Featherlite and the Shareholders agree that it would not be just and equitable
if contribution pursuant to this section 6.8 were determined by pro rata
allocation (even if the underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section 6.8, no underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and the Shareholders
shall not be required to contribute any amount in excess of the amount by which
the total price at which the securities of the Shareholders were offered to the
public exceeds the amount of any damages that the Shareholders has otherwise
been required to pay be reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Shareholders' obligations to contribute pursuant to this
section 6.8 are several in the same proportion that the proceeds of the offering
received by the Shareholders bear to the total proceeds of the offering received
by all the Shareholders and not joint.
6.9 Agreements by the Shareholders. The Shareholders shall take the
following actions:
6.9.1 In connection with any registration pursuant to this Article 6,
the Shareholders shall furnish to Featherlite such information regarding
the Shareholders and the distribution proposed by the Shareholders as
Featherlite may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to in this
Agreement.
6.9.2 If, during the effectiveness of the Registration Statement filed
pursuant to this Article 6, an intervening event ("Intervening Event")
occurs that, in the reasonable good faith opinion of Featherlite's Board of
Directors, with the advice of counsel, causes the prospectus included in
the Registration Statement to no longer comply with the Securities Act,
then, after notice from Featherlite to the Shareholders of the occurrence
of such an Intervening Event, the Shareholders shall make no further sales,
or other dispositions or offers therefor, of Registrable Shares under such
Registration Statement until he receives from Featherlite copies of a new,
amended, or supplemented prospectus complying with the Securities Act.
Promptly after such Intervening Event has been publicly disclosed, the
disclosure of which will not be unreasonably delayed by Featherlite, or has
been rendered moot, Featherlite will prepare and file any necessary
amendment or supplement as provided in section 6.2.5.
6.10 Featherlite Right of First Refusal. In the event that any Shareholder
desires to sell or offers for sale all or any portion of the Featherlite Shares
(the "Offered Shares") received by him as a result of the Exchange, such
Shareholder shall give written notice of such offer for sale to Featherlite
prior to making any public or private sale. Featherlite shall then have the
option, at its discretion, to purchase all of the Offered Shares. In such event,
Featherlite shall exercise such purchase option, if at all, by providing written
notice to the Shareholder, within five business days after receipt of the notice
of offer for sale pursuant to this section, that it will purchase all of the
Offered Shares for cash in an amount per share equal to the Average Market
Price, with the applicable date for these purposes being the date of the
Shareholder's notice to Featherlite. If Featherlite exercises its right of first
refusal hereunder, the closing of the purchase of the shares of Featherlite
Common Stock with respect to which such right has been exercised shall take
place at the offices of Featherlite within 10 business days after Featherlite
gives notice of such exercise, which period of time shall be extended if
necessary in order to comply with applicable securities laws and regulations.
Notwithstanding the foregoing, each of Molder, Xxxxxxx and jointly the Mitchells
shall have the right to make open market sales of 25,000 or fewer Featherlite
Shares in any 30-day period without giving rise to Featherlite's right of first
refusal described in this section 6.10.
6.11. Pledge To and Participation by Xxxxxxx Xxxxxx. Featherlite
acknowledges that after issuance a number of the Featherlite Shares may be
pledged to Xxxxxxx Xxxxxx. If Xxxxxxx Xxxxxx subsequently acquires the pledge
Shares, then subject to requirements of applicable securities laws including
receipt of representations by Xxxxxx that he has received all appropriate
information concerning Featherlite and that he is acquiring such Shares not for
resale or redistribution in the absence of effective registration or exemption
under the Securities Act of 1933, Featherlite agrees that it will permit such
transfer to Xxxxxx and provide Xxxxxx all of the rights, subject to all of the
obligations, provided to Shareholders under Article 6 of this Agreement.
ARTICLE 7
CLOSING
7.1 Closing. The consummation of the deliveries, exchanges, and
transactions described herein shall occur on the Closing Date, but to be
effective as of the Effective Time.
7.2 Mutual Conditions to Closing. The obligations of each of the parties
under this Agreement to consummate the Closing shall, at the discretion of each
such party, be subject to the satisfaction, on or prior to the Closing Date, of
all of the following conditions, any of which conditions may be waived in
writing by a party:
7.2.1 Required Approvals. The parties shall have obtained the
permissions, consents, releases, or approvals, governmental or otherwise,
set forth on Schedule 7.2.1.
