EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
By and Between
CMI CORPORATION
and
REXWORKS INC.
October 1, 1997
TABLE OF CONTENTS
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Page
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ARTICLE I
TRANSFER OF ASSETS
1.01 Purchase and Sale of Assets 1
1.02 Excluded Assets 3
ARTICLE II
LIABILITIES
2.01 Assumed Liabilities 4
2.02 Excluded Liabilities 5
2.03 Right to Contest 5
ARTICLE III
PURCHASE PRICE
3.01 Consideration 5
3.02 Amount and Payment of Purchase Price 6
3.03 Closing Date Balance Sheet 6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
4.01 Organization and Qualification; Subsidiaries 8
4.02 Authority; Vote Required 8
4.03 No Conflict; Required Filings and Consents 9
4.04 Permits; Compliance 10
4.05 Absence of Certain Changes or Events 10
4.06 Absence of Litigation 12
4.07 Contracts; No Default 12
4.08 Intellectual Property Rights 13
4.09 Insurance 15
4.10 Brokers 15
4.11 Title to Properties 15
4.12 Proxy Statement 15
4.13 Inventory 16
4.14 Condition of Purchased Assets 16
4.15 Accounts Receivable 16
4.16 Major Customers and Suppliers 16
4.17 Product Warranty 17
4.18 Legal Compliance 17
4.19 Excluded Assets 17
4.20 Assigned Contracts 17
4.21 Product Liability 18
4.22 Employee Benefit Plans; Labor Matters 18
4.23 Taxes 19
4.24 Environmental, Health and Safety 19
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
5.01 Organization and Qualification 21
5.02 Authority 21
5.03 No Conflict; Required Filings and Consents 21
5.04 Brokers 22
5.05 Financing 22
ARTICLE VI
COVENANTS
6.01 Affirmative Covenants of Seller 22
6.02 Negative Covenants of Seller 23
6.03 Confidentiality Agreement 24
6.04 Acquisition Proposals 24
6.05 Merger Agreement 25
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 Proxy Statement 25
7.02 Meeting of Stockholders 27
7.03 Appropriate Action; Consents; Filings 27
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7.04 Update Disclosure 28
ARTICLE VIII
CLOSING
8.01 Closing 29
ARTICLE IX
CLOSING CONDITIONS
9.01 Conditions to Obligations of Each Party Under This
Agreement 29
9.02 Additional Conditions to Obligations of Purchaser 31
9.03 Additional Conditions to Obligations to Seller 34
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.01 Termination 36
10.02 Effect of Termination 37
10.03 Expenses 37
ARTICLE XI
INDEMNIFICATION
11.01 Indemnification by Seller 39
11.02 Indemnification by Purchaser 40
11.03 Arbitration Procedures 40
11.04 Matters Involving Third Parties 42
ARTICLE XII
GENERAL PROVISIONS
12.01 Non-Survival of Representations and Warranties 43
12.02 Notices 43
12.03 Amendment 44
12.04 Waiver 45
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12.05 Headings 45
12.06 Severability 45
12.07 Entire Agreement 45
12.08 Assignment 46
12.09 Parties in Interest 46
12.10 Governing Law 46
12.11 Counterparts 46
12.12 Press Releases and Public Announcements 46
12.13 Construction 46
12.14 Employees 47
12.15 WARN 47
12.16 Access 47
12.17 Bulk Sales 47
12.18 Litigation Support 47
12.19 Use of Marketing Materials 48
12.20 Further Assurances 48
EXHIBITS
Exhibit A Balance Sheet of the Divisions as of June 28, 1997
Exhibit B General Xxxx of Sale
Exhibit C Assignment and Assumption Agreement
INDEX OF SCHEDULES
Schedule Description
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1.01(a) Personal Property
1.01(b) Assigned Contracts
1.01(c) Vehicles
1.01(d) Intangible Assets
1.01(e) Licenses and Permits
1.01(i) Prepaid Items
1.01(k) Additional Personal Property
1.02(b) Excluded Real Property
1.02(g) Other Excluded Assets
2.01(e) Other Assumed Liabilities
4.00(a) Changes or Events Which Shall Not Constitute a Seller Material
Adverse Effect
4.00(b) Persons With Knowledge
4.01(a) Organization and Qualification
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4.01(b) Subsidiaries
4.03(a) Consents, Approvals, Authorizations or Permits
4.04 Permits; Compliance
4.05 Absence of Certain Changes or Events
4.06(a) Litigation
4.06(b) Orders, Decrees, etc.
4.07 Contracts
4.08 Intellectual Property Rights
4.09 Insurance
4.13 Inventory
4.14 Condition of the Purchased Assets
4.15 Accounts Receivable
4.16 Customers and Suppliers
4.17 Product Warranty
4.19 Excluded Assets
4.20 Assigned Contracts
4.21 Product Liability
4.22 Employee Benefit Plans; Labor Matters
4.23 Taxes
9.02(c) Third Party Consents
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT dated as of October 1, 1997 (the
"Agreement"), is made and entered into between CMI CORPORATION, an Oklahoma
corporation ("Purchaser"), and REXWORKS INC., a Delaware corporation ("Seller").
RECITALS
A. Seller operates, among other things, two divisions which are
engaged in the business of manufacturing and selling landfill and embankment
compactors and material reduction grinders (the "Divisions").
B. Seller desires to sell to Purchaser and Purchaser desires to buy
from Seller substantially all assets and rights of Seller relating to the
Divisions on the terms and conditions set forth in this Agreement (the "Asset
Sale").
AGREEMENTS
In consideration of the premises and the mutual agreements herein
contained, the parties agree as follows:
ARTICLE I
TRANSFER OF ASSETS
1.01 Purchase and Sale of Assets. Subject to the terms and
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conditions of this Agreement, Seller agrees to sell and deliver to Purchaser and
Purchaser agrees to purchase from Seller as of the Closing Date all of Seller's
right and title to and interest in all of the following assets, properties and
rights (the "Purchased Assets") relating to the Divisions (but expressly
excluding therefrom the Excluded Assets):
(a) Personal Property. All machinery, equipment, leasehold
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improvements, supplies, tools, fixtures, spare parts, furniture, furnishings and
other personal property listed on Schedule 1.01(a) ("Personal Property").
(b) Contracts and Leases. All rights of Seller under (including,
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without limitation, all Seller's right to receive goods and services and to
assert claims and to take other action with respect to breaches, defaults and
other
violations pursuant to) the contracts and leases listed on Schedule 1.01(b) (the
"Assigned Contracts").
(c) Vehicles. All automobiles, trucks, trailers, automotive equipment
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and other vehicles owned or leased by Seller and listed on Schedule 1.01(c) (the
"Vehicles").
(d) Intangible Assets. All of Seller's and its Subsidiaries'
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intangible assets solely relating to the Divisions or used exclusively in the
operation of the Divisions (collectively, the "Intangible Assets") including,
without limitation, all of the following Intangible Assets to the extent that
they relate solely to the Divisions or are used exclusively in the operation of
the Divisions: (i) 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, (ii) all trademarks, service marks, trade dress, logos, tradenames 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, (iii) all
copyrightable works, all copyrights and all applications, registrations and
renewals in connection therewith, (iv) all mask works and all applications,
registrations and renewals in connection therewith, (v) 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), (vi) all assignable computer software (including data and
related documentation), (vii) all data bases, compilations and directories (in
whatever form or medium), (viii) all copies and intangible embodiments thereof
(in whatever form or medium), and (ix) all Intangible Assets listed on Schedule
1.01(d).
(e) Licenses and Permits. All of Seller's rights in all government
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licenses, approvals, permits and authorizations (and all applications,
registrations and renewals for the foregoing) listed on Schedule 1.01(e)
("Licenses and Permits").
(f) Inventory. All of Seller's inventories, spare parts and supplies
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solely relating to the Divisions and all such items that Seller has ordered but
not physically received by the Closing Date ("Inventory").
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(g) Records and Documents. All records, computer software and
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documents, books, customer and member lists, sales leads and all other sales and
marketing information, credit information and correspondence, plans and
specifications, drawings and all other records and documents used exclusively by
Seller in connection with the operation of the Divisions ("Documents").
(h) Accounts and Notes Receivable. All of Seller's accounts and notes
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receivable relating solely to the Divisions ("Accounts Receivable").
(i) Prepaids. All prepaid rents, utilities, deposits and other
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prepaid items listed on Schedule 1.01(i).
(j) Certain Claims. All rights to causes of action, suits,
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proceedings, judgments, claims and demands of any nature, whenever maturing or
asserted, solely relating to or arising directly out of (a) the Purchased
Assets, (b) the Assumed Liabilities, or (c) the operations of the Divisions (or
either of them).
(k) Additional Personal Property. At Purchaser's option, which may be
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exercised by providing written notice to Seller not less than 10 days prior to
the Closing Date, Seller will replace each of the assets listed on Schedule
1.01(k) with comparable used equipment of equal or better quality and include
such replacement equipment in the Purchased Assets without an increase in the
Net Value (as defined in section 3.03). The book value of the equipment listed
on Schedule 1.01(k) shall be included in the calculation of the Net Value
regardless of whether Purchaser exercises its option with respect to replacement
equipment pursuant to this section 1.01(k).
To the extent that any Purchased Asset is not assignable without the
consent of another person or entity, and to the extent such consent is not
obtained prior to Closing, this Agreement shall, subject to the rights of any
such person or entity, constitute an assignment of Seller's interest in such
Purchased Asset. Seller agrees, at its expense, to use its reasonable best
efforts to obtain the consent of such other person or entity to the assignment
of any such Purchased Asset to the Purchaser.
1.02. Excluded Assets. There shall be excluded from sale by Seller
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under this Agreement all assets, properties and rights of Seller other than the
Purchased Assets specifically identified in section 1.01 above (the "Excluded
Assets"). The Excluded Assets shall include, without limitation, the following:
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(a) Mixer Assets. All of Seller's right and title to and interest in
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all assets, properties and rights relating to the Seller's division which is
engaged in the business of manufacturing and selling concrete mixers.
(b) Real Property. Seller's interest in the real estate listed on
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Schedule 1.02(b).
(c) Cash. All cash (currency and coin), negotiable instruments,
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securities, bank deposits and similar cash equivalents on hand at the Closing
Date ("Cash").
(d) Certain Contracts. All rights of Seller under any contracts,
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agreements or commitments other than the Assigned Contracts specifically
identified on Schedule 1.01(b).
(e) Certain Claims. All rights to causes of action, suits,
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proceedings, judgments, claims and demands of any nature, whenever maturing or
asserted, relating to or arising directly out of the Excluded Assets or the
Excluded Liabilities.
(f) Corporate Records. All corporate records, including but not
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limited to, stockholder records, stock records, stock transfer journals, board
of directors and stockholder minutes, payroll and financial information
necessary for the preparation of Seller's tax returns and satisfaction of other
reporting requirements.
(g) Scheduled Assets. All assets listed on Schedule 1.02(g).
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ARTICLE II
LIABILITIES
2.01 Assumed Liabilities. On the terms and subject to the conditions
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of this Agreement, Purchaser shall, by written instrument, assume as of the
Closing Date and thereafter shall be obligated to pay and fully satisfy the
liabilities and obligations specifically identified below, and only such
specifically identified liabilities and obligations (collectively, the "Assumed
Liabilities"):
(a) The liabilities and obligations of Seller arising under the
Assigned Contracts.
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(b) The liabilities of Seller for trade accounts payable solely
relating to the Divisions.
(c) Any and all liabilities and obligations of Seller arising from
any claims (whether known or unknown, asserted or unasserted, accrued or
unaccrued) with respect to any injury to individuals or property as a result of
the ownership, possession or use of any landfill and embankment compactors or
material reduction grinders manufactured by the Divisions ("Product
Liabilities").
(d) Any and all liabilities and obligations of Seller arising from
any express or implied warranties (whether known or unknown, asserted or
unasserted, accrued or unaccrued) with respect to landfill and embankment
compactors or material reduction grinders manufactured by the Divisions
("Warranty Liabilities").
