EXHIBIT 2(a) EXECUTION COPY
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INVESTMENT AGREEMENT
DATED AS OF DECEMBER 23, 1996
AMONG
RECOVERY EQUITY INVESTORS II, L.P.,
SPARTAN MOTORS, INC.,
XXXXXXXXX INDUSTRIES INC.,
XXXXXXXXX INDUSTRIES LLC,
THE BEURT SERVAAS REVOCABLE TRUST
AND
THE XXXXXX PUBLISHING COMPANY
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This Table of Contents is not part of the Agreement to which it is attached
but is inserted for convenience only.
TABLE OF CONTENTS
ARTICLE I
SALE OF PURCHASED INTERESTS; CLOSING
1.1 Purchase and Sale . . . . . . . . . . . . . . . . . . . . . .2
1.2 Purchase Price. . . . . . . . . . . . . . . . . . . . . . . .2
1.3 Closing.. . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.4 Obligations of Investors Several and Not Joint. . . . . . . .2
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE OWNERS, XXXXXXXXX AND THE COMPANY
2.1 Organization of Xxxxxxxxx and the Company . . . . . . . . . .2
2.2 Power and Authority . . . . . . . . . . . . . . . . . . . . .3
2.3 Capital . . . . . . . . . . . . . . . . . . . . . . . . . . .4
2.4 No Subsidiaries . . . . . . . . . . . . . . . . . . . . . . .5
2.5 No Conflicts. . . . . . . . . . . . . . . . . . . . . . . . .5
2.6 Governmental Approvals and Filings. . . . . . . . . . . . . .5
2.7 Books and Records . . . . . . . . . . . . . . . . . . . . . .6
2.8 Financial Statements. . . . . . . . . . . . . . . . . . . .6
2.9 Absence of Changes. . . . . . . . . . . . . . . . . . . . . .8
2.10 No Undisclosed Liabilities. . . . . . . . . . . . . . . . . 10
2.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.12 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 12
2.13 Compliance With Laws and Orders . . . . . . . . . . . . . . 12
2.14 Benefit Plans; ERISA. . . . . . . . . . . . . . . . . . . . 12
2.15 Real Property.. . . . . . . . . . . . . . . . . . . . . . . 14
2.16 Tangible Personal Property. . . . . . . . . . . . . . . . . 15
2.17 Intellectual Property Rights. . . . . . . . . . . . . . . . 15
2.18 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.19 Licenses. . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.20 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.21 Affiliate Transactions. . . . . . . . . . . . . . . . . . . 19
2.22 Employees; Labor Relations. . . . . . . . . . . . . . . . . 19
2.23 Environmental Matters.. . . . . . . . . . . . . . . . . . . 20
2.24 Substantial Customers and Suppliers. . . . . . . . . . . . 21
2.25 Other Negotiations; Brokers . . . . . . . . . . . . . . . . 21
2.26 Registration Rights . . . . . . . . . . . . . . . . . . . . 22
2.27 Exemption from Registration; Restrictions on Offer and
Sale of Same or Similar Securities. . . . . . . . . . . . . 22
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2.28 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . 22
2.29 Holding Company Act and Investment Company Act Status . . . 22
2.30 Corporate Governance. . . . . . . . . . . . . . . . . . . . 23
2.31 Projections . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
3.1 Organization; Power and Authority . . . . . . . . . . . . . 23
3.2 No Conflicts. . . . . . . . . . . . . . . . . . . . . . . . 23
3.3 Purchase for Investment . . . . . . . . . . . . . . . . . . 24
3.4 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IV
COVENANTS OF THE OWNERS, XXXXXXXXX AND THE COMPANY
4.1 Regulatory and Other Approvals. . . . . . . . . . . . . . . 25
4.2 Investigation by Investors. . . . . . . . . . . . . . . . . 25
4.3 No Solicitations. . . . . . . . . . . . . . . . . . . . . . 26
4.4 Conduct of Business . . . . . . . . . . . . . . . . . . . . 26
4.5 Financial Statements and Reports; Fiscal Year . . . . . . . 27
4.6 Certain Restrictions. . . . . . . . . . . . . . . . . . . . 28
4.7 Affiliate Transactions. . . . . . . . . . . . . . . . . . . 29
4.8 Notice and Cure . . . . . . . . . . . . . . . . . . . . . . 29
4.9 Restructuring Transactions. . . . . . . . . . . . . . . . . 30
4.10 Fulfillment of Conditions . . . . . . . . . . . . . . . . . 32
4.11 Venture Capital Operating Company Status. . . . . . . . . . 32
4.12 Business Plan . . . . . . . . . . . . . . . . . . . . . . . 32
4.13 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 32
4.14 Change of Name. . . . . . . . . . . . . . . . . . . . . . . 33
4.15 Delivery of Books and Records, etc. . . . . . . . . . . . . 33
4.16 Relocation and Completion of Semi-Finished Buses. . . . . . 33
4.17 Non-competition . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Warehousing of Certain Inventory. . . . . . . . . . . . . . 36
5.2 Debt Restructuring. . . . . . . . . . . . . . . . . . . . . 37
5.3 Extension or Refinancing of Unsecured Newcourt
Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . 37
5.4 Reimbursement of Certain Costs Relating to
Semi-Finished Buses . . . . . . . . . . . . . . . . . . . . 38
5.5 Adjustment of New Xxxxxx Note . . . . . . . . . . . . . . . 39
5.6 Certain Employee Matters. . . . . . . . . . . . . . . . . . 40
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5.7 Spartan Non-competition Covenant. . . . . . . . . . . . . . 42
5.8 Sale of Xxxxxxxx Facility . . . . . . . . . . . . . . . . . 42
5.9 New Lines of Company Business . . . . . . . . . . . . . . . 43
5.10 Provision of Parts and Services . . . . . . . . . . . . . . 43
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF THE INVESTORS
6.1 Representations and Warranties. . . . . . . . . . . . . . . 44
6.2 Performance . . . . . . . . . . . . . . . . . . . . . . . . 44
6.3 Officers' Certificates. . . . . . . . . . . . . . . . . . . 44
6.4 Orders and Laws . . . . . . . . . . . . . . . . . . . . . . 44
6.5 Regulatory Consents and Approvals.. . . . . . . . . . . . . 45
6.6 Third Party Consents. . . . . . . . . . . . . . . . . . . . 45
6.7 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . 46
6.8 Good Standing Certificates. . . . . . . . . . . . . . . . . 46
6.9 Other Agreements. . . . . . . . . . . . . . . . . . . . . . 46
6.10 Delivery of Certificates. . . . . . . . . . . . . . . . . . 46
6.11 Contribution. . . . . . . . . . . . . . . . . . . . . . . . 46
6.12 Contemporaneous Investment by Other Investor. . . . . . . . 46
6.13 Reaffirmation of Guarantees . . . . . . . . . . . . . . . . 47
6.14 Affiliate Transactions. . . . . . . . . . . . . . . . . . . 47
6.15 Business Plan . . . . . . . . . . . . . . . . . . . . . . . 47
6.16 No Adverse Change . . . . . . . . . . . . . . . . . . . . . 47
6.17 Board of Directors. . . . . . . . . . . . . . . . . . . . . 47
6.18 EMC Xxxxxxx Agreement . . . . . . . . . . . . . . . . . . . 47
6.19 Air Emissions . . . . . . . . . . . . . . . . . . . . . . . 47
6.20 Certain of Dr. Ser Vaas . . . . . . . . . . . . . . . . . . 48
6.21 By-laws Amendment . . . . . . . . . . . . . . . . . . . . . 48
6.22 Insurance Certificates. . . . . . . . . . . . . . . . . . . 48
6.23 Proceedings . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE COMPANY
7.1 Representations and Warranties. . . . . . . . . . . . . . . 48
7.2 Performance . . . . . . . . . . . . . . . . . . . . . . . . 48
7.3 Certificates. . . . . . . . . . . . . . . . . . . . . . . . 49
7.4 Orders and Laws . . . . . . . . . . . . . . . . . . . . . . 49
7.5 Regulatory Consents and Approvals.. . . . . . . . . . . . . 49
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ARTICLE VIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
8.1 Survival of Representations, Warranties, Covenants
and Agreements. . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification . . . . . . . . . . . . . . . . . . . . . . 50
9.2 Method of Asserting Claims. . . . . . . . . . . . . . . . . 51
ARTICLE X
TERMINATION
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . 53
10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . 53
ARTICLE XI
DEFINITIONS
11.1 Definitions.. . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE XII
MISCELLANEOUS
12.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 66
12.2 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . 68
12.3 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 69
12.4 Public Announcements. . . . . . . . . . . . . . . . . . . . 69
12.5 Confidentiality. . . . . . . . . . . . . . . . . . . . . . 69
12.6 Further Assurances; Post-Closing Cooperation. . . . . . . . 70
12.7 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.8 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 70
12.9 Third Party Beneficiaries . . . . . . . . . . . . . . . . . 70
12.10 No Assignment; Binding Effect . . . . . . . . . . . . . . . 70
12.11 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 71
12.12 Invalid Provisions. . . . . . . . . . . . . . . . . . . . . 71
12.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 71
12.14 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 71
12.15 Limited Recourse. . . . . . . . . . . . . . . . . . . . . . 71
12.16 Investors' Obligations Several and Not Joint. . . . . . . . 71
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Exhibit A -- Form of Officer's Certificate
Exhibit B -- Form of Secretary's Certificate
Exhibit C -- Form of Opinion of Leeuw, Plopper & Xxxxxx
Exhibit D -- Form of Contribution Agreement
Exhibit E -- Form of Stockholders' Agreement
Exhibit F -- Form of Management Agreement
Exhibit G -- Form of Registration Rights Agreement
Exhibit H -- Form of REI II Certificate
Exhibit I -- Form of Spartan Officer's Certificate
Exhibit J -- Form of Spartan Secretary's Certificate
Exhibit K -- Form of Certificate of Xx. XxxXxxx
Schedule 2.8A --Historical Financial Statements as of and for the
fiscal year ended December 31, 1995
Schedule 2.8B --September 30 Financial Statements
Schedule 2.8C --October 31 Financial Statements, Pro Forma Balance
Sheet and Estimated Pro Forma Operating Statements
Schedule 2.8D --Agreed-Upon Procedures Report
Schedule 2.31 --Projections
Disclosure Schedule
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INVESTMENT AGREEMENT dated as of December 23, 1996, among RECOVERY
EQUITY INVESTORS II, L.P., a Delaware limited partnership ("REI II"),
SPARTAN MOTORS, INC., a Michigan corporation ("Spartan" and, together with
REI II, the "Investors"), XXXXXXXXX INDUSTRIES INC., a Delaware corporation
(the "Company"), XXXXXXXXX INDUSTRIES LLC, an Indiana limited liability
company ("Xxxxxxxxx"), the BEURT SERVAAS REVOCABLE TRUST, a trust organized
under the laws of the State of Indiana (the "Trust"), and THE XXXXXX
PUBLISHING COMPANY, an Indiana corporation ("Xxxxxx" and, together with the
Trust, the "Owners").
WHEREAS, in order that the investments by the Investors
contemplated hereby may be made in a newly formed Delaware corporation,
immediately prior to the closing of the transactions contemplated hereby,
Xxxxxxxxx will contribute certain of its Assets and Properties and certain
of its Liabilities to the Company (and the Company shall assume such
Liabilities) pursuant to the terms of the Contribution Agreement (the
"Contribution"); and
WHEREAS, in exchange for the Contribution and the covenant of the
Owners and Xxxxxxxxx set forth in Sections 4.9, 4.14, 4.17, 5.3, 5.4 and
5.8, the Company will issue to Xxxxxxxxx 300 shares of the Company's
Common Stock, no par value per share (the "Common Stock");
WHEREAS, immediately following the Contribution, each of REI II
and Spartan desires to purchase from the Company, and the Company desires
to sell to each Investor, on the terms and subject to the conditions set
forth below, 300 shares of Common Stock, representing 33-1/3% of the total
number of shares of Common Stock outstanding after giving effect to the
Contribution and the other transactions contemplated by this Agreement (the
600 shares of Common Stock to be purchased by the Investors in the
aggregate hereunder being hereinafter referred to as the "Purchased
Stock");
WHEREAS, the parties hereto intend that the above-described
receipt of Common Stock by Xxxxxxxxx and the purchase of the Purchased
Stock by the Investors qualify as an exchange under Section 351 of the
Code; and
WHEREAS, capitalized terms used above and not otherwise defined
above shall have the respective meanings set forth in Section 11.1.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
SALE OF PURCHASED INTERESTS; CLOSING
1.1 PURCHASE AND SALE. The Company agrees to sell to each
Investor, and each Investor agrees to purchase from the Company, 300 shares
of the Purchased Stock for the Purchase Price at the Closing, in each case
on the terms and subject to the conditions set forth in this Agreement.
1.2 PURCHASE PRICE. The aggregate purchase price to be paid by
each Investor for the Purchased Stock to be purchased by it hereunder is
$10,000,000 (the "Purchase Price"), payable in cash in the manner provided
in Section 1.3.
1.3 CLOSING. The Closing will take place on the Closing Date at
the offices of Xxxxxx, Xxxxx & Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, or at such other place as the Investors and the Company
mutually agree, at 10:00 A.M. local time. At the Closing, each Investor
will pay the Purchase Price by wire transfer of immediately available funds
to such account as the Company may reasonably direct by written notice
delivered to such Investor by the Company at least five Business Days
before the Closing Date. Simultaneously, the Company will issue to each
Investor 300 shares of Purchased Stock, free and clear of all Liens, by
delivering to such Investor one or more certificates, registered in the
name of such Investor or any designee thereof, representing such shares of
Purchased Stock. At the Closing, there shall also be delivered to the
Company and the Investors the opinions, certificates and other Contracts,
documents and instruments to be delivered under Articles VI and VII.
1.4 OBLIGATIONS OF INVESTORS SEVERAL AND NOT JOINT. The
obligations of each Investor under this Agreement are separate from the
obligations of the other Investor under this Agreement, and neither
Investor shall be liable or otherwise responsible in any manner for any
obligation of the other Investor under this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE OWNERS, XXXXXXXXX AND THE COMPANY
Xxxxxxxxx, the Company and each of the Owners hereby jointly and
severally represent and warrant to each Investor as follows:
2.1 ORGANIZATION OF XXXXXXXXX AND THE COMPANY. (a) Xxxxxxxxx is
a limited liability company duly organized, validly existing and in good
standing under the Laws of the State of Indiana. During the period from
April 30, 1990 through and including June 28, 1996, CMI owned and conducted
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the business currently owned and conducted by Xxxxxxxxx. On June 28, 1996,
(i) CMI duly and validly distributed all of its Assets and Properties and
assigned all of its Liabilities to Xxxxxx and the Trust, and (ii) Xxxxxx
and the Trust duly and validly contributed all such Assets and Properties
and assigned all such Liabilities to Xxxxxxxxx. The Company is a
corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware. Each of Xxxxxxxxx and the Company is duly
qualified, licensed or admitted to do business and is in good standing in
the jurisdictions identified in SECTION 2.1 OF THE DISCLOSURE SCHEDULE,
those being in each case the only jurisdictions in which the failure to be
so qualified, licensed or admitted and in good standing could reasonably be
expected to have a material adverse effect on the Business or Condition of
Xxxxxxxxx or the Company. Xxxxxxxxx and the Company have, prior to the
execution of this Agreement, made available to Investor true and complete
copies of (i) the certificate of existence of Xxxxxxxxx, (ii) the articles
of organization of Xxxxxxxxx, (iii) the operating agreement of Xxxxxxxxx,
(iv) the certificate of incorporation of the Company, and (v) the by-laws
of the Company, in each case together with all amendments thereto and as in
effect on the date of this Agreement (the foregoing, collectively, the
"Charter Documents"). The name of each member of Xxxxxxxxx, and each
officer of Xxxxxxxxx and the position held by each, are listed in SECTION
2.1 OF THE DISCLOSURE SCHEDULE.
(b) The Company has been newly incorporated on October 30, 1996,
and since the date of its incorporation, the Company has not conducted any
business, incurred any Liabilities (whether contingent or otherwise),
entered into any Contract (other than this Agreement, the Operative
Agreements and any Contract that (i) is furnished to and approved by each
Investor before being entered into by the Company and (ii) is entered into
by the Company either as part of the Restructuring Transactions described
in clause (c) of Section 4.9 or in obtaining the written instruments
relating to the Xxxxx Bank revolving credit facility contemplated by
Section 6.6) or had any Assets and Properties or employees; PROVIDED,
HOWEVER, that on the Closing Date (and after giving effect to the
transactions contemplated hereby) the Company will have the Assets and
Properties, Liabilities and Contracts contributed to it and assumed by it
pursuant to the Contribution Agreement.
2.2 POWER AND AUTHORITY. (a) Each of Xxxxxxxxx, the Company and
the Owners has the requisite power and authority and legal capacity to
execute and deliver this Agreement and the Operative Agreements to which it
is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby, including (in
the case of Xxxxxxxxx) the Restructuring Transactions and (in the case of
the Company) the issuance and sale of the Purchased Stock to the Investors.
The execution and delivery by each of Xxxxxxxxx, the Company and the Owners
of this Agreement and the Operative Agreements to which it is a party, and
such Person's performance of its obligations hereunder and thereunder, have
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been duly and validly authorized by all necessary action on the part of the
members of Xxxxxxxxx, the trustees and settlors of the Trust, the board of
directors of the Company or the board of directors of Xxxxxx, as the case
may be, which action is the only action necessary to authorize the
execution, delivery and performance by such Person of this Agreement and
the Operative Agreements to which it is a party. This Agreement has been
duly and validly executed and delivered by each of Xxxxxxxxx, the Company
and the Owners and constitutes, and upon the execution and delivery by each
of Xxxxxxxxx, the Company and the Owners of the Operative Agreements to
which it is a party, each such Operative Agreement will constitute, a
legal, valid and binding obligation of such Person enforceable against such
Person in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to the enforcement of creditors' rights
generally and by general principles of equity.
(b) Xx. XxxXxxx has the requisite power and authority and legal
capacity to execute and deliver the Operative Agreements to which he is a
party, to perform his obligations thereunder and to consummate the
transactions contemplated thereby. Upon the execution and delivery by Xx.
XxxXxxx of the Operative Agreements to which he is a party, each such
Operative Agreement will constitute a legal, valid and binding obligation
of Xx. XxxXxxx, enforceable against Xx. XxxXxxx in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
the enforcement of creditors' rights generally and by general principles of
equity.
2.3 CAPITAL. The Trust and Xxxxxx are the only members of
Xxxxxxxxx and have a 30% and a 70% interest in the capital of Xxxxxxxxx,
respectively. The authorized capital stock of the Company consists of
1,000 shares of Common Stock. As of the date hereof, no shares of Common
Stock have been issued or are outstanding. Immediately prior to the
Closing (but after giving effect to the Contribution), there will be 300
shares of Common Stock issued and outstanding, all of which will be owned
by Xxxxxxxxx free and clear of all Liens. At the time of their issuance
and on the Closing Date, all of such issued and outstanding shares of
Common Stock will be validly issued, fully paid and nonassessable, and will
have been issued in compliance with all applicable federal and state
securities laws. Xxxxxxxxx has not, directly or indirectly, entered into
any agreement, arrangement or understanding with respect to the sale,
transfer or other disposition of any such shares of Common Stock (other
than the Stockholders' Agreement). There are no outstanding Options or
agreements, arrangements or understandings to issue Options with respect to
Xxxxxxxxx or the Company and there are no preemptive rights or agreements,
arrangements or understandings to issue preemptive rights with respect to
the issuance or sale of shares of capital stock of or other equity
interests in Xxxxxxxxx or the Company. Upon issuance at the Closing, the
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certificate or certificates representing the Purchased Stock delivered
hereunder to the Investors will transfer to each Investor good and valid
title to the Purchased Stock being purchased by it hereunder, free and
clear of all Liens, and all the Purchased Stock will have been duly
authorized, validly issued, fully paid and nonassessable. Upon the
issuance thereof at the Closing, the Purchased Stock in the aggregate will
represent 66-2/3% of the total voting power of all shares of capital stock
of the Company, and each share of Purchased Stock will represent the same
fraction of such total voting power.
2.4 NO SUBSIDIARIES. Neither Xxxxxxxxx nor the Company holds any
direct or indirect equity, partnership, limited liability company, joint
venture or other interest in any Person.
2.5 NO CONFLICTS. The execution and delivery by each of
Xxxxxxxxx, the Company and the Owners of this Agreement do not, and the
execution and delivery by each of Xxxxxxxxx, the Company, Xx. XxxXxxx and
the Owners of the Operative Agreements to which it is a party, the
performance by each of Xxxxxxxxx, the Company and the Owners of its
obligations under this Agreement and the Operative Agreements to which it
is a party, the performance by Xx. XxxXxxx of his obligations under the
Operative Agreements to which he is a party, and the consummation of the
transactions contemplated by the Agreement and the Operative Agreements
(including, without limitation, the Contribution, the Restructuring
Transactions and the issuance of the Purchased Stock) will not:
(a) conflict with or result in a violation or breach of any of
the terms, conditions or provisions of the Charter Documents, the
certificate or articles of incorporation or by-laws of Xxxxxx or the trust
agreement governing the Trust;
(b) subject to obtaining the consents, approvals and actions,
making the filings and giving the notices disclosed in SECTION 2.6 OF THE
DISCLOSURE SCHEDULE, if any, conflict with or result in a violation or
breach of any term or provision of any Law or Order applicable to any of
Xxxxxxxxx, the Company, Xx. XxxXxxx or the Owners or any of their
respective Assets and Properties; or
(c) except as disclosed in SECTION 2.5 OF THE DISCLOSURE
SCHEDULE, (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default
under, (iii) require Xxxxxxxxx, the Company, any Owner or Xx. XxxXxxx to
obtain any consent, approval or action of, make any filing with or give any
notice to any Person as a result or under the terms of, (iv) result in or
give to any Person any right of termination, cancellation, acceleration or
modification in or with respect to, (v) result in or give to any Person any
additional rights or entitlement to increased, additional, accelerated or
guaranteed payments under, (vi) result in the creation of any new,
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additional or increased liability of Xxxxxxxxx or the Company under, or
(vii) result in the creation or imposition of any Lien upon Xxxxxxxxx or
the Company, Xx. XxxXxxx or any of their respective Assets and Properties
under, any Contract or License to which any of Xxxxxxxxx, the Company, Xx.
XxxXxxx or the Owners is a party or by which any of their respective Assets
and Properties is bound.
2.6 GOVERNMENTAL APPROVALS AND FILINGS. Except as disclosed in
SECTION 2.6 OF THE DISCLOSURE SCHEDULE, no consent, approval or action of,
filing with or notice to any Governmental or Regulatory Authority on the
part of Xxxxxxxxx, the Company, any Owner or Xx. XxxXxxx is required in
connection with (a) the execution, delivery and performance of this
Agreement by Xxxxxxxxx, the Company or any Owner, (b) the execution,
delivery and performance by Xxxxxxxxx, the Company, Xx. XxxXxxx or any
Owner of any of the Operative Agreements to which it is a party or (c) the
consummation of the transactions contemplated by this Agreement or any
Operative Agreement.
2.7 BOOKS AND RECORDS. The minute books and other similar
records of Xxxxxxxxx and the Company as made available to each Investor
prior to the execution of this Agreement contain a true and complete
record, in all material respects, of all action taken at all meetings and
by all written consents in lieu of meetings of the members, the
stockholders, the management committee and the board of directors and
committees of the board of directors of Xxxxxxxxx and the Company, as
applicable.
2.8 FINANCIAL STATEMENTS. (a) Schedule 2.8A contains true and
complete copies of the Audited Financial Statements, fiscal year ended
December 31, 1995, which have been audited by Xxxx Xxxxx Xxxx & Xxxxxxx,
P.C. (the "Accounting Firm"). The Audited Financial Statements (x) have
been prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved and (y) fairly present, in all material
respects, the financial position of CMI as of December 31, 1995 and the
results of operations and cash flows of CMI for the fiscal year ended
December 31, 1995.
