ASSET SALE AND PURCHASE AGREEMENT
THIS ASSET SALE AND PURCHASE AGREEMENT ("Agreement") is made and
entered into as of the 22nd day of June, 1998,
BY AND BETWEEN ▇▇▇▇▇▇ INDUSTRIES, INC.,
a Kansas corporation,
hereinafter referred to as
"Buyer"
AND DEWEZE MANUFACTURING, INC.,
a Pennsylvania corporation,
hereinafter referred to as
"Seller"
WHEREAS, Seller owns and/or leases, as the case may be, all of the
tangible and intangible assets, including, inter alia, all of the accounts
receivable, inventories, lands and buildings, machinery and equipment, fixtures
and other operating assets used in the operation of the DewEze division of
Seller ("DewEze Division");
WHEREAS, Buyer desires to acquire substantially all of the tangible and
intangible assets pertaining to the DewEze Division of Seller and to assume only
those certain debts, liabilities and obligations pertaining to the DewEze
Division of Seller as specified herein, all in accordance with the terms and
conditions hereof; and
WHEREAS, Seller desires to sell substantially all of its tangible and
intangible assets and to transfer only those certain debts, liabilities and
obligations pertaining to the DewEze Division of Seller as specified herein, all
in accordance with the terms and conditions hereof.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Purpose. The purpose of this Agreement is to set forth the terms of
a sale and purchase of all of the assets of Seller relating to the conduct by
Seller of its equipment manufacturing business owned and currently operated by
Seller as the DewEze Division at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
("Premises").
2. Assets. Seller acknowledges and agrees that it owns certain personal
property comprising the DewEze Division of Seller located at the Premises.
Subject to the terms and conditions set forth herein, Seller agrees to sell, and
Buyer agrees to purchase, the following assets:
All machinery, inventory, vehicles, equipment, furniture,
fixtures, office equipment, office supplies, customer lists,
mailing lists, plans, specifications, drawings, designs,
know-how, marketing and production information, accounts,
accounts receivable, agreements, contracts, leases, tools,
licenses,
patents, trademarks, service marks, trade names, approvals,
authorizations, consents, orders, permits, prepaid expenses,
deferred charges, deposits on real property leases, leasehold
improvements, computer equipment, telephone numbers, the
exclusive right of Buyer to represent itself as carrying on
the business of Seller in continuation thereof, all books and
records, and other personal property and intangible assets of
Seller relative to the business at the Premises or used in the
conduct of the business of Seller relative to the business at
the Premises but held nominally by a third party all or a part
of which are described in Exhibit "A" attached hereto and made
a part hereof.
All of the above described assets including those described in greater detail in
Exhibit "A" are hereinafter referred to as the "Assets." Anything contained in
this Agreement to the contrary notwithstanding, this Agreement shall not
constitute an agreement to assign any contract, license, lease, agreement,
commitment, sales order, purchase or any claim or right of any benefit arising
thereunder or resulting therefrom if an attempted assignment thereof, without
the consent of a third party thereto, would constitute a breach thereof or in
any way affect the rights of Seller or Buyer thereunder. Seller shall obtain, at
Seller's expense, the consent of the other party to any of the foregoing to the
assignment thereof to Buyer in all cases in which such consent is required for
assignment or transfer.
3. Excluded Assets. Notwithstanding anything contained in paragraph 2
herein or elsewhere in this Agreement to the contrary, the property listed in
Exhibit "B" hereto is excluded from the Assets being purchased by Buyer from
Seller ("Excluded Assets").
4. Purchase Price. The purchase price for the Assets shall be (i) the
sum of Two Hundred Thousand Dollars ($200,000) plus the Net Book Value as
defined herein at Closing, subject to adjustment as set forth in paragraph 4.2,
plus (ii) the assumption by Buyer of the Assumed Liabilities (as defined) (the
"Purchase Price"). For purposes of this Agreement, the term "Net Book Value"
shall mean the "net book value" of the Assets and the Assumed Liabilities,
determined in accordance with generally accepted accounting practices and
applied consistently in the manner historically calculated by Seller in its
financial reporting to Owosso Corporation, including, without limitation, those
items, principles, methodology and calculations presented in Schedule 4.1
attached hereto. Provided, for purposes of calculating Net Book Value, Assumed
Liabilities shall also include Employer payroll taxes payable on unpaid
vacation, holiday pay and commissions earned prior to the Closing.
4.1 Payment of Purchase Price. At Closing, Buyer shall pay to
Seller an amount equal to Two Hundred Thousand Dollars ($200,000), plus
the Net Book Value of the Assets as determined by Sellers' April 26,
1998, balance sheet ("April Balance Sheet") payable by wire transfer of
immediately available funds to an account designated by Sellers and by
delivery of a secured Promissory Note, attached hereto as Exhibit "C,"
in the principal amount of Seven Hundred Thousand Dollars
($700,000.00), collateralized by a second position subordinate to
NationsBank, N.A., in the inventory and accounts receivable of Buyer
("Promissory Note").
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4.2 Adjustment to Purchase Price.
4.2.1 Closing Balance Sheet. Within thirty (30) days after the
Closing Date, Buyer shall prepare a balance sheet for the Seller as of
the Closing Date, excluding therefrom the Excluded Assets and/or
Excluded Liabilities, if any (the "Closing Balance Sheet"), prepared
on a basis consistent with the Seller's April Balance Sheet. Buyer
shall provide Seller with a copy of the Closing Balance Sheet and a
computation of the Net Book Value of the Seller as of the Closing
Date, together with copies of all work papers underlying such
computations of the Net Book Value, within such thirty (30) business
days after the Closing Date.