7.3 Conditions to Featherlite's Obligations. The obligations of Featherlite
under this Agreement to consummate the Closing shall, at its discretion, be
subject to the satisfaction, on or prior to the Closing Date, of all of the
following conditions, any of which conditions may be waived in writing by
Featherlite:
7.3.1 No Misrepresentations, Breaches or Adverse Events. All
representations and warranties of Xxxxxxxx Motorcoach and the Shareholders
in this Agreement shall be true and correct as of the Closing Date with the
same force and effect as though made on such date, and there shall have
been no material breach by, or material failure or inability of, Xxxxxxxx
Motorcoach or any Shareholder in the performance of any of material
covenant or obligation herein.
7.3.2 Shareholder and Board Approvals. Xxxxxxxx Motorcoach shall have
obtained all necessary approvals by its shareholders and board of directors
to this Agreement and the Exchange and Featherlite's board of directors
shall have given final approval to the Exchange.
7.3.3 Approvals; Consents. All other permissions, consents, releases,
or approvals, governmental or otherwise, necessary on the part of Xxxxxxxx
Motorcoach to consummate the transactions contemplated by this Agreement
shall have been obtained by Xxxxxxxx Motorcoach and delivered to
Featherlite.
7.3.4 Delivery of Documents. Xxxxxxxx Motorcoach and the Shareholders,
each as appropriate to the particular document or instrument at issue,
shall have executed and delivered to Featherlite all of the documents and
instruments required to be delivered to Featherlite at or prior to the
Closing, including each of the following:
7.3.4.1 Certified copy of resolutions of Xxxxxxxx Motorcoach's
Board of Directors and shareholders authorizing the execution and
delivery of this Agreement and performance of the transactions
contemplated herein, including specifically the authorization of the
Exchange.
7.3.4.2 A xxxx of sale and any other appropriate instruments of
assignment from Xxxxxxxx Motorcoach transferring and assigning all of
the Assets to Featherlite, free and clear of all encumbrances, liens,
security interests, and indebtedness of whatever nature other than
Permitted Liens.
7.3.4.3 Physical possession of the Assets.
7.3.4.4 Warranty deeds conveying to Featherlite marketable fee
simple title to the real property included in the Assets and all
rights appurtenant thereto, and other real estate title and related
documents required in connection therewith.
7.3.4.5 An assignment and assumption agreement assigning to
Featherlite all of Xxxxxxxx Motorcoach's right, title, and interest in
the Contracts included in the Assets.
7.3.4.6 The employment agreement described in section 5.8.
7.3.4.7 A certificate signed by the chief executive officer and
the chief financial officer of Xxxxxxxx Motorcoach with respect to the
matters described in section 7.3.1 hereof.
7.3.4.8 The written acknowledgements of the Shareholders
described in section 2.8 hereof.
7.3.5 Legal Opinion. Featherlite shall have received a favorable
opinion, addressed to Featherlite, of Jones, Givens, Xxxxxxx & Xxxxx,
counsel to Xxxxxxxx Motorcoach and the Shareholders, dated as of the date
of the Closing, in the form attached as Schedule 7.3.5.
7.3.6 Due Diligence. Featherlite shall be reasonably satisfied with
the results of its due diligence review of Xxxxxxxx Motorcoach.
7.3.7 Termination of Dealers. Xxxxxxxx Motorcoach shall have given
timely notice of termination to any and all of its dealers and distributors
such that all dealer and distributor agreements are terminated as of the
Closing Date.
7.4 Conditions to Xxxxxxxx Motorcoach's Obligations. The obligations of
Xxxxxxxx Motorcoach and the Shareholders under this Agreement to consummate the
Closing shall, at their discretion, be subject to the satisfaction, on or prior
to the Closing Date, of all of the following conditions, any of which conditions
may be waived in writing by Xxxxxxxx Motorcoach:
7.4.1 No Misrepresentations, Breaches or Adverse Events. All
representations and warranties of Featherlite in this Agreement shall be
true and correct as of the Closing Date with the same force and effect as
though made on such date, and there shall have been no material breach by,
or material failure or inability of, Featherlite in the performance of any
of its material covenants or obligations herein.
7.4.2 Approvals; Consents. All other permissions, consents, releases,
or approvals, governmental or otherwise, necessary on the part of
Featherlite to consummate the transactions contemplated by this Agreement
shall have been obtained by Featherlite and delivered to Xxxxxxxx
Motorcoach.