(b) Schedule 2.8B contains true and complete copies of the
combined compiled financial statements for CMI and Xxxxxxxxx as of and for
the nine months ended September 30, 1996, which have been compiled by the
Accounting Firm (collectively, the "September 30 Compiled Financial
Statements"). Schedule 2.8C contains true and complete copies of (i) a
compiled balance sheet for Xxxxxxxxx as of October 31, 1996, and the
related compiled statements of operations and accumulated deficit for the
four months ended October 31, 1996, which have been compiled by the
Accounting Firm (collectively, the "October 31 Compiled Financial
Statements"), (ii) a pro forma balance sheet for the Company as of October
31, 1996, reflecting the impact of the Restructuring Transactions, the
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Contribution and the other transactions contemplated hereby to occur on the
Closing Date as if the Restructuring Transactions and such other
transactions had occurred on October 31, 1996 (the "Pro Forma Balance
Sheet") and (iii) pro forma statements of income, members' equity and cash
flows for Xxxxxxxxx for the four months ended October 31, 1996, reflecting
the estimated results of operations and cash flows of Xxxxxxxxx for such
period after giving effect to the elimination of all non-recurring expenses
associated with (x) the ramp-up in Xxxxxxxxx'x production of buses during
the first three quarters of calendar year 1996 and (y) the production
changes implemented in October 1996 to complete work on Xxxxxxxxx'x
inventory of semi-finished buses (the "Estimated Pro Forma Operating
Statements"). The inventory balances set forth in the October 31 Compiled
Financial Statements and the Pro Forma Balance Sheet are based upon a
physical inventory of raw materials and work in process conducted in
accordance with the Agreed-Upon Procedures.
(c) Schedule 2.8D contains a true and complete copy of the
"Independent Accountant's Report on Applying Agreed-Upon Procedures"
delivered by the Accounting Firm to Xxxxxxxxx on December 17, 1996 (the
"Agreed-Upon Procedures Report"). The September 30 Compiled Financial
Statements and the October 31 Compiled Financial Statements accurately
reflect the results of the Agreed-Upon Procedures described in the Agreed-
Upon Procedures Report (including the Accounting Firm's observation of the
physical inventory referred to in Section 2.8(b)).
(d) The September 30 Compiled Financial Statements and the
October 31 Compiled Financial Statements accurately present, in all
material respects, the financial condition and results of operations of
Xxxxxxxxx as of and for the dates and periods indicated (subject in each
case to normal year-end audit adjustments that will not have or reflect a
material adverse effect). Except as otherwise disclosed in the related
compilation report, the September 30 Compiled Financial Statements and the
October 31 Compiled Financial Statements were prepared on a basis
consistent with the Audited Financial Statements (including the methods,
principles, practices and policies applied in preparing the Audited
Financial Statements).
(e) The Pro Forma Balance Sheet accurately reflects (i) the
adjustments specified in the journal entries attached thereto as part of
Schedule 2.8C and (ii) all other adjustments to the balance sheet included
in the October 31 Compiled Financial Statements required to be made to give
effect to the Restructuring Transactions, the Contribution and the other
transactions contemplated hereby to occur on the Closing Date as if the
Restructuring Transactions and such other transactions had occurred on
November 1, 1996.
(f) The Estimated Pro Forma Operating Statements accurately
reflect the effect (as estimated in good faith by Xxxxxxxxx'x management)
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of elimination of the non-recurring expenses identified in clause (iii) of
Section 2.8(b), and otherwise have been prepared in good faith by Xxxxxxxxx
on the basis of the best information known to Xxxxxxxxx and the Owners
(after due inquiry) as of the date hereof.
(g) Xxxxxxxxx and the Owners have, and have caused the Accounting
Firm to, make available to each Investor and its accountants all work
papers and related data used in connection with the preparation and review
of the September 30 Compiled Financial Statements, the October 31 Compiled
Financial Statements, the Pro Forma Balance Sheet and the Estimated Pro
Forma Operating Statements.
(h) The aggregate principal amount of outstanding Indebtedness
under the agreements relating to the Newcourt inventory financing
arrangement in respect of Federalled Buses that have been sold by CMI or
Xxxxxxxxx and paid for by the purchasers thereof prior to the date hereof
equals $6,132,644.48 (such outstanding Indebtedness, the "Unsecured
Newcourt Indebtedness"). As of the date hereof, the agreements relating to
the Newcourt inventory financing arrangement have been modified to provide
that the Unsecured Newcourt Indebtedness, together with all accrued
interest thereon, is due and payable on December 31, 1996.
(i) The Net Contribution Amount for the period beginning on
September 1, 1996 and ending on the Closing Date will not be less than
$7,500,000.
2.9 ABSENCE OF CHANGES. Since the Audited Financial Statement
Date, except as set forth in SECTION 2.9 OF THE DISCLOSURE SCHEDULE, there
has not been any material adverse change, or any event or development
which, individually or together with other such events and developments,
could reasonably be expected to result in a material adverse change, in the
Business or Condition of Xxxxxxxxx or the Company (it being understood that
all references to Xxxxxxxxx in this Section 2.9 shall be deemed to include
CMI). None of the other representations or warranties set forth in this
Agreement shall be deemed to limit the foregoing. In addition, without
limiting the foregoing, except as disclosed in SECTION 2.9 OF THE
DISCLOSURE SCHEDULE and except in connection with the Restructuring
Transactions, the Contribution and (to the extent completed prior to the
Closing) the Debt Restructuring, there has not occurred since the Audited
Financial Statement Date:
(a) other than the distribution to Xxxxxx and the Trust of the
net proceeds of Xxxxxxxxx'x sale of 800 shares of CII's common stock
pursuant to the CII Stock Purchase Agreement, any declaration, setting
aside or payment of any dividend or other distribution in respect of the
capital of Xxxxxxxxx, or any direct or indirect redemption, purchase or
other acquisition by Xxxxxxxxx of any such capital of or any Option with
respect to Xxxxxxxxx;
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(b) except for the execution, delivery and performance by each of
Xxxxxxxxx, the Company and the Owners of this Agreement and the
Operative Agreements to which it is a party, and the consummation of the
transactions contemplated hereby and thereby, any authorization,
issuance, sale or other disposition by Xxxxxxxxx, the Company or any
Owner of any shares of capital stock of or other equity interests in or
Option with respect to Xxxxxxxxx or the Company, or any modification or
amendment of any right of any holder of any outstanding shares of
capital stock of or other equity interests in or Option with respect to
Xxxxxxxxx or the Company;
(c) other than pursuant to the terms of existing employment
Contracts listed in SECTION 2.18(A)(I) OF THE DISCLOSURE SCHEDULE: (i)
any increase in the salary, wages or other compensation, including any
increase in rate of compensation, of any officer, employee or consultant
of Xxxxxxxxx whose annual salary is, or after giving effect to such
change would be, $100,000 or more; (ii) any establishment or
modification of (A) targets, goals, pools or similar provisions under
any Benefit Plan, employment Contract or other employee compensation
arrangement or (B) salary ranges, increase guidelines or similar
provisions in respect of any Benefit Plan, employment Contract or other
employee compensation arrangement; or (iii) any adoption, entering into,
amendment, modification or termination (partial or complete) of any
Benefit Plan;
(d) (i) incurrences by Xxxxxxxxx of Indebtedness, other than (w)
Indebtedness consisting of advances made by Xxxxxx after October 31,
1996 for the purpose of financing ongoing business expenses of
Xxxxxxxxx, (x) revolving credit Indebtedness incurred in the ordinary
course of Xxxxxxxxx'x business pursuant to the inventory financing
agreement with Newcourt Financial USA, Inc., (y) the incurrence of
$2,500,000 aggregate principal amount of long-term Indebtedness as
consideration for Xxxxxxxxx'x acquisition of the Richmond Facility
pursuant to the Richmond Acquisition Agreement and (z) any other
Indebtedness, but only if the entire outstanding principal amount
thereof is included in the October 31, 1996 balance sheet for Xxxxxxxxx
included in the October 31 Financial Statements, or (ii) except as part
of the Restructuring Transactions, any voluntary purchase, cancellation,
prepayment or complete or partial discharge in advance of a scheduled
payment date with respect to, or waiver of any right of Xxxxxxxxx under,
any Indebtedness of or owing to Xxxxxxxxx;
(e) any physical damage, destruction or other casualty loss
(whether or not covered by insurance) affecting any of the real or
personal property or equipment of Xxxxxxxxx in an aggregate amount
exceeding $100,000;
-9-
(f) any write-off or write-down of, or any determination to write
off or write-down, any of the Assets and Properties of Xxxxxxxxx in an
aggregate amount exceeding $100,000;
(g) any acquisition by Xxxxxxxxx of any Assets and Properties of
any Person or disposition of, or incurrence of a Lien (other than a
Permitted Lien) on, any Assets and Properties of Xxxxxxxxx, other than
(i) acquisitions or dispositions of inventory in the ordinary course of
business of Xxxxxxxxx consistent with past practice, (ii) the sale of
800 shares of CII's common stock pursuant to the CII Stock Purchase
Agreement and (iii) the acquisition of the Richmond Facility pursuant to
the Richmond Acquisition Agreement;
(h) any capital expenditure or commitment for additions to
property, plant or equipment of Xxxxxxxxx constituting capital assets
(or any series of related capital expenditures or commitments) in an
amount exceeding $50,000;
(i) any commencement, termination or change by Xxxxxxxxx of any
line of business;
(j) any transaction by Xxxxxxxxx with any officer, director,
member, Affiliate or Associate of Xxxxxxxxx, other than (i) pursuant to
(x) any Contract in effect on June 28, 1996 and disclosed to Investor
pursuant to Section 2.18(a)(vi) and (y) any employment Contract
disclosed to Investor pursuant to SECTION 2.18(A)(I) OF THE DISCLOSURE
SCHEDULE and (ii) the advances made by Xxxxxx described in SECTION
2.21(A) OF THE DISCLOSURE SCHEDULE;
(k) any entering into of an agreement to do or engage in any of
the foregoing, including with respect to any Business Combination, other
than Xxxxxxxxx'x entering into the CII Stock Purchase Agreement and the
Richmond Acquisition Agreement; or
(l) any change in the accounting methods or procedures of
Xxxxxxxxx or any other transaction involving or development affecting
Xxxxxxxxx outside the ordinary course of business consistent with past
practice.
2.10 NO UNDISCLOSED LIABILITIES. Except as reflected or reserved
against in the October 31 Financial Statements or as disclosed in
SECTION 2.10 OF THE DISCLOSURE SCHEDULE, there are no Liabilities of,
relating to or affecting Xxxxxxxxx, the Company or any of their respective
Assets and Properties, other than (a) Liabilities incurred in the ordinary
course of business consistent with past practice since October 31, 1996 and
in accordance with the provisions of this Agreement, (b) Liabilities
consisting of the $2,500,000 aggregate principal amount of long-term
Indebtedness incurred as consideration for Xxxxxxxxx'x acquisition of the
-10-
Richmond Facility pursuant to the Richmond Acquisition Agreement, together
with interest accrued thereon since November 12, 1996, and (c) other
Liabilities which in the aggregate are not material to the Business or
Condition of Xxxxxxxxx or the Company, are not for tort or for breach of
contract and are not owed to any Affiliate or Associate of Xxxxxxxxx.
2.11 TAXES. (a) Except as disclosed in SECTION 2.11 OF THE
DISCLOSURE SCHEDULE, all Tax Returns required to have been filed by or with
respect to CMI, Xxxxxxxxx or the Company have been duly filed, and each
such Tax Return correctly and completely reflects the income, franchise or
other Tax liability and all other information required to be reported
thereon. All Taxes due and payable by CMI, Xxxxxxxxx or the Company,
whether or not shown on any Tax Return, have been paid.
(b) Except as disclosed in SECTION 2.11 OF THE DISCLOSURE
SCHEDULE, the provisions for Taxes due by Xxxxxxxxx in the October 31, 1996
balance sheet for Xxxxxxxxx contained in the October 31 Financial
Statements are sufficient for all unpaid Taxes, being only current Taxes
not yet due and payable, of Xxxxxxxxx.
(c) Except as disclosed in SECTION 2.11 OF THE DISCLOSURE
SCHEDULE, none of CMI, Xxxxxxxxx or the Company is a party to any agreement
extending the time within which to file any Tax Return. During the
preceding five years, no claim has been made and, to the best knowledge of
the Owners, Xxxxxxxxx and the Company, no claim has ever been made by a
jurisdiction in which CMI, Xxxxxxxxx or the Company does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction.
(d) Each of CMI, Xxxxxxxxx and the Company has withheld and paid
all Taxes required to have been withheld and paid by it in connection with
amounts paid or due and payable to any employee, creditor, independent
contractor or other third party.
(e) Except as disclosed in SECTION 2.11 OF THE DISCLOSURE
SCHEDULE, there is no dispute or claim concerning any Tax liability of CMI,
Xxxxxxxxx or the Company either (i) claimed or raised by any taxing
authority or (ii) otherwise known to any Owner, Xxxxxxxxx or the Company.
SECTION 2.11 OF THE DISCLOSURE SCHEDULE indicates those Tax Returns, if
any, that have been audited, and indicates those Tax Returns that currently
are the subject of audit. The Owners have made available to each Investor
complete and correct copies of all federal, state, local and foreign income
Tax Returns filed by, and all Tax examination reports and statements of
deficiencies assessed against or agreed to by, CMI, Xxxxxxxxx or the
Company, in each case since April 30, 1990.
(f) None of CMI, Xxxxxxxxx or the Company has waived any statute
of limitations in respect of Taxes or agreed to any extension of time with
respect to any Tax assessment or deficiency.
-11-
(g) None of CMI, Xxxxxxxxx or the Company has received any
written ruling related to Taxes, or entered into any written and legally
binding agreement with a taxing authority relating to Taxes, for which in
either case there is any further Liability.
(h) The Company does not have any Liability in respect of Taxes
of Xxxxxxxxx Body Works, Inc., CMI, Xxxxxxxxx or any other Person other
than the Company (i) under Section 1.1502-6 of the Treasury regulations (or
any similar provision of state, local or foreign law), (ii) as a transferee
or successor, (iii) by Contract or (iv) otherwise; PROVIDED, HOWEVER, that
pursuant to the Contribution Agreement the Company will be responsible for
the payment of Indiana property taxes of Xxxxxxxxx that are not yet due and
payable and either (i) have been properly accrued as a liability on the Pro
Forma Balance Sheet or (ii) are disclosed in SECTION 2.11 OF THE DISCLOSURE
SCHEDULE.
(i) None of CMI, Xxxxxxxxx or the Company has made any payments,
is obligated to make any payments, or is a party to any agreement that
under certain circumstances could require it to make any payments, that are
not deductible under Section 280G of the Code.
(j) None of CMI, Xxxxxxxxx or the Company (i) has agreed to, is
required to, or reasonably expects that it might have to, make any
adjustment under Section 481 of the Code (or any comparable provision of
state, local or foreign law) by reason of a change in accounting method or
otherwise, (ii) is a "consenting corporation" within the meaning of Section
341(f)(1) of the Code or comparable provisions of any state statutes, and
none of the Assets and Properties of Xxxxxxxxx or the Company is subject to
an election under Section 341(f) of the Code or comparable provisions of
any state statutes, (iii) except as set forth in SECTION 2.11 OF THE
DISCLOSURE SCHEDULE, has been a member of an affiliated, combined,
consolidated, unitary or similar group for Tax purposes, or (iv) is a party
to any joint venture, partnership or other arrangement that is (or should
be) treated as a partnership for Tax purposes.
2.12 LEGAL PROCEEDINGS. (a) Except as set forth in SECTION 2.12
OF THE DISCLOSURE SCHEDULE:
(i) there are no Actions or Proceedings pending or, to the best
knowledge of the Owners, Xxxxxxxxx and the Company, threatened against,
relating to or affecting Xxxxxxxxx, the Company, Xx. XxxXxxx any Owner
or any of their respective Assets and Properties which (A) could
reasonably be expected to result in the issuance of an Order
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement
or any of the Operative Agreements or otherwise result in a material
diminution of the benefits contemplated by this Agreement or any of the
Operative Agreements to any Investor, or (B) if determined adversely to
-12-
Xxxxxxxxx, the Company or any Owner, could reasonably be expected to
result in (x) any injunction or other equitable relief against
Xxxxxxxxx, the Company or any Owner that would interfere with
Xxxxxxxxx'x or the Company's business or operations or (y) Losses by
Xxxxxxxxx or the Company, individually or in the aggregate with Losses
in respect of other such Actions or Proceedings, exceeding $100,000;
(ii) there are no facts or circumstances known to Xxxxxxxxx, the
Company or any Owner that could reasonably be expected to give rise to
any Action or Proceeding that would be required to be disclosed pursuant
to clause (i) above, except as disclosed in SECTION 2.12 OF THE
DISCLOSURE SCHEDULE; and
(iii) none of the Owners, Xxxxxxxxx or the Company has received
notice or is aware of any Orders outstanding against CMI, Xxxxxxxxx or
the Company.
(b) Prior to the date hereof, the Owners have made available to
each Investor all responses of counsel for CMI and Xxxxxxxxx to auditors'
requests for information for the preceding two years (together with any
updates provided by such counsel) regarding Actions or Proceedings pending
or threatened against, relating to or affecting Xxxxxxxxx or the Company.
2.13 COMPLIANCE WITH LAWS AND ORDERS. Except as disclosed in
SECTION 2.13 OF THE DISCLOSURE SCHEDULE, none of CMI, Xxxxxxxxx or the
Company is or at any time since October 31, 1991 has been, or has received
any notice that it is or since such date has been, in violation of or in
default under, any Law or Order applicable to CMI, Xxxxxxxxx, the Company
or any of their respective Assets and Properties, other than any such
violation or default which individually or together with any other such
violations and defaults would not have a material adverse effect on the
Business or Condition of Xxxxxxxxx or the Company. In furtherance and not
in limitation of the foregoing, none of CMI, Xxxxxxxxx or the Company has
violated the Securities Act or any other Federal or state securities law in
connection with the offer, issuance, sale or purchase of any securities.
2.14 BENEFIT PLANS; ERISA. All Benefit Plans are listed in
SECTION 2.14 OF THE DISCLOSURE SCHEDULE, and copies of all documentation
relating to such Benefit Plans have been delivered or made available to
each Investor. Except as disclosed in SECTION 2.14 OF THE DISCLOSURE
SCHEDULE:
(a) each Benefit Plan and the administration thereof complies,
and has at all times complied, in all material respects with the
requirements of all applicable Law, including ERISA and the Code; each
Qualified Plan is in fact qualified under Section 401 of the Code; and
none of the Owners, Xxxxxxxxx or the Company is aware of any facts or
circumstances which could reasonably be expected to affect the qualified
status under Section 401 of the Code of any Qualified Plan;
-13-
(b) each of CMI, Xxxxxxxxx, the Company and the ERISA Affiliates
does not presently maintain or contribute to, and at no time has
maintained or contributed to, any single-employer plan (within the
meaning of Section 3(41) of ERISA) or any multiemployer plan (within the
meaning of Section 3(37) of ERISA) subject to Title IV of ERISA, and
none of Xxxxxxxxx, the Company or the ERISA Affiliates is aware of any
circumstances pursuant to which Xxxxxxxxx or the Company could have
liability to any party under Title IV of ERISA;
(c) none of CMI, Xxxxxxxxx, the Company or the ERISA Affiliates
has incurred any liability for any tax imposed under Section 4971
through 4980B of the Code, or any civil liability under Section 502(i)
or (l) of ERISA, which (individually or together with other such
liabilities and civil liabilities) could have a material adverse effect
on the Business or Condition of Xxxxxxxxx or the Company;
(d) no Benefit Plan provides health or death benefit coverage
beyond the termination of an employee's employment, except as required
by Part 6 of Subtitle B of Title I of ERISA or Section 4980B of the Code
or any state laws requiring continuation of benefits coverage following
termination of employment;
(e) no suits, actions or other litigation (excluding claims for
benefits incurred in the ordinary course of plan activities) have been
brought or, to the best knowledge of the Owners, Xxxxxxxxx and the
Company, threatened against or with respect to any Benefit Plan and
there are no facts or circumstances known to Xxxxxxxxx, the Company or
any Owner that could reasonably be expected to give rise to any such
suit, action or other litigation; and
(f) all contributions to Benefit Plans that were required to be
made under such Benefit Plans have been made, and all benefits accrued
under any unfunded Benefit Plan have been paid, accrued or otherwise
adequately reserved in accordance with GAAP, all of which accruals under
unfunded Benefit Plans, if any, are as disclosed in SECTION 2.14(F) OF
THE DISCLOSURE SCHEDULE, and each of CMI and Xxxxxxxxx has performed all
material obligations currently required to be performed by it under all
Benefit Plans.
2.15 REAL PROPERTY. (a) SECTION 2.15(A) OF THE DISCLOSURE
SCHEDULE contains a true and correct list of (i) each parcel of real
property owned (the "Owned Real Property") by Xxxxxxxxx, (ii) each parcel
of real property leased by Xxxxxxxxx (as lessor or lessee) (the "Leased
Real Property") and (iii) all Liens (other than Permitted Liens) relating
to or affecting any parcel of real property referred to in clause (i) or
(ii) above.
-14-
(b) Xxxxxxxxx has good and marketable title to each parcel of
Owned Real Property (including the improvements thereon), free and clear of
all Liens (other than Permitted Liens and Liens disclosed in SECTION
2.15(B) OF THE DISCLOSURE SCHEDULE). After giving effect to the
Contribution, the Company will have good and marketable title to each
parcel of Owned Real Property (including the improvements thereon)
designated with an asterisk in SECTION 2.15(A) OF THE DISCLOSURE SCHEDULES,
free and clear of all Liens (other than Permitted Liens and Liens DISCLOSED
IN SECTION 2.15(B) OF THE DISCLOSURE SCHEDULE).
(c) Subject to the terms of the related leases, Xxxxxxxxx has,
and after giving effect to the Contribution the Company will have with
respect to each parcel of Leased Real Property designated with an asterisk
in SECTION 2.15(A) OF THE DISCLOSURE SCHEDULE, a valid and subsisting
leasehold estate in and the right to quiet enjoyment of the real properties
currently leased by Xxxxxxxxx for the full term of the lease thereof. Each
lease referred to in clause (ii) of paragraph (a) above is a legal, valid
and binding agreement, enforceable in accordance with its terms, of
Xxxxxxxxx and of each other Person that is a party thereto, and except as
set forth in SECTION 2.15(C) OF THE DISCLOSURE SCHEDULE, there is no, and
none of CMI, Xxxxxxxxx, the Company or the Owners has received notice of
any, default (or any condition or event which, after notice or lapse of
time or both, would constitute a default) thereunder. None of Xxxxxxxxx or
the Company owes brokerage commissions or finders fees with respect to any
such leased space, except to the extent that Xxxxxxxxx or the Company may
renew the term of any such lease, in which case any such commissions and
fees would be in amounts that are reasonable and customary for the spaces
so leased, given their intended use and terms.
(d) Xxxxxxxxx has made available to each Investor prior to the
execution of this Agreement true and complete copies of (i) title policies,
mortgages, deeds of trust, deeds, certificates of occupancy and similar
documents, and all amendments thereto, concerning the Owned Real Property,
and (ii) all leases (including any amendments thereto and renewal letters
in respect thereof) and, to the extent reasonably available, all other
documents referred to in clause (i) of this paragraph (d) with respect to
the real property listed in SECTION 2.15(A) OF THE DISCLOSURE SCHEDULE
pursuant to clause (ii) of paragraph (a) above.
(e) The improvements on the real property identified in
SECTION 2.15(A) OF THE DISCLOSURE SCHEDULE are in good operating condition
and in a state of good maintenance and repair, ordinary wear and tear
excepted, are adequate and suitable for the purposes for which they are
presently being used and, to the best knowledge of the Owners, Xxxxxxxxx
and the Company, there are no condemnation or appropriation proceedings
pending or threatened against any of such real property or the improvements
thereon.
-15-
(f) Except as set forth in Section 2.23(c) of the Disclosure
Schedule, none of Xxxxxxxxx, the Company or any of the Owners has any
knowledge, nor has any of CMI, Xxxxxxxxx, the Company or the Owners
received any notice, of any claim, action or proceeding, actual or
threatened, against or affecting Xxxxxxxxx, the Company or any of the real
property identified in SECTION 2.15(A) OF THE DISCLOSURE SCHEDULE which
would materially affect the future use, occupancy or value of such real
property or any part thereof.
