Exhibit 2.1
Stock Purchase Agreement between
Sooner Investment Manufacturing Company (Purchaser) and
Owosso Corporation (Seller), dated January 19, 2001.
STOCK PURCHASE AGREEMENT
between
SOONER INVESTMENT MANUFACTURING COMPANY
(Purchaser)
and
OWOSSO CORPORATION
(Seller)
January 19, 2001
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is dated the 19th day of
January, 2001 by and between Owosso Corporation, a Pennsylvania corporation (the
"Seller"), and Sooner Investment Manufacturing Company, an Oklahoma corporation
(the "Purchaser").
Background
WHEREAS, the Seller has agreed to sell and the Purchaser has agreed to
purchase the common stock, par value $0.01 per share, of Sooner Trailer
Manufacturing Co. ("Sooner" or the "Company") owned by the Seller which, on the
Closing Date (as hereafter defined), constitutes one hundred percent (100%) of
the issued and outstanding shares of said common stock (such shares of common
stock are hereinafter referred to as the "Shares"); and
WHEREAS, the Seller desires to sell the Shares and the Purchaser
desires to purchase the Shares on the terms and conditions set forth in this
Agreement:
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NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Seller and the Purchaser hereby agree as
follows:
1. Sale of Shares.
1.1 Sale and Purchase. Subject to the terms and conditions of this
Agreement, at the Closing (as hereafter defined), the Seller hereby agrees to
sell to the Purchaser, and the Purchaser hereby agrees to purchase from Seller,
the Shares.
1.2 Books and Records. On the Closing Date (as hereafter defined), the
Seller shall, or shall cause the Company to, deliver to the Purchaser, or turn
over to the Purchaser's representatives, all minute books, stock record books,
corporate seals, and certificates representing all of the issued and outstanding
stock of the Company, and the original copies of all lists, files and other
documents of any kind or nature belonging to the Company and necessary or
desirable in the Purchaser's judgment for the on-going conduct of the Company's
business, whether in the possession of the Seller or the Company.
1.3 Resignations. On the Closing Date, the Seller will make available
to the Purchaser the written resignations of all the directors and officers of
the Company effective as of the Closing Date, with the exception of such
officers and directors as the Purchaser shall designate in writing.
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2. Purchase Price.
2.1 Aggregate Purchase Price. Subject to the adjustments of Section 2.2
below, the consideration payable to the Seller for the Shares shall be Eleven
Million Five Hundred Thousand Dollars ($11,500,000) (the "Purchase Price")
payable by wire transfer of immediately available federal funds to the Seller at
the Closing.
2.2 Adjustment to Purchase Price.
(a) Subsequent to the Closing Date and for sixty (60) days then
following, the Purchaser shall cause the Company to make appropriate
accounting entries consistent with past policies, procedures and practices
on its books and prepare and deliver to the Seller the tentative closing
balance sheet of the Company as of the Closing Date calculated and prepared
in accordance with, and consistent with, the policies, practices and
procedures used in preparing the October 29, 2000 financial statements (the
"Tentative Closing Balance Sheet").
(b) If the Seller and the Purchaser agree on the form and content of
the Tentative Closing Balance Sheet, then it will be deemed to be accepted
by all parties for all purposes. In the event that the Seller does not
agree on the form and content of the Tentative Closing Balance Sheet, then
the Seller shall deliver a written notice (the "Notice of Objection") to
the Purchaser specifying the nature of the objection or dispute and, upon
the Seller's written request, the Purchaser shall cause the Company to
provide the Seller with reasonable access to the books and records relating
to the Tentative Closing Balance Sheet, as well as the appropriate
personnel used in connection with the preparation thereof. If a Notice of
Objection is not sent by the Seller by the fifteenth (15th) day following
the date the Seller receives the Tentative Closing Balance Sheet, then the
Tentative Closing Balance Sheet will be deemed to be accepted by all
parties for all purposes.
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(c) The parties will work expeditiously and in good faith to attempt to
resolve any dispute within a period of twenty (20) days after the date of
the Notice of Objection. If such dispute cannot be resolved within such
twenty (20) day period then, within the next fifteen (15) days following
the end of the twenty (20) day period, the Seller shall submit the
Tentative Closing Balance Sheet and the Notice of Objection to
PriceWaterhouseCoopers, or another accounting firm mutually agreeable to
the parties, with a request that such accounting firm make a determination
as to the propriety of the Notice of Objection and to specify the form and
content of the Tentative Closing Balance Sheet. The parties shall use their
best efforts to cause the determination of such accounting firm to be made
within fifteen (15) days, and such determination shall be final and binding
upon the parties and shall not be subject to appeal absent manifest error.
The balance sheet agreed upon by the parties or, if none, determined by
such accounting firm is herein referred to as the "Final Closing Balance
Sheet." All parties shall cooperate fully with such accounting firm in
making the final determination and will promptly provide all necessary and
required documents, working papers, personnel interviews and other
assistance.
(d) If such accounting firm agrees with the position set forth in the
Notice of Objection entirely, then the costs and expenses of such
accounting firm in the determination will be borne entirely by the
Purchaser. If such accounting firm rejects entirely the position taken by
the Seller in the Notice of Objection, then the costs and expenses of such
accounting firm in making the determination will be borne entirely by the
Seller. If such accounting firm partially accepts and partially rejects the
position taken by the Seller in the Notice of Objection, then each party
will pay a pro rata amount, based on the final determination, of the costs
and expenses of such accounting firm. The Seller and the Purchaser shall
each bear its own costs in presenting its respective cases to such
accounting firm.
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(e) If no Notice of Objection has been served, then within twenty (20)
days after receipt of the Tentative Closing Balance Sheet, or if a Notice
of Objection has been served and the parties have resolved all disputes,
within ten (10) days of such final resolution, or if a Notice of Objection
has been served and submitted to such accounting firm, then within ten (10)
days of such accounting firm's determination, the Purchaser shall pay to
the Seller by wire transfer of immediately available federal funds the
amount by which the Working Capital, as defined below, as determined from
the Final Closing Balance Sheet, exceeds $7,098,741, or the Seller shall
pay to the Purchaser by wire transfer of immediately available federal
funds the amount by which the Working Capital, as determined from the Final
Closing Balance Sheet, is less than $7,098,741, as an adjustment to the
Purchase Price; provided, however, that the Purchaser shall have the option
to defer, without interest, the payment to the Seller of any amounts
required under this Section 2.2 until the sixtieth (60th) day after the
date otherwise required for payment, and the Purchaser agrees that it shall
not have the right to offset such payment by any indemnification or other
obligation from the Seller to which the Purchaser is entitled or otherwise
to reduce or defer such payment. The determination and adjustment of the
Purchase Price in accordance with the provisions of this Section 2.2 shall
not limit or affect any other rights or causes of action that either the
Purchaser or the Seller may have with respect to the representations,
warranties, covenants and indemnities in its favor contained in this
Agreement; provided, however, that no party shall be entitled to more than
one recovery or satisfaction (via indemnification or adjustment to purchase
price, or otherwise) by reason of the same loss or by reason of the same
facts or events.
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(f) For purposes of this Section 2.2, Working Capital shall mean (i)
the sum of the Company's inventory at net book value, cash and cash
equivalents, and net accounts receivable less (ii) the current payables of
the Company, calculated and prepared in accordance with, and consistent
with, the policies, procedures and practices used in preparing the October
29, 2000 financial statements. Attached as Schedule 2.2(f) is the
computation of Working Capital, as herein defined, as at October 29, 2000.
3. The Closing.
The closing of the transactions contemplated hereby (the "Closing")
shall be held at 9:00 a.m. on or before January 31, 2001, at the offices of
Xxxxxxx Xxxxxx Xxxxx & Xxxxxxx, 1600 Bank of Oklahoma Plaza, 201 Xxxxxx X. Xxxx,
Oklahoma City, Oklahoma, or at such other time and date as the Purchaser and the
Seller may agree in writing (the "Closing Date"). At the Closing, in addition to
the deliveries required by Sections 1.2 and 10 (a) the Seller shall (i) deliver
to the Purchaser certificate(s) evidencing the Shares, together with duly
executed stock powers for transfer to the Purchaser, and all other good and
sufficient instruments of transfer and conveyance as may be necessary in the
Purchaser's reasonable opinion to vest in the Purchaser good, legal and
beneficial title to the Shares and (ii) pay or provide for payment of the stay
bonus referred to in Section 4.21(f) of the Seller's Disclosure Schedule; and
(b) the Purchaser shall pay to the Seller the Purchase Price by wire transfer of
immediately available federal funds, as required by Section 2.
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4. Representations and Warranties of the Seller.
The Seller, as of the date hereof and as of the Closing Date,
represents, warrants and covenants, where applicable, to the Purchaser that,
except as otherwise set forth on Schedule 4 hereto (the "Seller's Disclosure
Schedule"):
4.1 Corporate Organization and Status. The Company is a corporation,
duly organized, validly existing and in good standing under the laws of
Delaware, and has all requisite corporate power and authority to own, lease and
operate its assets and properties and to conduct and operate its business as
heretofore and now being conducted.
4.2 Qualification. The Company is duly qualified or licensed as a
foreign corporation to do business and is in good standing in Oklahoma and in
all other states or jurisdictions in which the nature of its business as
presently operated by it or the character of the property owned or leased by it
makes such qualification or authorization necessary, except in such
jurisdictions where the failure to be so qualified or licensed and in good
standing would not have an effect which is materially adverse to the business
and financial condition of the Company taken as a whole (a "Material Adverse
Effect").
