ASSET PURCHASE AGREEMENT
BETWEEN
YUKON EQUIPMENT, INC.
AND
WESTERN POWER & EQUIPMENT CORP.
DATE: XXXXX 00, 0000
XXXXX PURCHASE AGREEMENT
BETWEEN: Yukon Equipment, Inc.,
an Alaska corporation ("Yukon")
AND: Western Power & Equipment Corp.,
an Oregon corporation ("Western")
DATE: April 30, 1998
RECITALS
A. Yukon is the owner and operator of construction equipment sales, service,
and leasing operations in Anchorage, Fairbanks, and Juneau, Alaska (the "Retail
Operations"); and
B. Western desires to purchase from Yukon certain of the properties and assets
relating to the Retail Operations, and Yukon is willing to sell such assets and
properties to Western all under the terms and conditions below.
AGREEMENT
ARTICLE 1. DEFINITIONS
SECTION 1.01 "AFFILIATE" shall mean any Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with the Person specified.
SECTION 1.02 "ENVIRONMENTAL LAWS" shall mean any applicable federal,
state or local law, rule or regulation in effect on the date hereof: (a)
relating to releases or threatened releases of Hazardous Materials; (b) relating
to the manufacture, handling, transport, use, treatment, storage or disposal of
Hazardous Materials or materials containing Hazardous Materials; or (c)
otherwise relating to pollution of the environment or the protection of human
health.
Asset Purchase Agreement Page 1
(#9101)
SECTION 1.03 "HAZARDOUS MATERIALS" shall mean materials that contain
substances defined as hazardous or toxic substances under the following
statutes, as well as such statutes implementing regulations as in effect on the
date hereof: the Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water
Act, the Atomic Energy Act, the Toxic Substances Control Act, the Federal
Insecticide, Fungicide, and Rodenticide Act, and the Clean Air Act, and any
other materials that a federal, state or local agency requires to be remediated
pursuant to any Environmental Law.
SECTION 1.04 "KNOWLEDGE" with respect to Yukon shall mean the best
knowledge of Xxxxx Xxxxxxxxx, President and Xxxx Xxxxxx, Sales Manager.
SECTION 1.05 "LIEN" shall mean any mortgage, pledge, security interest,
lease, lien or other encumbrance of any kind, including without limitation any
conditional sale contract, title retention contract or similar arrangement.
SECTION 1.06 "PERMITTED EXCEPTIONS" shall mean:
(a) Liens for taxes not yet due and payable or being contested in
good faith.
(b) Materialmen, mechanics, workers, repairmen, employees or other
similar Liens arising in the ordinary course of the operation of the
Retail Operations.
(c) All rights to consent by, required notices to, filings with, or
other actions by governmental entities if the same are customarily
obtained or made subsequent to sale or conveyance.
(d) Rights reserved to or vested in any local, state or federal
governmental bodies, authorities or agencies to control or regulate
any of the Real Property in any manner, and all laws, rules,
regulations, ordinances and orders of any such bodies, authorities or
agencies.
(e) All reservations and conveyances of minerals of whatever kind and
character (including, without limitation, all coal, iron ore, oil,
gas, sulfur, methane gas in coal seams, limestone and other minerals,
metals and ores) located on, in or under the Real Property and all
rights with respect to the mining, extraction and removal of the
minerals so located, that have been granted or leased to, or excepted
or reserved by, persons other than Yukon, its Affiliates and its
corporate predecessors by merger.
(f) Any other Liens that would not reasonably be expected to have a
material adverse effect on the conduct of the Retail Operations as
currently conducted by Yukon.
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(g) Any liens of Case Credit Corporation, Case Corporation, or as
disclosed in the attached EXHIBIT X.
ARTICLE 2. PURCHASE AND SALE
SECTION 2.01 PURCHASE AND SALE OF ASSETS. Western purchases from Yukon,
and Yukon sells to Western, all of the right, title and interest of Yukon in the
following assets, properties and rights associated with the Retail Operations
(the "Purchased Assets"), which Purchased Assets are more particularly described
below:
(a) New Case Equipment. All items of new Case construction equipment
and attachments set forth on EXHIBIT A ("New Case Equipment").
(b) Allied Equipment. All items of allied equipment and attachments
set forth on EXHIBIT B ("Allied Equipment").
(c) Used Equipment. All items of used construction equipment and
attachments set forth on EXHIBIT C ("Used Equipment").
(d) Case Parts. All Case parts set forth on EXHIBIT D ("Case
Parts").
(e) Allied Parts. All allied parts set forth on EXHIBIT E ("Allied
Parts").
(f) Accounts Receivable. The accounts receivable set forth on
EXHIBIT F ("Accounts Receivable").
(g) Vehicles. All vehicles set forth on EXHIBIT G ("Vehicles").
(h) Furniture and Fixtures. All furniture and fixtures set forth on
EXHIBIT H ("Furniture and Fixtures").
(i) Shop Tools. All shop tools and equipment set forth on EXHIBIT I
("Shop Tools").
(j) Manuals. All service libraries, technical publications, parts
books, warranty cards, computer tapes (containing parts inventory,
sales history, and customer master list) and customer lists set forth
on EXHIBIT J ("Manuals").
(k) Supplies. All office and shop supplies set forth on EXHIBIT K
(collectively, the "Supplies").
(l) Forklifts. All forklifts set forth on EXHIBIT L ("Forklifts").
(m) Work-In-Process. All parts and labor expended by Yukon on
service
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orders in-process set forth on EXHIBIT M ("Work-In-Process").
(n) Office Equipment Leases. All leases for radios, copiers,
facsimile machines, telephones and telephone lines and other items of
office equipment set forth on EXHIBIT N ("Office Equipment Leases").
(o) Customer Orders. All customer orders set forth on Exhibit O (the
"Customer Orders").