2.16 TANGIBLE PERSONAL PROPERTY. Except as disclosed in SECTION
2.16 OF THE DISCLOSURE SCHEDULE, Xxxxxxxxx is in possession of and has,
and, immediately after giving effect to the Contribution the Company will
be in possession of and have, good and marketable title to, or valid
leasehold interests in or valid rights under Contract to use, all tangible
personal property including (a) all tangible personal property reflected in
the Pro Forma Balance Sheet and (b) all tangible personal property that has
been acquired by Xxxxxxxxx since October 31, 1996 and is to be so
contributed (in each case other than property disposed of since such date
in the ordinary course of business consistent with past practice and the
terms of this Agreement). All such tangible personal property is free and
clear of all Liens, other than Permitted Liens, and is adequate and
suitable for the conduct by Xxxxxxxxx or the Company of the business
presently conducted or to be conducted by it (as the case may be), and
(except as disclosed in SECTION 2.16 OF THE DISCLOSURE SCHEDULE) is in good
working order and condition, ordinary wear and tear excepted, and its use
complies in all material respects with all applicable Laws.
2.17 INTELLECTUAL PROPERTY RIGHTS. Xxxxxxxxx has interests in or
uses, and immediately after giving effect to the Contribution, the Company
will have interests in or use, the Intellectual Property disclosed in
SECTION 2.17 OF THE DISCLOSURE SCHEDULE, each item of which Xxxxxxxxx has,
and immediately after giving effect to the Contribution, the Company will
have either all right, title and interest in or a valid and binding license
to use. No other Intellectual Property is used or necessary in the conduct
of the business conducted or to be conducted by the Company or in the
conduct of the corresponding business conducted by Xxxxxxxxx as of the date
hereof. Except as disclosed in SECTION 2.17 OF THE DISCLOSURE SCHEDULE,
(i) Xxxxxxxxx has, and immediately after giving effect to the Contribution
the Company will have, the right to use the Intellectual Property disclosed
therein, (ii) all registrations with and applications to Governmental or
Regulatory Authorities on behalf of Xxxxxxxxx or the Company in respect of
such Intellectual Property are valid and in full force and effect and are
not subject to the payment of any Taxes or maintenance fees or the taking
of any other actions by Xxxxxxxxx or the Company to maintain their validity
or effectiveness, (iii) there are no restrictions on the direct or indirect
transfer of any license, or any interest therein, held by Xxxxxxxxx or the
Company in respect of such Intellectual Property, (iv) the Owners and
Xxxxxxxxx have made available to each Investor prior to the execution of
-16-
this Agreement all documentation in their possession with respect to any
invention, process, design, computer program or other know-how or trade
secret included in such Intellectual Property, which documentation is
accurate in all material respects and reasonably sufficient in detail and
content to identify and explain such invention, process, design, computer
program or other know-how or trade secret, (v) Xxxxxxxxx and its
predecessors have taken reasonable security measures to protect the
secrecy, confidentiality and value of the trade secrets included in such
Intellectual Property, (vi) none of Xxxxxxxxx or the Company is, and none
of CMI, Xxxxxxxxx or the Company has received any notice that it is, in
default (or with the giving of notice or lapse of time or both, would be in
default) under any license to use such Intellectual Property and (vii) none
of Xxxxxxxxx, the Company or the Owners has any knowledge that such
Intellectual Property is being infringed by any other Person. Xxxxxxxxx is
not infringing, to the best knowledge of Xxxxxxxxx, the Company and the
Owners, any Intellectual Property of any other Person, and no claim is
pending or, to the best knowledge of Xxxxxxxxx, the Company and the Owners,
has been threatened to such effect (or with respect to any infringement on
the part of CMI).
2.18 CONTRACTS. (a) SECTION 2.18(A) OF THE DISCLOSURE SCHEDULE
(with paragraph references corresponding to those set forth below) contains
a true and complete list of each of the following Contracts or other
arrangements (true and complete copies or, if none, reasonably complete and
accurate written descriptions of which, together with all amendments and
supplements thereto and all waivers of any terms thereof, have been made
available to each Investor prior to the execution of this Agreement), to
which Xxxxxxxxx is a party or by which any of its Assets and Properties is
bound:
(i) (A) all Contracts (excluding Benefit Plans) providing for a
commitment of employment or with consultants for a specified or
unspecified term other than any such Contract involving aggregate
payments of not more than $50,000 (whether in cash, securities or other
property) in each calendar year; and (B) any written or unwritten
representations, commitments, promises, communications or courses of
conduct involving an obligation of Xxxxxxxxx to make payments (with or
without notice, passage of time or both) to any Person in connection
with, or as a consequence of, the transactions contemplated hereby or to
any employee who is disclosed on SECTION 2.22(A) OF THE DISCLOSURE
SCHEDULE, other than with respect to salary or incentive compensation
payments in the ordinary course of business, consistent with past
practice;
(ii) all Contracts with any Person containing any provision or
covenant prohibiting or limiting the ability of Xxxxxxxxx to engage in
any business activity or compete with any Person or prohibiting or
limiting the ability of any Person to compete with Xxxxxxxxx;
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(iii) all partnership, limited liability company, joint venture,
shareholders' or other similar Contracts with any Person;
(iv) all Contracts evidencing Indebtedness of Xxxxxxxxx;
(v) all Contracts (A) with independent contractors, distributors,
dealers, manufacturers' representatives, sales agencies or franchisees,
(B) with aggregators, manufacturers and equipment vendors, and (C) with
respect to the sale of services, products or both to customers, other
than any such Contract pursuant to which neither Xxxxxxxxx nor any other
Person will, or is or could be required to, make aggregate payments in
excess of $50,000 in any calendar year or aggregate payments in excess
of $250,000 during the term of the Contract (in each case whether in
cash, securities or other property);
(vi) all guarantees by other Persons of any Indebtedness or other
obligations of Xxxxxxxxx, and all guarantees by Xxxxxxxxx of any
Indebtedness or other obligations of other Persons;
(vii) all Contracts relating to (A) the future disposition or
acquisition of any Assets and Properties, other than dispositions or
acquisitions in the ordinary course of business consistent with past
practice and the provisions of this Agreement, and (B) any Business
Combination;
(viii) all executory Contracts between or among Xxxxxxxxx, on the one
hand, and any Owner, any current or former officer, director, Affiliate
or Associate of CMI or Xxxxxxxxx, or any Associate of any such officer,
director or Affiliate, on the other hand, other than Contracts disclosed
pursuant to Section 2.18(a)(i);
(ix) all collective bargaining or similar labor Contracts;
(x) all Contracts that (A) limit or contain restrictions on the
ability of Xxxxxxxxx to declare or pay dividends on, to make any other
distribution in respect of or to issue or purchase, redeem or otherwise
acquire its equity interests, to incur Indebtedness, to incur or suffer
to exist any Lien, to purchase or sell any Assets and Properties, to
change the lines of business in which it participates or engages or to
engage in any Business Combination or (B) require Xxxxxxxxx to maintain
specified financial ratios or levels of net worth or other indicia of
financial condition; and
(xi) all other Contracts not otherwise required to be disclosed in
SECTION 2.18(A) OF THE DISCLOSURE SCHEDULE which are material to the
Business or Condition of Xxxxxxxxx (including the CII Stock Purchase
Agreement and the Richmond Acquisition Agreement) and all powers of
attorney or comparable delegations of authority.
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(b) Each Contract required to be disclosed in SECTION 2.18(A) OF
THE DISCLOSURE SCHEDULE is in full force and effect and constitutes a
legal, valid and binding agreement, enforceable in accordance with its
terms, of each party thereto, except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to the enforcement of creditors' rights generally and
by general principles of equity; and except as disclosed in SECTION 2.18(B)
OF THE DISCLOSURE SCHEDULE, neither Xxxxxxxxx nor, to the best knowledge of
Xxxxxxxxx, the Company and the Owners, any other party to any such Contract
is, or has received notice that it is, in violation or breach of or default
under any such Contract (or with notice or lapse of time or both, would be
in violation or breach of or default under any such Contract).
(c) To the knowledge of the Owners, Xxxxxxxxx and the Company,
Xxxxxxxxx is not a party to or bound by any Contract that has been or could
reasonably be expected to be, individually or in the aggregate with any
other such Contracts, materially adverse to the Business or Condition of
Xxxxxxxxx or the Company or which has resulted or could reasonably be
expected to result, individually or in the aggregate with any such other
Contracts, in a loss to Xxxxxxxxx or the Company (alone or together) in
excess of $100,000.
2.19 LICENSES. SECTION 2.19 OF THE DISCLOSURE SCHEDULE contains a
true and complete list of all Licenses used in and material to the business
or operations of Xxxxxxxxx or the Company, setting forth the owner, the
function and the expiration and renewal date of each. Prior to the
execution of this Agreement, the Owners have made available to each
Investor true and complete copies of all such Licenses. Except as
disclosed in SECTION 2.19 OF THE DISCLOSURE SCHEDULE:
(a) each of Xxxxxxxxx and the Company owns or validly holds, and
after giving effect to the Contribution the Company will own or validly
hold, all Licenses that are material to its business or operations;
(b) each License listed in SECTION 2.19 OF THE DISCLOSURE
SCHEDULE is valid, binding and in full force and effect; and
(c) neither Xxxxxxxxx nor the Company is, or has received any
notice that it is, in default (or with the giving of notice or lapse of
time or both, would be in default) under any such License.
2.20 INSURANCE. SECTION 2.20(A) OF THE DISCLOSURE SCHEDULE
contains a true and complete list (including the names and addresses of the
insurers, the expiration dates thereof, the annual premiums and payment
terms thereof and a brief description of the interests insured thereby) of
all liability, property, workers' compensation, directors' and officers'
liability and other insurance policies currently in effect that insure the
business, operations or employees of Xxxxxxxxx or the Company or affect or
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relate to the ownership, use or operation of any of the Assets and
Properties of Xxxxxxxxx or the Company and that (i) have been issued to
Xxxxxxxxx or the Company or (ii) have been issued to any Person (other than
Xxxxxxxxx or the Company) for the benefit of Xxxxxxxxx or the Company. The
insurance coverage provided by the policies described in clauses (i) and
(ii) above with respect to Xxxxxxxxx will not terminate or lapse by reason
of the transactions contemplated by this Agreement and, from and after the
Closing, the Company will succeed to all of Xxxxxxxxx'x rights and benefits
thereunder. Each policy listed in SECTION 2.20 OF THE DISCLOSURE SCHEDULE
is valid and binding and in full force and effect (and will be in full
force and effect with respect to the Company, after giving effect to the
Contribution), all premiums due thereunder have been paid when due and none
of Xxxxxxxxx, the Company or the Person to whom such policy has been issued
has received any notice of cancellation or termination in respect of such
policy or is in default thereunder, and none of Xxxxxxxxx, the Company or
any Owner knows of any reason or state of facts that could lead to the
cancellation of such policy. Except as disclosed in SECTION 2.12 OF THE
DISCLOSURE SCHEDULE, there have not been any claims made during the past
year or which are pending which, individually or in the aggregate with any
such other claims, are in excess of $100,000 under any insurance policies
covering Xxxxxxxxx or the Company. Neither Xxxxxxxxx nor the Company has
received notice that any insurer under any policy referred to in this
Section 2.20 is denying liability with respect to a claim thereunder or
defending under a reservation of rights clause.
2.21 AFFILIATE TRANSACTIONS. (a) Except as disclosed in SECTION
2.21(A) OF THE DISCLOSURE SCHEDULE, (i) there are not any and during the
preceding two years there have not been any Liabilities between CMI,
Xxxxxxxxx or the Company, on the one hand, and any Owner, any current (or,
to the best knowledge of the Owners, Xxxxxxxxx and the Company, former)
officer, director, member, Affiliate or Associate of CMI, Xxxxxxxxx or the
Company, or any Associate of any such officer, director, member or
Affiliate, on the other hand, (ii) none of the Owners or any such current
(or, to the best knowledge of the Owners, Xxxxxxxxx and the Company,
former) officers, directors, members, Affiliates or Associates provides or
causes to be provided or during the preceding two years provided or caused
to be provided any assets, services or facilities to CMI, Xxxxxxxxx or the
Company, (iii) none of CMI, Xxxxxxxxx or the Company provides or causes to
be provided or during the preceding two years provided or caused to be
provided any assets, services or facilities to any Owner or any such
current (or, to the best knowledge of the Owners, Xxxxxxxxx and the
Company, former) officer, director, member, Affiliate or Associate and (iv)
none of CMI, Xxxxxxxxx or the Company beneficially owns, directly or
indirectly, any Investment Assets of any such current (or, to the best
knowledge of the Owners, Xxxxxxxxx and the Company, former) Affiliate or
Associate.
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(b) Except as disclosed in SECTION 2.21(B) OF THE DISCLOSURE
SCHEDULE, each of the Liabilities and transactions listed in
SECTION 2.21(A) OF THE DISCLOSURE SCHEDULE was incurred or engaged in, as
the case may be, on an arm's-length basis on competitive terms.
2.22 EMPLOYEES; LABOR RELATIONS. (a) SECTION 2.22(A) OF THE
DISCLOSURE SCHEDULE contains a list of the name of each officer and key
employee, consultant and independent contractor, other than any salesperson
whose total annual compensation package is less than $100,000, of
Xxxxxxxxx, together with each such person's position or function, annual
base salary or wages and any incentive or bonus arrangement with respect to
such person.
(b) Except as disclosed in SECTION 2.22(B) OF THE DISCLOSURE
SCHEDULE, (i) no employee of Xxxxxxxxx is presently a member of a
collective bargaining unit and, to the best knowledge of Xxxxxxxxx, the
Company and the Owners, there are no threatened or contemplated attempts to
organize for collective bargaining purposes any of the employees of
Xxxxxxxxx and (ii) no unfair labor practice complaint or sex or age
discrimination claim has been brought against CMI or Xxxxxxxxx before the
National Labor Relations Board or any other Governmental or Regulatory
Authority. There has been no work stoppage, strike or other concerted
action by employees of CMI or Xxxxxxxxx. Since October 31, 1991, each of
CMI, Xxxxxxxxx and the Company has complied in all material respects with
all applicable Laws relating to the employment of labor, including those
relating to wages, hours and collective bargaining.
2.23 ENVIRONMENTAL MATTERS. Except as disclosed in Section 2.23 of
the Disclosure Schedule (with paragraph references corresponding to those
set forth below):
(a) Except for the Title V air permit for the Richmond Facility
(the "Title V Permit"), Xxxxxxxxx has obtained and holds, and after giving
effect to the Contribution the Company will hold, all Environmental Permits
which are required in respect of its business, operations or Assets and
Properties under applicable Environmental Laws, other than those
Environmental Permits so required in respect of the Company (i) which
cannot be obtained or transferred prior to the Closing and that will not
result in a material adverse effect on the Company, (ii) the absence of
which on the Closing Date will not have a material adverse effect on the
Business or Condition of the Company and (iii) which the Owners, Xxxxxxxxx
and the Company have no reason to believe cannot or will not be obtained
promptly following the Closing in the ordinary course of the Company's
business. Xxxxxxxxx has duly applied for the Title V Permit on its own
behalf and on behalf of the Company, and the Owners, Xxxxxxxxx and the
Company have no reason to believe that the Title V Permit cannot or will
not be obtained promptly following the Closing in the ordinary course of
the Company's business.
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(b) Each of Xxxxxxxxx and the Company is, and after giving effect
to the Contribution the Company will be, in compliance with all terms,
conditions and provisions of all applicable (i) Environmental Permits and
(ii) Environmental Laws.
(c) There are no past, pending or threatened Environmental Claims
against CMI, Xxxxxxxxx or the Company, and none of Xxxxxxxxx, the Company
or the Owners is aware of any facts or circumstances which could reasonably
be expected to form the basis for any Environmental Claim against Xxxxxxxxx
or the Company.
(d) No Releases of Hazardous Materials have occurred at, from,
in, to, on or under any Site and no Hazardous Materials are present in, on
or about or migrating from or (to the knowledge of the Owners, Xxxxxxxxx
and the Company) to any Site that could give rise to an Environmental Claim
against Xxxxxxxxx or the Company.
(e) None of Xxxxxxxxx, the Company, any predecessor of Xxxxxxxxx
or the Company, or any entity previously owned by CMI, Xxxxxxxxx or the
Company has transported, or arranged for the treatment, storage, handling,
disposal or transportation of, any Hazardous Material at or to any off-Site
location which could reasonably be expected to result in an Environmental
Claim against Xxxxxxxxx or the Company.
(f) No Site is a current, or to the knowledge of Xxxxxxxxx, the
Company and the Owners, a proposed Environmental Clean-up Site.
(g) There are no Liens (other than Permitted Liens) arising under
or pursuant to any Environmental Law on any Site, and none of Xxxxxxxxx,
the Company or the Owners is aware of any facts, circumstances or
conditions that could reasonably be expected to restrict, encumber or
result in the imposition of special conditions under any Environmental Law
with respect to the ownership, occupancy, development, use or
transferability of any Site.
(h) There are not currently or formerly, (a) underground storage
tanks, active or abandoned, (b) polychlorinated biphenyl containing
equipment or (c) asbestos-containing material at any Site.
(i) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by or on behalf of, or
which are in the possession of, Xxxxxxxxx, the Company, any Owner or their
respective Affiliates with respect to any Site which have not been made
available to each Investor prior to execution of this Agreement.
2.24 SUBSTANTIAL CUSTOMERS AND SUPPLIERS. SECTION 2.24(A) OF THE
DISCLOSURE SCHEDULE lists the 10 largest customers of CMI on the basis of
revenues for goods sold or services provided for its most recent full
-22-
fiscal year. SECTION 2.24(B) OF THE DISCLOSURE SCHEDULE lists the 10
largest suppliers of CMI on the basis of cost of goods or services
purchased for its most recent full fiscal year. Except as disclosed in
SECTION 2.24(C) OF THE DISCLOSURE SCHEDULE, no such customer or supplier
has ceased or materially reduced its purchases from or sales or provision
of services to CMI or Xxxxxxxxx since the Audited Financial Statement Date,
or to the best knowledge of Xxxxxxxxx, the Company and the Owners has
threatened to cease or materially reduce such purchases or sales or
provision of services after the date hereof. Except as disclosed in
SECTION 2.24(D) OF THE DISCLOSURE SCHEDULE, to the best knowledge of
Xxxxxxxxx, the Company and the Owners, no such customer or supplier is
threatened with bankruptcy or insolvency.
2.25 OTHER NEGOTIATIONS; BROKERS. None of the Owners, CMI,
Xxxxxxxxx, the Company or any of their respective Affiliates (nor any
investment banker, financial advisor, attorney, accountant or other Person
retained by or acting for or on behalf of CMI, Xxxxxxxxx, the Company, any
Owner or any such Affiliate) (i) has entered into any agreement that
conflicts with any of the transactions contemplated by this Agreement or
any of the Operative Agreements or (ii) has entered into any agreement or
had any discussions with any third party regarding any transaction
involving CMI, Xxxxxxxxx or the Company which could result in any Investor,
any of its general or limited partners or any officer, director, employee,
agent, Affiliate or Associate of any Investor or any such general or
limited partner being subject to any claim for liability to said third
party in connection with this Agreement or any Operative Agreement or the
consummation of any of the transactions contemplated hereby or thereby.
Except for Xxxxxx Xxxx, whose fees and expenses will be paid by the Company
and will not exceed $200,000 under any circumstances, no agent, broker,
finder, investment banker, financial advisor or other similar Person will
be entitled to any fee, commission or other compensation in connection with
any of the transactions contemplated by this Agreement or any Operative
Agreement on the basis of any act or statement made or alleged to have been
made by any Owner, CMI, Xxxxxxxxx, the Company, any of their respective
Affiliates or Associates, or any investment banker, financial advisor,
attorney, accountant or other Person retained by or acting for or on behalf
of any Owner, CMI, Xxxxxxxxx, the Company or any such Affiliate or
Associate.
2.26 REGISTRATION RIGHTS. Except as disclosed in SECTION 2.26 OF
THE DISCLOSURE SCHEDULE and except for the Registration Rights Agreement,
neither Xxxxxxxxx nor the Company has granted registration rights to any
holder of any of the securities of Xxxxxxxxx or the Company.
2.27 EXEMPTION FROM REGISTRATION; RESTRICTIONS ON OFFER AND SALE
OF SAME OR SIMILAR SECURITIES. Assuming the representations and warranties
set forth in Section 3.3 are true and correct in all material respects with
respect to each Investor, the offer and sale of the Purchased Stock made
-23-
pursuant to this Agreement is exempt from the registration requirements of
the Securities Act. None of the Owners, Xxxxxxxxx, the Company or any
Person authorized to act on behalf of any of them has, in connection with
the offering of the Purchased Stock, engaged in (A) any form of general
solicitation or general advertising (as those terms are used within the
meaning of Rule 501(c) under the Securities Act), (B) any action involving
a public offering within the meaning of Section 4(2) of the Securities Act
or (C) any action that would require the registration under the Securities
Act of the offering and sale of Purchased Stock pursuant to this Agreement
or that would violate applicable state securities or "blue sky" laws. None
of the Owners, Xxxxxxxxx, the Company or any Person authorized to act on
behalf of any of them has made or will prior to the Closing make, directly
or indirectly, any offer or sale of Purchased Stock or of securities of the
same or a similar class as the Purchased Stock if as a result any offer and
sale of Purchased Stock contemplated hereby could fail to be entitled to
exemption from the registration requirements of the Securities Act. As
used herein, the terms "offer" and "sale" have the meanings specified in
Section 2(3) of the Securities Act.
2.28 DISCLOSURE. To the knowledge of the Owners, Xxxxxxxxx and
the Company after due inquiry, all material facts regarding the Business or
Condition of Xxxxxxxxx or the Company have been disclosed to each Investor
in or in connection with this Agreement. No representation or warranty on
the part of Xxxxxxxxx, the Company or any Owner contained in this
Agreement, and no statement contained in the Disclosure Schedule or in any
certificate, list or other writing furnished to any Investor pursuant to
any provision of this Agreement or any Operative Agreement, including
pursuant to Article VI hereof, contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements herein or therein, in the light of the circumstances under which
they were made, not misleading.
2.29 HOLDING COMPANY ACT AND INVESTMENT COMPANY ACT STATUS.
Neither Xxxxxxxxx nor the Company is a "holding company" or a "public
utility company", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended. Neither Xxxxxxxxx nor the Company is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
2.30 CORPORATE GOVERNANCE. The Owners have taken or caused to be
taken all necessary action to cause, as of the Closing, the Company's board
of directors to consist of, and at the Closing the Company's board of
directors will consist of, the following six persons: Xxxxxx Xxxxxxxx,
Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxx-Xxxx, Xxxxxxx X. Xxxxxx, Xx. XxxXxxx and
Xxxxxxx X. Xxxxxx.
2.31 PROJECTIONS. The projections of the Company contained in
SCHEDULE 2.31 are mathematically accurate, are based on reasonable
-24-
assumptions as of the date hereof, have been prepared by Xxxxxxxxx in good
faith and, except as set forth in SECTION 2.31 OF THE DISCLOSURE SCHEDULE,
represent the good faith estimate of the Owners, Xxxxxxxxx and the Company
of the most probable course of the business of the Company (after giving
effect, in all material respects, to the Restructuring Transactions, the
Contribution and the Closing).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor, severally and not jointly, represents and warrants
to the Company, with respect to such Investor only, as follows:
3.1 ORGANIZATION; POWER AND AUTHORITY. Such Investor is (a) in
the case of REI II, a limited partnership duly organized, validly existing
and in good standing under the Laws of the State of Delaware or (b) in the
case of Spartan, a corporation duly organized, validly existing and in good
standing under the Laws of the State of Michigan. Such Investor has the
requisite power and authority to execute and deliver this Agreement and the
Operative Agreements to which it is a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by such Investor of this
Agreement and the Operative Agreements to which it is a party and the
performance by such Investor of its obligations hereunder and thereunder,
have been duly and validly authorized by all necessary action on the part
of (i) in the case of REI II, the general partner of REI II, or (ii) in the
case of Spartan, the board of directors of Spartan, which action is the
only action necessary to authorize the execution, delivery and performance
by such Investor of this Agreement and the Operative Agreements to which it
is a party. This Agreement has been duly and validly executed and
delivered by such Investor and constitutes, and upon the execution and
delivery by such Investor thereof, each Operative Agreement to which such
Investor is a party will constitute the legal, valid and binding obligation
of such Investor enforceable against such Investor in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
the enforcement of creditors' rights generally and by general principles of
equity.
