STOCK PURCHASE AGREEMENT
By and Among
XXXXXXX PARTNERS, LLC
and
REDSTONE CAPITAL CORPORATION,
Purchasers
and
XXXXXXX X. XXXXX and XXXXX X. XXXXX
Sellers
and
R & S TRUCK BODY COMPANY, INC.
TABLE OF CONTENTS
1. DEFINITIONS......................................................1
1.1 Affiliate..................................................1
1.2 Ancillary Documents........................................1
1.3 Assets.....................................................1
1.4 Code.......................................................3
1.5 Commitments................................................3
2. SALE OF STOCK....................................................3
2.1 Purchase and Sale of Stock.................................3
2.2 Delivery of Possession and Instruments of Transfer.........3
3. CONSIDERATION....................................................3
3.1 Cash Consideration.........................................3
3.2 Deposit....................................................4
3.3 Payment at Closing.........................................4
3.4 Other Consideration........................................4
(a) Employment Agreements................................4
(b) Accrued Bonus Compensation...........................4
(c) Consulting Contract..................................5
(d) Stock................................................5
(e) Stock Option Plan....................................5
3.5 Allocation of Consideration for Tax Purposes...............5
4. CLOSING..........................................................5
Closing and Closing Date.........................................5
5. REPRESENTATIONS AND WARRANTIES OF THE
SHAREHOLDERS AND R & S...........................................6
5.1 Organization, Good Standing, Power, Etc....................6
5.2 Capital Stock..............................................6
5.3 Articles of Incorporation and By-Laws......................7
5.4 Subsidiaries, Divisions and Affiliates.....................7
5.5 Equity Investments.........................................7
5.6 Authorization of Agreement.................................7
5.7 Effect of Agreement........................................7
5.8 Restrictions...............................................7
5.9 Governmental and Other Consents............................8
5.10 Financial Statements.......................................8
i
5.11 Absence of Certain Changes or Events.......................8
5.12 Title to Assets; Absence of Liens and Encumbrances.........9
5.13 Equipment..................................................9
5.14 Insurance..................................................9
5.15 Agreements, Arrangements, Etc.............................10
5.16 Patents, Trademarks, Copyrights, Etc......................13
5.17 Permits, Licenses, Etc....................................13
5.18 Compliance with Applicable Laws...........................13
5.19 Litigation................................................14
5.20 No Interest in Competitors................................14
5.21 Customers, Suppliers, Distributors and Agents.............14
5.22 Books and Records.........................................15
5.23 Employee Benefit Plan.....................................15
5.24 Powers of Attorney........................................16
5.25 Sufficiency of Assets and Commitments.....................16
5.26 Labor Disputes, Unfair Labor Practices....................16
5.27 Past Due Obligations......................................16
5.28 Environmental Matters.....................................16
5.29 Tax and Other Returns and Reports.........................18
5.30 Certain Tax Definitions...................................18
5.31 Recent Dividends and Other Distributions..................19
5.32 Inventory.................................................19
5.33 Purchase and Sale Obligations.............................19
5.34 Other Information.........................................19
5.35 Accounts Receivable and Accounts Payable..................19
5.36 Knowledge of R & S and the Shareholders...................19
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER.....................20
6.1 Organization..............................................20
6.2 Authorization of Agreement................................20
6.3 Effect of Agreement.......................................20
6.4 Litigation................................................20
7. PRE-CLOSING COVENANTS OF THE SHAREHOLDERS.......................21
7.1 Conduct of Business Until Closing Date....................21
7.2 Approvals, Consents and Further Assurances................22
7.3 Access to Properties, Records, Suppliers, Agents, Etc.....22
7.4 Advice of Changes.........................................22
7.5 Conduct...................................................23
7.6 Employee Benefit Plans....................................23
7.7 Satisfaction of Conditions by Shareholders................23
ii
8. PRE-CLOSING COVENANTS OF PURCHASER..............................23
Satisfaction of Conditions by Purchaser.........................23
9. POST-CLOSING COVENANTS..........................................23
Further Assurances..............................................23
10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
PURCHASER.......................................................24
10.1 Accuracy of Representations and Warranties................24
10.2 Performance of Agreements.................................24
10.3 Litigation, Etc...........................................24
10.4 Approvals and Consents....................................25
10.5 Shareholder's Certificate.................................25
10.6 Officer's Certificate.....................................25
10.7 Good Standing Certificates................................25
10.8 No Material Adverse Change................................25
10.9 Actions, Proceedings, Etc.................................25
10.10 Opinion of Counsel to R & S...............................26
10.11 Licenses, Permits, Consents, Etc..........................26
10.12 Documentation of Rights...................................26
11. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE
SHAREHOLDERS....................................................26
11.1 Accuracy of Representations and Warranties................26
11.2 Performance of Agreements.................................26
11.3 No Injunction.............................................26
11.4 Opinion of Counsel to Purchaser...........................26
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION.................................................26
12.1 Survival..................................................26
12.2 Indemnification by the Shareholders.......................27
12.3 Indemnification by Purchaser..............................27
12.4 Right to Defend...........................................27
12.5 Subrogation...............................................28
13. MISCELLANEOUS...................................................28
13.1 Expenses..................................................28
13.2 Termination of Agreement..................................28
iii
13.3 Waivers...................................................28
13.4 Binding Effect; Benefits..................................28
13.5 Assignment................................................29
13.6 Notices...................................................29
13.7 Entire Agreement..........................................30
13.8 Headings; Certain Terms...................................30
13.9 Counterparts..............................................30
13.10 Governing Law.............................................30
13.11 Severability..............................................31
13.12 Amendments................................................31
13.13 Transaction Taxes.........................................31
13.14 Section References........................................31
13.15 Brokers and Finders.......................................31
iv
EXHIBIT INDEX
1. Exhibit 1.3(b) Inventory
2. Exhibit 1.3(c) Equipment
3. Exhibit 1.3(d) Rights (Patents, Trademarks, Copyrights, etc.)
4. Exhibit 1.3(h) Real Property (owned or leased) (included or
excluded)
5. Exhibit 1.3(j) Excluded Assets
6. Exhibit 3.4(b) Xxxxxxx Xxxxxxx and Xxxx Xxxx Employment
Agreements
7. Exhibit 3.5 Allocation of Consideration
8. Exhibit 4.l Form of Closing Memorandum
9. Exhibit 5.1 Good Standing Certificates - R & S
10. Exhibit 5.2 Outstanding Offers, Options, Warrants,
Securities, Etc.
11. Exhibit 5.3 Articles of Incorporation and By-laws of R & S
12. Exhibit 5.4 Subsidiaries, Divisions and Affiliates of R & S
13. Exhibit 5.5 Equity Investments
14. Exhibit 5.8 Restrictions
15. Exhibit 5.9 Governmental and Other Consents
16. Exhibit 5.10 Financial Statements of R & S
17. Exhibit 5.11 Material Adverse Changes
18. Exhibit 5.12 Notices, Liens and Encumbrances of R & S
19. Exhibit 5.14 Insurance Policies
20. Exhibit 5.15 Commitments
21. Exhibit 5.16 Patents, Trademarks, Copyrights
22. Exhibit 5.17 Permits, Licenses, Etc.
23. Exhibit 5.19 Material Litigation
24. Exhibit 5.20 5% Interest Ownership Table
25. Exhibit 5.21(a) Customers, Suppliers, Distributions and Agents
26. Exhibit 5.21(b) 20 Largest Purchasers and Providers
27. Exhibit 5.23 Employee Benefit Plans
28. Exhibit 5.24 Powers of Attorney
29. Exhibit 5.25 Sufficiency of Assets & Commitments
30. Exhibit 5.26 Material Labor Disputes
31. Exhibit 5.27 Past Due Obligations
32. Exhibit 5.28 Environmental Matters
33. Exhibit 5.29(a) Tax Examination Dates
34. Exhibit 5.29(b) Examinations of Tax Returns by Governmental
Agency
35. Exhibit 5.29(c) Proposal by Governmental Entity of Deficiency,
Assessment or Claim of Taxes
36. Exhibit 5.32(a) Inventory
v
37. Exhibit 5.32(b) Non-useable Inventory
38. Exhibit 5.35 Accounts Receivable and Accounts Payable
39. Exhibit 10.10 Opinion of Counsel to R & S
41. Exhibit 11.4 Opinion of Counsel to Redstone/Xxxxxxx
vi
STOCK PURCHASE AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of this _____ day
of ___________, 1997, by and among Xxxxxxx Partners, LLC ("Xxxxxxx"), a Nevada
limited liability company, and Redstone Capital Corporation, a Texas corporation
having an office at 000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000
("Redstone") (Redstone and Xxxxxxx collectively "Purchaser") or their assignees
under Section 13.5 of this Agreement, Xxxxxxx X. Xxxxx and Xxxxx X. Xxxxx (the
"Shareholders"), and R & S Truck Body Company, Inc. of Xxxxx 0000, Xxxxx,
Xxxxxxxx 00000 ("R & S").
RECITALS:
WHEREAS, the Shareholders are the record and beneficial owners of
_________ shares of common stock of R & S, which is 100% of the issued and
outstanding capital stock of R & S (the "Common Stock");
WHEREAS, Purchaser desires to purchase from Shareholders, and Shareholders
desire to sell to Purchaser, the Common Stock of R & S on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements of the parties hereinafter set forth, and for other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. DEFINITIONS
1.1 "Affiliate". As used in this Agreement, the term "Affiliate" shall
mean, as applied to any person, any other person directly or indirectly
controlling, controlled by, or under common control with, that person. For
purposes of this definition, "control" (including with correlative meanings, the
terms "controlling", "controlled by", and "under common control with") as
applied to any person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of that
person or entity, whether through the ownership of voting securities, by
contract, or otherwise.