4.2.2 Post-Closing Adjustment of Purchase Price. Following the
Closing and subject to the provisions of paragraph 4.2.3 hereof, the
Purchase Price shall be increased or reduced, as the case may be, by
$1.00 for every $1.00 by which the Net Book Value, computed using the
Closing Balance Sheet, is more than or less than the Net Book Value,
computed using the April Balance Sheet. Reductions to the Purchase
Price pursuant to this paragraph 4.2.2, if any, shall be due and
payable from Seller (i) with respect to undisputed matters, within ten
(10) business days following the Seller's receipt of the Closing
Balance Sheet and (ii) if Seller disputes the information contained in
the Closing Balance Sheet or Buyer's calculations based thereon, with
respect to such disputed matters, ten (10) business days following the
final resolution of the dispute as provided in paragraph 4.2.3 below.
Increases to the Purchase Price pursuant to this paragraph 4.2.2, if
any, shall be due and payable by Buyer (i) with respect to undisputed
matters, within ten (10) business days following the Seller's receipt
of the Closing Balance Sheet and (ii) if Seller disputes the
information contained in the Closing Balance Sheet or Buyer's
calculations based thereon, with respect to such disputed matters, ten
(10) business days following the final resolution of the dispute as
provided in paragraph 4.2.3 below.
4.2.3 Resolution of Dispute.
---------------------
(i) As to any dispute, controversy or claim arising
out of the terms of paragraph 4.2.2 of this
Agreement, the parties shall, within 10 days of the
initial notice of dispute, attempt to resolve in good
faith any disputed item.
(ii) Any dispute, controversy or claim arising out of
the terms of paragraph 4.2.2 of this Agreement, after
the 10-day period set forth in (i) above, shall be
finally resolved by arbitration. Arbitration shall be
conducted by a nationally recognized firm of
certified public accountants, mutually acceptable to
Buyer and Seller. Arbitration under this paragraph
shall be initiated by a written demand for
arbitration specifying the controversy or claim on
which arbitration is sought, as well as the relief
requested. Service
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of the arbitration demand shall be effective if made
pursuant to the notification provisions contained in
paragraph 36 of this Agreement.
The arbitration, including the rendering of the award, shall
take place in Harper, Kansas, and shall be the exclusive forum for
resolving such dispute, controversy or claim. For the purposes of this
Arbitration, this Agreement shall be governed by the governing law
described in paragraph 31. This arbitration agreement is intended by
the parties to be self- executing. The arbitrators shall have sole
jurisdiction to determine whether (i) a claim under this paragraph
4.2.3 is subject to arbitration, (ii) the arbitration may proceed even
if one of the parties refuses to attend or participate, and (iii) an
award against that part may be ordered pursuant to default or otherwise
by the arbitrators. The parties agree that they will arbitrate all
claims agreed to be arbitrated herein, regardless of the existence of
any related dispute, action or special proceeding between any or all of
the parties hereto and/or any third part. The decision of the
arbitrators shall be final and binding upon the parties hereto, and
judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof. The prevailing party shall be
entitled to recover its reasonable attorneys' fees and its share of the
costs, as the arbitrators determine.
Notwithstanding anything to the contrary contained in this
paragraph 4.2.3, a party shall have the right to institute judicial
proceedings against another party or anyone acting by, through or under
such other party in order to enforce the instituting party's rights
hereunder through specific performance, injunction or similar equitable
relief. Each party, accordingly, submits to the exclusive jurisdiction
of the courts of the State of Kansas and the U. S. federal courts of
Kansas for purposes thereof, ▇▇▇▇▇▇ County, Kansas, shall be the venue
for any such proceeding.
5. Assumed Liabilities. At Closing, Buyer shall assume the certain
debts, liabilities and obligations of Seller, if any, as described in Exhibit
"D" attached hereto and made a part hereof and only those certain debts,
liabilities and obligations to the extent and only in the amount the same shall
be outstanding at Closing and listed in Exhibit "D" hereto. All of the debts,
liabilities and obligations set forth in Exhibit "D" are hereinafter referred to
collectively as the "Assumed Liabilities."
6. Excluded Liabilities. Buyer shall not be obligated with respect to
any liabilities, except to the extent that it constitutes a valid and legally
enforceable claim against Seller. Except for the Assumed Liabilities
specifically assumed by Buyer as set forth in paragraph 5 herein, Buyer is not
assuming any other debts, liabilities or obligations of Seller including,
without limitation, the debts, liabilities or obligations set forth in Exhibit
"E" hereto. The debts, liabilities and obligations of Seller referred to in this
paragraph 6 and set forth in Exhibit "E" which are not being assumed by Buyer as
aforesaid are hereinafter referred to as the "Excluded Liabilities." Seller
shall pay the Excluded Liabilities when due.
7. Purchase Price Allocation. The Purchase Price shall be allocated as
negotiated by the parties and as set forth in Exhibit "F" hereto. The Assumed
Liabilities, if any, shall be allocated by Seller and Buyer based upon the
individual debt, liability or obligation as determined upon the date of Closing.
Seller and Buyer acknowledge that Exhibit "F" hereto is a proper allocation of
the Purchase Price and of the Assumed Liabilities and that Seller and Buyer each
agree that they will not
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take any position inconsistent with this allocation in preparing financial
statements, tax returns, reports to stockholders, reports to general partners or
governmental authorities or otherwise which relate to the transactions evidenced
by this Agreement. Seller and Buyer shall agree to the allocations required
under Section 1060 of the Internal Revenue Code of 1986, as amended, and Seller
and Buyer will each file Internal Revenue Service Form 8594 reflecting the final
agreed upon Purchase Price allocation.
8. Bills of Sale/Assignments. At the Closing, Seller shall execute an
Assignment or ▇▇▇▇ of Sale relating to the Assets. Seller shall likewise assign
to Buyer any necessary Certificates of Title, Certificates of Origin for the
Assets and such other documents or instruments that Buyer reasonably believes
are necessary to vest in Buyer good and marketable title in fee simple to the
Assets. Subsequent to the Closing, Seller shall execute such other documents as
may be reasonably required to vest in Buyer marketable title to the Assets and
to consummate the transactions contemplated herein.