3.2 NO CONFLICTS. The execution, delivery and performance by
such Investor of this Agreement and the Operative Agreements to which it is
a party, and the consummation by such Investor of the transactions
contemplated hereby and thereby, will not conflict with, or constitute a
default under, any agreement, indenture or instrument to which such
Investor is a party, or result in a violation of (a) (i) in the case of REI
II, REI II's agreement of limited partnership, or (ii) in the case of
-25-
Spartan, its articles of incorporation or by-laws, or (b) any Order of any
Governmental or Regulatory Authority having jurisdiction over such Investor
or any of its properties. No consent, approval or action of, or filing or
registration with, any Governmental or Regulatory Authority is required on
the part of such Investor for its execution, delivery and performance of
this Agreement.
3.3 PURCHASE FOR INVESTMENT. The Purchased Stock being purchased
by such Investor hereunder will be purchased by such Investor for its own
account for the purpose of investment and not with a view to the resale or
distribution of all or any part of such Purchased Stock in violation of the
Securities Act, it being understood that the right to dispose of such
Purchased Stock shall be entirely within the discretion of such Investor.
Such Investor represents and warrants that it is an "accredited investor"
as such term is defined in Rule 501 of Regulation D of the Securities Act.
Such Investor understands that the certificates for the shares of Purchased
Stock to be issued to it have not been registered under the Securities Act
in reliance on an exemption therefrom under Section 4(2) of the Securities
Act and Regulation D thereunder and that such certificates shall bear the
following legend:
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (ii) AN
APPLICABLE EXEMPTION FROM REGISTRATION THEREUNDER."
The Company shall remove such legend upon receipt of an opinion
from counsel to such Investor, reasonably satisfactory in form and
substance to counsel to the Company, that the requirements for such legend
have terminated.
3.4 BROKERS. Except (in the case of REI II) for Mesirow
Financial Services Inc., whose fees and expenses will be paid by REI II
subject to reimbursement in accordance with Section 12.3, and (in the case
of Spartan) for Xxxxx & Co., whose fees and expenses will be paid by
Spartan subject to reimbursement in accordance with Section 12.3, no agent,
broker, finder, investment banker, financial advisor or other similar
Person will be entitled to any fee, commission or other compensation in
connection with any of the transactions contemplated by this Agreement or
any Operative Agreement on the basis of any act or statement made by such
Investor.
ARTICLE IV
COVENANTS OF THE OWNERS, XXXXXXXXX AND THE COMPANY
Each of the Owners, Xxxxxxxxx and the Company jointly and
severally covenants and agrees with each Investor that, at all times from
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and after the date hereof and until the Closing and, with respect to any
covenant or agreement by its terms to be performed in whole or in part
after the Closing, for the period specified herein or, if no period is
specified herein, indefinitely, each of the Owners, Xxxxxxxxx and the
Company will comply with all applicable covenants and provisions of this
Article IV, except to the extent that the Investors may otherwise consent
in writing.
4.1 REGULATORY AND OTHER APPROVALS. Each of the Owners,
Xxxxxxxxx and the Company will (a) take all necessary or desirable steps
and proceed diligently and in good faith and use its best efforts, as
promptly as practicable, to obtain all consents, approvals or actions of,
to make all filings with and to give all notices to, Governmental or
Regulatory Authorities and other Persons required of such Owner, Xxxxxxxxx
or the Company (as the case may be) to consummate the transactions
contemplated hereby and by the Operative Agreements, including those
required in connection with the Contribution and the Restructuring
Transactions and those described in SECTIONS 2.5 AND 2.6 OF THE DISCLOSURE
SCHEDULE, (b) provide such other information and communications to such
Governmental or Regulatory Authorities and other Persons as any Investor or
any such Governmental or Regulatory Authority or other Person may
reasonably request and (c) cooperate with each Investor as promptly as
practicable in obtaining all consents, approvals or actions of, making all
filings with and giving all notices to, Governmental or Regulatory
Authorities and other Persons required of such Investor to consummate the
transactions contemplated hereby and by the Operative Agreements.
Xxxxxxxxx or the Company will provide prompt notification to each Investor
when any such consent, approval, action, filing or notice referred to in
clause (a) above is obtained, taken, made or given, as applicable, and will
advise each Investor of any communications (and, unless precluded by Law,
provide each Investor with copies of any such communications that are in
writing) with any Governmental or Regulatory Authority or other Person
regarding any of the transactions contemplated by this Agreement or any of
the Operative Agreements.
4.2 INVESTIGATION BY INVESTORS. From the date hereof until the
Closing, each of Xxxxxxxxx and the Company will, and thereafter for so long
as an Investor owns any Purchased Stock or other equity interests in the
Company, the Company will, (a) provide such Investor and its officers,
employees, agents, counsel, accountants, financial advisors, consultants
and other representatives (together "Representatives") with full access,
upon reasonable prior notice and during normal business hours, to its and
its Subsidiaries' respective directors, officers, employees, agents and
accountants, its and its Subsidiaries' Assets and Properties and its and
its Subsidiaries' Books and Records, and (b) furnish such Investor and such
Representatives with all such information and data (including without
limitation copies of Contracts, Benefit Plans and other Books and Records)
concerning, its and its Subsidiaries' business and operations as such
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Investor or any of such other Representatives reasonably may request in
connection with such investigation. Prior to the Closing, all information
and documents reviewed or obtained by an Investor pertaining to Xxxxxxxxx
or the Company shall be subject to (i) in the case of REI II, the
Confidentiality Agreement dated September 17, 1996, between REI II and
Xxxxxxxxx, as the same may be amended from time to time, or (ii) in the
case of Spartan, the Confidentiality Agreement dated October 29, 1996,
between Spartan and Xxxxxxxxx, as the same may be amended from time to
time. Nothing contained in this Section 4.2, and no investigation by or
disclosure to any Investor, shall affect the survival of or modify, limit
or create any exception to the representations, warranties, covenants,
agreements and indemnities of Xxxxxxxxx, the Company or any Owner hereunder
or the conditions to the obligations of any Investor to close as set forth
in Article VI hereof.
4.3 NO SOLICITATIONS. From the date hereof until the earlier of
(a) the Closing and (b) the termination of this Agreement pursuant to
Article X hereof, none of the Owners, Xxxxxxxxx or the Company will take,
or will permit any Affiliate or Associate of any of them to take (nor will
any Owner, Xxxxxxxxx, the Company or any Affiliate or Associate of any of
them authorize or permit any investment banker, financial advisor,
attorney, accountant or other Person retained by or acting for or on behalf
or any Owner, Xxxxxxxxx, the Company or any such Affiliate or Associate to
take), directly or indirectly, any action to initiate, assist, solicit,
receive, negotiate, encourage or accept any offer or inquiry from any
Person (i) to engage in any Business Combination or other transaction
inconsistent with this Agreement with respect to Xxxxxxxxx or the Company,
(ii) to reach any agreement or understanding (whether or not such agreement
or understanding is absolute, revocable, contingent or conditional) for, or
otherwise attempt to consummate, any Business Combination or other
transaction inconsistent with this Agreement with respect to Xxxxxxxxx or
the Company, or (iii) to furnish or cause to be furnished any information
with respect to Xxxxxxxxx or the Company to any Person (other than as
contemplated by Section 4.2) who any Owner, Xxxxxxxxx, the Company, or any
Affiliate or Associate of any of them (or any such Person acting for or on
behalf thereof) knows or has reason to believe is in the process of, or may
be, considering any Business Combination with respect to Xxxxxxxxx or the
Company. If any Owner, Xxxxxxxxx, the Company or any such Affiliate or
Associate (or any such Person acting for or on behalf thereof) receives
from any Person (other than an Investor or any of its Representatives, in
each case in its capacity as such) any offer, inquiry or informational
request referred to in this Section 4.3, Xxxxxxxxx or the Company will
promptly advise such Person, by written notice, of the terms of this
Section 4.3 and will promptly, orally and in writing, advise each Investor
of all the terms of such offer, inquiry or request (including the identity
of the Person making such offer, inquiry or request) and deliver a copy of
such notice to each Investor.
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4.4 CONDUCT OF BUSINESS. Except for the Restructuring
Transactions, the Contribution and Xxxxxxxxx'x ongoing effort to complete
work on Semi-Finished Buses (including the effect of such effort on other
production), between the date hereof and the Closing Date, Xxxxxxxxx and
the Company will conduct business only in the ordinary course consistent
with past practice and the terms of this Agreement. Without limiting the
generality of the foregoing, the Owners, Xxxxxxxxx and (in the case of
clauses (b) and (d) below) the Company will:
(a) use their commercially reasonable efforts to (i) preserve
intact the present business organization and reputation of Xxxxxxxxx,
(ii) keep available (subject to dismissals and retirements in the
ordinary course of business consistent with past practice) the services
of the present officers, employees and consultants of Xxxxxxxxx,
(iii) maintain the Assets and Properties of Xxxxxxxxx in good working
order and condition, ordinary wear and tear excepted, (iv) maintain the
good will of customers, suppliers, lenders and other Persons with whom
Xxxxxxxxx otherwise has significant business relationships and (v) other
than with respect to the Shuttle Bus Business, continue all current
sales, marketing and promotional activities relating to the business and
operations of Xxxxxxxxx;
(b) except to the extent required by applicable Law, cause the
Books and Records to be maintained in the usual, regular and ordinary
manner;
(c) use their commercially reasonable efforts to maintain in full
force and effect substantially the same levels of coverage as the
insurance afforded under the policies listed in SECTION 2.20 OF THE
DISCLOSURE SCHEDULE;
(d) comply in all material respects with all Laws and Orders
applicable to the business and operations of Xxxxxxxxx and the Company,
and promptly following receipt thereof give Investor copies of any
notice received from any Governmental or Regulatory Authority or other
Person alleging any violation of any such Law or Order;
(e) administer each Benefit Plan, or cause the same to be
administered, in all material respects in accordance with the applicable
provisions of the Code, ERISA and all other applicable Laws; and
(f) promptly notify each Investor in writing of each receipt by
Xxxxxxxxx or any Owner (and furnish each Investor with copies) of any
notice of investigation or administrative proceeding by the IRS, the
Department of Labor, the Pension Benefit Guaranty Corporation or any
other Person involving any Benefit Plan.
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4.5 FINANCIAL STATEMENTS AND REPORTS; FISCAL YEAR.
(a) From the date hereof until the Closing and thereafter for so
long as an Investor, any partner of such Investor, or any Affiliate or
Associate of such Investor or any such partner owns any Purchased Stock
or other Common Stock (or any other securities issued in respect
thereof), (b) as promptly as practicable, and in no event later than the
presentation of the following materials to Xxxxxxxxx'x or the Company's
management, Xxxxxxxxx (prior to the Closing) and the Company will
deliver to such Investor true and complete copies of all financial
statements, reports and analyses as may be prepared or received by
Xxxxxxxxx, the Company or any Subsidiary of the Company relating to the
business or operations of Xxxxxxxxx, the Company or any such Subsidiary
or as such Investor may otherwise reasonably request and (c) Xxxxxxxxx
and the Company will not change their respective fiscal years; PROVIDED,
HOWEVER, that this Section 4.5 shall apply to Xxxxxxxxx (i) in the case
of clause (a) above, during the period from the date hereof until the
Closing only and (ii) in the case of a change in Xxxxxxxxx'x fiscal year
effected after the Closing Date, only if such change would affect any of
the Company's fiscal periods (or portions thereof) ending before or
after the Closing.
(b) Without limiting the generality of paragraph (a) above,
Xxxxxxxxx shall prepare and deliver to each Investor, at least two
Business Days prior to the Closing Date, true and complete copies of an
unaudited balance sheet for Xxxxxxxxx as of November 30, 1996, and the
related unaudited statements of operations and accumulated deficit
(collectively, the "November 30 Financial Statements"). The Owners and
Xxxxxxxxx agree that the November 30 Financial Statements shall be
prepared in good faith to present accurately, in all material respects,
the financial condition of Xxxxxxxxx as of November 30, 1996 and the
results of operations of Xxxxxxxxx for the month ended November 30,
1996. Xxxxxxxxx shall make available to each Investor and its
accountants prior to the Closing all work papers and related data used
in connection with the preparation of the November 30 Financial
Statements.
4.6 CERTAIN RESTRICTIONS. (a) From the date hereof through the
Closing, each of Xxxxxxxxx and the Company (and, in the case of clause (iv)
below, the Owners) will refrain from:
(i) amending its certificate or articles of organization or
incorporation, operating agreement or by-laws (or other comparable
charter documents), including the Charter Documents, or taking any
action with respect to any such amendment or any reorganization,
liquidation or dissolution of Xxxxxxxxx or the Company, except that
Xxxxxxxxx may amend its operating agreement to the extent necessary to
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appoint officers and authorize such officers to execute documents on
behalf of Xxxxxxxxx in connection with the transactions contemplated
hereby;
(ii) in the case of Xxxxxxxxx, except as disclosed in SECTION 2.9
OF THE DISCLOSURE SCHEDULE, taking any of the actions listed in Section
2.9;
(iii) violating, breaching, or defaulting under, in any material
respect, or taking or failing to take any action that (with or without
notice or lapse of time or both) would constitute a material violation
or breach of, or default under, any term or provision of any License
held or used by it or any Contract required to be disclosed in SECTION
2.18(A) OF THE DISCLOSURE SCHEDULE;
(iv) (A) taking or agreeing or committing to take, or omitting or
agreeing or committing to omit, any action that would make any
representation or warranty contained in Article IV inaccurate in any
material respect; and (B) taking any action or course of action
inconsistent with compliance with the covenants and agreements of any
Owner, Xxxxxxxxx or the Company herein or which might adversely affect
the interests of any Investor hereunder; and
(v) entering into any agreement to do or engage in any of the
foregoing.
(b) Prior to the Closing, the Company will not conduct any
business, incur any Liabilities (whether contingent or otherwise), enter
into any Contract (other than this Agreement, the Operative Agreements and
any Contract that (i) is furnished to and approved by each Investor before
being entered into by the Company and (ii) is entered into by the Company
either as part of the Restructuring Transactions described in clause (c) of
Section 4.9 or in obtaining the written instruments relating to the Xxxxx
Bank revolving credit facility contemplated by Section 6.6), acquire any
Assets and Properties or hire any employees, except for any Assets and
Properties, Liabilities and Contracts contributed to or assumed by it on
the Closing Date pursuant to the Contribution Agreement.
4.7 AFFILIATE TRANSACTIONS. Except for the termination and
cancellation of certain Indebtedness and lease obligations between
Xxxxxxxxx, on the one hand, and certain of the Owners or their respective
Affiliates, on the other hand, as part of the Restructuring Transactions,
prior to the Closing, neither Xxxxxxxxx nor the Company will enter into any
Contract or amend or modify any existing Contract with any Owner, any
current or former officer, director, Affiliate or Associate of CMI,
Xxxxxxxxx or the Company, or any Associate of any such officer, director or
Affiliate, in each case except with the consent of each Investor.
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4.8 NOTICE AND CURE. Xxxxxxxxx or the Company will notify each
Investor promptly in writing of, and contemporaneously will provide each
Investor with true and complete copies of any and all information or
documents relating to, and the Owners, Xxxxxxxxx and the Company will use
all commercially reasonable efforts to cure before the Closing, any event,
transaction or circumstance occurring after the date of this Agreement that
causes or will cause any covenant or agreement of any Owner, Xxxxxxxxx or
the Company under this Agreement to be breached or that renders or will
render untrue any representation or warranty of any Owner, Xxxxxxxxx or the
Company contained in this Agreement as if the same were made on or as of
the date of such event, transaction or circumstance. Xxxxxxxxx or the
Company also will notify each Investor promptly in writing of, and the
Owners, Xxxxxxxxx and the Company will use their best efforts to cure
before the Closing, any violation or breach of any representation,
warranty, covenant or agreement made by any Owner, Xxxxxxxxx or the Company
contained in this Agreement, whether occurring or arising before, on or
after the date of this Agreement, PROVIDED that any such violation or
breach that is not cured prior to the Closing may be waived prior to the
Closing by means of a written waiver executed by each Investor. No notice
given pursuant to this Section 4.8 shall have any effect on the
representations, warranties, covenants and agreements contained in this
Agreement for purposes of determining satisfaction of any condition
contained herein or shall in any way limit any Investor's right to seek
indemnity under Article IX.
4.9 RESTRUCTURING TRANSACTIONS. Without limiting the Owners',
Xxxxxxxxx'x or the Company's obligations under any other provision of this
Agreement, the Owners, Xxxxxxxxx and the Company shall adopt all such
resolutions, enter into all such agreements, make all such filings and take
or cause to be taken all such other actions, all in form and substance
satisfactory to each Investor, as are necessary to effectuate as promptly
as practicable (and in any event prior to the Closing):
(a) the cancellation (by contribution to the capital of
Xxxxxxxxx) of all Indebtedness owed by Xxxxxxxxx to any of its
Affiliates and the release of Xxxxxxxxx and the Company from any
Liabilities in respect thereof, other than: (i) subject to clause (A)
below, the aggregate principal amount of all advances made by Xxxxxx
to Xxxxxxxxx after September 1, 1996; PROVIDED, HOWEVER, that the
Indebtedness referred to in this clause (i) shall be evidenced solely
by a promissory note issued by the Company to Xxxxxx on the Closing
Date on the following terms: (A) the original principal amount of
such note shall equal Xxxxxxxxx'x good faith estimate of the Net
Contribution Amount for the period beginning on September 1, 1996 and
ending on the Closing Date, and shall be adjusted (effective as of the
Closing Date) to reflect the final determination of such Net
Contribution Amount pursuant to Section 5.5; (B) the maturity date of
such note shall be the first Business Day following the date on which
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such Net Contribution Amount is finally determined pursuant to Section
5.5; (C) the principal amount of such note may be prepaid at any time
and from time to time, in whole or in part, without penalty; (D)
interest on the unpaid principal amount of such note shall accrue, at
a rate per annum equal to the prime rate, from and after the last day
of the seven-day period referred to in Section 5.5(c); (E) interest on
overdue amounts shall accrue at a rate per annum equal to the prime
rate plus 3%; (F) such note shall not be transferrable other than to
Xxxxxxxxx; and (G) such note shall contain such other terms as the
Company's other Lenders reasonably require (such note, the "New Xxxxxx
Note"); (ii) Indebtedness owed by Xxxxxxxxx to Xxxxxxx X. Xxxxxx in an
aggregate principal amount not exceeding $36,000, which Indebtedness
(together with any accrued but unpaid interest thereon) shall be
repaid as provided in Section 4.13; and (iii) any Indebtedness under
the leases identified in the parenthetical in subparagraph (b) below;
(b) the cancellation and termination of, and the release of
Xxxxxxxxx and the Company from any Liabilities in respect of, all
leases between Xxxxxxxxx (as lessee), on the one hand, and any of its
Affiliates, on the other hand (other than (i) subleases covering
equipment leased to the relevant Affiliate by CIT (as disclosed in
SECTION 2.18(A)(IV)(M) OF THE DISCLOSURE SCHEDULE), (ii) the lease of
office space from SerVaas Management, Inc. (as disclosed in SECTION
2.15(A)(2) OF THE DISCLOSURE SCHEDULE) and (iii) the lease from
SerVaas, Inc. of the building at 000 Xxxxx 00xx Xxxxxx xx Xxxxxxxx,
Xxxxxxx (as disclosed in SECTION 2.15(A)(2) OF THE DISCLOSURE
SCHEDULE); and
(c) the restructuring of the agreements relating the Newcourt
inventory financing arrangement to provide that, from and after the
Closing, (i) the Company shall not have any Liabilities under such
agreements in respect of the period prior to the Closing, other than
(w) Liabilities in respect of borrowings made under such agreements
against Unfinished Buses and Chassis included in the Company's
inventory on the Closing Date after giving effect to the Contribution,
(x) subject to clause (ii) below, Liabilities in respect of the
Unsecured Newcourt Indebtedness, (y) Liabilities in respect of
borrowings made under such agreements against non-approved dealer
buses that have become Federalled Buses prior to the Closing Date and
(z) Liabilities under such agreements in respect of (and equal in
amount to) any receivables for Federalled Buses that have been
invoiced prior to the Closing Date, (ii) all Liabilities in respect of
the Unsecured Newcourt Indebtedness shall be evidenced by a new
instrument or agreement executed by the Company, and shall cease to
constitute Liabilities under such agreements, (iii) Xxxxxxxxx shall
remain liable for all other Liabilities under such agreements in
respect of the period prior to the Closing, including all Liabilities
in respect of borrowings made under such agreements against Semi-
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Finished Buses included in Xxxxxxxxx'x inventory on the Closing Date,
(iv) Xxxxxxxxx may assign its obligation to repay borrowings (but not
any interest which has accrued thereon prior to the date of transfer)
in respect of any such Semi-Finished Bus that becomes a Federalled
Bus, PROVIDED that such assignment is made in accordance with Section
4.16, and (v) the Company shall have the right to borrow under such
agreements on substantially the same terms as are in effect on the
date hereof with respect to borrowings thereunder by Xxxxxxxxx;
(the transactions contemplated by subparagraphs (a) through (c) above being
hereinafter collectively referred to as the "Restructuring Transactions").
Without limiting the generality of the foregoing, except as otherwise
expressly provided in the immediately preceding sentence, the Company shall
not incur or assume as a result of any of the Restructuring Transactions
any Liabilities, whether for Taxes or otherwise, arising or continuing on
or after the Closing (other than Liabilities under Section 5.5 below). The
Owners, Xxxxxxxxx and the Company shall (i) inform each Investor on a
regular basis as to the status of the Restructuring Transactions and (ii)
provide each Investor promptly, but in any event prior to the adoption,
execution or filing thereof, with true and complete copies of all
resolutions, agreements, filings, certificates and other material documents
prepared in connection with any of the Restructuring Transactions.
4.10 FULFILLMENT OF CONDITIONS. Each of the Owners, Xxxxxxxxx and
the Company will take all steps necessary or desirable and use its best
efforts to satisfy each condition to the obligations of each Investor
contained in this Agreement and will not take or fail to take any action if
such action or failure to act could reasonably be expected to result in the
nonfulfillment of any such condition.
4.11 VENTURE CAPITAL OPERATING COMPANY STATUS. Without limiting
any other right contained herein, REI II shall have the right to consult
with and advise the management of the Company and to receive all materials
provided to members of the board of directors of the Company so long as may
be required to enable REI II to qualify as a "venture capital operating
company" within the meaning of Section 2510.3-101 of the plan asset
regulations promulgated by the United States Department of Labor (a
"VCOC"). In addition, in the event that (i) at any time REI II is not
entitled to designate at least one member for election to the board of
directors of the Company, or (ii) the United States Department of Labor
through formal or informal rules, regulations or interpretations provides,
or it is otherwise established through governmental or court action, that
such representation does not constitute the exercise of management rights
of the kind necessary to enable REI II to continue to qualify as a VCOC,
then the Company and REI II shall in good faith negotiate (and Spartan
shall, if requested by REI II, consent to) provisions to enable REI II to
exercise the minimum amount of such management rights in order to continue
to qualify as a VCOC.
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4.12 BUSINESS PLAN. Xxxxxxxxx and the Company shall follow the
operating and strategic plan to be delivered to Investor pursuant to
Section 6.15 and such plan shall not be amended or modified prior to the
Closing without the approval of each of the Owners and the Investors or
after Closing without the approval of the Company's board of directors and
all approvals then required under the Stockholders' Agreement in connection
with such amendment or modification.
4.13 USE OF PROCEEDS. As reflected in the Pro Forma Balance
Sheet, the proceeds realized from the sale of the Purchased Stock to the
Investors (net of any transaction costs paid or reimbursed by the Company
in accordance with Section 12.3) shall be used by the Company as follows:
(a) to repay, within one Business Day after the Closing Date, all
outstanding loans (together with any accrued but unpaid interest thereon)
under the Xxxxx Bank revolving credit facility; (b) to repay, within one
Business Day after the Closing Date, the entire outstanding principal
amount (together with any accrued but unpaid interest thereon) under the
Harsco inventory note dated June 30, 1995; (c) to repay, within two
Business Days after the Closing Date, $2.4 million (as nearly as possible)
of outstanding accounts payable; (d) to repay, within one Business Day
after the Closing Date, all outstanding loans made by Xxxxxxx X. Xxxxxx to
Xxxxxxxxx (together with any accrued but unpaid interest thereon);
PROVIDED, HOWEVER, that the aggregate amount repaid pursuant to this clause
(d) in respect of the principal of such loans shall not in any event exceed
$36,000; and (e) in the case of the portion of such proceeds that remains
after giving effect to the foregoing provisions of this Section 4.13, for
working capital and general corporate purposes and for the payment of
principal of and interest on the New Xxxxxx Note in accordance with the
terms thereof and of Section 5.5.