(p) Store Obligations. All maintenance contracts between Yukon and
certain municipalities and utility companies and all equipment
contracts between Yukon and governmental agencies pursuant to which
Yukon is obligated to repurchase equipment listed on EXHIBIT P
(collectively, "Store Obligations").
(q) Intellectual Property. All tradenames, trademarks, servicemarks,
and other intellectual property of Yukon, including, but not limited
to, the Yukon Equipment name and related trademark, as set forth on
attached EXHIBIT Q ("Intellectual Property"), but excluding computer
software if the sale or transfer of such software would violate any
licensing agreement between Yukon and the software manufacturer.
(r) Real Property Leases. Western assumes Yukon's obligations on the
real property leases for Yukon's facilities in Fairbanks, Alaska and
in Juneau, Alaska.
SECTION 2.02 PURCHASE AND SALE OF REAL PROPERTY.
(a) Effective May 1, 1998, Yukon and Western shall enter into a
standard triple net commercial month-to-month lease for the real
estate and improvements used in connection with the Retail Operations
located at 0000 X. Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxx (collectively, the
"Real Property"). The monthly lease rate shall be $8,000.00 payable
in advance on the first of each month. The monthly rent shall be
prorated for commencement and termination on other than the first day
of any month. Western shall provide insurance coverage on the Real
Property and its business operations reasonably acceptable to Yukon.
(b) Within 90 days of the date of this Agreement, Yukon may elect to
sell to Western, and upon such election Western shall be obligated to
purchase from Yukon, subject to the exceptions below, all of the
right, title, and interest of Yukon at the Real Property's fair market
value as determined by independent appraisal. Western and Yukon shall
each select one MAI certified appraiser to prepare an appraisal of the
Real Property. The costs of each of the appraiser shall be born by
the party selecting the appraiser. As long as the two appraisals do
not differ by more than 15%, the purchase price shall be the average
of the two appraisals. If the two appraisals differ by 15% or more,
the two selected
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appraisers shall jointly select a third appraiser to appraise the
facility. The costs of the third appraisal shall be shared equally by
the parties. The third appraiser's fair market value shall be
included in the arithmetic average of the other two appraisers and the
resulting average of all three appraisals shall be the purchase price.
Such amount shall be paid in full in cash no more than three (3)
months following the date of Yukon's election to sell the Real
Property to Western. Yukon will provide a title insurance policy at
closing which is satisfactory to Western. Western's obligation to
purchase the Real Property shall be subject to Western's approval of
the title policy as well as the environmental survey to be performed
in accordance with Section 6.04, which approval shall not be
unreasonably withheld.
(c) If Yukon does not elect to sell the Real Property within 90 days
of the date of this Agreement, Yukon and Western shall enter into a
ten year lease of the facility, in substantially the form of attached
EXHIBIT Z, at an initial lease rate of $8,000.00 per month. Such
lease shall be renewable at the end of the ten year lease period for
an additional ten year period, at Western's option, with the rental
amount to be determined by agreement between Yukon and Western. Once
such a lease becomes effective, all prior rental and lease agreements
regarding the Real Property shall be terminated.
SECTION 2.03 EXCLUDED ASSETS. The assets of Yukon being sold,
transferred, assigned and delivered to Western shall include only those
Purchased Assets described in Section 2.01 and the Real Property described in
Section 2.02. Such Purchased Assets and Real Property shall not, however,
include any of the following assets or properties of Yukon:
(a) Cash and cash equivalents on hand or in banks as of April 30,
1998.
(b) Prepaid taxes, insurance, and other expenses and credits, refunds
and receivables of such items.
(c) Any other assets not specifically described in Section 2.01 or
Section 2.02.
For purposes of this Agreement, all of the property, assets and rights retained
by Yukon under this Section 2.03 are collectively referred to as the "Excluded
Assets."
SECTION 2.04 ASSUMED LIABILITIES. As of the date of this Agreement,
Western assumes and shall hereafter pay, perform, or otherwise discharge all
obligations of Yukon, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, or any of its Affiliates
under the contracts and contract rights included in the Purchased Assets and
including, but not limited to:
(a) The Store Obligations.
(b) Yukon's existing liability to Case Credit Corporation and Case
Corporation.
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(c) Yukon's liability under the leases described in Paragraphs
2.01(n), (p), and (r).
It is understood and agreed that Western is purchasing the Purchased Assets
specified under this Agreement only and is not purchasing any business or the
Retail Operations as a going concern. Except as otherwise specified in this
Agreement, Western is not assuming any debt, liability, contract, undertaking,
or commitment of, or claim against, Yukon, the Retail Operations, or the
Purchased Assets, of any nature, known or unknown, fixed or contingent, or
whether pertaining to the Purchased Assets or otherwise, that occurred prior to
the date of this Agreement.
SECTION 2.05 PURCHASE PRICE.
(a) The purchase price for the Purchased Assets ("Purchase Price") is
as follows:
(1) NEW CASE EQUIPMENT. The purchase price for the New Case
Equipment, as set forth on Exhibit A attached hereto, is
$3,371,489.00.
(2) ALLIED EQUIPMENT. The purchase price for the Allied
Equipment, as set forth on Schedule B attached hereto, is
$2,190,387.00.
(3) USED EQUIPMENT. The purchase price for the Used
Equipment, as set forth on Schedule C attached hereto, is
$118,275.00.
(4) CASE PARTS. The purchase price for the Case Parts, as set
forth on Schedule D attached hereto, is $407,937.00.
(5) ALLIED PARTS. The purchase price for the Allied Parts, as
set forth on Schedule E attached hereto, is $205,231.00.
(6) ACCOUNTS RECEIVABLE. The purchase price for the Accounts
Receivable, as set forth on Schedule F attached hereto, is
$651,157.23.
(7) VEHICLES. The purchase price for the Vehicles, as set
forth on Schedule G attached hereto, is $187,600.
