ASSET
PURCHASE
AGREEMENT
between
e*xxxxxxxxx.xxx, Inc. ("EMAC" or "Buyer")
and
WESTERN POWER & EQUIPMENT CORP. ("WPEC" or "Seller")
TABLE OF CONTENTS
1. Definitions 1
2. Basic Transaction 5
(a) Purchase and Sale of Assets 5
(b) Title to Assets 6
(c) Purchase Price 6
(d) The Closing 6
(e) Deliveries at the Closing 7
(f) Allocation 7
3. Representations and Warranties Regarding the Seller 8
(a) Organization of the Sellers 8
(b) Authorization of Transaction 8
(c) Noncontravention 8
(d) Title to Assets 9
(e) Subsidiaries 9
(f) Financial Statements 9
(g) Events Subsequent to Most Recent Fiscal Year End 9
(h) Undisclosed Liabilities 11
(i) Legal Compliance 11
(j) Tax and Other Returns and Reports 12
(k) Intellectual Property 12
(l) Tangible Assets 13
(m) Contracts 13
(n) Change of Name and Stock Symbol 14
(o) Powers of Attorney 15
(p) Insurance 15
(q) Litigation 15
(r) Employees 15
(s) Employee Benefits 15
(t) Guaranties 15
(u) Environment, Health, and Safety 15
(v) Certain Business Relationships With the Seller 16
(w) Disclosure 16
4. Representations and Warranties of the Buyer 16
(a) Organization of the Buyer 16
(b) Authorization of Transaction 16
(c) Capitalization 16
(d) Noncontravention 17
(e) Securities Filings 17
(f) Disclosure 17
(g) Legal Compliance 17
(h) Tax and Other Returns and Reports 17
(i) Financial Statements 17
(j) Litigation 17
(k) Environment, Health and Safety 18
(l) Cooperation 18
5. Pre-Closing Covenants 18
(a) General 18
(b) Notices and Consents 18
(c) Operation of Business 19
(d) Preservation of Business 19
(e) Full Access 19
(f) Notice of Developments 19
6. Conditions to Obligation to Close 19
(a) Conditions to Obligation of the Buyer 19
(b) Conditions to Obligation of the Seller 20
7. Termination 21
(a) Termination of Agreement 21
8. Indemnification 21
(a) Survival of Representations and Warranties 21
(b) Indemnification Provisions for Benefit of the Buyer 22
(c) Matters Involving Third Parties 22
(d) Indemnification Provisions for Benefit of the Seller 23
(e) Limitations and Conditions on Indemnification 24
9. Miscellaneous 24
(a) Litigation Support 24
(b) Restrictive Covenants 25
(c) Restriction of Stock of EMAC 25
(d) No Third-Party Beneficiaries 25
(e) Entire Agreement 26
(f) Succession and Assignment 26
(g) Counterparts 26
(h) Headings 26
(i) Notices 26
(j) Governing Law 27
(k) Amendments and Waivers 27
(l) Severability 27
(m) Expenses 27
(n) Brokers'/Finders' Fees 27
(o) Construction 27
(p) Incorporation of Exhibits and Schedules 28
(q) Specific Performance 28
(r) Submission to jurisdiction 28
(s) Bulk Transfer Laws 28
(t) Investment Purpose 29
ASSET PURCHASE AGREEMENT
Agreement entered into effective as of September ___ 2001, by and
between E*XXXXXXXXX.XXX, INC., a Delaware corporation whose main
administrative address is 0000 Xxxxxxx Xxxxx, Xxxxx 00 and Hartford Road,
Medford, New Jersey 08055 (hereinafter referred to as "EMAC" or "Buyer") and
WESTERN POWER & EQUIPMENT, INC. (hereinafter referred to as "New Corp."), a
new corporation to be formed in the State of Washington which will be a
wholly owned subsidiary of EMAC; and WESTERN POWER & EQUIPMENT CORP., a
Delaware corporation whose main business address is 0000-X X.X. 000xx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000 (hereinafter referred to as "WP-D" or "Parent"),
and WESTERN POWER & EQUIPMENT CORP., an Oregon corporation (hereinafter
referred to as "WP-O" or "Seller"), a wholly owned subsidiary of WP-D, whose
main address is 0000-X X.X. 000xx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000. The
Buyer, the Parent, and the Seller are referred to collectively herein as the
"Parties."
WHEREAS, EMAC desires to form New Corp. for the purpose of purchasing
certain assets of WP-O's equipment business in consideration of cash, notes
and restricted common stock; and
WHEREAS, Seller desires to sell same.
NOW, THEREFORE, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations,
warranties, and covenants herein contained, the Parties agree as follows.
1. Definitions
"Acquired Assets" means all right, title, and interest in and to all of
the assets of the Seller, including the name "Western Power & Equipment";
"WPEC" and related tradenames" and all its (a) real property, leaseholds and
subleaseholds therein, improvements, fixtures, and fittings thereon, except
for the Anchorage, Alaska and Moxee, Washington properties more particularly
described on Schedule 1, (b) tangible personal property (such as machinery,
equipment, inventories of supplies, manufactured and purchased parts, work in
process and finished work, furniture, automobiles and trucks,), (c)
Intellectual Property, goodwill associated therewith, licenses and
sublicenses granted and obtained with respect thereto, and rights thereunder,
remedies against infringements thereof, and rights to protection of interests
therein under the laws of all jurisdictions, (d) leases, subleases, and
rights thereunder, (e) agreements, contracts, indentures, mortgages,
instruments, Security Interests, guaranties, other similar arrangements, and
rights thereunder, (f) claims, deposits, prepayments, refunds, causes of
action, choses in action, rights of recovery, rights of set off, and rights
of recoupment (including any such item relating to the payment of Taxes), (g)
franchises, approvals, permits, licenses, orders, registrations,
certificates, variances, and similar rights obtained from governments and
governmental agencies, (h) books, records, ledgers, files, documents,
correspondence, lists, plats, architectural plans, drawings, and
1
specifications, creative materials, advertising and promotional materials,
studies, reports, and other printed or written materials, curricula, either
finished, in process, or planned, and (i) rights in and with respect to the
assets associated with its Employee Health and Disability Plans; provided,
however, that the Acquired Assets shall not include the Excluded Assets. The
enumeration of asset categories set forth herein shall not imply that Seller
necessarily owns each such type of asset.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within the meaning of Code
Sec. 1504(a) [or any similar group defined under a similar provision of state,
local, or foreign law].
"Basis" means any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could, with reasonable probability,
form the basis for any specified consequence.
"Buyer" means New Corp., a corporation to be formed that will be a wholly
owned subsidiary of EMAC.
"Closing" has the meaning set forth in Section 2(d) below.
"Closing Date " has the meaning set forth in Section 2(d) below.
"Code" means the Internal Revenue Code of 1986, as amended.
"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Excluded Assets" means the assets of Seller being excluded from the
Acquired Assets sold, conveyed, and transferred to Buyer as set forth on
attached Schedule 1.
"Employee Benefit Plan "means any (a) nonqualified deferred compensation
or retirement plan or arrangement which is an Employee Pension Benefit Plan, (b)
qualified defined contribution retirement plan or arrangement which is an
Employee Pension Benefit Plan, (c) qualified defined benefit retirement plan or
arrangement which is an Employee Pension Benefit Plan (including any
Multiemployer Plan), or (d) Employee Welfare Benefit Plan or material fringe
benefit plan or program.
"Employee Pension Benefit Plan "has the meaning set forth in ERISA Sec.
3(2).
"Employee Welfare Benefit Plan "has the meaning set forth in ERISA Sec.
3(l).
2
"Environmental, Health, and Safety Laws" means the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Occupational Safety and Health
Act of 1970, each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder) of federal, state, local, and foreign governments (and all
agencies thereof) concerning pollution or protection of the environment, public
health and safety, or employee health and safety, including laws relating to
emissions, discharges, releases, or threatened releases of pollutants,
contaminants, or chemical, industrial, hazardous, or toxic materials or wastes
into ambient air, surface water, ground water, or lands or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Extremely Hazardous Substance" has the meaning set forth in Sec. 302 of
the Emergency Planning and Community Right-to-Know Act of 1986, as amended.
"Fiduciary" has the meaning set forth in ERISA Sec. 3(21).
