EXHIBIT 10.1
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ASSETS SALE AND PURCHASE AGREEMENT
by and among:
WESTERN POWER & EQUIPMENT CORP.,
a Delaware corporation
WESTERN POWER & EQUIPMENT CORP.,
an Oregon corporation
and
CNH DEALER HOLDING COMPANY LLC,
a Delaware limited liability company
Dated as of June __, 2008
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.........................................................1
ARTICLE II SALE AND PURCHASE OF ASSETS AND ASSUMPTION OF
CERTAIN LIABILITIES...........................................................5
2.1 SALE AND PURCHASE OF ASSETS...........................................5
2.2 EXCLUDED ASSETS.......................................................7
2.3 ASSUMPTION OF LIABILITIES.............................................7
2.4 CONSIDERATION FOR ASSET PURCHASE; HOLDBACK............................8
2.5 ADJUSTMENTS TO PURCHASE PRICE.........................................9
2.6 SCHEDULES............................................................10
2.7 CLOSING..............................................................10
2.8 DELIVERY TO BUYER....................................................10
2.9 DELIVERY TO SELLERS..................................................11
2.10 REQUIRED CONSENTS....................................................12
2.11 FURTHER ASSURANCE....................................................12
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS........................12
3.1 CORPORATE STATUS.....................................................12
3.2 AUTHORIZATION........................................................13
3.3 CONSENTS AND APPROVALS...............................................13
3.4 FINANCIAL DISCLOSURES................................................13
3.5 TITLE TO PURCHASED ASSETS AND RELATED MATTERS........................13
3.6 REAL PROPERTY LEASES.................................................14
3.7 ACCOUNTS.............................................................15
3.8 INVENTORY............................................................15
3.9 CONTRACTS............................................................15
3.10 LEGAL PROCEEDINGS....................................................15
3.11 EMPLOYEES............................................................16
3.12 ENVIRONMENTAL MATTERS................................................16
3.13 FINDER'S FEES........................................................17
3.14 TAXES................................................................17
3.15 INTENTIONALLY DELETED................................................18
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3.16 AFFILIATED TRANSACTIONS..............................................18
3.17 BENEFITS PLANS.......................................................18
3.18 OVERTIME, BACK WAGES, VACATION AND MINIMUM WAGES.....................19
3.19 DISCRIMINATION, WORKERS COMPENSATION AND OCCUPATIONAL
SAFETY AND HEALTH....................................................20
3.20 INTENTIONALLY DELETED................................................20
3.21 LABOR DISPUTES; UNFAIR LABOR PRACTICES...............................20
3.22 INSURANCE POLICIES...................................................20
3.23 PRODUCT WARRANTIES...................................................20
3.24 COMPLIANCE WITH LAWS; LICENSES AND PERMITS...........................20
3.25 PRODUCT SAFETY AUTHORITIES...........................................20
3.26 INTENTIONALLY DELETED................................................21
3.27 FULL DISCLOSURE......................................................21
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER...........................21
4.1 ORGANIZATIONAL STATUS................................................21
4.2 AUTHORIZATION........................................................21
4.3 CONSENTS AND APPROVALS...............................................21
ARTICLE V COVENANTS OF SELLERS...............................................22
5.1 OPERATION OF THE BUSINESS............................................22
5.2 ACCESS...............................................................22
5.3 INSURANCE AND MAINTENANCE OF THE PURCHASED ASSETS....................22
5.4 EMPLOYEES............................................................23
5.5 FULFILLMENT OF CONDITIONS............................................23
5.6 NOTIFICATION OF CERTAIN MATTERS......................................23
5.7 NEW LEASE............................................................23
5.8 NON-COMPETITION......................................................23
5.9 USE OF NAME..........................................................24
ARTICLE VI COVENANTS OF BUYER................................................24
6.1 FULFILLMENT OF CONDITIONS............................................24
6.2 EMPLOYEES............................................................25
6.3 PRO RATA SHARE OF PREPAID RENT AND LEASE EXPENSES....................25
6.4 ACCOUNTS.............................................................25
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ARTICLE VII FURTHER COVENANTS................................................25
7.1 CONFIDENTIALITY......................................................25
7.2 COMMERCIALLY REASONABLE EFFORTS......................................26
7.3 EXPENSES.............................................................26
7.4 TRANSFER TAXES.......................................................26
7.5 RECEIPT OF PAYMENTS POST-CLOSING.....................................26
7.6 TERMINATION OF DEALER AGREEMENTS AND RELEASE OF CLAIMS...............27
ARTICLE VIII CONDITIONS PRECEDENT TO THE TRANSACTIONS........................27
8.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS...............................27
8.2 CONDITIONS TO OBLIGATIONS OF BUYER...................................27
8.3 CONDITIONS TO OBLIGATIONS OF SELLERS.................................29
ARTICLE IX INDEMNIFICATION...................................................30
9.1 BY SELLERS...........................................................30
9.2 BY BUYER.............................................................31
9.3 PROCEDURE FOR CLAIMS.................................................31
9.4 THIRD PARTY CLAIMS...................................................31
9.5 HOLDBACK.............................................................32
9.6 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS................33
ARTICLE X TERMINATION........................................................33
10.1 GROUNDS FOR TERMINATION..............................................33
10.2 EFFECT OF TERMINATION................................................34
ARTICLE XI PUBLIC ANNOUNCEMENTS..............................................35
ARTICLE XII CONTENTS OF AGREEMENT, AMENDMENT, PARTIES IN INTEREST,
ASSIGNMENT, ETC..............................................................35
ARTICLE XIII INTERPRETATION..................................................35
ARTICLE XIV NOTICES..........................................................36
ARTICLE XV GOVERNING LAW; CONSENT TO JURISDICTION; CONSENT TO
SERVICE OF PROCESS...........................................................37
ARTICLE XVI COUNTERPARTS.....................................................38
ARTICLE XVII SEVERABILITY....................................................38
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EXHIBITS
Exhibit A List of Acquired Locations
Exhibit B Form of ▇▇▇▇ of Sale
Exhibit C Form of Assignment and Assumption
SCHEDULES
2.1(a) Leases
2.1(b) Fixed Assets
2.1(c)(i) New Equipment Inventory
2.1(c)(ii) Used and Rental Equipment Inventory
2.1(c)(iii) Parts Inventory
2.1(d) Customer Deposits, Rent Deposits, Prepaid Items
2.1(e)(i) Accounts, Notes, Other Receivables Under 90 Days
2.1(e)(ii) Accounts, Notes, Other Receivables Over 90 Days
2.1(f) Assigned Contracts
2.1(g) Assigned Permits
2.1(j) Intellectual Property
2.1(k) Work Orders in Process
2.3(a)(ii) Scheduled Liabilities
2.4 Purchase Price
2.5 Inventory
3.3(a) Required Consents
3.4 Financial Disclosures
3.5 Title Exceptions
3.7 Adjustments to Accounts
3.8 Consignment/Materials
3.9 Defaults, etc. Under Assigned Contracts
3.10(a) Pending Litigation
3.10(b) Claims
3.11(a) Employees; Collective Bargaining Agreements
3.11(b) Indebtedness to Employees
3.12 Environmental
3.14 Taxes
3.16 Affiliated Transactions
3.17(a) Benefit Plans
3.17(c) Determination Letters
3.18 Employee Claims
3.19 Workers Compensation Claims
3.21 Labor Disputes/Unfair Labor Practices
3.22 Insurance Policies
3.23 Product Warranties
3.24 Compliance with Laws, Licenses, Permits
6.2 Vacation/Sick Leave
8.2(f) Creditors
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ASSETS SALE AND PURCHASE AGREEMENT
THIS ASSETS SALE AND PURCHASE AGREEMENT is made effective as of June
__, 2008, by and among WESTERN POWER & EQUIPMENT CORP., a Delaware corporation
(the "Parent"), WESTERN POWER & EQUIPMENT CORP., an Oregon corporation and a
wholly owned subsidiary of the Parent ("WPE"), and CNH DEALER HOLDING COMPANY
LLC ("Buyer"), a Delaware limited liability company which is a wholly-owned
subsidiary of CNH America, LLC ("CNH"). The Parent and WPE are hereinafter
sometimes referred to individually as a "Seller" and collectively as "Sellers."
Certain terms are used herein as defined below in Article I or elsewhere in this
Agreement.
BACKGROUND
WPE desires to sell, and Buyer desires to purchase, the Purchased
Assets (as such term is defined in Section 2.1) and, as part of such sale and
purchase, Buyer is willing to assume certain obligations and liabilities of WPE
as set forth herein.
WITNESSETH
NOW, THEREFORE, in consideration of the respective covenants
contained herein and intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
For convenience, certain terms used in more than one part of this
Agreement are listed in alphabetical order and defined or referred to below
(such terms, as well as any other terms defined elsewhere in this Agreement,
shall be equally applicable to both the singular and plural forms of the terms
defined).
"Accounts" is defined in Section 2.1(e).
"Acquired Locations" means the WPE branch locations identified on
Exhibit "A" attached hereto and made a part hereof.
"Adjustment Amount" is defined in Section 2.5(b).
"Affiliates" means, with respect to a particular party, persons or
entities controlling, controlled by or under common control with that party,
including but not limited to any members, officers, directors and majority-owned
entities of that party and of its other Affiliates.
"Agreement" means this Agreement and the exhibits and schedules
hereto.
"Assigned Contracts" means those Contracts of WPE (other than the
Leases) assigned to and assumed by the Buyer pursuant to Section 2.1(f) hereof.
"Assigned Permits" is defined in Section 2.1(g).
"Assumed Liabilities" is defined in Section 2.3(a).
"Benefit Plan" is defined in Section 3.17(a).
"Business" means WPE's business of selling, renting, repairing and
maintaining construction equipment and related parts manufactured by Buyer or
one of WPE's other suppliers at the Acquired Locations.
"Charter Documents" means an entity's certificate of organization or
formation, certificate or articles of incorporation, certificate defining the
rights and preferences of securities, articles of organization, limited
liability company or operating agreement, general or limited partnership
agreement, certificate of limited partnership, joint venture agreement, by-laws
or similar document governing the entity.
"Claim" means any allegation, claim, action, cause of action,
lawsuit or other legal proceeding, whether at law, in equity or before any
governmental agency or arbitrator, for damages, costs, losses or expenses
incurred by any person as a result of any actions or failure to act by any
party, or its officers, directors, employees or agents.
"Closing" means the closing of the Transactions.
"Closing Date" is defined in Section 2.6.
"CNH Capital" means CNH Capital America LLC, a Delaware limited
liability company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contract" means any written or oral contract, agreement, lease,
instrument or other commitment that is binding on any Person or its property
under applicable law.
"Court Order" means any judgment, decree, injunction, order,
directive or ruling of any federal, state, local or foreign court or
governmental or regulatory body or authority, whether in the United States or in
any other jurisdiction, that is binding on any Person or its property under
applicable law.
"Damages" is defined in Section 9.1.
"Default" means (i) a breach, default or violation or (ii) the
occurrence of an event that with the passage of time or the giving of notice, or
both, would constitute a breach, default or violation.
"Disclosure Schedules" is defined in Section 2.6.
"Encumbrances" means any lien, mortgage, security interest, pledge,
restriction on transferability, defect of title or other claim, charge or
encumbrance of any nature whatsoever on any property or property interest.
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"Environmental Condition" is defined in Section 3.12(b).
"Environmental Law" is defined in Section 3.12(a).
"Environmental Liabilities" means, without limitation, all
liabilities, losses, claims, debts, assessments, deficiencies, charges, demands,
fines, penalties, costs, expenses, damages, natural resource damages, reasonable
fees and disbursements of counsel, costs of Remedial Action, liens or other
claims against property or improvements thereon for work, labor or services
performed with respect thereto or other obligations of any kind, character or
description (whether absolute, contingent, matured, liquidated, unliquidated,
accrued, known, unknown, direct, indirect, derivative or otherwise) that pertain
or relate, in whole or in part, to an Environmental Condition.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor thereto.
"Excluded Assets" is defined in Section 2.2.
"Excluded Liabilities" is defined in Section 2.3(b).
"Fixed Assets" is defined in Section 2.1(b).
"GAAP" means U.S. generally accepted accounting principles, applied
on a consistent basis.
"Governmental Body" means any federal, state, local or foreign
government entity or any court, administrative or regulatory agency or
commission or other governmental authority or agency.
"Hazardous Substances" is defined in Section 3.12.
"Holdback Amount" is defined in Section 2.4(c).
"Holdback Period" is defined in Section 9.5.
"Indemnification Obligations" is defined in Section 9.5.
"Indemnified Party" is defined in Section 9.3.
"Indemnitor" is defined in Section 9.3.
"Inventory" is defined in Section 2.1(c).
"Knowledge" means the actual knowledge of the respective party or
parties, as the case may be, after reasonable inquiry, as well as knowledge that
a reasonable prudent individual in a similar position would be likely to have.
In the case of either Seller, "Knowledge" shall mean the knowledge of ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇▇▇▇▇, including their actual knowledge and
knowledge attributed to them under the foregoing standard.