4.3 Authority to Execute and Perform Agreement; Authorization; Binding
Effect; No Breach. The Seller has the corporate power and all authority and
approvals required to execute and deliver this Agreement and the other documents
contemplated to be delivered at the Closing (the "Ancillary Agreements") to
which the Seller is a party and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the Ancillary
Agreements by the Seller and the performance of its obligations hereunder and
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thereunder have been duly authorized by all necessary corporate action of the
Seller. This Agreement and the Ancillary Agreements have been duly executed and
delivered by the Seller and constitute, or when executed and delivered by the
Seller will constitute, the legal, valid and binding obligation of the Seller,
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, arrangement, moratorium, reorganization, insolvency and other laws
and to equitable principles affecting enforcement of the rights of creditors or
obligations of debtors generally. Except as otherwise set forth in this
Agreement or the Seller's Disclosure Schedule attached hereto, no approval or
consent of any other person is required in connection with the execution and
delivery by the Seller of this Agreement and the Ancillary Agreements and the
consummation and performance by the Seller of the transactions contemplated
hereby and thereby, except for such consents and approvals which will have to be
obtained prior to the Closing. The execution, delivery and performance of this
Agreement and the Ancillary Agreements by the Seller and the consummation of the
transactions contemplated hereby and thereby by the Seller will not (i) violate
any provision of the Articles of Incorporation or By-laws of the Seller; (ii)
violate, conflict with or result in the breach of any of the terms of, result in
a material modification of, otherwise give any other contracting party the right
to terminate, or constitute (or with notice or lapse of time or both constitute)
a default under, any material contract or agreement to which the Seller or the
Company is a party or by or to which the Seller or the Company or their
respective assets or properties may be bound or subject; (iii) violate any
order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body by which the Seller or the Company, or the
assets or properties of the Seller or the Company are bound; or (iv) violate any
statute, law or regulation in any material respect.
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4.4 Authorized and Issued Capital; Options and Warrants.
(1) The Company's authorized capital consists of 1,000 shares of common
stock, of which 200 shares are issued and outstanding and owned of record and
beneficially by the Seller.
(2) All of the Shares have been duly authorized and validly issued, are
fully paid and nonassessable, and have been issued in conformity with all laws.
There are no preemptive rights with respect to the Shares.
(3) The Company has not issued any securities exercisable for or
convertible into equity securities of the Company, nor is it legally bound to
issue any equity securities.
(d) The Company has no subsidiaries or equity interests in any other
entities.
(e) There are no outstanding or authorized stock appreciation, phantom
stock, profit participation, or similar rights with respect to the Company.
There are no voting trusts, proxies or other agreements or understandings with
respect to the voting of the capital stock of the Company. There are no
obligations outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other contracts or
binding commitments that would require the Company to issue, sell, or otherwise
cause to become outstanding any of its capital stock.
4.5 Title to the Shares. The Seller is the record and beneficial owner
of the Shares, which constitute all of the issued and outstanding shares of
capital stock of the Company. The Seller has, and upon delivery of the duly
executed stock powers pursuant to this Agreement the Purchaser shall acquire,
good, marketable and valid title to the Shares, free and clear of all liens or
other encumbrances (except for any restrictions imposed by the Securities Act of
1933, as amended, and any applicable state securities laws).
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4.6 Financial Statements. The Seller has delivered to the Purchaser
copies of the Company's unaudited financial statements at October 31, 1999 and
October 25, 1998 (which financial statements were prepared for and included in
the Seller's audited financial statements), and the Company's unaudited
financial statements at October 29, 2000 (collectively, the "Company's Financial
Statements"); copies of which are included in the Seller's Disclosure Schedule.
The Company's Financial Statements (a) have been prepared and presented in
accordance with generally accepted accounting principles ("GAAP") applied on a
basis consistent throughout the periods indicated (except as otherwise noted
therein), except that the Company's Financial Statements do not contain all
disclosures, including footnotes, which are required by GAAP, (b) were prepared
from the books and records of the Company, which books and records are complete
and correct in all material respects and fairly reflect all material
transactions of the Company's business as a member of the Seller's consolidated
group, and (c) present fairly the financial condition and the results of
operations of the Company as of the dates thereof and for the periods indicated,
except, as to (a), (b) and (c), that such Company's Financial Statements do not
reflect or contain any accrual or reserve for medical or health claims, workers
compensation, corporate allocations or federal taxes.
4.7 Compliance with Laws. The Company has complied in all material
respects with, and at Closing is conducting its business in all material
respects in accordance with, all applicable federal, state and local statutes
and regulations, except where a failure so to comply would not have a Material
Adverse Effect. The Seller's Disclosure Schedule sets forth a list of all
permits, licenses and other authorizations of any federal, state or local
governmental or regulatory bodies necessary for and material to the conduct of
the Company's business as heretofore conducted in the ordinary course
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(collectively, "Permits"). All such Permits are in full force and effect and
there are no proceedings pending or, to the knowledge of the Seller, threatened
which would result in the revocation or cancellation of any Permits. The
consummation of the transactions contemplated hereby will not result in any such
revocation or cancellation.
4.8 Litigation. Except as set forth in the Seller's Disclosure
Schedule, there is no action, suit, arbitration or other legal or administrative
proceeding or governmental or other investigation pending or, to the knowledge
of the Seller, threatened against the Company or with respect to the Company's
business.
4.9 Real Property.
(1) The Seller's Disclosure Schedule sets forth a complete listing and
description of all real property owned beneficially or of record (the "Owned
Real Property"), or leased (the "Leased Real Property") by the Company
(collectively, the "Real Property"). There are no options, licenses, leases,
rights of first refusal, conditional sale agreements, or similar arrangements
respecting any Owned Real Property, or any portion thereof or interest therein.
(2) The Company holds title to all Owned Real Property subject to no
liens or other encumbrances.
(3) There are no actions, suits or proceedings pending or, to the
knowledge of the Seller, threatened to condemn all or any material portion of
any of the Real Property pursuant to a power of eminent domain or similar
governmental authority. There are no laws, statutes or ordinances or building or
use restrictions or zoning laws applicable to any Real Property which prohibit
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the uses presently being made thereof by the Company. The Company is not a party
to any contract or agreement with any governmental or regulatory body or taxing
authority the subject matter of which concerns the abatement of any taxes or
assessments on any Real Property or any amounts due in lieu of any taxes or
assessments on any Real Property. No assessment for public improvements, such as
sewer and water lines and mains, streets, sidewalks and curbs, has been made
against any of the Real Property which remains unpaid. No public improvement
with respect to any Real Property has been ordered to be made which has not been
heretofore completed, and the costs therefor assessed and paid. There are no tax
abatements or exemptions affecting the Real Property. There are no parties
(other than the Company) in possession of any portion of the Owned Real
Property.
(4) The Seller's Disclosure Schedule sets forth a listing of all leases
and subleases under which the Company is lessor or lessee of any real property
(collectively, "Leases"). With respect to each Lease, neither the Company nor,
to the Seller's knowledge, any other party thereto is in material default or
breach thereunder. The Leases, copies of which (or summaries of oral leases)
have been delivered to the Purchaser, are in full force and effect and the
Company has not received any notice of any default by any other contracting
party thereunder. No approval or consent of any person is needed in order that
any Lease does not become unenforceable by the Company as a result of the
consummation of the transactions contemplated by this Agreement.
4.10 Inventory. The inventory shown on the Company's Financial
Statements consists of items of a quantity, quality and condition saleable in
the ordinary course of the Company's business at the value reflected therefor in
the Company's Financial Statements. The value of all obsolete materials and
finished goods in the inventory shown on the Company's Financial Statements has
been written down to net realizable value or adequate reserves have been
provided therefor, and the values at which inventories are carried on the
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Company's Financial Statements, unless otherwise indicated, reflect the normal
inventory valuation procedures of the Company of stating inventories at the
lower of cost or market.
4.11 Accounts Receivable. The accounts receivable reflected in the
Company's Financial Statements are valid receivables, are fully collectible
(subject to the reserve for bad debts in the Company's Financial Statements) in
the ordinary course of the Company's business using reasonable diligence and
customary business practices, are not subject to any setoff or counterclaim, and
arose from arms' length transactions in the ordinary course of the Company's
business.
4.12 Contracts and Other Agreements. The Seller's Disclosure Schedule
sets forth all of the following contracts and other agreements (other than the
Leases) to which the Company is a party or by which the Company or its assets or
properties are bound or subject and which involve more than $20,000: (i)
contracts and other agreements with any labor union or association representing
employees in employment negotiations; (ii) contracts, including but not limited
to dealer agreements, having a term of more than one year not entered into in
the ordinary course of business for the purchase or sale of materials, supplies,
merchandise, equipment or services; (iii) contracts and other agreements for the
sale of any of assets or properties (other than contracts and other agreements
in the ordinary course of business) or for the grant to any person of any
preferential rights to purchase any assets or properties; (iv) joint venture and
partnership agreements; (v) contracts or other agreements under which the
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Company has agreed to indemnify any party or to share any liability of any party
including, without limitation, liability with respect to taxes, other than
contracts and other agreements regarding the sale of goods in the ordinary
course of business; (vi) contracts and other agreements with customers, dealers
or suppliers for the sharing of fees, the rebating of charges or other similar
arrangements; (viii) contracts and other agreements containing covenants of the
Company not to compete in any line of business or with any person in any
geographical area; (viii) contracts and other agreements relating to the
acquisition by the Company of any operating business or the capital stock of any
other person; (ix) options for the sale or purchase of any stock, note or other
security; (x) contracts and other agreements requiring the payment to any person
of a royalty, override or similar commission; (xi) contracts and other
agreements relating to the borrowing of money or the incurrence of indebtedness;
(xii) guarantees, performance or completion bonds and surety agreements; (xiii)
contracts of agency, representation, distribution or franchise; and (xiv)
contracts for the employment for any period of time whatsoever, or restricting
the employment, of any salaried employee. There have been delivered to the
Purchaser copies of all of the contracts and other agreements set forth or
required to be set forth on the Seller's Disclosure Schedule or, if unwritten,
accurate summaries of all of the material terms thereof, and there are no other
material terms of such contracts or other agreements except as set forth on such
copies and/or summaries. All of such contracts and other agreements are valid,
in force and binding upon the Company and, to the Seller's knowledge, the other
parties thereto, in accordance with their terms; and neither the Company nor, to
the Seller's knowledge, the other parties thereto, are in material default under
any of them. No approval or consent of any person is needed in order that the
contracts and other agreements set forth on the Seller's Disclosure Schedule
continue in full force and effect following the consummation of the transactions
contemplated by this Agreement.