9. Prorations. The prepaid expenses, deposits and other fees listed in
Schedule 9, relating to the business of Seller, shall be prorated as of the
Closing Date and paid or credited ten (10) days after the Closing. The amounts
of proration shall be set forth in the Post Closing Balance Sheet. Prorations
shall include any deposits under any contracts and other agreements not refunded
to Seller.
With respect to real estate and personal property taxes and assessments
accrued but unpaid on the Assets (other than those which are delinquent)
proration shall be made as of the Closing, based upon most recent tax bills.
Subsequent adjustment of such proration shall be made, if necessary, upon
receipt of the actual tax ▇▇▇▇ for the current period. Any other proratable
items that cannot be determined or estimated to the satisfaction of the parties
prior to or on the Closing shall be prorated and payment made by the appropriate
party as soon after the Closing as practicable.
10. Closing. The closing of transactions contemplated hereby (the
"Closing Date") shall be on July 24, 1998. Provided, the closing may be held at
such other time and on such other date as the parties may mutually agree to in
writing. Provided, further, the parties may mutually agree to extend the date
for Closing for not in excess of thirty (30) days. The closing shall be held at
the offices of Klenda, Mitchell, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, L.L.C., 1600 Epic Center,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
11. Representations and Warranties of Seller. As the basis upon which
this Agreement is made, Buyer hereby relies upon, and Seller hereby represents
and warrants to Buyer as of the date of this Agreement and as of the date of
Closing, as follows:
11.1 Organization Power; Standing and Qualification. Seller is
a corporation duly organized, validly existing, and in good standing
under the laws of the State of Pennsylvania, and has full corporate
power and authority to carry on its businesses as it is now being
conducted and to own and operate the Assets now owned and operated by
it. Seller is duly qualified to do business and is in good standing in
Pennsylvania and Kansas, the only jurisdictions where the failure to
qualify or to be in good standing would have a material adverse effect
upon its financial condition, the conduct of its business or the
ownership of its property or the Assets.
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11.2 Power and Authority. Seller has the power and authority
to execute, deliver and perform this Agreement. This Agreement is a
valid and binding obligation of Seller, enforceable in accordance with
its terms, except as such enforcement may be limited by applicable
bankruptcy, insolvency, moratorium, or similar laws affecting the
enforcement of creditors' rights generally.
11.3 Validity of Contemplated Transactions. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby do not and will not contravene any
provision of the Articles of Incorporation or Bylaws of Seller; nor
violate, be in conflict with or constitute a default under, cause the
acceleration of any payments pursuant to, or otherwise impair the good
standing, validity or effectiveness of any agreement, contract,
indenture, lease, or mortgage; or subject any property or asset of
Seller to any indenture, mortgage, contract, commitment, or agreement,
other than this Agreement, to which Seller is a party or any of its
assets is bound; or violate any provision of law, rule, regulation,
order, permit or license to which Seller is subject.
11.4 Real Property. Except as set forth in Schedule 11.4,
there are no options, leases, conditional sales agreements, or similar
arrangements respecting any real property presently owned of record or
beneficially owned by Seller to be acquired hereunder.
11.5 Title to Assets. At the Closing, Seller has good,
marketable and indefeasible title to all of the Assets, with the
exception of (i) liens for taxes accrued but not yet payable; (ii)
liens arising as a matter of law in the ordinary course of business, as
to which there is no known default; and (iii) those certain security
interests held by all creditors who are listed on Schedule 11.5. Except
as set forth herein, none of the Assets, buildings, structures and
appurtenances of Seller or the operation or maintenance thereof, as now
operated and maintained, contravenes any applicable zoning ordinance or
other administrative regulation or violates any restrictive covenant or
any provision of law, the enforcement of which could in any respect
interfere with the continued operation of the businesses of Seller in
substantially the manner in which such business is presently being
conducted or could reasonably be expected to have a material adverse
effect on Buyer.
11.6 Absence of Undisclosed Liabilities. To the knowledge of
Seller, it has no material liabilities or obligations except for (i)
those reflected or reserved against (which reserves, to the knowledge
of Seller, are adequate in all material respects) in its April 1998
financial statements of the DewEze Division ("Financial Statements");
(ii) those incurred, consistent with past business practices,
reasonably and in the ordinary course of its business, since April 26,
1998 (the "Financial Statement Date"); and (iii) those which are
specifically disclosed in this Agreement or in a Schedule attached
hereto. Seller does not know of any basis for the assertion against it
as of the Financial Statement Date of any material liability not
reflected or reserved against in the Seller's balance sheet as of such
date or as disclosed by this Agreement.
11.7 Certain Tax Matters. To the knowledge of Seller, it has
duly filed all federal, state and local tax returns and reports
required to be filed by it and all taxes, including
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income, gross receipt and other taxes and any penalties with respect
thereto, due and payable, have been paid, withheld or reserved for or,
to the extent that they relate to periods on or prior to the Financial
Statement Date, are reflected as a liability on the Financial
Statements. Seller has provided Buyer access to correct and complete
copies of all federal, state and local income tax returns for the
periods covered by the Financial Statements. Since the audit of the tax
returns for the fiscal period ended October 27, 1996, the Seller's
federal income tax liabilities have not been audited by the Internal
Revenue Service. To Seller's knowledge, its federal income tax
liabilities have been satisfied for all taxable years up to and
including the taxable year ended October 26, 1997. Neither the Internal
Revenue Service nor any state or local taxing authority has asserted
that additional taxes are owed by Seller.
11.8 Litigation: Compliance with Laws. Except as set forth in
Schedule 11.8 attached hereto, there is no suit, action, claim,
arbitration, administrative or legal or other proceeding; or
governmental or other investigation pending or, to Seller's knowledge,
threatened against or affecting it, whether or not covered by
insurance; nor, to the knowledge of Seller, does there exist any
failure to comply with, nor any default under, any law, ordinance,
requirement, regulation, or order applicable to Seller; nor any
violation of or default with respect to any order, writ, injunction,
judgment, or decree of any court or federal, state or local department,
official, commission, authority, board, bureau, agency; or other
instrumentality issued or pending against Seller which might have a
material adverse effect on the financial condition, business, results
of operations, properties, or assets of Seller or Buyer's purchase or
ownership of the Shares. To the knowledge of Seller, it has obtained
all permits, licenses, zoning variances approvals, and other
authorization necessary for the complete operation of its business as
presently operated, and there are none. To the knowledge of Seller, it
has not made any illegal kickbacks, bribes or political contributions.