"Leases" is defined in Section 2.1(a).
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"Legal Requirement" means any statute, law, ordinance, regulation,
order, governmental permit or rule of any federal, state, local, foreign or
other governmental agency or body or of any other type of regulatory body,
whether in the United States or in any other jurisdiction, including but not
limited to those covering food and drug, environmental, energy, safety, health,
transportation, bribery, recordkeeping, zoning, employment, antidiscrimination,
antitrust, wage and hour, and price and wage control matters.
"Liability" means any direct or indirect liability, indebtedness,
obligation, expense, claim, loss, damage, deficiency, guaranty or endorsement of
or by any Person, absolute or contingent, accrued or unaccrued, due or to become
due, liquidated or unliquidated.
"Litigation" means any lawsuit, action, arbitration, administrative
or other proceeding, criminal prosecution or governmental investigation or
inquiry.
"Material Adverse Change" with respect to any Person means any
material adverse change in the business, properties, results of operations,
condition (financial or otherwise), liquidity, products, competitive position,
customers and customer relations.
"Material Adverse Effect" means any effect which has resulted in, or
is reasonably likely to result in, a Material Adverse Change.
"Ordinary Course" or "ordinary course of business" means the
ordinary course of business of a Person that is consistent with such Person's
past practices.
"Person" means any natural person, limited liability company,
corporation, partnership, proprietorship, association, trust or other legal
entity.
"Purchased Assets" is defined in Section 2.1.
"Remedial Action" is defined in Section 3.12.
"Required Consents" is defined in Section 3.3.
"Scheduled Liabilities" is defined in Section 2.3(a)(ii).
"Taxes" means all taxes, charges, fees, levies, or other like
assessments, including income, gross receipts, ad valorem, value added, premium,
excise, real property, personal property, windfall profit, sales, use, transfer,
license, withholding, employment, payroll, stamp, occupation , premium, custom
duties, severance and franchise taxes imposed by a Governmental Body; and shall
include any interest, fines, penalties, assessments, or additions to tax
resulting from, attributable to, or incurred in connection with any such Taxes
or any contest or dispute thereof.
"Termination Date" is defined in Section 10.1(b).
"Transaction Documents" means this Agreement and the other
agreements and documents among the parties contemplated hereby and thereby.
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"Transactions" means the transactions contemplated by the
Transaction Documents.
"WPE Financial Disclosures" is defined in Section 3.4.
ARTICLE II
SALE AND PURCHASE OF ASSETS
AND ASSUMPTION OF CERTAIN LIABILITIES
2.1 SALE AND PURCHASE OF ASSETS. Subject to the terms and conditions
of this Agreement, at the Closing Sellers shall sell, transfer, convey, assign
and deliver to Buyer, free and clear of all Encumbrances or Liabilities (other
than the Assumed Liabilities and Encumbrances that secure the Assumed
Liabilities) and with no impairments of title, and Buyer shall purchase, acquire
and accept from Sellers, all the right, title and interest of Sellers in and to
the following assets to the extent such assets are associated with the Acquired
Locations and the Ordinary Course operation of the Business (collectively, the
"Purchased Assets"):
(a) Leases. All rights and interests under the real
estate leases relating to the Acquired Locations, as described on Schedule
2.1(a) (including all exhibits and amendments thereto, the "Leases");
(b) Fixed Assets. All machinery, equipment, computer
hardware, tools, vehicles (other than vehicles included in Inventory),
furniture, furnishings, leasehold improvements and fixtures (to the extent owned
by WPE), office and shop supplies and other tangible personal property located
at the Acquired Locations, in transit thereto or in the possession of any bailee
and used in the Ordinary Course of the Business at the Acquired Locations, as
more fully described on Schedule 2.1(b) (the "Fixed Assets"), as adjusted
pursuant to Section 2.5; provided further, that for purposes of the Section 2.5
adjustments, the following criteria will be applied in valuing the Fixed Assets:
(1) office and shop supplies will be sold to Buyer for a total of $16,000; (2)
service, parts and sales manuals will be sold to Buyer for a total of $16,000;
(3) leasehold improvements will be sold to Buyer for their net book value at
Closing Date; and (4) all other Fixed Assets shall be valued at fair market
replacement value, taking into consideration age and condition;
(c) Inventory. The (i) new equipment inventory listed on
Schedule 2.1(c)(i), (ii) used and rental equipment inventory listed on Schedule
2.1(c)(ii), and (iii) parts inventory listed on Schedule 2.1(c)(iii), as
adjusted pursuant to Section 2.5 (collectively, the "Inventory"); provided
further, that for purposes of the Section 2.5 adjustments, the following
criteria will be applied in valuing the Inventory: (1) new equipment will valued
at dealer net price, minus all applicable discount programs, plus freight,
assembly, and reasonable handling costs; (2) discounts will be allowed for
demonstration hours or use; (3) where applicable, normal hourly use rates will
apply, as set forth in CNH's "Schedule of Terms and Discounts;" (4) where normal
hourly use rates are not applicable, reasonable depreciation will be applied by
Buyer, subject to adjustment as provided in Section 2.5 hereof; (5) WPE will
make reasonable efforts to return all equipment inventory that is competitive
with CNH equipment to the original manufacturer prior to Closing; (6) all
unreturned competitive inventory will be acquired by Buyer at its liquidation
value; (7) equipment owned by WPE but rented to or otherwise in use by Arizona
Pacific
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Materials LLC (an Affiliate of WPE) will be deemed Excluded Assets, and
will not be acquired by Buyer; (8) used and rental equipment will be sold at a
price based on fair market wholesale value; (9) parts with a turn within the
past twenty-four (24) months will be sold to Buyer at current dealer net less
all-applicable dealer discounts; (10) parts without a turn for more than
twenty-four (24) months will be sold at current dealer net less 50%; and (11)
WPE will make reasonable efforts to return all parts inventory that is
competitive with CNH equipment to the original manufacturer prior to closing,
provided that all unreturned competitive parts will be purchased by Buyer at the
prices specified above;
(d) Prepaid Items. The customer deposits, rent deposits
and other prepaid items relating to the Purchased Assets or the Acquired
Locations, listed on Schedule 2.1(d) ("Prepaid Items"), as adjusted pursuant to
Section 2.5;
(e) Accounts. The accounts, notes and other receivables
listed on Schedule 2.1(e)(i) (accounts 60 days and under) and Schedule
2.1(e)(ii) (accounts over 60 days, discounted as hereinafter provided), as
adjusted pursuant to Section 2.5 (the "Accounts"); provided further, that for
purposes of the Section 2.5 adjustments, the following criteria will be applied
in valuing the Accounts: (1) accounts 60 days and under will be valued at 100%
of face amount; (2) accounts over 60 days but under 121 days will be valued at
75% of face amount; and (3) accounts over 120 days will be valued at zero
(subject to the provisions of Section 6.4);
(f) Assigned Contracts. All rights under the Contracts,
including distributor agreements, capital leases, collective bargaining
agreements, security agreements, mortgages, agreements with customers (including
without limitation purchase orders, preventive maintenance agreements, rental
agreements, and recourse and buy-back contracts and obligations), vehicle
leases, computer leases, mobile telephone agreements, and software licenses, and
including without limitation any and all liens or security interests associated
with any of the foregoing rights, to the extent relating to the Purchased Assets
or the Acquired Locations and identified on Schedule 2.1(f) (collectively, the
"Assigned Contracts");
(g) Assigned Permits. Any governmental permits or
licenses, to the extent assignable, relating exclusively to the Acquired
Locations and identified on Schedule 2.1(g) (the "Assigned Permits");
(h) Causes of Action. All causes of action, demands,
rights against third parties and choses in action arising out of occurrences
before or after the Closing, including without limitation all rights under
express or implied warranties, and all other intangible rights and assets,
relating exclusively to the Purchased Assets, the Acquired Locations or the
Assumed Liabilities;
(i) Books and Records. The books and records of WPE,
including all service, parts and sales manuals, personnel files, data, plans and
recorded knowledge, including customer and supplier lists, equipment maintenance
and warranty information, all correspondence with any customers, suppliers,
employees or governmental entities relating to the Business, sales and pricing
data, and any other reports, marketing studies, plans and documents relating to
the Business, in whatever form, including without limitation electronic
databases, and whether held by Sellers or stored on behalf of Sellers by third
parties, directly and exclusively related to any of
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the foregoing (provided that Sellers may retain copies of all of the foregoing
and the originals of personnel and other records Sellers are required by law to
retain in their possession or are necessary or desirable to be retained for
their ongoing business, regulatory compliance, the maintenance of their
corporate franchises, or for archival purposes);
(j) Intellectual Property. The intellectual property of
WPE listed on Schedule 2.1(j);
(k) Service Work Orders in Process. The rights to
accrued but unbilled obligations arising out of the service work orders listed
on Schedule 2.1(k) (the "Work Orders in Process"), as adjusted pursuant to
Section 2.5; provided further, that for purposes of the Section 2.5 adjustments,
the following criteria will be applied in valuing the Work Orders in Process:
(1) unbilled customer repair labor will be sold to Buyer at 60% of normal
customer hourly rate; and (2) internal repair labor will be sold to Buyer at the
various mechanics' hourly rates; and
(l) Other Necessary Assets. All other assets and
property owned by WPE and necessary for the operation of the Business in the
Ordinary Course.
2.2 EXCLUDED ASSETS. Sellers shall not sell, transfer, convey,
assign or deliver, and shall retain, any and all assets whatsoever other than
the Purchased Assets (the "Excluded Assets").
2.3 ASSUMPTION OF LIABILITIES.
(a) At the Closing, Buyer shall assume, and shall agree
to pay and discharge when due, only those Liabilities of WPE that are set forth
below, subject to the further limitations hereinafter set forth (collectively
the "Assumed Liabilities"):
(i) All Liabilities of WPE under the Leases,
the Assigned Contracts and the Assigned Permits, arising after the Closing Date;
and
(ii) The Liabilities listed on Schedule
2.3(a)(ii) (the "Scheduled Liabilities"), subject to adjustment as provided in
Section 2.5.
(b) Buyer shall not be deemed to assume or to be
otherwise liable, and Sellers will be responsible for, any Liabilities relating
to the Business other than the Assumed Liabilities (the "Excluded Liabilities").
The Excluded Liabilities include without limitation: (i) all amounts outstanding
under any and all indebtedness for borrowed money, including lines of credit,
letters of credit, notes payable and loans payable or deferred compensation,
except to the extent included in the Scheduled Liabilities and expressly assumed
by Buyer; (ii) all Environmental Liabilities that arise out of or result from
events occurring or conditions existing on or prior to the Closing Date; (iii)
all product liability or claims for injury to any person or property that relate
to equipment or parts sold or maintenance or repairs made to equipment or parts
by WPE on or prior to the Closing Date; (iv) all Tax Liabilities of WPE,
including any such Liabilities of WPE related to consummation of the
Transactions and any Liabilities of WPE for Taxes of another Person (but not
including transfer taxes that are Buyer's responsibility under Section 7.4 of
this Agreement); (v) any Liabilities arising out of WPE's violation or failure
to comply with any Legal Requirement or any Court Order; (vi) except as provided
in Section 6.3 with respect to
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accrued vacation and sick leave, any Liability arising under or relating to any
Benefit Plans or any person's employment or termination of employment with
either Seller; (vii) any deductibles, self-insured retentions or retrospective
rating plans connected with any insurance policy of WPE; and (viii) any fees,
costs and expenses incurred in connection with this Agreement and the
Transactions.
2.4 CONSIDERATION FOR ASSET PURCHASE; HOLDBACK. Subject to the terms
and conditions of this Agreement, the consideration (the "Purchase Price") for
the purchase of the Purchased Assets shall be as follows:
(a) The following amounts payable in cash at Closing
(subject to the Hold-Back):
(i) $13,488,500 for new equipment Inventory
(subject to adjustment as provided in Section 2.5); plus
(ii) $3,181,249 for parts Inventory (subject
to adjustment as provided in Section 2.5); plus
(iii) $7,707,293 for used and rental
equipment Inventory (subject to adjustment as provided in Section 2.5); plus
(iv) An amount representing reimbursement of
the security deposits with respect to the Leases, as identified in Schedule
2.1(a), plus the amount of any additional prepaid items identified in Schedule
2.1(d) (subject to adjustment as provided in Section 2.5); plus
(v) $2,829,665 for Fixed Assets (subject to
adjustment as provided in Section 2.5), which includes an aggregate of $32,000
for (A) office and shop supplies and (B) service, parts and sales manuals and
literature; plus
(vi) $3,893,634 for the Accounts (subject to
adjustment as provided in Section 2.5); plus
(vii) An amount representing reimbursement
for labor costs related to Work Orders in Process as reflected on Schedule
2.1(k) (subject to adjustment as provided in Section 2.5); minus
(viii) The aggregate dollar amount of the
Scheduled Liabilities (subject to adjustment as provided in Section 2.5); minus
(b) An amount equal to the aggregate of all amounts paid
by Buyer (at Buyer's option) directly to creditors of WPE to discharge
Encumbrances on the Purchased Assets in accordance with payoff letters delivered
to Buyer as provided in Section 8.2(f) hereof, including without limitation
repayment of WPE's debt to CNH Capital, which payments shall be deemed made for
the benefit of WPE; minus
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(c) An amount equal to $1,000,000 (the "Holdback
Amount"), to be held by the Buyer to pay any Adjustment Amount owed to the Buyer
as provided in Section 2.5 hereof, and to satisfy any Indemnification
Obligations of the Sellers as provided in Section 9.5 hereof, in the declining
amounts for the respective periods and otherwise on the terms and conditions set
forth in Section 9.5; plus
(d) The assumption of the Assumed Liabilities.