4.14 CHANGE OF NAME. Not later than the close of business on the
second Business Day following the Closing Date, Xxxxxxxxx shall make all
filings with Governmental or Regulatory Authorities required to change its
name from "Xxxxxxxxx Industries LLC" to another dissimilar name and shall
do or cause to be done all other acts, including the payment of any fees
required in connection therewith, to cause such filings to become
effective. After the Closing Date, none of Xxxxxxxxx, the Owners or any of
their respective Affiliates shall do business as, or use in the conduct of
its businesses or otherwise the name "Xxxxxxxxx" or any other similar name;
PROVIDED, HOWEVER, that the Semi-Finished Buses retained by Xxxxxxxxx under
the Contribution Agreement shall display the name "Xxxxxxxxx" and any
related trademarks in a manner consistent with past practice.
4.15 DELIVERY OF BOOKS AND RECORDS, ETC. On the Closing Date,
Xxxxxxxxx will deliver to the Company at the Richmond Facility (or such
other location as the Company may reasonably request) (a) all of the Books
and Records relating to the Business or Condition of the Company (after
giving effect to the Contribution) and (b) such other Assets and Properties
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being contributed to the Company in the Contribution as are in the
possession of Xxxxxxxxx, any Owner or any of their respective Affiliates or
Associates at other locations. If at any time after the Closing Xxxxxxxxx
or any Owner discovers in its possession or under its control any other
such Books and Records or any other Assets and Properties contributed to
the Company in the Contribution, it will forthwith deliver such Books and
Records or other Assets to the Company.
4.16 RELOCATION AND COMPLETION OF SEMI-FINISHED BUSES. (a)
Xxxxxxxxx shall use its best efforts to (i) remove from the Richmond
Facility all Semi-Finished Buses and related items of tangible personal
property that are being retained by Xxxxxxxxx pursuant to the Contribution
Agreement and (ii) transport all such Semi-Finished Buses and tangible
personal property to the Xxxxxxxx Facility, in each case prior to the
Closing Date; PROVIDED, HOWEVER, that all such Semi-Finished Buses shall be
so removed and transported within 15 days after the Closing Date. Such
removal and transportation shall be at the sole expense and risk of
Xxxxxxxxx; PROVIDED, HOWEVER, that the Owners shall reimburse the Company
promptly following the Closing Date for all out-of-pocket expenses
incurred by the Company (or, prior to the Closing Date, by Xxxxxxxxx) in
connection therewith. None of the Company or the Investors shall have any
liability to Xxxxxxxxx, any Owner or any other person with respect to such
removal or transportation, and the Owners and Xxxxxxxxx shall jointly and
severally indemnify and hold harmless the Company and the Investors from
and against any and all Losses resulting from such removal and
transportation.
(b) From and after the Closing Date, Xxxxxxxxx shall diligently
and promptly perform, at its own cost and expense and in a manner
consistent with Xxxxxxxxx'x and CMI's past practices, all work required to
cause each such Semi-Finished Bus to become a Federalled Bus. The Company
and its representatives shall be entitled to observe and inspect all such
work for the purpose of assuring such Semi-Finished Buses, upon becoming
Federalled Buses, will comply with applicable quality and safety standards.
Upon the request of Xxxxxxxxx at any time and from time to time, the
Company will lease to Xxxxxxxxx such equipment as is owned by the Company
and then located at the Xxxxxxxx Facility for the purpose of enabling
Xxxxxxxxx to complete work on such Semi-Finished Buses. Any such lease
shall be on such commercially reasonable terms as are agreed between
Xxxxxxxxx and the Company.
(c) As soon as practicable after any such Semi-Finished Bus has
become a Federalled Bus, Xxxxxxxxx shall deliver written notice thereof to
each of the Company and the requisite lenders under the agreements
governing the Newcourt inventory financing arrangement. As promptly as
practicable following the receipt of such notice by the Company and such
lenders, Xxxxxxxxx and the Company shall execute and deliver such mutually
satisfactory documents as are necessary to contemporaneously (i) transfer
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all of Xxxxxxxxx'x right, title and interest in and to such Federalled Bus
to the Company, free and clear of all Liens other than those granted by the
Company under the Newcourt inventory financing arrangement, (ii) transfer
to the Company all of Xxxxxxxxx'x right, title and interest in, to and
under any account receivable relating to such Federalled Bus, and all other
rights to payment and other rights retained by Xxxxxxxxx pursuant to the
Contribution Agreement in respect of such Federalled Bus, free and clear of
all Liens other than those granted by the Company under the Newcourt
inventory financing arrangement, and (iii) transfer to the Company all
Liabilities of Xxxxxxxxx in respect of such Federalled Bus under the
Newcourt inventory financing arrangement (other than any obligation to pay
interest in respect of the period prior to the date of such transfer).
(d) On the 15th day (or the next succeeding Business Day)
following the Closing Date, and at the end of each subsequent 15-day
period, Xxxxxxxxx and the Company will compare (i) the principal amount of
the Indebtedness transferred to the Company during such period pursuant to
clause (c)(iii) above to (ii) the amount of the receivables and other
payment rights (as adjusted for any related change orders or discounts)
transferred to the Company during such period pursuant to clause (c)(ii)
above. In the event that the amount determined pursuant to clause (i)
above exceeds the amount determined pursuant to clause (ii) above for any
such period, Xxxxxxxxx will forthwith pay to the Company a cash amount
equal to such excess, and in the event that the amount determined pursuant
to clause (ii) above exceeds the amount determined pursuant to clause (i)
above for any such period, the Company will forthwith pay to Xxxxxxxxx a
cash amount equal to such excess (it being understood that the provisions
of paragraph (c) above are intended to be "cash neutral" as between
Xxxxxxxxx and the Company).
(e) In the event that the prospective purchaser of such a
Federalled Bus refuses to accept delivery of such Federalled Bus after the
Company has used commercially reasonable efforts to effect such delivery,
then the Company shall deliver written notice of such refusal to Xxxxxxxxx
and the requisite lenders under the Newcourt inventory financing
arrangement as soon as practicable after the occurrence thereof. As
promptly as practicable following the receipt of such notice by Xxxxxxxxx
and such lenders, Xxxxxxxxx and the Company shall execute and deliver such
mutually satisfactory documents as are necessary to contemporaneously (i)
transfer all of the Company's right, title and interest in and to such
Federalled Bus to Xxxxxxxxx, free and clear of all Liens other than those
granted by Xxxxxxxxx under the Newcourt inventory financing arrangement,
(ii) transfer to Xxxxxxxxx all of the Company's right, title and interest
in, to and under any account receivable relating to such Federalled Bus,
and all other rights to payment in respect of such Federalled Bus, free and
clear of all Liens other than those granted by Xxxxxxxxx under the Newcourt
inventory financing arrangement, and (iii) transfer to Xxxxxxxxx all
Liabilities of the Company in respect of such Federalled Bus under the
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Newcourt inventory financing arrangement (other than any obligation to pay
interest in respect of the period beginning on the date on which such bus
was transferred to the Company pursuant to paragraph (c) above and ending
on the date of the transfer pursuant to clause (i) above). As soon as
practicable following the transfer of a Federalled Bus to Xxxxxxxxx
pursuant to this paragraph (e), Xxxxxxxxx shall pay all unpaid Indebtedness
under the Newcourt inventory financing arrangement in respect of such
Federalled Bus. Xxxxxxxxx and the Company shall cooperate with each other
in good faith to effect the disposition by Xxxxxxxxx, in a mutually
satisfactory manner, of any Federalled Bus that is transferred to Xxxxxxxxx
pursuant to this paragraph (e).
(f) Within 10 Business Days after the Closing Date, Xxxxxxxxx
shall pay to the Company a cash amount equal to the product of (i) $250
MULTIPLIED BY (ii) the number of Semi-Finished Buses being retained by
Xxxxxxxxx pursuant to the Contribution Agreement (it being understood that
such payment will be made in consideration of the Company's assumption
under the Contribution Agreement of warranty claims in respect of such
Semi-Finished Buses).
4.17 NON-COMPETITION. (a) Each of Xxxxxxxxx, Xx. XxxXxxx and
the Owners will (and will cause its Affiliates (other than the Company or
any Subsidiary thereof) to), for a period of five years from the Closing
Date, refrain from (either alone or in conjunction with any other Person,
or directly or indirectly):
(i) employing, engaging or seeking to employ or engage any Person
who within the prior twelve months had either been an officer of
Xxxxxxxxx or the Company or been otherwise employed in a managerial or
administrative position at the Richmond Facility (other than Xxxx
Xxxxxxx or Xxxxx Xxxxxxx), in each case unless the employment of such
manager, officer or other employee is terminated by the Company after
the Closing Date;
(ii) causing or attempting to cause (x) any client, customer or
supplier of the Company following the Closing to terminate or materially
reduce its business with the Company or any of its respective
Subsidiaries or (y) any officer, manager, other employee or consultant
of the Company or any of its Subsidiaries to resign from or sever a
relationship with the Company or any of its Subsidiaries; or
(iii) participating or engaging anywhere in the United States or
Canada in (other than through the ownership of the Company's capital
stock or of 5% or less of any class of securities registered under the
Exchange Act), or otherwise lending assistance (financial or otherwise)
to any Person participating or engaged anywhere in the United States or
Canada in, any of the lines of business which comprised the business of
Xxxxxxxxx on the date hereof or (before giving effect to the
Contribution) on the Closing Date;
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PROVIDED, HOWEVER, that notwithstanding the foregoing restrictions
contained in subparagraphs (ii)(x) and (iii) above, (x) Xxxxxxxxx may
complete all remaining work required to cause the Semi-Finished Buses
retained by Xxxxxxxxx pursuant to the Contribution Agreement to become
Federalled Buses, (y) Xxxxxxxxx shall be entitled to continue its tool and
die operations at the Xxxxxxxx Facility and (z) Xx. XxxXxxx, the Owners and
their respective Affiliates shall be entitled to participate and engage in
the Shuttle Bus Business.
(b) The parties hereto recognize that the Laws and public
policies of the various states of the United States may differ as to the
validity and enforceability of covenants similar to those set forth in this
Section 4.17. It is the intention of the parties that the provisions of
this Section 4.17 be enforced to the fullest extent permissible under the
Laws and policies of each jurisdiction in which enforcement may be sought,
and that the unenforceability (or the modification to conform to such Laws
or policies) of any provisions of this Section 4.17 shall not render
unenforceable, or impair, the remainder of the provisions of this Section
4.17. Accordingly, notwithstanding anything in Section 12.12 to the
contrary, if any provision of this Section 4.17 shall be determined to be
invalid or unenforceable, such invalidity or unenforceability shall be
deemed to apply only with respect to the operation of such provision in the
particular jurisdiction in which such determination is made and not with
respect to any other provision or jurisdiction.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 WAREHOUSING OF CERTAIN INVENTORY. Effective as of the
Closing, Xxxxxxxxx agrees that it shall, upon the request of the Company at
any time and from time to time, (a) store, in warehouse space located at
the Xxxxxxxx Facility, inventory and other items of tangible personal
property owned by the Company or used in the Company's business (other than
any such items of tangible personal property leased to Xxxxxxxxx pursuant
to Section 4.16(b)) and (b) provide all services reasonably requested by
the Company in connection therewith. The provision of such storage space
and services shall in each case be on commercially reasonable terms as
agreed between Xxxxxxxxx and the Company and approved by each Investor.
The agreements set forth in this Section 5.1 shall terminate on the earlier
of (i) the second anniversary of the Closing Date and (ii) such other date
as Xxxxxxxxx shall designate on not less than 10 Business Days' prior
written notice to the Company. Prior to the Closing, the Company shall
furnish each Investor with a list setting forth the approximate types and
amounts of inventory and other tangible personal property to be stored at
the Xxxxxxxx Facility on the Closing Date pursuant to this Section 5.1.
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5.2 DEBT RESTRUCTURING. The Company agrees that it shall use its
commercially reasonable efforts to complete the Debt Restructuring promptly
following the Closing, and each of the Owners, Xxxxxxxxx and the Investors
agrees to cooperate with the Company as reasonably requested by the Company
in connection therewith (it being understood that such cooperation shall
not under any circumstances involve guaranteeing any Indebtedness or other
obligations of the Company or otherwise providing any financial or other
undertakings to lenders). Notwithstanding the immediately preceding
sentence, in attempting to complete the Debt Restructuring, the Company
shall not be required to agree to any terms (including with respect to
interest rates and amortization) that, in the aggregate, are materially
more onerous than those under its existing debt agreements or to pay any
commitment or other fee which, in the Company's reasonable judgment, is
above the range of fees normally charged by financial institutions in
similar situations.
5.3 EXTENSION OR REFINANCING OF UNSECURED NEWCOURT INDEBTEDNESS.
In the event that the Company does not for any reason (a) refinance the
Unsecured Newcourt Indebtedness as part of the Debt Restructuring or (b)
extend the maturity date of the Unsecured Newcourt Indebtedness to a date
later than the first anniversary of the Closing Date, then the Company
shall have the right to require Xxxxxxxxx to (or cause one of its
Affiliates to) lend to the Company, at any time on or after the maturity
date of the Unsecured Newcourt Indebtedness (as the same may be extended
from time to time), all or any portion of the funds required to repay the
entire outstanding principal amount of the Unsecured Newcourt Indebtedness
(together with all accrued but unpaid interest thereon). In order to
exercise such right, the Company shall give Xxxxxxxxx prior written notice
of such exercise, which notice shall specify (i) the amount to be loaned by
Xxxxxxxxx (or such Affiliate, as the case may be) and (ii) the date on
which such loan is to be made (which in any event shall not be less than
five Business Days after the giving of such notice).
Following its receipt of such notice, Xxxxxxxxx shall (or shall
cause one of its Affiliates to) lend to the Company, in immediately
available funds, the amount specified in such notice. In consideration for
such loan, Xxxxxxxxx (or such Affiliate, as the case may be) shall receive
a promissory note issued by the Company on the following terms: (A) the
maturity date of such note shall be the first anniversary of the date on
which the loan evidenced thereby is made; (B) interest on the unpaid
principal amount of such note shall accrue at a rate per annum equal to the
prime rate as in effect from time to time plus 1%; (C) the principal amount
of such note may be prepaid at any time and from time to time, in whole or
in part, without penalty; (D) the Company's obligations in respect of such
note shall be secured by a second Lien on the Richmond Facility; (E) such
note shall be subordinated in right of payment to all other secured
Indebtedness for borrowed money of the Company outstanding from time to
time; (F) such note shall not be transferable other than to Xxxxxxxxx and
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its Affiliates; and (G) such note shall contain such other terms as the
Company's other lenders reasonably require.
5.4 REIMBURSEMENT OF CERTAIN COSTS RELATING TO SEMI-FINISHED
BUSES. (a) Commencing on January 2, 1997, Xxxxxxxxx (or, if the Closing
Date shall theretofore have occurred, the Company) shall conduct a physical
inventory of its raw materials and work in process inventory as of the
close of business on December 31, 1996. Such physical inventory shall be
observed by the Accounting Firm and, at the request of any Investor, by an
accounting firm of nationally recognized standing designated by such
Investor. Within 15 Business Days after the Closing Date, the Company
shall prepare and deliver to Xxxxxxxxx and each Investor a computation (the
"Inventory Computation") setting forth (i) the aggregate cost of all
materials issued out of raw materials and work in process inventory during
the period beginning on November 1, 1996 and ending on the Closing Date in
respect of Semi-Finished Buses held by Xxxxxxxxx at any time during such
period (the "Materials Cost") and (ii) to the extent not included in clause
(i) above, the aggregate cost of all raw materials and work in process
inventory retained by Xxxxxxxxx pursuant to the Contribution Agreement (the
"Retained Inventory Cost"). The Inventory Computation shall be prepared on
the basis of the aforementioned physical inventory and such other
procedures as are mutually acceptable to the Accounting Firm and Price
Waterhouse (or such other firm of independent certified public accountants
of recognized national standing as the Investors may designate) and shall
be accompanied by a certificate to such effect from the Company's
Treasurer.
(b) Within 15 days after the Closing Date, the Company shall
prepare and deliver to Xxxxxxxxx and each Investor a computation (the
"Labor Computation") setting forth the aggregate direct labor cost incurred
during the period beginning on November 1, 1996 and ending on the Closing
Date in respect of Semi-Finished Buses held by Xxxxxxxxx at any time during
such period (the "Labor Cost"). The Labor Computation shall be prepared in
accordance with such procedures as are mutually acceptable to the
Accounting Firm and Price Waterhouse (or such other firm of independent
certified public accountants of recognized national standing as the
Investors may designate) and shall be accompanied by a certificate to such
effect from the Company's Treasurer.
(c) The Company shall (and shall cause the Accounting Firm to)
make available to Xxxxxxxxx and each Investor all work papers and related
data used in the preparation of the Inventory Computation and the Labor
Computation.
(d) Except as otherwise provided in paragraph (e) below, within
20 days after the delivery of the Inventory Computation and the Labor
Computation to the Company and each Investor, Xxxxxxxxx shall pay to the
Company a cash amount equal to the amount, if any, by which (i) the sum of
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(x) the Materials Cost PLUS (y) the Retained Inventory Cost PLUS (z) the
Labor Cost exceeds (ii) $1,667,494, and shall also pay to the Company all
interest accrued on such amount from and after the last day of such 20-day
period at a rate per annum equal to the prime rate.
(e) If Xxxxxxxxx or any Investor disagrees with the computation
of Materials Cost or Retained Inventory Cost set forth in the Inventory
Computation or the computation of Labor Cost set forth in the Labor
Computation, such person shall notify the Company of such disagreement
(including the amount in dispute) within 20 days after its receipt of the
Inventory Computation or the Labor Computation, as the case may be. If
none of Xxxxxxxxx or the Investors so provides notice within such 20-day
period disagreeing with any such computation, then such computation as set
forth in the Inventory Computation or the Labor Computation, as the case
may be, shall, as of the last day of such period, be final and binding on
the parties hereto. If any of Xxxxxxxxx or the Investors so provides such
notice within such period, but no such notice of disagreement disputes that
the sum referred to in clause (i) of paragraph (d) above exceeds
$1,667,494, then Xxxxxxxxx shall pay to the Company, in partial
satisfaction of its obligations under paragraph (d) above, an amount equal
to the undisputed portion of such excess (together with any accrued
interest on such amount) within one Business Day after the last day of such
period. If any of Xxxxxxxxx or the Investors so provides notice within
such period disagreeing with any such computation, then (unless the matters
in disagreement have been resolved by Xxxxxxxxx, the Company and the
Investors in full) within 20 days after the Company's receipt of such
notice, Xxxxxxxxx, the Company and the Investors shall engage the
Independent Accounting Firm to review such computation. The Independent
Accounting Firm shall render a written opinion with respect to such
computation as soon as practicable after its engagement, and such opinion
shall, as of the date thereof, be final and binding on the parties hereto.
Xxxxxxxxx shall pay all amounts required to be paid by it under paragraph
(d) above within three Business Days after its receipt of such opinion.
The fees of the Independent Accounting firm shall be borne by the
disagreeing party if the Company's determination of the amount in question
as set forth in the Inventory Computation or the Labor Computation, as the
case may be, is found by the Independent Accounting Firm to be within
$50,000 of being correct, and otherwise by the Company.
5.5 ADJUSTMENT OF NEW XXXXXX NOTE. (a) Within 15 days after the
Closing Date, the Company shall prepare and deliver to Xxxxxxxxx and each
Investor a report setting forth the Net Contribution Amount for the period
beginning on September 1, 1996 and ending on the Closing Date. Such report
shall be accompanied by a certificate from the Accounting Firm confirming
the accuracy of the Net Contribution Amount. The Company shall (and shall
cause the Accounting Firm to) make available to Xxxxxxxxx and each Investor
all work papers and related data used in the preparation of such report.
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(b) Subject to paragraph (c) below, on the first Business Day
after such Net Contribution Amount is finally determined pursuant to
paragraph (c) below, (i) the original principal amount of the New Xxxxxx
Note will be adjusted to equal the amount, if any, by which (x) such Net
Contribution Amount EXCEEDS (y) $7,500,000, and (b) the Company shall repay
the entire unpaid principal amount of the New Xxxxxx Note (as so adjusted),
together with all accrued but unpaid interest thereon.
(c) If Xxxxxxxxx or any Investor disagrees with the computation
of such Net Contribution Amount as set forth in the report delivered
pursuant to paragraph (a) above, such person shall notify the Company of
such disagreement (including the amount in dispute) within seven days after
its receipt of such report. If none of Xxxxxxxxx or the Investors so
provides notice within such seven-day period, the determination of such Net
Contribution Amount as set forth in such report shall, as of the last day
of such period, be final and binding on the parties hereto. If any of
Xxxxxxxxx or the Investors so provides such notice within such period, but
no such notice of disagreement disputes that such Net Contribution Amount
exceeds $7,500,000, then the Company shall prepay principal of the New
Xxxxxx Note (together with any accrued but unpaid interest on such prepaid
principal) in an amount equal to the undisputed portion of such excess
within one Business Day after the last day of such period. If any of
Xxxxxxxxx or the Investors so provides notice within such period, then
(unless the matters in disagreement have been resolved by Xxxxxxxxx, the
Company and the Investors in full) within 20 days after the Company's
receipt of such notice, Xxxxxxxxx, the Company and the Investors shall
engage the Independent Accounting Firm to review such computation. The
Independent Accounting Firm shall render a written opinion with respect to
such computation as soon as practicable after its engagement, and such
opinion shall, as of the date thereof, be final and binding on the parties
thereto. The fees of the Independent Accounting Firm shall be borne by the
disagreeing party if the determination of such Net Contribution Amount as
set forth in such report is found by the Independent Accounting Firm to be
within $100,000 of being correct, and otherwise by the Company.
5.6 CERTAIN EMPLOYEE MATTERS. (a) The Company shall offer
employment to employees actively employed at the Richmond Facility as of
the Closing Date on such terms and conditions (including benefit plan
coverages) that are, in the aggregate, no less favorable than those on
which such employees were employed by Xxxxxxxxx immediately prior to the
Closing. All such employees who accept employment with the Company are
hereinafter referred to as the "TRANSFERRED EMPLOYEES." Periods of service
prior to the Closing shall be credited for purposes of determining
eligibility, vesting and benefit entitlement under all benefit plans,
programs and policies maintained by the Company after the Closing, and
amounts credited prior to the Closing for purposes of determining health
plan deductibles shall be credited after the Closing.
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(b) Effective as of the Closing, Xxxxxxxxx shall take all such
actions as may be necessary to cause all Transferred Employees to cease to
participate in all Benefit Plans, and the Company shall have no obligations
thereunder or with respect thereto. The Owners and Xxxxxxxxx shall be
solely responsible for, and the Owners and Xxxxxxxxx shall indemnify and
hold harmless the Company and the Investors from and against (i) any and
all Liabilities which have arisen or may arise in connection with any
Benefit Plan (including, but not limited to, Liabilities arising from
penalties, income or excise tax assessments, participant benefit claims or
fiduciary misconduct, or under Title IV of ERISA), (ii) any and all
Liabilities which have arisen or may arise in any way from the employment,
compensation or benefits of any employee, agent, contractor or consultant
currently or heretofore engaged by Xxxxxxxxx or CMI, whether or not
employed by the Company after the Closing, or the termination thereof,
relating to any period of employment with Xxxxxxxxx or CMI, including any
liability or obligation arising out of or relating to any act or omission
by Xxxxxxxxx or CMI, any violation of or non-compliance with or obligation
arising under any applicable law respecting employment, compensation or
benefits, and (iii) any and all costs, liabilities and obligations for
severance pay, accrued vacation pay, sick pay and other benefits relating
to any period of employment with Xxxxxxxxx or CMI, whether arising as a
matter of Contract, Law or otherwise.