7.4.3 Delivery of Documents. Featherlite shall have executed and
delivered to Xxxxxxxx Motorcoach all of the documents and instruments
required to be delivered by Featherlite to Xxxxxxxx Motorcoach at or prior
to the Closing, including each of the following:
7.4.3.1 Certified copy of resolutions of Featherlite's Board of
Directors authorizing the execution and delivery of this Agreement and
performance of the transactions contemplated herein, including
specifically the authorization of the Exchange.
7.4.3.2 Certificates representing the Featherlite Shares.
7.4.3.3 The employment agreement described in section 5.8.
7.4.3.4 A certificate signed by the chief executive officer and
the chief financial officer of Featherlite with respect to the matters
described in section 7.4.1 hereof.
7.4.4 Legal Opinion. Xxxxxxxx Motorcoach shall have received a
favorable opinion, addressed to Xxxxxxxx Motorcoach, of Xxxxxxxxxx & Xxxxx,
P.A., counsel to Featherlite, dated as of the date of the Closing, in the
form attached as Schedule 7.4.4.
ARTICLE 8
TERMINATION
8.1 Termination Prior to Closing. The obligation of the parties hereto to
consummate the Closing may be terminated and abandoned at any time on or before
the Closing as follows:
8.1.1 By and at the option of Featherlite, upon written notice to
Xxxxxxxx Motorcoach, if the conditions set forth in sections 7.2 and 7.3
have not been satisfied and the Closing shall not have occurred by June 30,
1998.
8.1.2 By and at the option of Xxxxxxxx Motorcoach and the
Shareholders, upon written notice to Featherlite, if the conditions set
forth in sections 7.2 and 7.4 have not been satisfied and the Closing shall
not have occurred by July 31, 1998.
8.1.3 At any time, without liability of any party to the others, upon
the mutual written consent of Xxxxxxxx Motorcoach and Featherlite.
8.2 Consequences of Termination Prior to Closing. In the event of
termination of this Agreement prior to the Closing, (i) each of the parties may
pursue any remedies for any breach of this Agreement available at law or in
equity (subject to section 10.6 hereof), and (ii) each party will return to the
others all documents and materials obtained from the others pursuant to this
Agreement.
ARTICLE 9
SURVIVAL; INDEMNIFICATION
9.1 Survival. All representations, warranties, covenants, and agreements
contained in this Agreement, or any Schedule, certificate, agreement, document,
or statement delivered pursuant hereto, shall survive (and not be affected in
any respect by) the Closing, any investigation conducted by any party hereto, or
any information that any party may receive, and shall remain in full force and
effect until the close of business on the date that is six years after the
Effective Time (the "Indemnity Period"). Upon the expiration of the Indemnity
Period, all such representations, warranties, covenants, and agreements shall
expire, terminate, and be of no further force or effect except as to claims
asserted prior to the expiration of the Indemnity Period; provided, however,
that the covenants and agreements contained herein, to the extent that they
specifically require performance following the Effective Time (all such
specified covenants and agreements are referred to herein collectively as the
"Specified Provisions") shall not expire but shall continue in perpetuity.