4.13 Trade Secrets, Patents, Trademarks, Etc. All trade secrets,
computer software, patents, patent applications, registered copyrights, trade
names, registered trademarks, trademark applications, and other material
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intellectual property rights (collectively, the "Rights") owned or licensed to
the Company necessary and material to the conduct of the Company's business in
the ordinary course as heretofore conducted are listed on the Seller's
Disclosure Schedule. All patents, registered trademarks, service marks and
copyrights held by the Company are valid and enforceable. The Company owns or
possesses adequate and legally enforceable rights to use the Rights. The Company
has not granted any outstanding licenses or other rights to any patent,
registered copyright, registered trademark, or trade name listed or required to
be listed on the Seller's Disclosure Schedule, nor is the Company under any
binding obligation to grant the same. The Seller has no knowledge of any claim
or basis for any claim that the Company is or may be infringing on the rights of
any person under or in respect of any Rights. The Company is not obligated or
under any liability whatsoever to make any payments by way of royalties, fees,
or otherwise to any owner or licensee of, or other claimant to, any Rights. The
Company will not, as a result of the execution and delivery of this Agreement or
any of the Ancillary Agreements or the performance of its obligations hereunder
and thereunder, be in breach of any license, sublicense or other agreement
relating to the Rights.
4.14 Title to Assets. The Company has good, valid and marketable title
to, or the valid, legal right to hold or use, the tangible personal property
used or owned by it, including but not limited to the personal property
reflected in the Company's Financial Statements, free and clear of all liens and
encumbrances.
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4.15 Undisclosed Liabilities. The Company does not have any
indebtedness or liabilities (and to the Seller's knowledge there is no existing
basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against the Company giving
rise to any such indebtedness or liabilities) which are not reflected in the
Company's Financial Statements and which would be required under GAAP to be
reflected in the Company's Financial Statements, except as have arisen,
consistent with past business practices, reasonably and in the ordinary course
of business subsequent to the dates of such Financial Statements.
4.16 Suppliers and Customers. The Seller's Disclosure Schedule sets
forth an accurate list of the Company's ten largest customers and suppliers by
dollar value for the period from November 1, 1999 through October 29, 2000. The
Seller has no knowledge that any material supplier or customer of the Company
currently intends, or intends if the transactions contemplated hereby are
consummated, to cancel or otherwise modify its relationship with the Company or
to decrease materially its services, supplies or materials provided to the
Company or its usage or purchase of the services or products of the Company's
business, such that, as a result thereof, there would be a Material Adverse
Effect.
4.17 Employee Benefit Plans. The Seller's Disclosure Schedule contains
a list of any of the following which relate to or cover any employees of the
Company or their beneficiaries: (i) "employee pension benefit plans",
"employment benefit plans" and "employee welfare benefit plans", as defined,
respectively, in Sections 3(2), 3(3) and 3(1) of the Employee Retirement Income
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Security Act of 1974, as amended ("ERISA"), including "multiemployer plans" as
defined in Section 3(37) of ERISA, and (ii) any other pension, profit sharing,
retirement, deferred compensation, stock purchase, stock option, incentive,
bonus, vacation, severance, disability, hospitalization, medical insurance or
other employee benefit plan, policy or program which the Company or any
subsidiary, affiliate or any other entity which is a member of a controlled
group (within the meaning of Section 4001(b) of ERISA and/or Sections 414(b)-(n)
of the Internal Revenue Code of 1986, as amended (the "Code")) including the
Company or to which the Company has any obligation to contribute (the "Plans").
The Seller has delivered or made available to the Purchaser copies of all
documents embodying or relating to any Plan.
(1) The Company maintains no other employee pension benefit plan as
defined in ERISA Section 3(2) for the benefit of employees of the Company's
business.
(2) With respect to each Plan, such Plan is in substantial compliance
with all applicable provisions of ERISA, the Code and any other applicable law;
no termination, partial termination or reportable event has occurred and no
liability to the Pension Benefit Guaranty Corporation ("PBGC") has been incurred
(other than normal premiums and fees due the PBGC); no accumulated funding
deficiency within the meaning of ERISA Section 302 and Section 412 of the Code
has been incurred, and no such accumulated funding deficiency has been waived by
the PBGC; and all contributions or premiums required to be made to such Plan or
the PBGC have been made.
(3) The Company is not obligated to contribute to any multiemployer
plan as defined in ERISA Section 3(37) in which any employee of the Company's
business is a participant. The Company has never completely or partially
withdrawn (within the meaning of the Multiemployer Pension Plan Amendments Act
of 1980 ("MPPAA")) from any multiemployer plan.
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(4) Neither the Company nor any other "disqualified person" or "party
in interest" (as defined in Section 4975 of the Code and ERISA Section 3,
respectively) has engaged in any "prohibited transaction" as such term is
defined in Section 4975 of the Code or ERISA Section 406, which would subject
any of the Plans (or their related trusts), the Company or any officer,
director, employee or shareholder of the Company or any trustee, administrator
or any other fiduciary of any of the Plans to any material tax or penalty,
including those imposed under Section 4975 of the Code or ERISA Section 502(e),
with respect to the employees of the Company.
(5) There are no material actions, audits, suits or claims pending or,
to the knowledge of the Seller, threatened against the Company with respect to
any Plan.
(f) Since October 31, 1994, all contributions to and payments from the
Plans which may have been required to be made in accordance with the Plans and,
when applicable, Section 302 of ERISA or Section 412 of the Internal Revenue
Code, have been timely made. All such contributions to the Plans, and all
payments under the Plans, except those to form a trust qualified under Section
401(a) of the Internal Revenue Code, for any period ending before the Closing
Date that are not yet, but will be, required to be made are disclosed in the
Seller's Disclosure Schedule. Except as disclosed in the Seller's Disclosure
Schedule, the Company has funded or will fund each Plan in accordance with its
terms through the Closing, including the payment of applicable premiums on any
insurance contract funding a Plan for coverage provided through the Closing.
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4.18 Employee Relations. The Company is not a party to any union,
collective bargaining or similar agreement with respect to employees of the
Company's business, nor to the knowledge of the Seller is there currently any
organizing drive or campaign on behalf of any union or other employees'
association. The Company's business has not at any time during the last three
years had a strike, work stoppage or work slowdown relating to the Company's
business. To the Seller's knowledge, no present employee has requested that a
"reasonable accommodation" under the Americans With Disabilities Act be made for
him or her. Except as set forth in the Seller's Disclosure Schedule, each
employee of the Company is an employee-at-will, and no employee has any
agreement as to length of notice or severance payment required to terminate his
or her employment.
4.19 Product Liability Claims. The Company has no liability in excess
of the accrual for warranty claims on the Final Closing Balance Sheet (and, to
the knowledge of the Seller, there is no existing basis for any present or
future action, suit, proceeding, hearing, investigation, charge, complaint,
claim or demand against the Company giving rise to any liability based upon
events which will have occurred prior to Closing) arising out of any injury to
individuals or property as a result of the ownership, possession or use of any
product manufactured or delivered by the Company prior to Closing. The Company
has delivered to the Purchaser a narrative of all incidents, events and claims
under all policies of product liability insurance relating to the Company to the
extent such incidents, events and/or claims arose within five (5) years prior to
the date hereof, or are continuing on the date hereof. The Company is an insured
under all policies of insurance relating to product liability for and against
covered claims for product liability based on claims made prior to the Closing
Date. To the knowledge of the Seller, the above-described coverage is adequate
considering the Company's claims history and the industry taken as a whole. For
purposes of Sections 4.19, 4.20, 12.1(v), 12.2 and 12.3(v), the Company shall be
deemed to have manufactured a product if the serial number for the product is
affixed to the product by the Company.
19
4.20 Products. Each product heretofore manufactured or delivered by the
Company has been in material conformity with all applicable contractual
commitments and all express and implied warranties of the Company, and the
Company has no liabilities in excess of the accrual for warranty claims on the
Final Closing Balance Sheet (and, to the knowledge of the Seller, there is no
existing basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against the Company giving
rise to any liability based upon events which will have occurred prior to
Closing) for replacement or repair thereof or other damages in connection
therewith. No product heretofore manufactured or delivered by the Company is
subject to any written guaranty, warranty or other indemnity beyond the
applicable standard terms and conditions of sale or lease as set forth in the
Seller's Disclosure Schedule. There are no orders or decrees of any court or
governmental or regulatory body by which the Company is bound and, to the
knowledge of the Seller, no citations or decisions against the Company by any
governmental or regulatory body that any product manufactured, marketed or
distributed by the Company is defective or fails to meet any safety standards
promulgated by any such governmental or regulatory body. There have been no
recalls ordered by any such governmental or regulatory body with respect to any
product within the last three (3) years.