(c) (i)The Company shall establish or maintain, effective as of
the Closing Date, a defined contribution profit sharing plan qualified
under Section 401(a) of the Code and exempt under Section 501(a) of the
Code (the "Company Plan") for the benefit of Transferred Employees who
are covered by the Xxxxxxxxx 401(k) Plan (the "Xxxxxxxxx Plan") as of
the Closing Date.
(ii) Xxxxxxxxx shall direct the trustee of the Xxxxxxxxx Plan to
segregate the portion of each investment fund thereunder attributable to
the aggregate individual account balances of Transferred Employees (whether
or not vested), and to transfer in cash or in kind, as determined by
Company, such segregated portion of each investment fund to the Company
Plan. The transfer shall be effected as soon as is practicable after the
Closing and individual account balances shall be determined as of the date
of such transfer.
(d) (i)The Company shall establish for eligible Transferred
Employees a group health plan or plans which provides coverage
substantially comparable to that in effect with Xxxxxxxxx immediately
prior to the Closing and, to the extent commercially reasonable, without
exclusion for pre-existing conditions.
(ii) If requested by Company, Xxxxxxxxx shall cooperate with the
Company in effecting an assignment to the Company of any policies of
insurance for the provision of health or welfare benefits to Transferred
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Employees, and administrative contracts relating thereto, PROVIDED that the
assignment of any such policy shall not be construed as an assumption by
the Company of any plan of Xxxxxxxxx or any liability thereunder if not
otherwise payable pursuant to the terms of the policy.
(iii) Without limiting the scope of Section 5.6(b), Xxxxxxxxx
shall be responsible for: (x) providing retiree health or life insurance
coverage with respect to any individual who is not a Transferred Employee,
(y) all claims regarding all injuries or illnesses occurring prior to the
Closing, and (z) providing continuation health coverage as required under
Part 6 of Subtitle B of Title I of ERISA with respect to any individual who
is not a Transferred Employee.
(e) Xxxxxxxxx and the Investors agree that, following the
Closing, each of them shall direct the board of directors of the Company to
establish, within one year after the Closing Date, a stock option plan for
certain key employees of the Company with respect to the reservation of up
to 7% of the Common Stock (on a fully diluted basis) for issuance pursuant
to such plan.
(f) Nothing in this Section 5.6 express or implied shall be
construed to prevent the Company from modifying the terms and conditions of
employment of any Transferred Employee, or from terminating or modifying to
any extent or in any respect any benefit plan that the Company may
establish or maintain from time to time.
(g) Nothing in this Section 5.6, whether express or implied,
shall confer upon any Transferred Employee or other individual or legal
representative thereof any rights or remedies, including any right to
employment, continued employment for any specified period, or compensation
or benefits of any nature or kind whatsoever under or by reason of this
Agreement.
5.7 SPARTAN NON-COMPETITION COVENANT. (a) Spartan will (and
will cause its Affiliates (other than the Company or any Subsidiary
thereof) to), for a period of five years from the Closing Date, refrain
from (either alone or in conjunction with any other Person, or directly or
indirectly) participating or engaging anywhere in the United States or
Canada (other than through the ownership of the Company's capital stock or
of 5% or less of any class of securities registered under the Exchange Act)
in the design, manufacture or sale of vehicle bodies for any line of
business which comprises part of the business of the Company (after giving
effect to the Contribution); PROVIDED, HOWEVER, that nothing in this
Section 5.7 shall prohibit Spartan from engaging in any of the lines of
business which comprise its business as of the date hereof.
(b) The parties hereto recognize that the Laws and public
policies of the various states of the United States may differ as to the
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validity and enforceability of covenants similar to those set forth in this
Section 5.7. It is the intention of the parties that the provisions of
this Section 5.7 be enforced to the fullest extent permissible under the
Laws and policies of each jurisdiction in which enforcement may be sought,
and that the unenforceability (or the modification to conform to such Laws
or policies) of any provisions of this Section 5.7 shall not render
unenforceable, or impair, the remainder of the provisions of this Section
5.7. Accordingly, notwithstanding anything in Section 12.12 to the
contrary, if any provision of this Section 5.7 shall be determined to be
invalid or unenforceable, such invalidity or unenforceability shall be
deemed to apply only with respect to the operation of such provision in the
particular jurisdiction in which such determination is made and not with
respect to any other provision or jurisdiction.
5.8 SALE OF XXXXXXXX FACILITY. In the event the Xxxxxxxx
Facility shall be sold, either alone or in connection with any sale of the
business of Xxxxxxxxx or substantially all of the Assets and Properties of
Xxxxxxxxx or the equity interests in Xxxxxxxxx to any Person other than the
Company (and whether in one transaction or a series of related
transactions), at any time prior to the fourth anniversary of the Closing
Date, Xxxxxxxxx shall contribute to the capital of the Company, without
additional consideration to Xxxxxxxxx, an amount equal to the lesser of (a)
$1,800,000 and (b) either (i) in the event the Xxxxxxxx Facility is sold
alone, the net proceeds of such sale after deducting therefrom the direct
selling costs (which shall not include the cost of performing or causing to
be performed, any remediation of a condition of the Xxxxxxxx Facility which
is or may be in violation of or not in compliance with any Environmental
Laws or Environmental Permits), or (ii) in the event of the sale of the
Xxxxxxxx Facility in connection with the sale of Xxxxxxxxx'x business,
Assets and Properties or equity interests, an amount equal to the
"Applicable Percentage" of the net proceeds of the sale (including, as part
of such net proceeds, all Liabilities of Xxxxxxxxx being assumed by the
purchaser), after payment of the "Applicable Percentage" of the direct
selling costs of such sale. The "Applicable Percentage" shall be a
fraction, the numerator of which shall be $1,800,000 and the denominator of
which shall be the net proceeds to be paid to Xxxxxxxxx (or its owners) in
such sale.
5.9 NEW LINES OF COMPANY BUSINESS. (a) In the event that the
Company or any Subsidiary thereof proposes to enter into any line of
business comprised of the manufacture, design or sale of (i) fire trucks,
(ii) recreational vehicles, (iii) shuttle buses, (iv) transit buses (other
than school buses and small school buses which are modified to serve as
transit buses) or (v) cement mixers (collectively, the "Existing Spartan
Businesses"), the Company shall notify Spartan of its (or its Subsidiary's)
intention to enter into such line of business before doing so. In the
event that, within 30 days after the delivery of such notice, Spartan
delivers a written notice to the Company stating that Spartan vetoes the
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entry by the Company or such Subsidiary into such line of business, then
the Company shall not (and shall not permit any of its Subsidiaries to)
enter into such line of business prior to the earlier date specified in
paragraph (c) below.
(b) In the event that Spartan or any subsidiary thereof proposes
to enter into any line of business other than the Existing Spartan
Businesses, Spartan shall notify the Company in writing of its (or its
subsidiary's) intention to enter into such line of business before doing
so. In the event that, within 30 days after its receipt of such notice,
the Company delivers a written notice to Spartan to the effect that the
Company also desires to enter into such line of business, then Spartan and
the Company shall negotiate in good faith to provide for the entry by
Spartan (or such subsidiary) and the Company into such line of business on
mutually satisfactory terms. In the event that the Company does not
deliver such a notice to Spartan within such 30-day period or notifies
Spartan that it does not intend to enter into such line of business, then
the Company shall not (and shall not permit any of its Subsidiaries to)
enter into such line of business prior to the earlier date specified in
paragraph (c) below.
(c) The agreements contained in this Section 5.9 shall terminate
and be of no further force and effect from and after the earlier of (i) the
fifth anniversary of the Closing Date and (ii) the first date as of which
Spartan ceases to own at least 20% of the Common Stock on a fully diluted
basis.
5.10 PROVISION OF PARTS AND SERVICES. Effective as of the
Closing, the Company agrees that it shall, upon the reasonable request of
Xxxxxxxxx at any time and from time to time, (a) supply Xxxxxxxxx with
parts required to complete work on the Semi-Finished Buses being retained
by Xxxxxxxxx pursuant to the Contribution Agreement and (b) provide
administrative and support services to Xxxxxxxxx, including accounting and
management information services. The provision of such services shall in
each case be on commercially reasonable terms as agreed between Xxxxxxxxx
and the Company and approved by each Investor. The Company shall furnish
to each Investor, on a weekly basis, a report setting forth in reasonable
detail the amount and terms of such transactions during the preceding week.
The agreements set forth in this Section 5.10 shall terminate on the date
that is six months after the Closing Date.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF THE INVESTORS
The obligations of each Investor hereunder are subject to the
fulfillment, at or before the Closing, of each of the following conditions
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(all or any of which may be waived in whole or in part (as to such
Investor) by such Investor in its sole discretion):
6.1 REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by the Owners, Xxxxxxxxx or the Company in this
Agreement shall be true and correct in all material respects (if not
qualified by materiality) or in all respects (if qualified by materiality)
on and as of the Closing Date as though such representation or warranty was
made on and as of the Closing Date, and any representation or warranty made
as of a specified date earlier than the Closing Date shall also have been
true and correct in all material respects (if not qualified by materiality)
or in all respects (if qualified by materiality) on and as of such earlier
date.
6.2 PERFORMANCE. Each of the Owners, Xxxxxxxxx and the Company
shall have performed and complied with, in all material respects, each
agreement, covenant and obligation required by this Agreement to be
performed or complied with by such Person at or before the Closing.
6.3 OFFICERS' CERTIFICATES. Each of the Company and Xxxxxxxxx
shall have delivered to the Investors a certificate, dated the Closing Date
and executed by its Chairman of the Board, its President or one of its Vice
Presidents, substantially in the form and to the effect of EXHIBIT A-1 (in
the case of the Company) or A-2 (in the case of Xxxxxxxxx), and a
certificate, dated the Closing Date and executed by its Secretary or one of
its Assistant Secretaries substantially in the form and to the effect of
EXHIBIT B-1 (in the case of the Company) or B-2 (in the case of Xxxxxxxxx).
6.4 ORDERS AND LAWS. There shall not be in effect on the Closing
Date any Order or Law restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions contemplated by
this Agreement or any of the Operative Agreements or which could reasonably
be expected to otherwise result in a material diminution of the benefits of
the transactions contemplated by this Agreement or any of the Operative
Agreements to any Investor, and there shall not be pending or threatened on
the Closing Date any Action or Proceeding or any other action (i) which
could reasonably be expected to result in the issuance of any such Order or
the enactment, promulgation, or deemed applicability to Investor, any
Owner, Xxxxxxxxx, the Company, or any of the transactions contemplated by
this Agreement or any of the Operative Agreements, of any such Law; or (ii)
wherein an unfavorable judgment, decree or Order would prevent the carrying
out of this Agreement or any of the Operative Agreements or any of the
transactions or events contemplated hereby or thereby, declare unlawful any
of the transactions contemplated by this Agreement or present a risk of
damages to any Investor.
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6.5 REGULATORY CONSENTS AND APPROVALS. All consents, approvals
and actions of, filings with and notices to any Governmental or Regulatory
Authority necessary to permit the Investors, the Owners, Xx. XxxXxxx,
Xxxxxxxxx and the Company to perform their respective obligations under
this Agreement and the Operative Agreements and to consummate the
transactions contemplated hereby and thereby (a) shall have been duly
obtained, made or given, (b) shall be in form and substance reasonably
satisfactory to each Investor, (c) shall not impose any limitations or
restrictions on any Investor, any Owner, Xx. XxxXxxx, Xxxxxxxxx or the
Company, (d) shall not be subject to the satisfaction of any condition that
has not been satisfied or waived and (e) shall be in full force and effect,
and all terminations or expirations of waiting periods imposed by any
Governmental or Regulatory Authority necessary for the consummation of the
transactions contemplated by this Agreement and the Operative Agreements
shall have occurred.
6.6 THIRD PARTY CONSENTS. The consents (or in lieu thereof
waivers) disclosed and designated with an asterisk in SECTIONS 2.5 AND 2.6
OF THE DISCLOSURE SCHEDULE, and all other consents (or in lieu thereof
waivers) to the performance by the Investors, the Owners, Xxxxxxxxx and
the Company of their respective obligations under this Agreement and the
Operative Agreements or to the consummation of the transactions
contemplated hereby and thereby as are required under any Contract to which
any Investor, any Owner, Xxxxxxxxx or the Company is a party or by which
any of their respective Assets and Properties are bound and where the
failure to obtain any such consent (or in lieu thereof waiver) could
reasonably be expected, individually or in the aggregate with other such
failures, to materially adversely affect any Investor or the Business or
Condition of Xxxxxxxxx or the Company or otherwise result in a material
diminution of the benefits of the transactions contemplated by this
Agreement and the Operative Agreements to any Investor in its sole
discretion, (a) shall have been obtained, (b) shall be in form and
substance satisfactory to each Investor in its sole discretion, (c) shall
not be subject to the satisfaction of any condition that has not been
satisfied or waived and (d) shall be in full force and effect. Without
limiting the generality of the foregoing, each Investor shall have received
written instruments from the lenders under the Xxxxx Bank revolving credit
facility and from Newcourt Financial USA, Inc., in form and substance
satisfactory to such Investor, to the effect that (i) there are no uncured
defaults or events of default under the Xxxxx Bank revolving credit
facility or (after giving effect to the Restructuring Transactions) the
agreements relating to the Newcourt inventory financing arrangement, or
that any such defaults or events of default are permanently waived, (ii) in
the case of the Xxxxx Bank revolving credit facility, after giving effect
to the repayment of outstanding amounts under such revolving credit
facility contemplated by Section 4.13, the Company will be eligible to
incur additional borrowings of not less than $7 million in aggregate
principal amount under such revolving credit facility and (iii) the
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maturity date of the Unsecured Newcourt Indebtedness has been extended to a
date not earlier than February 15, 1997. Each Investor shall have received
evidence satisfactory to it that the portion of the loans and commitments
held by People's Bank under the Xxxxx Bank revolving credit facility shall
be assigned on or prior to February 15, 1997, to a reputable financial
institution (or to SerVaas, Inc., Xxxxxx or any Affiliate thereof
reasonably satisfactory to such Investor) on the basis of the commitment
termination dates contained in such facility on the date hereof. Each
Investor shall have received evidence satisfactory to it that the
Restructuring Transactions have been completed on terms satisfactory to it.
6.7 OPINION OF COUNSEL. Each Investor shall have received the
opinion of Leeuw, Plopper & Xxxxxx, counsel to the Owners, Xxxxxxxxx and
the Company, dated the Closing Date, substantially in the form and to the
effect of EXHIBIT C, and to such further effect as any Investor may
reasonably request.
6.8 GOOD STANDING CERTIFICATES. The Company shall have delivered
to each Investor (a) certified copies of the Charter Documents as in effect
on the Closing Date, (b) copies of the certificates or articles of
formation or incorporation (or other comparable constitutive documents),
including all amendments thereto, of each Subsidiary (if any), in each case
certified by the Secretary of State or other appropriate official of the
jurisdiction of formation or incorporation, (c) certificates from the
Secretary of State of the State of Delaware to the effect that the Company
is in good standing or subsisting in such State, listing all charter
documents of the Company on file with such Secretary of State and attesting
to the Company's payment of all franchise or similar Taxes imposed by such
State and (d) a certificate from the Secretary of State or other
appropriate official in each jurisdiction in which the Company is
qualified, licensed or admitted to do business to the effect that the
Company is duly qualified or admitted and in good standing in such
jurisdiction.
6.9 OTHER AGREEMENTS. The Operative Agreements shall have been
duly executed and delivered by the respective parties thereto other than
the relevant Investor and shall be in full force and effect.
6.10 DELIVERY OF CERTIFICATES. Duly executed certificates
representing 300 shares of Purchased Stock shall have been delivered to
each Investor.
6.11 CONTRIBUTION. The Contribution shall have been completed
pursuant to the terms of the Contribution Agreement.
6.12 CONTEMPORANEOUS INVESTMENT BY OTHER INVESTOR. Each Investor
shall have received evidence satisfactory to it that, concurrently with its
purchase of the Purchased Stock being purchased by it hereunder, the other
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Investor shall have paid the Purchase Price to the Company in cash in
consideration for the issuance to such other Investor of the Purchased
Stock being purchased by such other Investor hereunder.
6.13 REAFFIRMATION OF GUARANTEES. Each Investor shall have
received evidence satisfactory in form and substance to it that each
guarantee of Indebtedness or other obligations of Xxxxxxxxx identified in
SECTION 2.18(A)(VI) OF THE DISCLOSURE SCHEDULE shall have been either (i)
confirmed by the guarantor thereunder as continuing in full force and
effect notwithstanding the assumption of the guaranteed Indebtedness or
other obligations by the Company pursuant to the Contribution Agreement or
(ii) except in the case of the Xxxxx Bank revolving credit facility,
released, on terms satisfactory to such Investor, by the Person to whom the
guaranteed Indebtedness or other obligations are owed.
6.14 AFFILIATE TRANSACTIONS. Each of the Contracts, Liabilities
of Xxxxxxxxx and other arrangements listed in SECTION 2.18(A)(VIII) OR
SECTION 2.21(A) OF THE DISCLOSURE SCHEDULE and not designated with an
asterisk therein (other than the loans and leases expressly excluded from
the definition of "Restructuring Transactions" in Section 4.9) shall have
been terminated without any further Liability on the part of Xxxxxxxxx or
the Company, and each Investor shall have received evidence satisfactory to
it of such termination.
6.15 BUSINESS PLAN. The Owners shall have approved, and there
shall have been delivered to each Investor, a written and detailed two year
operating and strategic plan for the Company satisfactory to such Investor
in its sole discretion.
6.16 NO ADVERSE CHANGE. Except as set forth in SECTION 2.9 OF THE
DISCLOSURE SCHEDULE, there shall not have occurred any material adverse
change in the Business or Condition of Xxxxxxxxx or the Company since the
Audited Financial Statement Date.
6.17 BOARD OF DIRECTORS. The board of directors of the Company
shall consist of the following six persons: Xxxxxx Xxxxxxxx, Xxxxxxx X.
Xxxxxx, Xxxxxx X. Xxxx-Xxxx, Xxxxxxx X. Xxxxxx, Xx. XxxXxxx and Xxxxxxx X.
Xxxxxx.
6.18 EMC XXXXXXX AGREEMENT. Xxxxxxxxx shall have obtained either
a verbal or written commitment satisfactory to each Investor from E.M.C.
Enterprises Xxxxxx Xxxxxxx, Inc. ("Xxxxxxx") that the Fundamentals of a
Strategic Alliance Agreement between Xxxxxxx and Xxxxxxxxx Industries, Inc.
dated February 1, 1995 shall be modified promptly following the Closing in
a manner reasonably satisfactory to such Investor to reflect the actual
relationship between Xxxxxxxxx and Xxxxxxx.
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6.19 AIR EMISSIONS. Each Investor shall have received assurances
from its environmental consultant satisfactory to it in its sole discretion
to the effect that: (a) no material penalties will be assessed against the
Company as a result of any non-compliance with any Environmental Laws or
Environmental Permits relating to air emissions from or at the Richmond
Facility; (b) the Richmond Facility will not be subject to "New Source
Review," "Prevention of Significant Deterioration," or "Reasonably
Available Control Technology" requirements as defined under applicable
Environmental Laws; and (3) no material expenditures will be required under
applicable Environmental Laws or Environmental Permits for the installation
of air emissions control technology at the Richmond Facility.
6.20 CERTIFICATE OF XX. XXXXXXX. Xx. XxxXxxx shall have executed
and delivered to the Investors a certificate, dated the Closing Date,
substantially in the form and to the effect of Exhibit K.
6.21 BY-LAWS AMENDMENT. The by-laws of the Company shall have
been amended, in a manner satisfactory in form and substance to each
Investor, to create the office of "executive vice president--
manufacturing" and to make such other changes as are necessary or
appropriate in connection with the Stockholders' Agreement.
6.22 INSURANCE CERTIFICATES. Each Investor shall have received
satisfactory written assurances from the Company's insurers to the effect
that effective as of the Closing Date, (a) the Company has obtained
(i) directors' and officers' and product liability insurance in amounts and
on terms satisfactory to such Investor and (ii) health and excess health
insurance policies comparable to Xxxxxxxxx'x existing policies and (b) the
insurance policies listed in SECTION 2.20 OF THE DISCLOSURE SCHEDULE have
been properly assigned to the Company.
6.23 PROCEEDINGS. All proceedings to be taken on the part of the
Owners, Xxxxxxxxx or the Company in connection with the transaction
contemplated by this Agreement and all documents incident thereto shall be
reasonably satisfactory in form and substance to each Investor, and each
Investor shall have received copies of all such documents and other
evidences as such Investor may reasonably request in order to establish the
consummation of such transactions and the taking of all proceedings in
connection therewith.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company hereunder are subject to the
fulfillment, at or before the Closing, of each of the following conditions
(all or any of which may be waived in whole or in part by the Company in
its sole discretion):
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7.1 REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by any Investor in this Agreement shall be true and
correct in all material respects on and as of the Closing Date as though
such representation or warranty was made on and as of the Closing Date.
7.2 PERFORMANCE. Each Investor shall have performed and complied
with, in all material respects, each agreement, covenant and obligation
required by this Agreement to be performed or complied with by such
Investor at or before the Closing including the payment of the Purchase
Price by such Investor.
7.3 CERTIFICATES. REI II shall have delivered to the Company a
certificate, dated the Closing Date and executed by the general partner of
REI II, substantially in the form and to the effect of EXHIBIT H. Spartan
shall have delivered to the Company a certificate, dated the Closing Date
and executed by the President or any Vice President of Spartan,
substantially in the form and to the effect of EXHIBIT I, and a
certificate, dated the Closing Date and executed by the Secretary or any
Assistant Secretary of Spartan, substantially in the form and to the effect
of EXHIBIT J.
7.4 ORDERS AND LAWS. There shall not be in effect on the Closing
Date any Order or Law that became effective after the date of this
Agreement restraining, enjoining or otherwise prohibiting or making illegal
the consummation of any of the transactions contemplated by this Agreement
or any of the Operative Agreements.
7.5 REGULATORY CONSENTS AND APPROVALS. All consents, approvals
and actions of, filings with and notices to any Governmental or Regulatory
Authority necessary to permit the Owners, Dr. SerVaas, Carpenter, the
Company and the Investors to perform their respective obligations under
this Agreement and the Operative Agreements and to consummate the
transactions contemplated hereby and thereby (a) shall have been duly
obtained, made or given, (b) shall not be subject to the satisfaction of
any condition that has not been satisfied or waived and (c) shall be in
full force and effect, and all terminations or expirations of waiting
periods imposed by any Governmental or Regulatory Authority necessary for
the consummation of the transactions contemplated by this Agreement and the
Operative Agreements shall have occurred.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
8.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
AGREEMENTS. Notwithstanding any right of any Investor (whether or not
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exercised) to investigate the affairs of Xxxxxxxxx or the Company or any
right of any party (whether or not exercised) to investigate the accuracy
of the representations and warranties of the other party contained in this
Agreement or the waiver of any condition to Closing, each of the Owners,
Xxxxxxxxx, the Company and the Investors has the right to rely fully upon
the representations, warranties, covenants and agreements of the others
contained in this Agreement. The representations, warranties, covenants
and agreements of the Owners, Xxxxxxxxx, the Company and the Investors
contained in this Agreement, the Contribution Agreement, and any
certificate or other document provided hereunder or thereunder will survive
the Closing (a) until the sixth anniversary of the Closing Date with
respect to the representations and warranties contained in Sections 2.1,
2.2, 2.3, 2.4, 2.25, 2.26, 2.27 and (as it relates to the foregoing
Sections) 2.28 and 3.1, (b) until the later of (i) 60 calendar days after
the expiration of all applicable statutes of limitation (including all
periods of extension, whether automatic or permissive) and (ii) the fifth
anniversary of the Closing Date with respect to the representations and
warranties contained in Sections 2.11, 2.14, 2.23 and (as it relates to the
foregoing Sections) 2.28, (c) until the second anniversary of the Closing
Date with respect to all other representations and warranties or (d) with
respect to each covenant or agreement contained in this Agreement, the
Contribution Agreement or any certificate provided hereunder or thereunder,
indefinitely, except that any representation, warranty, covenant or
agreement that would otherwise terminate in accordance with clause (a), (b)
or (c) above will continue to survive if a Claim Notice or Indemnity Notice
(as applicable) shall have been timely given under Article IX on or prior
to such termination date, until the related claim for indemnification has
been satisfied or otherwise resolved as provided in Article IX, but only
with respect to matters described in the Claim Notice or Indemnity Notice.