1.2 "Ancillary Documents" shall have the meaning set forth in Section 9
hereof.
1.3 "Assets". As used in this Agreement, the term "Assets" shall mean the
assets of R & S (as of the Closing) as follows:
(a) the business of R & S as a going concern, the goodwill pertaining
thereto and all of R & S's right, title and interest in and to the names
"R & S Truck Body
Company, Inc.", and all other names used by R & S, as well as all logos
relating thereto;
(b) all items of inventory owned by R & S including, without limitation,
all raw materials, work-in-progress and finished products of R & S (all of
which are collectively referred to hereinafter as "Inventory"), as set
forth in Exhibit 1.3(b); all vehicles, machinery, equipment (including
equipment which has previously been fully depreciated by R & S and all
equipment loaned to customers), furniture, fixtures and non-inventory
supplies of R & S (including containers, packaging and shipping material,
tools and spare parts and other similar tangible personal property owned
by R & S, which are listed on Exhibit 1.3(c), all of which are
collectively referred to hereinafter as the "Equipment");
(c) all of R & S' right, title and interest in and to the United States
and foreign rights of R & S currently owned or used by R & S (and the
rights proposed to be used) which are set forth on Exhibit 1.3(d), in the
conduct of the business of R & S, with respect to copyrights, licenses,
patents, trademarks, trademark rights, tradenames, service marks, service
right marks, trade secrets, shop rights, know-how, technical information,
techniques, discoveries, designs, proprietary rights and non-public
information and registrations, reissues and extensions thereof and
applications and licenses therefor, including the items listed on Exhibit
1.3(d) (all of such rights being collectively referred to hereinafter as
the "Rights");
(d) all books and records of R & S including all in-house mailing lists,
other customer and supplier lists, trade correspondence, production and
purchase records, promotional literature, data storage tapes and computer
disks, computer software, order forms, accounts payable records (including
invoices, correspondence and all related documents), accounts receivable
ledger from December 31, 1995 through the Closing Date, all documents
relating to uncollected invoices, and all shipping records from December
31, 1995 through the Closing Date;
(e) all contracts, agreements and orders for goods; all corporate
opportunities under discussion and related to the business of R & S,
including any documentation related thereto;
(f) all trade receivables of R & S and all advance payments, prepaid
items, rights to offset and credits of all kinds of R & S;
(g) all real property owned or leased by R & S together with all fixtures
attached thereto, except for property excluded, as set forth in Exhibit
1.3(h) (the "Real Property");
2
(h) all real property and all tangible personal property owned by R & S
which is not specifically included in, or specifically excluded by, the
foregoing subsections (a) through (j);
(i) all plans, contracts, financing commitments and other rights with
respect to the land and new plant to be constructed on Route ____, Allen,
Kentucky; and
(j) all other assets of R & S, except as specifically excluded on Exhibit
1 .3(j) "Excluded Assets").
1.4 "Code" shall mean the Internal Revenue Code of 1986, as amended,
and/or superseded.
1.5 "Commitments" shall mean all agreements, indentures, mortgages, plans,
policies, arrangements, and other instruments, including all amendments thereto
(or where they are verbal, written summaries of the materials terms thereof),
fixed or contingent, required to be disclosed on Exhibit 5.15.
2. SALE OF STOCK
2.1 Purchase and Sale of Stock. In exchange for the consideration
specified herein, and upon and subject to the terms and conditions of this
Agreement, Purchaser agrees to purchase and acquire from the Shareholders, and
the Shareholders agrees to sell, assign, transfer, convey and deliver to
Purchaser or its assignee under Section 13.5 at the Closing, all rights, title
and interest in and to the Common Stock.
2.2 Delivery of Possession and Instruments of Transfer. At the Closing,
the Shareholders shall deliver to Purchaser possession of all of the
certificates representing the shares of Common Stock, duly endorsed in blank or
accompanied by duly executed stock powers with signatures guaranteed, and such
other instruments of transfer requested by and satisfactory to Purchaser and its
counsel for the consummation of the transactions contemplated under this
Agreement and as are necessary to vest in Purchaser all of Shareholders' rights,
title and interest in and to the Common Stock, free and clear of any lien,
encumbrance, security agreement, equity, option, claim, charge or restriction,
other than restrictions imposed by federal or applicable state securities laws.
3. CONSIDERATION
3.1 Cash Consideration. The cash consideration to be paid by Purchaser in
consideration for its purchase of the Common Stock and the other rights provided
herein shall be the sum of $11,000,000.
3.2 Deposit. A deposit in the amount of $400,000 to be held in escrow in
an interest bearing account by Seller's attorney shall be paid by Purchaser upon
execution
3
hereof. Should Purchaser default in its obligation to close and should
Shareholders be in all respects ready to close and along with R & S are in
compliance with this Agreement, the Shareholders shall be entitled to retain the
deposit with all interest thereon as liquidated damages, and neither party shall
have any further obligation to the others.
3.3 Payment at Closing. The down payment shall be released to the
Shareholders and an additional $10,500,000 in cash shall be payable at the
Closing in clearing house funds, provided good and marketable title to the
Common Stock is delivered, free and clear of any lien, or encumbrance as set
forth in Section 2.2 hereof and provided all other terms and conditions of this
Agreement have been complied with. Interest on the down payment shall be a
credit to the Purchaser. At least ten days prior to closing, Shareholders shall
deliver to Purchaser a direction setting forth the proportion the cash portion
of the Purchase Price is to be paid among the individual Shareholders. Failing
such instruction, the cash portion of the Purchase Price shall be payable to
each individual Seller in proportion to the number of shares of R & S owned by
each such Seller.
3.4 Other Consideration. In further consideration of the sale by the
Shareholders, and the purchase by Purchaser of the Common Stock, and as
additional inducements to Purchaser to enter into this Agreement, the following
shall be applicable:
(a) Employment Agreements. Mr. Xxxxxxx Xxxxxxx and Xx. Xxxx Xxxx shall, at
the Closing, deliver executed Employment Agreements, and R & S shall
execute said Employment Agreements, in the form attached hereto as Exhibit
3.4(b). Said Employment Agreements shall have a term of three years and
shall recite, among other things, that Xxxxxxx Xxxxxxx shall receive a
salary of $150,000 per year, that Xxxx Xxxx shall receive a salary of
$175,000 per year, that a bonus plan shall be established for management
personnel including Messrs. Xxxxxxx and Xxxx to consist of 5% of R & S'
earnings before depreciation, amortization, interest and taxes (EBITDA)
during employment of Xxxxxxx Xxxxxxx and Xxxx Xxxx, to be divided between
the management personnel as the Board of Directors of R & S shall
determine for each year of employment under the Employment Agreements and
a non-competition clause with respect to any products made or contemplated
to be made by R & S extending through course of employment and for one
year thereafter.
(b) Accrued Bonus Compensation. On or before the Closing Date, R & S shall
be entitled to pay out all accrued management bonuses under the current
bonus program for the period from January 1, 1997 through the date of
Closing.
4
(c) Consulting Contract. At the closing Xxxxxxx X. Xxxxx shall enter into
a consulting contract in the form attached hereto as Exhibit 3.4(c) with R
& S for a term of three years to provide approximately ten hours per month
to R & S, to provide essentially the same services he provides now. The
consulting contract shall call for a consulting fee of $8,333 per month
payable in increments at the time R & S normally pays its payroll.
(d) Stock. At the Closing Purchaser shall cause to be allocated to the
Shareholders a total of $500,000 worth of shares of Standard Automotive
Corporation, valued at the average closing price of said shares on the
immediate ten trading days prior to the Closing. Said shares shall contain
no restrictions on transfer except as set forth in SEC Rule 144 or any
replacement thereof. In the alternative, Purchaser shall be entitled to
satisfy the requirement of this paragraph 3.4(d) by delivery of $500,000
in cash to Shareholders at the Closing.
(e) Stock Option Plan. At the Closing the Company shall establish a tax
qualified stock option plan (such as an incentive stock option plan) for
all employees in which management shall be entitled to participate.
3.5 Allocation of Consideration for Tax Purposes. The parties agree to
allocate the consideration paid pursuant to this Agreement in the manner and in
accordance with the values specified in Exhibit 3.5 for tax purposes. None of
the parties shall, at any time hereafter, in any tax or information return filed
with any state or federal agency or in any audit, other tax proceeding or
otherwise, take a position which is contrary to such allocation.
4. CLOSING
Closing and Closing Date. Subject to the provisions of this Agreement, the
consummation of the transactions contemplated by this Agreement (the "Closing")
shall be held at the offices of ___________________________ at 10:00 A.M. (local
time), November 15, 1997, or at such later date, place or time as the parties
shall otherwise mutually agree upon (the date of the Closing being referred to
herein as the "Closing Date"). All Closing transactions shall be deemed to take
place simultaneously, and no Closing transaction shall be deemed consummated
until all transactions to take place at the Closing have been consummated. The
actions and documents necessary for the consummation of transactions
contemplated by this Agreement shall be set forth in the Closing Memorandum
attached hereto as Exhibit 4.1.