11.9 Employee Benefits. Schedule 11.9 lists all deferred
compensation, pension, profit sharing, stock option, stock purchase,
savings, group insurance and retirement plans, and all vacation pay,
severance pay, incentive compensation, consulting, bonus and other
employee benefit or fringe benefit plans or arrangement maintained by
Seller (including health, life insurance and other benefit plans
maintained for retirees). Said plans, including but not limited to all
plans or programs that constitute "employee benefit plans" as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), are sometimes collectively referred to in this
paragraph as "Benefit Plans." Access to true and complete copies of all
Benefit Plans, including any insurance contracts under which benefits
are provided, as currently in effect has been provided to Buyer. Buyer
has also been provided with access to a true and complete copy of the
summary plan description, if any was required by ERISA to be prepared
and distributed to participants, for each Benefit Plan. Except as set
forth in Schedule 11.9:
11.9.1 Seller has no affiliates and has not at any time been
a party to any pension plan or welfare benefit plan
that is a "Multiemployer Plan" within the meaning of
Section 4001(a)(3) of ERISA.
11.9.2 To the knowledge of Seller, each Benefit Plan that
provides medical benefits has been operated in
compliance with all requirements of Sections 601
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through 608 of ERISA and either (i) Sections
162(i)(2) and (k) of the Code and regulations
thereunder (prior to 1989) or (ii) Section 4980B of
the Code and regulations thereunder (after 1988),
relating to the continuation of coverage under
certain circumstances in which coverage would
otherwise cease.
11.9.3 Schedule 11.9 discloses, and separately indicates,
each plan, fund or program maintained by Seller that
provides post retirement medical benefits, post
retirement death benefits or other post retirement
welfare benefits. A copy of any written description
of post retirement welfare benefits that has been
provided to employees has been furnished to Buyer. A
copy of each plan document, insurance contract or
other written instrument providing for post
retirement welfare benefits has been provided to
Buyer, together with a description of any advance
funding arrangement that has been established to fund
post retirement welfare benefits.
11.9.4 To the knowledge of Seller, all contributions to, and
payment from the Benefit Plans which may have been
required to be made in accordance with the Benefit
Plans and, when applicable, Section 302 of ERISA or
Section 412 of the Code, have been timely made. To
the knowledge of Seller, all such contributions to
the Benefit Plans, and all payments under the Benefit
Plans, except those to form a trust qualified under
Section 401(a) of the Code, for any period ending
before the Closing Date that are not yet, but will
be, required to be made are properly accrued and
reflected on the pre-Closing Balance Sheet or are
disclosed on Schedule 11.9. Except as disclosed on
Schedule 11.9, Seller has funded or will fund each
Benefit Plan in accordance with its terms through the
Closing, including the payment of applicable premiums
on any insurance contract funding a Benefit Plan for
coverage provided through the Closing.
11.9.5 To the knowledge of Seller, each Benefit Plan is in
compliance in all material respects with the
presently applicable provisions of ERISA and the
Code, including but not limited to the satisfaction
of all applicable reporting and disclosure
requirements under ERISA and the Code. Seller has
filed or caused to be filed with the Internal Revenue
Service annual reports on Form 5500 or 5500C and
5500R, as applicable, for each Benefit Plan for all
years and periods for which such reports were
required. To the knowledge of Seller, each of the
Benefits Plans has been administered at all times,
and in all material respects, in accordance with its
terms except that in any case in which any Benefit
Plan is currently required to comply with a provision
of ERISA or of the Code, but is not yet required to
be amended to reflect such provision, it has been
administered in accordance with such provision.
11.9.6 To the knowledge of Seller, no "prohibited
transaction," as defined in Section 406 of ERISA and
Section 4975 of the Code, has occurred in respect of
any Benefit Plan which could give rise to any
liability or tax under ERISA or the
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Code on the part of Seller, and no civil or criminal
action brought pursuant to part 5 of Title I of ERISA
is pending or is threatened in writing or orally
against any fiduciary of any such plan.
11.9.7 To the knowledge of Seller, all of the Benefit Plans
which are pension benefit plans have received
determination letters from the IRS to the effect that
such plans are qualified and exempt from federal
income taxes under Sections 401(a) and 501(a),
respectively, of the Code, as amended through
December 31, 1984; and no determination letter with
respect to any Benefit Plan has been revoked nor, to
the knowledge of Seller, has revocation been
threatened, nor to the knowledge of Seller has any
Benefit Plan been amended since the date of its most
recent determination letter or application therefor
in any request which would adversely affect its
qualification or materially increase its cost and no
Benefit Plan has been amended in a manner that would
require security to be provided in accordance with
Section 401(a)(29) of the Code.
11.9.8 To the knowledge of Seller, there have been no
statements or communications made or materials
provided to any employee or former employee of Seller
by any person (including any Affiliate or any
employee, officer or director of any Affiliate) which
provide for or could be construed as a contract or
promise by Seller or any Affiliate to provide for any
pension, welfare, or other insurance-type benefits to
any such employee or former employee, whether before
or after retirement, other than benefits under
Benefit Plans set forth on Schedule 11.9, nor under
the form of employment contracts.