4.21 Absence of Changes. Since October 29, 2000, the Company has
operated its business in the ordinary course of business and has not:
20
(1) mortgaged, pledged or subjected to any lien or other encumbrance
any of its assets or properties;
(2) acquired or disposed of any material assets or properties except in
the ordinary course of business;
(3) except in the ordinary course of business, forgiven or canceled
without consideration any material debts;
(4) canceled, terminated or amended any material agreement relating to
the conduct of the Company's business, except in the ordinary course;
(5) incurred or assumed any material debt or material liability, except
in the ordinary course of business;
(6) except in the ordinary course of business, made or given any wage
or salary increase or bonus, or increase in any other direct or any indirect
compensation or any severance or termination pay, for or to any of the
directors, officers or employees of the Company, other than a certain stay bonus
for Xxx Xxxxxxxx, provided such stay bonus is paid by the Seller and not the
Company;
(7) entered into, amended or terminated any employment agreement except
in the ordinary course of business, or any agreement with any labor union or
association representing any employee or adopted or entered into any Plan;
(8) entered into any lease (as lessor or lessee);
21
(9) except in the ordinary course of business, sold, abandoned or made
any disposition of any of its material assets or properties; or
(10) except in accordance with their terms or in the ordinary course of
business, terminated any contract or other agreement set forth on the Seller's
Disclosure Schedule.
4.22 Absence of Certain Commercial Practices. The Company has not,
directly or indirectly, given or agreed to give any unlawful gift or similar
benefit to any customer, supplier, governmental employee, employee or official
of a domestic or foreign government or political party or any other person who
is or may be in a position to help or hinder or assist the Company in connection
with any actual or proposed transaction, nor does it maintain any unaccounted
fund for such purpose.
4.23 Insurance. All inventories, machinery, equipment, buildings,
improvements, and other tangible assets and properties owned or leased by the
Company are, and between the date hereof and the Closing Date will be, insured
against fire and casualty under the policies and in the amounts and types of
coverage set forth in the Seller's Disclosure Schedule and such policies are,
and between the date hereof and the Closing Date will be, outstanding and duly
in force and the premiums thereon fully paid when and as the same are due and
payable. The Seller has delivered to the Purchaser a list of all insurance
policies or binders of insurance or programs of self-insurance which insure the
Company and relate to the Company's business. To the knowledge of the Seller, no
notice of cancellation or nonrenewal with respect to, or disallowance of any
material pending claim under, any such policy or binder has been received by
Company.
22
4.24 Taxes. The Company has timely filed or caused to be timely filed
all federal, state and local tax returns required to be filed by it and all such
tax returns are true, correct and complete in all material respects. The Company
has paid all taxes which have become due and payable by it (whether reflected on
said tax returns or otherwise). The Seller has delivered to the Purchaser
correct and complete copies of all federal, state, and local tax returns for the
periods covered by the Seller's Financial Statements. The Company's federal
income and excise tax liabilities with respect to any returns as to which the
statute of limitations on assessment remains open have not been audited by the
Internal Revenue Service. The Company has not waived any statute of limitations
in respect of taxes or agreed to any extension of time with respect to any tax
assessment or deficiency. The Company has withheld and paid all taxes required
to have been withheld and paid in connection with amounts paid or owing to any
person. Since October 31, 1994, no claim has been made by any authority in any
jurisdiction where the Company does not file tax returns that the Company is or
may be subject to taxation by that jurisdiction. The Company has no reason to
believe that any taxing authority may assess any additional taxes for any period
for which tax returns have been filed. There is no dispute or claim concerning
any tax liability of the Company either (i) claimed or raised by any taxing
authority in writing or (ii) as to which the Seller has knowledge. The unpaid
taxes of the Company did not, as of October 29, 2000, exceed the reserve for tax
liabilities set forth in the Company's Financial Statements.
23
4.25 Environmental Matters. "Environmental Law" means any federal,
state or local statute, law, rule, regulation, ordinance or legal requirement
relating to pollution, protection of public health, safety, welfare or the
environment including those relating to emissions, discharges, releases or
threatened releases of Hazardous Substances into the environment (including
ambient air, surface water, ground water, soil or land) or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances.
"Hazardous Substance" means any pollutant, contaminant, industrial,
toxic, hazardous, regulated or noxious substance, waste or byproduct the
emission, discharge, release, use, storage, disposal, transport or handling of
which is regulated by any federal, state or local law or governmental authority
including, without limitation, (a) any petroleum, petroleum byproduct, petroleum
compound (refined or crude), flammable substance, explosive, radioactive
material, and any other material, pollutant or contaminant which poses or may
pose a hazard to any property or to any person or protected animal or cause any
property to be in violation of any Environmental Law, (b) asbestos or any
asbestos containing material of any kind or character, (c) polychlorinated
biphenyls regulated by the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq., (d) any materials or substances designated as "hazardous substances"
pursuant to the Clean Water Act, 33 U.S.C. Section 1251 et seq., (e) any
"pesticide" as defined in the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. Section 135 et seq., (f) any "chemical substance," "new chemical
substance" or "hazardous chemical substance or mixture" pursuant to the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq., (g) any "hazardous
substance" within the meaning of the Comprehensive Environmental Response,
24
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., and (h) any
"hazardous waste" within the meaning of the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901 et seq.
(1) The Company has conducted its business at all times since October
31, 1994 in compliance in all material respects with all Environmental Laws and
is in compliance in all material respects with all permits required under the
Environmental Laws for the conduct of the Company's business or the occupancy of
the Real Property. No condition exists at any of the Real Property which
constitutes a material violation of any Environmental Law (each such matter
being referred to as an "Environmental Deficiency").
(2) There is not presently pending or, to the knowledge of the Seller,
threatened any civil or governmental suit, action, proceeding, claim or
investigation against the Company relating to (i) any violation by the Company
of any Environmental Law, or (ii) any release by the Company of any Hazardous
Substance.
(3) There are no underground storage tanks located on any of the Owned
Real Property or, to the Seller's knowledge, any Leased Real Property.
(4) The Seller has provided to the Purchaser copies of all studies,
reports, assessments, investigations, surveys and other materials in the
Company's or the Seller's possession or control relating to (i) the occurrence
of any discharge, release or presence of any Hazardous Substance on or affecting
any of the Real Property, (ii) the existence of any circumstance or condition at
any of the Real Property which could reasonably be expected to result in the
material violation of any Environmental Law, and (iii) any other physical
condition of any of the Real Property giving rise to any claim under any
25
Environmental Law. The Seller's Disclosure Schedule lists all such studies,
reports, assessments, investigations, surveys and other materials which the
Company has provided to Purchaser.
4.26 Tangible Assets. The Company owns or leases all buildings,
machinery, equipment and other tangible assets and properties necessary to
conduct the business as heretofore conducted. Except as set forth in the
Seller's Disclosure Schedule, all of the assets and properties of the Company,
including the Real Property, are in such operating condition as is necessary for
the operation of the business of the Company as heretofore operated in the
ordinary course and, to the knowledge of the Seller, the operation and use of
such assets and properties in the Company's business conform in all material
respects to all applicable laws, ordinances, regulations, Permits, licenses and
certificates.
4.27 Compensation Arrangements. The Seller's Disclosure Schedule sets
forth a complete list showing the names of all officers, employees and agents
performing services for the Company in connection with its business (as of
January 2, 2001) and the rate of hourly, monthly or annual compensation (as the
case may be) payable by the Company to such person as of such date. The
Purchaser has been provided access to records reflecting amounts paid or to be
paid to each such person in 1999 and 2000, any accrued sick leave or vacation
and any bonus or similar arrangement with any of them.
26
4.28 Bank Accounts. The Seller's Disclosure Schedule lists the names
and addresses of every bank and other financial institution in which the Company
maintains an account (whether checking, savings or otherwise), lock box or safe
deposit box, and the account numbers and names of persons having signing
authority or other access thereto.
4.29 Borrowed Funds; Other. The Company is not in default in any
respect under, and is not otherwise in violation or contravention of, any of the
terms or provisions of any agreement for the repayment of borrowed funds which
will survive Closing. Copies of all promissory notes and other documents
evidencing or relating to indebtedness for amounts borrowed by the Company are
set forth in the Seller's Disclosure Schedule. The Company is not a guarantor or
otherwise liable for any liability or obligation (including indebtedness) of any
other person. There are no outstanding powers of attorney executed on behalf of
the Company.
4.30 Representations and Warranties; Complete Disclosure. Neither this
Agreement nor any Ancillary Agreements to which the Seller is a party (i)
contain any untrue statement of a material fact in respect to the Seller, the
affairs, operations or condition of the Company or its business or (ii) omits
any statement of a material fact necessary in order to make the statements in
respect of the Seller, the affairs, operations or condition of the Company or
its business contained herein or therein not misleading.
27
5. Representations and Warranties of the Purchaser. The Purchaser, as of
the date hereof and as of the Closing Date represents and warrants to the
Seller that:
5.1 Due Incorporation. The Purchaser is an Oklahoma corporation duly
organized, validly existing and in good standing under the laws of the State of
Oklahoma, and has all requisite corporate power and authority to own, lease and
operate its assets and properties, and to conduct and operate its business as
heretofore and now being conducted.
5.2 Qualification of the Purchaser. The Purchaser is duly qualified or
licensed as a foreign corporation to do business and is in good standing in all
states or jurisdictions in which the nature of its business as presently
operated by it or the character of the property owned or leased by it makes such
qualification or authorization necessary, except in such jurisdiction where the
failure to be so qualified or licensed and in good standing would not have an
effect which is materially adverse to the business and financial condition of
the Purchaser taken as a whole.