2.5 ADJUSTMENTS TO PURCHASE PRICE.
(a) Schedule 2.1(b) (Fixed Assets), Schedule 2.1(c)(i)
(equipment Inventory), Schedule 2.1(c)(ii) (used and rental equipment
Inventory), Schedule 2.1(c)(iii) (parts Inventory), Schedule 2.1(e)(i) and
Schedule 2.1(e)(ii) (Accounts) and Schedule 2.3(a)(ii) (Scheduled Liabilities)
attached to this Agreement as executed and delivered by the parties (together,
the "Interim Purchase Price Schedules") show the Fixed Assets, the Inventory,
the Accounts and the Scheduled Liabilities as of the effective dates set forth
therein. On or before that date which is three (3) business days prior to the
Closing Date (or such other date as the parties may agree in writing), Buyer
shall prepare and deliver to Sellers up-dated Purchase Price Schedules showing
the Fixed Assets, the Inventory, the Accounts and the Scheduled Liabilities as
of the then most recent date for which data is available (the Interim Purchase
Price Schedules, adjusted as aforesaid, are hereinafter referred to as the
"Closing Schedules"), using the valuation methodologies as set forth in Section
2.1 hereof. Sellers shall cooperate with Buyer to assist in the preparation of
the Closing Schedules. The Closing Schedules as prepared by Buyer shall be used
for purposes of calculating the Purchase Price payable on the Closing Date as
provided in Section 2.4 hereof, but shall be subject to further post-closing
adjustment as provided in Section 2.5(b) hereof.
(b) Within thirty (30) calendar days after the Closing
Date, Buyer shall prepare and deliver to Sellers (i) amended schedules, listing
(A) the actual Fixed Assets, Inventory, Accounts and Scheduled Liabilities
transferred to or assumed by Buyer, and (B) the actual value of Prepaid Items
and Work Orders in Process as of the Closing Date (the "Amended Schedules"),
using the valuation methodologies as set forth in Section 2.1 hereof, and (ii) a
statement showing an adjustment amount (the "Adjustment Amount") equal to the
net of change in the aggregate value of the Fixed Assets, the Inventory, the
Accounts, the Prepaid Items and the Work Orders in Process, net of the Scheduled
Liabilities, as determined based on the Amended Schedules, from such value as
determined based on the Closing Schedules. If the Adjustment Amount is a
negative amount, then the Purchase Price shall be reduced by such amount. If the
Adjustment Amount is a positive amount, then the Purchase Price shall be
increased by such amount.
(c) Sellers shall have ten (10) calendar days to review
the Adjustment Amount as determined by Buyer pursuant to subsection (b) hereof
and to notify Buyer of their agreement or disagreement thereto, provided that,
if Sellers fail to so notify Buyer within such 10-day period they shall be
deemed to have agreed with the Adjustment Amount determined by Buyer in all
respects. If Sellers agree (or are deemed to have agreed) with the Adjustment
Amount as determined by Buyer, then within five (5) calendar days following the
end of the aforesaid 10-day period, or if earlier, within five (5) calendar days
of Sellers notifying Buyer of
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such agreement, Buyer shall pay WPE the Adjustment Amount if such amount is a
positive number, and Sellers shall pay Buyer the Adjustment Amount if such
amount is a negative number. Sellers' obligation to pay the Adjustment Amount
(if any) shall be satisfied by deducting the Adjustment Amount from the Holdback
Amount as provided in Section 9.5 hereof.
(d) If Sellers disagree with Buyer's calculation of the
Adjustment Amount, then Sellers and Buyer shall have fifteen (15) calendar days
following the date Sellers send the notice of disagreement provided for in
subsection (c) hereof to resolve such issues. If any issues remain unresolved
after that period of time, the parties will, within five (5) calendar days,
submit the dispute for resolution to an independent financial consulting firm
(the "Arbiter") for review and resolution of all matters that are in dispute,
based on the valuation methodologies as set forth in Section 2.1 hereof. The
Arbiter shall be a mutually acceptable nationally recognized independent
financial consulting firm agreed upon by Buyer and Sellers in writing. Buyer and
Sellers will use reasonable efforts to cause the Arbiter to render a decision
resolving the matters in dispute within fifteen (15) calendar days after the
submission of such matters to the Arbiter or such longer period as the parties
may mutually agree upon in writing. Buyer and Sellers agree that the
determination of the Arbiter (the "Determination") shall be final and binding
upon Buyer and Sellers (absent manifest error). Promptly following issuance of
the Determination, the Adjustment Amount will be calculated in accordance with
the Determination, and Sellers shall pay Buyer the Adjustment Amount if such
amount is a negative number, and Buyer shall pay WPE the Adjustment Amount if
such amount is a positive number. Sellers' obligation to pay the Adjustment
Amount (if any) shall be satisfied by deducting the Adjustment Amount from the
Holdback Amount as provided in Section 9.5 hereof. The fees, costs and expenses
of the Arbiter shall be borne equally by Sellers and Buyer.
2.6 SCHEDULES. The Schedules to this Agreement other than the
Interim Purchase Price Schedules, the Closing Schedules and the Amended
Schedules are referred to herein as the "Disclosure Schedules." This Agreement
may be executed and delivered by the parties, and shall be binding upon them in
accordance with and subject to its terms and conditions, notwithstanding the
fact that the Disclosure Schedules are not attached to this Agreement at the
time of such execution and delivery. Sellers shall prepare and deliver to Buyer
the Disclosure Schedules as soon as practicable following the execution and
delivery of this Agreement, but in any event on or before that date which is ten
(10) business days prior to the Closing Date (or such other date as the parties
may agree in writing). The obligation of Buyer to consummate the Transactions
shall be subject to its review and approval of the form and content of the
Disclosure Schedules, as provided in Section 8.2 hereof. Once approved by Buyer,
the Disclosure Schedules shall be attached to this Agreement and made a part
hereof.
2.7 CLOSING. Unless this Agreement shall have been terminated and
the Transactions abandoned pursuant to Article X, and subject to the conditions
to the Transactions set forth in Article VIII, the Closing shall take place as
promptly as practicable after satisfaction or waiver of such conditions but in
any event by that date which is sixty (60) days following the date of this
Agreement, at 10:00 AM local time, at the offices of Buyer's counsel, unless the
parties hereto agree in writing to another date, time or place. The date on
which the Closing occurs is referred to herein as the "Closing Date."
2.8 DELIVERY TO BUYER. At the Closing, Sellers shall deliver to
Buyer:
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(a) a duly executed ▇▇▇▇ of Sale in the form attached
hereto as Exhibit "B" (the "▇▇▇▇ of Sale");
(b) a duly executed Assignment and Assumption Agreement
in the form attached hereto as Exhibit "C (the "Assignment and Assumption
Agreement");
(c) duly executed assignment and assumption agreements
with respect to each of the Leases in form and substance satisfactory to Buyer;
(d) duly executed estoppel certificates with respect to
each of the Leases, in form and substance satisfactory to Buyer;
(e) duly executed instruments of assignment and
assumption and other instruments where required to transfer any Purchased
Assets;
(f) executed copies of each of the Required Consents
referred to in Schedule 3.3(a), except to the extent waived by Buyer and
Sellers;
(g) all business records and other documents containing
or relating to the Purchased Assets (or otherwise make such records and
documents available to Buyer);
(h) all such other endorsements, assignments and
instruments as, in the reasonable opinion of Buyer or its counsel, are necessary
to vest in Buyer good and marketable title to the Purchased Assets;
(i) the New Lease, as required by Section 5.7 hereof;
(j) the Non-Competition Agreement of ▇▇▇▇ ▇▇▇▇▇▇, as
required by Section 5.8(d) hereof;
(k) the Release, as required by Section 7.6 hereof;
(l) possession of the Purchased Assets, free and clear
of all Encumbrances; and
(m) all other previously undelivered documents required
to be delivered by Sellers to Buyer at or prior to the Closing in connection
with the Transactions, including those contemplated by Article VIII.
2.9 DELIVERY TO SELLERS. At the Closing, Buyer shall deliver to
Sellers:
(a) a duly executed Assignment and Assumption Agreement;
(b) assignment and assumption agreements with respect to
each of the Leases;
(c) duly executed instruments of assignment and
assumption and other instruments where required to effect Buyer's assumption of
the Assumed Liabilities;
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(d) payment by wire transfer, in immediately available
funds, of the Purchase Price as provided in Section 2.4;
(e) the Release, as required by Section 7.6 hereof;
(f) such other certificates, documents and instruments
as may reasonably be requested by Sellers to carry out the purposes or intent of
this Agreement; and
(g) all previously undelivered documents required
hereunder to be delivered by Buyer to Sellers at or prior to the Closing,
including those contemplated by Article VIII.
2.10 REQUIRED CONSENTS. Sellers shall use their commercially
reasonable efforts to obtain the Required Consents on or before the Closing Date
and Buyer shall use its commercially reasonable efforts to assist Sellers in
obtaining the Required Consents. If and to the extent Sellers are unable to
obtain any Required Consents by the Closing Date, Buyer may waive the closing
condition as to any such Required Consents and elect to have Sellers continue
using their commercially reasonable efforts to obtain such consents after the
Closing Date, in which event the affected Purchased Assets and/or Assigned
Contracts will be held by Sellers in trust for Buyer and shall be performed by
Buyer in the name of Sellers and all benefits and obligations derived thereunder
(except as otherwise provided in the Transaction Documents) shall be for the
account of Buyer, until such time as the applicable Required Consents are
obtained. Where entitlement of Buyer to such Purchased Assets and/or Assigned
Contracts hereunder is not recognized by any third party, Sellers shall, at the
request of Buyer, enforce in a reasonable manner, at the cost of and for the
account of Buyer, any and all rights of Sellers against such third party.
2.11 FURTHER ASSURANCE. After the Closing: (a) Sellers shall from
time to time, at the request of Buyer and without further cost or expense to
Sellers, execute and deliver such other instruments of conveyance and transfer
and take such other actions as Buyer may reasonably request in order to more
effectively consummate the Transactions and to vest in Buyer good and marketable
title to the Purchased Assets; and (b) Buyer shall from time to time, at the
request of Sellers and without further cost to Buyer, execute and deliver such
other instruments of assumption and take such other actions as Sellers may
reasonably request in order to more effectively consummate the Transactions and
to confirm the assumption by Buyer of the Assumed Liabilities. Nothing in this
Section 2.10 shall be construed to require Buyer to pay Sellers any additional
consideration for the Purchased Assets.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby jointly and severally represent and warrant to Buyer
that the following statements contained in this Article III are true and correct
and complete as of the date of this Agreement and will be true, correct and
complete as of the Closing Date:
3.1 CORPORATE STATUS. Each of the Sellers is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction under which it was incorporated. Each Seller, as applicable, has
all requisite corporate power and authority to own, lease and use
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the Purchased Assets and conduct the Business as now conducted. Each of the
Sellers is qualified to do business as a foreign corporation and is in good
standing in any jurisdiction where it is required to be so qualified, except
where the failure to so qualify would not have a Material Adverse Effect.
Sellers have made available to Buyer true and complete copies of the certificate
of incorporation and bylaws of each Seller, in each case as amended to date.
3.2 AUTHORIZATION. Each of the Sellers has the requisite power and
authority to execute and deliver the Transaction Documents to which it is or
will be a party and to perform its obligations under such of the Transaction
Documents to which it is a party. Such execution, delivery and performance by
the Sellers has been duly authorized by all necessary corporate action,
including approval by the respective Boards of Directors of the Sellers, as
required by the laws of the jurisdiction under which the Sellers are
incorporated. The Transaction Documents executed on or before the date hereof
constitute, and the Transaction Documents to be executed after the date hereof
will constitute, valid and binding obligations of the Sellers, enforceable
against each such party in accordance with their respective terms, except as
enforceability may be restricted, limited or delayed by applicable bankruptcy or
other laws affecting creditors' rights generally, and except as enforceability
may be subject to general principles of equity.
3.3 CONSENTS AND APPROVALS. (a) Except for the consents and filings
specified in Schedule 3.3(a) (the "Required Consents"), or consents the failure
of which to obtain would not have a Material Adverse Effect, neither the
execution and delivery by either Seller of the Transaction Documents to which it
is or will be a party, nor the performance of the Transactions to be performed
by either Seller, will (i) violate or require any filing, consent or approval or
constitute a Default under (x)any Legal Requirement, pending filing with any
Governmental Body, or Court Order to which a Seller is subject, (y) the Charter
Documents of either Seller or (z) any Contract, Assigned Permit or other
document to which a Seller is a party or to which any of the Business, the
Purchased Assets or the Acquired Locations may be subject; (ii) result in the
creation or imposition of any Encumbrance on any Purchased Asset; or (iii)
prevent the consummation of the Transactions.