(e) The liabilities described on Schedule 2.01(e).
2.02 Excluded Liabilities. Notwithstanding anything to the contrary
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contained in this Agreement, Purchaser will have no responsibility and will not
assume or be liable for any debts, liabilities or obligations of Seller or any
of its affiliates or any debts, liabilities or obligations of any kind or nature
relating to the respective businesses of Seller and its Subsidiaries, whenever
arising, and whether primary or secondary, direct or indirect, absolute or
contingent, contractual, tortuous or otherwise, other than the Assumed
Liabilities identified in section 2.01 above (all such liabilities other than
the Assumed Liabilities are collectively referred to as the "Excluded
Liabilities").
2.03 Right to Contest. The assumption and agreement of Purchaser to pay
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the Assumed Liabilities when due will not prohibit Purchaser from contesting
with the obligee, in good faith and at Purchaser's expense, the amount, validity
or enforceability of any of the Assumed Liabilities.
ARTICLE III
PURCHASE PRICE
3.01 Consideration. In consideration of the sale, assignment,
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transfer and conveyance of the Purchased Assets and the other undertakings of
Seller in this Agreement, and subject to the terms and conditions of this
Agreement, Purchaser shall (a) pay the Purchase Price as provided in this
Article III, and (b) assume the Assumed Liabilities as of the Closing Date as
provided in section 2.01 above.
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3.02 Amount and Payment of Purchase Price. The purchase price for
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the Purchased Assets (the "Purchase Price") shall equal the sum of (a) the Net
Value (as defined in section 3.03 below), and (b) $3,167,000. At Closing,
Purchaser shall pay the Purchase Price to Seller by wire transfer of immediately
available funds.
3.03 Closing Date Balance Sheet.
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(a) Prior to Closing, the parties will cooperate in preparing a
balance sheet dated as of the Closing Date (the "Closing Date Balance Sheet")
reflecting the amount by which the value of the Purchased Assets as of the
Closing Date exceeds the Assumed Liabilities as of the Closing Date (the "Net
Value"). Purchaser and Seller agree that the Closing Date Balance Sheet will be
prepared in a manner consistent with the balance sheet as of June 28, 1997
attached hereto as Exhibit A and will reflect an update of the Preliminary
Balance Sheet (as defined in Section 3.03(b) below). Purchaser and Seller will
endeavor in good faith to resolve any disputes in the determination of the Net
Value and the preparation of the Preliminary Balance Sheet and the Closing Date
Balance Sheet.
(b) Seller shall take a physical inventory (the "Closing Inventory")
of the Divisions as of the last day of the most recent month that is not more
than 30 days prior to the Closing Date (or such other date as Seller and
Purchaser shall mutually agree) and will prepare a preliminary balance sheet as
of the date of the Closing Inventory (the "Preliminary Balance Sheet")
reflecting the value of the Purchased Assets and the Assumed Liabilities as of
the date of the Preliminary Balance Sheet. Purchaser and its representatives
will have the right to participate in the taking of the Closing Inventory. Not
less than five days prior to Closing, Seller will deliver a copy of the
Preliminary Balance Sheet to Purchaser for its review. Seller and Purchaser
will cooperate to determine a method reasonably acceptable to each party to make
adjustments to and update the Preliminary Balance Sheet for purposes of
preparing the Closing Date Balance Sheet.
3.04 Allocation of Purchase Price. The Purchase Price shall be
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assigned and allocated to the Purchased Assets in the manner mutually agreed
upon by the parties. Purchaser and Seller agree to reflect such allocations in
all reports to governmental authorities, including, without limitation, with
respect to all taxes.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
The term "Seller Material Adverse Effect" as used in this Agreement
shall mean any change or effect that, individually or when taken together with
all other changes or effects, is materially adverse to the condition (financial
or otherwise), results of operations, businesses, properties, assets, or
liabilities of Seller relating to the Divisions; provided, however, that the
occurrence of any or all of the changes or events described on Schedule 4.00(a)
shall not, individually or in the aggregate, constitute a "Seller Material
Adverse Effect."
The term "Person" as used in this Agreement shall mean an individual,
corporation, partnership, association, trust, limited liability company,
unincorporated organization, other entity or group (as defined in section 13(d)
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the "Exchange Act")).
The term "Affiliate" as used in this Agreement shall mean, with
respect to any Person, a Person that, directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control with
the first mentioned Person. The term "control" (including the terms "controlled
by" and "under common control with") means the possession, directly or
indirectly or as trustee or executor, of the power to direct or cause the
direction of the management or policies of a Person whether through the
ownership of stock or as trustee or executor, by contract or credit arrangement
or otherwise.
The term "Subsidiary" (or its plural) as used in this Agreement with
respect to Seller, Purchaser or any other Person shall mean any corporation,
partnership, joint venture or other legal entity of which Seller, Purchaser or
such other Person, as the case may be (either alone or through or together with
any other Subsidiary), owns, directly or indirectly, greater than 50% of the
stock or other equity interests the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
With respect to any representation, warranty or statement of Seller in
this Agreement that is qualified by or to Seller's knowledge, such knowledge
shall be deemed to exist only if, at the time as of which such representation,
warranty or statement was made, any of the individuals listed on Schedule
4.00(b) had actual knowledge, after reasonable investigation, of the matter to
which such qualification applies.
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Except as set forth in the disclosure schedules delivered by Seller to
Purchaser prior to the execution of this Agreement, Seller represents and
warrants to Purchaser that the statements contained in this Article IV are true
and correct as of the date of this Agreement. The disclosure of any matter in
the disclosure schedules shall not necessarily be deemed an indication that such
matter is material or is required to be disclosed.
4.01 Organization and Qualification; Subsidiaries. Except as set
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forth on Schedule 4.01(a), Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as it is now being conducted and is duly qualified
and in active status in each jurisdiction in which the nature of the business
conducted by it or the ownership or leasing of its properties makes such
qualification necessary, except such jurisdictions if any, where the failure to
be so qualified would not have a Seller Material Adverse Effect. A true and
complete list of all Seller's directly or indirectly owned Subsidiaries together
with the jurisdiction of incorporation or organization of each Subsidiary and
the percentage of each Subsidiary's outstanding capital stock or other equity
interest owned by Seller or another Subsidiary of Seller, is set forth on
Schedule 4.01(b).
4.02 Authority; Vote Required.
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(a) Seller has the requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations under this
Agreement and to consummate the transactions contemplated by this Agreement,
subject to required approval of the holders of the common stock, par value $.12
per share, of Seller ("Seller Common Stock"). The execution and delivery of this
Agreement by Seller and the consummation by Seller of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action, including such corporate action as may be required by section
271 of the Delaware General Corporation Law (the "Delaware Law"), and no other
corporate proceedings on the part of Seller are necessary to authorize this
Agreement or to consummate the transactions contemplated by this Agreement
(other than with respect to the approval of this Agreement by the holders of
Seller Common Stock in accordance with the Delaware Law and Seller's Certificate
of Incorporation and By-Laws). This Agreement has been duly executed and
delivered by Seller and constitutes the valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except to the extent
that enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws relating to or
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affecting the rights and remedies of creditors generally and by general
principles of equity including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance, injunctive relief or other equitable remedies, regardless
of whether enforceability is considered in a proceeding in equity or at law.
(b) The affirmative vote of the holders of at least a majority
of the outstanding shares of Seller Common Stock is the only vote of the holders
of any class or series of capital stock of Seller necessary to approve the Asset
Sale.
4.03 No Conflict; Required Filings and Consents.
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(a) The execution and delivery of this Agreement by Seller do not, and
the performance of this Agreement by Seller will not: (i) violate the
Certificate of Incorporation or By-Laws of Seller or any of its Subsidiaries;
(ii) subject to (x) obtaining the requisite approval of this Agreement by the
holders of at least a majority of the outstanding shares of Seller Common Stock
in accordance with the Delaware Law and Seller's Certificate of Incorporation
and By-Laws, (y) obtaining the consents, approvals, authorizations and permits
of, and making filings with or notifications to, any governmental or regulatory
authority, domestic or foreign ("Governmental Entities"), pursuant to the
applicable requirements, if any, of the Exchange Act, the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR Act"), the applicable provisions of the Delaware Law, and
the requirements of the National Association of Securities Dealers, Inc.
("NASD") or the NASDAQ National Market System, and (z) giving the notices and
obtaining the consents, approvals, authorizations or permits described on
Schedule 4.03(a), violate any constitution, statute, regulation, rule,
injunction, decree, ruling, judgment, order or other restriction of any
Governmental Entity or court to which Seller or any of its Subsidiaries is
subject or by which any of their respective properties is bound, other than a
potential violation under any federal or state antitrust or similar laws, rules
or regulations; or (iii), except as set forth on Schedule 4.03(a), result in any
material breach of or constitute a material default (or an event that with
notice or lapse of time or both would become a material default) under, or give
to any Person any rights of termination, amendment, acceleration or cancellation
of, or result in the creation of a lien or encumbrance on any of the properties
or assets of Seller or any of its Subsidiaries, or require any notice pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument, arrangement or obligation to which Seller
or any of its Subsidiaries is a party or by which Seller or any of its
Subsidiaries or any of their respective properties is bound.
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(b) The execution and delivery of this Agreement by Seller do
not, and the performance of this Agreement by Seller shall not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entity, except for applicable requirements, if any, of (i)
the Exchange Act, the HSR Act, and the requirements of the NASD and the NASDAQ
National Market System, and (ii) the consents, approvals, authorizations or
permits described on Schedule 4.03(a).
4.04 Permits; Compliance. Except as set forth on Schedule 4.04,
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Seller is in possession of all franchises, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
necessary for Seller or any of its Subsidiaries to own, lease and operate its
properties or to carry on the business of the Divisions as it is now being
conducted (the "Seller Permits"), except for any Seller Permits the absence of
which would not have a Seller Material Adverse Effect. No suspension,
revocation or cancellation of any of the Seller Permits is pending or, to the
knowledge of Seller, is threatened. Neither Seller nor any of its Subsidiaries
is operating in material default under or material violation of (i) any
constitution, statute, regulation, rule, injunction, decree, ruling, judgment,
order or other restriction of any Governmental Entity or court to which Seller
or any of its Subsidiaries is subject or by which any of their respective
properties is bound or (ii) any of the Seller Permits.
4.05 Absence of Certain Changes or Events. Except as set forth on
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Schedule 4.05 or as contemplated by this Agreement, since December 31, 1996:
(a) Seller conducted the business of the Divisions in the ordinary
course and consistent with Seller's past practice;
(b) there has not been any Seller Material Adverse Effect;
(c) there has not been any change in the accounting methods or
practices followed by Seller or any Subsidiary, except as required by generally
accepted accounting principles ("GAAP");
(d) there has not been any sale, lease, transfer, assignment,
abandonment or other disposition of (including, without limitation, any grant of
an option or similar right to purchase) any asset which would be a Purchased
Asset other than for a fair consideration in the ordinary course of business;
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(e) Seller has not entered into any material transaction with any of
its officers, directors or employees;
(f) No party (including any of Seller and its Subsidiaries) has
accelerated, terminated, modified or canceled (prior to the expiration of its
term) any material agreement, contract, lease or license (or series of related
agreements, contracts, leases and licenses) relating to the business of the
Divisions and to which any of Seller and its Subsidiaries is a party or by which
any of its assets is bound;
(g) None of Seller and its Subsidiaries has delayed or postponed the
payment of accounts payable or other liabilities of any kind or nature relating
to the Divisions or the Purchased Assets outside the ordinary course of
business;
(h) None of Seller and its Subsidiaries has canceled, compromised,
waived, or released any right or claim (or series of related rights and claims)
relating to the Divisions or the Purchased Assets outside the ordinary course of
business;
(i) None of Seller and its Subsidiaries has granted any license or
sublicense of any rights under or with respect to any Intangible Assets;
(j) None of Seller and its Subsidiaries has experienced any damage,
destruction or loss (whether or not covered by insurance) to any material assets
of the Divisions, ordinary wear and tear excepted;
(k) None of Seller and its Subsidiaries has granted any increase in
the base compensation of, or made any other change in the employment terms for,
any employees of the Divisions outside the ordinary course of business;
(l) None of Seller and its Subsidiaries has adopted, amended, modified
or terminated any bonus, profit-sharing, incentive, severance or other plan,
contract or commitment for the benefit of any of the employees of the Divisions
(or taken any such action with respect to any other employee benefit plan);
(m) None of Seller and its Subsidiaries has sold or otherwise
transferred any Intangible Asset; and
(n) neither Seller nor any Subsidiary has entered into any commitment
or other agreement to do any of the foregoing.