5.3 Corporate Power of the Purchaser; Authorization; Binding Effect; No
Conflict. The Purchaser has the corporate power and all authority and approvals
required to execute and deliver this Agreement and the Ancillary Agreements to
which the Purchaser is a party and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the Ancillary
Agreements by the Purchaser and the performance of its obligations hereunder and
thereunder have been duly authorized by all necessary corporate action of the
Purchaser. This Agreement and the Ancillary Agreements have been duly executed
and delivered by the Purchaser and constitute, or when executed and delivered by
the Purchaser will constitute, the legal, valid and binding obligation of the
28
Purchaser enforceable in accordance with their respective terms, subject to
applicable bankruptcy, arrangement, moratorium, reorganization, insolvency and
other laws and to equitable principles affecting enforcement of the rights of
creditors or obligations of debtors generally. No approval or consent of any
other person is required in connection with the execution and delivery by the
Purchaser of this Agreement and the consummation and performance by the
Purchaser of the transactions contemplated hereby, except for such consents and
approvals which will have to be obtained prior to the Closing. The execution,
delivery and performance of this Agreement and the Ancillary Agreements by the
Purchaser and the consummation of the transactions contemplated hereby and
thereby by the Purchaser will not (i) violate any provision of the Certificate
of Incorporation or By-laws of the Purchaser; (ii) violate, conflict with or
result in the breach of any of the terms of, result in a material modification
of, otherwise give any other contracting party the right to terminate, or
constitute (or with notice or lapse of time or both constitute) a default under,
any material contract or agreement to which the Purchaser is a party or by or to
which the Purchaser or any of its assets or properties may be bound or subject;
(iii) violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body by which the Purchaser or its
properties or business is bound; or (iv) violate any statute, law or regulation
which is material to the Purchaser or to its properties or business.
5.4 Concerning the Shares. The Purchaser is acquiring the Shares for
its own account for investment and not with any view to the resale or public
distribution thereof. The Purchaser understands that the Shares have not been
registered under the Securities Act of 1933, as amended, or any applicable state
securities or blue sky law and may not be resold or otherwise transferred
without registration thereunder, unless an exemption from the registration
requirements of the Securities Act of 1933, as amended, and such state laws is
available.
29
0.1 Projections Disclosures. Notwithstanding any other express
representation or warranty made by the Seller herein, the Purchaser agrees that
the Seller has not and shall not be deemed to have made any representations or
warranties to the Purchaser with respect to any projections, estimates or
budgets heretofore delivered or made available to the Purchaser of future
revenues, expenses or expenditures of, or future results of operations of, the
Company.
5.5 Representations and Warranties. The representations and warranties
of the Purchaser contained in this Section 5 are, and on the Closing Date shall
be, true and correct in all material respects with the same force and effect as
though such representations and warranties were made on the Closing Date.
6. Covenants of the Seller.
6.1 Continuance of Business. From the date hereof through the Closing
Date, the Seller agrees that it will cause the Company, unless otherwise
consented to in writing by the Purchaser, not to take any of the actions
prohibited by Section 4.21 and to:
(1) carry on the Company's business in, and only in, the regular and
ordinary course in substantially the same manner as heretofore carried on; and
exercise its reasonable efforts to preserve intact its present business and
dealer organization, to keep available the services of its present employees, to
preserve its relationships with customers, suppliers and others having business
dealings with it to the end that the Company's business shall be conducted on
substantially the same basis at the Closing Date as at the date hereof;
(2) maintain its assets in the same condition as exists on the date
hereof, except for depreciation, obsolescence and ordinary wear and tear;
30
(3) keep in full force and effect insurance at least equal to that
carried by the Company with respect to the Company's business on the date
hereof;
(4) perform in all material respects all of its obligations under all
agreements and contracts relating to the Company's business;
(5) maintain books of account and business records of the Company in
the usual, regular and ordinary manner;
(6) comply in all material respects with all statutes, rules and
regulations applicable to it or to the conduct of the Company's business; and
(7) promptly advise the Purchaser in writing of (i) any material
adverse change in the Company's financial condition or assets or properties;
(ii) any event, condition or circumstance occurring from the date hereof through
the Closing Date that would constitute a material violation or breach of this
Agreement, or constitute the failure of any condition to the obligations of the
Seller; or (iii) any event, occurrence, transaction or other item which would
have been required to have been disclosed on the Seller's Disclosure Schedule or
statement delivered hereunder, had such event, occurrence, transaction or item
existed on the date hereof. Information provided under this Section 6.1(g) on or
prior to the Closing Date and designated as such shall constitute an update to
the Seller's Disclosure Schedule.
6.2 Access to Information. Prior to the Closing Date, the Purchaser
shall be entitled, through its employees and representatives, to make such
investigation of the assets, properties, business and operations of the Company
and such examination of the books, records and financial condition of the
Company's business as the Purchaser deems desirable. Any such investigation and
31
examination shall be conducted at reasonable times and under reasonable
circumstances, and the Seller and the officers and employees of the Company
shall cooperate fully therein. In order that the Purchaser may have full
opportunity to make such business, accounting and legal review, examination or
investigation as it may wish of the business and affairs of the Company's
business, the Seller shall furnish the Purchaser and its representatives with
all such information and copies of such documents concerning the Company's
affairs as the Purchaser or its representatives may reasonably request, and
cause the Company's officers, employees, consultants, agents, accountants and
attorneys to cooperate fully with the Purchaser and its representatives in
connection with such review and examination.
6.3 Confidentiality; Consultation Regarding Disclosure. Except as
required by applicable law or contemplated by this Agreement, neither party
shall publicly disclose the existence or contents of this Agreement. In
preparing any public announcement required by applicable law, a party hereto
shall in good faith consult with the other party and take into account, insofar
as is reasonably possible, the views of the other party with respect to the
timing and content of such disclosure.
6.4 Exclusivity. The Seller will not, and the Seller will not cause or
permit the Company to (i) solicit, initiate, or encourage the submission of any
proposal or offer from any person relating to the acquisition of the Real
Property or any capital stock or other voting securities, or any substantial
portion of the assets and properties of, the Company including any acquisition
structured as a merger, consolidation, share acquisition, share exchange or
comparable transaction or (ii) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in or
facilitate in any other manner any effort or attempt by any person to do or seek
any of the foregoing. The Seller will not vote the Shares in favor of any such
32
acquisition, whether structured as a merger, share acquisition, consolidation,
share exchange or otherwise. The Seller will notify the Purchaser immediately if
any person makes any proposal, offer, inquiry or contact with respect to any of
the foregoing.
6.5 Certain Transition Matters. The Seller will not take any action
that is intended or has the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of the Company from maintaining
the same business relationships with the Company after the Closing as it
maintained with the Company prior to the Closing. The Seller will refer all
customer inquiries relating to the business of the Company to the Company or the
Purchaser from and after the Closing.
6.6 Confidentiality. The Seller will treat and hold as such all of the
Confidential Information, refrain from using any of the Confidential Information
except in connection with this Agreement, and deliver promptly to the Purchaser
or destroy, at the request and option of the Purchaser, all tangible embodiments
(and all copies) of the Confidential Information which are in its possession. In
the event that the Seller is requested or required (by oral question or request
for information or documents in any legal proceeding, interrogatory, subpoena,
civil investigative demand or similar process) to disclose any Confidential
Information, the Seller will notify the Purchaser promptly of the request or
requirement so that the Purchaser may seek an appropriate protective order or
waive compliance with the provisions of this Section 6.6. If, in the absence of
a protective order or the receipt of a waiver hereunder, the Seller is, on the
written advice of counsel, compelled to disclose any Confidential Information to
any tribunal or else stand liable for contempt, the Seller may disclose the
Confidential Information to the tribunal; provided, however, that the Seller
shall use reasonable efforts to obtain, at the reasonable request of the
Purchaser, an order or other assurance that confidential treatment will be
33
accorded to such portion of the Confidential Information required to be
disclosed as the Purchaser shall designate. The foregoing provisions shall not
apply to any Confidential Information which is generally available to the public
immediately prior to the time of disclosure, provided that such Confidential
Information has not become available to the public due to a breach of this
Agreement.
0.2 Plan Termination. The parties acknowledge and agree that all of the
Employee Plans, including medical and dental plans, the Code Section 401(k)
plan, short-term disability, long-term disability, group life insurance and
accidental death and disability, flexible spending accounts and voluntary
supplemental life insurance shall be terminated as of the Closing, except that
in the case of the Code Section 401(k) plan the Company's employees'
participation in such Plan shall terminate and, pursuant to the mutual agreement
of the Purchaser and the Seller, it shall be administered so as to allow the
Company's employees to elect to roll their accounts over to a newly-created plan
of the Company.
0.3 Consents and Approvals. Prior to the Closing, the Seller shall
cause (i) Bank One (formerly the National Bank of Detroit) to consent to the
sale of the Shares and release its security interest in the Shares and in the
Company's assets and (ii) PNC Bank to unconditionally release the Company from
its guaranty of PNC Bank indebtedness arising under the credit agreement
described in Section 4.3 of the Seller's Disclosure Schedule. In addition, the
Seller shall use its commercially reasonable efforts to obtain all other
material consents, Permits or approvals that may be required in connection with
the performance by the Seller of its obligations under this Agreement.
0.4 Defense of Existing Claims and Lawsuits. With respect to the claims
and lawsuits described in Section 4.8 of the Seller's Disclosure Schedule (the
"Existing Claims"), the Seller agrees to continue to conduct and control at its
sole cost and expense, through counsel selected by the Seller but reasonably
34
acceptable to the Company (the Purchaser hereby agreeing that the present
counsel for the Existing Claims are currently acceptable), the defense of the
Existing Claims. The Seller shall have the right to compromise or settle any
Existing Claim, provided that the Seller gives the Company advance written
notice of any proposed compromise or settlement and otherwise complies with this
Section 6.9. The Company shall be permitted to participate in the defense of the
Existing Claims through counsel chosen by the Company, provided that the fees
and expenses of such counsel shall be borne by the Company. If the Seller
determines to settle any Existing Claim (i) the Seller shall not, without the
prior written consent of the Company, permit to exist any security interests
upon any assets of the Company or the Purchaser; (ii) the Seller shall not
permit there to be any settlement that does not include as an unconditional term
thereof the giving of a complete release from liability with respect to such
Existing Claim to the Company; and (iii) the Seller shall not permit there to be
any settlement for other than money damages without the prior written consent of
the Company. If the Seller fails, for whatever reason, to continue the competent
defense of any Existing Claim, the Company shall be entitled to assume the
defense of such Existing Claim, retain counsel of its choice (but reasonably
acceptable to the Seller), and negotiate or otherwise deal with such Existing
Claim, and the out-of-pocket fees, costs, and expenses of the Company in so
dealing with such Existing Claim shall be considered an indemnification
obligation of the Seller under Section 12 below, without regard to the $100,000
basket.