11.10 Insurance. All inventories, machinery, equipment,
buildings, improvements, and other tangible assets of the DewEze
Division owned or leased by Seller are, and between the date hereof and
the Closing Date will be, insured against fire and casualty under the
policies and in the amounts and types of coverage set forth in Schedule
11.10 attached hereto and such policies are, and between the date
hereof and the Closing Date will be, outstanding and duly in force and
the premiums thereon fully paid when and as the same are due and
payable. Schedule 11.10 attached hereto is a true and correct schedule
of all policies of fire, liability, and other forms of insurance,
excluding the Benefit Plans listed in Schedule 11.10 attached hereto,
pursuant to which Seller or its Assets are insured (whether or not held
by Seller) or with respect to which Seller directly or indirectly pays
all or part of the premium.
11.11 Proprietary Rights. To the knowledge of Seller, it owns,
possesses, or lawfully uses all patents, patent applications,
trademarks, trade applications, service marks, trade names, franchises,
permits, copyrights, and similar intangible rights used in its business
(collectively, the "Patents and Trademarks"), each of which is listed
in Schedule 11.11 attached hereto, and those Patents and Trademarks
designated in Schedule 11.11 are owned exclusively by Seller, are valid
and enforceable, and, to the knowledge of Seller, none infringe (nor
have any claim been made that there is any such infringement) the
patents, trademarks, service marks, trade names, copyrights or similar
intangible rights of others. Such franchises, licenses, permits,
easements, rights and other authorizations will not be adversely
affected by the transaction contemplated by this Agreement. Seller has
no knowledge of any claim or
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basis for any claim that it is or may be infringing on or otherwise
acting adversely to the rights of any person under or in respect, of
any patent, trademark, service ▇▇▇▇, trade name, copyright, license,
franchise, permit, or other intangible right. To the knowledge of
Seller, except as provided in Schedule 11.11, it is not obligated or
under any liability whatever to make any payments by way of royalties,
fees, or otherwise to any owner or licensee of, or other claimant to,
any patent, trademark, trade name, copyright, or other intangible asset
with respect to the use thereof, in connection with the conduct of its
business, or otherwise.
11.12 Labor Disputes. Seller is not a party to any contract or
other agreement with any labor union; and Seller is not experiencing or
the subject of or threatened by any union organization campaign or any
strike, slowdown, picketing, work stoppage, or other labor disturbance
by any labor union or group of employees.
11.13 Contracts. Except for sales orders, purchase
commitments, distributor agreements, marketing representative
agreements, or any agreements listed in Schedule 11.13 hereto, there
are no contracts applicable to the operation of the DewEze Division of
Seller and to which Seller is a party and which fall into any of the
following categories:
a) Contracts, separately or in aggregate, with any
third party, involving an amount in excess of
$100,000;
b) Contracts upon the same terms and conditions
or based upon the same contract form,
involving, in aggregate, an amount in excess
of $100,000; or
c) Other contracts the non-performance of which
could have a material, adverse effect on
Seller.
All such contracts in the above categories have been made in the ordinary course
of business. To the knowledge of Seller, it and each other party to any of the
aforesaid documents has performed all material obligations required to be
performed by it to date, and is not in default, under any such contract,
agreement, commitment, lease, plan or indenture in the above categories, nor has
an event occurred which with the passage of time or giving of notice or both
will result in the occurrence of a default under any of the aforesaid documents.
11.14 Other Transactions. Except as disclosed on Schedule
11.14 hereto, or otherwise disclosed to and approved by Buyer, Seller
has not, since the Financial Statement Date, (a) operated its business
except in the ordinary course of business, (b) incurred any debts,
liabilities or obligations except in the ordinary course, (c)
discharged or satisfied any liens or encumbrances, or paid any liens or
encumbrances, or paid any debts, liabilities or obligations, except in
the ordinary course of business, (d) mortgaged, pledged or subjected to
lien or other encumbrance any of its assets, tangible or intangible,
except in the ordinary course of business, (e) sold or transferred any
of its tangible assets, or canceled any debts or claims, except, in
each case, in the ordinary course of business, or (f) suffered any
extraordinary losses or waived any rights of substantial value.
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11.15 Product Liability Claims. Seller has delivered to Buyer
a narrative of incidents, events and claims under all policies of
product liability insurance relating to Seller. Seller is an insured
under all policies of insurance relating to product liability listed on
Schedule 11.15 for and against covered claims for product liability
based on events occurring prior to the Closing Date, which insurance
coverage Seller covenants to continue in effect, listing Buyer as an
additional insured thereunder, after the Closing Date for a period of
seven (7) years.
11.16 No Changes. Since April 26, 1998, and except as
disclosed to Buyer in writing as soon as any such events have occurred,
there has not been any materially adverse change in the financial or
other condition, assets, liabilities or business of Seller, except
changes described in Schedule 11.16 hereto, none of which individually
or in the aggregate has been materially adverse to Seller.
11.17 Veracity of Statements. No representation or warranty by
Seller contained in this Agreement and no statement contained in any
certificate or Schedule or other instrument furnished to Buyer pursuant
hereto or in connection with the transactions contemplated hereby,
contains any untrue statement of a material fact or omits to state a
material fact.
11.18 Accounts Receivable. Except to the extent of the reserve
for bad debts shown on the balance sheet of Seller as of the Financial
Statement Date, all of the accounts receivable of Seller constitute
valid receivables, have been incurred in the ordinary course of
business and, to the knowledge of Seller, are not subject to any setoff
or counterclaim. No part of such accounts receivable is contingent upon
performance by Seller of any obligation and no agreements for
deductions or discounts have been made with respect to any part of such
receivables.
11.19 Hazardous Substances. Except as listed on Schedule
11.19, to the knowledge of Seller: (i) none of the Assets has been used
for the manufacture, storage, transportation, deposit, disposal,
treatment, handling, production, processing or recycling of toxic,
dangerous or hazardous substances nor is there any tank or facility for
the storage of hazardous substances located on or in the Assets; (ii)
there are no asbestos materials on or in the Assets creating, or likely
to create, a hazardous condition; (iii) there is not now nor has there
been any activity on or in the Assets which would subject the Seller or
the Buyer to liens, damages, penalties, injunctive relief or cleanup
costs under any federal, state or local law, or under any civil action
respecting hazardous substances. To the knowledge of Seller, no portion
of the Assets constitutes any of the following "environmentally
sensitive areas": (1) a wetland or other "water of the United States"
for purposes of Section 404 of the Federal Clean Water Act, 33 U.S.C.
ss.1344, or any similar area regulated under any state law; (2) a
100-year floodplain; or (3) a portion of the coastal zone for purposes
of the federal Coastal Zone Management Act, 16 U.S.C. ss.ss.1451-1464.