ARTICLE IX
INDEMNIFICATION
9.1 INDEMNIFICATION.
The Owners and Xxxxxxxxx shall jointly and severally indemnify
each Investor and its general partner and limited partners and the
officers, directors, employees, agents and Affiliates of such Investor or
any such general or limited partner, in respect of, and hold each of them
harmless from and against, any and all Losses (after giving effect to any
net proceeds from insurance actually received by the Indemnified Parties)
suffered, incurred or sustained by any of them or to which any of them
becomes subject, resulting from, arising out of or relating to: (i) any
misrepresentation or breach of warranty (subject to any applicable survival
period with respect thereto under Section 8.1) or nonfulfillment of or
failure to perform any covenant or agreement on the part of the Owners,
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Xxxxxxxxx or the Company contained in this Agreement or the Contribution
Agreement (other than any nonfulfillment or failure on the part of the
Company to perform any such covenant or agreement that relates solely to
the period following the Closing); (ii) the issuance of the Letter of
Intent dated September 23, 1996, relating to REI II's proposed investment
in Xxxxxxxxx; (iii) (A) the presence, Release or threatened Release of any
Hazardous Materials existing as of or prior to the Closing Date at, from,
in, to, on or under the Xxxxxxxx Facility or any real property located in
Mitchell, Indiana that was formerly owned, leased or operated by Xxxxxxxxx,
the Company, any predecessor of Xxxxxxxxx or the Company, or any entity
previously owned by Xxxxxxxxx or the Company (collectively, the "Former
Xxxxxxxx Properties"), (B) the transportation, treatment, storage, handling
or disposal, or arrangement for transportation, treatment, storage,
handling or disposal, of Hazardous Materials at, to or from the Xxxxxxxx
Facility or any Former Xxxxxxxx Property by Xxxxxxxxx or the Company, any
predecessor of Xxxxxxxxx or the Company, or any entity previously owned by
Xxxxxxxxx or the Company, (C) any violation of Environmental Law at the
Xxxxxxxx Facility or any Former Xxxxxxxx Property prior to the Closing or
(D) any and all arrangements with American Print Towel for treatment,
storage, transportation, disposal or handling of Hazardous Materials
(including but not limited to rags containing solvents) generated by
Xxxxxxxxx, any of its predecessors or any entity previously owned by
Xxxxxxxxx; (iv) any Liability for Taxes of Xxxxxxxxx Body Works, Inc., CMI
or Xxxxxxxxx, including any Lien on the Assets and Properties of the
Company resulting from such a Liability (other than Indiana property taxes
that are not yet due and payable and either (i) have been properly accrued
as a liability on the Pro Forma Balance Sheet or (ii) are disclosed in
SECTION 2.11 OF THE DISCLOSURE SCHEDULE, which taxes shall be Liabilities
of the Company as provided in the Contribution Agreement); or (v) any
Liability of CII (whether for Taxes or otherwise) and any Liability of
Xxxxxxxxx under or in respect of the CII Stock Purchase Agreement;
PROVIDED, HOWEVER, that the Owners and Xxxxxxxxx shall not be obligated
pursuant to clause (ii) of this Section 9.1 to the extent that a Loss
claimed thereunder is finally adjudicated by a court of competent
jurisdiction to have resulted primarily from the gross negligence or wilful
misconduct of the Indemnified Party making such claim; and PROVIDED
FURTHER, that if and to the extent that any indemnification hereunder is
finally determined by a court of competent jurisdiction to be
unenforceable, the Owners and Xxxxxxxxx shall jointly and severally make
the maximum contribution to the payment and satisfaction of the indemnified
Losses as shall be permissible under applicable laws.
9.2 METHOD OF ASSERTING CLAIMS. All claims for indemnification
by any Indemnified Party under Section 9.1 will be asserted and resolved as
follows:
(a) In order for an Indemnified Party to be entitled to any
indemnification provided for under Section 9.1 in respect of, arising out
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of or involving a claim or demand made by any Person not a party to this
Agreement against the Indemnified Party (a "Third Party Claim"), the
Indemnified Party must deliver a Claim Notice to the Indemnifying Party
within 30 Business Days after receipt by such Indemnified Party of written
notice of the Third Party Claim; PROVIDED, HOWEVER, that failure to give
such Claim Notice shall not affect the indemnification provided hereunder
except to the extent the Indemnifying Party shall have been actually
prejudiced as a result of such failure.
(b) If a Third Party Claim is made against an Indemnified Party,
the Indemnifying Party shall be entitled to participate in the defense
thereof and, if it so chooses, to assume the defense thereof with counsel
selected by the Indemnifying Party, which counsel must be reasonably
satisfactory to the Indemnified Party. Should the Indemnifying Party so
elect to assume the defense of a Third Party Claim, the Indemnifying Party
shall not be liable to the Indemnified Party for legal expenses
subsequently incurred by the Indemnified Party in connection with the
defense thereof, but shall continue to pay for any expenses of
investigation or any Loss suffered. If the Indemnifying Party assumes such
defense, the Indemnified Party shall have the right to participate in such
defense and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnifying Party. If (i) the Indemnifying Party
shall not assume the defense of a Third Party Claim with counsel reasonably
satisfactory to the Indemnified Party within five Business Days of any
Claim Notice, or (ii) legal counsel for the Indemnified Party notifies the
Indemnifying Party that there are or may be legal defenses available to the
Indemnified Party or to other Indemnified Parties which are different from
or additional to those available to the Indemnifying Party, which, if the
Indemnified Party and the Indemnifying Party were to be represented by the
same counsel, would constitute a conflict of interest for such counsel or
prejudice prosecution of the defenses available to such Indemnified Party,
or (iii) if the Indemnifying Party shall assume the defense of a Third
Party Claim and fail to diligently prosecute such defense, then in each
such case the Indemnified Party, by notice to the Indemnifying Party, may
employ its own counsel and control the defense of the Third Party Claim and
the Indemnifying Party shall be liable for the reasonable fees, charges and
disbursements of counsel employed by the Indemnified Party; and the
Indemnified Party shall be promptly reimbursed for any such fees, charges
and disbursements, as and when incurred. Whether the Indemnifying Party or
the Indemnified Party controls the defense of any Third Party Claim, the
parties hereto shall cooperate in the defense thereof. Such cooperation
shall include the retention and provision to the counsel of the controlling
party of records and information which are reasonably relevant to such
Third Party Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any material
provided hereunder. The Indemnifying Party shall have the right to settle,
compromise or discharge a Third Party Claim (other than any such Third
Party Claim in which criminal conduct is alleged) without the Indemnified
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Party's consent if such settlement, compromise or discharge (i) constitutes
a complete and unconditional discharge and release of the Indemnified
Party, and (ii) provides for no relief other than the payment of monetary
damages and such monetary damages are paid in full by the Indemnifying
Party.
(c) In the event any Indemnified Party shall have a claim under
Section 9.1 against any Indemnifying Party that does not involve a Third
Party Claim, the Indemnified Party shall deliver an Indemnity Notice with
reasonable promptness to the Indemnifying Party. The failure by any
Indemnified Party to give the Indemnity Notice shall not impair such
party's rights hereunder except to the extent that an Indemnifying Party
demonstrates that it has been materially prejudiced thereby. If the
Indemnifying Party notifies the Indemnified Party that it does not dispute
the claim described in such Indemnity Notice or fails to notify the
Indemnified Party within the Dispute Period whether the Indemnifying Party
disputes the claim described in such Indemnity Notice, the Loss in the
amount specified in the Indemnity Notice will be conclusively deemed a
liability of the Indemnifying Party under Section 8.1 and the Indemnifying
Party shall pay the amount of such Loss to the Indemnified Party on demand.
If the Indemnifying Party has timely disputed its liability with respect to
such claim, the Indemnifying Party and the Indemnified Party will proceed
in good faith to negotiate a resolution of such dispute, and if not
resolved through negotiations within the Resolution Period, such dispute
shall be resolved by litigation in a court of competent jurisdiction.
(d) The rights accorded to Indemnified Parties hereunder shall be
in addition to any rights that any Indemnified Party may have at law or in
equity, under federal and state securities laws, by separate agreement
(including, without limitation, under the Operative Agreements) or
otherwise.
ARTICLE X
TERMINATION
10.1 TERMINATION. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written agreement
of the Owners, Xxxxxxxxx, the Company and the Investors;
(b) at any time before the Closing, by the Owners, Xxxxxxxxx or
the Company on the one hand or any Investor on the other hand, in the
event (i) of a material breach hereof by any non-terminating party if
such non-terminating party fails to cure such breach within five
Business Days following notification thereof by the terminating party or
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(ii) upon notification of the non-terminating parties by the terminating
party that the satisfaction of any condition to the terminating party's
obligations under this Agreement has become impossible or impracticable
with the use of commercially reasonable efforts, so long as the failure
of such condition to be satisfied is not caused by a breach hereof by
the terminating party; or
(c) at any time after January 8, 1997, by the Owners, Xxxxxxxxx
or the Company, on the one hand, or any Investor, on the other hand,
upon notification of the non-terminating parties by the terminating
party if the Closing shall not have occurred on or before such date and
such failure to consummate is not caused by a material breach of this
Agreement by the terminating party.
10.2 EFFECT OF TERMINATION. If this Agreement is validly
terminated pursuant to Section 10.1, this Agreement will forthwith become
null and void, and there will be no liability or obligation on the part of
any Owner, Xxxxxxxxx, the Company or any Investor, except as provided in
the next two succeeding sentences and except that the provisions with
respect to expenses in Section 12.3, confidentiality in Section 12.5 and
governing law in Section 12.13 will continue to apply following any such
termination. Notwithstanding any other provision in this Agreement to the
contrary, upon termination of this Agreement pursuant to Section 10.1(b) or
(c) by an Investor, (i) each of the Owners, Xxxxxxxxx and the Company will
remain liable to the Investors for any misrepresentation or breach of
warranty or nonfulfillment of or failure to perform any covenant or
agreement of the Owners, Xxxxxxxxx or the Company existing at the time of
such termination, and (ii) each Investor will remain liable to the Owners,
Xxxxxxxxx and the Company for any misrepresentation or breach of warranty
or nonfulfillment of or failure to perform any covenant or agreement of
such Investor existing at the time of such termination. Each of the
Owners, Xxxxxxxxx, the Company and the Investors may seek such remedies,
including damages and reimbursement for fees and expenses of attorneys,
against the others with respect to any misrepresentation, breach,
nonfulfillment or failure referred to in clause (i) or (ii) above as are
provided under this Agreement, including its remedies under Article IX with
respect thereto, or as are otherwise available at Law or in equity.
ARTICLE XI
DEFINITIONS
11.1 DEFINITIONS. (a) As used in this Agreement, the following
defined terms shall have the meanings indicated below:
"ACTIONS OR PROCEEDINGS" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.
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"AFFILIATE" means, as applied to any Person, (a) any other Person
directly or indirectly controlling, controlled by or under common control
with, that Person, (b) any other Person that owns or controls (i) 5% or
more of any class of equity securities of that Person or any of its
Affiliates or (ii) 5% or more of any class of equity securities (including
any equity securities issuable upon the exercise of any option, warrant,
convertible security or similar right) of that Person or any of its
Affiliates, or (c) any director, partner, officer, agent, employee or
relative of that Person. For the 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 and policies of that Person, whether through
ownership of voting securities or by contract or otherwise.
"AGREED-UPON PROCEDURES" means the tests and procedures described
in the Agreed-Upon Procedures Report (including the Accounting Firm's
observation of the physical inventory referred to in Section 2.8(b)).
"AGREED-UPON PROCEDURES REPORT" has the meaning ascribed to it in
Section 2.8(c).
"AGREEMENT" means this Investment Agreement, the Exhibits, the
Schedules and the Disclosure Schedule and the certificates delivered in
connection herewith, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with the provisions hereof.
"ASSETS AND PROPERTIES" of any Person means all assets and
properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute,
accrued, contingent, fixed or otherwise and wherever situated), including
the goodwill related thereto, operated, owned or leased by such Person,
including cash, cash equivalents, Investment Assets, accounts and notes
receivable, chattel paper, documents, instruments, general intangibles,
real estate, equipment, inventory, goods and Intellectual Property.
"ASSOCIATE" means, with respect to any Person, any corporation or
other business organization of which such Person is an officer or partner
or is the beneficial owner, directly or indirectly, of 10% or more of any
class of its equity securities, any trust or estate in which such Person
has a substantial beneficial interest or as to which such Person serves as
a trustee or in a similar capacity and any relative or spouse of such
Person, or any relative of such spouse, who has the same home as such
Person.
"AUDITED FINANCIAL STATEMENT DATE" means December 31, 1995.
"AUDITED FINANCIAL STATEMENTS" means the audited consolidated
balance sheet of CMI as of December 31, 1995 and the related audited
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consolidated statements of income, stockholders' equity and cash flows for
the fiscal year then ended, in each case including the notes thereto.
"BENEFIT PLAN" means any Plan established by Xxxxxxxxx or the
Company or any predecessor of either of them, existing at the Closing Date
or prior thereto, to which Xxxxxxxxx or the Company contributes or has
contributed, or under which any employee, former employee, member, manager
or director of Xxxxxxxxx or the Company or any beneficiary thereof is
covered, is eligible for coverage or has benefit rights.
"BOOKS AND RECORDS" means all files, documents, instruments,
papers, books and records relating to the Business or Condition of
Xxxxxxxxx or the Company, including without limitation financial
statements, Tax Returns and related work papers and letters from
accountants, budgets, pricing guidelines, ledgers, journals, deeds, title
policies, minute books, stock certificates and books, stock transfer
ledgers, Contracts, Licenses, customer lists, computer files and programs,
retrieval programs, operating data and plans and environmental studies and
plans.
"BUSINESS COMBINATION" means with respect to any Person (i) any
merger, consolidation or other business combination to which such Person is
a party, (ii) any sale, dividend, split or other disposition of any capital
stock of or other equity interests in such Person, (iii) any
recapitalization, refinancing (of indebtedness or equity), liquidation,
dissolution or similar transaction with respect to such Person, (iv) any
sale, dividend or other disposition of all or any material portion of the
Assets and Properties of such Person (other than in connection with the
Contribution) or (v) the entering into of any agreement or understanding,
or the grant of any rights or options with respect to any of the foregoing.
"BUSINESS DAY" means a day other than Saturday, Sunday or any day
on which banks located in the State of Indiana or New York are authorized
or obligated to close.
"BUSINESS OR CONDITION OF XXXXXXXXX OR THE COMPANY" means (a) with
respect to Xxxxxxxxx, the business, condition (financial or otherwise),
results of operations and Assets and Properties of Xxxxxxxxx, and (b) with
respect to the Company, the business, condition (financial or otherwise),
results of operations, Assets and Properties and (as set forth in the
projections contained in Schedule 2.31) prospects of the Company.
"XXXXXXXXX" has the meaning ascribed to it in the introductory
paragraph of this Agreement.
"CHARTER" means the certificate of incorporation of the Company
following the Conversion, as the same may be amended, modified or restated
from time to time.
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"CHARTER DOCUMENTS" has the meaning ascribed to it in Section
2.1(a).
"CII" means Xxxxxx International, Inc., an Indiana corporation.
"CII STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement
dated September 26, 1996, by and among Xx. XxxXxxx, Xxxxxxxx Niemczycki,
Carpenter, CII and certain other Persons.
"CLAIM NOTICE" means written notification pursuant to
Section 9.2(a) of a Third Party Claim as to which indemnity under
Section 9.1 is sought by an Indemnified Party, enclosing a copy of all
papers served, if any, on the Indemnified Party and identifying the basis
for the Indemnified Party's claim against the Indemnifying Party under
Section 9.1.
"CLOSING" means the closing of the transactions contemplated by
Section 1.3.
"CLOSING DATE" means the date on which the Closing actually
occurs, which date shall be either (a) the fifth Business Day after the day
on which the last of the consents, approvals, actions, filings, notices or
waiting periods described in or related to the filings described in
Sections 6.5 and 6.6 and Section 7.4 has been obtained, made or given or
has expired, as applicable, or (b) such other date as the Investors, the
Company, Xxxxxxxxx and the Owners may mutually agree.
"CMI" means Xxxxxxxxx Manufacturing, Inc., an Indiana corporation
(formerly known as CBW, Inc.) and a predecessor of Xxxxxxxxx.
"CODE" means the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"COMMON STOCK" has the meaning ascribed thereto in the recitals
hereto.
"COMPANY" has the meaning ascribed to it in the introductory
paragraph of this Agreement.
"CONTRACT" means any agreement, lease, debenture, note, other
evidence of Indebtedness, mortgage, deed of trust, indenture, security
agreement or other contract (whether written or oral).
"CONTRIBUTION" has the meaning ascribed thereto in the recitals
hereto.
"CONTRIBUTION AGREEMENT" means the Contribution Agreement to be
entered into on the Closing Date by Xxxxxxxxx and the Company,
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substantially in the form of Exhibit D, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof and thereof.
"XXXXXX" has the meaning ascribed to it in the introductory
paragraph of this Agreement.
"DEBT RESTRUCTURING" means: (i) the restructuring of the Xxxxx
Bank revolving credit facility to effect the release of all guarantees
provided by Affiliates of Xxxxxxxxx in respect of Xxxxxxxxx'x or the
Company's obligations under such revolving credit facility, or the
replacement and refinancing of such revolving credit facility with a new
revolving credit facility of at least the same size as to which the
borrower's obligations thereunder are not guaranteed by any Affiliate of
Xxxxxxxxx or the Company; (ii) the refinancing, with the proceeds of a term
loan secured only by a Lien on all or a portion of the Company's equipment
and real estate, of (A) all outstanding Indebtedness under the equipment
financing arrangements with the City of Richmond, Indiana, the First
National Bank of Xxxxxxxx, Newcourt (other than the Newcourt inventory
financing arrangement), Harsco and Xxxxx Bank Presses and (B) the Out-of-
Trust Indebtedness; and (iii) the termination of the CIT sublease
arrangement through the purchase by the Company in an arm's-length
transaction of the equipment subject to such arrangement, which purchase
will be financed with the proceeds of a term loan obtained by the Company
(which term loan may be combined with the term loan contemplated by clause
(ii) above); all of the foregoing in form and substance satisfactory to
each Investor in its sole discretion.
"DISCLOSURE SCHEDULE" means the schedules delivered to the
Investors by or on behalf of the Owners, Xxxxxxxxx and the Company,
containing all lists, descriptions, exceptions and other information and
materials as are required to be included therein pursuant to this
Agreement.
"DISPUTE PERIOD" means the period ending 30 calendar days
following receipt by an Indemnifying Party of an Indemnity Notice.
"XX. XXXXXXX" means Xx. Xxxxx X. XxxXxxx.
"ENVIRONMENT" means all air, surface water, groundwater and land,
including land surface and subsurface, including all fish, wildlife and
other natural resources.
"ENVIRONMENTAL CLAIM" means any and all administrative or judicial
actions, suits, orders, claims, Liens, notices, notices of violations,
investigations, complaints, requests for information, proceedings, or other
communication (written or oral), whether criminal or civil, (collectively,
"CLAIMS") pursuant to or relating to any applicable Environmental Law by
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any Person (including any Governmental or Regulatory Authority, individual
or citizens' group) based upon, alleging, asserting, or claiming any actual
or potential (i) violation of or liability under any Environmental Law,
(ii) violation of any Environmental Permit or (iii) liability for
investigatory costs, cleanup costs, removal costs, remedial costs, response
costs, natural resource damages, property damage, personal injury, fines or
penalties arising out of, based on, resulting from, or related to the
presence, Release, or threatened Release into the Environment of any
Hazardous Materials at any location, including but not limited to any off-
Site location to which Hazardous Materials or materials containing
Hazardous Materials have been sent for handling, storage, treatment, or
disposal.
"ENVIRONMENTAL CLEAN-UP SITE" means any location which is listed
or proposed for listing on the National Priorities List, the Comprehensive
Environmental Response, Compensation and Liability Information System, or
on any similar state list of sites requiring investigation or cleanup, or
which is the subject of any pending or threatened action, suit, proceeding
or investigation related to or arising from any alleged violation of any
Environmental Law, or at which there has been a Release, threatened or
suspected Release of a Hazardous Material.
"ENVIRONMENTAL LAW" means any and all current and future, federal,
state, local and foreign, civil and criminal laws, statutes, ordinances,
orders, codes, rules, regulations, Environmental Permits, policies,
guidance documents, judgments, decrees, injunctions or agreements with any
Governmental or Regulatory Authority relating to the protection of health
and the Environment, or governing the handling, use, generation, treatment,
storage, transportation, disposal, manufacture, distribution, formulation,
packaging, labeling or Release of Hazardous Materials, whether now existing
or subsequently amended or enacted, including: the Clean Air Act, 42 U.S.C.
7401 ET SEQ.; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. 9601 ET SEQ.;
the Federal Water Pollution Control Act, 33 U.S.C. 1251 ET SEQ.;
the Hazardous Material Transportation Act 49 U.S.C. 1801 ET
SEQ.; the Federal Insecticide, Fungicide and Rodenticide Act 7 U.S.C.
136 ET SEQ.; the Resource Conservation and Recovery Act of 1976,
42 U.S.C. 6901 ET SEQ.; the Toxic Substances Control Act, 15
U.S.C. 2601 ET SEQ.; the Oil Pollution Act of 1990, 33 U.S.C.
2701 ET SEQ.; and the state analogies thereto, all as amended or
superseded from time to time; and any common law doctrine, including
negligence, nuisance, trespass, personal injury, or property damage,
relating to the presence or Release of or an exposure to a Hazardous
Material.
"ENVIRONMENTAL PERMIT" means any and all federal, state, local or
foreign permits, licenses, approvals, consents or authorizations required
by any Governmental or Regulatory Authority under or in connection with any
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Environmental Law, including any and all orders, consent orders or binding
agreements issued or entered into by a Governmental or Regulatory Authority
under any applicable Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the rules and regulations promulgated thereunder.
"ERISA AFFILIATE" means any Person who is or at any time was in
the same controlled group of corporations or who is under common control
with CMI, Xxxxxxxxx or the Company (within the meaning of Section
412(n)(6)(b) of the Code).
"ESTIMATED PRO FORMA OPERATING STATEMENTS" has the meaning
ascribed to it in Section 2.8(b).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder.
"FEDERALLED BUS" means, as of any date of determination, any Semi-
Finished Bus retained by Xxxxxxxxx pursuant to the Contribution Agreement
which, as of such date, has been (a) certified by a duly authorized
Xxxxxxxxx inspector, in a manner consistent with past practice, as
complying with all applicable federal motor vehicle safety standards and
(b) stickered by such inspector for delivery to the purchaser thereof.
"FORMER XXXXXXXX PROPERTIES" shall have the meaning ascribed to it
in Section 9.1.
"GAAP" means generally accepted accounting principles,
consistently applied throughout the specified period and the immediately
prior comparable period.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic
or foreign state, county, city or other political subdivision, and shall
include, without limitation, any stock exchange, quotation service and the
National Association of Securities Dealers.
"GUARANTEE" means the Guarantee of Xx. Xxxxx XxxXxxx attached to
this Agreement, as such Guarantee may be amended, supplemented or otherwise
modified from time to time in accordance with the provisions thereof.
"HAZARDOUS MATERIAL" means (A) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation and transformers or other
equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls (PCBs); (B) any chemicals, materials, substances
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or wastes which are now or hereafter become defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous wastes,"
"toxic substances," "toxic pollutants" or words of similar import, under
any Environmental Law; and (C) any other chemical, material, substance or
waste, exposure to which is now or hereafter prohibited, limited or
regulated by any Governmental or Regulatory Authority.
"INDEBTEDNESS" of any Person means all obligations of such Person
(i) for borrowed money, (ii) evidenced by notes, bonds, debentures or
similar instruments, (iii) for the deferred purchase price of goods or
services (other than trade payables or accruals incurred in the ordinary
course of business), (iv) under capital leases, (v) as an account party in
respect of letters of credit and (vi) in the nature of guarantees of the
obligations described in clauses (i) through (v) above of any other Person.
"INDEMNIFIED PARTY" means any Person claiming indemnification
under any provision of Article IX.