(8) FURNITURE AND FIXTURES. The purchase price for the
Furniture and Fixtures, as set forth on Schedule H attached
hereto, is $73,328.00.
(9) SHOP TOOLS. The purchase price for the Shop Tools, as set
forth on Schedule I attached hereto, shall be $105,319.00.
(10) MANUALS. The purchase price for the Manuals, as set forth
on
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Schedule J attached hereto, shall be $11,436.00.
(11) SUPPLIES. The purchase price for the Supplies, as set
forth on Schedule K attached hereto, shall be $7,700.00.
(12) FORKLIFTS. The purchase price for the Forklifts, as set
forth on Schedule L attached hereto, shall be $13,000.00.
(13) WORK-IN-PROCESS. The purchase price for the
Work-in-Process is $59,008.00, as set forth on Schedule M
attached hereto.
(14) OFFICE EQUIPMENT LEASES. The purchase price for the
Office Equipment Leases, as set forth on Schedule N attached
hereto, is $8,215.35.
(15) CUSTOMER ORDERS. The purchase price for the Customer
Orders, as set forth on Schedule O attached hereto, is
$200,000.00.
(16) STORE OBLIGATIONS. The purchase price for the Store
Obligations, as set forth on Schedule P attached hereto, is $-0-.
(17) INTELLECTUAL PROPERTY. The purchase price for the
Intellectual Property, as set forth on Schedule Q attached
hereto, is $100,000.00.
(b) The Purchase Price is payable in cash, except as follows:
(1) NEW CASE EQUIPMENT. Western is assuming Yukon's existing
flooring obligations on New Case Equipment in the amount of
$2,378,352.00 with the difference paid in cash.
(2) WESTERN STOCK. Western shall, within 30 days of the date
of this Agreement, deliver to Yukon a stock certificate for
50,000 shares of Western's common stock.
(3) OFFICE EQUIPMENT LEASES. Western is assuming Yukon's
existing obligations on the Office Equipment Leases in the amount
of $8,215.35.
(4) REAL PROPERTY LEASES. Western is assuming Yukon's
liability under Yukon's real property leases with C & N Partners
and Excalibur Drilling.
(5) CASE PARTS. Yukon's existing inventory of Case Parts will
be transferred to Western in accordance with Case Corporation's
current Dealer Parts Inventory Transfers Policy. Such transfer
will result in Case Corporation issuing Yukon a credit in the
amount of the Case Parts
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purchase price. In the event that all or a portion of the Case
Parts purchase price is not credited to Yukon by Case
Corporation, Western will pay Yukon such portion of the Case
Parts purchase price in cash within 30 days of the date of this
Agreement.
(c) Western shall reimburse Yukon $200,000.00 for all of Yukon's
closing and related costs.
SECTION 2.06 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be
allocated in the manner set forth in Section 2.05.
ARTICLE 3. DELIVERIES
SECTION 3.01 DELIVERIES BY YUKON. Yukon has delivered to Western the
following:
(a) An executed and acknowledged xxxx of sale and assignment and
assumption agreement substantially in the forms attached hereto as
Exhibits S and T, respectively, each in form and substance as
necessary to transfer to Western all of Yukon's right, title, and
interest in and to the Purchased Assets.
(b) An Executed Stock Subscription Agreement and related documents as
required by Western for issuance of any Western common stock to be
received by Yukon substantially in the form attached as EXHIBIT U.
(c) The other documents, instruments, and writings required to be
delivered by Yukon pursuant to this Agreement or otherwise required in
connection herewith.
SECTION 3.02 DELIVERIES BY WESTERN. Western has delivered to Yukon the
following:
(a) The amount of the Purchase Price and any other amounts due under
this Agreement other than the amount due for purchase of the Real
Property.
(b) An employment agreement between Western and Xxxxx Xxxxxxxxx in
the form attached as EXHIBIT V.
(c) An executed and acknowledged assignment and assumption agreement
substantially in the form attached hereto as EXHIBIT T.
(d) The other documents, instruments and writings required to be
delivered by Western pursuant to this Agreement or otherwise required
in connection herewith.
SECTION 3.03 DELIVERIES TO BE MADE BY WESTERN. Western shall deliver to Yukon
within 30 days of the date of this Agreement the following:
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(a) A stock certificate for 50,000 shares of Western's common stock;
and
(b) A stock option agreement for 25,000 shares of Western's common
stock between Western and Xxxxx Xxxxxxxxx in the form attached as
EXHIBIT W.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF YUKON. Yukon represents and
warrants to Western as set forth below:
SECTION 4.01 ORGANIZATION AND QUALIFICATION. Yukon is a corporation
validly existing and in good standing under the laws of the State of Alaska and
is duly qualified to conduct business in the State of Alaska.
SECTION 4.02 AUTHORITY RELATIVE TO THIS AGREEMENT. Yukon has the
requisite corporate power to execute and deliver this Agreement and the related
agreements contemplated hereby to which it is a party and to consummate the
transactions contemplated thereby. The execution and delivery by Yukon of this
Agreement and the related agreements contemplated hereby to which Yukon is a
party and the consummation of the transactions contemplated thereby have been
duly authorized by all necessary corporate action on the part of Yukon. This
Agreement and the related agreements contemplated hereby to which Yukon is a
party have been duly executed and delivered by Yukon and constitute legal, valid
and binding obligations of Yukon and are enforceable against Yukon in accordance
with their terms subject to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws affecting
creditors' rights and remedies generally and to the effect of general principles
of equity (regardless of whether enforcement is considered in a proceeding at
law or in equity).