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4.06 Absence of Litigation.
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(a) Schedule 4.06(a) lists all claims, actions, suits, litigation, or
arbitrations or, to the knowledge of Seller, investigations or proceedings
relating to the Divisions (or either of them) or any of the Purchased Assets, at
law or in equity, which are pending or, to the knowledge of Seller, threatened,
and which involve in excess of $25,000. There is no action pending seeking to
enjoin or restrain any of the transactions contemplated by this Agreement.
(b) Except as set forth on Schedule 4.06(b), neither Seller nor any of
its Subsidiaries is subject to any continuing order of, consent decree,
settlement agreement or other similar agreement (oral or written) with or, to
the knowledge of Seller, continuing investigation by, any Governmental Entity
with respect to the business of the Divisions.
4.07 Contracts; No Default.
---------------------
(a) Schedule 4.07 lists:
(i) each contract or agreement to which Seller or any of its
Subsidiaries is a party concerning a partnership, joint venture or similar
arrangement with another Person or materially limiting the right of Seller or
any of its Subsidiaries prior to the Closing Date, or Purchaser or any of its
Subsidiaries at or after the Closing Date, to engage in, or to compete with any
Person in, any business of the Divisions including each contract or agreement
containing exclusivity provisions restricting the geographical area in which, or
the method by which, any business may be conducted by Seller or any of its
Subsidiaries prior to the Closing Date, or by the Purchaser or any of its
Subsidiaries after the Closing Date;
(ii) each distributorship or other dealer or distribution
agreement which Seller or any of its Subsidiaries is a party relating to the
Divisions or any of the products manufactured or sold by either of the
Divisions;
(iii) each contract relating to the Divisions or the Purchased
Assets that would be required to be filed pursuant to Item 601(10) of Regulation
S-K under the Securities Act if Seller were filing a Registration Statement on
Form S-1 on the date of this Agreement.
12
(b) None of the distributors or former distributors identified in
Schedule 4.07 paid to Seller any fee or other consideration of any kind for the
right to become a distributor of any products manufactured by Seller.
4.08 Intellectual Property Rights.
----------------------------
(a) To the knowledge of Seller, (i) Seller owns or has the right to
use pursuant to license, sublicense or other agreement all Intangible Assets,
without any conflict or alleged conflict with the rights of any other Person,
and (ii) Seller has taken all necessary action to maintain and protect each
Intangible Asset. Each Intangible Asset owned or used by Seller immediately
prior to the Closing hereunder will be owned or available for use by Purchaser
on substantially similar terms and conditions immediately subsequent to the
Closing hereunder.
(b) To the knowledge of Seller, with respect to the operation of the
Divisions, none of Seller and its Subsidiaries has infringed upon or
misappropriated any intellectual property rights of third parties, and none of
Seller and the directors and officers (and employees with responsibility for
intellectual property matters) of Seller and its Subsidiaries has received any
charge, complaint, claim, demand or notice alleging any such infringement or
misappropriation (including any claim that any of Seller and its Subsidiaries
must license or refrain from using any intellectual property rights of any third
party). To the knowledge of Seller, no third party has infringed upon or
misappropriated in any material respect any intellectual property rights
included in the Intangible Assets.
(c) Schedule 4.08(c) identifies each patent or registration which has
been issued to Seller with respect to any of the Intangible Assets, identifies
each pending patent application or application for registration which Seller has
made with respect to any of the Intangible Assets, identifies each copyright,
trade name, service name, unregistered trademark and unregistered service xxxx
used by Seller in connection with the operation of the Divisions and the
manufacture, marketing and distribution of the products manufactured by the
Divisions and identifies each license, agreement or other permission which
Seller has granted to any third party with respect to any of its Intangible
Assets (together with any exceptions). Seller has made available to Purchaser
correct and complete copies of all such patents, registrations, applications,
licenses, agreements and permissions (as amended to date) and all other written
documentation evidencing ownership and prosecution (if applicable) of each such
item. With respect to each Intangible Asset required to be identified in
Schedule 4.08(c), except as set forth on Schedule 4.08(c):
13
(i) Seller possesses all right, title and interest in and to the
Intangible Asset, free and clear of any security interest, lien, license, or
other encumbrance;
(ii) the Intangible Asset is not subject to any outstanding
injunction, judgment, order, decree or ruling;
(iii) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand is pending or, to the knowledge of Seller, is
threatened which challenges the legality, validity, enforceability, use or
ownership of the Intangible Asset; and
(iv) none of Seller and its Subsidiaries has ever agreed to indemnify
any Person for or against any infringement or misappropriation with respect to
the Intangible Asset.
(d) Schedule 4.08(d) identifies each Intangible Asset that any third
party owns and that Seller and its Subsidiaries use in the operation of the
Divisions pursuant to license, sublicense, agreement or permission. Seller has
made available to Purchaser correct and complete copies of all such licenses,
sublicenses, agreements and permissions (as amended to date). With respect to
each Intangible Asset required to be identified in Schedule 4.08(d), except as
set forth on Schedule 4.08(d):
(i) the license, sublicense, agreement or permission covering the
Intangible Asset is legally valid, binding, enforceable and in full force and
effect;
(ii) the license, sublicense, agreement or permission will continue on
substantially similar terms following the consummation of the transaction
contemplated hereby;
(iii) Seller is not in breach or default of the license, sublicense,
agreement or permission and has not repudiated any provisions thereof;
(iv) to Seller's knowledge, no other party to the license, sublicense,
agreement or permission is in breach or default or has repudiated any provision
thereof and no event has occurred which with notice or lapse of time would
constitute a breach or default or permit termination, modification or
acceleration thereunder;
14
(v) with respect to each sublicense, the representations and
warranties set forth in subsections (i) through (iv) above are true and correct
with respect to the underlying license;
(vi) the underlying Intangible Asset is not subject to any
outstanding injunction, judgment, order, decree, ruling or charge;
(vii) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand is pending or, to the knowledge of Seller, is
threatened which challenges the legality, validity or enforceability of the
underlying Intangible Asset; and
(viii) none of Seller and its Subsidiaries has granted any
sublicense or similar right with respect to the license, sublicense, agreement
or permission.
4.09 Insurance. All policies and binders of insurance for professional
---------
liability, directors and officers, property and casualty, fire, liability,
worker's compensation and other customary matters held by or on behalf of Seller
or its Subsidiaries ("Insurance Policies") are identified on Schedule 4.09 and
have been made available to Purchaser. The Insurance Policies are in full force
and effect. To the knowledge of Seller, neither Seller nor any of its
Subsidiaries has failed to give any notice of any claim under any Insurance
Policy in due and timely fashion, nor to the knowledge of Seller, has any
coverage for claims been denied, which failure or denial has had or would have a
Seller Material Adverse Effect.
4.10 Brokers. No broker, finder or investment banker other than ABN
-------
AMRO Chicago Corporation is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon any arrangements made by or on behalf of Seller.
4.11 Title to Properties. Seller has or will have at Closing good
-------------------
and marketable title to, or a valid leasehold or contractual interest in, all
Purchased Assets, free and clear of all mortgages, liens, security interests,
rights of first refusal, easements or other similar encumbrances ("Liens"),
except Liens (a) for taxes not yet due and payable, or (b) which relate to any
of the Assumed Liabilities.
4.12 Proxy Statement. The definitive Proxy Statement and related
---------------
materials will comply with the Exchange Act in all material respects. The
definitive proxy materials will not contain an untrue statement of material fact
or omit a material fact necessary in order to make the statements made therein,
in
15
light of the circumstances under which they will be made, not misleading;
provided, however, that Seller makes no representation or warranty with respect
to any information that the Purchaser supplies to Seller in writing for use in
connection with such proxy materials.
4.13 Inventory. The Inventory consists of raw materials and
---------
supplies, manufactured and purchased parts, goods in process and finished goods,
all of which are merchantable and fit for the purpose for which they were
procured or manufactured, subject only to the reserve for inventory writedown
set forth on the balance sheet attached hereto as Exhibit A (as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of the Divisions). Except as described on Schedule 4.13, no Inventory
has been consigned to others. The quantity of Inventory is sufficient and
adequate for, but is not materially in excess of the level appropriate to, the
conduct of the business of the Divisions as it previously has been conducted.
Seller has not made any purchase commitments in excess of normal, ordinary and
usual requirements.
4.14 Condition of Purchased Assets. No maintenance outside the
-----------------------------
ordinary course of business is needed with respect to the Purchased Assets.
None of the Purchased Assets or other assets owned, leased, occupied or operated
by Seller in connection with the business of the Divisions, or the ownership,
leasing or operation thereof, is in violation of any law, ordinance, code, rule
or regulation. Except as set forth on Schedule 4.14, the Purchased Assets are
in all respects in good condition and working order (reasonable wear and tear
excepted) and are adequate, in quality and quantity, for the operation of the
business of the Divisions.
4.15 Accounts Receivable. All Accounts Receivable of the Seller and
-------------------
those existing as of the Closing Date represent valid claims for bona fide,
arms-length sales of goods and services actually made by Seller in the ordinary
course of its business. All of the Accounts Receivable are valid receivables
subject to no setoffs or counterclaims, and are current (within 180 days) and
collectible (or have been collected) in the ordinary course of business using
normal collection practices at the aggregate recorded amounts thereof, net of an
allowance for doubtful account in the amount of $83,800 as of August 23, 1997.
Schedule 4.15 sets forth an aging schedule of the Accounts Receivable as of
August 23, 1997, and such schedule is correct and complete in all material
respects.
4.16 Major Customers and Suppliers. Schedule 4.16 sets forth (a) a
-----------------------------
list of the ten largest customers of the Divisions for each of the fiscal years
ended December 31, 1995 and December 31, 1996 (determined on the basis of the
total dollar amount of net revenues) showing the dollar amount of net revenues
16
from each such customer during each such year, (b) a list of the ten largest
suppliers of the Divisions in terms of dollar volume of purchases during such
fiscal years, and (c) a list as of a recent date of all purchase orders for
finished goods accepted by the Company with respect to products manufactured by
either of the Divisions.
4.17 Product Warranty. Schedule 4.17 sets forth a general
----------------
description of all warranty, guaranty and indemnity provisions provided by
Seller with respect to the business of the Divisions. There are no claims
pending or, to Seller's knowledge, threatened against Seller or any of its
Subsidiaries for warranty obligations relating to the business of the Divisions,
except claims which in the aggregate involve an amount that is consistent with
Seller's past practice.
4.18 Legal Compliance. Each of the Divisions 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 material action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand or notice has been filed or commenced against Seller
or, to the knowledge of Seller, threatened against Seller alleging any failure
so to comply.
4.19 Excluded Assets. Schedule 4.19 lists all material machinery,
---------------
equipment and intangible assets not included in the Purchased Assets that are
used primarily in the operation of the Divisions and the manufacture, marketing
and distribution of landfill and embankment compactors and material reduction
grinders.
4.20 Assigned Contracts. With respect to each Assigned Contract,
------------------
except as set forth on Schedule 4.20:
(a) the contract or lease is legal, valid, binding, enforceable
and in full force and effect;
(b) the benefits and burdens of such contract or lease will
continue on substantially similar terms following consummation of the
transactions contemplated hereby;
(c) Seller is not in breach or default under the contract or
lease and has not repudiated any provision of the contract or lease; and
(d) to Seller's knowledge, no other party is in breach or
default under the contract or lease, no other party has repudiated any provision
of
17
the contract or lease, and no event has occurred which, with notice or lapse of
time, would constitute a breach or default or permit termination, modification
or acceleration under the contract or lease.