5
5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS AND R & S
As an inducement to Purchaser to enter into this Agreement and perform its
obligations hereunder, the Shareholders and R & S, jointly and severally, hereby
represent and warrant to Purchaser as follows, each of which representation and
warranty is material and is being relied upon by Purchaser, and each of which is
true as of the date hereof and shall be true as of the Closing, with the same
effect as if said representations and warranties had been made at and as of the
Closing Date:
5.1 Organization, Good Standing, Power, Etc. R & S is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Kentucky. R & S is authorized or licensed to do business as a foreign
corporation and is in good standing in each jurisdiction (set forth in Exhibit
5.1) in which the character and location of its Assets or the nature of the
business transacted by R & S makes such qualification necessary. R & S has all
requisite corporate power and authority to (i) execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby and (ii) to own or lease and operate its properties and assets, and carry
on its business as it is presently being conducted.
5.2 Capital Stock.
(a) R & S has authorized capital stock consisting of _________________
(________) shares of common stock, $___________ par value, of which
___________ (________) shares are issued and outstanding, and all of which
are duly authorized, validly issued, fully paid, non assessable, free of
preemptive rights, and were issued in compliance with all federal and
applicable state securities laws.
(b) Except as set forth in Exhibit 5.2 hereof, there are no outstanding
offers, options, warrants, rights, calls, commitments, obligations (verbal
or written), conversion rights, plans or other agreements (conditional or
unconditional) of any character providing for, requiring or permitting the
offer, sale, purchase or issuance of any shares of capital stock of R & S
or any other securities (as such term is defined in the Securities Act of
1933, as amended). Except as set forth in Exhibit 5.2, there are no equity
securities of the Company that are reserved for issuance or are
outstanding.
(c) The Common Stock is owned by the Shareholders free and clear of all
liens, charges, encumbrances or claims of any kind whatsoever, except for
restrictions imposed by federal or applicable state securities laws.
6
5.3 Articles of Incorporation and By-Laws. Included in Exhibit 5.3 hereto
are correct and complete copies of the Articles of Incorporation of R & S, as
amended to date, and the By-Laws of R & S, as amended to date. Such Articles of
Incorporation and By-Laws are in full force and effect.
5.4 Subsidiaries, Divisions and Affiliates. Except as set forth on Exhibit
5.4, there are no subsidiaries, divisions or Affiliates of R & S. Except as set
forth on Exhibit 5.4, the business of R & S has been conducted solely by R & S
and not through any Affiliate, joint venture or other entity, person or under
any other name.
5.5 Equity Investments. Except as set forth in Exhibit 5.5, R & S does not
own or have any rights to any equity interest, directly or indirectly, in any
corporation, partnership, joint venture, firm or other entity.
5.6 Authorization of Agreement. The execution, delivery and performance of
this Agreement has been, and the Ancillary Documents will be, duly and validly
executed and delivered by the Shareholders of R & S. This Agreement constitutes
a valid and binding obligation of the Shareholders enforceable in accordance
with its terms, except that such enforcement may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditor's rights
generally.
5.7 Effect of Agreement. The execution, delivery and performance of this
Agreement by the Shareholders and the consummation by the Shareholders and R &
S, respectively, of the transactions contemplated hereby, will not, with or
without the giving of notice and the lapse of time, or both, (a) violate any
provision of law, statute, rule, regulation or executive order to which R & S or
the Shareholders is subject; (b) violate any judgment, order, writ or decree of
any court applicable to the Shareholders or R & S; or (c) result in the breach
of or conflict with any term, covenant, condition or provision of, result in the
modification or termination of, constitute a default under, or result in the
creation or imposition of any lien, security interest, charge or encumbrance
upon any of the Assets pursuant to, any corporate charter, by-law, commitment,
contract or other agreement or instrument, including any of the Commitments, to
which R & S or the Shareholders is a party or by which any of the Assets is or
may be bound or affected or from which R & S or the Shareholders derive benefit,
which breach, conflict, modification, termination, default or encumbrance
described in this clause (c) would be material to the business of R & S or any
of the Assets.
5.8 Restrictions. Except as set forth on Exhibit 5.8, neither R & S nor
the Shareholders is a party to any contract, commitment or agreement, nor is any
of them, the Common Stock or Assets subject to, or bound or affected by, any
provision of the Articles of Incorporation, Bylaws or other corporate
restriction, or any order, judgment, decree, law, statute, ordinance, rule,
regulation or other restriction of any kind or
7
character, which would, individually or in the aggregate, materially adversely
affect R & S's business, the Common Stock or any of the Assets.
5.9 Governmental and Other Consents. Except as set forth on Exhibit 5.9,
no consent, authorization or approval of, or exemption by, any governmental or
public body or authority is required in connection with the execution, delivery
and performance by the Shareholders of this Agreement or by R & S or the
Shareholders of any of the instruments or agreements herein referred to, or the
taking of any action herein contemplated.
5.10 Financial Statements. The Shareholders have delivered to Purchaser,
and included in Exhibit 5.10 hereto, correct and complete copies of financial
statements financial statements of R & S for the fiscal years ended December 31,
1996, 1995 and 1994, and unaudited for the period ended June 30, 1997, together
with such other financial documents requested by Purchaser covering the period
June 30, 1997 through the date of Closing (collectively, the "Financial
Statements"). The Financial Statements are in accordance with the books and
records of R & S, have been prepared in accordance with generally accepted
accounting principles and practices consistently applied and accurately present
the financial position of R & S at their respective dates and the results of
operations and cash flows for the respective periods covered thereby and all
items that could have a material adverse effect on the willingness of a
prospective purchaser to acquire R & S have been disclosed in the Financial
Statements or in the Exhibits to this Agreement.
5.11 Absence of Certain Changes or Events. Except as set forth on Exhibit
5.1 1, since December 31, 1996, R & S has not: (a) suffered any adverse change
in, or the occurrence of any events which, individually or in the aggregate, has
or have had, or might reasonably be expected to have, a material adverse effect
on, R & S's financial condition, results of operations or business or the value
of the Assets; (b) incurred damage to or destruction of any material Asset or
material portion of the Assets, whether or not covered by insurance; (c)
incurred any material obligation or liability (fixed or contingent) except (i)
current trade or business obligations incurred in the ordinary course of
business, none of which were entered into for grossly inadequate consideration,
(ii) obligations or liabilities under the Commitments to the extent required
thereby, and (iii) obligations and liabilities under this Agreement; (d) made or
entered into contracts or commitments to make any capital expenditures in excess
of Ten Thousand Dollars ($ 10,000.00); (e) mortgaged, pledged or subjected to
lien or any other encumbrance any of the Assets; (f) sold, transferred or leased
any material Asset or material portion of the Assets, or canceled or compromised
any debt or material claims, except in each case, in the ordinary course of
business; (g) sold, assigned, transferred or granted any rights under or with
respect to any licenses, agreements, patents, inventions, trademarks, trade
names, copyrights or formulae or with respect to know-how or any other
intangible asset
8
including, but not limited to, the Rights; (h) amended or terminated any of the
contracts, agreements, leases or arrangements which otherwise would have been
set forth on Exhibit 5.15 hereto; (i) waived or released any other rights of
material value; or (i) entered into any transactions not in the ordinary course
of business which would, individually or in the aggregate, materially adversely
affect the Assets or the business of R & S.
5.12 Title to Assets; Absence of Liens and Encumbrances. Except as set
forth on Exhibit 5.12, (a) R & S has good title to, and owns outright, the
Assets, which include substantially all of R & S's assets reflected in the
Financial Statements (except (i) as sold, used or otherwise disposed of in the
ordinary course of business, and (ii) as disclosed in the Financial Statements),
free and clear of all mortgages, claims, liens, charges, encumbrances, security
interests, restrictions on use or transfer or other defects as to title; and (b)
immediately following the Closing, R & S will have good and marketable title to
all Assets, free and clear of all mortgages, claims, liens, charges,
encumbrances, security interests, restrictions on use or transfer, or other
defects of any nature. The leases and other agreements or instruments under
which R & S holds, leases or is entitled to the use of any real or personal
property included in the Assets are in full force and effect and all rentals,
royalties or other payments accruing thereunder prior to the date hereof have
been duly paid. R & S enjoys peaceable and undisturbed possession under all such
leases, and the change in ownership of the Assets will not adversely affect such
leases, other agreements and instruments. All Assets are in conformance with all
applicable zoning and other laws, ordinances, rules and regulations; and no
notice of violation of any law, ordinance, rule or regulation thereunder has
been received by the Shareholders or R & S.
5.13 Equipment. Set forth on Exhibit 1.3(c) is a correct and complete list
as of December 31, 1996 of all of the Equipment (in excess of a fair market
value of $3,000.00) (as defined in Section 1.3(c)), indicating for each piece of
Equipment whether it is owned or leased and setting forth where it is located.
None of the Equipment has been disposed of since May 30, 1997. Except as noted
on Exhibit 1.3(c), all of the Equipment (a) is in good working condition, with
no material defects, and generally has been suitable to R & S for the uses for
which it was designed or has been employed by R & S, and (b) conforms in all
material respects with any laws, ordinances, regulations, orders or other
similar governmental requirements relating to its use, as the same are currently
in effect.