SECTION 4.03 CONSENTS AND APPROVALS. The execution and delivery by Yukon
of this Agreement and the related agreements contemplated hereby to which it is
a party do not, and compliance by Yukon with the terms thereof and consummation
by Yukon of the transactions contemplated thereby will not, require Yukon to
obtain any consent, approval, exemption, authorization, or other action of, or
make any filing with or give any notice to, any court, administrative agency or
other governmental authority, except where failure to obtain such consents,
approvals, exemptions, authorizations, or actions, make such filings or give
such notices would not reasonably be expected to have a material adverse effect
on the Retail Operations as currently conducted by Yukon or would not reasonably
be expected to materially adversely affect the ability of Yukon to perform any
of its material obligations hereunder.
SECTION 4.04 NO VIOLATION. Assuming all consents, approvals, exemptions,
authorizations, and other actions have been obtained, the execution and delivery
by Yukon of this Agreement and the related agreements contemplated hereby to
which Yukon is a party do not, and the performance by Yukon of this Agreement
and the related agreements contemplated hereby to which Yukon is a party will
not conflict with or result in a breach of the Certificate of Incorporation or
bylaws of Yukon.
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SECTION 4.05 LITIGATION. At the date of this Agreement (i) there are no
actions, suits, claims, arbitration proceedings or governmental investigations
or inquiries pending, or to the Knowledge of Yukon threatened, against Yukon, or
its properties, assets, operations or businesses (A) seeking to prevent the
consummation of the transactions contemplated hereby or (B) that would
reasonably be expected to have a material adverse effect on the Retail
Operations as currently conducted by Yukon, and (ii) there are no judgments,
decrees, injunctions, orders or consent orders of any court, governmental
authority or arbitrator issued in any proceeding to which Yukon or any of its
Affiliates is or was a party that, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the Retail
Operations as currently conducted by Yukon.
SECTION 4.06 OWNERSHIP OF PURCHASED ASSETS AND REAL PROPERTY. Yukon has
title to (i) the tangible personal property included in the Purchased Assets;
and (ii) the Real Property, sufficient for the conduct of the Retail Operations
as currently conducted by Yukon. Yukon shall, by June 15, 1998, do all things
necessary to extinguish any liens against the Purchased Assets existing as of
April 30, 1998, except for the Permitted Exceptions.
SECTION 4.07 LABOR MATTERS. Yukon is not a party to any collective
bargaining agreement relating to employees who are employed at the Retail
Operations. There are no labor controversies pending or, to the Knowledge of
Yukon, threatened with respect to the Retail Operations that could reasonably be
expected to have, individually or in the aggregate, a material adverse effect on
the ownership or operation of the Purchased Assets, the Real Property or the
Retail Operations, and there are no grievances outstanding, or unfair labor
practice complaints pending before the National Labor Relations Board, against
Yukon in respect of employees who are employed at the Retail Operations that
would reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the Retail Operations as currently conducted by
Yukon.
SECTION 4.08 ENVIRONMENTAL COMPLIANCE. Yukon has operated the Retail
Operations in an environmentally acceptable manner, and to the knowledge of
Yukon, there have been no material discharges of Hazardous Material onto the
Real Property.
SECTION 4.09 ACCURACY OF INFORMATION. To the Knowledge of Yukon, all
information contained in this Agreement and all exhibit to this Agreement,
including descriptions of the Purchased Assets, price information and
information on the schedules to such exhibits and to the Agreement, is true and
correct.
SECTION 4.10 BROKERS OR FINDERS. Neither Yukon nor any of its directors,
officers, employees, or agents have retained, employed or used any broker or
finder in connection with the transaction provided for herein or in connection
with the negotiation thereof.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF WESTERN. Western represents and
warrants to Yukon as set forth below.
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SECTION 5.01 ORGANIZATION AND QUALIFICATION. Western is a corporation
validly existing and in good standing under the laws of the State of Oregon.
SECTION 5.02 AUTHORITY RELATIVE TO THIS AGREEMENT. Western has the
requisite corporate power to execute and deliver this Agreement and the related
agreements contemplated hereby to which it is a party and to consummate the
transactions contemplated thereby. The execution and delivery by Western of
this Agreement and the related agreements contemplated hereby to which Western
is a party and the consummation of the transactions contemplated thereby have
been duly authorized by all necessary corporate action on the part of Western.
This Agreement and the related agreements contemplated hereby to which Western
is a party have been duly executed and delivered by Western and constitute
legal, valid and binding obligations of Western and are enforceable against
Western in accordance with their terms subject to the effect of any applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting creditors' rights and remedies generally and to the
effect of general principles of equity (regardless of whether enforcement is
considered in a proceeding at law or in equity).
SECTION 5.03 CONSENTS AND APPROVALS. The execution and delivery by
Western of this Agreement and the related agreements contemplated hereby to
which Western is a party do not, and compliance by Western with the terms
thereof and consummation by Western of the transactions contemplated thereby
will not, require Western to obtain any consent, approval, exemption,
authorization or other action of, or make any filing with or give any notice to,
any court, administrative agency, or other governmental authority or any other
person, or except where failure to obtain such consents, approvals, exemptions,
authorizations, or actions, make such filings or give such notices would not
materially adversely affect the ability of Western to perform any of its
material obligations hereunder.
SECTION 5.04 NO VIOLATION. Assuming all consents, approvals, exemptions,
authorizations, and other actions have been obtained, the execution and delivery
by Western of this Agreement and the related agreements contemplated hereby to
which Western is a party do not, and the performance by Western of this
Agreement and the related agreements contemplated hereby to which Western is a
party will not, (i) conflict with or result in a breach of Western's Certificate
of Incorporation or bylaws, (ii) violate, or conflict with, or constitute a
default under, or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation or imposition of any
Lien upon the properties or assets of Western under, any mortgage, indenture,
agreement, judgment, decree or court order to which Western is a party or by
which any of the properties or assets of Western is bound, which violation,
conflict, default or Lien would adversely affect the ability of Western to
perform its obligations under this Agreement or the related agreements
contemplated hereby to which Western is a party.