(b) Except as provided in Section 3.3(a) hereof, no
consent, waiver, approval, order, permit or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Body is required on
the part of Sellers in connection with the execution and delivery of this
Agreement or any Transaction Documents, or on the part of Sellers in connection
with the consummation of the Transactions or the performance or compliance by
Sellers with any of the provisions hereof or thereof.
3.4 FINANCIAL DISCLOSURES. In connection with the Transactions,
Sellers have delivered to Buyer's representative, Navigant Capital Advisors,
certain financial data and other disclosures with respect to the Business as set
forth on Schedule 3.4 (referred to herein as the "WPE Financial Disclosures").
The WPE Financial Disclosures have been prepared from the books and records of
WPE in accordance with GAAP, present accurately the assets, liabilities and
results of operations of WPE as of the dates thereof and for the periods stated
therein, and accurately present in all material respects the financial condition
of WPE and the Business.
3.5 TITLE TO PURCHASED ASSETS AND RELATED MATTERS. Except as set
forth on Schedule 3.5, WPE has good and marketable title to, or valid leasehold
interests in, all of the
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Purchased Assets, free from any Encumbrances (other than the Assumed Liabilities
and Encumbrances that secure the Assumed Liabilities). The use of the Purchased
Assets is not subject to any Encumbrances (other than those specified in the
preceding sentence), and such use does not materially encroach on the property
or rights of anyone else. The Purchased Assets, the Assumed Liabilities and the
Acquired Locations constitute all property and property rights now used or
necessary for the conduct of the Business in the manner and to the extent
presently conducted by WPE.
3.6 REAL PROPERTY LEASES. (a) WPE has delivered to Buyer true,
correct and complete copies of the Leases. With respect to the Leases, and
except as reflected in Schedule 2.1(a), the Leases have not been modified or
amended by any written or oral agreement and are in full force and effect and
are valid and subsisting; neither WPE nor any person on behalf of WPE has
received any notice of cancellation or termination from any landlord under any
of the Leases; WPE is not in Default under the terms of any of the Leases; to
WPE's Knowledge, no lessor under any of the Leases is in Default under the terms
of any such Leases; the current monthly rentals under each of the Leases is
correctly set forth in Schedule 2.1(a), and WPE has paid its monthly rental,
additional rent and all other monetary obligations due under each of the Leases
through the last day of the month of this Agreement; the commencement dates and
expiration dates of each of the Leases are correctly set forth in Schedule
2.1(a); no ongoing dispute exists with any landlord concerning the payment of
rent or WPE's performance of any of its obligations under the Leases; WPE has
not assigned or otherwise transferred its rights under any of the Leases, nor
has WPE sublet or permitted any other person to occupy all or any portion of the
leased premises; the amount of any security deposit made by or on behalf of WPE
under each of the Leases is correctly set forth on Schedule 2.1(a); and any
renewal option of WPE under the Leases, including the renewal rent, is correctly
set forth on Schedule 2.1(a). Each Lease constitutes the sole and entire
agreement between the lessor thereunder and WPE respecting the premises leased
thereunder. WPE is the lessee of the leasehold estate purported to be granted by
each Lease, and its possession thereof has not been disturbed, nor has any claim
been asserted against it adverse to its rights in such leasehold estate.
(b) To WPE's Knowledge, none of the leasehold
improvements installed by WPE or its representatives at any of the Acquired
Locations contravenes any zoning ordinance, building code, use or occupancy
restriction, or other administrative regulation or violates any restrictive
covenant or other agreement to which the applicable property is bound, or any
provision of law, the effect of which in any material respect would interfere
with or prevent the continued use of the applicable property for the purposes
for which it is now being used by WPE or would materially affect the value
thereof to Buyer for similar use. To WPE's Knowledge, all of the Acquired
Locations, buildings, fixtures and improvements thereon are in good operating
condition and repair (subject to normal wear and tear).
(c) To WPE's Knowledge, there are no pending or
threatened condemnation or similar proceedings affecting any Acquired Location
or any part thereof. The improvements on the Acquired Locations are served by
gas, electricity, water, sewage and waste disposal and other utilities adequate
to operate the improvements located thereon. To WPE's Knowledge, the buildings
and other facilities located on the Acquired Locations are free of any patent
and latent structural or engineering defects.
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3.7 ACCOUNTS. Subject to applicable reserves, all Accounts are, and
all Accounts subsequently accruing in connection with conduct of the Business on
or prior to the Closing Date will be, (a) receivables arising in the Ordinary
Course, (b) valid, genuine and enforceable, (c) to WPE's Knowledge, subject to
no defenses, set-offs or counterclaims and (d) current and collectible in the
ordinary course, taking into account the acknowledged discounting provided for
in Section 2.1(e) of this Agreement. Except as set forth on Schedule 3.7, no
agreement for deduction, free goods, discount or other deferred price or
quantity adjustment has been made with respect to any such receivables.
3.8 INVENTORY. Schedules 2.1(c)(i), (ii), (iii) and (iv) and the
descriptions of the Inventory contained therein are complete and accurate in all
material respects, subject to adjustment as provided in Section 2.5 hereof.
Except as set forth in Schedule 3.8, neither Seller holds, in connection with
the Business, any materials on consignment or have title to any materials in the
possession of others.
3.9 CONTRACTS.
(a) Each of the Assigned Contracts is in full force and
effect and is a valid and binding obligation of WPE and, to Sellers' Knowledge,
the other parties thereto in accordance with its terms and conditions, except as
such enforceability may be limited by (a) bankruptcy, insolvency, or other
similar laws affecting the enforcement of creditors' rights generally and (b)
equitable principles of general applicability (whether considered in a
proceeding at law or in equity). Neither Seller nor any person on behalf of
Sellers has received any notice of cancellation or termination of any of the
Assigned Contracts, and to Sellers' Knowledge, no Assigned Contract is subject
to any dispute and WPE is not in Default under any Assigned Contract. Except as
disclosed in Schedule 3.9, Sellers have no Knowledge of any Default by any other
party under any Assigned Contract. To Sellers' Knowledge, no event has occurred
which, and neither the execution of this Agreement nor the Closing hereunder do
or will constitute or result in, a Default under or a violation of any Assigned
Contract by either Seller or any other party to such Assigned Contract or would
cause the acceleration of any obligation of any party thereto or the creation of
an Encumbrance upon any Purchased Asset. Sellers have made available to Buyer a
true, complete and accurate copy of each written Assigned Contract and none of
the Assigned Contracts has been modified or amended in any respect, except as
otherwise disclosed to Buyer in Schedule 3.9.
(b) To Sellers' Knowledge, except for the Assigned
Contracts or as set forth in Schedule 3.9, neither Seller is a party to or
otherwise obligated in connection with the Business under any contract or
commitment, whether written or oral, not made in the Ordinary Course of the
Business.
3.10 LEGAL PROCEEDINGS. (a) Except as disclosed in Schedule 3.10(a),
there is no Litigation that is pending or, to the Knowledge of Sellers,
threatened against or related to the Business, the Acquired Locations or the
Purchased Assets. There are no judgments, orders, decrees or awards entered
against either Seller related to the Business or the Purchased Assets. There is
no asserted claim, action or proceeding now pending or, to the Knowledge of
Sellers, threatened before any court, grand jury, administrative or regulatory
body, Governmental Body, arbitration or mediation panel or similar body
involving either Seller which will or may
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reasonably be expected to prevent or hamper the consummation of the Transactions
or have a Material Adverse Effect on the Business.
(b) Except as disclosed in Schedule 3.10(b), neither
Seller has received notice or information as to any claim or allegation of
personal injury, death, or property or economic damages, any claim for punitive
or exemplary damages, any claim for contribution or indemnification, or any
claim for injunctive relief in connection with any product manufactured, sold or
distributed by, or in connection with any service provided by, WPE in connection
with the Business, which will or may reasonably be expected to have a Material
Adverse Effect on the Business. Schedule 3.10(b) accurately and completely
describes all such claims of which Sellers have Knowledge, together in each case
with the date such claim was made, the amount claimed, the disposition or status
of such claim (including settlement or judgment amount). WPE has had at all
times and currently has in full force and effect insurance of the type and
amount adequate to cover all claims of the sort described in this Section.
3.11 EMPLOYEES. (a) Schedule 3.11(a) accurately identifies, as of
the date of this Agreement, the following information as to each employee of WPE
at the Acquired Locations: name, title, whether on leave of absence or layoff
status, accrued 2008 vacation, accrued 2008 sick leave, and annualized
compensation. Except as set forth on Schedule 3.11(a), there are no collective
bargaining agreements covering any of the employees at the Acquired Locations.
(b) Except as set forth in Schedule 3.11(b): (i) WPE is
not indebted in connection with the Business to any employee of WPE except for
amounts due as normal salaries, wages, employee benefits and bonuses and in
reimbursement of ordinary expenses; and (ii) no employee of WPE is indebted to
WPE except for advances for ordinary business expenses.
3.12 ENVIRONMENTAL MATTERS. Except as disclosed in Schedule 3.12:
(a) The Acquired Locations, while leased by WPE, have
been operated and are currently in compliance in all material respects with all
Legal Requirements concerning or relating to industrial hygiene or the
protection of health, safety and/or the environment and/or governing the use,
handling, generation, treatment, storage, transportation, disposal, manufacture,
distribution, formulation, packaging, labeling or Release of Hazardous
Materials, whether now existing or subsequently amended or enacted (collectively
referred to as "Environmental Laws"), including, but not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
ss.9601 as amended ("CERCLA"), the Resource Conservation and Recovery Act, 42
U.S.C. ss.6901 et seq., as amended ("RCRA"), the Federal Water Pollution Act, 33
U.S.C. ss.1251 et seq., as amended, the Clean Air Act, 42 U.S.C. ss.7401 et
seq., as amended ("Clean Air Act"), the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. ss.136 et seq., as amended, the Occupational Safety
and Health Act of 1970, 29 U.S.C. ss.651 et seq., as amended ("OSHA"), and the
Safe Drinking Water Act, 42 U.S.C. ss.300 et seq., as amended, or regulations
promulgated thereunder, and all applicable state and local environmental laws;
(b) Neither Seller has received any claims, notices,
demand letters or requests for information alleging any violation under
Environmental Law and there are no judicial,
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administrative or other actions, suits or proceedings pending, nor, to Sellers'
Knowledge, are there any investigations or conditions on, about, beneath or
arising from any of the Acquired Locations, which might, now or at any time in
the future, under any Environmental Law, (A) give rise to any Environmental
Liabilities or the imposition of a statutory lien upon Buyer or WPE, or (B)
require any Response, Removal or Remedial Action (as those terms are defined
below) or any other action, including, without limitation, reporting,
monitoring, cleanup or contribution by WPE (collectively, an "Environmental
Condition");
(c) To Sellers' Knowledge, WPE has not Released any
Hazardous Substances (as defined below) at or from the Acquired Locations.
(d) To Sellers' Knowledge, none of the following exists
at any Acquired Location: (1) underground storage tanks or sumps, (2)
asbestos-containing material in any friable and damaged form or condition, (3)
materials or equipment containing polychlorinated biphenyls, or (4) landfills,
surface impoundments or disposal areas.
(e) Except as disclosed in Schedule 3.12, there has been
no environmental investigation, study, audit, test, review or other analysis
conducted by or on behalf of either Seller (or by a third party of which either
Seller has Knowledge) in relation to operations of either Seller at an Acquired
Location.
As used in this Agreement:
(i) the terms "Release," "Response,"
"Removal" and "Remedial Action" shall have the meanings ascribed to them in
Sections 101(22)-101(25) of CERCLA;
(ii) The term "Hazardous Substances" or
"Hazardous Substance" shall mean any substance regulated under any of the
Environmental Laws, including, without limitation, any substance which is: (A)
petroleum, asbestos or asbestos-containing material, urea formaldehyde or
polychlorinated biphenyls; (B) a "hazardous substance," "pollutant" or
"contaminant" (as defined in Sections 101(14), and (33) of CERCLA or the
regulations designated pursuant to Section 102 of CERCLA), including any
element, compound, mixture, solution or substance that is or may be designated
pursuant to Section 102 of CERCLA; (C) listed in the United States Department of
Transportation Hazardous Material Tables, 49 C.F.R. ss.172.101; (D) defined,
designated or listed as a "Hazardous Waste" pursuant to the RCRA or (E) listed
as a "Hazardous Air Pollutant" under Section 112 of the Clean Air Act.
3.13 FINDER'S FEES. No Person retained by Sellers or any of its
Affiliates is or will be entitled to any commission or finder's or similar fee
in connection with the negotiation or consummation of the Transactions.
3.14 TAXES.
(a) All Tax and information returns and reports
("Returns") required to be filed by WPE on or prior to the Closing Date with
respect to Taxes have been or will be properly and timely filed.