"INDEMNIFYING PARTY" means any Person against whom a claim for
indemnification is being asserted under any provision of Article IX.
"INDEMNITY NOTICE" means written notification pursuant to Section
9.2(c) of a claim for indemnity under Article IX by an Indemnified Party,
specifying the nature of and basis for such claim, together with the amount
or, if not then reasonably ascertainable, the estimated amount, determined
in good faith, of such claim.
"INDEPENDENT ACCOUNTING FIRM" shall mean Xxxxxx Xxxxxxxx or, if
Xxxxxx Xxxxxxxx shall decline or otherwise be unable to perform the
engagement in question, another firm of independent certified public
accountants of nationally recognized standing (other than the Accounting
Firm, Price Waterhouse and Deloitte) mutually acceptable to Xxxxxxxxx and
the Investors.
"INTELLECTUAL PROPERTY" means all patents and patent rights,
trademarks and trademark rights, trade names and trade name rights, service
marks and service xxxx rights, service names and service name rights, brand
names, inventions, processes, formulae, copyrights and copyright rights,
trade dress, business and product names, logos, slogans, trade secrets,
industrial models, designs, methodologies, computer programs (including all
source codes) and related documentation, technical information,
manufacturing, engineering and technical drawings, know-how and all pending
applications for and registrations of patents, trademarks, service marks
and copyrights.
"INVENTORY COMPUTATION" has the meaning ascribed to it in Section
5.6(a).
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"INVESTMENT ASSETS" means all debentures, notes and other
evidences of Indebtedness, stocks, securities (including rights to purchase
and securities convertible into or exercisable or exchangeable for other
securities), interests in joint ventures and general and limited
partnerships, mortgage loans and other investment or portfolio assets owned
of record or beneficially by Xxxxxxxxx or the Company.
"INVESTORS" has the meaning ascribed to it in the introductory
paragraph of this Agreement.
"IRS" means the United States Internal Revenue Service.
"LAWS" means all laws, statutes, rules, regulations, ordinances
and other pronouncements having the effect of law of the United States, any
foreign country or any domestic or foreign state, county, city or other
political subdivision or of any Governmental or Regulatory Authority.
"LEASED REAL PROPERTY" has the meaning ascribed to it in Section
2.15(a).
"LIABILITIES" means all Indebtedness, obligations and other
liabilities of a Person (whether absolute, accrued, contingent, known or
unknown, fixed or otherwise, and whether due or to become due).
"LICENSES" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.
"LIEN" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind,
or any conditional sale Contract, title retention Contract or other
Contract to give any of the foregoing.
"LOSSES" means any and all damages, fines, fees, penalties,
deficiencies, losses and expenses, including interest, reasonable expenses
of investigation, court costs, reasonable fees and expenses of attorneys,
accountants and other experts and other expenses of litigation or other
proceedings or of any claim, default or assessment (such fees and expenses
to include all fees and expenses, including, without limitation fees and
expenses of attorneys, incurred in connection with (i) the investigation or
defense of any Third Party Claims or (ii) asserting or disputing any rights
under this Agreement against any party hereto or otherwise). Also included
within the meaning of Loss, as applied to any Investor, shall be the
diminution in value to such Investor's investment hereunder.
"MANAGEMENT AGREEMENTS" means, collectively, (a) the Management
Agreement to be entered into as of the Closing Date by the Company and
Xxxxxx, (b) the Management Agreement to be entered into as of the Closing
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Date by the Company and REI II, and (c) the Management Agreement to be
entered into as of the Closing Date between the Company and Spartan, each
substantially in the form of Exhibit F, and each as it may be amended,
supplemented or otherwise modified from time to time in accordance with the
provisions thereof.
"MATERIALS COST" has the meaning ascribed to it in Section 5.4(a).
"XXXXXXXX FACILITY" means the real property located at 0000 Xxxx
Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxx, that is owned on the date hereof by
Xxxxxxxxx.
"NASD" means the National Association of Securities Dealers, Inc.
"NET CONTRIBUTION AMOUNT" means, with respect to any period, an
amount equal to (a) the aggregate amount of cash advanced to Xxxxxxxxx by
the Owners and their respective Affiliates (other than Xxxxxxx X. Xxxxxx)
during such period, PLUS (b) the aggregate amount of cash contributed to
the capital of Xxxxxxxxx by the Owners and their respective Affiliates
during such period, MINUS (c) the aggregate amount of such advances and
contributions made for the primary purpose of developing Xxxxxxxxx'x
Shuttle Bus Business, MINUS (d) the aggregate amount of all cash,
securities and other property paid (other than as salary or as
reimbursement of expenses, in either case incurred in the ordinary course
of business including rental expense for the office at Xxxxxx in
Indianapolis (as set forth in SECTION 2.15(A) OF THE DISCLOSURE SCHEDULE)
and equipment lease expenses under that certain Equipment Lease Agreement
between SerVaas, Inc. and Xxxxxxxxx, dated December 21, 1993 (as set forth
in SECTION 2.18(2)(M) OF THE DISCLOSURE SCHEDULE)) or distributed to the
Owners and their respective Affiliates during such period (other than the
distribution to the Owners of the net proceeds of Xxxxxxxxx'x sale of 800
shares of CII's common stock pursuant to the CII Stock Purchase Agreement).
"NEW XXXXXX NOTE" has the meaning ascribed to it in Section 4.9.
"NOVEMBER 30 FINANCIAL STATEMENTS" has the meaning ascribed to it
in Section 4.5(b).
"OCTOBER 31 COMPILED FINANCIAL STATEMENTS" has the meaning
ascribed to it in Section 2.8(b).
"OPERATIVE AGREEMENTS" means the Guarantee, the Contribution
Agreement, the Registration Rights Agreement, the Stockholders' Agreement,
the Management Agreements, the Supply Agreement and any support or other
agreements to be entered into in connection with the transactions
contemplated by this Agreement.
"OPTION" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
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gives the right to (i) purchase or otherwise receive or be issued any
shares of capital stock of such Person or any security of any kind
convertible into or exchangeable or exercisable for any shares of capital
stock of such Person or (ii) receive any benefits or rights similar to any
rights enjoyed by or accruing to the holder of shares of capital stock of
such Person, including any rights to participate in the equity, income or
election of directors or officers of such Person.
"ORDER" means any writ, judgment, decree, injunction or similar
order of any Governmental or Regulatory Authority (in each case whether
preliminary or final).
"OUT-OF-TRUST INDEBTEDNESS" has the meaning ascribed to it in
Section 2.8(h).
"OWNED REAL PROPERTY" has the meaning ascribed to it in Section
2.15(a).
"OWNERS" has the meaning ascribed to it in the introductory
paragraph of this Agreement.
"PERMITTED LIEN" means (i) any Lien for Taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with GAAP, (ii)
the Liens set forth in SECTION 11.1 OF THE DISCLOSURE SCHEDULE and (iii)
any minor imperfection of title or similar Lien which, individually or in
the aggregate with other such Liens, does not impair the value or
marketability of the property subject to such Lien or interfere with the
use of such property in the conduct of the business of Xxxxxxxxx or the
Company and which does not secure obligations for money borrowed.
"PERSON" means any natural person, corporation, general
partnership, limited partnership, limited liability company,
proprietorship, other business organization, trust, union, association or
Governmental or Regulatory Authority.
"PLAN" means any bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock purchase, stock
option, stock ownership, stock appreciation rights, phantom stock, leave of
absence, layoff, vacation, day or dependent care, legal services,
cafeteria, life, health, accident, disability, workmen's compensation or
other insurance, severance, separation or other employee benefit plan,
practice, policy or arrangement of any kind, whether written or oral,
including, but not limited to, any "employee benefit plan" within the
meaning of Section 3(3) of ERISA.
"PRO FORMA BALANCE SHEET" has the meaning ascribed to it in
Section 2.8(b).
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"PURCHASE PRICE" has the meaning ascribed to it in Section 1.2.
"PURCHASED STOCK" has the meaning ascribed to it in the recitals
hereto.
"QUALIFIED PLAN" means each Benefit Plan which is intended to
qualify under Section 401 of the Code.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement to be entered into as of the Closing Date by the Company,
Xxxxxxxxx and the Investors, substantially in the form of Exhibit G, as the
same may be amended, supplemented or otherwise modified from time to time
in accordance with the provisions thereof.
"REI II" has the meaning ascribed to it in the introductory
paragraph of this Agreement.
"REIMBURSABLE EXPENSES" has the meaning ascribed to it in Section
12.3.
"RELEASE" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing
of a Hazardous Material into the Environment.
"REPRESENTATIVES" has the meaning ascribed to it in Section 4.2.
"RESOLUTION PERIOD" means the period ending 30 calendar days
following receipt by an Indemnified Party of a Dispute Notice.
"RESTRUCTURING TRANSACTIONS" has the meaning ascribed to it in
Section 4.9.
"RETAINED INVENTORY COST" has the meaning ascribed to it in
Section 5.4(a).
"RICHMOND ACQUISITION AGREEMENT" means the agreement dated
November 12, 1996 between Xxxxxxxxx and the City of Richmond, Indiana,
pursuant to which Xxxxxxxxx has acquired ownership of the Richmond Facility
from such City.
"RICHMOND FACILITY" means the real property and improvements
thereon comprising Xxxxxxxxx'x manufacturing facility in Richmond, Indiana.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC thereunder.
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"SEPTEMBER 30 COMPILED FINANCIAL STATEMENTS" has the meaning
ascribed to it in Section 2.8(a).
"SEMI-FINISHED BUSES" means, as of any date of determination,
those buses held by Xxxxxxxxx as inventory on such date which consist of a
bus body attached to a bus chassis.
"SITE" means any of the real properties currently or previously
owned, leased or operated by Xxxxxxxxx, the Company, any predecessor of
Xxxxxxxxx or the Company, or Subsidiaries, or any entity previously owned
by CMI, Xxxxxxxxx or the Company (other than the Xxxxxxxx Facility and the
Former Xxxxxxxx Properties), including all soil, subsoil, surface waters
and groundwater thereat.
"SPARTAN" has the meaning ascribed to it in the introductory
paragraph of this Agreement.
"STOCKHOLDERS' AGREEMENT" means the Stockholders' Agreement to be
entered into as of the Closing Date by the Company, Xxxxxxxxx and the
Investors, substantially in the form of Exhibit E, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with the provisions thereof.
"SUBSIDIARY" means any Person in which Xxxxxxxxx or the Company,
directly or indirectly through Subsidiaries or otherwise, beneficially owns
more than 50% of either the equity interests in, or the voting control of,
such Person.
"SUPPLY AGREEMENT" means the Supply Agreement to be entered into
as of the Closing Date by Xxxxxxxxx and the Company with respect to tool
and die products manufactured at the Mitchell Facility, substantially in
the form of Exhibit K, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the provisions
thereof.
"TAX" or "TAXES" means all federal, state, local or foreign net or
gross income, gross receipts, net proceeds, sales, use, AD VALOREM, value
added, franchise, bank shares, withholding, payroll, employment, excise,
property, alternative or add-on minimum, environmental or other taxes,
assessments, duties, fees, levies or other governmental charges of any
nature whatever, whether disputed or not, together with any interest,
penalties, additions to tax or additional amounts with respect thereto.
"TAX RETURNS" means any returns, reports or statements (including
any information returns) required to be filed with any Governmental or
Regulatory Authority for purposes of a particular Tax.
"THIRD PARTY CLAIM" has the meaning ascribed to it in Section
8.2(a).
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"TRANSFERRED EMPLOYEES" has the meaning ascribed to it in Section
5.6(a).
"TRUST" has the meaning ascribed to it in the introductory
paragraph of this Agreement.
"UNFINISHED BUSES AND CHASSIS" means, as of any date of
determination, those items held by Xxxxxxxxx or the Company as inventory on
such date which consist of either (a) a bus body which is not attached to a
bus chassis or (b) a bus chassis that has been received at the Richmond
Facility or on behalf of Xxxxxxxxx or the Company at a Xxxxxxx facility and
that is not attached to a bus body.
"UNSECURED NEWCOURT INDEBTEDNESS" has the meaning ascribed to it
in Section 2.8(h).
(b) Unless the context of this Agreement otherwise requires, (i)
words of any gender include each other gender; (ii) words using the
singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof," "herein," "hereby" and derivative
or similar words refer to this entire Agreement; (iv) the terms "Article"
or "Section" refer to the specified Article or Section of this Agreement;
(v) the words "include," "includes" and "including" are deemed to be
followed by the phrase "without limitation"; and (vi) the phrases "ordinary
course of business" and "ordinary course of business consistent with past
practice" refer to the business and practice of CMI and Xxxxxxxxx. All
accounting terms used herein and not expressly defined herein shall have
the meanings given to them under GAAP.
ARTICLE XII
MISCELLANEOUS
12.1 NOTICES. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given
only if delivered personally against written receipt or by facsimile
transmission or mailed by prepaid first class certified mail, return
receipt requested, or mailed by overnight courier prepaid, to the parties
at the following addresses or facsimile numbers:
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If to REI II, to:
Recovery Equity Investors II, L.P.
000 Xxxxxxx'x Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxx-Xxxx
Xxxxxxx X. Xxxxxx
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
If to Spartan, to:
Spartan Motors, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx Xxxxxxxx
with a copy to:
Foster, Swift, Xxxxxxx & Xxxxx
000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxx, Xx., Esq.
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If to Xxxxxxxxx or the Company, to:
Xxxxxxxxx Industries LLC
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx
with a copy to:
Leeuw, Plopper & Xxxxxx
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
If to Xxxxxx, to:
The Xxxxxx Publishing Company
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xx. Xxxxx XxxXxxx
with a copy to:
Leeuw, Plopper & Xxxxxx
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
If to the Trust, to:
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xx. Xxxxx XxxXxxx
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with a copy to:
Leeuw, Plopper & Xxxxxx
000 Xxxxx Xxxxxxxxxxxx Xxxxxx
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
All such notices, requests and other communications to any party hereto
will (i) if delivered personally to such party at its address as provided
in this Section 12.1, be deemed given upon delivery, (ii) if delivered by
facsimile transmission to such party at its facsimile number as provided in
this Section 12.1, be deemed given upon receipt, (iii) if delivered by mail
in the manner described above to such party at its address as provided in
this Section 12.1, be deemed given on the earlier of the third Business Day
following mailing or upon receipt and (iv) if delivered by overnight
courier prepaid to such party at its address as provided in this Section
12.1, be deemed given on the earlier of the first Business Day following
the date sent by such overnight courier or upon receipt (in each case
regardless of whether such notice, request or other communication is
received by any other Person to whom a copy of such notice is to be
delivered pursuant to this Section 12.1). Any party hereto from time to
time may change its address, facsimile number or other information for the
purpose of notices to that party by giving notice specifying such change to
each other party hereto.
12.2 ENTIRE AGREEMENT. This Agreement and the Operative
Agreements supersede all prior discussions and agreements between the
parties with respect to the subject matter hereof and thereof and contain
the sole and entire agreement between the parties hereto with respect to
the subject matter hereof and thereof.
12.3 EXPENSES. Except as otherwise expressly provided in this
Agreement (including without limitation as provided in Article IX and
Section 10.2), each party hereto will pay its own costs and expenses;
PROVIDED, HOWEVER, that (x) upon the Closing, the Company shall reimburse
each of Xxxxxxxxx and the Investors for all of the reasonable fees and
expenses (including the fees and expenses of counsel, consultants and
accountants), incurred by Xxxxxxxxx or such Investor, as the case may be,
prior to the Closing in connection with this Agreement, the Operative
Agreements and the transactions contemplated hereby or thereby, provided
that the approximate amount of any such expense has been previously
disclosed to the Investors and Xxxxxxxxx prior to the date hereof (the
"Reimbursable Expenses"); (y) in the event any provision of this Agreement
is breached by any of the Owners, Xxxxxxxxx or the Company and the Closing
does not occur, the Owners, Xxxxxxxxx and the Company jointly and severally
shall reimburse each Investor for its Reimbursable Expenses and (z) in the
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event this Agreement has been terminated or, prior to June 30, 1997, the
Closing has not occurred and Xxxxxxxxx, the Company or any Subsidiary of
either of them consummates within 12 months following the earlier of such
termination or June 30, 1997, a Business Combination or enters into an
agreement, arrangement or understanding (including a non-binding letter of
intent) to consummate a Business Combination, the Owners, Xxxxxxxxx and the
Company jointly and severally shall, promptly upon the earliest of such
event to occur, pay $500,000 in cash to each Investor.
12.4 PUBLIC ANNOUNCEMENTS. At all times at or before the Closing,
none of the Owners, Xxxxxxxxx, the Company or the Investors will issue or
make any statements or releases to the public with respect to this
Agreement or the transactions contemplated hereby without the consent of
the others, which consent shall not be unreasonably withheld. If any party
hereto is unable to obtain the approval of its public statement or release
from the other parties hereto and such statement or release is, in the
opinion of legal counsel to such party, required by Law in order to
discharge such party's disclosure obligations, then such party may make or
issue the legally required statement or release and promptly furnish the
other parties with a copy thereof. Each of the Owners, Xxxxxxxxx, the
Company and the Investors will also obtain the other parties' prior
approval of any press release to be issued immediately following the
Closing announcing the consummation of the transactions contemplated by
this Agreement.
12.5 CONFIDENTIALITY. Each party hereto will hold in strict
confidence from any Person (other than any Affiliate or Representative or
partner of such party) unless (i) compelled to disclose by judicial or
administrative process (including without limitation in connection with
obtaining the necessary consents and approvals in respect of this Agreement
and the transactions contemplated hereby of Governmental or Regulatory
Authorities and other third parties) or by other requirements of Law or
(ii) disclosed in an Action or Proceeding brought by a party hereto in
pursuit of its rights or in the exercise of its remedies hereunder, all
documents and information concerning the other parties or any of their
respective Affiliates furnished to it by any such other party or any such
other party's Representatives in connection with this Agreement or the
transactions contemplated hereby, except to the extent that such documents
or information can be shown to have been (a) previously known by the party
receiving such documents or information, (b) in the public domain (either
prior to or after the furnishing of such documents or information
hereunder) through no fault of such receiving party or (c) later acquired
by the receiving party from another source if the receiving party is not
aware that such source is under an obligation to another party hereto to
keep such documents and information confidential. In the event the
transactions contemplated hereby are not consummated, upon the request of
any other party hereto, each party hereto will, and will cause its
Affiliates and their respective Representatives to, promptly redeliver or
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cause to be redelivered all copies of documents and information furnished
by such other party in connection with this Agreement or the transactions
contemplated hereby and destroy or cause to be destroyed all notes,
memoranda, summaries, analyses, compilations and other writings related
thereto or based thereon prepared by the party furnished such documents and
information or its Representatives.
12.6 FURTHER ASSURANCES; POST-CLOSING COOPERATION. At any time
and from time to time after the Closing, the Owners, Xxxxxxxxx and the
Company shall execute and deliver to each Investor such other documents and
instruments, provide such materials and information and take such other
actions as any Investor may reasonably request more effectively to vest
title in such Investor to the Purchased Stock being purchased by such
Investor hereunder and otherwise to cause the Owners, Xxxxxxxxx and the
Company and to fulfill their respective obligations under this Agreement
and the Operative Agreements.
12.7 WAIVER. Any term or condition of this Agreement may be
waived at any time by any party hereto that is entitled to the benefit
thereof, but no such waiver shall be effective unless set forth in a
written instrument duly executed by or on behalf of the party waiving such
term or condition (and no such waiver shall in any event be binding on any
other party hereto that is entitled to the benefits of such term or
provision). No waiver by any party hereto of any term or condition of this
Agreement, in any one or more instances, shall be deemed to be or construed
as a waiver of the same or any other term or condition of this Agreement on
any future occasion. All remedies, either under this Agreement or by Law
or otherwise afforded, will be cumulative and not alternative.
12.8 AMENDMENT. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
12.9 THIRD PARTY BENEFICIARIES. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and
their respective successors and permitted assigns, and it is not the
intention of the parties to confer third-party beneficiary rights, and this
Agreement does not confer any such rights, upon any other Person other than
any Person entitled to indemnity under Article IX.
12.10 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor
any right, interest or obligation hereunder may be assigned (by operation
of law or otherwise) by any of the Owners, Xxxxxxxxx or the Company without
the prior written consent of the Investors and any attempt to do so will be
void. No Investor may assign its right hereunder to acquire Purchased
Stock to any other Person without the prior written consent of the other
parties hereto. Subject to the two immediately preceding sentences, this
Agreement is binding upon, inures to the benefit of and is enforceable by
the parties hereto and their respective successors and assigns.
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12.11 HEADINGS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
12.12 INVALID PROVISIONS. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future
Law, and if the rights or obligations of any party hereto under this
Agreement will not be materially and adversely affected thereby, (a) such
provision will be fully severable, (b) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, (c) the remaining provisions of this Agreement
will remain in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom
and (d) in lieu of such illegal, invalid or unenforceable provision, there
will be added automatically as a part of this Agreement a legal, valid and
enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.
12.13 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the
State of New York.
12.14 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
12.15 LIMITED RECOURSE. Notwithstanding anything in this
Agreement, any Operative Agreement or any other document, agreement or
instrument contemplated hereby or thereby to the contrary, the obligations
of any Investor hereunder and under any Operative Agreement shall be
without recourse to any partner, Associate or Affiliate of such Investor or
its partners, or any of such Investor's officers, directors, employees or
agents and shall be limited to the assets of such Investor.
12.16 INVESTORS' OBLIGATIONS SEVERAL AND NOT JOINT. The
obligations of each Investor under this Agreement are several and not
joint, and no Investor shall be Liable or otherwise responsible in any
manner for any violation or breach of, or any failure to perform, any
provision of this Agreement on the part of the other Investor.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by each party hereto as of the date first above written.
XXXXXXXXX INDUSTRIES INC.
By: /S/ XXXXXXX XXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: President
XXXXXXXXX INDUSTRIES LLC
By: /S/ XXXXXXX XXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: President
THE XXXXXX PUBLISHING COMPANY
By: /S/ BEURT SERVAAS
Name: Xx. Xxxxx X. XxxXxxx
Title: President
By: /S/ XXXX X. XXXXXX
Name: Xxxx X. Xxxxxx
Title: Assistant Secretary
BEURT SERVAAS REVOCABLE TRUST
By: /S/ BEURT SERVAAS
Name: Xx. Xxxxx X. XxxXxxx
Title: in his capacity as Trustee and
not in his individual capacity
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SPARTAN MOTORS, INC.
By: /S/ XXXXXX X. XXXXXXXX C.E.O.
Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer
RECOVERY EQUITY INVESTORS, II, L.P.,
By: Recovery Equity Partners II, L.P.,
its general partner
By: /S/ XXXXXX X. XXXX-XXXX
Name: Xxxxxx X. Xxxx-Xxxx
Title: General Partner
By: /S/ XXXXXXX X. XXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: General Partner
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GUARANTEE OF XX. XXXXX X. XXXXXXX
1. Xx. Xxxxx X. XxxXxxx (the "Guarantor") does hereby personally
guarantee full, prompt and complete performance by The Xxxxxx
Publishing Company, an Indiana corporation, Xxxxxxxxx Industries LLC,
an Indiana limited liability company, and the Beurt X. XxxXxxx
Revocable Trust (collectively, the "SerVaas Entities"), of their
respective obligations under Sections 4.16, 4.17, 5.1, 5.3, 5.4 and 5.8
of the Investment Agreement dated as of December 23, 1996 (as the same
may be amended, supplemented or otherwise modified from time to time,
the "Agreement"), including, without limitation, the payment of all
sums that may become due to Xxxxxxxxx Industries Inc., a Delaware
corporation, from the SerVaas Entities thereunder.
2. This Guarantee shall continue in full force and effect until
all the obligations of the SerVaas Entities under the Sections of the
Agreement specified in paragraph 1 above have been fully discharged by
the SerVaas Entities.
3. The obligations of the Guarantor under this Guarantee shall not
be discharged, impaired or otherwise affected by any alteration,
modification or extension of the obligations of the SerVaas Entities
under the Agreement.
4. The Guarantor hereby waives notice of acceptance of this
Guarantee.
5. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the undersigned hereby sets his hand as of
the day and year set forth below.
/S/ BEURT X. XXXXXXX
XX. XXXXX X. XXXXXXX
Dated as of December 23, 1996.
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