SECTION 5.05 LITIGATION. At the date of this Agreement to the best
knowledge of Western, (i) there are no actions, suits, claims, arbitration
proceedings or governmental investigations or inquiries pending, or to the
knowledge of Western threatened, against Western or its properties, assets,
operations or businesses (A) seeking to prevent the consummation of the
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transactions contemplated hereby; or (B) that, individually or in the aggregate,
could reasonably be expected to have a material adverse effect on the ability of
Western to perform its obligations under this Agreement or the transactions
contemplated hereby; and (ii) there are no judgments, decrees, injunctions,
orders or consent orders of any court, governmental authority or arbitrator
issued in any proceeding to which Western or any of its affiliates is or was a
party that, individually or in the aggregate, could reasonably be expected to
have a material adverse effect on the ability of Western to perform its
obligations under this Agreement or the transactions contemplated hereby.
SECTION 5.06 FINANCING. Western has sufficient funds or committed lines
of credit to consummate the transactions contemplated by this Agreement.
SECTION 5.07 INSPECTION OF ASSETS AND REAL PROPERTY. Western has
inspected to its complete satisfaction the physical condition of the Purchased
Assets and the Real Property; PROVIDED, that the provisions of this section
shall not constitute a waiver by Western of any its rights or any of Yukon's
obligations with respect to the Real Property.
SECTION 5.08 BANKRUPTCY. Western is not, and has not within the past six
years been, the subject of a bankruptcy or insolvency proceeding, nor is Western
subject to any Lien that might adversely affect Western's ability to perform its
obligations as contemplated by this Agreement.
SECTION 5.09 EMPLOYER IDENTIFICATION NUMBER. Western's federal employer
identification number is 00-0000000.
ARTICLE 6. ADDITIONAL COVENANTS OF THE PARTIES
SECTION 6.01 FURTHER ASSURANCES. Each party will use reasonable efforts
to take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable to carry out all of its respective
obligations under this Agreement and to consummate and make effective the
purchase and sale of the Purchased Assets and the Real Property pursuant to this
Agreement. Each party shall, and shall cause its Affiliates to, execute,
acknowledge and deliver all such further conveyances, notices, assumptions,
releases and acquittances and such other instruments, and shall take such
further actions, as may be necessary or appropriate more fully to assure to
Western and their successors or permitted assigns, all of the properties,
rights, titles, interests, estates, remedies, powers and privileges intended to
be conveyed to Western pursuant to this Agreement and more fully to assure to
Yukon and its Affiliates and their successors and assigns the assumption of the
liabilities and obligations intended to be assumed by Western pursuant to this
Agreement, respectively.
SECTION 6.02 NONASSIGNABLE CONTRACTS. To the extent any lease, contract,
right, or commitment included in the Purchased Assets is not capable of being
assigned, transferred, subleased, or sublicensed without the consent or waiver
of the issuer thereof, the other party thereto, or any third party (including a
government or governmental unit), or if such assignment,
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transfer, sublease, or sublicense or attempted assignment, transfer, sublease or
sublicense would constitute a breach thereof or a violation of any law, decree,
order, regulation, or other governmental edict, this Agreement shall not
constitute an assignment, transfer, sublease, or sublicense thereof, or an
attempted assignment, transfer, sublease or sublicense of any such lease,
contract, right, or commitment. Anything in this Agreement to the contrary
notwithstanding, Yukon is not obligated to transfer to Western any of its rights
and obligations in and to any such contract, lease, right, or commitment without
first having obtained all necessary consents and waivers.
SECTION 6.03 PRESERVATION OF RECORDS. Except for tax records, Western
shall preserve and keep (or cause to be preserved and kept) the books and
records conveyed pursuant to this Agreement, and Yukon shall preserve and keep
(or cause to be preserved and kept) such books and records as it or any of its
Affiliates shall retain with respect to the Purchased Assets, for a period of
three years after the date of this Agreement, and Western and Yukon shall each
grant to the other reasonable access to such books and records retained by them
during such period. In the event either Western or Yukon wishes to destroy such
records after such period, it shall first give written notice to the other party
and the other party shall have the right at its option, upon prior written
notice given to the party providing the initial notice, to take possession of
said records as promptly as practicable, but in any event within 180 days after
the date of its notice requesting the same.
SECTION 6.04 ENVIRONMENTAL MATTERS.
(a) Yukon shall contract for an environmental phase one survey to be
conducted for the Anchorage facility which survey shall be delivered
to Western at least two weeks prior to the closing of Western's
purchase of the Real Property.
(b) Western shall provide Yukon and its agents and representatives
access to the Retail Operations and Real Property for purposes of
performing any remedial action recommended in such survey.
(c) After any such remedial work has been performed, Western agrees
to accept the Retail Operations and the Real Property "AS IS," "WHERE
IS." Yukon shall have no further liability with respect to
environmental matters, except as may arise from the breach of its
representations and warranties contained in Section 4.08.
SECTION 6.05 RISK OF LOSS. Western assumes all risk of loss from all
causes with respect to the Real Property and Purchased Assets from and after the
date of this Agreement.
SECTION 6.06 CERTAIN PERSONNEL MATTERS.
(a) Compensation of, and bonuses for, all employees of the Retail
Operations owed for all periods of employment of such employees
through and including the
Page 13
date of this shall be borne and paid for by Yukon. Compensation of
and any bonuses for all employees hired by Western for all periods of
employment subsequent to the date of this Agreement shall be borne and
paid for by Western. All vacation, sick day and holiday pay of all
employees of the Retail Operations that have accrued or were earned
prior to the date of this Agreement shall be the sole responsibility
of Yukon and shall be paid in full prior to the date of this Agreement
or accrued on the books of Yukon and remitted to the employee at the
time of his or her vacation or holiday.