"Financial Statements" has the meaning set forth in Section 3(f) and (g)
below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (e) all computer software (including data and related
documentation), (f) all other proprietary rights, and (g) all copies and
tangible embodiments thereof (in whatever form or medium), (h) teaching or
instructor notes, teaching plans, or other syllabus.
"Knowledge" means actual knowledge after reasonable inquiry.
3
"Liabilities" As set forth on Schedule C2 in detail.
"Liability" means any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"Most Recent Balance Sheet" means the balance sheet of July 31, 2001.
"Most Recent Financial Statements" has the meaning set forth in Section
3(f) and (g) below.
"Most Recent Fiscal Month End" has the meaning set forth in Section3(f)
and (g) below.
"Most Recent Fiscal Year End" has the meaning set forth in Section 3(f)
and (g) below.
"Multiemployer Plan" has the meaning set forth in ERISA Sec. 3(37).
"New Corp." means the entity to be formed by EMAC that will own the
purchased assets subject to certain liabilities involved in this purchase.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Parent" means WP-D, a Delaware corporation.
"Party" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof.
"Purchase Price" has the meaning set forth in Section 2(c) below.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's, and
similar liens, (b) liens for Taxes not yet due and payable or for Taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c)
4
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
"Seller" means WP-O, an Oregon corporation.
"Stock of e*xxxxxxxxx.xxx, inc." means restricted common stock of
e*xxxxxxxxx.xxx, inc.
"Tax" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Sec. 59A), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof for WP-O and/or WP-D, as
appropriate.
"WPEC" means WP-O, a wholly owned subsidiary of WP-D, and WP-D.
2. Basic Transaction
(a) Purchase and Sale of Assets. On and subject to the terms and
conditions of this Agreement, the Buyer through New Corp., which will be a
wholly owned subsidiary of Buyer, agrees to purchase from the Seller (WP-O, a
wholly owned subsidiary of WP-D), and the Seller agrees to sell, transfer,
convey, and deliver to the Buyer, all of the Acquired Assets, as set forth in
Schedule C-1 attached hereto, at the Closing for the consideration specified
below in this Section 2. (WPEC agrees to provide EMAC with a preliminary
itemized list of all inventory and assets being sold not later than September
30, 2001, with an updated and final itemized list provided prior to the date of
Closing). WPEC hereby represents that at the time of Closing, EMAC shall have
the exclusive ownership of the assets, free and clear of any liens or
encumbrances, except and subject to as set forth in Schedule C-2 to be prepared
and attached to the Purchase Agreement. The Buyer will not assume or have any
responsibility with respect to any other obligation or liabilities of the Seller
not included within the Schedule of Liabilities as set forth in Schedule C2.
WPEC agrees to provide EMAC with a preliminary itemized list of all liabilities
of which the Assets are subject to not later than October 14, 2001, with an
5
updated and final itemized list provided prior to the date of Closing. The
current consulting contract or any liabilities related thereto between Xxxxxx
Xxxxx and WPEC will not be assumed by EMAC or New Corp. WPEC shall indemnify
EMAC for all undisclosed liabilities, claims, costs, expenses, and litigation
resulting from WPEC's operations of the Assumed Assets prior to the date of
Closing of the acquisition.
(b) Title to Assets. Except as set forth herein, Title to all of the
Acquired Assets shall be transferred from WPEC to New Corp. or Buyer at Closing.
(c) Purchase Price.
(i) The "Purchase Price" shall be the sum of (a) five hundred
thousand ($500,000) dollars in cash; (b) a seven hundred thousand ($700,000)
dollar seven-year Promissory Note of New Corp. guaranteed by EMAC; and (c) one
million two hundred thousand (1,200,000) shares of EMAC restricted common stock.
(ii) The Purchase Price shall be paid as follows: (A) five hundred
thousand ($500,000) dollars payable at Closing in cash or other immediately
available funds; (B) a seven hundred thousand ($700,000) dollar seven-year
Promissory Note of New Corp. (guaranteed by EMAC), which shall be in the form of
Exhibit 2C, at the interest rate of seven (7%) percent per annum [interest only
(monthly) for the first two years and amortized straight line principal and
interest monthly payments for the remaining five years]. To secure payment of
the note, WPEC shall be granted a security interest in all of New Corp.'s
assets, which shall be in the form of Exhibit 2C, which security interest shall
be subordinate to the security interests of all present and future secured debt
of EMAC and New Corp; and (C) one million two hundred thousand (1,200,000)
shares of restricted EMAC common stock. Such stock shall have an additional
legend indicating that any sale shall be subject to the following limitations:
I) during the first year following the Closing Date no
stock shall be sold;
II) during the second year following the Closing Date, a
three (3) business day first right of refusal to EMAC or
its designees and also subject to a maximum of two
hundred fifty thousand ($250,000) dollars worth of stock
sold by WP-D and all of WP-D's shareholders in the
aggregate in any sixty (60) calendar day period;
III) during the third year following the Closing Date, a 10
business day right of first refusal to EMAC or its
designees and also subject to a maximum number of shares
sold equal to the maximum allowed under Rule 144 for
non-affiliate holders of shares for one year;
IV) After three full years from the Closing Date, a 10
business day right of first refusal to EMAC or its
designees.
6
(d) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Levy & Levy, P.A.,
Plaza 1000, Suite 000, Xxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx, 00000, commencing at
9:00 a.m. local time on the business day or at any other mutually agreed upon
location or by Federal Express, following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take, at the closing itself) or such other date as the
Parties may mutually determine (the "Closing Date"); provided, however, that the
Closing Date shall be no later than November 28, 2001 or such later date as the
Parties may mutually agree upon.
(e) Deliveries at the Closing. At the Closing, (i) the Seller will
deliver to the Buyer the various certificates, instruments, and documents
referred to in Section 6(a) below; (ii) the Buyer will deliver to the Seller the
instructions for EMAC's transfer agent to issue the agreed upon shares in
Section 6(b) below; (iii) the Seller will execute, acknowledge (if appropriate),
and deliver to the Buyer (A) assignments (including leases of real property and
Intellectual Property transfer documents) in the forms attached hereto under
Schedule (A) and (B) such other instruments of sale, transfer, conveyance, and
assignment as the Buyer and its counsel may reasonably request; (iv) the Buyer
will execute, acknowledge (if appropriate), and deliver to the Seller (A) an
Agreement in the form attached hereto for the responsibility of certain
liabilities as Schedule B; and (B) such other instruments of agreement for
payment as the Seller and its counsel may reasonably request; (v) the Buyer will
deliver to the Seller the consideration specified in Section 2(c) above; (vi)
the current consulting contract and any liabilities related thereto between
Xxxxxx Xxxxx and WPEC will not be assumed by EMAC or New Corp. At Closing, WPEC
and Xxxxxx Xxxxx will release all claims, current and future, against EMAC and
New Corp. related to such consulting contract. In consideration of Xx. Xxxxx
agreeing to a non-compete restriction, New Corp. will execute, on or before
Closing, a new contract with Xx. Xxxxx. Such new contract shall provide for the
following: (a) two hundred thousand ($200,000) dollars per year for six
consecutive years, beginning monthly thirty (30) days after Closing; (b) two
hundred thirty-three thousand (233,000) shares of EMAC restricted common stock
with same three (3) day first right of refusal as set forth above; and (c) the
benefits, but not the obligations, under such contract shall be assignable by
Xx. Xxxxx. At the Closing, Buyer shall deliver to Xx. Xxxxx instructions for
EMAC's transfer agent to issue the agreed upon shares to Xx. Xxxxx or assigns.
Such shares shall also be subject to a restriction of fifteen thousand (15,000)
shares sold in any forty-five (45) calendar day period; (vii) the execution, on
or before Closing, of a new six-year Employment Agreement with New Corp, with C.
Xxxx XxXxxx as the President and CEO of New Corp., a copy of which is attached
hereto as Schedule O; (viii) the execution, on or before Closing, of a new six-
year Employment Agreement with New Corp, with Xxxx Xxxxxx as the Vice President,
Secretary and Chief Financial Officer of New Corp., a copy of which is attached
hereto as Schedule P; (ix) EMAC shall obtain, prior to Closing, a minimum of two
million ($2,000,000) dollars in cash, to be utilized by New Corp. for working
capital. EMAC also agrees to use its best efforts to raise up to an additional
three million ($3,000,000) dollars within six months of Closing; (x) the
7
approval by Case Corp. of a "change in control", the agreement of Case Corp. to
provide New Corp. with acceptable financing, as well as other favorable terms
and conditions acceptable to EMAC; and (xi) the approval by Deutsche Bank of a
"change in control", the agreement of Deutsche Bank to provide acceptable debt
financing for New Corp. for a reasonable period in order to permit time for New
Corp. to replace or supplement a significant portion of such financing, as well
as other favorable terms and conditions acceptable to EMAC.