4.21 Product Liability. To the knowledge of Seller, except as set
-----------------
forth on Schedule 4.21, there is no present (and Seller has no knowledge of any
facts which could reasonably be expected to result in any future) action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
Seller or either of the Divisions giving rise to any liability arising out of
any injury to individuals or property as a result of the ownership, possession
or use of any product manufactured, sold, leased or delivered by either of the
Divisions.
4.22 Employee Benefit Plans; Labor Matters.
-------------------------------------
(a) Schedule 4.22(a) lists or describes any pension, retirement,
savings, disability, medical, dental, health, life (including any individual
life insurance policy as to which Seller is the owner, beneficiary or both),
death benefit, group insurance, profit sharing, deferred compensation, stock
option, bonus incentive, vacation pay, severance pay, "cafeteria" or "flexible
benefit" plan under section 125 of the Internal Revenue Code of 1986 as amended
(the "Code"), or other employee benefit plan, trust, arrangement, contract,
agreement, policy or commitment, under which employees of Seller or its
Subsidiaries are entitled to participate by reason of their employment with
Seller or its Subsidiaries, (i) to which Seller or a Subsidiary is a party or a
sponsor or a fiduciary thereof or (ii) with respect to which Seller or a
Subsidiary has made payments, contributions or commitments, or has any liability
(collectively, the "Employee Benefit Plans").
(b) The Employee Benefit Plans have been operated and
administered by Seller in compliance in all material respects with all
applicable laws relating to employment or labor matters, including without
limitation, the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and the Code and all contributions required under such plans have been
made as required.
(c) Each Employee Benefit Plan that is intended to be tax
qualified under section 401(a) of the Code has received, or Seller has applied
for or will in a timely manner apply for, a favorable determination letter from
the Internal Revenue Service (the "IRS") stating that the Plan meets the
requirements of the Code and that any trust or trusts associated with the plan
are tax exempt under section 501(a) of the Code.
18
(d) Neither Seller nor any of its Subsidiaries maintains, and
neither Seller nor any of its Subsidiaries has maintained or contributed to, any
defined benefit plan covering employees of Seller or its Subsidiaries within the
meaning of section 3(35) of ERISA or any multiemployer plan.
(e) Schedule 4.22(e) sets forth a list of all written employment
agreements, employment contracts or understandings relating to employment (other
than relating to "at-will" employment) to which Seller or any of its
Subsidiaries is a party.
4.23 Taxes. Seller and its Subsidiaries have filed or caused to be
-----
filed with the appropriate Governmental Entity, all federal, state, municipal,
and local income, franchise, excise, sales, real and personal property, and
other tax returns and reports that are required to be filed, and neither Seller
nor any of its Subsidiaries is delinquent in the payment of any material taxes
shown on such returns or reports or on any material assessments for any such
taxes received by it and has otherwise complied in all material respects with
all legal requirements applicable to Seller and its Subsidiaries with respect to
all income, sales, use, real or personal property, excise or other taxes.
Except as set forth on Schedule 4.23, neither Seller nor any of its Subsidiaries
has executed or filed with the Internal Revenue Service any agreement extending
the period for assessment and collection of any federal tax. Neither Seller nor
any of its Subsidiaries is a party to any pending action or proceeding, nor, to
the knowledge of Seller, has any action or proceeding been threatened, by any
Governmental Entity for assessment or collection of taxes, and no claim for
assessment or collection of taxes has been asserted against Seller or any of its
Subsidiaries. Each of Seller and its Subsidiaries has withheld and paid all
taxes required to have been withheld and paid in connection with all amounts
paid or owing to any employee, independent contractor, creditor, stockholder or
other third party.
4.24 Environmental, Health and Safety.
--------------------------------
(a) To the knowledge of Seller, each of Seller, its Subsidiaries
and their respective predecessors and Affiliates has complied with all
Environmental, Health, and Safety Laws (defined below), 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, to the
knowledge of Seller, each of Seller, its Subsidiaries and their respective
predecessors and Affiliates has obtained and been in compliance in all material
respects with all of the terms and conditions of all permits, licenses, and
other authorizations which are required under, and has complied with all other
limitations, restrictions,
19
conditions, standards, prohibitions, requirements, obligations, schedules, and
timetables which are contained in, all Environmental, Health, and Safety Laws.
(b) To the knowledge of Seller, none of Seller and its Subsidiaries
has 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 or for any reason under any Environmental, Health and Safety Law.
(c) All properties and equipment used in the operation of the
Divisions have been free of asbestos, PCBs, methylene chloride,
trichloroethylene, 1,2-trans-dichloroethylene, dioxins, dibenzofurans, and other
hazardous substances or wastes.
(d) There is no pending audit known to Seller by any foreign, federal,
state, or local governmental authority with respect to groundwater, soil, or air
monitoring; the storage, burial, release, transportation, or disposal of
hazardous substances or wastes; or the use of underground storage tanks by any
of Seller, its Subsidiaries and their respective predecessors and Affiliates or
relating to the facilities of any of Seller, its Subsidiaries and their
respective predecessors and Affiliates. None of Seller and its Subsidiaries has
any agreement with any foreign, federal, state, or local governmental authority
or any other third party relating to any such environmental matter or
environmental cleanup.
(e) For purposes of this Agreement, the term "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
and local 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,
groundwater 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.
20
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
The term "Purchaser Material Adverse Effect" as used in this Agreement
shall mean any change or effect that, individually or when taken together with
all such other changes or effects, is materially adverse to the condition
(financial or otherwise), results of operations, business, properties, assets or
liabilities of Purchaser and its Subsidiaries, taken as a whole.
Purchaser represents and warrants to Seller that the statements
contained in this Article V are true and correct as of the date of this
Agreement.
5.01 Organization and Qualification. Purchaser is a corporation,
------------------------------
duly incorporated, validly existing and in good standing under the laws of the
State of Oklahoma, and has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as it is now being
conducted.
5.02 Authority. Purchaser has the requisite corporate power and
---------
authority to execute and deliver this Agreement, to perform its obligations
hereunder, and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by Purchaser, and the consummation by
Purchaser of the transactions contemplated hereby, have been duly authorized by
all necessary corporate action and no other corporate proceedings on the part of
Purchaser are necessary to authorize this Agreement or to consummate the
transactions contemplated by this Agreement. This Agreement has been duly
executed and delivered by Purchaser and constitutes a legal, valid and binding
obligation of Purchaser enforceable against Purchaser in accordance with its
terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, moratorium and other
similar laws relating to or affecting the rights and remedies of creditors
generally and by general principles of equity including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance, injunctive relief or other
equitable remedies, regardless of whether enforceability is considered in a
proceeding in equity or at law.
5.03 No Conflict; Required Filings and Consents.
------------------------------------------
(a) The execution and delivery of this Agreement by Purchaser do
not, and the performance of this Agreement by Purchaser will not, (i) violate
the Certificate of Incorporation or By-Laws or equivalent organizational
21
documents of Purchaser, (ii) subject to obtaining the consents, approvals,
authorizations and permits of, and making filings with or notifications to, any
Governmental Entity pursuant to the applicable requirements, if any, of the
Exchange Act and the HSR Act, conflict with or violate any laws applicable to
Purchaser or by which any of its properties is bound or affected, except such as
would not have a Purchaser Material Adverse Effect.
(b) The execution and delivery of this Agreement by Purchaser do
not, and the performance of this Agreement by Purchaser shall not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entities, except as described in section 5.03(a) above.
5.04 Brokers. No broker, finder or investment banker is entitled to
-------
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Purchaser.
5.05 Financing. Purchaser has the ability to and intends to finance
---------
the aggregate of the Purchase Price pursuant to Article III with cash on hand
and utilization of existing credit facilities. Purchaser will use its best
efforts to ensure the continued availability of such financing and pay such
amounts in accordance with the terms of this Agreement and will not take any
action between the date hereof and the Closing Date which would impair its
ability to obtain such financing.
ARTICLE VI
COVENANTS
6.01 Affirmative Covenants of Seller. Seller covenants and agrees
-------------------------------
that prior to the Closing Date, unless otherwise contemplated by this Agreement
or consented to in writing by Purchaser, Seller will and will cause each of its
Subsidiaries to:
(a) operate the Divisions in the ordinary course of business and
consistent with its past practice (provided, however, that Seller will not cause
or permit the Divisions to engage in any practice, take any action or enter into
any transaction of the sort described in Section 4.05 above);
(b) use reasonable efforts to preserve intact the Divisions and
the assets thereof, and maintain its rights and franchises, retain the services
of
22
its respective officers and key employees and maintain the relationships with
its respective key customers, lessors, licensors and suppliers with respect to
the Divisions;
(c) subject to the provisions of the Purchaser Confidentiality
Agreement (as hereinafter defined), confer with Purchaser at its reasonable
request to report operational matters of a material nature relating to the
Divisions and to report the general status of the ongoing operations of the
Divisions;
(d) maintain compliance with all permits, laws, rules,
regulations and orders applicable to the Divisions; and
(e) maintain the Purchased Assets in good working order and
condition, ordinary wear and tear excepted.
6.02 Negative Covenants of Seller. Except as contemplated by this
----------------------------
Agreement or consented to in writing by Purchaser, from the date of this
Agreement until the Closing Date, Seller shall not do, and shall not permit any
of its Subsidiaries to do, any of the following:
(a) increase the compensation payable to any employee of either
of the Divisions, except for increases in salary or wages payable or to become
payable in the ordinary course of business and consistent with the policies
currently in effect;
(b) enter into or establish any new compensation plan or
employee benefit plan;
(c) acquire or agree to acquire, by merging or consolidating
with, by purchasing an equity interest in or a portion of the assets of, or by
any other manner, any business or any corporation, partnership, association or
other business organization or division thereof, or otherwise acquire or agree
to acquire any assets of any other Person (other than the purchase of assets
from suppliers or vendors in the ordinary course of business and consistent with
Seller's past practice);
(d) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, any assets of the Divisions, except for
dispositions of inventory and supplies in the ordinary course of business and
consistent with Seller's past practice;
23
(e) change any of its methods of accounting in effect at
December 31, 1996 or make or rescind any express or deemed election relating to
taxes, settle or compromise any claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to taxes, or change
any of its methods of reporting income or deductions for federal income tax
purposes from those employed in the preparation of the federal income tax
returns for the taxable year ending December 31, 1996, except in either case as
may be required by law, the IRS, or GAAP or in the ordinary course of business
consistent with past practice; provided, however, that Seller shall immediately
notify Purchaser of any such change or other action;
(f) incur any obligation for borrowed money or purchase money
indebtedness, whether or not evidenced by a note, bond, debenture or similar
instrument, except as approved by Purchaser in advance;
(g) guarantee any debts or obligations of any Person; or
(h) agree in writing or otherwise to do any of the foregoing.
6.03 Confidentiality Agreement. The parties will, and will cause their
-------------------------
respective officers, employees, accountants, consultants, legal counsel and
other representatives to, comply with all of their respective obligations under
the Confidentiality Agreement dated December 3, 1996 between Seller and
Purchaser concerning Seller's confidential information (the "Purchaser
Confidentiality Agreement").