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(b) All amounts required to be shown on each of such
Returns have been paid or will be paid when due by WPE.
(c) Except as disclosed in Schedule 3.14, to Sellers'
knowledge, there are no grounds for the assertion or assessment of any Taxes
against WPE, the Purchased Assets or the Business other than those reflected or
reserved against on the WPE Financial Disclosures.
(d) Neither the Purchased Assets nor the Business are,
and neither will be, encumbered by any Encumbrances arising out of any unpaid
Taxes and there are no grounds for the assertion or assessment of any
Encumbrances against the Purchased Assets or the Business in respect of any
Taxes.
(e) The transactions contemplated by this Agreement will
not give rise to (i) the creation of any Encumbrances against the Purchased
Assets or the Business in respect of any Taxes, (ii) the assertion of any
additional Taxes against the Purchased Assets or the Business or (iii) the
imposition on Buyer of any liability for Taxes payable by Sellers with respect
to conduct of the Business on or prior to the Closing Date.
(f) Except as disclosed in Schedule 3.14, there is no
action or proceeding or unresolved claim for assessment or collection, pending
or threatened, by, or present or expected dispute with, any Governmental Body
for assessment or collection from any of the Sellers of any Taxes of any nature
affecting the Purchased Assets or the Business.
(g) Except as disclosed in Schedule 3.14, there is no
extension or waiver of the period for assertion of any Taxes against the Sellers
affecting the Purchased Assets or the Business.
(h) None of the Purchased Assets or Assumed Liabilities
will constitute a partnership, joint venture, or other arrangement or contract
that could be treated as a partnership for federal income tax purposes.
(i) None of the Purchased Assets are tax-exempt use
property within the meaning of Section 168(h) of the Code.
(j) None of the Purchased Assets are subject to a tax
indemnification agreement.
3.15 INTENTIONALLY DELETED.
3.16 AFFILIATED TRANSACTIONS. Except as disclosed in Schedule 3.16,
no director, officer, employee or affiliate of either Seller, is a party to any
agreement, Contract, commitment or other form of transaction or arrangement with
Sellers in connection with the Business or has any interest in any property used
by or in connection with the Business.
3.17 BENEFITS PLANS.
(a) As used in this Agreement, "Benefit Plan" means any
employee benefit plan within the meaning of Section 3(3) of ERISA, and any other
plan, program, agreement,
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arrangement, policy, contract, commitment, written or oral, statutory or
contractual, that provides for compensation or benefits, including, but not
limited to, any deferred compensation, executive compensation, bonus, or
incentive plan, any cafeteria plan or any holiday or vacation plan or practice,
with respect to which WPE has or has had in the one year period preceding the
date hereof any obligation or liability or which are or were in the one year
period preceding the date hereof maintained, contributed to or sponsored by WPE
for the benefit of any current or former employee, officer or director of WPE.
Schedule 3.17(a) sets forth a list of all Benefit Plans. With respect to each
Benefit Plan, Sellers have made available to Buyer a true and complete copy of
each such Benefit Plan (including all amendments thereto) and a true and
complete copy of each material document (including all amendments thereto)
prepared in connection with each such Benefit Plan including, without
limitation, (i) a copy of each trust or other funding arrangement, (ii) each
summary plan description and summary of material modifications, and (iii) a copy
of the most recent favorable determination letter referred to in Section 3.17(c)
(if any).
(b) None of the Benefit Plans is a plan that is or has
ever been subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of
the Code. None of the Benefit Plans is a "multiemployer plan" as defined in
Section 3(37) of ERISA.
(c) Except as set forth on Schedule 3.17(c), each
Benefit Plan or trust which is intended to be qualified or exempt from taxation
under Section 401(a), 401(k) or 501(a) of the Code has received a favorable
determination letter from the IRS that it is so qualified or exempt, and nothing
has occurred since the date of such determination letter that would adversely
affect the qualified or exempt status of any Benefit Plan or related trust.
(d) There has been no amendment to, written
interpretation of, or announcement (whether or not written) by either Seller
relating to, or change in employee participation or coverage under, any Benefit
Plan that would increase materially the expense of maintaining such Benefit Plan
above the level of the expense incurred in respect thereto for the most recent
fiscal year ended prior to the date hereof.
(e) No employee or former employee of WPE will become
entitled to any bonus, retirement, severance, job security or similar benefit or
enhanced such benefit (including acceleration of vesting or exercise of an
incentive award) as a result of the consummation of the Transactions
contemplated by this Agreement, other than as provided for in Section 5.4.
3.18 OVERTIME, BACK WAGES, VACATION AND MINIMUM WAGES. Except as set
forth on Schedule 3.18, no present or former employee of WPE in connection with
the Business has given written notice to either Seller of, and to Sellers'
Knowledge there is no valid basis for, any claim against either Seller or the
Purchased Assets (whether under law, any employment agreement or otherwise) on
account of or for (a) overtime pay, other than overtime pay for the current
payroll period, (b) wages or salary (excluding current bonus, accruals and
amounts accruing under "employee benefit plans," as defined in Section 3(3) of
ERISA) for any period other than the current payroll period, (c) vacation, time
off or pay in lieu of vacation or time off, other than that earned in respect of
the current fiscal year, or (d) any violation of any law relating to minimum
wages or maximum hours of work.
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3.19 DISCRIMINATION, WORKERS COMPENSATION AND OCCUPATIONAL SAFETY
AND HEALTH. To Sellers' Knowledge, no person or party (including government
agencies of any kind) has any valid claim, or valid basis for any action or
proceeding, against Sellers or the Purchased Assets arising out of any law
relating to discrimination in employment or employment practices or occupational
safety and health standards in connection with WPE's operation of the Business.
Neither Seller has received any written notice from any Governmental Body
alleging a violation of occupational safety or health standards. Except as set
forth in Schedule 3.19, there are no pending workers compensation claims
involving Sellers in connection with the Business and there have never been any
workers compensation claims against either Seller in connection with the
Business relating to the use or existence of asbestos in any of Sellers'
products. WPE has delivered to Buyer a true, correct and complete list of all
workers compensation claims against WPE in connection with the Business while
operated by WPE.
3.20 INTENTIONALLY DELETED.
3.21 LABOR DISPUTES; UNFAIR LABOR PRACTICES. Except as set forth in
Schedule 3.21, there is neither pending nor, to the Knowledge of Sellers,
threatened any labor dispute, strike or work stoppage in connection with the
Business which affects or which reasonably may be expected to affect Sellers,
the Business, the Purchased Assets or the Assumed Liabilities.
3.22 INSURANCE POLICIES. Set forth in Schedule 3.22 is a list of all
insurance policies and bonds in force covering or relating to the properties,
operations or personnel of the Business.
3.23 PRODUCT WARRANTIES. Set forth in Schedule 3.23 are the standard
forms of product warranties and guarantees used by Sellers in connection with
the Business (other than standard forms provided by Case for Case products) and
copies of all other product warranties and guarantees given or made in
connection with the Business. No oral product warranties or guarantees have been
made containing terms less favorable to Sellers than the terms of the forms of
product warranties and guarantees set forth in Schedule 3.23. To Sellers'
Knowledge, no person or party (including, but not limited to, government
agencies of any kind) has any valid claim, or valid basis for any action or
proceeding, against Sellers under any law relating to unfair competition, false
advertising or other similar claims arising out of product warranties,
guarantees, specifications, manuals or brochures or other advertising materials
used by Sellers in connection with the Business.
3.24 COMPLIANCE WITH LAWS; LICENSES AND PERMITS. Except as disclosed
in Schedule 3.24, Sellers have to their Knowledge complied with and are not in
Default under or in violation of any applicable Legal Requirement, or the
provisions of any franchise or license. WPE holds all licenses or permits
required to conduct the Business as presently conducted by it, and each such
license or permit is valid, in full force and effect, and listed in Schedule
2.1(g), and neither the execution of this Agreement nor the Closing do or will
constitute or result in a Default under or violation of any such permit or
license.
3.25 PRODUCT SAFETY AUTHORITIES. WPE has not been required to file
any notification or other report with or provide written information or oral
presentation to any government agency or product safety standards group
concerning actual or potential defects or hazards with respect to any product
manufactured, sold or distributed by WPE in connection with the
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Business, and to Sellers' Knowledge there exist no valid grounds for the recall
of any such product.
3.26 INTENTIONALLY DELETED.
3.27 FULL DISCLOSURE. No representation or warranty of Sellers
herein and no statement, information or certificate furnished or to be furnished
by or on behalf of Sellers pursuant hereto or in connection with the
transactions contemplated hereby contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary in
order to make the statements contained herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers that the following
statements contained in this Article IV are true and correct and complete as of
the date of this Agreement and will be true, correct and complete as of the
Closing Date:
4.1 ORGANIZATIONAL STATUS. Buyer is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has all requisite power and authority to purchase the Purchased
Assets. Buyer is qualified to do business and is in good standing as a foreign
entity in any jurisdiction where it is required to be so qualified, except where
the failure to so qualify would not have a material adverse effect on Buyer's
ability to perform its obligations under this Agreement. Buyer has made
available to Sellers true and complete copies of the Charter Documents of Buyer.
4.2 AUTHORIZATION. Buyer has the requisite power and authority to
execute and deliver the Transaction Documents to which it is or will be a party
and to perform its obligations under such of the Transaction Documents to which
it is a party. Such execution, delivery and performance by Buyer has been duly
authorized by all necessary limited liability company action. The Transaction
Documents executed on or before the date hereof constitute, and the Transaction
Documents to be executed after the date hereof will constitute, valid and
binding obligations of Buyer, enforceable against Buyer, as the case may be, in
accordance with their terms, except as enforceability may be restricted, limited
or delayed by applicable bankruptcy or other laws affecting creditors' rights
generally, and except as enforceability may be subject to general principles of
equity.
4.3 CONSENTS AND APPROVALS. Except as herein provided, neither the
execution and delivery by Buyer of the Transaction Documents to which it is or
will be a party, nor the performance of the Transactions to be performed by
Buyer, violate or will require any filing, consent or approval or constitute a
Default under (a) any Legal Requirement, pending filing with any Governmental
Body, or Court Order to which Buyer is subject, (b) the Charter Documents of
Buyer or (c) any Contract, government permit or other document to which Buyer is
a party or by which the properties or other assets of Buyer may be subject.
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ARTICLE V
COVENANTS OF SELLERS
5.1 OPERATION OF THE BUSINESS. From the date hereof through the
Closing Date, WPE will conduct the Business at the Acquired Locations in the
Ordinary Course, and will make commercially reasonable efforts to maintain its
relationships and goodwill with licensors, suppliers, distributors, customers,
landlords, employees, agents and others having business relationships with
either Seller in connection with the Business, maintain in inventory quantities
of raw materials, component parts, work in process, finished goods and other
supplies and materials in such manner and in such amounts as are consistent with
past practices, and shall refrain from the following actions in furtherance of
and in addition to such restriction (except as contemplated by this Agreement)
without the prior written consent of Buyer, which shall not be unreasonably
withheld: (i) encumbering, selling or otherwise disposing of any Purchased
Assets other than in the Ordinary Course; (ii) entering into any Contract,
waiving any right or otherwise incurring any Liability with respect to the
Purchased Assets or the Acquired Locations, other than in the Ordinary Course;
(iii) accelerating or discounting any Account other than in the Ordinary Course;
(iv) modifying or amending in any material respect or terminating any Assigned
Contract; (v) terminating or closing any Acquired Location; (vi) causing or
permitting to occur any event, occurrence or omission which, individually or
together with other matters, could reasonably be expected to have a Material
Adverse Effect; (vii) taking any action that would cause any of the
representations and warranties made by Sellers in this Agreement not to remain
true and correct or any of the conditions set forth in this Agreement not to be
satisfied; (viii) settling, releasing or forgiving any claim or litigation or
waiving any right thereto that relates to any of the Purchased Assets or the
Assumed Liabilities, but excluding any such claim or right that relates solely
to any Excluded Asset or Excluded Liability; (ix) other than in the Ordinary
Course, (a) materially increasing compensation or other benefits payable to any
employee of WPE or (b) entering into any employment or other similar agreement
or arrangement providing for compensation or benefits of any kind, or (ix)
initiating or participating in any discussions or negotiations to do, or
entering into any agreement to do, any of the foregoing.
5.2 ACCESS. Sellers shall give Buyer and its accountants, counsel
and other representatives reasonable access (subject to providing reasonable
notice and subject further to being under the supervision and direction of WPE
personnel if requested by WPE and subject further to such personnel complying
with the confidentiality provisions of this Agreement), without unreasonably
interfering with business operations, to all properties, books, Contracts and
records of Sellers related to the Purchased Assets or the Acquired Locations and
shall furnish to Buyer all such documents, records and information as Buyer
shall from time to time reasonably request.
5.3 INSURANCE AND MAINTENANCE OF THE PURCHASED ASSETS. From the date
hereof through the Closing Date, WPE shall continue to maintain its existing
insurance policies on property owned or leased by it in connection with the
Business and maintain and service the Purchased Assets at its own expense in a
manner consistent with past practice.