(f) Allocation. This transaction is structured as a taxable exchange of
assets for cash, notes and stock. The transaction does not qualify as a tax-
free reorganization under Internal Revenue Code 368. The Buyer and Seller agree
to report the transaction as a taxable exchange to the Internal Revenue Service.
Therefore, the parties agree to allocate the purchase price (and all other
capitalizable costs) among the acquired assets as follows:
(i) The fixed assets shall be valued at their book value as of the
Closing; and
(ii) All other assets set forth in the July 31, 2001 Balance Sheet
of the Seller (with the exception of organizational costs, which are not being
transferred) shall be valued at the lesser of their respective book values as of
the Closing or the remainder of the unapplied balance of the Purchase Price,
provided that accounts receivable shall be valued at 100% of the invoiced amount
less any applicable reserve as of the Closing; and
(iii) The balance of the Purchase Price, if any, shall be allocated
to "good will."
3. Representations and Warranties Regarding the Seller. WP-O and WP-D
represent and warrant to the Buyer that the statements contained in this Section
3 are correct and complete as of the date of this Agreement except as set forth
in the disclosure schedule accompanying this Agreement (or to be prepared by
Seller and submitted to Buyer not later than October 14, 2001) and initialed
by the Parties (the "Disclosure Schedule"). The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 3.
(a) Organization of the Sellers. WP-D is a corporation duly organized,
validly existing, and in good standing in the State of Delaware; and WP-O, its
wholly owned subsidiary, is a corporation duly organized, validly existing, and
in good standing in the State of Oregon.
(b) Authorization of Transaction. Both WP-O and WP-D have full
corporate power and authority, to execute and deliver this Agreement and to
perform their obligations hereunder. Without limiting the generality of the
foregoing, the Board of Directors of WP-O and WP-D have duly authorized the
execution, delivery, and performance of this Agreement by WP-O and WP-D. This
Agreement constitutes the valid and legally binding obligation of each of WP-O
8
and WP-D, enforceable in accordance with its terms and conditions, subject only
to WP-D Shareholder ratification, if required.
(c) Noncontravention. Except as otherwise disclosed herein, neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate in any material respect any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which the Seller is subject, (ii) violate any provision of the charter
or bylaws of WPEC or (iii) conflict with, result in a material breach of,
constitute a material default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any material agreement, contract, lease, license, instrument, or
other arrangement to which WPEC is a party or by which it is bound or to which
any of the Acquired Assets are subject (or result in the imposition of any
Security Interest upon any of the Acquired Assets). WPEC does not need to give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.
(d) Title to Assets. WP-O has good and marketable title to, or a valid
leasehold interest in, the assets used by it, located on its premises, or shown
on the Most Recent Balance Sheet or acquired after the date thereof, free and
clear of all Security Interests, except for assets disposed of in the Ordinary
Course of Business since the date of the Most Recent Balance Sheet and except
for liens disclosed in the Notes to the Financial Statements. Without limiting
the generality of the foregoing, WP-O has good and marketable title to all of
the Acquired Assets, free and clear of any Security Interest or restriction on
transfer, except for liens disclosed in the Notes to the Financial Statements
and in the Disclosure Schedule.
(e) Subsidiaries. WP-O does not have any Subsidiaries. WP-D has only
one subsidiary, WP-O.
(f) Financial Statements. Attached hereto as Schedule D, or provided
prior to the Closing, are the following financial statements (collectively the
"Financial Statements"): (i) audited balance sheets, statements of income,
retained earnings, and cash flows as of and for the last two fiscal years ended
July 31, 2000 and July 31, 2001 (the "Most Recent Fiscal Year End") for WP-O;
and (ii) unaudited balance sheet, statements of income, retained earnings, and
cash flows (the "Most Recent Financial Statements") as of and for the 2002
fiscal year-to-date period ended not more than 45 days prior to the Closing (the
"Most Recent Fiscal Month End") for WP-O. The Financial Statements (including
the Notes thereto where applicable) have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby, present
fairly the financial condition of WP-O as of such dates and the results of
operations of WP-O for such periods, and are consistent with the books and
records of WP-O. The financial statements referenced in clause (ii) will be
internally prepared by WP-O and such financial statement information as of
the date thereof will be to the best of WP-O's knowledge, true and correct.
9
WP-O hereby represents that WP-O's financial statements are able to be audited
for the time periods required under SEC and GAAP rules and guidelines.
(g) Events Subsequent to Most Recent Fiscal Year End. Since the Most
Recently Audited Fiscal Year End, there has not been any material adverse change
in the business, financial condition, operations, or results of operations of
WP-O or on behalf of WP-O that has not been previously disclosed in SEC filings.
Without limiting the generality of the foregoing, since that date:
(i) WPEC has not sold, leased, transferred, or assigned any of WP-
O's assets, tangible or intangible, of a value in excess of $1,000, other than
for a fair consideration and in the Ordinary Course of Business;
(ii) WP-O has not entered into any agreement, contract, lease, or
license (or series of related agreements, contracts, leases and licenses)
outside the Ordinary Course of Business;
(iii) No party (including WP-O) has accelerated, terminated,
modified, or canceled any material agreement, contract, lease or license (or
series of related agreements, contracts, leases and licenses) to which the WP-O
is a party or by which it is bound;
(iv) WPEC has not permitted any Security Interest upon any of WP-
O's material assets, tangible or intangible;
(v) WP-O has not made any capital expenditure (or series of
related capital expenditures) outside the Ordinary Course of Business;
(vi) WPEC has not made any capital investment in, any loan to, or
any acquisition of the securities or assets of, any other Person (or series of
related capital investments, loans, and acquisitions) ;
(vii) WP-O has not issued any note, bond, or other debt security or
created, incurred, assumed, or guaranteed any indebtedness for borrowed money or
capitalized lease obligation;
(viii) WP-O has not delayed or postponed the payment of
accounts payable and other Liabilities or WP-O, other than as consistent with
its Ordinary Course of Business.
(ix) The Seller has not canceled, compromised, waived, or released
any right or claim (or series of related rights and claims in excess of $1,000),
outside the Ordinary Course of Business.
(x) The Seller has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
10
(xi) WPEC represents that there has been no change made or
authorized in the charter or bylaws of WP-O;
(xii) WPEC has not issued, sold, or otherwise disposed of any of its
capital stock, or granted any options, warrants, or other rights to purchase or
obtain (including upon conversion, exchange, or exercise) any of WP-O's capital
stock;
(xiii) WPEC has not declared, set aside, or paid any dividend
or made any distribution with respect to WP-O's capital stock (whether in cash
or in kind) or redeemed, purchased, or otherwise acquired any of its capital
stock;
(xiv) WP-O has not experienced any material damage, destruction, or
loss (whether or not covered by insurance) to its property;
(xv) WP-O has not made any loan to, or entered into any other
transaction with, any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xvi) WP-O has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the terms of any
existing such contract or agreement outside the Ordinary Course of Business;
(xvii) WP-O has not granted any increase in the base
compensation of any of its directors, officers, and employees outside the
Ordinary Course of Business;
(xviii) WP-O has not adopted, amended, modified or terminated any
bonus, profit-sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of its directors, officers, and employees (or
taken any such action with respect to any other Employee Benefit Plan) on behalf
of WP-O;
(xix) WP-O has not made any other change in employment terms for any
of WP-O's directors, officers, and employees outside the Ordinary Course of
Business;
(xx) WP-O has not made or pledged to make any charitable or other
capital contribution.
(xxi) WP-O has not paid any amount to any third party with respect
to any Liability or obligation (including any costs and expenses WP-O has
incurred or may incur in connection with this Agreement and the transactions
contemplated hereby) which would not constitute an Assumed Liability if in
existence as of the Closing, other than accounting fees equal in amount to the
usual accounting costs which would have been incurred by WP-O in the Ordinary
Course of Business.