To the knowledge of Seller, the Assets are free from the presence of
unacceptable levels of radon gas or the presence of the radioactive
decay products of radon. A "hazardous substance" shall mean that term
as defined in the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. ss.9601, et sea., as amended, and
dangerous, regulated toxic or hazardous substances or similar terms
under any other applicable state, federal or local law and any
regulations thereunder.
11
12. Representations and Warranties of Buyer. As the basis upon which
this Agreement is made, Seller hereby relies upon, and Buyer hereby represents
and warrants to Seller, as of the date of this Agreement and as of the date of
Closing as follows:
12.1 Power and Authority. Buyer has full power and authority
to enter into this Agreement and to perform all of Buyer's covenants
and undertakings herein set forth. This Agreement is a valid and
binding obligation of Buyer, enforceable in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy,
insolvency, moratorium or similar laws affecting the rights of
creditors generally.
12.2 Conflict With Authority; Bylaws, Etc. Neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby in the manner herein provided will
violate, be in conflict with, constitute a default under, cause the
acceleration of any payments pursuant to, or otherwise impair the good
standing, validity, and effectiveness of any lease, license, permit,
authorization, or approval applicable to Buyer; or violate any
provision of law, rule, regulation, order, or permit to which Buyer is
subject.
12.3 Financing. Buyer has all funds or has preliminary
commitments from financing sources as to the provision of funds, as
necessary to pay the Purchase Price and related fees and expenses; and
Buyer will have the financial capacity to perform all of its other
obligations under this Agreement and the closing documents to be
executed hereunder at the Closing.
13. Seller's Activities Prior to Closing.
------------------------------------
13.1 Operation of Business. To the extent such matters are not
otherwise the responsibility of the local management of Seller, prior
to the Closing Date, Seller will make all reasonable effort to conduct
its business only in the ordinary course; to maintain the Assets in
good condition and repair and to use best efforts to preserve its
business organization intact; to keep available to Buyer the services
of Seller's employees and other representatives; and to preserve for
the benefit of Buyer the goodwill of Seller's suppliers, customers and
others having business relations with Seller.
13.2 Access to Information. To the extent that any information
is not located at the Premises, Seller will cooperate fully with Buyer;
and shall provide Buyer and its accountants, counsel and other
representatives, during normal business hours, full access to the
books, records, equipment, real estate, contracts and other assets of
Seller; and full opportunity to discuss Seller's business, affairs and
Assets with its officers, employees and independent accountants; and
furnish to Buyer and its representatives copies of such documents,
records and information with respect to the affairs of Seller as Buyer
or its representatives may reasonably request. In addition to the
foregoing right of access and information, Buyer may designate on-site
observers of the business and operations of Seller, which observers
shall be permitted such access to Seller's business and operations as
Buyer may reasonably request and shall be fully informed by it
concerning all of its assets, operation and business affairs. Buyer and
Seller shall hold, and shall cause their respective financing sources,
counsel, accountants and other agents and representatives to hold, all
such information and documents in confidence and shall not disclose any
such information to any
12
person or entity, absent the prior written consent of the disclosing
party or as required by applicable law.
13.3 Best Efforts. Subject to the other provisions of this
Agreement, Seller will use its best efforts to cause the conditions
listed in paragraph 13 hereof to be satisfied on the Closing Date.
14. Conditions to Obligation of Buyer to Close. The obligation of Buyer
to consummate the transaction contemplated under this Agreement on the Closing
Date shall be subject to the satisfaction or the waiver by Buyer of the
following conditions on or prior to the Closing Date:
14.1 Financing. Buyer, at its own expense, shall have obtained
on terms satisfactory to it financing for its purchase of the Assets.
Buyer shall use its best efforts to obtain such funding for the
purchase of the Assets as expeditiously as possible.
14.2 Representations and Warranties; Compliance with
Agreement. The representations and warranties of Seller set forth in
this Agreement shall be true and correct in all material respects as of
the date of this Agreement and as of the Closing Date as though made on
and as of the Closing Date, and Seller shall have performed all
covenants and agreements to be performed by it under this Agreement on
or prior to the Closing Date. Provided, Buyer shall not be excused from
consummating the transaction contemplated by this Agreement to the
extent Buyer knew any such representation or warranty was false at the
time of execution of this Agreement.
14.3 Opinion of Counsel for Seller. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
counsel for Seller, shall have delivered to Buyer their favorable
opinion, dated the Closing Date.
14.4 Warranty Deed/Title Policies. Seller shall have executed
and delivered to Buyer a warranty deed covering the facility located at
the Premises in the form and substance acceptable to Buyer and shall
have delivered to Buyer an Owner's Policy of title insurance, written
by a title insurance company acceptable to Buyer on ALTA Form
(10-17-92), which title insurance policy shall contain ALTA 3.1 zoning
endorsements and access endorsements and the costs of which shall be
borne equally by Seller and Buyer.
14.5 Litigation Affecting Closing. On the Closing Date, no
proceeding shall be pending or threatened before any court or
governmental agency in which it is sought to restrain or prohibit or to
obtain damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated hereby, and no
investigation that might result in any such suit, action or proceeding
shall be pending or threatened.