9.2 Indemnification by Xxxxxxxx Motorcoach and the Shareholders. Xxxxxxxx
Motorcoach and each of the Shareholders jointly and severally shall indemnify,
defend and hold harmless Featherlite and its officers, directors, shareholders,
employees, agents and affiliates (collectively, all such indemnitees are
referred to in this section as "Featherlite") against and in respect of any and
all claims, demands, losses, obligations, liabilities, damages, deficiencies,
actions, settlements, judgments, costs and expenses (including reasonable costs
and legal fees incident thereto or in seeking indemnification therefor) that
Featherlite may incur or suffer, arising out of or based upon (i) the breach by
Xxxxxxxx Motorcoach or the Shareholders of any of their representations,
warranties, covenants or agreements contained or incorporated in this Agreement
or any agreement, certificate or document executed and delivered to Featherlite
by Xxxxxxxx Motorcoach or any Shareholder in connection with the transactions
hereunder and (ii) Excluded Liabilities. The indemnification provided for under
this section 9.2, as it relates to breaches of Xxxxxxxx Motorcoach's and the
Shareholders' representations, warranties, covenants and agreements contained
herein, shall specifically be interpreted to mean and include, but not be
limited to, the following occurrences for which Xxxxxxxx Motorcoach and each of
the Shareholders jointly and severally shall be liable pursuant hereto: (i)
occurrences prior to the Effective Time that result in any breach giving rise to
indemnification hereunder, regardless of when the claim is made or the loss is
booked; (ii) any losses resulting from returns of product sold after the
Effective Time that was manufactured and booked by Xxxxxxxx Motorcoach as a
receivable prior to the Effective Time, but only to the extent that such losses
exceed the reserve for returns reflected on the Closing Date Balance Sheet;
(iii) any inventory of Xxxxxxxx Motorcoach as of the Effective Time that is
subsequently written off, but only to the extent that the aggregate amount of
such inventory so written off exceeds the reserve for obsolete inventory
reflected on the Closing Date Balance Sheet; and (iv) failure to perform and pay
any Excluded Liabilities. Claims for indemnification shall be satisfied out of,
and recourse shall be limited to, the aggregate number of Featherlite Shares
paid to Xxxxxxxx Motorcoach pursuant to the Exchange; provided, however, that
(i) in the event that Xxxxxxxx Motorcoach sells or transfers all or any portion
of the Featherlite Shares held by Xxxxxxxx Motorcoach prior to the date of a
claim by Featherlite pursuant hereto, the indemnification provided for under
this section 9.2 shall be limited to the aggregate number of Featherlite Shares
that continue to be held by Xxxxxxxx Motorcoach plus (A) a dollar amount equal
to the aggregate proceeds received from any bona fide public sale(s) of the
Featherlite Shares and (B) the aggregate value of the Featherlite Shares sold or
transferred in a transaction other than a bona fide public sale, valuing any
Featherlite Shares so sold or transferred at the Average Market Price (with the
applicable date, for purposes of calculating the Average Market Price, being the
Effective Time), and (ii) Xxxxxxxx Motorcoach shall be permitted to satisfy a
claim for indemnification against Xxxxxxxx Motorcoach either in cash or by
returning to Featherlite the number of Featherlite Shares equal in value to the
amount of the claim, valuing the Featherlite Shares so returned at the Average
Market Price (with the applicable date, for purposes of calculating the Average
Market Price, being the Effective Time). As used in this section 9.2 in
connection with satisfaction of claims for indemnification from the Featherlite
Shares, references to "Xxxxxxxx Motorcoach" shall mean and refer to the
Shareholders following the distribution by Xxxxxxxx Motorcoach to the
Shareholders of the Featherlite Shares, or rights with respect to the
Featherlite Shares held in escrow.
9.3 Indemnification by Featherlite. Featherlite shall indemnify, defend and
hold harmless Xxxxxxxx Motorcoach, and its officers, directors, shareholders,
employees, agents and affiliates (collectively, all such indemnitees are
referred to in this section as "Xxxxxxxx Motorcoach") and each of the
Shareholders against and in respect of any and all claims, demands, losses,
obligations, liabilities, damages, deficiencies, actions, settlements,
judgments, costs and expenses (including reasonable costs and legal fees
incident thereto or in seeking indemnification therefor) that Xxxxxxxx
Motorcoach or the Shareholders may incur or suffer and which are not reimbursed
by insurance, arising out of or based upon (i) breach by Featherlite of any of
its representations, warranties, covenants or agreements contained or
incorporated in this Agreement or any agreement, certificate or document
executed and delivered to Xxxxxxxx Motorcoach or the Shareholders by Featherlite
in connection with the transactions hereunder; (ii) any occurrence subsequent to
Closing (except where such occurrence constitutes a breach of representations,
warranties or covenants of Xxxxxxxx Motorcoach and/or the Shareholders) relating
to the post-closing manufacture and/or sale of products by Featherlite; or (iii)
any claim for employee benefits, salary, compensation or any other claim by an
employee of Featherlite based upon any representation by Featherlite to such
employee in connection with this agreement or based on any occurrence in
Featherlite's control subsequent to Closing.