5.14 Insurance. There are no outstanding or unsatisfied written
requirements or verbal recommendations imposed or made by any of R & S'S current
insurance companies with respect to current policies covering any of the Assets,
or by any governmental authority requiring or recommending, with respect to any
of the Assets, that any repairs or other work be done on or with respect to, or
requiring or recommending any equipment or facilities be installed on or in
connection with, any of
9
the Assets. R & S carries, and (with respect to any period for which a claim
against R & S may still arise) has always carried product liability insurance,
worker's compensation insurance in reasonable amounts, and other insurance which
is reasonably necessary to the conduct of the R & S's business. On Exhibit 5.14
is set forth a correct and complete list of (a) all currently effective
insurance policies and bonds covering the Assets or the business of R & S, and
their respective annual premiums (as of the last renewal or purchase of new
insurance), and (b) for the five-year period ending on the date hereof, (i) all
accidents, casualties or damage occurring on or to the Assets or relating to the
business or products of R & S which in the aggregate are in excess or Ten
Thousand Dollars ($ 10,000.00), and (ii) claims for product liability, damages,
contribution or indemnification and settlements (including pending settlement
negotiations) relating thereto which in the aggregate are in excess of Ten
Thousand Dollars ($ 10,000.00). Except as set forth on Exhibit 5.14, as of the
date hereof there are no disputes with underwriters of any such policies or
bonds, and all premiums due and payable have been paid. There are no pending or
threatened terminations or premiums increases with respect to any of such
policies or bonds and there is no condition or circumstance applicable to the
business of R & S, other than the sale of the Common Stock pursuant to this
Agreement, which may result in such termination or increase. R & S and the
Assets are in compliance with all conditions contained in such policies or
bonds, except for noncompliance which, individually or in the aggregate, would
not have a material adverse affect on the business of R & S or the Assets.
5.15 Agreements, Arrangements, Etc.
5.15.1 Except as set forth on Exhibit 5.15.1 (a)-(t), R & S is not a party
to, nor are R & S or any of the Assets bound by any:
(a) lease agreement (whether as lessor or lessee) of the Assets;
(b) license agreement, assignment or contract (whether as licensor or
licensee, assignor or assignee) relating to trademarks, trade names,
patents, or copyrights (or applications therefor), unpatented designs or
processes, formulae, know-how or technical assistance, or other
proprietary rights;
(c) employment or other contract or agreement with an employee or
independent contractor which (i) may not be terminated without liability
to R & S upon notice to the employee or independent contractor of not more
than 30 days, or (ii) provides payments (contingent or otherwise) of more
than $30,000 per year (including all salary, bonuses and commissions);
(d) agreement, contract or order with any buying agent, supplier or other
individual or entity who assists, provides or is otherwise involved in the
acquisition, supplying or providing Assets or other goods to R & S;
10
(e) non-competition, secrecy or confidentiality agreements;
(f) agreement or other arrangement for the sale of goods or services by R
& S to any third party (including the government or any other governmental
authority);
(g) agreement with any labor union;
(h) policy of insurance (including bonds) in force with respect to R & S
or any of its operations, properties, assets or executive officers;
(i) agreement, contract or order with any distributor, dealer, leasing
company, sales agent or representative, other than contracts or orders for
the purchase, sale or license of goods made in the usual and ordinary
course of business at an aggregate price per contract or more than $10,000
and a term of more than six months under any such contract or order;
(j) agreement, contract or order with any manufacturer, leasing company,
supplier or customer (including those agreements which allow discounts or
allowances or extended payment terms);
(k) agreement with any distributor or brokerage company, leasing company,
management company or any other individual or entity who assists, places,
brokers or otherwise is involved with the marketing or distribution of R &
S's products to its customers;
(l) joint venture or partnership agreement with any other person or
entity;
(m) agreement guaranteeing, indemnifying or otherwise becoming liable for
the obligations or liabilities of another;
(n) agreement with any banks or other persons, other than its employees,
for the borrowing or lending of money or payment or repayment of draws on
letters of credit or currency swap or exchange agreements (other than
purchase money security interests which may, under the terms of invoices
from its suppliers, be granted to suppliers with respect to goods so
purchased);
(o) agreement with any bank, finance company or similar organization which
acquires from R & S receivables or contracts for sales on credit;
(p) agreement granting any person a lien, security interest or mortgage on
any of the Assets, including, without limitation, any factoring or
agreement for the assignment of receivables or inventory;
11
(q) agreement for the incurrence of any capital expenditure in excess of
$10,000;
(r) advertising, publication or printing agreement;
(s) agreement which restricts R & S from doing business anywhere in the
world;
(t) agreement or statute or regulation giving any party the right to
renegotiate or require a reduction in prices or the repayment of any
amount previously paid; or
(u) other agreement or contract, not included in or expressly excluded
from the terms of the foregoing clauses (a) through (t), materially
affecting the Assets or R & S's business, except contracts or purchase
orders for the purchase or sale of goods or services made in the usual and
ordinary course of business.
Correct and complete copies of all Commitments required to be shown on Exhibit
5.15 have been separately delivered to Purchaser prior to the date hereof.
5.15.2 Each of the Commitments is valid, in full force and effect and
enforceable by R & S in accordance with its terms.
5.15.3 Except as set forth on Exhibit 5.15, R & S has fulfilled, or has
taken all action reasonably necessary to enable it to fulfill when due, all of
its obligations under the Commitments, except where the failure to do so would
not, individually or in the aggregate, have a material adverse affect on the
business of R & S or the Assets. Furthermore, there has not occurred any default
by R & S or any event which, with the lapse of time or the election of any
person other than R & S, will become a default, nor has there occurred any
default by others or any event which, with the lapse of time or the election of
R & S, will become a default under any of the Commitments, except for such
defaults, if any, which (a) have not resulted and will not result in any
material loss to or liability of R & S or any of its successors or assigns or
(b) have been indicated on Exhibit 5.15, R & S is not in arrears in any material
respect with respect to the performance of satisfaction of the terms or
conditions to be performed or satisfied by it under any of the Commitments and
no waiver or variance has been granted by any of the parties hereto.
5.15.4 After the Closing, except as set forth on Exhibit 5.15, each of the
Commitments included in the Assets does not require the consent of the other
parties thereto and, with respect to any of the Commitments which do require the
consent of the other parties thereto, R & S has obtained such consent and has
provided or will provide Purchaser with copies thereof.
12
5.16 Patents, Trademarks, Copyrights, Etc. Exhibit 1.3(d) sets forth (i)
the registered and beneficial owner and the expiration date, to the extent
applicable, for each of the Rights set forth on such Exhibit and (ii) the
product, service, or products or services of R & S which make use of, or are
sold, licensed or made under, each such Right. All of the Rights are included in
the Assets and constitute all Rights necessary for the conduct of the business
of R & S, as such business is currently being conducted. Except as set forth on
Exhibit 5.16, R & S has not sold, assigned, transferred, licensed, sub-licensed
or conveyed the Rights, or any of them, or any interest in the Rights, or any of
them, to any person, and has the entire right, title and interest (free and
clear of all security interests, liens and encumbrances of every nature) in and
to the Rights necessary to the conduct of the business of R & S as currently
being conducted; neither has the validity of such items been, nor is the
validity of such items, nor the use thereof by R & S, the subject of any pending
or threatened opposition, interference, cancellation, nullification, conflict,
concurrent use, litigation or other proceeding. The conduct of the business of R
& S as currently operated, and the use of the Assets does not and will not
conflict with, or infringe, legally enforceable rights of third parties. Except
as set forth on Exhibit 5.16, the Rights owned by or licensed to R & S have not
been used, and no use is now being made, by any entity except R & S and other
entities duly licensed to use the same. Except as set forth on Exhibit 5.16,
there is no infringement of any proprietary right owned or licensed by R & S.
5.17 Permits, Licenses, Etc. There are no permits, licenses,
registrations, memberships, orders or approvals of governmental or
administrative authorities or required to permit R & S to carry on its business
as currently conducted (other than (i) permits, licenses, registrations, trade
memberships, orders or approvals which are set forth on Exhibit 5.17, all of
which are in full force and effect, and (ii) other permits, licenses, orders or
approvals, the failure to obtain which would not, individually or in the
aggregate, have a material adverse affect on the Assets or on R & S's business).
5.18 Compliance with Applicable Laws. The conduct by R & S of its business
does not violate or infringe, and there is no basis for any claims of violation
or infringement of, any law, statute, ordinance, regulation or executive order
(including, without limitation, the Federal Food, Drugs and Cosmetics Act, as
amended, the Occupational Safety and Health Act, the National Environmental
Policy Act and the Foreign Corrupt Practices Act and the respective regulations
thereunder and similar applicable state laws and regulations) currently in
effect, except in each case for violations or infringements which do not and
will not, individually or in the aggregate, have a material adverse affect on
the Assets or R & S's business. R & S is not in default under any governmental
or administrative registration, membership or license issued to it, under any
governmental or administrative order or demand directed to it, or with respect
to any order, writ, injunction or decree of any court which, in any case,
13
materially adversely affects the financial condition, results of operations or
business of R & S or the value of the Assets.