(b) Yukon shall be solely liable and responsible for obligations
under any and all deferred compensation, pension, profit sharing,
retirement, group insurance, or other employee benefit or welfare
plans, written or oral, relating to employees of the Retail
Operations, whether or not constituting an "employee benefit plan"
under the Employee Retirement Income Security Act of 1974, as amended,
that have accrued through and including the date of this Agreement.
Western shall be solely liable and responsible for such obligations
from the date of this Agreement.
SECTION 6.07 BUSINESS CUTOFF. Commencing as of the day following the
date of this Agreement (i) all sales of new, used, and allied machinery and
attachments, parts and service shall be deemed to have been conducted for the
account of Western and (ii) all obligations for the following shall be deemed to
have been for the account of Western: sales commissions, travel and
entertainment expenses, purchases of allied parts, allied machinery and
attachments and shop and office supplies, shipping costs and costs of outside
labor and materials incurred in connection with the Retail Operations.
SECTION 6.08. CONSENT OF CASE CREDIT CORPORATION AND CASE CORPORATION.
Western acknowledges that Yukon's agreements with Case Credit Corporation and
Case Corporation ("Case") require that Yukon obtain the consent of Case to the
sale transaction described in this agreement, and that such consent HAS NOT been
obtained. It is therefore stipulated and agreed that should Western fail to
obtain the consent of Case to this transaction, or should Case decline to
release Xxxxx Xxxxxxxxx or Xxxxx Xxxxxxxxx from their existing liability to
Case, by June 15, 1998, this agreement shall be deemed null and void, AB INITIO.
ARTICLE 7. INDEMNIFICATION AND LIMITATIONS ON LIABILITY
SECTION 7.01 DEFINITIONS. As used in this Article, the following terms
shall have the meanings set forth below:
(a) LOSSES. The term "Loss" or "Losses" shall mean any and all
direct or indirect payments, assessments, liabilities, costs and
expenses paid or incurred (whether or not known or asserted prior to
the date hereof, fixed or unfixed, conditional or unconditional,
xxxxxx or inchoate, liquidated or unliquidated, secured or unsecured,
accrued, absolute, contingent or otherwise), including without
limitation penalties, interest on any amount payable to an
unaffiliated party
Page 14
as a result of the foregoing and, subject to Section 7.05 hereof, any
legal or other expenses reasonably incurred in connection with
investigating or defending any Third-Party Claims, whether or not
resulting in any liability, and all amounts paid in respect of claims
or actions in accordance with Section 7.05 hereof; PROVIDED, however,
that Losses shall not include any loss of profit or anticipated profit
and shall be net of any insurance proceeds received by an Indemnitee
from a nonaffiliated insurance company on account of such Losses
(after deducting any direct costs incurred in obtaining such
proceeds); PROVIDED, FURTHER, however, that nothing in this Article
shall require an Indemnitee to proceed against its insurance carrier.
(b) THIRD-PARTY CLAIMS. The term "Third-Party Claims" shall mean any
claims, actions or rights asserted against an Indemnitee by a party
that is not the Indemnitor and is not an Affiliate of the Indemnitee,
including without limitation, claims by governmental authorities.
(c) INDEMNITEE. The term "Indemnitee" shall mean any Person that may
be entitled to seek indemnification pursuant to the provisions of
Section 7.02 or Section 7.03 hereof.
(d) INDEMNITOR. The term "Indemnitor" shall mean any Person that may
be obligated to provide indemnification pursuant to Section 7.02 or
Section 7.03 hereof.
(e) SPECIFIED OFFICER. With respect to any particular matter, the
term "Specified Officer," as applied to any corporation, shall mean
the chairman, president, general counsel, any vice president, or
secretary of such corporation, or the manager of any plant or other
facility of such corporation, or any other employee or agent of such
corporation (who may report, directly or indirectly, to such person)
having responsibility for an operational or staff function who in the
normal course of such officer's, manager's or other person's
responsibility would reasonably be expected to have knowledge of such
matter.
(f) NOTICE PERIOD--THIRD-PARTY CLAIMS. The term "Notice Period," as
applied to any Third-Party Claim for which an Indemnitee seeks to be
indemnified pursuant to this Article, shall mean the period ending the
earlier of the following:
(1) Three months after the time at which any Specified Officer
of the Indemnitee (or the Indemnitee, if the Indemnitee is an
individual) has received actual notice of such Third-Party Claim.
(2) With respect to any Third-Party Claim that has become the
subject of proceedings before any court or tribunal, such time as
would allow the Indemnitor sufficient time to contest, on the
assumption that there is an
Page 15
arguable defense to such Third-Party Claim, such proceeding prior
to any judgment or decision thereon.
(3) With respect to any Third-Party Claim that the Indemnitee
proposes to pay or settle, such time as would provide the
Indemnitor sufficient time prior to such payment or settlement to
determine whether to contest such claim and assume the defense
pursuant to Section 7.05.
(4) The time period under which a Claim Notice must be given as
set forth in Section 7.06.
(g) CLAIM NOTICE. The term "Claim Notice" shall have the meaning set
forth in Section 7.04.
SECTION 7.02 INDEMNITY BY YUKON. Subject to Section 7.09, Yukon shall,
to the fullest extent permitted by law, defend and hold harmless Western and
their Affiliates, including the directors, officers, employees, agents and
representatives of each of them (each of whom may be an Indemnitee pursuant to
this section), from and against the following:
(a) BREACH. All Losses arising from the breach by Yukon in any
material respect of any of its covenants or representations set forth
in this Agreement.
(b) LIABILITIES. Other than Losses pertaining to Environmental Loss
(specifically sections 4.08, 6.04 and 7.09[a]) all Losses relating to
the ownership or operation of the Retail Operations prior to the date
of this Agreement.