(xxii) to the knowledge of WPEC, there has not been any other
material occurrence, event, incident, action, failure to act, or transaction
11
involving WP-O which will have a material adverse effect upon the business of
the Seller; and
(h) Undisclosed Liabilities. WP-O does not have any undisclosed
liabilities affecting their assets being sold herewith. There is no basis for
any present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against any of the assets to be acquired giving rise
to any liability.
(i) Legal Compliance. WP-O has complied in all material respects with
all applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against it alleging any failure so to comply.
(j) Tax and Other Returns and Reports. All federal, state, local and
foreign Tax Returns and other similar filings required to be filed by WP-O and
WP-D with respect to any federal, state, local or foreign tax have been filed
with the appropriate governmental agencies in all jurisdictions in which such
Tax Returns are required to be filed, and all such Tax Returns properly reflect
the liabilities of WP-O and WP-D for Taxes for the periods, property, or events
covered thereby. All Taxes which are called for in the Tax Returns, or claimed
to be due by any taxing authority from WP-O or WP-D, have been properly accrued
or paid. WPEC has not received any notice of assessment or proposed assessment
in connection with any Tax Returns and there are no pending tax examinations of
or tax claims asserted against the Acquired Assets. There are no tax liens
(other than any lien for current taxes not yet due and payable) in any of the
Acquired Assets.
(k) Intellectual Property.
(i) WP-O owns or has the right to use pursuant to ownership
license, sublicense, agreement or permission all Intellectual Property used in
the operation of the businesses of the Seller as presently conducted. Each item
of Intellectual Property owned or used by WP-O immediately prior to the Closing
hereunder will be owned or available for use by the Buyer on identical terms and
conditions immediately subsequent to the Closing hereunder.
(ii) To the knowledge of WPEC, WP-O has not interfered with,
infringed upon, misappropriated, otherwise come into conflict with any material
Intellectual Property rights of third parties, and none of WPEC and the
directors and officers of WPEC have ever received any charge, complaint, claim,
demand, or notice alleging any such interference, infringement,
misappropriation, or violation. To the knowledge of WPEC and the directors and
officers of WPEC, no significant competitor of WP-O has interfered with
infringed upon, misappropriated, or otherwise come into conflict with any
Intellectual Property rights of WP-O for commercial purposes.
(iii) Section 3(k)(iii) of the Disclosure Schedule identifies
each item of Intellectual Property that any third party owns and that WP-O uses
12
pursuant to license, sublicense, agreement, or permission (other than
commercially available software which is subject to a "shrinkwrap" license (the
"Shrinkwrap Software").The Seller has delivered to the Buyer correct and
complete copies of all such licenses, sublicenses, agreements, and permissions
(as amended to date) that are being purchased herewith. With respect to each
item of Intellectual Property required to be identified in Section 3(k)(iii) of
the disclosure Schedule, to the knowledge of WPEC:
(A) the license, sublicense, agreement, or permission
covering the item is legal, valid, binding, enforceable, and in full force and
effect;
(B) the license, sublicense, agreement, or permission will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions contemplated
hereby;
(C) to the knowledge of the Seller, no party to the license,
sublicense, agreement, or permission is in material breach or default, and no
event has occurred which with notice or lapse of time would constitute a
material breach or default or permit termination, modification, or acceleration
thereunder;
(D) no party to the license, sublicense, agreement, or
permission has repudiated any provision thereof;
(E) with respect to each sublicense, the representations and
warranties set forth in subsections (A) through (D) above are true and correct
with respect to the underlying license;
(F) the Seller has not granted any sublicense or similar
right with respect to the license, sublicense, agreement, or permission.
(iv) To the knowledge of any of the directors and officers of WPEC,
WP-O will not interfere with, infringe upon, misappropriate, or otherwise come
into conflict with, any Intellectual Property rights of third parties as a
result of the continued operation of its business as presently conducted.
(l) Tangible Assets. Substantially all of the tangible assets that are
being purchased herewith used by WP-O in the conduct of its business are in good
operating condition and repair (subject to normal wear and tear), and is
suitable for the purposes for which they presently are used, subject to normal
obsolescence.
(m) Contracts. Section 3(m) of the Disclosure Schedule lists the
following contracts and other agreements to which WP-O is a party:
(i) any agreement (or group of related agreements) for the lease
of personal property to or from any Person providing for aggregate remaining
lease payments in excess of $5,000;
13
(ii) any agreement (or group of related agreements) for the
purchase or sale of supplies, products, or other personal property, or for the
furnishing or receipt of services, the performance of which will extend over a
period of more than one year, result in a material loss to the Seller, or
involve consideration in excess of $1,000;
(iii) any agreement concerning a partnership or joint venture;
(iv) any agreement (or group of related agreements) under which it
has created, incurred, assumed, or, guaranteed any indebtedness for borrowed
money, or any capitalized lease obligation, in excess of $1,000 or under which
it has imposed a Security Interest on any of its assets, tangible or intangible;
(v) any agreement concerning confidentiality or noncompetition;
(vi) any agreement between WP-O and its Affiliates;
(vii) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or arrangement for
the benefit of its current or former directors, officers, and employees which
would result in liability to the Buyer;
(viii) any collective bargaining agreement;
(ix) any agreement for the employment of any individual on a full-
time, part-time, consulting, or other basis providing annual compensation or
providing severance benefits;
(x) any agreement under which it has advanced or loaned any amount
to any of its directors, officers, and employees outside the Ordinary Course of
Business;
(xi) any agreement under which the consequences of a default or
termination could have a material adverse effect on the business, financial
condition, operations, results of operations of WP-O; or
(xii) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $1,000.
The Seller has furnished or made available to the Buyer a correct and
complete copy of each written agreement listed in Section 3(m) of the Disclosure
Schedule (as amended to date) and a written summary setting forth the terms and
conditions of each oral agreement referred to in Section 3(m) of the Disclosure
Schedule. With respect to each agreement required to be disclosed hereunder:
(A) the agreement is legal, valid, binding, enforceable, and in full force and
effect subject to laws limiting or affecting creditors' rights generally; (B)
the agreement will continue to be legal, valid, binding, enforceable, and in
full force and effect on identical terms following the consummation of the
14
transactions contemplated hereby subject to laws limiting or affecting
creditors' rights generally; (C) no party is in breach or default, in any
material respect, and no event has occurred which with notice or lapse of time
would constitute a material breach or default, or permit termination,
modification, or acceleration, under the agreement; and (D) to WPEC's knowledge
no party has repudiated any material provision of the agreement. With respect
to verbal employment arrangements, the Disclosure Schedule shall only be
required to list the name, title, base compensation, and full or part-time
status of employees and those consultants currently performing active services
for the Seller.
(n) Change of Name and Stock Symbol. Parent agrees that within 30 days
after the Closing, Parent will cause its name to be changed, and will cause WP-O
to have its name changed, to a name dissimilar to Western Power & Equipment or
any tradename or assumed business name currently used by Parent or Seller. In
addition, Parent agrees that within 30 days after the Closing, Parent shall
apply to the appropriate regulatory authority to have its stock symbol changed
as soon as possible from WPEC to a symbol dissimilar to WPEC.
(o) Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Seller.
(p) Insurance. WP-O's business has been insured through insurance
policies maintained by WPEC which at the time of closing will be current and in
force.
(q) Litigation. Section 3(q) of the Disclosure Schedule sets forth each
instance in which WPEC (i) is subject to any outstanding injunction, judgment,
order, decree, ruling, or charge or (ii) is a party or to WPEC's knowledge, is
threatened to be made a party to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction or before any
arbitrator. None of the actions, suits, proceedings, hearings' and
investigations set forth in Section 3(q) of the Disclosure Schedule could result
in any material adverse change in the assets being sold and liabilities being
assumed, business, financial condition, operations or results of operations of
WP-O. Neither WPEC nor the directors and officers of WPEC has any reason to
believe that any such action, suit, proceeding, hearing, or investigation may be
brought or threatened against WP-O.