14.6 Required Consents. The parties to any material contract,
commitment or agreement to which Seller is a party; any governmental
agency or body or any other person, firm or corporation which owns or
has authority to grant any franchise, license, permit, easement, right
or other authorization necessary for the business or operations of
Seller; and any governmental body or regulatory agency having
jurisdiction over Buyer or Seller, to the extent that their consent or
approval is required under the pertinent debt, lease, contract,
13
commitment or agreement or other document or instrument or under
applicable laws, rules or regulations for the consummation of the
transaction contemplated hereby in the manner herein provided, shall
have granted such consent or approval. Seller does represent and Buyer
does acknowledge the accuracy of the same that all such parties,
agencies, bodies, persons, firms and corporations are set forth on the
attached Schedule 14.6.
14.7 No Material Damage to Business. The assets, properties
and business of Seller shall not have been and shall not be threatened
to be materially adversely affected in any way as a result of fire,
explosion, earthquake, disaster, accident, labor dispute, any action by
any governmental authority, flood, drought, embargo, riot, civil
disturbance, uprising, activity of armed forces or act of God or public
enemy;
14.8 Approval of Buyer; Corporate Matters. All actions,
proceedings, resolutions, instruments and documents required to carry
out this Agreement or incidental hereto and all other related legal
matters shall have been approved by Buyer, in the exercise of its
reasonable judgment, and Buyer or its counsel shall have been furnished
with certified copies, satisfactory in form and substance to Buyer in
the exercise of its reasonable judgment, of all such corporate records
of Seller and of the proceedings of such persons authorizing its
execution, delivery and performance of this Agreement as Buyer shall
reasonably require.
14.9 Industrial Revenue Bonds. On the Closing Date, Seller
shall have provided for the defeasance of those certain $1,500,000 City
of ▇▇▇▇▇▇, Kansas, Industrial Revenue Bonds (DewEze Manufacturing,
Inc.) Series 1993, including the funding thereof, as provided for under
the terms of the applicable indenture, provided, that the City of
▇▇▇▇▇▇ shall have first delivered to Seller its waiver of the right to
call the bonds or otherwise exercise any other rights solely by virtue
of Seller having previously delivered its notice of intent to defease
such bonds and failed to do so by reason of the closing not occurring.
14.10 Bonuses. On or prior to the Closing Date, Seller shall
pay all accrued bonuses owed to its employees and timely deposit with
the appropriate taxing authority all applicable FICA and related
payroll taxes applicable to such bonuses.
14.11 Resolutions. On the Closing Date, Seller shall have
delivered to Buyer certified copies of resolutions of the board of
directors and stockholders of Seller, authorizing the transactions
contemplated herein.
14.12 Certificate. On the Closing Date, the president of
Seller shall have executed and delivered to Buyer a certificate dated
the Closing Date, certifying that the conditions set forth in
paragraphs 14.2 and 14.9 of this Agreement have been fulfilled.
14.13 MIS Agreement. On or prior to the Closing Date, Seller
and Buyer shall have entered into an agreement whereby Seller shall
provide Buyer with use of its management information and accounting
system for a period of not more than six (6) months following the
Closing.
14
14.14 Subordination Agreement. On or prior to the Closing
Date, Seller and NationsBank, N.A., shall have executed a Subordination
Agreement, acceptable to both NationsBank, N.A., and Seller, with
respect to the obligations of Buyer as evidenced by the Promissory Note
and Buyer's obligations under the accounts receivable and inventory
financing to be provided by NationsBank, N.A.
14.15 Execution of Additional Documents. On or prior to the
Closing Date, Seller and Buyer shall have executed and delivered a
Security Agreement mutually acceptable to the parties, collateralizing
a second position in the inventory to accounts receivable of Seller,
along with the Promissory Note.
15. Conditions to Obligation of Seller to Close. The obligation of
Seller to consummate the transaction contemplated under this Agreement on the
Closing Date shall be subject to the satisfaction or the waiver by Seller of the
following conditions on or prior to the Closing Date.
15.1 Representations and Warranties. The representations and
warranties of Buyer set forth in this Agreement shall be true and
correct as of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, and Buyer shall have
delivered to Seller a certificate to such effect, dated the Closing
Date, which certificate shall be in form and substance satisfactory to
Seller and its counsel.
15.2 Compliance with Agreement. Buyer shall have performed all
covenants and agreements to be performed by it under this Agreement on
or prior to the Closing Date and shall have delivered to Seller a
certificate dated the Closing Date and signed on behalf of Buyer to
such effect and to the effect that the transactions contemplated by
this Agreement were duly authorized by all necessary action on the part
of Buyer, which certificate shall be in form and substance satisfactory
to Seller.
15.3 Opinion of Counsel of Buyer. Klenda, Mitchell, ▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, L.L.C., counsel for Buyer, shall have delivered to Seller
their opinion, dated the Closing Date.
15.4 Litigation Affecting Closing. On the Closing Date, no
proceeding shall be pending or threatened before any court or
governmental agency in which it is sought to restrain or prohibit or to
obtain damages or other relief in connection with this Agreement or the
consummation of the transaction contemplated hereby, and no
investigation that might eventuate in any such suit, action or
proceeding shall be pending or threatened.
15.5 Approval of Seller: Corporate Matters. All actions,
proceedings, resolutions, instruments and documents required to carry
out this Agreement or incidental hereto and all other related legal
matters shall have been approved on the Closing Date by Seller, in the
exercise of their reasonable judgment, and Seller shall have been
furnished with certified copies, satisfactory in form and substance to
Seller in the exercise of their reasonable judgment, of all such
records of Buyer and Seller and of the proceedings of Buyer and Seller
authorizing their execution, delivery and performance of this Agreement
as Seller shall reasonably require.
15
15.6 Resolutions. On the Closing Date, Buyer shall have
delivered to Seller certified copies of resolutions of the board of
directors and stockholders of Buyer, authorizing the transactions
contemplated herein.
16. Termination. Anything contained herein to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time prior to the Closing Date:
(a) by mutual written consent of Seller and Buyer;
(b) by Seller, if any of the conditions set forth in
paragraph 15 hereof shall have become incapable of
fulfillment and shall not have been waived by Seller;
(c) by Buyer, if any of the conditions set forth in
paragraph 14 hereof shall have become incapable of
fulfillment and shall not have been waived by Buyer;
or
(d) by either party hereto, if the Closing does not occur
on or prior to September 1, 1998.