6.04 Acquisition Proposals. Upon execution of this Agreement, Selller
---------------------
and its Subsidiaries and their respective officers, directors, employees, agents
and advisors (a) will immediately cease any existing discussions or negotiations
with any parties conducted heretofore with respect to any Acquisition Proposal
(as hereinafter defined), and (b) (except as described in the next sentence)
shall not participate in any new discussions or negotiations with respect to any
Acquisition Proposal. Seller may, directly or indirectly, furnish information
and access, in each case only in response to requests that were not solicited by
Seller (or any officer, director, employee, agent or advisor on its behalf)
after the date of this Agreement, to any corporation, partnership, person or
other entity or group (each, a "Potential Purchaser") pursuant to
confidentiality agreements, and may participate in discussions and negotiate
with a Potential Purchaser concerning any Acquisition Proposal, if such
Potential Purchaser has submitted a written proposal to the Board of Directors
relating to any such transaction, and the Board of
24
Directors determines in good faith after consultation with independent legal
counsel that the failure to provide such information or access or to engage in
such discussions or negotiations would be inconsistent with their fiduciary
duties to Seller's stockholders under applicable law. Seller shall notify
Purchaser immediately if any such request or proposal, or any inquiry or contact
with any Person with respect thereto, is made and shall keep Purchaser apprised
of all developments that could reasonably be expected to culminate in the Board
withdrawing, modifying or amending its recommendation of the Asset Sale and the
other transactions contemplated by this Agreement. Seller has entered into
confidentiality agreements with other third parties substantially in the form of
the Purchaser Confidentiality Agreement. Seller agrees not to release any third
party from, or waive any provision of, any confidentiality or standstill
agreement to which Seller is a party unless, in the opinion of the Board of
Directors after consultation with independent legal counsel, the failure to
provide such release or waiver would be inconsistent with its fiduciary duties
to Seller's stockholders under applicable law. For purposes of this section
6.04, the term "Acquisition Proposal" means any proposal or offer for a merger,
asset acquisition or other business combination involving the acquisition,
directly or indirectly, of the Divisions or any assets of the Divisions.
6.05 Merger Agreement. Notwithstanding anything else in this
----------------
Agreement to the contrary, the parties agree that on or prior to the Closing
Date Seller may take such actions as are contemplated in the Agreement and Plan
of Merger, dated as of August 15, 1997 (the "Merger Agreement"), by and among
Seller, Xxxxxxx Bros. Cranes, Inc. ("Xxxxxxx") and 00xx Xxxxxx Acquisition Corp.
("Xxxxxxx Sub"). On the Closing Date, Seller may consummate the transactions
contemplated by the Merger Agreement.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 Proxy Statement.
---------------
(a) As promptly as practicable after the execution of this
Agreement, Seller shall prepare and file with the SEC, and shall use all
reasonable efforts to have promptly cleared by the SEC, and promptly thereafter
shall mail to its stockholders, a proxy statement and a form of proxy
(collectively, the "Proxy Statement"), as may be amended and supplemented, to be
used in connection with the special meeting (the "Stockholders' Meeting") of
Seller's stockholders to consider the Asset Sale (the "Stockholders' Meeting").
Seller shall provide Purchaser with a reasonable opportunity to review and
comment upon the Proxy
25
Statement prior to its filing with the SEC and distribution to Seller's
stockholders, and Purchaser shall use reasonable efforts to provide its comments
thereon as promptly as practicable after delivery of the Proxy Statement to
Purchaser and its legal counsel. Seller shall notify Purchaser promptly of the
receipt of any comments of the SEC with respect to the Proxy Statement and of
any requests by the SEC for amendments or supplements to the Proxy Statement and
will supply Purchaser with copies of all correspondence between Seller and its
representatives, on the one hand, and the SEC or the members of its staff, on
the other hand, with respect to the Proxy Statement. Seller and Purchaser shall
each use reasonable efforts to obtain and furnish information required to be
included in the Proxy Statement; and Seller, after consultation with Purchaser,
shall use reasonable efforts (and Purchaser agrees to reasonably cooperate with
Seller in connection therewith) to respond promptly to any comments made by the
SEC with respect to the Proxy Statement and cause the Proxy Statement to be
mailed to its stockholders at the earliest practicable time. Seller shall
notify Purchaser of its intention to mail the Proxy Statement to the
stockholders of Seller at least 48 hours prior to the intended time of such
mailing. The Proxy Statement shall include the recommendation of Seller's Board
of Directors in favor of the Asset Sale and approval of this Agreement, unless
independent outside legal counsel to Seller shall advise Seller's Board of
Directors and the directors' fiduciary duties under applicable law make such
recommendation inappropriate.
(b) The information included in the Proxy Statement shall not,
at the date the Proxy Statement (or any amendment thereof or supplement thereto)
is first mailed to stockholders or at the time of the Stockholders' Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. If at any time prior to the Stockholders' Meeting, any event or
circumstance relating to Seller or any of its Subsidiaries, or its or their
respective officers or directors, is discovered by Seller which should be set
forth in a supplement to the Proxy Statement, Seller shall promptly inform
Purchaser. All documents that Seller is responsible for filing with the SEC in
connection with the transactions contemplated herein will comply as to form and
substance in all material respects with the applicable requirements of the
Exchange Act.
(c) Each of the parties will file (and Seller will cause each of
its Subsidiaries to file) any Notification and Report Forms and related material
that it may be required to file with the Federal Trade Commission and the
Antitrust Division of the United States Department of Justice under the HSR Act,
will use its reasonable best efforts to obtain (and Seller will cause each of
its Subsidiaries to use its reasonable best efforts to obtain) an early
termination of the applicable
26
waiting period, and will make (and Seller will cause each of its Subsidiaries to
make) any further filings pursuant thereto that may be necessary, proper, or
advisable.
7.02 Meeting of Stockholders. As promptly as practicable after the
-----------------------
execution of this Agreement, Seller shall take all action necessary or
appropriate in accordance with the Delaware Law and its Certificate of
Incorporation and By-Laws to convene the Stockholders' Meeting, and Seller shall
consult with Purchaser in connection therewith. Seller shall use reasonable
efforts to solicit from the stockholders of Seller proxies in favor of the Asset
Sale and shall take all other actions necessary or advisable to secure the vote
or consent of stockholders required by the Delaware Law to approve this
Agreement, including the retention of proxy solicitation agents if requested by
Purchaser, unless otherwise required by the applicable fiduciary duties of
directors or officers of Seller.
7.03 Appropriate Action; Consents; Filings.
-------------------------------------
(a) Subject to the terms and conditions herein provided, Seller
and Purchaser shall use all reasonable efforts to (i) take, or cause to be
taken, all appropriate action, and do or cause to be done, all things necessary,
proper or advisable under applicable law or otherwise to consummate and make
effective the transactions contemplated by this Agreement as promptly as
practicable, (ii) obtain from all Governmental Entities all consents, licenses
or orders required to be obtained by Purchaser or Seller or any of their
respective Subsidiaries in connection with the authorization, execution and
delivery of this Agreement and the consummation of the transactions contemplated
by this Agreement, including, without limitation, the Asset Sale, and (iii) make
all necessary notifications and filings and thereafter make any other required
submissions with respect to this Agreement and the Asset Sale required under (A)
the Exchange Act and any other applicable federal or state securities laws, (B)
the HSR Act and (C) any other applicable law; provided that Purchaser and Seller
shall cooperate with each other in connection with the making of all such
filings. Seller and Purchaser shall furnish to each other all information
required for any application or other filing to be made pursuant to the rules
and regulations of any applicable law (including all information required to be
included in the Proxy Statement) in connection with the transactions
contemplated by this Agreement.
(b) (i) Seller and Purchaser shall give (or cause their
respective Subsidiaries to give) any notices to third parties, and use, and
cause their respective Subsidiaries to use, all reasonable efforts to obtain any
third-party consents, (A) necessary to consummate the transactions contemplated
in this
27
Agreement, (B) disclosed or required to be disclosed in the disclosure schedules
to this Agreement, or (C) required to prevent a Seller Material Adverse Effect
from occurring prior to the Closing Date.
(ii) In the event that any party shall fail to obtain any
third-party consent described in subsection (b)(i) above, such party shall use
reasonable efforts, and shall take any such actions reasonably requested by the
other party to minimize any adverse effect upon the other party, its
Subsidiaries and its businesses resulting, or which could reasonably be expected
to result after the Closing Date, from the failure to obtain such consent.
(c) From the date of this Agreement until the Closing Date,
Seller shall promptly notify Purchaser in writing of any pending or, to the
knowledge of Seller, threatened action, proceeding or investigation by any
Governmental Entity or any other Person (i) challenging or seeking damages in
connection with the Asset Sale, (ii) alleging that the consent of such
Governmental Entity or Person may be required in connection with the Asset Sale
or this Agreement, (iii) seeking to restrain or prohibit the consummation of the
Asset Sale or otherwise limit the right of Purchaser or its Subsidiaries to own
or operate all or any portion of the businesses or assets of the Divisions, or
(iv) involving any of the Purchased Assets or either of the Divisions.
(d) From the date of this Agreement until the Closing Date,
Purchaser shall promptly notify Seller in writing of any pending or, to the
knowledge of Purchaser, threatened action, proceeding or investigation by any
Governmental Entity or any other Person (i) challenging or seeking material
damages in connection with the Asset Sale or (ii) seeking to restrain or
prohibit the consummation of the Asset Sale or otherwise limit the right of
Purchaser or its Subsidiaries to own or operate all or any portion of the
business or assets of the Divisions.
(e) From the date of this Agreement until the Closing Date,
Seller shall promptly notify Purchaser in writing of (i) any amendments made to
the Merger Agreement, and (ii) any additional agreements between Seller and
Xxxxxxx.
7.04 Update Disclosure. From and after the date of this Agreement until
-----------------
the Closing Date, each party shall promptly notify the other party hereto by
written update to its disclosure schedules ("Update Schedule") of (i) the
occurrence or non-occurrence of any event the occurrence or non-occurrence of
which would be reasonably likely to cause any condition to the obligations of
any party to effect the Asset Sale and the other transactions contemplated by
this
28
Agreement not to be satisfied, (ii) the failure of Seller or Purchaser, as the
case may be, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it pursuant to this Agreement which would be
reasonably likely to result in any condition to the obligations of any party to
effect the Asset Sale and the other transactions contemplated by this Agreement
not to be satisfied, or (iii) of any changes to the information contained in its
disclosure schedules (including any change to any representations or warranties
herein as to which no schedule has been created as of the date hereof but as to
which a schedule would have been required hereunder to have been created on or
before the date hereof if such change had existed on the date hereof). No
disclosure by any party pursuant to this Section 7.04, however, shall cure any
breach of any representation or warranty made by such party as of the date of
this Agreement.
ARTICLE VIII
CLOSING
8.01 Closing. Unless this Agreement shall have been terminated pursuant
-------
to Section 10.01 and subject to the fulfillment or waiver of each of the
conditions set forth in Article IX, the closing ("Closing") of the transactions
pursuant to this Agreement shall take place at (a) the offices of Reinhart,
Boerner, Van Deuren, Xxxxxx & Xxxxxxxxxx, s.c., 0000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000, at the same time as the effective time of the merger
pursuant to the Merger Agreement or (b) at such other time and place as the
parties hereto shall mutually agree. Notwithstanding anything to the contrary
herein, without the prior written consent of Purchaser, the Closing shall not
occur prior to December 15, 1997.
ARTICLE IX
CLOSING CONDITIONS
9.01 Conditions to Obligations of Each Party Under This Agreement.
------------------------------------------------------------
The respective obligations of each party to effect the transactions contemplated
by this Agreement shall be subject to the satisfaction on or prior to the
Closing Date of the following conditions, any or all of which may be waived by
the parties hereto, in whole or in part, to the extent permitted by applicable
law:
(a) Stockholder Approval. This Agreement and the Asset Sale
--------------------
shall have been approved by the requisite vote of the stockholders of Seller in
accordance with the Delaware Law and the Certificate of Incorporation and By-
Laws of Seller.