(r) Employees. WPEC has not been informed that any executive, key
employee, employee engaged in training, or group of employees comprising the
majority of the employees of any department that he, she or they intend to
terminate employment with WP-O, or that if offered employment by
e*xxxxxxxxx.xxx, inc. or New Corp. that they would not accept same. WPEC is not
a party to or bound by any collective bargaining agreement, nor has it
experienced any strikes, grievances, claims of unfair labor practices, or other
collective bargaining disputes. WPEC has not committed any unfair labor
practice. Neither WPEC nor the directors and officers of WPEC has any knowledge
of any organizational effort presently being made or threatened by or on behalf
16
of any labor union with respect to employees of WP-O.
(s) Employee Benefits. The employees of WP-O are covered by employee
benefit plans sponsored by WPEC.
(t) Guaranties. WPEC is not a guarantor or otherwise liable for any
Liability or obligation (including indebtedness) of any other Person except as
set forth in Schedule C2.
(u) Environment, Health, and Safety.
(i) To the knowledge of the Seller, the Seller and their
respective Affiliates have complied with all Environmental, Health, and Safety
Laws, and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or commenced against any of
them alleging any failure so to comply. Without limiting the generality of the
preceding sentence, the Seller has obtained and been in compliance with all of
the material terms and conditions of all permits, licenses, and other
authorizations which are required under, and has complied in all material
respects with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables which are
contained in, all Environmental, Health, and Safety Laws.
(ii) The Seller does not have any Liability (and the Seller has not
handled or disposed of any substance, arranged for the disposal of any
substance, exposed any employee or other individual to any substance or
condition, or owned or operated any property or facility in any manner that
could form the basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against the Seller
giving rise to any Liability) for damage to any site, location, or body of water
(surface or subsurface), for any illness of or personal injury to any employee
or other individual, under any Environmental, Health, and Safety Law except
with respect to possible such liabilities associated with the sale, use,
operation, repair, and rental of equipment used in the ordinary course of the
Seller's business, including electromagnetic radiation.
(iii) To the knowledge of the Seller, all properties and equipment
used in the business of WP-O have been free of asbestos, PCB'S, methylene
chloride, trichloroethylene, 1,2-transdichloroethylene, dioxins, dibenzofurans,
and Extremely Hazardous Substances other than in the ordinary course of business
or in de minimus quantities.
(v) Certain Business Relationships with the Seller. The real property
and improvements used in connection with WP-O's operations at Sacramento,
California; Yuba City, California; Sparks, Nevada; and Vancouver, Washington;
are leased from XxXxxx-Xxxxx Realty Company, LLC ("MRR"), a Delaware limited
liability company, the owners of which are the XxXxxx Family Irrevocable Trust
for the benefit of the family of Xxxx XxXxxx, the Chairman of WP-D's Board of
Directors as well as its President and CEO, and the Xxxxx Family Irrevocable
16
Trust for the benefit of the family of Xxxxxx X. Xxxxx, one of its directors.
Such leases are fair market value rent leases with terms of approximately 7
years each. In addition to base rent, WP-O is also responsible for the payment
of all related taxes and other assessments, utilities, insurance and repairs
(both structural and regular maintenance) with respect to the leased real
properties during the term of the leases.
(w) Disclosure. The representations and warranties contained in this
Section 3 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 3 not misleading.
4. Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Seller that the statements contained in this Section 4 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 4),
except as set forth in the Disclosure Schedule. The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered paragraphs
contained in this Section 4.
(a) Organization of the Buyer. EMAC is a corporation duly organized,
validly existing, and in good standing under the laws of Delaware. New Corp.
will be a corporation duly organized, validly existing, and in good standing
under the laws of Washington.
(b) Authorization of Transaction. EMAC has the full corporate power and
authority to execute, deliver, and perform this Agreement and all instruments
and documents which are required to be executed and delivered by EMAC pursuant
to this Agreement (the "EMAC Ancillary Documents") and has taken all corporate
action required by law and its organizational documents to authorize the
execution and delivery of this Agreement and the EMAC Ancillary Documents and
the consummation of the transactions set forth in this Agreement and the EMAC
Ancillary Documents. This Agreement and the EMAC Ancillary Documents and the
consummation by EMAC of the transactions set forth in this Agreement have been
duly and validly authorized, executed, and delivered by EMAC, and this Agreement
and the EMAC Ancillary Documents are valid and binding upon EMAC and enforceable
against EMAC in accordance with their terms (except as the enforceability
thereof may be limited by bankruptcy, bank moratorium or similar laws affecting
creditors' rights generally and laws restricting the availability of equitable
remedies and may be subject to general principles of equity whether or not such
enforceability is considered in a proceeding at law or in equity). Each share of
Stock of EMAC to be issued to WP-D at the closing will be duly and validly
authorized and issued, free and clear of all liens and fully paid and non-
assessable.
(c) Capitalization. EMAC's authorized capital stock consists of
60,000,000 shares of Common Stock, $0.0001 par value, of which 17,140,150 shares
are issued and outstanding or reserved for issuance, all of which are, or will
17
be prior to the Closing validly issued, fully paid and nonassessable. EMAC's
issued and outstanding shares are the only shares of stock authorized to be
issued by EMAC and, except as disclosed in EMAC public and regulatory filings
and press releases or described in this Agreement there are no subscriptions,
options, warrants, rights or other agreements outstanding to acquire shares of
stock of EMAC or any other equity security or security convertible into an
equity security. There are no agreements or commitments to increase, decrease or
otherwise alter the authorized capital stock of EMAC. EMAC and its officers and
directors have no knowledge of EMAC stock being delisted. EMAC will use its best
efforts to retain is listing on the OTC Bulletin Board. Listing of EMAC stock
on any national exchange (NYSE or Nasdaq) will satisfy the requirement of EMAC
to use its best efforts to retain its listing.
(d) Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer is subject or any provision of
its charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Buyer is a party or by which it is bound or to which any of its assets is
subject. EMAC does not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency in order for the Parties to consummate the transactions contemplated by
this Agreement.
(e) Securities Filings. EMAC is currently listed on the OTC Bulletin
Board and has made all filings required by the Securities Act of 1933 and the
Securities Exchange Act of 1934, as amended, and such filings did not contain
any material misstatement or omit to state a material fact required to make the
statements therein not misleading.
(f) Disclosure. The representations and warranties contained in
this paragraph 4 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this paragraph 4 not misleading.
(g) Legal Compliance. EMAC has complied in all material respects with
all applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against it alleging any failure so to comply.
(h) Tax and Other Returns and Reports. All federal, state, local and
foreign Tax Returns and other similar filings required to be filed by EMAC with
18
respect to any federal, state, local or foreign tax have been filed with the
appropriate governmental agencies in all jurisdictions in which such Tax Returns
are required to be filed, and all such Tax Returns properly reflect the
liabilities of EMAC or Taxes for the periods, property or events covered
thereby.
(i) Financial Statements. EMAC has filed with the U.S. Securities and
Exchange Commission the following financial statements (collectively the "EMAC
Financial Statements"): (i) audited balance sheets, statements of income,
retained earnings, and cash flows as of and for the last two fiscal years ended
December 31, 1999 and December 31, 2000 (the "Most Recent Fiscal Year End") for
EMAC; and (ii) unaudited balance sheet, statement of income, retained earnings,
and cash flow for the 3 month and 6 month period ended June 30, 2001. The
Financial Statements (including the Notes thereto where applicable) have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, present fairly the financial condition of EMAC as of
such dates and the results of operations of EMAC for such periods, and are
consistent with the books and records of EMAC.
(j) Litigation. EMAC is not (i) subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (ii) a party or to EMAC's
knowledge, is threatened to be made a party to any action, suit, proceeding,
hearing, or investigation of, in, or before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator. There are no actions, suits, proceedings, hearings' and
investigations which could result in any material adverse change in the assets
being sold and liabilities being assumed, business, financial condition,
operations or results of operations of EMAC. To EMAC's directors and officers'
knowledge, no such action, suit, proceeding, hearing, or investigation may be
brought or threatened against EMAC.
(k) Environment, Health, and Safety.
(i) To the knowledge of the Buyer, the Buyer and their respective
Affiliates have complied with all Environmental, Health, and Safety Laws, and no
action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging any
failure so to comply. Without limiting the generality of the preceding
sentence, the Buyer has obtained and been in compliance with all of the material
terms and conditions of all permits, licenses, and other authorizations which
are required under, and has complied in all material respects with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables which are contained in, all
Environmental, Health, and Safety Laws.