6.7 Survival. The provisions of this Section 6 shall survive the
Closing Date.
35
7. Covenants of the Purchaser.
7.1 Confidentiality; Consultation Regarding Disclosure. Except as
required by applicable law or as contemplated by this Agreement, the Purchaser
shall not publicly disclose the existence or contents of this Agreement. In
preparing any public announcement required by applicable law, the Purchaser
shall in good faith consult with the Seller, and take into account, insofar as
the Purchaser reasonably deems possible, the views of the Seller with respect to
the timing and content of such disclosure. Nothing in this Section 7.1 shall
prohibit the Purchaser from issuing a press release after the Closing Date.
0.5 Approvals. The Purchaser shall use its best efforts to obtain all
material consents or approvals that may be required in connection with the
performance by the Purchaser of its obligations under this Agreement.
8. Conditions Precedent to the Purchaser's Obligations. The obligations of
the Purchaser hereunder are, at the option of the Purchaser, subject to the
satisfaction on or prior to the Closing Date of the following conditions:
8.1 Legal Proceedings. All actions and legal proceedings in connection
with the transactions contemplated hereby and all documents required to be
delivered by the Seller to the Purchaser hereunder and all other related matters
shall have been approved by the Purchaser and its counsel, which approval shall
not be unreasonably withheld and the Seller shall have delivered to the
Purchaser certificates of its appropriate officers, dated as of the Closing
Date, as to the resolutions adopted by the board of directors of the Seller duly
authorizing the execution, delivery and performance of this Agreement and the
execution and delivery of all documents contemplated hereby.
36
8.2 Representations and Warranties on Closing Date. All representations
and warranties of the Seller made in this Agreement or in the Ancillary
Agreements shall be true and correct in all respects on the Closing Date with
the same force and effect as though such representations and warranties were
made on the Closing Date.
8.3 Terms, Covenants and Conditions. All the terms, covenants and
conditions of this Agreement to be complied with and performed by the Seller on
or prior to the Closing Date shall have been complied with and performed in all
respects.
8.4 Consents, Approvals, Etc. All consents, permits, approvals,
authorizations or orders of any court or governmental authority or regulatory
body, including under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
if applicable, necessary for the lawful consummation of the transactions
contemplated hereby shall have been obtained; all consents, Permits and
approvals from parties to contracts and other agreements with respect to the
Company's business, and any other material consent, Permit or approval that may
be required in connection with the performance by the Seller of its obligations
under this Agreement or the consummation of the transactions contemplated
hereby, or the continuance of such contracts, Permits or other agreements after
the Closing shall have been obtained.
8.5 No Material Adverse Change. Between the date hereof and the Closing
Date, there shall have been no material adverse effect. Solely for purposes of
this Section 8.5, a material adverse effect shall be deemed to have occurred if,
as a result of the supplemental disclosures made by the Seller in the Seller's
Disclosure Schedule between the date of execution of this Agreement and the
Closing Date, there is a disclosure or group of disclosures (i) which are
individually or collectively materially adverse to the business, operations,
37
assets, or financial condition of the Company or (ii) the effect of which would
reasonably be expected to have an aggregate financial consequence to the Company
in an amount greater than $100,000.
8.6 Litigation. No action, suit or proceeding shall have been
instituted by or before any court or governmental or regulatory body, or
instituted or threatened by any person or governmental or regulatory body, to
restrain the consummation of the transactions contemplated hereby, or to modify
in any material respect the terms hereof or the manner in which the Company
conducts its businesses, or to seek damages or a discovery order in connection
with such transactions.
8.7 Opinion of Counsel. The Purchaser shall have received an opinion of
the Seller's counsel in form reasonably satisfactory to the parties.
8.8 Intercompany Accounts. All intercompany receivables from the Seller
to the Company shall have been eliminated from the Company's balance sheet,
books and records by crediting the receivable and debiting the appropriate
equity account, and all intercompany payables owed by the Company to the Seller
shall have been eliminated by debiting the payable and crediting the appropriate
equity account.
8.9 Other. The Seller shall have delivered documents to the Purchaser
which, in the Purchaser's opinion, evidence that (i) Bank One has consented to
the transactions described herein and released its security interest in the
Shares; (ii) the Company has been unconditionally released of its guarantee
relating to Stature Electric, Inc. to PNC Bank; (iii) PNC Bank has consented to
the transactions described herein; and (iv) Bank One has terminated, or made
provision for termination of, its financing statements filed against the
Company.
38
9. Conditions Precedent to the Seller's Obligations. The obligations of the
Seller hereunder are, at the option of the Seller, subject to the satisfaction
on or prior to the Closing Date of the following conditions:
9.1 Legal Proceedings. All actions and legal proceedings in connection
with the transactions contemplated hereby and all documents required to be
delivered by the Purchaser to the Seller hereunder and all other related matters
shall have been approved by the Seller and its counsel, which approval shall not
be unreasonably withheld, and the Purchaser shall have delivered to the Seller
certificates of its appropriate officers, dated as of the Closing Date, as to
the resolutions adopted by the board of directors of the Purchaser duly
authorizing the execution, delivery and performance of this Agreement and the
execution and delivery of all instruments and documents contemplated hereby.
9.2 Representations and Warranties on Closing Date. All representations
and warranties of the Purchaser contained in this Agreement or in the Ancillary
Agreements shall be true and correct in all respects on the Closing Date with
the same force and effect as though such representations and warranties were
made on the Closing Date.
9.3 Terms, Covenants and Conditions. All the terms, covenants and
conditions of this Agreement to be complied with and performed by the Purchaser
on or prior to the Closing Date shall have been complied with and performed in
all respects.
9.4 Litigation. No action, suit or proceeding shall have been
instituted by or before any court or governmental or regulatory body, or
instituted or threatened by any person or governmental or regulatory body, to
restrain the consummation of the transaction contemplated hereby, or modify in
any material respect the terms hereof or prevent the carrying out of the
39
transactions contemplated hereby, or to seek damages or a discovery order in
connection with such transactions.
0.6 Consents, Approvals, Etc. All consents, permits, approvals,
authorizations or orders of any court or governmental authority or regulatory
body, including under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
if applicable, necessary for the lawful consummation of the transactions
contemplated hereby shall have been obtained; all consents, Permits and
approvals from parties to contracts and other agreements with respect to the
Company's business, and any other material consent, Permit or approval that may
be required in connection with the performance by the Purchaser of its
obligations under this Agreement or the consummation of the transactions
contemplated hereby, or the continuance of such contracts, Permits or other
agreements after the Closing shall have been obtained.
9.5 Opinion of Counsel. The Seller shall have received an opinion of
the Purchaser's counsel in form reasonably satisfactory to the parties.
9.7 Other. The Seller shall have received documents which, in the
Seller's opinion, evidence that (i) Bank One has consented to the transactions
described herein and released its security interest in the Shares; (ii) the
Company has been unconditionally released of its guarantee to PNC Bank in
respect of Stature Electric, Inc.; (iii) PNC Bank has consented to the
transactions described herein; (iv) Bank One has terminated, or made provision
for termination of, its financing statements filed against the Company; (v)
BancFirst Xxxxxx has released the Seller from its obligations as guarantor of
the Company's existing credit arrangement with BancFirst Xxxxxx.
10. Actions to be Taken at the Closing. The following actions shall be
taken at the Closing, each of which shall be conditional on completion of all
the others and all of which shall be deemed to have taken place simultaneously:
40
10.1 Delivery of Shares. The Seller shall deliver to the Purchaser (i)
certificates, duly endorsed in blank for transfer or accompanied by stock powers
so endorsed, for the Shares, sufficient to vest in Purchaser good title to the
Shares as required by this Agreement and (ii) any approvals and consents
required to be delivered pursuant to the terms of this Agreement.
10.2 Payment for Shares. The Purchaser shall deliver to the Seller the
Purchase Price as required by Section 2.
10.3 Opinions of Counsel. Each of the Seller and Purchaser shall
deliver to the other the opinions contemplated by Sections 8.7 and 9.6.
10.4 Other Documents:
(a) The resignations required by Section 1.3.
(b) A certificate of the Seller in form reasonably satisfactory to the
Purchaser to the effect that each of the conditions specified in Sections 8.2
and 8.3 has been satisfied in all respects.
(c) A certificate of the Purchaser in form reasonably satisfactory to
the Seller to the effect that each of the conditions specified in Sections 9.2
and 9.3 have been satisfied in all respects.
(d) Certificates from the appropriate public officials to the effect
that the Company is a validly existing entity in good standing in its state of
incorporation and in each state in which the Company carries on its business as
of a date not more than ten (10) days prior to the Closing Date.
(e) A true and correct copy of the Certificate of Incorporation of the
Company as of a date not more than thirty (30) days prior to the Closing Date,
certified by the appropriate public official in its state of incorporation, and
41
bylaws of the Company as of the Closing Date, certified by the secretary of the
Company and by the Seller.
11. Survival.
11.1 Survival of Representations and Warranties; Certain Other Matters.
(1) All of the representations and warranties of the Seller and the
Purchaser contained in this Agreement (as supplemented pursuant to the terms
hereof) shall survive the execution and delivery hereof and the Closing for a
period of 18 months except as hereinbelow set forth. No claim shall be brought
more than eighteen (18) months after the Closing Date, except for
indemnification claims arising out of breaches of the representations and
warranties set forth in (i) Sections 4.4, 4.5, 4.17, and 4.24 above which shall
extend until the expiration of the applicable statute or period of limitations
and (ii) Section 4.25 above which shall extend for a period of five (5) years
after the Closing Date (the "Survival Period"). Anything to the contrary
notwithstanding, the Survival Period shall be automatically extended to include
any time period necessary to resolve a claim for indemnification that was made
before the expiration of the Survival Period but not resolved prior to its
expiration, and any such extension shall apply only as to claims timely asserted
and not so resolved within the Survival Period. Liabilities for any such items
shall continue until such claims shall have been finally settled, decided or
adjudicated.