9.4 Procedure for Claims. If a claim by a third party is made against any
indemnified party, and if the indemnified party intends to seek indemnity with
respect thereto under this Article 9, such indemnified party shall promptly
provide written notice to the indemnifying party of such claim, including the
amount of the claim to the extent then known. With respect to claims for
indemnification made under this Article 9, other than claims with respect to the
Specified Provisions, an indemnifying party shall be liable to an indemnified
party only if such written notice of the claim for indemnification is given by
the indemnified party to the indemnifying party prior to the expiration of the
Indemnity Period; with respect to claims under the Specified Provisions, such
notice can be given at any time after the Effective Time. If such notice is
timely given, the indemnifying party's obligation to indemnify the indemnified
party shall survive the expiration of the Indemnity Period until resolved. If
the indemnifying party hereunder is Xxxxxxxx Motorcoach or the Shareholders,
references in this section 9.4 to actions to be taken by the indemnifying party
shall mean and refer to the actions to be taken by the Shareholders
collectively. The indemnifying party shall have 20 days after receipt of the
above-mentioned notice to undertake, conduct and control, through counsel of its
own choosing (subject to the consent of the indemnified party, such consent not
to be unreasonably withheld) and at its expense, the settlement or defense
therefor, and the indemnified party shall cooperate with it in connection
therewith; provided that: (i) the indemnifying party shall not thereby permit to
exist any Lien upon any asset of any indemnified party, (ii) the indemnifying
party shall permit the indemnified party to participate in such settlement or
defense through counsel chosen by the indemnified party, with the fees and
expenses of such counsel to be borne by the indemnifying party only if and to
the extent that such counsel is necessary by reason of a demonstrable conflict
of interest, and (iii) the indemnifying party shall agree promptly to reimburse
the indemnified party for the full amount of any loss (subject to the
limitations contained in sections 9.2 and 9.3) resulting from such claim and all
related expenses incurred by the indemnified party pursuant to this Article 9.
So long as the indemnifying party is reasonably contesting any such claim in
good faith, the indemnified party shall not pay or settle any such claim. If the
indemnifying party does not notify the indemnified party within 20 days after
receipt of the indemnified party's notice of a claim of indemnity hereunder that
it elects to undertake the defense thereof, the indemnified party shall have the
right to contest, settle or compromise the claim in the exercise of its
exclusive discretion at the expense of the indemnifying party.
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and the successors or assigns of the
parties hereto; provided that the rights of Xxxxxxxx Motorcoach and the
Shareholders herein may not be assigned, and all or any portion of the rights of
Featherlite may be assigned only to a subsidiary of Featherlite or to such
business organization that shall succeed to the business of Featherlite or of
such subsidiary to which this Agreement relates, provided that Featherlite
remains liable for the fulfillment by such assignee(s), in accordance with and
subject to the terms and conditions hereof, of Featherlite's obligations
hereunder.
10.2 Further Assurances; Copies. Xxxxxxxx Motorcoach, the Shareholders and
Featherlite each shall, at the request of the other and without further
consideration, execute and deliver such instruments of assignment, transfer,
license or assumption and take such further actions as the others may reasonably
request in order more effectively to carry out the intents and purposes of this
Agreement and the transactions contemplated hereby. All out-of-pocket expenses
involved in compliance with this section shall be promptly reimbursed by the
requesting party(ies) to the other.
10.3 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be personally delivered or telecopied
(with confirmation of transmission) to the party receiving such notice or shall
be delivered by Federal Express or similar overnight courier, addressed as
follows:
if to Featherlite to: Featherlite Mfg., Inc.
Highways 63 and 9
X.X. Xxx 000
Xxxxxx, Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Telecopy No. (000) 000-0000
with a copy to: Xxxxxxxxxx & Xxxxx, P.A.
000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No. (000) 000-0000
if to Xxxxxxxx Motorcoach or the Shareholders to:
Xxxxxxxx Motorcoach Sales, Inc.
X.X. Xxx 000
Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Xxxxxxxx X.
Xxxxxxxx, Xxxxxx Xxxxxxx and Xxxx Xxxxxx
Telecopy No. (000) 000-0000
with a copy to: C. Xxxxxxx Xxxxxxxx
Jones, Givens, Xxxxxxx & Xxxxx
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Telecopy No. (000) 000-0000
Any party may change the above-specified recipient and/or mailing address by
notice to the other party given in the manner herein prescribed. All notices
shall be deemed given on the day when actually delivered as provided above, if
delivered personally or by telecopy, or the business day after the date
deposited, if delivered by Federal Express or similar overnight courier.
10.4 Public Announcement. Each of the parties to this Agreement hereby
agrees with the other parties hereto that, except as may be required to comply
with the requirements of applicable law and the Nasdaq National Market, no press
release or similar public announcement or communication will be made or caused
to be made concerning the execution or performance of this Agreement unless
specifically approved in advance by Featherlite and Xxxxxxxx Motorcoach.