(ii) The Buyer does not have any Liability (and the Buyer has not
handled or disposed of any substance, arranged for the disposal of any
substance, exposed any employee or other individual to any substance or
condition, or owned or operated any property or facility in any manner that
could form the basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand against the Buyer
19
giving rise to any Liability) for damage to any site, location, or body of water
(surface or subsurface), for any illness of or personal injury to any employee
or other individual, under any Environmental, Health, and Safety Law except
with respect to possible such liabilities associated with the sale, use,
operation, repair, and rental of equipment used in the ordinary course of the
Buyer's business, including electromagnetic radiation.
(iii) To the knowledge of the Buyer, all properties and equipment
used in the business of EMAC have been free of asbestos, PCB'S, methylene
chloride, trichloroethylene, 1,2-transdichloroethylene, dioxins, dibenzofurans,
and Extremely Hazardous Substances other than in the ordinary course of business
or in de minimus quantities
(l) Cooperation. Buyer agrees to cooperate with and assist Seller in
its efforts to sell any real estate leased to Buyer by Seller.
5. Pre-Closing Covenants. The Parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its best efforts to take all
action, and to do all things necessary, in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the closing conditions set forth in Section 6
below).
(b) Notices and Consents. WPEC will give any notices to third
parties, and WPEC will use their best efforts to obtain any third party
consents, that the Buyer reasonably may request in connection with the matters
referred to in Section 3(c) above. Each of the Parties will give any notices
to, make any filings with, and use its best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in Section 3(c) and Section 4(c)
above.
(c) Operation of Business. WPEC will not engage in any practice, take
any action, or enter into any transaction outside the Ordinary Course of
Business. Without limiting the generality of the foregoing, WPEC will not (i)
declare, set aside, or pay any dividend or make any distribution with respect to
WP-O capital stock, (ii) pay any amount to any third party with respect to any
Liability or obligation (including any costs and expenses the Seller has
incurred or may incur in connection with this Agreement and the transactions
contemplated hereby other than Seller's usual accounting-related costs) which
would not constitute a Liability if in existence as of the Closing, or (iii)
otherwise engage in any practice, take any action, or enter into any transaction
of the sort described in Section 3(g) above.
(d) Preservation of Business. WP-O will keep its business and
properties substantially intact, including its present operations, physical
facilities, working conditions, and relationships with lessors, licenser,
suppliers, customers, and employees.
20
(e) Full Access. WP-O will permit representatives of the Buyer to have
access at all reasonable times, and in a manner so as not to interfere with the
normal business operations of WP-O to all premises, properties, personnel,
books, records (including Tax records), contracts, and documents of or
pertaining to WP-O provided, however, that no activities will be carried out
within WP-O's premises except by prior arrangement with a representative of WP-O
who shall be designated for that purpose. Buyer shall use its best efforts to
minimize the need to conduct on-site activities and, when they are necessary, to
avoid unnecessary disruption of WP-O's business. Seller will make available to
Buyer those of WP-O's employees who are reasonably necessary in order for Buyer
to complete its due diligence investigations.
(f) Notice of Developments. Each Party will give prompt written notice
to the other Party of any material adverse development causing a breach of any
of its own representations and warranties in Section 3 and Section 4 above. No
disclosure by any Party pursuant to this Section 5(f), however, shall be deemed
to amend or supplement the Disclosure Schedule or to prevent or cure any
misrepresentation, breach of warranty, or breach of covenant provided that if
the party to whom a disclosure was made proceeds to closing, that party shall be
deemed to have waived such breach and any remedies which may have been available
with respect thereto.
6. Conditions to Obligation to Close
(a) Conditions to Obligation of the Buyer. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Seller shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) the Seller shall have procured all of the third party consents
specified in Section 5(b) above and the deliveries as set forth in Section 2(e)
above;
(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator, wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement,
(B) cause any of the transactions contemplated by this Agreement to be rescinded
following consummation, or (C) affect adversely and materially the right of the
Buyer to own the Acquired Assets and to operate the former businesses of the
Seller;
21
(v) receipt of Seller's audited Financial Statements for the year
ended July 31, 2001;
(vi) the Seller and the Buyer shall have received all
authorizations, consents, and approvals of governments and governmental
agencies, if any, referred to in Section 3(c) and Section 4(c) above;
(vii) all actions to be taken by the Seller in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to the
Buyer;
(viii) preliminary due diligence shall have been completed to the
satisfaction of Buyer not later than October 22, 2001 and no material adverse
due diligence has been discovered by Buyer prior to the Closing;
(ix) compliance with miscellaneous covenants in Paragraph 9 and
elsewhere in this Agreement;
(x) compliance with the various money obligations including
Promissory Notes, as set forth previously in this Agreement; and
(xi) receipt by Buyer of all schedules and exhibits to this
agreement on or before October 14, 2001 and approval thereof by Buyer not later
than October 22, 2001 with final schedules and exhibits without material changes
received by Buyer prior to the Closing.
The Buyer may waive any condition specified in this Section 6(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Seller. The obligation of the
Seller to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section 4
above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) EMAC shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement
or (B) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction, judgment, order,
22
decree, or charge shall be in effect);
(iv) WP-D shareholder approval if WP-D elects to submit the
transaction for such approval; and
(v) The Seller and the Buyer shall have received all other
authorizations, consents, and approvals of governments and governmental
agencies, if any, referred to in Section 3(c) and Section 4(c) above;
(vi) receipt by Seller of all schedules and exhibits to this
agreement on or before October 14, 2001 and approval thereof by Seller not later
than October 22, 2001 with final schedules and exhibits without material changes
received by Seller prior to the Closing.
The Buyer may waive any condition specified in this Section 6(b) if it
executes a writing so stating at or prior to the Closing.
7. Termination.
(a) Termination of Agreement. Certain of the Parties may terminate this
Agreement as provided below:
(i) the Buyer and the Seller may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written
notice to the Seller at any time prior to the Closing (A) in the event the
Seller has breached any material representation, warranty, or covenant contained
in this Agreement in any material respect, and the Buyer has notified the Seller
of the breach, and the breach has continued without cure for a period of ten
(10) days after the notice of breach; or (B) if the Buyer discovers any material
adverse change in Seller's assets or business arising after October 22, 2001;
and
(iii) the Seller may terminate this Agreement by giving written
notice to the Buyer (A) at any time prior to the Closing in the event the Buyer
has breached any material representation, warranty, or covenant contained in
this Agreement in any material respect, the Seller has notified the Buyer of the
breach, and the breach has continued without cure for a period of ten (10) days
after the notice of breach; (B) on or before October 24, 2001 if the Buyer has
failed to place in escrow a minimum of two million five hundred thousand
($2,500,000) dollars on or before October 22, 2001; or (C) on or before October
24, 2001 if Buyer has failed to provide written notice of completion of, and
satisfaction with, its preliminary due diligence. Such escrow shall be held by
the law firm of Levy & Levy, P.A. at Xxxxx 000, Xxxxx 0000, Xxxx Xxxxxx,
Xxxxxxxx, New Jersey 08043-4634 and the funds placed in such escrow shall remain
in the escrow until the Closing or until this Agreement is terminated.
23
8. Indemnification
(a) Survival of Representations and Warranties. All of the
representations of the Buyer and the Seller contained in this Agreement shall
survive the Closing and continue in full force and effect thereafter for a
period of two (2) years following the date of Closing (subject to any applicable
statutes of limitations, the last day of which shall be the "Expiration Date").
(b) Indemnification Provisions for Benefit of the Buyer.
Subject to the limitations set forth in Section 8(e) below:
(i) In the event the Seller breaches (or in the event any third
party alleges facts that, if true, would mean WPEC has breached) any of its
material representations, warranties, and covenants contained in the Asset
Purchase Agreement, and, provided that the Buyer makes a written claim for
indemnification against WPEC within the survival period set forth in Section
8(a) above, then WPEC, jointly and severally, agree to indemnify the Buyer from
and against the entirety of any Losses the Buyer may suffer through and after
the date of the claim for indemnification including any Losses the Buyer may
suffer after the end of any applicable survival period resulting from, arising
out of, relating to, in the nature of, or caused by the breach (or the alleged
breach).