(2) From time to time prior to Closing, the Purchaser shall immediately
advise the Seller in writing of any matters of which it becomes aware, whether
during the course of its due diligence or otherwise, which reasonably could be
expected to constitute a breach of any representation, warranty, covenant or
42
agreement on the part of the Seller. However, the right to indemnification,
payment of Losses or any other remedies based upon the representations,
warranties, covenants and obligations hereunder will not be affected by any
investigation conducted with respect to, or any knowledge acquired (or capable
of being acquired) at any time, whether before or after the execution and
delivery of this Agreement or the Closing Date from a source other than this
Agreement, the Seller's Disclosure Schedule or the updates thereto provided
prior to Closing. Unless otherwise agreed by the Purchaser and the Seller in
writing, the waiver of any condition based upon the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
Losses, or other remedies based upon such representations, warranties, covenants
and obligations.
12. Indemnification.
12.1 Obligation to Indemnify by the Seller. The Seller agrees to
indemnify, defend and hold harmless the Purchaser and, after the Closing Date,
the Company (and their respective shareholders, directors, officers and
employees) from and against all claims, suits, actions, causes of action,
settlements, judgments, losses, liabilities, damages, deficiencies,
out-of-pocket costs or expenses, including interest, penalties and reasonable
attorneys' fees and disbursements and other out-of-pocket costs incurred in
43
investigating, settling or defending any of the foregoing or in prosecuting a
claim for indemnification hereunder ("Losses"), whether or not involving a
third-party claim, based upon, as a result of, arising, directly or indirectly,
out of or caused by (i) any inaccuracy in or any breach of any representation or
warranty of the Seller contained in this Agreement; (ii) any breach of any
covenant or agreement of the Seller contained in this Agreement; (iii) any
liability for federal, state or local taxes of the Company, beyond the reserve
for tax liability for unpaid taxes of the Company as reflected in the Final
Closing Balance Sheet, which taxes are attributable to the period of time ending
on or before the Closing Date, including any interest, penalties, assessments or
additions to tax resulting from, attributable to, or incurred in connection
with, any such tax or any contest or dispute thereof; (iv) any severance
payment, including the stay bonus contemplated under Section 4.21(f), with
respect to employees of the Company which result directly and solely from the
share transfer transaction contemplated hereunder; (v) any product manufactured
(as defined in Section 4.19 above) or delivered by, or any services provided by,
44
the Company on or prior to the Closing Date with the exception of any Losses
related to repairs or similar work after the Closing Date on products
manufactured or delivered on or prior to the Closing Date upon which the
applicable express warranty has expired; (vi) any of the matters described in
Section 4.8 of the Seller's Disclosure Schedule; or (vii) the Company's
obligations as borrower, co-borrower, guarantor, or co-guarantor under those
certain credit arrangements described in Section 4.3 of the Seller's Disclosure
Schedule.
12.2 Limitations on Indemnification by the Seller. The Seller's
obligation to indemnify the Purchaser hereunder shall expire and terminate as
set forth in Section 11.1(a). The Seller shall be obligated to indemnify the
Purchaser for Losses only to the extent that the Purchaser's Losses exceed
$100,000 in the aggregate, in which event the Purchaser shall be entitled to
indemnification in the amount of all of its Losses, including such $100,000
basket, up to the amount of the Purchase Price; provided, however, that such
$100,000 basket shall not apply to Losses under Sections 12.1(vi) or 12.1(vii).
In no event shall the Seller be liable to the Purchaser under or in respect of
this Agreement, including but not limited to Section 12.1 hereof, in an amount
or amounts in the aggregate in excess of the Purchase Price. Further, in no
event shall the Seller be liable for breaches of the Seller's representations
and warranties under Section 4.9 relating to title to the Real Property in an
amount in excess of $2,700,000, and the Purchaser agrees to look first for
recovery of Losses related thereto from title insurance on the Real Property.
45
Further, any Losses by the Purchaser related to repairs or similar work after
the Closing Date on products manufactured or delivered on or prior to the
Closing Date upon which the applicable express warranty has expired shall not
count toward the $100,000 basket.
12.3 Obligations to Indemnify by the Purchaser. The Purchaser agrees to
indemnify, defend and hold harmless the Seller (and its shareholders, directors,
officers and employees) from and against all Losses based upon, as a result of,
arising, directly or indirectly, out of or caused by (i) any inaccuracy in or
any breach of any representation or warranty of the Purchaser contained in this
Agreement; (ii) any breach of any covenant or agreement of the Purchaser
contained in this Agreement; (iii) any liability for federal, state or local
taxes of the Company which is attributable to the period of time after the
Closing Date, including any interest, penalties, assessments or additions to tax
resulting from, attributable to, or incurred in connection with, any such tax or
any contest or dispute thereof; (iv) any violation of any Environmental Law by
the Company after the Closing Date; (v) any product manufactured (as defined in
Section 4.19 above) or delivered by, or any services provided by, the Company
after the Closing Date; or (vi) any severance payment or other liabilities with
respect to employees of the Company which arise after the Closing Date (except
for the stay bonus contemplated under Section 4.21(f) to be paid by the Seller
to Xxx Xxxxxxxx).
12.4 Limitations on Indemnification by the Purchaser. The Purchaser's
obligation to indemnify the Seller hereunder shall expire and terminate as set
forth in Section 11.1(a). The Purchaser shall be obligated to indemnify the
Seller for Losses only to the extent that the Seller's Losses exceed $100,000 in
the aggregate, in which event the Seller shall be entitled to indemnification in
the amount of all of its Losses, including such $100,000 basket, up to the
amount of the Purchase Price. In no event shall the Purchaser be liable to the
46
Seller under or in respect of this Agreement, including but not limited to
Section 12.3 hereof, in an amount or amounts in the aggregate in excess of the
Purchase Price. Anything in this Agreement or otherwise to the contrary
notwithstanding, neither party shall be entitled to greater than one
satisfaction of or on account of any Losses or other claim(s). To the extent
that an event or occurrence gives rise to, or is taken into consideration in, an
adjustment to the Purchase Price and a claim or right of indemnification, a
party shall be entitled to only one recovery in respect thereof.
12.5 Procedure. The provisions of this Section 12.5 shall apply in any
case where a party suffers or may suffer a Loss based on a claim made or an
action commenced by a third party.
(1) Promptly after receipt by any party hereto (the "Indemnitee") of
any written claim, demand for payment or legal process made or served by, for or
on behalf of any third party that asserts a liability of the Indemnitee that
could result in a Loss (an "Asserted Liability"), and promptly after acquiring
actual knowledge of circumstances which, with the lapse of time or the giving of
notice or both, are reasonably likely to result in the assertion of an Asserted
Liability, the Indemnitee shall give notice thereof (a "Claims Notice") to the
other party obligated or arguably obligated to provide indemnification pursuant
to Sections 12.1 or 12.3 (the "Indemnifying Party"). The Claims Notice shall
describe the Asserted Liability in reasonable detail, and shall indicate the
amount (estimated, if necessary) of the Loss that has been or may be suffered by
the Indemnitee. Notwithstanding the foregoing, an Indemnittee's failure to give,
or delay in giving, a Claims Notice pursuant to this subsection 12.5(a) with
respect to an Asserted Liability shall not discharge the obligation of an
Indemnifying Party hereunder, unless such failure or delay is materially
47
detrimental to the Indemnifying Party; provided, however, that nothing in this
Section 12.5(a) shall be construed to extend the Survival Period referred to in
Section 11.1(a).
(2) Upon receipt of any Claims Notice, the Indemnifying Party may elect
to compromise or defend, at its own expense and by its own counsel (reasonably
acceptable to the Indemnifying Party), any Asserted Liability. If the
Indemnifying Party elects to compromise or defend such Asserted Liability, it
shall within 20 days (or sooner, if the nature of the Asserted Liability so
requires) notify the Indemnitee in writing of its intent to do so, and the
Indemnitee shall cooperate, at the expense of the Indemnifying Party, in the
compromise of, or defense against, such Asserted Liability. If the Indemnifying
Party elects not to compromise or defend the Asserted Liability, fails to notify
the Indemnitee of its election as herein provided, fails to diligently defend
the Asserted Liability if it has undertaken to defend the Asserted Liability, or
contests its obligation to indemnify under this Agreement, the Indemnitee may
pay, compromise or defend, at the Indemnifying Party's cost and expense, such
Asserted Liability for the account of the Indemnifying Party, subject to a
determination that the Indemnifying Party is liable hereunder for such Loss.
Notwithstanding the foregoing, neither the Indemnifying Party nor the Indemnitee
may settle or compromise any claim over the reasonable objection of the other;
provided, however, that consent to settlement or compromise shall not be
unreasonably withheld or delayed. In any event, the Indemnitee and the
Indemnifying Party may participate, at their respective expense, in the defense
of such Asserted Liability. If the Indemnifying Party chooses to defend any
claim, the Indemnitee shall make available to the Indemnifying Party any other
documents within its control that are necessary or appropriate for such defense
and otherwise shall cooperate in good faith in the defense of such claim.
48
12.6 Limitations of Indemnification. Notwithstanding the foregoing
provisions of this Section 12:
(1) Intentionally left blank.
(2) The Survival Period contained Section 11.1(a) and the limitations
on indemnifications set forth in Sections 12.2 and 12.4 shall not apply to any
right of or to any indemnification arising out of (i) fraud or willful
misconduct or (ii) the breach of any representation or warranty in Section 14.4.