5.19 Litigation. Except as set forth on Exhibit 5.19, there is no claim,
action, suit, proceeding, arbitration, reparation, investigation or hearing or
notice of hearing, pending or threatened, before any court or governmental,
administrative or other competent authority or private arbitration tribunal
against or relating to or affecting (directly or indirectly, including by way of
indemnification) the business of R & S or any of the Assets, or the transactions
contemplated by this Agreement; nor are any facts known to R & S, which it
believes could reasonably give rise to any such claim, action, suit, proceeding,
arbitration, investigation or hearing, which may have any adverse affect,
individually or in the aggregate in excess of Ten Thousand Dollars ($ 10,000)
upon the business of R & S, the value of the Assets or the transactions
contemplated by this Agreement. R & S has not waived any statute of limitations
or other affirmative defense with respect to any of its obligations. There is no
continuing order, injunction or decree of any court, arbitrator or governmental,
administrative or other competent authority to which R & S is a party, or to
which the Company is subject. Neither R & S nor the Shareholders or other
current officer, director, partner or employee of R & S or any Affiliate of R &
S has been permanently or temporarily enjoined or barred by order, judgment or
decree of any court or other tribunal or any agency or other body from engaging
in or continuing any conduct or practice in connection with the business engaged
in by R & S.
5.20 No Interest in Competitors. Set forth on Exhibit 5.20 is a list
describing the extent to which R & S, the Shareholders or any other officer or
director of R & S or any Affiliate of any of the foregoing, directly or
indirectly, owns more than a five percent (5%) interest in or controls or is an
employee, officer, director, or partner of or participant in (but only to the
extent such a participation exceeds one percent), or consultant to any
corporation, partnership, limited partnership, joint venture, association or
other entity which is a competitor, supplier or customer of R & S or has any
type of business or professional relationship with R & S.
5.21 Customers, Suppliers, Distributors and Agents. Except as set forth on
Exhibit 5.21(a), R & S has no knowledge or reason to believe that any customer,
client, distributor, supplier or any other person or entity with material
business dealings with R & S, will or may cease to continue such relationship
with R & S, or will or may substantially reduce the extent of such relationship,
at any time prior to or after the Closing Date. Except for such common public
information, R & S has no knowledge of (1) any other existing or contemplated
modification or change in the business relationship of R & S with, or (2) any
existing condition or state of facts which has affected adversely, will
adversely affect (in more than a minimal manner), or has a reasonable likelihood
of adversely affecting the business of R & S with its customers, clients,
14
suppliers or other persons or entities with material business dealings with R &
S or which has prevented or will prevent such business from being carried on by
R & S under its new ownership after the Closing in essentially the same manner
as it is currently carried on. Exhibit 5.21 (b) sets forth as to R & S (a) the
twenty largest (in dollar value) purchasers of its goods and/or services and (b)
the twenty largest (in dollar value) providers of goods and/or services to it,
in each case with respect to each of the fiscal years ended December 31, 1996
and 1995 and the six months ended June 30, 1997.
5.22 Books and Records. The books of account and other financial and
corporate records of R & S are in all material respects complete, correct and up
to date, with all necessary signatures, and are in all material respects
accurately reflected in the Financial Statements.
5.23 Employee Benefit Plan. Except as described in Exhibit 5.23, R & S
does not have any hospitalization, health insurance, pension, retirement, profit
sharing, stock option or similar plans. Exhibit 5.23 sets forth a correct and
complete list of each and every employee benefit plan, including each pension,
profit sharing, stock bonus, bonus, deferred compensation, severance, stock
option or purchase plan, or other retirement plan or arrangement, covering
employees of R & S (the "Employee Benefit Plans"). For each such employee
pension plan, multi-employer plan or welfare plan as those terms are defined in
Section 3 of the Employee Retirement Income Security Act of 1974, as amended,
("ERISA") and for each Employee Benefit Plan with respect to which R & S is a
"party in interest" as defined in Section 3 of ERISA, or a "disqualified person"
as defined in Section 4975 of the Code, R & S has delivered to Purchaser
complete and accurate copies of (i) all Employee Benefit Plans and all
amendments thereto; (ii) the trust instrument or insurance contract, if any,
forming a part of the plans, and all amendments thereto; (iii) the most recent
and preceding year's Internal Revenue Service Form 5500 and all schedules
thereto; (iv) the most recent Internal Revenue Service determination letter, or
if no letter has been issued, any pending application to the Internal Revenue
Service for a determination letter regarding qualified status; (v) any bond
required by Section 412 of ERISA; and (vi) the summary plan description. R & S
has complied with all of the rules and regulations governing each of the
Employee Benefit Plans maintained for the benefit of R & S's employees,
including, without limitation, rules and regulations promulgated pursuant to
ERISA and the Code, by the Department of Treasury, Department of Labor, and the
Pension Benefit Plans Guaranty Corporation, and each of the Employee Benefit
Plans now operated has since its inception been operated in accordance with its
provisions and is in compliance with such rules and regulations. Neither R & S
nor any Employee Benefit Plans maintained by R & S or any fiduciaries thereof
have engaged in any prohibited transaction, as that term is defined in Section
406 of ERISA or Section 4975 of the Code, nor have any of them committed any
breach of fiduciary responsibility with respect to any of the Employee Benefit
Plans, and R & S
15
does not have any knowledge that any other person has not complied with these
rules and regulations.
5.24 Powers of Attorney. Except as set forth on Exhibit 5.24, no person
has any power of attorney to act on behalf of R & S in connection with any of R
& S's properties or business affairs other than such powers to so act as
normally pertain to the officers of R & S .
5.25 Sufficiency of Assets and Commitments. Except as set forth in Exhibit
5.25, the Assets and the Commitments, taken in the aggregate, are sufficient,
and constitute all of the property and Rights necessary, for the continuation of
the business and operations of R & S on a basis consistent with past operations.
5.26 Labor Disputes, Unfair Labor Practices. Except as set forth on
Exhibit 5.26, R & S is not engaged in any labor practice which would have a
material adverse affect on the Assets or R & S's business. There is no pending
or affirmatively threatened (i) unfair labor practice complaint, charge, labor
dispute, strike, slowdown, walkout or work stoppage before the National Labor
Relations Board or any other authority or (ii) grievance or arbitration
proceeding arising out of or under a collective bargaining agreement involving
employees of R & S. There have been no strikes, labor disputes, slow-downs,
walkouts, or work stoppages involving employees of R & S during the last five
(5) years. Union representation of employees exists as set forth on Exhibit
5.26. R & S has not received notice from any of its employees of such employee's
intent to terminate his or her employment or bring any action against R & S for
any reason related to the transactions contemplated by this Agreement or for any
other reason.
5.27 Past Due Obligations. Except as set forth on Exhibit 5.27, no past
due obligations of R & S over $5,000 have given rise or shall give rise within 5
days after the Closing Date (except as such will be performed by R & S prior to
the Closing so as to relieve Purchaser of all liability therefor) to any
additional liability to Purchaser on account of their being past due.
5.28 Environmental Matters.
(a) Except as set forth on Exhibit 5.28, (i) R & S is in compliance with
all environmental laws, regulations, permits and orders applicable to it,
and with all laws, regulations, permits and orders governing or relating
to asbestos removal and abatement; (ii) R & S has not transported, stored,
treated or disposed, or allowed or arranged for any third parties to
transport, store, treat or dispose, of any Hazardous Substances or other
waste to or at any location other than a site lawfully permitted to
receive such Hazardous Substances or other waste for such purposes, or had
performed, arranged for or allowed by any method or procedure such
transportation, storage, treatment or disposal in contravention of any
laws or
16
regulations nor has R & S disposed of, or allowed or arranged for any
third parties to dispose of, Hazardous Substances or other waste upon
property owned or leased by it in contravention of any applicable laws or
regulations; (iii) there has not occurred, nor is there presently
occurring, a Release of any Hazardous Substance on, into or beneath the
surface of any parcel of real property in which R & S has (or will have
after giving effect to the transactions contemplated hereby) an ownership
interest or any leasehold interest in contravention of any applicable laws
or regulations; (iv) R & S has not transported or disposed of, or allowed
or arranged for any third parties to transport or dispose of, any
Hazardous Substance or other waste to or at a site which, pursuant to the
U.S. comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA"), has been placed on the National Priorities
List or its Kansas equivalent; (v) R & S has not received notice and R & S
has no knowledge of any facts which could give rise to any substantive
notice, that R & S is a potentially responsible party for a federal or
state environmental cleanup site or for corrective action under CERCLA or
notice of any other Environmental Claim; (vi) R & S has not undertaken (or
been requested to undertake) any response or remedial actions or cleanup
actions of any kind at the request of any federal, state or local
governmental entity, or at the request of any other person or entity; and
(vii) there are no laws, regulations, ordinances, licenses, permits or
orders relating to environmental matters requiring any work, repairs,
construction or capital expenditures with respect to the assets or
properties of R & S.
(b) For the purposes of this Agreement: (i) "Environmental Claim" shall
mean any written demand, claim, governmental notice or threat of
litigation or the actual institution of any action, suit or proceeding
which asserts that an Environmental Condition constitutes a violation of
any statute, ordinance, regulation, or other governmental requirement
relating to the emission, discharge, or Release of any Hazardous Substance
into the environment or the generation, treatment, storage,
transportation, or disposal of any Hazardous Substance, prior to Closing
Date in each case in contravention of any applicable laws or regulations;
(ii) "Environmental Condition" shall mean the presence on any real
property during the period from the date such real property was first
owned, leased or used by R & S to the Closing Date, in surface water,
ground water, drinking water supply, land surface, subsurface strata or
ambient air of any Hazardous Substance arising out of or otherwise related
to the operations or other activities of R & S or of any predecessor of R
& S, conducted or undertaken prior to the Closing Date, and in each case
in contravention of any applicable laws or regulations; (iii) "Hazardous
Substance" shall mean any substance defined in the manner set forth in
Section 101(14) of the U.S. Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, as applicable on the
Closing Date, and shall
17
include any additional substances designated under Section 102(a) thereof
prior to the Closing Date; and (iv) "Release" shall mean releasing,
spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing into the environment
in each case in contravention of any applicable laws or regulations.