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5.4 EMPLOYEES. Sellers shall provide Buyer with reasonable access to
any employees at the Acquired Locations for purpose of discussing potential
future employment. After the Closing Date, upon the reasonable request of Buyer
and to the extent permitted by applicable Legal Requirements and subject to the
confidentiality provisions of this Agreement, Sellers shall make available to
Buyer any records in their possession with respect to former WPE employees hired
by Buyer. To the extent any WPE employee at the Acquired Locations is entitled
under WPE's existing policies to receive bonus compensation for any periods
prior to and through the Closing Date, WPE shall be responsible for and shall
pay to such employees, promptly following the Closing Date, the full amount of
such accrued bonus compensation (subject to normal withholding requirements).
5.5 FULFILLMENT OF CONDITIONS. Sellers shall use commercially
reasonable efforts to fulfill the conditions specified in Article VIII to the
extent that the fulfillment of such conditions is within their control. The
foregoing obligation includes (a) the execution and delivery of the Transaction
Documents and (b) taking or refraining from such actions as may be necessary to
fulfill such conditions (including conducting WPE's business in such manner that
on the Closing Date the representations and warranties of Sellers contained
herein shall be accurate as though then made, except as contemplated by the
terms hereof).
5.6 NOTIFICATION OF CERTAIN MATTERS. Between the date of this
Agreement and the Closing, either Seller shall give prompt notice to Buyer of
(a) the occurrence or failure to occur of any event of which either of them has
Knowledge, which occurrence or failure would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect any time from the date hereof through the
Closing Date and (b) any failure of either Seller to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that such disclosure shall not be deemed to cure
any breach of a representation, warranty, covenant or agreement or to satisfy
any condition.
5.7 NEW LEASE. With respect to WPE's corporate headquarters facility
in Vancouver, Washington, Sellers shall cause the landlord for the facility (an
Affiliate of Sellers) to terminate the existing lease and enter into a new lease
of the facility with Buyer, to be effective on and as of the Closing Date (the
"New Lease"). The new lease will be for a term of six (6) months at a monthly
rental rate equal to $14,000 per month.
5.8 NON-COMPETITION.
(a) Sellers agree that for a term of five (5) years
after the Closing Date (the "Restricted Period"), neither they nor any of their
Affiliates will: (i) engage, directly or indirectly, whether by itself or in
partnership or in conjunction with any other person, firm, association,
syndicate or corporation, as principal, agent, shareholder, employee, consultant
or in any other manner whatsoever, in any business activity competitive with the
Business as constituted on the date hereof; or (ii) at any time during the
Restricted Period, directly or indirectly induce or attempt to influence any
customer or supplier of Buyer to terminate its relationship with Buyer or to
enter into any relationship with any competitor of Buyer; or (iii) at any time
during the Restricted Period, induce or attempt to influence any employee or
contractor of Buyer to terminate a relationship with Buyer, or (iv) at any time
during the Restricted Period,
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without the prior written consent of Buyer, induce or attempt to influence any
employee of Buyer to enter into any employment or contractual relationship with
Sellers or any other person or entity.
(b) Sellers agrees that any violation of any of the
covenants in this Section 5.8 would cause substantial and irreparable injury to
Buyer, whereupon Buyer may seek to have Sellers enjoined from any breach or
threatened breach thereof in addition to, but not in limitation of, any other
rights or remedies to which Buyer is or may be entitled to at law or in equity
or under this Agreement.
(c) Sellers agree that the limitations set forth above
are reasonable in time and geographic scope, and if any provision hereof is held
invalid or unenforceable, the remainder shall nevertheless remain in full force
and effect. In particular, Sellers agree that if any court of competent
jurisdiction shall determine that the duration or geographical limit of the
foregoing non-competition covenant is invalid or unenforceable, it is the
intention of Sellers and Buyer that it shall not be terminated thereby but shall
be deemed to have been amended to the extent required to render it valid and
enforceable, such amendment to apply only with respect to the jurisdiction of
the court making such adjudication. Sellers acknowledge that the Purchase Price
and the agreements of Buyer set forth in this Agreement constitute good and
valid consideration for the covenants set forth in this Section 5.8.
(d) In order to more fully protect the interests of
Buyer, and as a condition to Buyer's agreement to acquire the Purchased Assets,
Sellers shall cause ▇▇▇▇ ▇▇▇▇▇▇ to execute and deliver to Buyer at Closing a
Non-Competition Agreement containing provisions comparable in all material
respects to the provisions of this Section 5.8.
5.9 USE OF NAME. Buyer shall have the exclusive (in respect of the
operation of a dealership), royalty-free right and license to use the name
"Western Power" and associated logos for a transition period of one hundred
eighty (180) days following the Closing, to allow for the orderly removal of the
name from signage, invoices and other assets used in the operation of the
Acquired Locations and the Purchased Assets. Nothing contained in this Section
5.9 shall prohibit WPE from using the name "Western Power" in connection with
sales of products that are not competitive with CNH products from any facility
currently maintained by WPE but not included in the Acquired Locations.
ARTICLE VI
COVENANTS OF BUYER
6.1 FULFILLMENT OF CONDITIONS. From the date hereof to the Closing,
Buyer shall use commercially reasonable efforts to fulfill the conditions
specified in Article VIII to the extent that the fulfillment of such conditions
is within its control and to cooperate with the Sellers as reasonably required
to obtain the Required Consents. The foregoing obligation includes (a) the
execution and delivery of the Transaction Documents and (b) taking or refraining
from such actions as may be necessary to fulfill such conditions.
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6.2 EMPLOYEES. As of the Closing Date, Buyer shall offer employment
(to be effective the day after the Closing Date) to substantially all of the
non-management employees of WPE at all the Acquired Locations who are not on
leave of absence (disability or otherwise) and in connection therewith shall
credit those employees who accept such offers of employment with the unused
vacation time or sick leave accrued by them (in accordance with WPE's policies)
during their employment with WPE, to the extent expressly identified on Schedule
6.2. Notwithstanding the foregoing, Buyer shall have the right not to offer
employment to any employee of WPE if Buyer determines, in its sole discretion,
that it would not be appropriate or desirable to retain such employee. Sellers
represent and warrant to Buyer that Schedule 6.2 correctly identifies all
vacation time and sick leave accrued and unused by the aforesaid employees.
Nothing contained in this Section 6.2 shall be deemed an undertaking by Buyer to
continue WPE's policies with respect to vacation time or sick leave, it being
understood and agreed that Buyer may initiate policies that differ from WPE's.
6.3 PRO RATA SHARE OF PREPAID RENT AND LEASE EXPENSES. In addition
to the Purchase Price, Buyer shall pay to WPE at the Closing its pro rata share
(based on their respective periods of occupancy) of all prepaid rent and other
prepaid expenses under the Leases.
6.4 ACCOUNTS6.5 . In addition to the Purchase Price, Buyer shall pay
to WPE, at the end of the Holdback Period (as defined in Section 9.5 hereof), an
amount equal to ninety percent (90%) of all cash payments actually received by
Buyer during the Holdback Period that are attributable to accounts identified on
Schedule 2.1(e)(ii) as being over 120 days old on and as of the Closing Date
(provided such payments are expressly designated by the payor as a payment in
satisfaction of such an over-120 days account), minus (a) any out-of-pocket
costs of collection of such accounts, and (b) any Indemnification Obligations
that remain unsatisfied from the Holdback Amount as provided in Section 9.5.
Buyer shall make commercially reasonable efforts, in accordance with its
ordinary practices, to collect such accounts during the six (6) month period
following the Closing Date, provided that "reasonable efforts" shall not include
initiating any collection action. Nothing contained in this Section 6.4 is
intended to modify or otherwise affect the absolute assignment of title to such
accounts to Buyer. Sellers shall not have the right to take any action to
collect such accounts following the Closing Date, and expressly covenant and
agree with Buyer that they and their representatives will refrain from taking
any such action. Buyer's payment obligations under this Section 6.4 shall
survive through the end of the Holdback Period.
ARTICLE VII
FURTHER COVENANTS
7.1 CONFIDENTIALITY. Prior to the Closing and for two years from any
termination of this Agreement, all parties to this Agreement shall hold, and
shall use commercially reasonable efforts to cause the Affiliates, officers,
directors, employees, accountants, counsel, consultants, advisors and agents of
such Person to hold, in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, and except as may be
required to enforce the Transaction Documents or to defend any claims arising
thereunder, the terms contained in the Transaction Documents as well as all
confidential documents and information concerning the other Person furnished in
connection with the Transactions, except to the extent
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that such information can be shown to have been (a) previously known on a
nonconfidential basis, (b) in the public domain through no fault of such Person,
(c) later acquired from sources other than such Person as long as, to the
Knowledge of such Person, such sources are not subject to a contractual or
fiduciary duty of confidentiality with respect to such information or (d)
required to be disclosed pursuant to operation of law or legal process,
governmental regulation or court order, provided that such Person will inform
the other parties thereof and reasonably cooperate with the other parties (at no
cost to such Person) in contesting such request or order and in obtaining
appropriate protection orders; provided that such Person may disclose such
information to its respective officers, directors, shareholders, employees,
accountants, counsel, consultants, advisors and agents in connection with the
Transactions as long as such Persons are informed of the confidential nature of
such information and are directed to treat such information confidentially. The
obligation of each Person to hold any such information in confidence shall be
satisfied if it exercises the same care with respect to such information as it
would take to preserve the confidentiality of its own similar information. If
this Agreement is terminated, each party shall, and shall use commercially
reasonable efforts to cause the officers, directors, employees, accountants,
counsel, consultants, advisors and agents of such Person to, destroy or deliver
to the other parties all documents and other materials, and all copies thereof,
obtained by such Person or on its behalf in connection with this Agreement that
are subject to such confidence.
7.2 COMMERCIALLY REASONABLE EFFORTS. Subject to the terms and
conditions of this Agreement, each party shall use commercially reasonably
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable Legal
Requirements to consummate the Transactions, including the execution and
delivery of any additional instruments necessary to consummate the Transactions.
7.3 EXPENSES. Whether or not the Closing occurs, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring the costs or expenses.
7.4 TRANSFER TAXES. Buyer shall be responsible for, pay, indemnify
and hold harmless the Sellers from, (a) any transfer, motor vehicle
registration, and documentary taxes and fees imposed with respect to instruments
of conveyance required to effect the Transactions; and (b) any sales, use,
gains, excise and other transfer or similar taxes on the transfer of the
Purchased Assets contemplated hereunder (collectively, the "Transfer Taxes").
Sellers shall execute and deliver to Buyer at the Closing any certificates or
other documents as the Buyer may reasonably request to perfect any exemption
from any such Transfer Tax.
7.5 RECEIPT OF PAYMENTS POST-CLOSING. After the Closing Date,
Sellers and Buyer will reasonably cooperate to assist each other in directing
customers and other third parties to make payments (in satisfaction of Accounts
or otherwise) to the account of the party to which such payments are properly
allocated under the terms of this Agreement. If and to the extent that, after
the Closing, either party receives any payment of funds which should have been
directed to the account of the other party as aforesaid, the party in receipt of
such payment will hold such funds in trust for the other party and will promptly
(but in any event within seven (7) days following receipt) remit the funds to
such other party; provided, however, that any amount payable by a party under
this Section 7.5 may be netted against any payment obligation owed to
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such party by the other party, to the extent the other party has acknowledged
such off-setting payment obligation in writing.
7.6 TERMINATION OF DEALER AGREEMENTS AND RELEASE OF CLAIMS. At the
Closing, Buyer shall cause CNH to execute and deliver to the Sellers and the
Sellers shall execute and deliver to CNH, an agreement in form and substance
mutually satisfactory to the parties thereto, terminating the construction
equipment sales and service agreement in effect by and between WPE and CNH,
effective as of the Closing Date, and containing a release by the Sellers of any
and all claims they may have against CNH, CNH Capital and their respective
Affiliates, arising out of or related to such distribution agreements or
otherwise, and containing a release by CNH of any and all claims it may have
against WPE arising out of or related to such sales and service agreement (the
"Release").
ARTICLE VIII
CONDITIONS PRECEDENT TO THE TRANSACTIONS
8.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective
obligations of each party to consummate the Transactions shall be subject to the
fulfillment at or prior to the Closing of the following conditions:
(a) Approval of Transactions by Sellers. Sellers shall
have delivered to Buyer a Secretary's Certificate as evidence that the
respective Boards of Directors and shareholders of WPE and the Parent previously
approved and adopted the Transactions in accordance with their respective
Charter Documents and the laws of the jurisdictions under which they were
incorporated and that such approvals have not been revoked, modified, amended or
rescinded and are still in full force and effect.
(b) Approval of Transactions by Buyer. Buyer shall have
obtained all necessary approvals of the Transactions from its executive
management and its Board of Directors or other governing body, and such
approvals shall not have been revoked, modified, amended or rescinded.
(c) Governmental Approvals. All approvals and consents
from Governmental Bodies (if any) required to consummate the Transactions shall
have been obtained.