29
(b) No Action or Proceeding. There shall not have been
-----------------------
instituted and there shall not be pending any action or proceeding by a
Governmental Entity, and no such action or proceeding shall have been approved
by a Governmental Entity with authority to institute such an action or
proceeding, before any court of competent jurisdiction or governmental agency or
regulatory or administrative body, and no order or decree shall have been
entered in any action or proceeding before such court, agency or body of
competent jurisdiction: (i) imposing or seeking to impose limitations on the
ability of Purchaser to acquire or hold or to exercise full rights of ownership
of any of the Purchased Assets; (ii) imposing or seeking to impose limitations
on the ability of Purchaser to combine and operate the business and assets of
the Divisions with any of Purchaser's Subsidiaries or other operations; (iii)
imposing or seeking to impose other sanctions, damages or liabilities arising
out of the Asset Sale on Purchaser, Seller or any of their officers or
directors; (iv) requiring or seeking to require divestiture by Purchaser of all
or any material portion of the Divisions or the assets thereof; or (v)
restraining, enjoining or prohibiting or seeking to restrain, enjoin or prohibit
the consummation of the Asset Sale, in each case, with respect to clauses (i)
through (iv) above, which would or is reasonably likely to result in a Seller
Material Adverse Effect on or prior to or after the Closing Date or, with
respect to clauses (i) through (v) above, which would or is reasonably likely to
subject any of their respective officers or directors to any penalty or criminal
liability. Notwithstanding the foregoing, prior to invoking the condition set
forth in this section 9.01(b), the party seeking to invoke it shall have used
its reasonable efforts to have any such pending or approved action or proceeding
withdrawn or dismissed or such order or decree vacated.
(c) HSR Act. The applicable waiting period, together with any
-------
extensions thereof, under the HSR Act shall have expired or been terminated.
(d) Other Approvals or Notices. All other consents, waivers,
--------------------------
approvals and authorizations required to be obtained from, and all filings or
notices required to be made with, any Governmental Entity by Purchaser or Seller
or any Subsidiary prior to consummation of the transactions contemplated in this
Agreement shall have been obtained from and made with all required Governmental
Entities, except for such consents, waivers, approvals or authorizations which
the failure to obtain, or such filings or notices which the failure to make,
would not have a Seller Material Adverse Effect prior to or after the Closing
Date or a Purchaser Material Adverse Effect before or after the Closing Date or
be reasonably likely to subject Seller, Purchaser, or any of their respective
Subsidiaries or any of their respective officers, directors, employees, agents
or representatives to substantial penalty or criminal liability.
30
9.02 Additional Conditions to Obligations of Purchaser. The obligations
-------------------------------------------------
of Purchaser to effect the transactions contemplated in this Agreement are also
subject to the satisfaction on or prior to the Closing Date of the following
conditions, any or all of which may be waived, in whole or in part, by Purchaser
in its sole discretion:
(a) Representations and Warranties. Each of the representations
------------------------------
and warranties of Seller contained in this Agreement shall have been true and
correct in all material respects when made and the information contained
therein, as updated by any Update Schedule, taken as a whole, shall not have
materially adversely changed; and each of the representations and warranties of
Seller contained in this Agreement shall be true and correct in all material
respects as of the Closing Date. Purchaser shall have received a certificate of
the Chief Executive Officer and Chief Financial Officer of Seller to that
effect.
(b) Agreements and Covenants. Seller shall have performed or
------------------------
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date, except to the extent failure to perform is caused by or is consented to by
Purchaser. Purchaser shall have received a certificate of the Chief Executive
Officer and Chief Financial Officer of Seller to that effect.
(c) Consents Under Agreements. Seller shall have obtained the
-------------------------
third party consents described on Schedule 9.02(c)(i). Seller shall have
obtained a third party consent with respect to each agreement described on
Schedule 9.02(c)(ii) that Seller and Purchaser reasonably agree is required
pursuant to applicable law to effectively assign to Purchaser all of Seller's
rights under any such agreement. Seller shall have obtained all other third-
party consents described in subsection 7.03(b)(i), except those for which the
failure to obtain such consents and approvals would not have a Seller Material
Adverse Effect prior to or after the Closing Date or a Purchaser Material
Adverse Effect before or after the Closing Date, other than as contemplated by
subsection 7.03(b)(ii).
(d) Opinion of Counsel. The Purchaser shall have received an
------------------
opinion of Reinhart, Boerner, Van Deuren, Xxxxxx & Rieselbach, s.c. counsel to
Seller, addressed to Purchaser, dated as of the Closing Date, and reasonably
satisfactory in form and substance to Purchaser and its counsel, to the
following effect:
(i) Seller is a corporation existing under the laws of
the State of Delaware and, based solely on a certificate of the Xxxxxxxxx xx
Xxxxx xx
00
Xxxxxxxx, (x) has filed with the Secretary of State during its most recently
completed report year the required annual report; (b) is not the subject of a
proceeding under the Delaware Law to cause its administrative dissolution; (c)
no determination has been made by the Secretary of State that grounds exist for
such action with respect to Seller; (d) no filing has been made with the
Secretary of State of a decree of dissolution with respect to Seller; and (e) no
Certificate of Dissolution of Seller has been filed with the Secretary of State.
Seller and its Subsidiaries have the corporate power to carry on their
respective businesses as currently being conducted.
(ii) This Agreement is a legal, valid and binding
obligation of Seller (a) except as this Agreement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (b) subject to general
principles of equity including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance, injunctive relief or other equitable remedies, regardless
of whether considered in a proceeding in equity or at law. Counsel expresses no
opinion with respect to section 10.03(e), section 10.03(g) or section 10.03(h)
of this Agreement. The execution, delivery and performance by Seller of the
Agreement have been duly authorized by all necessary corporation action,
including the requisite approval of the stockholders of Seller. Under the
Delaware Law and Seller's Certificate of Incorporation and By-Laws, Seller's
stockholders and Board of Directors properly approved the Asset Sale in
accordance with the terms of the Agreement.
(iii) The execution and delivery of the Agreement and the
performance by Seller of its terms do not [a] contravene or conflict with any
provision of the Certificate of Incorporation or By-Laws of Seller; or [b]
violate any order, judgment or decree of any court or governmental
instrumentality to which Seller or any of its assets is subject and of which
such counsel has knowledge.
(iv) To the knowledge of such counsel, there is no action,
suit, investigation or proceeding pending or threatened against Seller or any
assets, properties or rights of Seller by or before any court, arbitrator or
administrative or governmental body which questions the validity of this
Agreement or any action which has been or is to be taken by Seller hereunder.
(e) Deliveries on or Prior to Closing. Seller shall have
---------------------------------
delivered or cause to be delivered to Purchaser the following documents at or
prior to Closing:
32
(i) A General Xxxx of Sale duly executed by Seller, in
the form attached hereto as Exhibit B.
(ii) A written consent to the transfer or assignment to
Purchaser of any of the Purchased Assets, including the Assigned Contracts,
where the consent of any other party may be required for such assignment or
transfer.
(iii) Assignments of all United States and foreign
patents, patent applications, trademarks and trade names and other similar
Intangible Assets to be transferred in accordance with section 1.01(d), duly
executed by Seller.
(iv) Titles and registrations to all Vehicles, duly
executed by Seller.
(v) Certificate of status of Seller issued by the
Secretary of State of Delaware and other appropriate jurisdictions within one
week of the Closing Date.
(vi) The Assignment and Assumption Agreement duly
executed by Seller, in the form attached hereto as Exhibit C (the "Assignment
and Assumption Agreement").
(vii) Releases of mortgages, liens and/or financing
statements to reflect the termination of any Liens against, or security interest
in, any of the Purchased Assets.
(viii) Such other documents as Purchaser reasonably
deems necessary or appropriate to vest in it good and marketable title to all or
any part of the Purchased Assets, free and clear of all liens, encumbrances and
other rights as provided in this Agreement.
(f) Toll Manufacturing Agreement. Seller, Xxxxxxx and Purchaser
----------------------------
shall have entered into a Toll Manufacturing Agreement in a form reasonably
satisfactory to Seller, Xxxxxxx and Purchaser.
(g) No Material Adverse Change. Since the date of this
--------------------------
Agreement, no condition or fact shall have occurred which, as of the Closing
Date, is or may have a Seller Material Adverse Effect.
33
(h) Bulk Sales. The parties shall have complied in all material
----------
respects with the provisions of the Wisconsin Bulk Sales Act.
(i) Non-Competition Agreements. Seller and Xxxxxxx each shall
--------------------------
have entered into a Non-Competition Agreement with Purchaser in a form
reasonably satisfactory to Purchaser, Seller and Xxxxxxx.
9.03 Additional Conditions to Obligations of Seller. The obligation
----------------------------------------------
of Seller to effect the transactions contemplated in this Agreement is also
subject to the satisfaction on or prior to the Closing Date of the following
conditions, any or all of which may be waived, in whole or in part, by Seller in
its sole discretion:
(a) Representations and Warranties. Each of the representations
------------------------------
and warranties of Purchaser contained in this Agreement shall have been true and
correct in all material respects when made and the information contained
therein, as updated by any Update Schedule, taken as a whole, shall not have
materially adversely changed; and each of the representations and warranties of
the Purchaser contained in this Agreement shall be true and correct in all
material respects as of the Closing Date. Seller shall have received a
certificate of the Chief Executive Officer and Chief Financial Officer of
Purchaser to that effect.
(b) Agreements and Covenants. Purchaser shall have performed or
------------------------
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date. Seller shall have received a certificate of the Chief Executive Officer
and Chief Financial Officer of Purchaser to that effect.
(c) Fairness Opinion. Seller shall have received from ABN AMRO
----------------
Chicago Corporation an opinion, dated as of the date of the Proxy Statement, to
the effect that the Purchase Price is fair to Seller's stockholders from a
financial point of view.
(d) Opinion of Counsel. Seller shall have received an opinion of
------------------
Xxxxxxx Xxxxxx & Xxxxx, counsel to Purchaser, addressed to Seller, dated as of
the Closing Date, and reasonably satisfactory in form and substance to Seller
and its counsel, to the following effect:
(i) Purchaser is a corporation existing in good standing
under the laws of the State of Oklahoma, based solely on a certificate of the
Oklahoma Secretary of State.
34
(ii) The execution, delivery and performance of this
Agreement has been duly authorized by all requisite corporate action on the part
of Purchaser. The Agreement constitutes the legally valid and binding
obligations of Purchaser, enforceable in accordance with its terms, subject to
the following qualifications: [a] the enforceability against Purchaser of the
Agreement in accordance with its terms may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights
generally; [b] the enforceability of the Agreement is subject to the effect of
general principles of equity including, without limitation, the possible
unavailability of specific performance or injunctive relief or other equitable
remedies regardless of whether considered in a proceeding in equity or at law;
and [c] no opinion is expressed as to any provision of the Agreement providing
for the indemnification of persons for liability under federal or other
securities laws or with respect to section 10.03(h).
(iii) Execution and delivery of the Agreement and the
performance of the Purchaser of its terms do not [a] contravene or conflict with
any provision of the Certificate of Incorporation or By Laws of the Purchaser;
or [b] violate any order, judgment or decree of any Oklahoma or federal court or
governmental instrumentality to which Purchaser or any of its assets is subject
and of which such counsel has knowledge .
(iv) To the knowledge of such counsel, there is no action,
suit, investigation or proceeding pending or threatened against the Purchaser or
any assets, properties or rights of Purchaser by or before any court, arbitrator
or administrative or governmental body which questions the validity of the
Agreement or any action which has been or is to be taken by the Purchaser
thereunder.
(e) Deliveries on or Prior to Closing. Purchaser shall have
---------------------------------
delivered or cause to be delivered to Seller the following documents at or prior
to Closing:
(i) Wire transfer of immediately available funds in the
amount of the Purchase Price.
(ii) A certificate of status for Purchaser issued by the
Secretary of State of Oklahoma within one week of the Closing Date.
(iii) The Assignment and Assumption Agreement duly executed
by Purchaser.
35
(iv) Such other documents as Seller reasonably deems
necessary and appropriate to document the transfer of the Purchased Assets and
the assumption of the Assumed Liabilities .