5.29 Tax and Other Returns and Reports. R & S has timely filed or will
file all Tax Returns and information returns required to be filed by R & S and
has paid all Taxes due for all periods ending on or before December 31, 1996.
Adequate provision has been made in the books and records of R & S and in the
Financial Statements referred to in Section 5.10 above, for all Taxes whether or
not due and payable and whether or not disputed. Exhibit 5.29(a) lists the date
or dates through which any governmental entity has examined any Tax Return of R
& S. All required Tax Returns, including amendments to date, have been prepared
in good faith without negligence or willful misrepresentation and are complete
and accurate and in all material respects. Except as set forth in Exhibit
5.29(b), no governmental entity has, during the past three years, examined or is
in the process of examining any Tax Returns of R & S. Except as set forth on
Exhibit 5.29(c), no governmental entity has proposed (tentatively or
definitively), asserted or assessed or threatened to propose or assert, any
deficiency, assessment, lien, or other claim for Taxes and there would be no
basis for any such delinquency, assessment, lien or claim. There are no
agreements, waivers or other arrangements providing for an extension of time
with respect to the assessment of any Taxes or deficiency against R & S or with
respect to any Tax Return filed or to be filed by R & S.
5.30 Certain Tax Definitions. For purposes of this Agreement, the term
"Taxes" means all taxes, including without limitation all Federal, state, local,
foreign and other income, franchise, sales, use, property, payroll, withholding,
environmental, alternative or add- on minimum and other taxes, assessments,
charges, duties, fees, levies or other governmental charges of my kind
whatsoever, and all estimated taxes, deficiency assessments, additions to tax,
penalties, and interest, and any contractual or other obligation to indemnify or
reimburse any person with respect to any such assessment. For purposes of this
Agreement, the term "Tax Return" shall mean any report, statement, return,
declaration of estimated tax or other information required to be supplied by or
on behalf of R & S to a taxing authority in connection with Taxes, or with
respect to grants of tax exemption, including any consolidated, combined,
unitary, joint or other return filed by any person that properly includes the
income, deductions or other tax information concerning R & S.
5.31 Recent Dividends and Other Distributions. There has been no dividend
or other distribution of assets or securities whether consisting or money,
property or any other thing of value, declared, issued or paid to or for the
benefit of R & S's
18
Shareholders subsequent to the date of the most recent Financial Statements
described in Section 5.10 by R & S.
5.32 Inventory. Except as set forth in Exhibits 5.32(a) and (b), all of
the Inventory has been received within six months of June 30, 1997 and is of a
quantity and quality saleable at regular prices or usable in the ordinary course
of business during 1997. Exhibit 5.32(a) shall specify all Inventory that was
received more than 12 months before the Closing Date, including the calendar
month in which such Inventory was received, by quantity and product family.
Exhibit 5.32(b) shall specify all Inventory which is not of a quality or
quantity saleable or usable in the ordinary course of business during 1997.
5.33 Purchase and Sale Obligations. All purchase, sales and orders and all
other commitments for purchases, sales and orders made by or on behalf of R & S
have been made in the usual and ordinary course of its business in accordance
with normal practices. On the Closing Date, the Shareholders shall deliver to
Purchaser a schedule of all such uncompleted purchase and sale orders and other
commitments with respect to any of R & S's obligations as of a date not earlier
than ten (10) days prior to the Closing.
5.34 Other Information. None of the information which has been or may be
furnished by R & S or the Shareholders or any of their representatives to
Purchaser or any of its representatives in connection with the transactions
contemplated hereby, which is contained in this Agreement (including the
Exhibits hereto) or any Ancillary Document or any certificate or instrument
delivered or to be delivered by or on behalf of R & S or the Shareholders in
connection with the transactions contemplated hereby, does or will contain any
untrue statement of a material fact or omit a material fact necessary to make
the information contained herein or therein not misleading.
5.35 Accounts Receivable and Accounts Payable. All of the accounts
receivable of R & S are actual and bona fide accounts receivable representing
obligations for the total dollar amount thereof showing on the books of R & S,
and the accounts receivable are not and will not be subject to any recoupments,
set-offs or counter-claims. Exhibit 5.35 sets forth a true and correct aged
(30-60-90 days) list of all accounts receivable and accounts payable of R & S as
of the end of the calendar month preceding the date hereof.
5.36 Knowledge of R & S and the Shareholders. As to each representation
and warranty made by the Shareholders under this Article 5, any fact or
information known to R & S or notice received by R & S, shall be imputed to the
Shareholders as if such fact or information were known to the Shareholders or
such notice received by the Shareholders.
19
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to R & S as follows, each of
which representation and warranty shall be true as of the Closing Date:
6.1 Organization. Xxxxxxx is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Nevada.
Redstone Capital Corporation is a corporation duly organized, validly existing
and in good standing under the laws of the State of Texas. Purchaser has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby.
6.2 Authorization of Agreement. The execution, delivery and performance of
this Agreement by Purchaser, and the consummation of the transactions
contemplated hereby have been duly and effectively authorized by Purchaser's
Managers. This Agreement has been duly and validly authorized, executed and
delivered on behalf of Purchaser. This Agreement constitutes a valid and binding
obligation of Purchaser, enforceable in accordance with its terms, except that
such enforcement may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors, rights generally.
6.3 Effect of Agreement. The execution, delivery and performance of this
Agreement by Purchaser and consummation by Purchaser of the transactions
contemplated hereby will not, with or without the giving or notice and the lapse
of time, or both, (a) violate any provision of law, statute, rule, regulation or
executive order to which the Purchaser is subject; (b) violate any judgment,
order, writ or decree of any court applicable to Purchaser; or (c) result in the
breach of or conflict with any term, covenant, condition or provision of the
organizational documents of Purchaser or any commitment, contract or other
agreement on instrument to which Purchaser is a party.
6.4 Litigation. To the best knowledge of Purchaser, there are no actions,
suits, proceedings or governmental investigations or inquiries pending or
threatened against it which, in its reasonable judgment, would prevent the
consummation of the transactions contemplated hereby.
7. PRE-CLOSING COVENANTS OF THE SHAREHOLDERS
The Shareholders hereby covenant and agree with Purchaser that the
Shareholders and R & S shall do, or cause to be done, the following, between the
date of this Agreement and the Closing Date or date of termination of this
Agreement, as the case may be:
20
7.1 Conduct of Business Until Closing Date. Except as permitted or
required hereby or as Purchaser may otherwise consent in writing, the
Shareholders shall cause R & S to:
7.1.1 operate the business of R & S only in the usual, regular and
ordinary manner, and use their best efforts to (a) preserve the present business
organization of R & S intact, (b) keep available the services of the present
employees of R & S, and (c) preserve the current business relationships of R & S
with customers, clients, suppliers, distributors and others having business
dealings with it;
7.1.2 bear the risk of loss or damage to the Assets on and prior to the
Closing Date where such risk of loss is not the legal obligation of another, and
maintain all properties necessary for the conduct of the business of R & S,
whether owned or leased;
7.1.3 maintain the books, records and accounts of R & S in the usual,
regular and ordinary manner, on the basis consistent with prior periods;
7.1.4 duly comply with all laws, rules and regulations applicable to R & S
and to the conduct of its business;
7.1.5 perform all of the obligations of R & S without default, unless such
default is of no significance to R & S and could have no adverse impact on R &
S, its Assets or business;
7.1.6 neither (a) amend R & S's Articles of Incorporation or By-Laws; (b)
merge with or into, consolidate, amalgamate or otherwise combine with, any other
entity; nor (c) change the character of the business of R & S;
7.1.7 neither (a) encumber, mortgage, or voluntarily subject to lien any
of the existing Assets or the Common Stock; (b) transfer, sell, lease, license
or otherwise dispose of any of, or any part of, the Assets (other than in the
ordinary course of business); (c) convey, transfer or acquire any material Asset
or property to, for or on behalf of R & S other than in the ordinary course of
business; (d) enter into any arrangement, agreement or undertaking, with respect
to any of the employees relating to the payment of bonus, severance,
profit-sharing or special compensation or any increase in the compensation
payable or to become payable to any such employee; nor (e) incur any material
fixed or contingent obligation or enter into any agreement, commitment, contract
or other transaction or arrangement relating to the business of R & S or the
Assets;
7.1.8 not make any distributions or dividends of Assets or securities, nor
any changes to the capital structure of R & S; not agree to make or make any
sales of its securities including the issuance of any additional capital stock
or rights or options or
21
contracts to acquire, or instruments convertible into, common stock; however, R
& S shall be entitled to make the bonus distributions referred to in paragraph
3.4(b) hereof and further to distribute to Shareholders sufficient cash to
enable Shareholders to pay their federal and state income taxes attributable to
the Subchapter S income allocated to them from January 1, 1997 through the
Closing Date;
7.1.9 neither modify, change or terminate any of its material obligations
other than in the ordinary course of business, nor grant any power of attorney
with respect to the business of R & S or the Assets to any party except
Purchaser; and
7.1.10 anything in this Section 7.1 notwithstanding, Shareholders shall
have the right in their discretion to make all decisions and expenditures
regarding the new plant and equipment therefor required to keep that project on
schedule.