SECTION 7.03 INDEMNITY BY WESTERN. Western shall, to the fullest extent
permitted by law, defend and hold harmless Yukon and its Affiliates, including
the current and former directors, officers, employees, agents, and
representatives of each of them (each of whom may be an Indemnitee pursuant to
this section), from and against the following:
(a) LIABILITIES. All Losses (other than Losses for which Yukon is
obligated to indemnify Western pursuant to Section 7.02) relating to
or arising from the ownership, operation, occupancy, construction,
condition (including without limitation environmental conditions) or
use of the Purchased Assets or the Real Property or operation of a
dealership, to the extent such Losses relate to, arise from or are
associated with any period after the date of this Agreement and
whether arising from the negligence or gross negligence of Yukon or
any of its Affiliates or otherwise.
(b) BREACH. All Losses arising from the breach by Western in any
material respect of any of their covenants or representations set
forth in this Agreement.
SECTION 7.04 NOTIFICATION OF THIRD-PARTY CLAIMS. In no case shall any
Indemnitor
Page 16
under this Agreement be liable with respect to any Third-Party Claim against any
Indemnitee unless the Indemnitee shall have delivered to the Indemnitor within
the Notice Period a notice ("Claim Notice") describing in reasonable detail the
facts giving rise to such Third-Party Claim and stating that the Indemnitee
intends to seek indemnification for such Third-Party Claim from the Indemnitor
pursuant to this Article.
SECTION 7.05 DEFENSE OF CLAIMS. Upon receipt of a Claim Notice from an
Indemnitee with respect to any Third-Party Claim, the Indemnitor may assume the
defense thereof with counsel reasonably satisfactory to such Indemnitee and the
Indemnitee shall cooperate in all reasonable respects in such defense. The
Indemnitee shall have the right to employ separate counsel in any action or
claim and to participate in the defense thereof, provided that the fees and
expenses of counsel employed by the Indemnitee shall be at the expense of the
Indemnitor only if such counsel is retained pursuant to the second succeeding
sentence or if the employment of such counsel has been specifically authorized
by the Indemnitor. The Indemnitor may conduct such defense in the name of or on
behalf of the Indemnitee or Indemnitor and shall have full authority and control
with respect thereto, including the settlement thereof. If the Indemnitor does
not notify the Indemnitee within 60 days after receipt of the Claim Notice that
it elects to undertake the defense thereof, the Indemnitee shall have the right
to defend at the expense of the Indemnitor the claim with counsel of its
choosing, subject to the right of the Indemnitor to assume the defense of any
claim at any time prior to settlement or final determination thereof. In such
event, the Indemnitee shall send a written notice to the Indemnitor of any
proposed settlement of any claim, which settlement the Indemnitor may reject, in
its reasonable judgment, within 30 days after receipt of such notice. Failure
to reject such settlement within such 30-day period shall be deemed an
acceptance of such settlement. In the event the Indemnitor rejects such
settlement, the Indemnitee shall have the right to settle the claim over the
objection of the Indemnitor, unless the Indemnitor assumes the defense from the
Indemnitee upon rejecting the settlement.
SECTION 7.06 NOTICE OF OTHER CLAIMS. In the event any Indemnitee should
have a claim against any Indemnitor under or in connection with this Agreement
that does not involve a Third-Party Claim, the Indemnitee shall notify the
Indemnitor of such claim, specifying the nature of and specific basis for such
claim and the amount of such claim, with reasonable promptness, but in no event
later than when notice thereof is required to be made pursuant to this Article.
The Indemnitor shall remit payment for the amount of such claim upon receipt of
an invoice therefor, or in the event of a dispute, the Indemnitee and the
Indemnitor shall proceed in good faith to negotiate a resolution of such
dispute, and if not resolved through negotiations, such dispute will be resolved
by litigation in an appropriate court of competent jurisdiction.
SECTION 7.07 ACCESS AND COOPERATION. Yukon and Western shall each
cooperate fully with the other as to all claims made under this Agreement, shall
make available to the other as reasonably requested all information, records and
documents relating to all such claims and shall preserve all such information,
records and documents until the termination of any such claim. Yukon and
Western also shall each make available to the other, as reasonably requested and
subject to availability, its personnel (including technical and scientific),
agents and other representatives who are responsible for preparing or
maintaining information, records or other
Page 17
documents, or who may have particular knowledge with respect to any such claim.
SECTION 7.08 NO INSURANCE. The indemnifications provided for in this
Article shall not be construed as a form of insurance and shall be binding upon
and inure to the benefit of Yukon and Western and their respective Affiliates,
successors and permitted assigns. Yukon and Western hereby waive for
themselves, their Affiliates, successors and permitted assigns, including
without limitation any insurers, any rights to subrogation for Losses arising
from claims for which each of them is respectively liable or against which each
respectively indemnifies the other, and, if necessary, Yukon and Western shall
obtain waiver of such subrogation from their respective insurers.
SECTION 7.09 LIMITATIONS ON LIABILITIES.
(a) LIMITATION ON LIABILITY.
(1) Yukon's obligations for any claim relating to any
Environmental Law, Hazardous Materials or other
environmental matter shall arise only under Section 7.02(b)
for breaches of the representations and warranties contained
in Section 4.08.
(2) Yukon shall have no liability for any Indemnifiable
Loss, and Western shall have no liability for any claim for
indemnification under Section 7.03, unless a Claim Notice or
other notice has been delivered to the other as required by
Section 7.04 or Section 7.06. In addition, and anything
herein to the contrary notwithstanding, Yukon shall have no
liability for any Indemnifiable Loss, and Western shall have
no liability for any claim for indemnification under Section
7.03, for any breaches of covenants hereunder, unless a
Claim Notice or other notice has been delivered to the other
within one year after performance of the covenant giving
rise to such Indemnifiable Loss or claim for
indemnification, as the case may be, is required under this
Agreement. In addition, and anything herein to the contrary
notwithstanding, Yukon shall have no liability for any
Indemnifiable Loss for any breaches of representations
hereunder unless a Claim Notice or other notice has been
delivered to it within the period that the representation
giving rise to such Indemnifiable Loss survives as set forth
in Article 8.