(ii) WPEC agrees to indemnify the Buyer from and against the
entirety of any Losses the Buyer may suffer resulting from, arising out of,
relating to, in the nature of, or caused by any Liability of WP-O which is not a
Liability (including any Liability of WPEC that becomes a Liability of the Buyer
under any bulk transfer law of any jurisdiction, under any common law doctrine
of de facto merger or successor liability, or otherwise by operation of law).
This indemnity obligation with respect to Losses arising from any Third Party
Claim (as defined below) shall not be limited to the survival period set forth
in Paragraph 8(a) above.
(iii) For purposes of this Section 8, the term "Losses" shall mean
all actions, suits, proceedings, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees, rulings, damages,
dues, penalties, fines, costs, amounts paid in settlement, liabilities,
obligations, taxes, liens, losses, expenses, and fees, including court costs and
reasonable attorneys' fees and expenses.
(iv) At the option of Buyer, Buyer may set off any damages or
liabilities due Buyer by reducing its Promissory Note to WPEC. Buyer shall have
no right of set off against the EMAC stock issued to Seller.
(c) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") which may give rise
to a claim for indemnification against any other Party (the "Indemnifying
Party") under this Paragraph 8, then the Indemnified Party shall promptly notify
24
each Indemnifying Party thereof in writing; provided, however, that no delay on
the part of the Indemnified Party in notifying any Indemnifying Party shall
relieve the Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party thereby is prejudiced by such
delay.
(ii) Any Indemnifying Party will have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (A) the Indemnifying
Party notified the Indemnified Party in writing with 15 days after the
Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will, to the full extent required by this Agreement,
indemnify the Indemnified Party from and against the entirety of any Losses the
Indemnified Party may suffer resulting from, arising out of, relating to, in the
nature of, or caused by the Third Party Claim, (B) the Indemnifying Party
provides the Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the financial resources
to defend against the Third Party Claim and fulfill its indemnification
obligations hereunder, (C) the Third Party Claim involves only money damage and
does not seek an injunction or other equitable relief, (D) settlement of, or an
adverse judgment with respect to, the Third Party Claim is not, in the good
faith judgment of the Indemnified Party, likely to establish a prejudicial
custom or practice materially adverse to the continuing business interests of
the Indemnified Party, and (E) the Indemnifying Party conducts the defense of
the Third Party Claim actively and diligently.
(iii) So long as the Indemnifying Party is conducting the defense of
the Third Party Claim in accordance with Section 8(c)(ii) above, (A) the
Indemnified Party may retain separate co-counsel at its sole cost and expense
and participate in the defense of the Third Party Claim, (B) the Indemnified
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party (not to be withheld unreasonably), and (C) the Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the Third Party Claim without the prior written consent of the
Indemnified Party (not to be withheld unreasonably).
(iv) In the event any of the conditions in Section8(c)(ii) above is
or is not complied with, however, (A) the Indemnified Party may defend against,
and consent to the entry of any judgment or enter into any settlement with
respect to, the Third Party Claim in any manner it reasonably may deem
appropriate (and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith), (B) the
Indemnifying Parties will reimburse the Indemnified party promptly and
periodically for the costs of defending against the Third Party Claim (including
reasonable attorneys' fees and expenses), and (C) the Indemnifying Parties will
remain responsible for any Losses the Indemnified Party may suffer, result from,
arising out of, relating to, in the nature of, or caused by the Third Party
Claim to the fullest extent provided in this paragraph 8.
25
(d) Indemnification Provisions for Benefit of the Seller.
(i) In the event the Buyer breaches (or in the event any third
party alleges facts that, if true, would mean Buyer has breached) any of its
material representations, warranties, and covenants contained in the Asset
Purchase Agreement, and, provided that the Seller makes a written claim for
indemnification against Buyer within the survival period set forth in Section
8(a) above, then Buyer agrees to indemnify the Seller from and against the
entirety of any losses the Seller may suffer through and after the date of the
claim for indemnification including any Losses the Seller may suffer after the
end of any applicable survival period resulting from, arising out of, relating
to, in the nature of, or caused by the breach (or the alleged breach).
(ii) For purposes hereof, the term "Losses" shall have the same
meaning as set forth in Section 8(a)(iv) above, and all other capitalized terms
shall have the meaning elsewhere provided in this Agreement.
(e) Limitations and Conditions on Indemnification. Except as otherwise
specifically provided in this Agreement:
(i) Indemnity obligations of WPEC hereunder may at EMAC's
election, be satisfied through the set off of cash against the Promissory Notes.
Buyer shall have no right of set off against the EMAC stock issued to Seller.
(ii) Except as specifically set forth in this Agreement, no party
shall be entitled to indemnity for claims or conditions which have been waived,
or deemed to be waived, by such party.
(iii) Notwithstanding any provision herein to the contrary, no
Indemnified Party shall be entitled to make any claim for indemnification
hereunder after the appropriate Expiration Date, provided, however, that if
prior to the close of business on the Expiration Date an Indemnifying Party
shall have been notified of a claim for indemnity hereunder and such claim shall
not have been finally resolved or disposed of at such date, the basis for such
claim shall continue to survive with respect to such claim and shall remain a
basis for indemnity hereunder with respect to such claim until such claim is
finally resolved or disposed of in accordance with the terms hereof.
(iv) Upon making a claim for indemnification, the Indemnifying
Party shall be subrogated, to the extent of such payment, to any rights that the
Indemnified Party may have against any other parties with respect to the subject
matter underlying such indemnified claim.
(v) Each party's rights under Section 8 hereof (as specifically
limited thereby) shall be the exclusive means by which such party shall seek
money damages against another party in connection with the transactions
contemplated hereby.
26
(vi) Indemnity obligations under this Agreement for Losses by Buyer
against WPEC hereunder shall be limited in total to the total amount of cash
payments received by WPEC up to the date of the claim for indemnification (both
cash received at the Closing and subsequent cash received by WPEC in payment of
the Promissory Note principal and interest).
9. Miscellaneous
(a) Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceedings,
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 Seller, each of the other parties will
cooperate reasonably with the contesting or defending Party and his or its
counsel in the contest or defense, make available his or its personnel, and
provide such testimony and access to his or 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 8).
(b) Restrictive Covenants.
(i) WPEC agrees not to compete against Buyer and its subsidiaries
in the business in which WPEC is engaged for a period of three (3) years in any
cities which WPEC is engaged.
(ii) For a period of three (3) years, Seller agrees not to solicit,
directly or indirectly, alone or as principal, partner, joint venture, officer,
director, employee, consultant, agent, independent contractor, or in any other
capacity whatsoever, employ, retain, or enter into any employment, agency,
consulting or other similar arrangement with or for a firm that competes with
Buyer, any person who became an employee of Buyer to purchase the Acquired
Assets and who was at the time of closing an employee of EMAC, or induce or
attempt to induce such person to terminate his employment with Buyer.
(iii) WPEC shall not for a period of three (3) years, directly or
indirectly, alone or as principal, partner, joint venturer, officer, director,
employee, consultant, agent, independent contractor or stockholder, or in any
other capacity whatsoever, directly or indirectly, for his, her or its own
account, or for the account of others, solicit orders for services of a kind or
nature like or similar to services performed by EMAC as of the Closing, from any
party that was a customer or client of EMAC during the preceding thirty-six (36)
month period preceding the Closing.
(c) Restriction of Stock of EMAC
(i) All EMAC stock issued to Seller and Parent pursuant to this
27
Agreement, in addition to the usual Rule 144 legend, shall contain a legend
indicating that any sale shall be subject to a first right of refusal to EMAC or
its designees as provided in the applicable provisions of Section 2(e)(ii). In
addition, WPEC's (or any stock reissued by WPEC in the aggregate) right to sell
Stock of EMAC shall be limited to a maximum amount of stock sold as provided in
the applicable provisions of Section 2(e)(ii).
(ii) All EMAC stock issued to Xx. Xxxxx pursuant to this Agreement,
in addition to the usual Rule 144 legend, shall contain a legend indicating that
any sale shall be subject to a first right of refusal to EMAC or its designees
as provided in the applicable provisions of Section 2(e)(ii). In addition, Xx.
Xxxxx'x (or any stock reissued by Xx. Xxxxx in the aggregate) right to sell
Stock of EMAC shall be limited to the maximum amount of stock sold as provided
in the applicable provisions of Section 2(e)(ii).
(d) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(e) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they related in any way to the subject
matter hereof.