(f) Effectiveness of the Merger. The transactions contemplated
---------------------------
by the Merger Agreement shall have closed simultaneously with the Closing under
this Agreement.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.01 Termination. This Agreement may be terminated upon written notice
-----------
by the terminating party at any time prior to the Closing, whether before or
after approval of this Agreement and the Asset Sale by the stockholders of
Seller:
(a) by mutual written consent of Purchaser and Seller;
(b) by either Purchaser or Seller in the event the conditions to
such party's (the "Nonfailing Party") obligations under Article IX shall not
have been met or waived by the Nonfailing Party on or prior to January 31, 1998,
but only if the party terminating has not caused the condition giving rise to
termination to be not satisfied through its own action or inaction;
(c) by either Purchaser or Seller if any decree, permanent
injunction, judgment, order or other action by any court of competent
jurisdiction or any Governmental Entity preventing or prohibiting consummation
of the Asset Sale shall have become final and nonappealable;
(d) by Purchaser, if (A) the Proxy Statement does not include the
recommendation of Seller's Board of Directors in favor of this Agreement and the
Asset Sale, or (B) the Board of Directors of Seller withdraws, modifies or
changes in a manner materially adverse to Purchaser its recommendation of this
Agreement or the Asset Sale or shall have resolved to do any of the foregoing,
or (C) the Board of Directors of Seller shall have recommended to the
stockholders of Seller any proposed acquisition of the Divisions by any Person
or any "group" (as such term is defined under section 13(d) of the Exchange Act)
other than Purchaser and its Affiliates by (i) merger, consolidation, share
exchange, business combination or other similar transaction providing for the
acquisition of the Divisions or a substantial part of the assets of the
Divisions, (ii) purchase of all or a substantial part of the assets of
36
Seller relating to the Divisions, or (iii) the acquisition of more than 50% of
Seller's outstanding equity securities (other than pursuant to the Merger) (a
"Competing Transaction") or resolved to do so, or (D) a tender offer or exchange
offer for 50% or more of the outstanding shares of capital stock of Seller is
commenced, and the Board of Directors of Seller, within 10 business days after
such tender offer or exchange offer is so commenced, either fails to recommend
against acceptance of such tender offer or exchange offer by its stockholders or
takes no position with respect to the acceptance of such tender offer or
exchange offer by its stockholders;
(e) by Seller if, in the exercise of its judgment as to its
fiduciary duties to its stockholders as imposed by applicable law and, after
consultation with and receipt of advice from outside legal counsel, Seller's
Board of Directors determines that such termination is required by reasons of
any Competing Transaction being made or proposed;
(f) by either Purchaser or Seller, if any Update Schedule of the
other party contains disclosures of any fact or condition which makes untrue, or
shows to have been untrue, any representation or warranty by the other party in
this Agreement, unless concurrently with the delivery of the Update Schedule,
the other party represents and warrants that the disclosed fact or condition can
and will be corrected at the other party's expense prior to the Closing Date
(but in no event more than 30 days after the delivery of the Update Schedule);
provided that the effect of the fact or condition so disclosed upon the
representation or warranty so affected constitutes a Seller Material Adverse
Effect or Purchaser Material Adverse Effect, as applicable; or
(g) by either Purchaser or Seller, at any time after the
Stockholders' Meeting, in the event this Agreement and the Asset Sale are not
approved by the requisite vote of the stockholders of Seller in accordance with
the Delaware Law and the Certificate of Incorporation and By-Laws of Seller.
10.02 Effect of Termination. Subject to the remedies of the parties set
---------------------
forth in section 10.03(c), in the event of the termination of this Agreement
pursuant to section 10.01, this Agreement shall forthwith become void, and,
subject to sections 10.03(c), (d), (e), (f), (g) and (h), there shall be no
liability under this Agreement on the part of Purchaser or Seller or any of
their respective officers or directors and all rights and obligations of each
party hereto shall cease. The Purchaser Confidentiality Agreement shall survive
any termination of this Agreement.
37
10.03 Expenses.
--------
(a) Except as provided in section 10.03(c), section 10.03(d),
section 10.03(f), section 10.03(g) and section 10.03(h), all Expenses incurred
by the parties shall be borne solely and entirely by the party which has
incurred the same. Seller shall pay for all Expenses related to printing, filing
and mailing the Proxy Statement and all SEC and other regulatory filing fees
incurred in connection with the Proxy Statement.
(b) "Expenses" as used in this Agreement shall include all
reasonable out-of-pocket expenses (including, without limitation, all fees and
expenses of counsel, accountants, investment bankers, experts and consultants to
a party and its Affiliates) incurred by a party or on its behalf in connection
with or related to the authorization, preparation, negotiation, execution and
performance of this Agreement, the preparation, printing, filing and mailing of
the Proxy Statement, the solicitation of stockholder approvals and all other
matters related to the closing of the transactions contemplated by this
Agreement.
(c) Seller and Purchaser each agree that with respect to any
termination of this Agreement pursuant to section 10.01(b) as a direct result of
a material intentional breach by a party of any of its covenants or agreements
contained in this Agreement, all remedies available to the other party either in
law or equity shall be preserved and survive the termination of this Agreement.
(d) If all conditions to the obligations of a party at Closing
contained in Article IX of this Agreement have been satisfied (or waived by the
party entitled to waive such conditions), and the other party does not proceed
with the Closing, all remedies available to the party seeking to proceed, either
at law or in equity, on account of such failure to close, including, without
limitation, the right to seek specific performance of this Agreement as well as
the right to pursue a claim for damages on account of a breach of this
Agreement, shall be preserved and shall survive any termination of this
Agreement.
(e) Notwithstanding anything to the contrary herein, Seller
agrees that if this Agreement is terminated pursuant to section 10.01(d) or
section 10.01(e), Seller shall pay to Purchaser an amount equal to the greater
of (i) $400,000, and (ii) 20% of the amount by which the aggregate consideration
with respect to the Divisions in any Competing Transaction exceeds the Purchase
Price, provided that, solely for purposes of this section 10.03(e)(ii), the
Purchase Price shall be computed based on the balance sheet attached hereto as
Exhibit A and, if the Competing Transaction involves the acquisition of all of
Seller, whether by merger, tender offer or otherwise, then the consideration
with respect to the Divisions in the Competing Transaction shall equal 66.8% of
the total
38
consideration in the Competing Transaction. Such payment shall be made as
promptly as practicable but in no event later than the third business day
following termination of this Agreement and shall be made by wire transfer of
immediately available funds to an account designated by Purchaser.
(f) Seller and Purchaser shall share equally the filing fee for
any required filing under the HSR Act.
(g) Notwithstanding anything herein to the contrary, Seller
agrees that if this Agreement is terminated pursuant to section 10.01(b) as a
direct result of the failure to satisfy the condition to Seller's obligations
contained in section 9.03(f), then Seller shall reimburse Purchaser for its
Expenses up to $200,000. Such payment shall be made not later than the third
business day following receipt by Seller of written notice from Purchaser
describing in reasonable detail the amount of Expenses to be reimbursed by
Seller pursuant to this section 10.03(g).
(h) Notwithstanding anything herein to the contrary, Seller and
Purchaser each agree that if this Agreement is terminated pursuant to section
10.01(b) as a direct result of a material breach by a party of any of its
representations or warranties contained in this Agreement, the breaching party
shall reimburse the nonbreaching party for its Expenses up to $200,000. Such
payment shall be made not later than the third business day following receipt
by the breaching party of written notice from the nonbreaching party describing
in reasonable detail the amount of Expenses to be reimbursed by the breaching
party pursuant to this section 10.03(h).
ARTICLE XI
INDEMNIFICATION
---------------
11.01 Indemnification By Seller. Seller shall indemnify and hold
-------------------------
harmless Purchaser and its shareholders, directors, officers, employees and
other agents (collectively, the "Purchaser Indemnitees") in respect of any and
all damages, losses, liabilities, payments, obligations, penalties, claims,
litigation, demands, defenses, judgments, suits, proceedings, costs,
disbursements or expenses (including, without limitation, reasonable fees,
disbursements and expense of attorneys, accountants and other professional
advisors and of expert witnesses and costs of investigation and preparation) of
any kind or nature whatsoever (collectively, "Losses") asserted against or
incurred by any Purchaser Indemnitee as a result of, in connection with or
arising out of (a) any of the Excluded Liabilities, or (b) any claims made under
the provisions of the Worker
39
Adjustment and Retraining Notification Act (29 U.S.C. (S)(S) 2101-2109) and the
regulations promulgated thereunder ("WARN") arising in connection with the
transactions contemplated by this Agreement.
11.02 Indemnification by Purchaser. Purchaser shall indemnify and hold
----------------------------
harmless Seller and its stockholders, directors, officers, employees and other
agents (collectively, the "Seller Indemnitees") in respect of any and all Losses
asserted against or incurred by any Seller Indemnitee as a result of, in
connection with, or arising out of any of the Assumed Liabilities.
11.03 Arbitration Procedure.
---------------------
(a) Purchaser and the Seller agree that the arbitration procedure
set forth below shall be the sole and exclusive method for resolving and
remedying claims for Losses arising out of the provisions of section 11.01 and
section 11.02 (the "Disputes"). Nothing in this section 11.03 shall prohibit a
party hereto from instituting litigation to enforce any Final Determination (as
defined below) or availing itself of the other remedies set forth in this
Agreement. The parties hereby agree and acknowledge that, except as otherwise
provided in this section 11.03 or in the Commercial Arbitration Rules of the
American Arbitration Association as in effect from time to time, the arbitration
procedures and any Final Determination hereunder shall be governed by, and shall
be enforced pursuant to the Uniform Arbitration Act and applicable provisions
of, Delaware law.
(b) In the event that any Purchaser Indemnitee or Seller
Indemnitee (the "Indemnified Party") asserts that there exists a Dispute, such
Indemnified Party shall deliver a written notice to the party alleged to have
indemnification obligations pursuant to this Agreement (the "Indemnifying
Party") specifying the nature of the asserted Dispute and requesting a meeting
to attempt to resolve the same. If no such resolution is reached within ten
business days after such delivery of such notice, the Indemnified Party
delivering such notice of Dispute (the "Disputing Person") may, within 30
business days after delivery of such notice, commence arbitration hereunder by
delivering to the Indemnifying Party involved therein a notice of arbitration (a
"Notice of Arbitration") and by filing a copy of such Notice of Arbitration with
the Chicago office of the American Arbitration Association. Such Notice of
Arbitration shall specify the matters as to which arbitration is sought, the
nature of any Dispute, the claims of each party to the arbitration and shall
specify the amount and nature of any Losses, if any, sought to be recovered as a
result of any alleged claim, and any other matters required by the Commercial
Arbitration Rules of the American Arbitration Association as in effect from time
to time to be included therein, if any.
40
(c) The Indemnified Party on the one hand and the Indemnifying
Party on the other hand each shall select one independent arbitrator expert in
the subject matter of the Dispute (the arbitrators so selected shall be referred
to herein as "Seller's Arbitrator" and "Purchaser's Arbitrator" respectively).
In the event that either party fails to select an independent arbitrator as set
forth herein within 20 days from delivery of a Notice of Arbitration, then the
matter shall be resolved by the arbitrator selected by the other party. Seller's
Arbitrator and Purchaser's Arbitrator shall select a third independent
arbitrator expert in the subject matter of the dispute, and the three
arbitrators so selected shall resolve the matter according to the procedures set
forth in this section 11.03. If Seller's Arbitrator and Purchaser's Arbitrator
are unable to agree on a third arbitrator within 20 days after their selection,
Seller's Arbitrator and Buyer's Arbitrator shall each prepare a list of three
independent arbitrators. Seller's Arbitrator and Purchaser's Arbitrator shall
each have the opportunity to designate as objectionable and eliminate one
arbitrator from the other arbitrator's list within seven days after submission
thereof, and the third arbitrator shall then be selected by lot from the
arbitrators remaining on the lists submitted by Seller's Arbitrator and
Purchaser's Arbitrator.