(d) No Governmental Order or Legal Requirement. There
shall not be in effect any order, decree or injunction (whether preliminary,
final or appealable) of a United States federal or state court of competent
jurisdiction, and no Legal Requirement shall have been enacted or promulgated by
any governmental authority or agency, that prohibits consummation of the
Transactions.
8.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
consummate the Transactions shall be subject to the satisfaction or waiver, on
or before the Closing, of each of the following conditions:
(a) Representations and Warranties True. The
representations and warranties of Sellers contained herein shall be true and
correct at and as of the date hereof and at and as of
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the Closing as though such representations and warranties were made again at and
as of the Closing, except for changes contemplated by this Agreement.
(b) Performance. Sellers shall have performed and
complied in all material respects with the covenants and agreements contained in
this Agreement required to be performed or complied with by them on or prior to
the Closing.
(c) Consents and Approvals. Sellers shall have obtained
all the Required Consents.
(d) Due Diligence. Buyer shall have completed its due
diligence review of the Business to its satisfaction.
(e) Disclosure Schedules. Sellers shall have prepared
and delivered to Buyer the Disclosure Schedules and Buyer shall have approved
the form and content thereof.
(f) Discharge of Encumbrances. Sellers shall have
delivered to Buyer all releases, discharges and other instruments or documents,
duly executed or otherwise authorized in writing by the applicable creditors of
WPE listed in Schedule 8.2(f), to terminate, release and forever discharge all
security interests or liens with respect to the Purchased Assets and to effect
the transfer of the Purchased Assets to Buyer free and clear of all Encumbrances
as required by this Agreement; or, in the alternative, duly executed payoff
letters from such creditors showing the amounts to be paid to satisfy the
applicable Encumbrance (stating any applicable per diem payoff amount),
expressly authorizing the termination, release and discharge of the Encumbrance
upon payment of such payoff amount, and agreeing to execute and deliver to Buyer
any necessary release, discharge or other instrument or document and to
otherwise cooperate with Buyer to effect such termination, release and
discharge.
(g) Absence of Litigation. No action, suit, proceeding,
arbitration, investigation or inquiry, whether civil, criminal or
administrative, shall have been commenced against Sellers or any of their
Affiliates with respect to or affecting the Transactions or any aspect thereof
or affecting the Business, the Purchased Assets or the Acquired Locations which
would have a Material Adverse Effect on the Business, the Purchased Assets or
the Acquired Locations.
(h) Other Documents. Buyer shall have received executed
copies of all Transaction Documents to which Sellers are parties to the extent
that they shall not have been received on or prior to the Closing. Buyer shall
have received all other documents required under the terms of any of the
Transaction Documents and any other documents reasonably requested on or prior
to the Closing Date.
(i) Certificates. Sellers shall have furnished to Buyer
certificates of an officer of each of Sellers, dated the Closing Date,
certifying compliance as of the Closing with the conditions set forth in
paragraphs (a) and (b) of this Section 8.2.
(j) Material Adverse Change. There shall not have been
or occurred any Material Adverse Change in respect of the Business, the
Purchased Assets or the Acquired Locations.
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(k) Damage or Destruction.
(i) If, on or before the Closing Date, any
of the Acquired Locations is damaged or destroyed by fire or other cause,
Sellers shall notify Buyer thereof within ten (10) days after the occurrence of
such damage or destruction.
(ii) If such damage or destruction effects a
Material Portion (as defined below) of any individual Acquired Location, Buyer
shall within twenty (20) days after receipt of Seller's notification, elect
either to (a) exclude the particular parcel from the Purchased Assets to be
transferred on the Closing Date and the Purchase Price shall be adjusted by an
amount allocated to such Acquired Location as mutually agreed by the parties, or
(b) terminate this Agreement if the loss of the particular Acquired Location
would have a Material Adverse Effect.
(iii) If the above referenced time periods
overlap with the Closing Date, Buyer may, at Buyer's option, delay the Closing
Date until the expiration of Buyer's election period described in subsection
(ii) above.
(iv) For purposes hereof, the term "Material
Portion" means any portion or portions of an Acquired Location that collectively
constitutes more than twenty percent (20%) of the rentable square footage of
such Acquired Location or, with regard to any Acquired Location, that materially
and adversely affects Buyer's intended use of such Acquired Location.
(v) Condemnation. If, on or prior to the
Closing Date, any proceeding (judicial, administrative or otherwise), which
shall relate to the proposed taking of all or a Material Portion of any Acquired
Location by condemnation or eminent domain or any action in the nature of
eminent domain, is commenced or threatened, Sellers shall timely give Buyer
notice of such occurrence and Buyer shall, within twenty (20) days after receipt
of such notice, elect either (i) to exclude the particular Acquired Location
from the Purchased Assets and the Purchase Price shall be adjusted by the amount
allocated to such Acquired Location as mutually agreed by the parties, or (ii)
terminate this Agreement if the loss of the particular Acquired Location would
have a Material Adverse Effect. If the above referenced time periods overlap
with the Closing Date, Buyer may, at Buyer's option, delay the Closing Date
until the expiration of Buyer's election period described above.
8.3 CONDITIONS TO OBLIGATIONS OF SELLERS. The obligations of Sellers
to consummate the Transactions shall be subject to the satisfaction or waiver,
on or before the Closing, of each of the following conditions:
(a) Representations and Warranties True. The
representations and warranties of Buyer contained herein shall be true and
correct at and as of the date when made and at and as of the Closing as though
such representations and warranties were made again at and as of the Closing,
except for changes contemplated by this Agreement.
(b) Performance. Buyer shall have performed and complied
in all material respects with the covenants and agreements contained in this
Agreement required to be performed or complied with by it on or prior to the
Closing.
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(c) Consents and Approvals. Buyer shall have obtained
all governmental and third party consents and approvals necessary to consummate
the Transactions.
(d) Other Documents. Sellers shall have received
executed copies of all Transaction Documents to which Buyer is a party to the
extent that they shall not have been received prior to the Closing. Sellers
shall have received all other documents required under the terms of any of the
Transaction Documents and any other documents reasonably requested on or prior
to the Closing Date.
(e) Certificates. Buyer shall have furnished to Sellers
a certificate of its duly authorized officer, dated the Closing Date, certifying
compliance as of the Closing with the conditions set forth in paragraphs (a) and
(b) of this Section 8.3.
(f) Release of Guaranty. Effective upon the Closing of
the Transactions, Buyer shall have caused CNH and CNH Capital to release ▇▇▇▇
▇▇▇▇▇▇, a principal of Sellers, from his obligations to CNH and CNH Capital
under his personal guaranty of the Liabilities of WPE, other than any Liability
expressly identified by CNH Capital as continuing in effect after the Closing,
and except to the extent that at any time any payment by or on behalf of WPE is
rescinded, avoided or rendered void as a preferential transfer, impermissible
set-off, fraudulent conveyance or must otherwise be returned or disgorged by CNH
or CNH Capital upon the insolvency, bankruptcy or reorganization of either of
the Sellers or otherwise. The latter exception shall continue in effect through
the final expiration of all applicable statutes of limitation.
ARTICLE IX
INDEMNIFICATION
9.1 BY SELLERS. After the Closing Date, Sellers shall jointly and
severally indemnify and hold harmless Buyer and each Affiliate and agent of
Buyer ("Buyer Indemnified Parties") from and against any Damages that any such
indemnified party may sustain, suffer or incur and that result from, arise out
of, or relate to (i) any breach of any representation, warranty, covenant or
agreement of either Seller contained in any Transaction Document; (ii) any
Environmental Liabilities arising out of or resulting from events occurring or
conditions existing on or prior to the Closing Date or any Tax Liability of WPE,
including any such Liabilities of WPE related to consummation of the
Transactions or any Liability of WPE for Taxes of another Person (but not
including Transfer Taxes that are Buyer's responsibility under Section 7.4 of
this Agreement); and (iii) any Excluded Liability or any obligation, debt or
liability of the Sellers that does not arise out of or relate to the Business,
whether arising before, on or after the Closing Date. As used in this Article
IX, the term "Damages" shall include (A) all losses, damages (excluding
consequential damages), judgments, awards, penalties and settlements; (B) all
demands, claims, suits, actions, causes of action, proceedings and assessments,
whether or not ultimately determined to be valid; and (C) all costs and expenses
(including, without limitation, interest (including prejudgment interest in any
litigated or arbitrated matter), penalties, court costs and reasonable fees and
expenses of attorneys and expert witnesses) of investigating, defending or
enforcing any of the foregoing or of enforcing this Agreement.
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9.2 BY BUYER(a) . After the Closing Date, Buyer shall indemnify and
hold harmless Sellers and each Affiliate and agent thereof ("Seller Indemnified
Party") from and against any Damages that any such Seller Indemnified Party may
sustain, suffer or incur and that result from, arise out of or relate to(i) any
breach of any representation, warranty, covenant or agreement of Buyer contained
in any Transaction Document; or (ii) all Claims against any Seller Indemnified
Party arising out of Buyer's operation of the Purchased Assets from and after
the Closing or with respect to any Assumed Liability.
9.3 PROCEDURE FOR CLAIMS. A party seeking indemnification under this
Article IX (an "Indemnified Party") shall give prompt notice in writing of the
Claim for Damages and a brief explanation of the basis thereof to the party
alleged to be responsible for indemnification hereunder (an "Indemnitor"). The
Indemnitor shall promptly pay the Indemnified Party any amount due under this
Article IX. The Indemnified Party may pursue whatever legal remedies may be
available for recovery of the Damages claimed from any Indemnitor. In
determining the amount of any Damages in this Article IX, materiality qualifiers
contained in any representation, warranty or covenant will be disregarded.
9.4 THIRD PARTY CLAIMS. An Indemnified Party shall give any
Indemnitor prompt written notice of the institution by a third party of any
actions, suits or other administrative or judicial proceedings if the
Indemnified Party would be entitled to claim indemnification under this Article
IX in connection with any such action, suit or other proceeding. The Indemnitor
shall, provided that it gives notice within ten (10) business days of receipt of
notice from the Indemnified Party, have the option of assuming the defense of
such action with counsel reasonably satisfactory to such Indemnified Party (and
such costs of defense shall be included in Damages with respect to such claim).
In this regard, ▇▇▇▇▇▇▇ Savage LLP shall be deemed reasonably satisfactory to
such Indemnified Party. The Indemnified Party shall be entitled to participate
in any such defense with separate counsel at its own expense; provided, however,
that if, in the reasonable opinion of counsel to the Indemnified Party, a
non-waivable conflict exists between the Indemnified Party and the Indemnitor
that would make the failure to have such separate representation either
unethical or illegal, the reasonable cost of such separate representation shall
be paid by the Indemnitor. If an Indemnitor assumes the defense of such an
action, (x) no compromise or settlement thereof may be effected by the
Indemnitor without the Indemnified Party's consent (which shall not be
unreasonably withheld, conditioned or delayed) unless (i) there is no finding or
admission of any violation of a Legal Requirement or any violation of the rights
of any person and no effect on any such claims that may be made against the
Indemnified Party and (ii) the sole relief provided is monetary damages that are
paid in full by the Indemnitor and (y) the Indemnitor shall have no liability
with respect to any compromise or settlement thereof effected by the Indemnified
Party that would involve a payment by the Indemnitor of Damages without its
consent (which shall not be unreasonably withheld, conditioned or delayed). If
notice is given to an Indemnitor of the commencement of any Action pursuant
hereto and it does not, within ten (10) business days after the Indemnitor's
notice is received, give notice to the Indemnified Party of its election to
assume the defense, the Indemnitor shall be bound by any determination made in
such action or any commercially reasonable compromise or settlement thereof
effected by the Indemnified Party. Any failure to give prompt notice under this
Section 9.4 shall not bar an Indemnified Party's right to claim indemnification
under this Article IX, except to the extent that an Indemnitor shall have been
harmed by such failure. Notwithstanding anything to the contrary set forth in
this Section 9.4, in
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the event that the third party claim is covered by insurance and the insurance
policy provides for procedures other than those set forth herein as a condition
to coverage, the procedures set forth in the insurance policy shall supersede
those set forth herein to the extent that they are inconsistent with those set
forth herein.
9.5 HOLDBACK In addition to any Adjustment Amount owed by the
Sellers under Section 2.5 hereof, the Buyer shall be entitled to set-off against
the Holdback Amount the amount of any indemnification obligations owed to the
Buyer by the Sellers under the provisions of Section 9.1 hereof (each
individually an "Indemnification Obligation" and, collectively, the
"Indemnification Obligations"), and to retain such amount in full or partial
satisfaction of such Indemnification Obligations, free and clear of any and all
rights or claims of Sellers or Persons claiming through Sellers. The Buyer shall
give the Sellers written notice (an "Indemnification Notice") of the aggregate
amount of any outstanding Indemnification Obligations to be set-off against the
Holdback Amount (including, in the case of a claim that has arisen but remains
unliquidated, a good faith estimate of the reasonably foreseeable maximum amount
of the applicable Indemnification Obligation), on or before the last day of each
of the following three periods: (i) the period from the Closing Date through
that date which is ninety (90) days following the Closing Date (or if later,
that date which is five (5) calendar days following a final determination of the
Adjustment Amount under the provisions of Section 2.5 hereof) (the "Initial
Holdback Period");(ii) the period from the end of the Initial Holdback Period
through December 31, 2008 (the "Second Holdback Period"); and (iii) the period
from January 1, 2009 through that date which is two hundred and seventy (270)
days following the Closing Date (the "Final Holdback Period" and, collectively
with the Initial Holdback Period and the Second Holdback Period, the "Holdback
Period"). During the Holdback Period, the Holdback Amount outstanding from time
to time (after deducting any set-offs and payments made under the provisions of
Section 2.5 and this Section 9.5) shall bear interest at a fixed rate per annum
equal to the "Prime Rate," as published by the WALL STREET JOURNAL on the
Closing Date, plus one percent (1%) ("Interest"). Any accrued and unpaid
Interest shall be paid to WPE, in immediately available funds, on each of the
three (3) payment dates set forth below.