(f) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party; provided, however, that the Buyer may (i) assign any or all
of its rights and interests hereunder to one or more of its Affiliates and (ii)
designate one or more of its Affiliates to perform its obligations hereunder (in
any or all of which cases the Buyer nonetheless shall remain responsible for the
performance of all of its obligations hereunder).
(g) Counterparts. This Agreement may be executed in any number of
counterparts, including counterparts transmitted by telecopier or FAX, any one
of which shall constitute an original of this Agreement. When counterparts of
facsimile copies have been executed by all parties, they shall have the same
effect as if the signature to each counterpart or copy were upon the same
document and copies of such documents shall be deemed valid as originals. The
parties agree that all such signatures may be transferred to a single document
upon the request of any party.
(h) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(i) Notices. All notices, requests, demands, claims, and other
28
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is personally delivered with receipt, sent by
reputable overnight delivery service or by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to WPEC: Copy to:
Western Power & Equipment Corp. Xxxxx & Fraade, P.C.
0000-X X.X. 000xx Xxxxxx 000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000 Suite 1100
(000) 000-0000 or Xxx Xxxx, XX 00000
(000) 000-0000 (fax) (000) 000-0000
(000) 000-0000 (fax)
Mr. Xxxxxx Xxxxx
00 Xxxxxxxx Xxxx
Xxx Xxxxx, Xxx Xxxx 00000
(000) 000-0000
If to the Buyer: Copy to:
e*xxxxxxxxx.xxx, Inc. Levy & Levy, P.A.
1400 Medford Xxxxx Xxxxx 0000, Xxxxx 000
Xxxxx 00 & Hartford Road Main Street
Medford, NJ 08055 Xxxxxxxx, XX 00000
(000) 000-0000 (000) 000-0000
(000) 000-0000 (fax) (000) 000-0000 (fax)
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the recipient at the address set forth above using any other means
(including personal delivery, expedite messenger service, telecopy, telex,
ordinary mail, or electronic mail), but no such notice, request, demand other
communication shall be deemed to have been duly given unless and until it
actually is received by its intended recipient. Any Party may change the
address to which notices, requests, demands, claims, and other' communications
hereunder are to be delivered by giving the other Party notice in the manner
herein set forth.
(j) Governing Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Delaware, or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Delaware.
(k) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
29
Buyer and the Seller. The Seller may consent to any such amendment at any time
prior to the Closing with the prior authorization of its board of directors;
provided, however, that any amendment effected WPEC has approved this Agreement
will be subject to the restrictions contained in the Delaware General
Corporation Law. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(l) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(m) Expenses. The Buyer and the Seller will bear their own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby. Buyer and Seller agree that
each will be solely responsible for all its own legal, accounting and consulting
fees, if any, for the review and completion of this transaction.
(n) Brokers'/Finders' Fees. WPEC represents that there are no finders
or any other fees to third persons or that WPEC has any liability or
responsibility for same. However, EMAC represents that it will be responsible
for a fair and reasonable finders fee that is deemed appropriate by EMAC's Board
of Directors and shall indemnify and hold WPEC harmless from any claims for
finders fees from sources derived from EMAC. Also, such finders fees do not
have to be paid at Closing.
(o) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.] Any reference to any federal, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. Nothing in the
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Disclosure Schedule identifies
the exception with particularity and describes the relevant facts in reasonable
detail.
(p) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(q) Specific Performance. Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
30
terms or otherwise are breached. Accordingly, each of the Parties agrees that
the other Party, shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action instituted in any
court of the United States or any state thereof having jurisdiction over the
Parties and the matter (subject to the provisions set forth in Section 9(s)
below), in addition to any other remedy to which it may be entitled, at law or
in equity (except as limited by this Agreement).
(r) Submission to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Delaware, in any action or
proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of the action or proceeding may be heard and determined in any
such court. Each party also agrees not to bring any action or proceeding arising
out of or relating to this Agreement in any other court. Each of the Parties
waives any defense of inconvenient forum to the maintenance of any action or
proceeding so brought and waives any bond, surety, or other security that might
be required of any other Party with respect thereto. Any Party may make service
on the other Party by sending or delivering a copy of the process (i) to the
Party to be served at the address and in the manner provided for the giving of
notices in Section 9(i) above or (ii) to the Party to be served at the address
and in the manner provided for the giving of notices in Section 9(i) above.
Nothing in this section, however, shall affect the right of any Party to bring
any action or proceeding arising out of or relating to this Agreement in any
other court or to serve legal process in any other manner permitted by law or in
equity. Each Party agrees that a final judgment in any action or proceeding so
brought shall be conclusive and may be enforced by suit on the judgment or in
any other manner provided by law or in equity.
(s) Bulk Transfer Laws. The Seller represents that in connection with
the transactions contemplated by this Agreement either (i) it is not necessary
to comply with the provisions of any bulk transfer laws of any state; or (ii) it
will comply with all applicable provisions of any bulk transfer laws of
applicable state.
(t) Investment Purpose. EMAC's shares shall be restricted stock.
Seller confirms that the EMAC shares are being acquired by it for investment,
and not with a view to sale or distribution thereof except to the extent
permitted by the Securities Act of 1933 and the rules and regulations of the
Securities Exchange Commission promulgated thereunder as amended from time to
time.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the
date first above written.
e*xxxxxxxxx.xxx, Inc.
By: /s/Xxxxxx X. X'Xxxx, III Date: September 18, 2001
--------------------------------- ------------------
Xxxxxx X. X'Xxxx, III, President
31
Attest By: /s/Xxxxx X. XxXxxxxx Date: September 18, 2001
--------------------------------- ------------------
Xxxxx X. XxXxxxxx, Secretary
Western Power & Equipment, Inc. (a corporation to be organized
under the laws of the State of Washington)
By: /s/C. Xxxx XxXxxx Date: September 18, 2001
--------------------------------- ------------------
C. Xxxx XxXxxx, President
Attest By: /s/Xxxx X. Xxxxxx Date: September 18, 2001
--------------------------------- ------------------
Xxxx X. Xxxxxx, Secretary
Western Power & Equipment Corp. (an Oregon corporation)
By: /s/C. Xxxx XxXxxx Date: September 18, 2001
--------------------------------- ------------------
C. Xxxx XxXxxx, President and CEO
Attest By: /s/Xxxx X. Xxxxxx Date: September 18, 2001
--------------------------------- ------------------
Xxxx X. Xxxxxx, Secretary
Western Power & Equipment Corp. (a Delaware corporation)
By: /s/C. Xxxx XxXxxx Date: September 18, 2001
--------------------------------- ------------------
C. Xxxx XxXxxx, President and CEO
Attest By: /s/Xxxx X. Xxxxxx Date: September 18, 2001
--------------------------------- ------------------
Xxxx X. Xxxxxx, Secretary
By: /s/C. Xxxx XxXxxx Date: September 18, 2001
--------------------------------- ------------------
C. Xxxx XxXxxx, Director
By: /s/Xxxxxx X. Xxxxx Date: September 18, 2001
--------------------------------- ------------------
Xxxxxx X. Xxxxx, Director
By: /s/Xx. Xxxxxxx Xxxxxxx Date: September 18, 2001
--------------------------------- ------------------
Xx. Xxxxxxx Xxxxxxx, Director
By: /s/Xxxxx Xxxxxx Date: September 18, 2001
--------------------------------- ------------------
Xxxxx Xxxxxx, Director
By: /s/Xxxxx Xxxxx Date: September 18, 2001
--------------------------------- ------------------
Xxxxx Xxxxx, Director
32
Schedule 1
Excluded Assets
1. The Anchorage, Alaska property located at 0000 X. Xxxxx Xxxxxx, Xxxxxxxxx,
XX 00000 along with all improvements, fixtures, leaseholds, and fittings
thereon.
2. The Moxee, Washington property located at 000 Xxxxxxxx Xxxxx, Xxxxx, XX
along with all improvements, fixtures, leaseholds, and fittings thereon
and subject to all leasehold interests held by United Rentals therein.
3. The corporate charter, qualifications to conduct business as a foreign
corporation, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, seals, minute
books, stock transfer books, blank stock certificates, and other documents
relating to the organization, maintenance, and existence of the Seller as
a corporation.
4. All federal and state Tax Refunds.
5. Any of the rights of the Seller under this Agreement.
33