(d) The arbitrator(s) selected pursuant to section 11.03(c) will
determine the allocation of the costs and expenses of arbitration based upon the
percentage which the portion of the contested amount not awarded to each party
bears to the amount actually contested by such party. For example, if Purchaser
submits a claim for $1,000, and if the Seller contests only $500 of the amount
claimed by Purchaser, and if the arbitrator(s) ultimately resolves the dispute
by awarding Purchaser $300 of the $500 contested, then the costs and expenses of
arbitration will be allocated 60% (i.e., 300 - 500) to the Seller and 40% (i.e.,
200 - 500) to Purchaser.
(e) The arbitration shall be conducted under the Commercial
Arbitration Rules of the American Arbitration Association as in effect from time
to time, except as otherwise set forth herein or as modified by the agreement of
all of the parties to this Agreement. The arbitrator(s) shall so conduct the
arbitration that a final result, determination finding, judgment and/or award
(the "Final Determination") is made or rendered as soon as practicable, but in
no event later than 90 business days after the delivery of the Notice of
Arbitration nor later than 10 days following completion of the arbitration. The
Final Determination must be agreed upon and signed by the sole arbitrator or by
at least two of the three arbitrators (as the case may be). The Final
Determination shall be final and binding on all parties and there shall be no
appeal from or reexamination of the Final Determination, except for fraud,
perjury, evident
41
partiality or misconduct by an arbitrator prejudicing the rights of any party
and to correct manifest clerical errors.
(f) The Purchaser Indemnitees and the Seller Indemnitees may
enforce any Final Determination in any state or federal court having
jurisdiction over the Dispute. For the purpose of any action or proceeding
instituted with respect to any Final Determination, each party hereto hereby
irrevocably submits to the jurisdiction of such courts, irrevocably consents to
the service of process by registered mail or personal service and hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may have or hereafter have as to personal jurisdiction, the laying of the
venue of any such action or proceeding brought in any such court and any claim
that any such action or proceeding brought in such court has been brought in an
inconvenient forum.
11.04 Matters Involving Third Parties.
-------------------------------
(a) If any third party shall notify any Indemnified Party with
respect to any matter (a "Third Party Claim") which may give rise to a claim for
indemnification against any Indemnifying Party under this section 11, then the
Indemnified Party shall promptly (and in any event within ten business days
after receiving notice of the Third Party Claim) notify the Indemnifying Party
in writing; provided, however, that no delay on the part of the Indemnified
Party in notifying the Indemnifying Party shall relieve the Indemnifying Party
from any obligation hereunder, except to the extent the Indemnifying Party
thereby is materially prejudiced. Such notice shall describe the claim, the
amount thereof (to the extent then known and quantifiable), and the basis
thereof, in each case to the extent known to the Indemnified Party.
(b) The Indemnifying Party will have the right at any time to
assume and thereafter conduct the defense of the Third Party Claim with counsel
of his or its choice reasonably satisfactory to the Indemnified Party; so long
as (i) the Indemnifying Party notifies the Indemnified Party in writing within
15 days after the Indemnified Party has given notice of the Third Party Claim
that the Indemnifying Party will indemnify the Indemnified Party from and
against the entirety of any Losses the Indemnified Party may suffer resulting
from or in connection with the Third Party Claim, (ii) the Indemnifying Party
will have the financial resources to defend against the Third Party Claim and
fulfill its indemnification obligations hereunder, (iii) the Third Party Claim
involves only money damages and does not seek an injunction or other equitable
relief, and (iv) the Indemnifying Party conducts the defense of the Third Party
Claim actively and diligently.
42
(c) Unless and until the Indemnifying Party assumes the defense
of the Third Party Claim as provided in section 11.04(b) above, however, the
Indemnified Party may defend against the Third Party Claim in any manner it
reasonably may deem appropriate.
(d) If the Indemnifying Party has the right, but does not assume
control of defense of any claim in accordance with this section 11.04, then the
Indemnifying Party may nonetheless participate (at its own expense) in the
defense of such claim and the Indemnified Party will consult with the
Indemnifying Party in respect of such defense. If the Indemnifying Party has
the right and does assume control of defense of any claim in accordance with
this section 11.04, then the Indemnified Party may nonetheless participate (at
its own expense) in the defense of such claim and the Indemnifying Party will
consult with the Indemnified Party in respect of such defense.
(e) So long as the Indemnifying Party is conducting the defense
of the Third Party Claim in accordance with paragraph 11.04(b) above, (i) 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 (ii)
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).
ARTICLE XII
GENERAL PROVISIONS
12.01 Non-Survival of Representations, Warranties and Certain Covenants.
-----------------------------------------------------------------
The respective representations, warranties and covenants of the parties in this
Agreement shall expire with, and be terminated and extinguished upon,
consummation of the Asset Sale or termination of this Agreement, and, except as
otherwise provided in Section 10.03(c), thereafter neither Seller, Purchaser nor
any of their respective officers, directors or employees shall have any
liability whatsoever with respect to any such representation, warranty or
covenant. Notwithstanding anything to the contrary herein, the obligations of
the parties set forth in Article X, Article XI and Article XII shall survive the
consummation of the Asset Sale. This section 12.01 shall have no effect upon any
other obligation of the parties hereto, whether to be performed before or after
consummation of the transactions contemplated by this Agreement.
43
12.02 Notices. All notices and other communications given or made
-------
pursuant to this Agreement shall be in writing and shall be deemed to have been
duly given or made upon receipt, if delivered personally, on the third business
day following deposit in the U.S. mail if mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or when sent by electronic transmission to the telecopier
number specified below with receipt acknowledged:
(a) If to Purchaser:
CMI Corporation
I-40 and Xxxxxx Road
X.X. Xxx 0000
Xxxxxxxx Xxxx, XX 00000
Telecopier No. 000-000-0000
Attention: Xx. Xxx X. Xxxxxxx, Senior Vice President
With a copy to:
Xxxxxxx Xxxxxx & Xxxxx
1600 Bank of Oklahoma Plaza
000 Xxxxxx X. Xxxx
Xxxxxxxx Xxxx, XX 00000
Telecopier No. 000-000-0000
Attention: Xxxx Xxxxxxxxx, Esq.
(b) If to Seller:
Rexworks Inc.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xx. Xxxxxxxx X. Xxxxxx, President and
Chief Executive Officer
44
With a copy to:
Reinhart, Boerner, Van Deuren,
Xxxxxx & Xxxxxxxxxx, s.c.
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Telecopier No: 414-298-8097
Attention: Xxxxx X. Xxxxxx, Esq.
12.03 Amendment. This Agreement may be amended by the parties by
---------
action taken by or on behalf of their respective Boards of Directors at any time
prior to the Closing; provided, however, that after approval of this Agreement
by the stockholders of Seller, no amendment may be made without further approval
of such stockholders, which amendment would reduce the amount or change the type
of consideration to be received by Seller upon consummation of the Asset Sale.
This Agreement may not be amended except by an instrument in writing signed by
each of the parties hereto.
12.04 Waiver. At any time prior to the Closing, any party may (a)
------
extend the time for the performance of any of the obligations or other acts of
any other party, (b) waive any inaccuracies in the representations and
warranties of any other party contained in this Agreement or in any document
delivered pursuant to this Agreement, or (c) waive compliance by any other party
with any of the agreements or conditions contained in this Agreement.
Notwithstanding the foregoing, no failure or delay by either party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law. Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound thereby.
12.05 Headings. The headings contained in this Agreement are for
--------
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
12.06 Severability. If any term or other provision of this Agreement
------------
is finally adjudicated by a court of competent jurisdiction to be invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party.
45
Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
12.07 Entire Agreement. This Agreement (together with the Purchaser's
----------------
Confidentiality Agreement, the Exhibits, the disclosure schedules to this
Agreement and the other documents delivered pursuant hereto), constitutes the
entire agreement of the parties and supersedes all prior agreements and
undertakings, both written and oral, between the parties, or any of them, with
respect to the subject matter hereof including, without limitation, that certain
letter of intent dated August 15, 1997 between Purchaser and Seller.
12.08 Assignment. This Agreement shall not be assigned, whether by
----------
operation of law or otherwise, without the prior written consent of the parties
hereto. Notwithstanding the preceding sentence, Purchaser 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 Purchaser nonetheless shall remain
responsible for the performance of all of its obligations hereunder).
12.09 Parties in Interest. This Agreement shall be binding upon and
-------------------
inure solely to the benefit of and be enforceable by each party and its
respective successors and permitted assigns, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other Person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
12.10 Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law, provided, however, that if any court of competent jurisdiction determines
not to construe this Agreement in accordance with the laws of the State of
Delaware, then this Agreement shall be governed by, and construed in accordance
with, the laws of the State of Oklahoma, regardless of the laws that might
otherwise govern under applicable principles of conflicts of law.
12.11 Counterparts. This Agreement may be executed by facsimile and
------------
in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
46
12.12 Press Releases and Public Announcements. No party shall issue any
---------------------------------------
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other party; provided,
---------
however, that any party may make any public disclosure it believes in good faith
-------
is required by applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing party will use its
reasonable best efforts to advise the other party prior to making the
disclosure).
12.13 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 otherwise requires. The
word "including" shall mean including without limitation.
12.14 Employees. Purchaser shall not assume and shall not be deemed to
---------
have assumed any obligation in respect of any employee of Seller or its
Subsidiaries, any employee benefit plans or any other similar obligations
(including, but not limited to wages, severance pay and vacation pay) of Seller
or its Subsidiaries to their employees who are employed at or in connection with
the Divisions or otherwise. Purchaser shall not assume and shall not be deemed
to have assumed any employee insurance or benefit plan or formal or informal
practice maintained by or contributed to by Seller or its Subsidiaries.
12.15 WARN. Seller shall be responsible for all notices and liabilities
----
required under WARN.
12.16 Access. From the date of this Agreement until the Closing Date,
------
Seller shall, and Seller shall cause each of its Subsidiaries to, afford
Purchaser and its representatives full and complete access to the books and
records, financial statements, tax returns and tax records, facilities,
employees and such other information of Seller and its Subsidiaries as Purchaser
may reasonably request to evaluate the business, operations, properties, assets,
liabilities and prospects of the Divisions. In connection therewith,
representatives of Purchaser shall be entitled to consult with the
representatives, officers and employees of Seller and its Subsidiaries. Such
access to information and any such consultations shall be conducted in a manner
not to unreasonably interfere with the operation of the business of Seller and
its Subsidiaries.
47
12.17 Bulk Sales. The parties acknowledge that it is the intent of the
----------
parties to comply with the terms of the Wisconsin Bulk Sales Act. Seller shall
use all reasonable efforts to take or cause to be taken all appropriate action,
and do or cause to be done all things necessary, proper or advisable, to comply
with the terms of the Wisconsin Bulk Sales Act.
12.18 Litigation Support. In the event and for so long as Purchaser is
------------------
contesting or defending any action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand in connection with any of the Assumed
Liabilities, Seller will use reasonable efforts to cooperate with Purchaser and
its counsel in the contest or defense, make available its personnel and provide
such testimony and access to its books and records that shall be reasonably
necessary in connection with the contest or defense, all at the sole cost and
expense of Purchaser.
12.19 Use of Marketing Materials. For a period of one year after the
--------------------------
Closing Date, Purchaser shall be entitled to use without charge any and all of
the current stock of sales and marketing materials used by Seller in connection
with the operation of the Divisions, but solely to the extent permitted by the
Agreement regarding trademarks dated April 23, 1982 between Rexnord, Inc. and
Seller.
12.20 Further Assurances. After the Closing, Seller shall from time to
------------------
time, at the request of Purchaser and at Purchaser's sole cost and expense,
execute and deliver to Purchaser such other instruments of conveyance and
transfer and take such other action as Purchaser may reasonably request so as to
more effectively transfer, assign and deliver and vest in Purchaser title to the
Purchased Assets as provided in this Agreement.
REXWORKS INC.
BY /s/ XXXXXX X. XXXXXXXX
-----------------------------------
Xxxxxx X. Xxxxxxxx, Vice President
Administration and Chief Financial
Officer
CMI CORPORATION
BY /s/ XXX X. XXXXXXX
-----------------------------------
Xxx X. Xxxxxxx, Senior Vice
President
48