The Holdback Amount will be released to WPE in three (3) tranches,
as and to the extent provided below:
(a) At the end of the Initial Holdback Period, the Buyer
shall deduct from the Holdback Amount (i) any Adjustment Amount owed by the
Sellers under section 2.5 hereof, plus (ii) the amount of any Indemnification
Obligations accrued through such date. If and to the extent, after making such
deductions, the remaining Holdback Amount exceeds $666,666, then, in addition to
any Interest payable as hereinbefore provided, the Indemnification Notice shall
be accompanied by payment to WPE, in immediately available funds, of such excess
amount;
(b) At the end of the Second Holdback Period, the Buyer
shall deduct from the Holdback Amount the amount of any Indemnification
Obligations accrued through such date (other than Indemnification Obligations
previously satisfied under clause (a) above). If and to the extent, after making
such deduction, the remaining Holdback Amount exceeds $333,333, then, in
addition to any Interest payable as hereinbefore provided, the Indemnification
Notice shall be accompanied by payment to WPE, in immediately available funds,
of such excess amount;
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(c) At the end of the Final Holdback Period, the Buyer
shall deduct from the Holdback Amount the amount of any Indemnification
Obligations accrued through such date (other than Indemnification Obligations
previously satisfied under clauses (a) or (b) above). If and to the extent,
after making such deduction, any portion of the Holdback Amount remains, then,
in addition to any Interest payable as hereinbefore provided, the
Indemnification Notice shall be accompanied by payment to WPE, in immediately
available funds, of such remaining portion; provided, however, that if a claim
or claims for indemnification arise under the provisions of Section 9.1 prior to
the expiration of the Holdback Period, then the portion of the Holdback Amount
that would be necessary to satisfy such claims (as determined by Buyer in good
faith) shall not be paid until such claims have been fully and finally resolved,
after which that portion (if any) not applied to the satisfaction of the claims,
plus any accrued and unpaid Interest thereon, shall be paid to WPE.
By way of example, if at the end of the Initial Holdback Period the
Sellers owe the Buyer an Adjustment Amount of $200,000 and Indemnification
Obligations of $50,000, then those amounts will be satisfied from the Holdback
Amount, leaving a net Holdback Amount of $750,000, of which $83,334 (plus
Interest) will be paid to WPE on that date. By way of further example, if at the
end of the Initial Holdback Period the Sellers owe the Buyer an Adjustment
Amount of $200,000 and Indemnification Obligations of $350,000, then those
amounts will be satisfied from the Holdback Amount, leaving a net Holdback
Amount of $450,000, and no payment (other than Interest) will be made to WPE on
that date.
Any dispute between the Sellers and the Buyer with respect to the
amount of any Indemnification Obligation claimed by the Buyer as hereinbefore
provided shall be resolved by arbitration in Chicago, Illinois by the American
Arbitration Association in accordance with its Commercial Arbitration Rules then
existing, provided that discovery as provided for under the Illinois Rules of
Civil Procedure shall be available to all parties to the arbitration. This
agreement to arbitrate is specifically enforceable and the arbitration award
will be final and judgment may be entered upon it in any court having
jurisdiction over the subject matter of the dispute, absent manifest error.
Arbitration shall be held within 90 days after notice of dispute is provided to
the Buyer by the Sellers. The prevailing party shall be awarded their reasonable
attorney fees incurred in the arbitration. Nothing in this Section 9.5 shall be
construed to require the Sellers and the Buyer to arbitrate any disputes other
than those disputes expressly provided for herein.
9.6 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations, warranties and covenants of the parties in this Agreement or
any other Transaction Document shall survive the Closing.
ARTICLE X
TERMINATION
10.1 GROUNDS FOR TERMINATION. This Agreement may be terminated at
any time prior to the Closing Date:
(a) By mutual written consent of Buyer and Sellers;
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(b) By either Buyer or Sellers, if the Closing has not
occurred by that date which is sixty (60) days following the date of this
Agreement (such date, as it may be extended from time to time by the written
agreement of Buyer and Sellers, is referred to herein as the "Termination
Date"); provided, however, that the right to terminate this Agreement under this
paragraph (b) of Section 10.1 shall not be available to a party if such failure
to close results from such party breaching any of its covenants, representations
or warranties in this Agreement;
(c) By Sellers if Buyer shall have breached any of its
covenants hereunder in any material respect or if the representations and
warranties of Buyer contained in this Agreement shall not be true and correct,
except for such changes as are contemplated by this Agreement, in all material
respects, and in either event, if such breach is subject to cure, Buyer has not
cured such breach within ten (10) business days of Sellers' notice of an intent
to terminate;
(d) By Buyer if Sellers shall have breached any of their
covenants hereunder in any material respect or if the representations and
warranties of Sellers contained in this Agreement shall not be true and correct,
except for such changes as are contemplated by this Agreement, in all material
respects, and in either event, if such breach is subject to cure, Sellers have
not cured such breach within ten (10) business days of Buyer's notice of an
intent to terminate;
(e) By Buyer if any of the conditions set forth in
Sections 8.1 or 8.2 have not been met by that date which is sixty (60) days
following the date of this Agreement or earlier become incapable of fulfillment;
(f) By Sellers if any of the conditions set forth in
Sections 8.1 or 8.3 have not been met by that date which is sixty (60) days
following the date of this Agreement or earlier become incapable of fulfillment;
or
(g) By Sellers or Buyer if there shall be in effect a
final nonappealable order of a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby; it being agreed that the parties hereto shall
promptly appeal any adverse determination which is not nonappealable (and pursue
such appeal with reasonable diligence).
10.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant
to Section 10.1, the agreements contained in Sections 7.1, 7.3 and this Section
10.2 and Article XI shall survive the termination hereof, but the rights and
obligations of the parties hereunder will otherwise terminate. In addition,
either party may pursue any further legal or equitable remedies that may be
available to it if such termination is based on a breach by the other party.
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ARTICLE XI
PUBLIC ANNOUNCEMENTS
Buyer and Sellers will consult with each other before issuing any
press release or making any public statement with respect to this Agreement and
the Transactions and, except as may be required by applicable law or stock
exchange regulations, will not issue any such press release or make any such
public statement without the written consent of the other party.
ARTICLE XII
CONTENTS OF AGREEMENT, AMENDMENT,
PARTIES IN INTEREST, ASSIGNMENT, ETC.
This Agreement and the Transaction Documents referred to herein
together embody the entire agreement and understanding of the parties concerning
the subject matter contained herein, and supersedes any and all prior agreements
and understandings between the parties, whether written or oral. No action taken
pursuant to this Agreement, including without limitation, any investigation by
or on behalf of either party, shall be deemed to constitute a waiver by the
party taking such action of compliance with any representation, warranty,
covenant or agreement contained herein. No provision of this Agreement may be
waived, modified or otherwise changed by any means, including, without
limitation, any course of dealing, course of performance or trade usage, or oral
evidence of any nature, except pursuant to a writing executed by the party
against which enforcement of such waiver, modification or change is sought. This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and permitted assigns of the parties hereto. No
party hereto shall assign this Agreement or any right, benefit or obligation
hereunder, except that (a) Buyer shall have the right to assign any of its
rights and obligations hereunder to an Affiliate or other third party, and (b)
WPE may assign its right to receive any amounts payable to WPE under this
Agreement, including, but not limited to, under Sections 2.4, 2.5(c), 6.3, 6.4,
and 9.5 hereof, to ▇▇▇▇▇▇▇▇ Investment Master Fund, Ltd., individually and as
agent for the senior secured noteholders identified in that certain Securities
Purchase Agreement dated as of June 8, 2005, as amended (collectively,
"▇▇▇▇▇▇▇▇"), pursuant to an assignment agreement in form and substance
reasonably satisfactory to Buyer's counsel. ▇▇▇▇▇▇▇▇ shall not by such
assignment acquire any rights in or to such payments greater than or otherwise
different from the rights of WPE. There are no intended third party
beneficiaries (including without limitation ▇▇▇▇▇▇▇▇) under this Agreement.
ARTICLE XIII
INTERPRETATION
Unless the context of this Agreement clearly requires otherwise, (a)
references to the plural include the singular, the singular the plural, (b) "or"
has the inclusive meaning frequently identified with the phrase "and/or" and (c)
"including" has the inclusive meaning frequently identified with the phrase "but
not limited to" or "without limitation." The section and other headings
contained in this Agreement are for reference purposes only and shall not
control or
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affect the construction of this Agreement or the interpretation thereof in any
respect. Section, subsection, schedule and exhibit references are to this
Agreement unless otherwise specified. Each accounting term used herein that is
not specifically defined herein shall have the meaning given to it under GAAP.
Unless otherwise expressly stated, all dollars specified in this Agreement shall
be in United States dollars. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that any rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.
ARTICLE XIV
NOTICES
All notices that are required or permitted hereunder shall be in
writing and shall be sufficient if personally delivered or sent by mail,
facsimile message or national overnight courier or other delivery service,
provided that notice by facsimile message shall only be effective if confirmed
by at least one other method of notification provided for herein. Any notices
shall be deemed given upon the earlier of the date when received at, or the
third day after the date when sent by registered or certified mail or the day
after the date when sent by national overnight courier to, the address or fax
number set forth below, unless such address or fax number is changed by notice
to the other party hereto:
If to Buyer:
Case Construction Equipment
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President, Sales & Marketing NA
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Duane, Morris LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esquire
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇
Fax Number: ▇▇▇-▇▇▇-▇▇▇▇
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If to Sellers:
Western Power & Equipment Corp.
▇▇▇▇-▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, President
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇ (ext. 109)
Fax Number: 360-_______________
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇, Esquire
Telephone Number: ▇▇▇-▇▇▇-▇▇▇▇
ARTICLE XV
GOVERNING LAW; CONSENT TO JURISDICTION; CONSENT TO SERVICE OF PROCESS
(a) This Agreement shall be construed and interpreted in
accordance with the laws of the State of Illinois, without regard to its
provisions concerning conflict of laws. Each of the parties hereto irrevocably
appoints each and every of its officers as its attorneys upon whom may be
served, by regular or certified mail at the address set forth in Article XIV
hereof, any notice, process or pleading in any action or proceeding against it
arising out of or in connection with this Agreement; and each hereby further
agrees that any action or proceeding against it may be commenced and maintained
in any court within the State of Illinois by service of process on any such
officer, and that the courts of the State of Illinois shall have jurisdiction
with respect to the subject matter hereof and the parties hereto.
Notwithstanding the foregoing, any party in its absolute discretion may also
initiate proceedings in the courts of any other jurisdiction in which the other
party may be found or in which any of its properties may be located.
(b) THE PARTIES ACKNOWLEDGE THAT THEY HAVE EACH
IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO A JURY TRIAL WITH REGARD TO ANY
DISPUTE OR CLAIM ARISING UNDER THIS AGREEMENT.
(c) Each party hereby consents to process being served
by the other party to this Agreement in any suit, action or proceeding by the
mailing of a copy thereof in accordance with the provisions of Article XIV.
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ARTICLE XVI
COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be binding as of the date first written above, and all of which
shall constitute one and the same instrument. Each such copy shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such counterpart. A facsimile copy of an
executed original of this Agreement shall have the same force and effect as an
executed original.
ARTICLE XVII
SEVERABILITY
The invalidity of any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any part thereof,
all of which are inserted conditionally on their being valid in law, and, in the
event that any one or more of the words, phrases, sentences, clause or sections
contained in this Agreement shall be declared invalid, this Agreement shall be
construed as if such invalid word or words, phrase or phrases, sentence or
sentences, clause or clauses, or section or sections had not been inserted. If
such invalidity is caused by length of time or size of area, or both, the
otherwise invalid provision will be considered to be reduced to a period or area
which would cure such invalidity.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first written above.
WESTERN POWER & EQUIPMENT CORP., a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Title: President
----------------------
WESTERN POWER & EQUIPMENT CORP., an Oregon corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Title: President
----------------------
CNH DEALER HOLDING COMPANY LLC,
a Delaware limited liability company
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------
Title: Chairman
----------------------
EXHIBIT A
LIST OF ACQUIRED LOCATIONS
1. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
4. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
5. ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
6. ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
8. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