7.2 Approvals, Consents and Further Assurances. The Shareholders shall use
and shall cause R & S to use its best efforts to obtain in writing as promptly
as possible all approvals, consents and waivers required in order to effectuate
the transactions contemplated hereby, and shall deliver to Purchaser copies,
reasonably satisfactory in form and substance to counsel to Purchaser, of such
approvals and consents. The Shareholders shall also use their best efforts to
assure that the other conditions set forth in Article 10 hereof are satisfied by
the Closing Date.
7.3 Access to Properties, Records, Suppliers, Agents, Etc. The
Shareholders shall cause R & S to give to Purchaser and to Purchaser's counsel,
financiers, accountants and other representatives access to and copies of such
of R & S's properties, personnel, books, tax returns, contracts, commitments and
records as relate to the Assets, suppliers, agents, distributors, etc. or other
aspects of the business of R & S; and shall furnish to Purchaser and such
representatives all such additional instruments, contracts, documents or other
written obligations (certified by officers of R & S, if so requested) and
financial and other information concerning such business, Assets, suppliers,
agents, etc. as Purchaser or its representatives may from time to time request.
7.4 Advice of Changes. If the Shareholders becomes aware of any fact or
facts which, if known at the date hereof, would have been required to be set
forth or disclosed in or pursuant to this Agreement or which, individually or in
the aggregate, could materially adversely affect the business, Assets or Common
Stock of R & S, Shareholders shall promptly advise Purchaser in writing thereof.
7.5 Conduct. Except as permitted or required hereby or as Purchaser may
otherwise consent in writing, neither R & S nor the Shareholders shall enter
into any transaction or take any action which would result in any of the
representations and warranties of R & S or the Shareholders contained in this
Agreement or in any Ancillary
22
Document not being true and correct as of the time immediately after such
transaction has been entered into or such event has occurred and on the Closing
Date.
7.6 Employee Benefit Plans. Except for payment of R & S's current
obligations, R & S shall not incur any additional obligations or liabilities,
including (i) all liabilities for all claims incurred, whether or not reported,
on or before the Closing Date under all "employee welfare benefit plans," within
the meaning of Section 3(1) of ERISA, (ii) all liabilities or obligations for
vacations or sick leave or retiree, medical or life benefits to employees or
former employees of R & S, and (iii) all liabilities of R & S for all benefits
accrued under any "employee pension benefit plan," within the meaning of Section
3(2) of ERISA under each Employee Benefit Plan.
7.7 Satisfaction of Conditions by Shareholders. The Shareholders hereby
covenants and agrees with Purchaser that, between the date of this Agreement and
the Closing Date or date of termination of this Agreement, as the case may be,
they shall use their best efforts to assure that the conditions set forth in
Article 10 hereof are satisfied by the Closing Date.
8. PRE-CLOSING COVENANTS OF PURCHASER
Satisfaction of Conditions by Purchaser. Purchaser hereby covenants and
agrees with R & S that, between the date of this Agreement and the Closing Date
or date of termination of this Agreement, as the case may be, Purchaser shall
cause the conditions set forth in Article 11 hereof to be satisfied by the
Closing Date.
9. POST-CLOSING COVENANTS
Further Assurances. After the Closing hereunder, the Shareholders, at the
request of Purchaser, shall execute, acknowledge and deliver to Purchaser,
without further consideration, all such further assignments, conveyances,
endorsements, deeds, powers of attorney, consents and other documents (together
with the instruments referred to in Section 1.3, referred to herein collectively
as the "Ancillary Documents") and take such other action as Purchaser may
reasonably request (a) to transfer to and fully vest in Purchaser, and protect
Purchaser's right, title and interest in and to all of R & S's right, title and
interest in and to the Assets, and (b) otherwise to consummate the transactions
contemplated by this Agreement.
10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
The obligations of Purchaser pursuant to this Agreement are subject to the
satisfaction at the Closing of each of the following conditions, any or all of
which conditions may be waived by Purchaser in its sole discretion:
23
10.1 Accuracy of Representations and Warranties. All representations and
warranties made by the Shareholders (contained in this Agreement, any Exhibit or
Schedule hereto, or any certificate or instrument delivered to Purchaser or its
representatives by the Shareholders or their representatives) shall be true on
and as of the Closing Date with the same force and effect as though made on and
as of the Closing Date (i.e., with respect to representations that a state of
facts exists on or as of the date hereof, it is a condition that such state of
facts exists on or as of the Closing Date; and with respect to a representation
that a state of facts has or has not changed between a date prior to the date
hereof and the date hereof, it is a condition that such state of facts has or
has not changed between such prior date and the Closing Date), except as
affected by transactions contemplated hereby.
10.2 Performance of Agreements. The Shareholders and R & S shall have
performed and complied with all covenants, obligations and agreements to be
performed or complied with by them on or before the Closing Date pursuant to
this Agreement.
10.3 Litigation, Etc.
10.3.1 Except as set forth on Exhibit 5.19, no claim, action, suit,
proceeding, arbitration, investigation or hearing or note of hearing shall be
pending or threatened against or affecting the Shareholders or R & S or any of
the Assets, which (a) might result either in an action or enjoin or prevent the
consummation of the transactions contemplated by this Agreement; (b) would
materially adversely affect the business of R & S or the ability of Purchaser to
consummate the transactions contemplated by this Agreement or to own the Common
Stock or to operate the business of R & S.
10.3.2 R & S shall not be in violation of any law, statute, ordinance,
rule, regulation or executive order, the enforcement of which would,
individually or in the aggregate, materially adversely affect the Assets or the
business of R & S; or which would individually or in the aggregate, materially
adversely affect the ability of Purchaser to consummate the transactions
contemplated by this Agreement or to own the Common Stock or to operate the
business of R & S.
10.3.3 No law, regulation or decree shall have been proposed, adopted or
promulgated, or have become effective, the enforcement of which would materially
adversely affect the ability of Purchaser to consummate the transactions
contemplated by this Agreement or to own the Common Stock or to operate any such
business.
10.4 Approvals and Consents. R & S shall have obtained, and Purchaser
shall have received copies of, all of the approvals and consents referred to in
Section 7.2, each of which approvals and consents shall be in full force and
effect and reasonably satisfactory in form and substance to Purchaser and its
counsel.
24
10.5 Shareholders's Certificate. Purchaser shall have received an accurate
certificate of the Shareholders, dated the Closing Date, satisfactory in form
and substance to Purchaser and its counsel, certifying (a) as to the fulfillment
of the matters specified in Sections 10.1 through 10.3, and (b) any changes that
Purchaser is required to be notified of pursuant to Section 7.4, or that
previously had not been disclosed to Purchaser.
10.6 Officer's Certificate. Purchaser shall have received an accurate
certificate, dated the Closing Date, of Xxxxxxx Xxxxxxx, President of R & S,
dated as of the Closing Date, stating, among other things, that he is not aware
of any material omissions or facts that would materially alter any of the
Financial Statements, nor is he aware of any facts or factors that are
reasonably likely to occur, or if known to other parties, that could have a
material adverse effect on the financial condition, business, operations,
Assets, liabilities, management or prospects of R & S.
10.7 Good Standing Certificates. Purchaser shall have received (a) a
certificate of the office of the Secretary of State of Kentucky, dated within 30
days before the Closing Date, certifying that the records of such state
regarding R & S incorporated in such state reflect neither a certificate of
dissolution, a court order declaring dissolution, a merger or consolidation
which terminated its existence, nor suspension of its corporate powers, rights
and privileges, and that in accordance with the records of such state, such
corporation is authorized to exercise all of its corporate powers, rights and
privileges in such state and (b) a telegram or other document from one or more
appropriate officials of the State of Kentucky or an affidavit of counsel with
respect to telephone conversations with such officials, dated within two days
before the Closing Date, to the same effect.
10.8 No Material Adverse Change. There shall have been no material adverse
changes in the financial condition, business, operations, assets, liabilities,
management or prospects of R & S.
10.9 Actions, Proceedings, Etc. All actions, proceedings, instruments and
documents required to carry out the transactions contemplated by this Agreement
shall have been completed.
10.10 Opinion of Counsel to R & S. Purchaser shall have received an
opinion of Xxxxxxx, Xxxxxxxx & Xxxxxxx, P.L.L., counsel to R & S, addressed to
Purchaser, dated the Closing Date, to the effect set forth in, and substantially
in the form, of Exhibit 10.10.
10.11 Licenses, Permits, Consents, Etc. Purchaser shall have received
evidence, in form and substance reasonably satisfactory to counsel for
Purchaser, that such licenses, permits, consents, approvals, authorizations or
orders of governmental authorities as are
25
necessary to the consummation of the transactions contemplated by this Agreement
and the continued operation of the business of R & S have been obtained.
10.12 Documentation of Rights. R & S shall have delivered to Purchaser
true and complete copies of all of the documentation held by R & S relating to
each of the Rights.
11. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SHAREHOLDERS
The obligations of the Shareholders under this Agreement are subject to
the satisfaction at the Closing of each of the following conditions.
11.1 Accuracy of Representations and Warranties. All representations and
warranties by Purchaser in this Agreement shall be true as of the Closing Date
with the same force and effect as though made on and as of the Closing Date.
11.2 Performance of Agreements. Purchaser shall have performed and
complied in all material respects with all covenants, obligations and agreements
to be performed or complied with by it on or before the Closing Date pursuant to
this Agreement.
11.3 No Injunction. No third party injunction, stay or restraining order
shall be in effect prohibiting the consummation of the transactions contemplated
hereby.