10.5 Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Minnesota, including all matters of
construction, validity, performance and enforcement, without giving effect to
principles of conflict of laws.
10.6 Arbitration. Any dispute arising out of or relating to this Agreement
or the alleged breach of it, or the making of this Agreement, including claims
of fraud in the inducement, shall be discussed between the disputing parties in
a good-faith effort to arrive at a mutual settlement of any such controversy.
If, notwithstanding, such dispute cannot be resolved, such dispute shall be
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association, and judgment upon the award may be entered
in any court having jurisdiction of the controversy. The arbitrator shall be a
retired state or federal judge or an active or retired attorney experienced in
business or commercial litigation selected by agreement of the parties. If they
cannot so agree within 20 days, any party may request that the chief judge of
the District Court for Hennepin County, Minnesota (or such other court elsewhere
as may have jurisdiction of the parties and appropriate subject matter
jurisdiction), select a retired judge or, if one is not available, an attorney
experienced in business or commercial litigation. The costs of the proceedings
shall be shared equally by the disputing parties.
10.7 Severability and Interpretation. In the event that any provision of
this Agreement is held invalid by a court of competent jurisdiction, the
remaining provisions shall nonetheless be enforceable according to their terms.
Any provision held overbroad as written shall be deemed amended to narrow its
application to the extent necessary to make the provision enforceable under
applicable law, and enforced as amended. This Agreement shall be construed
without regard to any presumption or other rule requiring construction hereof
against the party causing this Agreement to be drafted.
10.8 Benefit. Nothing in this Agreement, expressed or implied, is intended
to confer on any person other than the parties hereto or their respective
permitted successors or assigns any rights, remedies, obligations or liabilities
under or by reason of this Agreement.
10.9 Entire Agreement; Modification and Waiver. This Agreement, together
with the Schedules and the related written agreements specifically referred to
herein, represents the only agreement among the parties concerning the subject
matter hereof and supersedes all prior proposals or agreements, whether written
or oral, relating to the subject matter hereof, including but not limited to the
Letter Agreement. No purported amendment, modification, or waiver of any
provision hereof shall be binding unless set forth in a written document signed
by all parties. Any waiver shall be limited to the circumstance or event
specifically made subject thereto and shall not be deemed a waiver of any other
term hereof or of the same circumstance or event upon any recurrence thereof.
10.10 Counterparts. This Agreement may be executed in counterparts and by
different parties on different counterparts with the same effect as if the
signatures thereto were on the same instrument. This Agreement shall be
effective and binding upon all parties hereto at such time as all parties have
executed a counterpart of this Agreement.
IN WITNESS WHEREOF, each of the parties has duly executed this Agreement
effective as of the day and year first above written.
FEATHERLITE MFG., INC.
By /s/ X. Xxxxxxx
Its President
XXXXXXXX MOTORCOACH SALES, INC.
By /s/ Xxxxxx X. Xxxxxxxx
Its President
/s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxxxx X. Xxxxxxxx
Xxxxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
/s/ Xxxx Xxxxxx
Xxxx Xxxxxx
SCHEDULES
1.33 Permitted Liens
2.2.3 Excluded Contracts (Not Assigned or Assumed)
2.3 Excluded Assets
2.5.2(i) Obligations to Institutional and Other Lenders
2.5.2(ii) Finance and Capital Lease Obligations
2.5.2(iii) Accrued Benefit Obligations
2.5.2(iv) Other Permitted Liabilities
3.1 Foreign Qualifications
3.4 Corporate Authority Matters
3.7 Liabilities
3.8 Changes and Events
3.9(i), (ii)
and (iii) Assets and Liens
3.10 Intellectual Property
3.11 Licenses, Permits, Etc.
3.12 Litigation
3.14 Contracts
3.15 Insurance
3.16 Accounts Receivable
3.17 Scheduled Plans (ERISA and non-ERISA)
3.18 Employees
3.19 Bank Accounts
5.8 Form of Employment Agreement
5.9 Employment Matters
7.2.1 Required Approvals
7.3.5 Form of Opinion of Xxxxxxxx Motorcoach's Counsel
7.4.4 Form of Opinion of Featherlite's Counsel
APPENDICES
A. Litigation Pledge Agreement