12.7 Limitation of Liability. ANYTHING IN THIS AGREEMENT TO THE
CONTRARY NOTWITHSTANDING, IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY FOR
ANY CONSEQUENTIAL, INCIDENTAL, LOST PROFITS, PUNITIVE OR EXEMPLARY DAMAGES
HOWSOEVER CAUSED ARISING OUT OF OR RELATING TO THIS AGREEMENT EVEN IF SUCH PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH DAMAGES OR LOSSES.
12.8 Equitable Remedy. The foregoing indemnification provisions are in
addition to, and not in derogation of, any equitable non-monetary remedy that
any party may have for breach of representation, warranty or covenant.
13. Termination of Agreement.
13.1 Termination. This Agreement may be terminated at any time prior to
the Closing as follows:
49
(1) at the election of the Purchaser, (a) if any one or more of the
conditions to its obligation to close has not been fulfilled as of the Closing
Date in all respects, (b) if the Seller has breached any representation,
warranty, covenant or agreement contained in this Agreement in any respect, or
(c) if the Closing shall not have taken place by February 1, 2001; and
(2) at the election of the Seller, (a) if any one or more of the
conditions to its obligation to close has not been fulfilled as of the Closing
Date in all respects, (b) if the Purchaser has breached any representation,
warranty, covenant or agreement contained in this Agreement in any respect, or
(c) if the Closing shall not have taken place by February 1, 2001; and
(3) at the election of either the Seller or the Purchaser if any legal
proceeding is commenced or threatened by any governmental or regulatory body or
other person directed against the consummation of the Closing or any other
transaction contemplated under this Agreement and the Seller or the Purchaser,
as the case may be, reasonably and in good xxxxx xxxx(s) it impractical or
inadvisable to proceed in view of such legal proceeding or threat thereof.
13.2 Effect of Termination. The termination of this Agreement in
accordance with Section 13.1 shall not affect the rights or remedies of any
party hereto against any other party hereto based on any breach of this
Agreement existing prior to such termination.
14. Miscellaneous.
14.1 Intentionally left blank.
50
14.2 Expenses. The parties to this Agreement shall, except as otherwise
specifically provided herein, bear their respective expenses incurred in
connection with the preparation, execution and performance of this Agreement and
the transactions contemplated hereby, including, without limitation, all fees
and expenses of agents, representatives, employee benefit consultants, counsel
and accountants. The Seller covenants that it shall bear all of its own costs
and expenses in connection with this Agreement, and the Company shall not bear
any of the Seller's such costs and expenses (the Seller's breach of such
covenant shall not be subject to the basket set forth in Section 12.2 above). In
addition, the Seller covenants that it shall pay all costs associated with (i)
the purchase of the phase I and phase II environmental assessments and (ii) the
purchase of the title commitment and the title policy for the Real Property.
14.3 Further Assurances. Each of the parties shall execute such
documents and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the transactions contemplated
hereby. Each such party shall use its reasonable efforts to fulfill or obtain
the fulfillment of the conditions to the Closing, including, without limitation,
the execution and delivery of any documents, the execution and delivery of which
are conditions precedent to the Closing.
14.4 Indemnification of Brokerage. The Purchaser represents and
warrants to the Seller that no broker, finder, agent or similar intermediary has
acted on its behalf in connection with this Agreement or the transactions
contemplated hereby, and there are no brokerage commissions, finders' fees or
similar fees or commissions payable in connection therewith based on any
agreement, arrangement or understanding with the Purchaser or any action taken
by the Purchaser. The Seller represents and warrants to the Purchaser that,
except for Brookwood Associates, Inc. which the Seller agrees to pay, no broker,
51
finder, agent or similar intermediary has acted on behalf of the Seller in
connection with this Agreement or the transactions contemplated hereby, and that
there are no brokerage commissions, finders' fees or similar fees or commissions
payable in connection therewith based on any agreement, arrangement or
understanding with the Seller, or any action taken by the Seller. Each of the
Purchaser, on the one hand, and the Seller on the other, agrees to indemnify and
save the other harmless from any claim or demand for commissions or other
compensation by any broker, finder, agent or similar intermediary claiming to
have been employed by or on behalf of the Purchaser, on the one hand, or the
Seller, on the other, and to bear the cost of legal expenses incurred in
defending against any such claim.
14.5 Certain Definitions. As used in this Agreement, the following
terms have the following meanings unless the context otherwise requires:
(1) "affiliate" with respect to any person, means any other person
controlling, controlled by or under common control with such person.
(2) "Confidential Information" means any information concerning the
business and affairs of the Company that is not already generally available to
the public, other than in violation of the terms of this Agreement.
(3) "contracts and other agreements" means all contracts, agreements,
understandings, indentures, notes, bonds, loans, instruments, leases, mortgages,
franchises, licenses, commitments or other binding arrangements, written or
oral.
(4) "document" means any document, agreement, instrument, certificate,
notice, consent, affidavit, letter, telegram, telex, statement, schedule
(including any Disclosure Schedule to this Agreement), exhibit (including any
Exhibit to this Agreement) or any other paper whatsoever.
52
(5) "governmental or regulatory body" means any government or political
subdivision thereof, whether federal, state, local or foreign, or any agency or
instrumentality of any such government or political subdivision.
(6) "lien or other encumbrance" means any lien, pledge, negative
pledge, mortgage, security interest, claim, lease, charge, option, right of
first refusal, easement, servitude, transfer restriction under any shareholder
or similar agreement, encumbrance or any other restriction or limitation
whatsoever.
(7) "person" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, limited liability
company, unincorporated organization, governmental or regulatory body or other
entity of any kind whatsoever.
(8) "property" means real, personal or mixed property, tangible or
intangible.
14.6 Knowledge. As used in this Agreement, the term "knowledge" in the
case of the Seller means the actual knowledge of Xxxxxx X. Xxxxxx, Xx.,
President and Chief Executive Officer, Xxxx X. Xxxxxxx, Executive Vice President
of Finance and Chief Financial Officer, or Xxxxx X. Holiday, Chief Operating
Officer, or any knowledge that any such individuals reasonably should have had
upon due inquiry.
14.7 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
53
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. If any court determines
that any covenant, or any part of any covenant, is invalid or unenforceable all
other covenants shall not thereby be affected and shall be given full effect,
without regard to the invalid portions.
14.8 Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed, sent by facsimile transmission or sent by certified, registered or
express mail, postage prepaid. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by confirmed facsimile
transmission or, if mailed, upon receipt, as follows:
(1) If to the Purchaser, to:
Sooner Investment Manufacturing Company
0000 X. 00xx Xxxxxx
P. O. Xxx 000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Phone: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxx X. Xxxxx, Esquire
Xxxxxx Xxxxxxxx, Esquire
Xxxxxxx Xxxxxx Xxxxx & Xxxxxxx
1600 Bank of Oklahoma Plaza
000 Xxxxxx X. Xxxx
Xxxxxxxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
(2) if to the Seller, to:
Owosso Corporation
The Triad Building
0000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxx xx Xxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Attn: G. B. Xxxxxx, Jr. President
54
with a copy to:
Xxxxx X. Xxxxxxxxxx, Xx., Esquire
Montgomery, McCracken,
Xxxxxx & Xxxxxx, LLP
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
14.9 Entire Agreement; No Other Inducement. This Agreement (including
the Disclosure Schedules and Exhibits) and the documents delivered at Closing
pursuant hereto contain the entire agreement among the parties with respect to
the transactions described herein, and supersede all prior statements,
information and agreements (written or oral) with respect thereto. The parties
acknowledge and agree that in entering into this Agreement and engaging in the
transactions contemplated hereby they have not relied upon, nor were they
induced to enter into this Agreement by, any statement, representation,
warranty, promise, covenant or matter (whether written or oral) of or made by
any person, and whether or not provided to the Purchaser by or on behalf of the
Seller, except as expressly set forth in Section 4 (as modified by the Seller's
Disclosure Schedule) of this Agreement.
14.10 Waivers and Amendments; Non-Contractual Remedies. This Agreement
may be amended, superseded, canceled, renewed or extended, and the terms hereof
55
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. The rights and remedies
herein provided are exclusive of any rights or remedies for the recovery of
money damages. Without limiting the generality of the foregoing, the provisions
of Section 12 shall constitute the parties' sole monetary remedy for breach of
representation, warranty, agreement or covenant hereunder.
14.11 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware applicable to agreements made
and to be performed entirely within such State, without regard to Delaware
conflicts of laws principles.
14.12 Binding Effect; No Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
legal representatives. This Agreement shall not be assignable by either party
without the consent of the other party and any purported assignment without such
consent shall be null and void.
14.13 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all, of the parties
hereto.
14.14 Exhibits and Schedules. The Seller's Disclosure Schedule shall be
arranged in paragraphs corresponding to the numbered paragraphs contained in
Sections 3 and 4. The Seller's Disclosure Schedule is a part of this Agreement
as if fully set forth herein. All references herein to Sections, subsections,
clauses or Schedules shall be deemed references to such parts of this Agreement,
unless the context shall otherwise require.
56
14.15 Headings. The headings in this Agreement are for reference only,
and shall not affect the interpretation of this Agreement.
14.16 Litigation Support. In the event and for so long as any party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Company, the other party will cooperate with
the other party and its counsel in the contest or defense, make available its
personnel, and provide such testimony and access to its books and records as
shall be necessary in connection with the contest or defense, all at the sole
cost and expense of the contesting or defending party (unless the contesting or
defending party is entitled to indemnification therefor under Section 12 above).
57
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
Owosso Corporation (Seller)
By:_________________________
President
SOONER INVESTMENT MANUFACTURING
COMPANY (Purchaser)
By:_________________________
Xxxxx X. Xxxxx,
Vice President