11.4 Opinion of Counsel to Purchaser. The Shareholders shall have received
an opinion of counsel to Purchaser, addressed to the Shareholders, dated as of
the Closing Date, to the effect set forth in, and substantially in the form, of
Exhibit 11.4.
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
12.1 Survival. The representations and warranties set forth in this
Agreement, in any Exhibit or Schedule hereto and in any certificate or
instrument delivered in connection herewith shall survive for a period of two
(2) years after the Closing Date and shall thereupon terminate and expire and
shall be of no force or effect thereafter, except (i) with respect to any claim,
written notice of which shall have been delivered to Purchaser, the Shareholders
or R & S, as the case may be, such claim shall survive the termination of such
period and shall survive for as long as such claim is unsettled, and (ii) with
respect to any litigation which shall have been commenced to resolve such claim
on or prior to such date. Notwithstanding the foregoing, with respect to taxes,
the period shall be the applicable statute of limitations, and with respect to
customer claims, the period shall be five (5) years.
12.2 Indemnification by the Shareholders. The Shareholders hereby covenant
and agree with Purchaser that, regardless of any investigation made at any time
by or on
26
behalf of Purchaser or any information Purchaser may have and, regardless of the
Closing hereunder, the Shareholders shall indemnify Purchaser and R & S and its
respective directors, officers, employees and Affiliates of Purchaser, and each
of their successors and assigns (individually, a "Purchaser Indemnified Party"),
and hold them harmless from, against and in respect of any and all costs,
losses, claims, liabilities, fines, penalties, damages and expenses (including
interest which may be imposed in connection therewith, court costs and
reasonable fees and disbursements of counsel) incurred by any of them resulting
from any misrepresentation, breach of warranty or nonfulfillment of any
agreement, covenant or obligation by the Shareholders made in this Agreement
(including without limitation any Exhibit hereto and any certificate or
instrument delivered in connection herewith).
12.3 Indemnification by Purchaser. Subject to the limitations set forth in
Section 12.1, Purchaser hereby covenants and agrees with the Shareholders that
Purchaser shall indemnify the Shareholders and hold them harmless from, against
and in respect of any and all costs, losses, claims, liabilities, fines,
penalties, damages and expenses (including interest which may be imposed in
connection therewith and court costs and reasonable fees and disbursements of
counsel) incurred by any of them resulting from any misrepresentation, breach of
warranty or the nonfulfillment of any agreement, covenant or obligation by
Purchaser made in this Agreement (including without limitation any Exhibit
hereto and any certificate or instrument delivered in connection herewith).
12.4 Right to Defend. If the facts giving rise to any such indemnification
shall involve any actual claim or demand by any third party against a Purchaser
Indemnified Party or Shareholders (referred to hereinafter as an "Indemnified
Party"), the indemnifying parties shall be entitled to notice of and entitled
(without prejudice to the right of any Indemnified Party to participate at its
own expense through counsel of its own choosing) to defend or prosecute such
claim at their expense and through counsel of their own choosing if they give
written notice of their intention to do so no later than the time by which the
interest of the Indemnified Party would be materially prejudiced as a result of
its failure to have received such notice; provided, however, that if the
defendants in any action shall include both the indemnifying parties and an
Indemnified Party, and the Indemnified Party shall have reasonably concluded
that counsel selected by the indemnifying parties has a conflict of interest
because of the availability of different or additional defenses to the
Indemnified Party, the Indemnified Party shall cooperate fully in the defense of
such claim and shall make available to the indemnifying parties pertinent
information under its control relating thereto, but shall be entitled to be
reimbursed, as provided in this Article 12, for all costs and expense incurred
by it in connection therewith.
12.5 Subrogation. If the Indemnified Party receives payment or other
indemnification from the indemnifying party hereunder, the indemnifying party
shall be
27
subrogated to the extent of such payment or indemnification to all rights in
respect of the subject matter of such claim to which the Indemnified Party may
be entitled, to institute appropriate action for the recovery thereof, and the
Indemnified Party agrees reasonably to assist and cooperate with the
indemnifying party at no expense to the Indemnified Party in enforcing such
rights.
13. MISCELLANEOUS
13.1 Expenses. Except as and to the extent otherwise provided in this
Agreement, whether or not the transactions contemplated by this Agreement are
consummated, the Shareholders and Purchaser shall each pay their own respective
expenses and the fees and expenses of their respective counsel and other
experts.
13.2 Termination of Agreement. This Agreement may be terminated and the
transaction contemplated hereby may be abandoned at any time, but not later than
the Closing Date by the mutual consent of the parties. In the event of the
termination of this Agreement, no party shall have any liability hereunder,
including any liability for damages. In the event that a condition precedent to
a party's obligation is not met, nothing contained herein shall be deemed to
require any party to terminate this Agreement rather than to waive such
condition precedent and proceed with the Closing.
13.3 Waivers. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein or in any other documents. The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach. Any party
hereto may, at or before the Closing, waive any conditions to its obligations
hereunder which are not fulfilled.
13.4 Binding Effect; Benefits. This Agreement shall inure to the benefit
of the parties hereto and shall be binding upon the parties hereto and their
respective successors and assigns. Except as otherwise set forth herein, nothing
in this Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement.
13.5 Assignment. Without limitation, and without the consent, prior,
written or otherwise, of R & S, this Agreement and all of the rights and
obligations hereunder may be assigned by Purchaser to any entity owned or
controlled by, or affiliated with it. Immediately upon such assignment,
Purchaser shall be released from any obligation, of any kind or nature, under
this Agreement.
28
13.6 Notices. All notices, requests, demands and other communications
which are required to be or may be given under this Agreement shall be in
writing and shall be deemed to have been duly given when delivered in person or
upon receipt when transmitted by facsimile or telex or after dispatch by
certified or registered first class mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or made:
If to Purchaser, to:
Xx. Xxxxxx Xxxxxx
Xxxxxxx Partners, LLC
x/x Xxxx, Xxxxx & Partners LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and
Xx. Xxxxxx X. Xxxx
Redstone Capital Corporation
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
If to the Shareholders or R & S, to:
Xx. Xxxxxxx X. Xxxxx
Chief Executive Officer
R & S Truck Body Company, Inc.
Xxxxx 0000
Xxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx, Xxxxxxxx & Xxxxxxx, P.L.L.
1800 Provident Tower
Xxx XXXx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Fax: (000) 000-0000
29
13.7 Entire Agreement. This Agreement (including the Exhibits hereto) and
the Ancillary Documents constitute the entire agreement and supersede all prior
agreements and understandings, oral and written, among the parties hereto with
respect to the subject matter hereof and supersede all prior agreements,
representations, warranties, statements, promises and understandings, whether
written or oral, with respect to the subject matter hereof. No party hereto
shall be bound by or charged with any written or oral arguments,
representations, warranties, statements, promises or understandings no
specifically set forth in this Agreement or in any Exhibit hereto or any
Ancillary Documents, or in certificates and instruments to be delivered pursuant
hereto on or before the Closing.
13.8 Headings; Certain Terms. The section and other headings contained in
this Agreement are for reference purposes only and shall not be deemed to be a
part of this Agreement or to affect the meaning or interpretation of this
Agreement. As used in this Agreement, the term "including" means "including, but
not limited to" unless otherwise specified; the word "or" means "and/or," and
the word "person" means and refers to any individual, corporation, trust,
partnership, joint venture, government or governmental authority, or any other
entity; and the plural and singular forms are used interchangeably.
13.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed, shall be deemed to be an original and
all of which together shall be deemed to be one and the same instrument.
13.10 Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Delaware, without giving effect to the choice of law
principles thereof.
13.11 Severability. If any term or provision of this Agreement shall to
any extent be invalid or unenforceable, the remainder of this Agreement shall
not be affected thereby, and each term and provision of the agreement shall be
valid and enforced to the fullest extent permitted by law.
13.12 Amendments. This Agreement may not be modified or changed except by
an instrument or instruments in writing signed by the party or parties against
whom enforcement of any such modification or amendment is sought.
13.13 Transaction Taxes. The Shareholders shall pay any and ail taxes
imposed upon the sale of the Common Stock and transfer of ownership thereof.
13.14 Section References. All references contained in this Agreement to
any section number are references to sections of this Agreement unless otherwise
specifically stated.
30
13.15 Brokers and Finders. The Shareholders recognize that Xxxxxx
Associates is the broker which brought about this transaction and the
Shareholders shall be solely responsible for the payment of all fees and
expenses of Xxxxxx Associates, 0000 Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxx
00000. Each party represents and warrants there are no other brokers, finders or
similar persons to whom compensation will be due or owing as a result of
consummation of the transactions contemplated by this Agreement and each party
hereby agrees to indemnify and hold the other party harmless against any such
claims.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement, or have
caused this Agreement to be signed in their respective names by an officer
thereunder duly authorized, on the date first above written.
R & S TRUCK BODY COMPANY, INC.
By:
--------------------------------------------
Xxxxxxx X. Xxxxx, Chief Executive Officer
31
Selling Shareholders:
------------------------------------
Xxxxxxx X. Xxxxx, Individually
------------------------------------
Xxxxx X. Xxxxx
Purchasers: XXXXXXX PARTNERS, LLC
By:
----------------------------------
Xxxxxx Xxxxxx, Manager
REDSTONE CAPITAL CORPORATION
By:
----------------------------------
Xxxxxx X. Xxxx, President
32