(b) NO INCIDENTAL OR CONSEQUENTIAL DAMAGES. Neither Western nor
Yukon shall be entitled to recover from the other for any Losses
any amount in excess of the actual damages suffered by such
party. Western and Yukon each waive any right to recover
punitive, special, exemplary, incidental and consequential
damages.
(c) MAXIMUM LIABILITY. Neither Yukon nor any of its Affiliates
shall be liable
Page 18
for aggregate Losses (i) in excess of the Purchase Price, or (ii)
for any Losses pertaining to the Real Property in excess of the
purchase price thereof.
(d) EXCLUSIVE REMEDY. Yukon and Western each hereby
acknowledges and agrees that its sole and exclusive remedy with
respect to any and all claims relating to the representations,
warranties, covenants and agreements contained in this Agreement
or other claims pursuant to or in connection with this Agreement
shall be pursuant to the indemnification provisions set forth in
this Article.
(e) NO RESCISSION. Except as provided in Section 6.08, no
breach of any representation, warranty, covenant or agreement
contained herein shall give rise to any right on the part of
Western or Yukon, as the case may be, after the consummation
of the purchase and sale contemplated hereby, to rescind this
Agreement or any of the transactions contemplated hereby.
(f) MITIGATION. Western and Yukon shall take all reasonable
steps to mitigate all Losses upon and after becoming aware of
any event that could reasonably be expected to give rise to any
Losses that are indemnifiable hereunder.
ARTICLE 8. SURVIVAL. The representations and warranties of Yukon set forth in
this Agreement and in any certificate or instrument delivered in connection
herewith shall survive for a period of one year following the date of this
Agreement.
ARTICLE 9. BROKERS. Each of the Western and Yukon represent to the other that,
neither of the Western nor Yukon has, directly or indirectly, employed any
broker, finder or intermediary in connection with this Agreement or the
transactions contemplated hereby who might be entitled to a fee or commission
upon the execution of this Agreement or consummation of the transactions
contemplated hereby.
ARTICLE 10. EXPENSES. Except as otherwise specifically provided herein, each
party will bear all legal and other costs and expenses incurred by it.
ARTICLE 11. NOTICES; MISCELLANEOUS
SECTION 11.01 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or by
facsimile transmission or mailed by registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice; PROVIDED,
that notices of a change of address shall be effective only upon receipt
thereof):
To Yukon, as follows: To Western, as follows:
Page 19
Yukon Equipment, Inc. Western Power & Equipment Corp.
0000 X. Xxxxx Xxxxxx 0000 X.X. 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attn: President Attn: President
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
SECTION 11.02 MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement supersedes all prior agreements
between the parties (written or oral) and, except as aforesaid, is
intended as a complete and exclusive statement of the terms of the
Agreement between the parties. This Agreement may be amended only by
a written instrument duly executed by the parties.
(b) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Alaska, without regard to
the principles of conflicts of laws of such state.
(c) HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) ASSIGNABILITY. Neither Western nor Yukon may transfer, assign,
or encumber any of its rights, duties, or obligations under this
Agreement or any part hereof without the prior written consent of the
other party. Except as otherwise provided herein, this Agreement shall
be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
(e) NO THIRD-PARTY BENEFICIARIES. Except as otherwise expressly
provided herein, nothing in this Agreement shall entitle any person
(other than Xxxxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Yukon, Western or their
respective successors and assigns permitted hereby) to any claim,
cause of action, remedy, or right of any kind.
(f) SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability, but this shall not affect the validity or
enforceability of any of the terms and provisions of this Agreement in
any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, such provision shall be interpreted to
be only so broad as is enforceable.
(g) EQUITABLE RELIEF. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms
or were otherwise breached. Accordingly,
Page 20
it is agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition
to any other remedy at law or in equity.
(h) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, no one of which needs to be executed by all the parties,
and this Agreement shall be binding upon all the parties with the same
force and effect as if all the parties had signed the same document,
and each such signed counterpart shall constitute an original of this
Agreement.
Yukon Equipment, Inc., Western Power & Equipment Corp.,
an Alaska corporation an Oregon corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxx
--------------------------------- ------------------------------
Xxxxxxx X. Xxxxxxxxx, President Xxxx X. Xxxxxx, Vice President
of Finance & Chief Financial
Officer
Page 21
EXHIBITS
Exhibit Label Description Of Exhibit
------------- ----------------------
Exhibit A List of New Case Equipment Purchased
Exhibit B List of Allied Equipment Purchased
Exhibit C List of Used Equipment Purchased
Exhibit D List of Case Parts Purchased
Exhibit E List of Allied Parts Purchased
Exhibit F List of Accounts Receivable Purchased
Exhibit G List of Vehicles Purchased
Exhibit H List of Furniture and Fixtures Purchased
Exhibit I List of Shop Tools Purchased
Exhibit J List of Manuals Purchased
Exhibit K List of Supplies Purchased
Exhibit L List of Forklifts Purchased
Exhibit M List of Work-in-Process Purchased
Exhibit N List of Office Equipment Leased Purchased
Exhibit O List of Customer Orders Purchased
Exhibit P List of Store Obligations Purchased
Exhibit Q List of Intellectual Property Purchased
Exhibit R Real Property to be Purchased
Exhibit S Xxxx of Sale
Exhibit T Assignment and Assumption Agreement
Exhibit U Form of Stock Subscription Agreement Between
Yukon and Western
Exhibit V Form of Employment Agreement Between
Xxxxx Xxxxxxxxx and Western
Exhibit W Form of Stock Option Agreement Between
Xxxxx Xxxxxxxxx and Western
Exhibit X Liens Disclosed by Yukon