17. Indemnification.
---------------
17.1 By Seller. To the extent and in the manner herein
provided, Seller shall indemnify and hold harmless Buyer from and
against any and all damages, losses, obligations, deficiencies,
liabilities, claims, encumbrances, penalties, costs, and expenses,
including reasonable attorneys' fees, which Buyer may suffer or incur,
resulting from, related to, or arising out of (i) any
misrepresentation, breach of warranty or nonfulfillment of any of the
covenants of Seller in this Agreement or from any misrepresentation in
or omission from any schedule to this Agreement, certificate, financial
statement, or from any other document furnished or to be furnished to
Buyer hereunder; (ii) any Excluded Liabilities; or (iii) any claims
based upon alleged injuries to persons, property or business by reason
of alleged defectiveness, improper design, or manufacture or
malfunction or otherwise of any product manufactured by Seller and any
and all actions, suits, investigations, proceedings, demands,
assessments, audits, judgments, and claims (including
employment-related claims) arising out of the foregoing even though
such proceeding or claim may not be filed until after the Closing Date.
Notwithstanding the foregoing, the parties acknowledge and agree that
Buyer shall not be entitled to indemnification for a breach of a
representation and/or warranty on the part of Seller which Buyer knows
to be false when made.
17.2 By Buyer. From and after the Closing Date, Buyer agrees
to indemnify and hold harmless Seller from and against any and all
damages, losses, obligations, deficiencies, liabilities, claims,
encumbrances, penalties, costs, and expenses, including reasonable
attorneys' fees, which Seller may suffer or incur, resulting from,
related to, or arising out of (i) any misrepresentation, breach of
warranty, or nonfulfillment of any of the covenants or agreements of
Buyer in this Agreement; (ii) from any misrepresentation in or omission
from any certificate or document furnished or to be furnished to Seller
hereunder; (iii) any Assumed
16
Liabilities; or (iv) any and all suits, actions, investigations,
proceedings, demands, assessments, audits, judgments, and claims
arising out of any of the foregoing.
17.3 Notice. Promptly after acquiring knowledge of any damage,
loss, deficiency, liability, claim, encumbrance, penalty, cost,
expense, action, suit, investigation, proceeding, demand, assessment,
audit, judgment, or claim against which Seller has indemnified Buyer or
against which Buyer has indemnified Seller, or as to which either Buyer
or Seller (herein, a "Party") may be liable, Seller or Buyer, as the
case may be, shall give to the other Party written notice thereof. Each
indemnifying Party shall, at its own expense, promptly defend, contest
or otherwise protect against any damage, loss, deficiency, liability,
claim, encumbrance, penalty, cost, expense, action, suit,
investigation, proceeding, demand, assessment, audit, judgment, or
claim against which it has indemnified an indemnified Party, and each
indemnified Party shall receive from the other Party all necessary and
reasonable cooperation in said defense including, but not limited to,
the services of employees of the other Party who are familiar with the
transactions out of which any such damage, loss, deficiency, liability,
claim, encumbrance, penalty, cost, expense, action, suit,
investigation, proceeding, demand, assessment, audit, judgment, or
claim may have arisen. The indemnifying Party shall have the right to
control the defense of any such proceeding unless it is relieved of its
liability hereunder with respect to such defense by the indemnified
Party. The indemnifying Party shall have the right, at its option, and,
unless so relieved, to compromise or defend, at its own expense by its
own counsel, any such matter involving the asserted liability of the
indemnified Party. In the event that the indemnifying Party shall
undertake to compromise or defend any such asserted liability, it shall
promptly notify the indemnified Party of its intention to do so. In the
event that an indemnifying Party, after written notice from an
indemnified Party, fails to take timely action to defend the same, the
indemnified Party shall have the right to defend the same by counsel of
its own choosing, but at the cost and expense of the indemnifying
Party.
17.4 Limitation on Indemnification. Seller shall have no
liability with respect to paragraph 15.1, unless the aggregate amount
of the damages and losses to Buyer from all claims finally determined
to arise under this Agreement exceed an aggregate amount equal to
$25,000; and, in such event Seller shall be required to indemnify for
losses relating back to the first dollar in excess of $10,000. Provided
that, except for claims arising out of a breach of the representations
set forth in paragraph 11.9 and for claims based on an allegation of
fraud, the aggregate amount which Seller shall be obligated to expend
hereunder shall not exceed an amount equal to the Purchase Price.
18. Employee Matters. Notwithstanding anything to the contrary
contained herein, the following shall apply with respect to employment matters:
18.1 Termination of Seller's Employee Welfare Benefit Plans.
As of the Closing Date, all employees of Seller shall cease to be
covered by any employee welfare benefit plans maintained by Seller,
including, without limitation, plans, programs, policies and
arrangements which provide medical and dental coverage, life and
accident insurance, disability coverage and vacation and severance pay
(collectively, "Welfare Plans"). With respect to claims under Seller's
Welfare Plans, Seller shall retain responsibility for all Welfare Plan
claims, whenever
17
made, by employees of Seller (i) under any medical, dental or health
plan with respect to an injury or occupational disease identifiably
sustained prior to the Closing Date, and (ii) incurred under any life
insurance plans with respect to deaths occurring on or after the
Closing Date. Buyer shall be responsible for any claims which occurred
on or after the Closing Date with respect to the employees, arising
under any welfare plan established or maintained by Buyer.
18.2 Workers' Compensation. With respect to claims under
workers' compensation coverage, Seller shall be responsible for
injuries and occupational diseases identifiably sustained by Seller's
employees prior to the Closing Date; and Buyer shall be responsible for
injuries and occupational diseases identifiably sustained by the
employees on and after the Closing Date.
18.3 Employment of Employees at Closing. On the Closing Date,
Buyer will offer to employ substantially all of the employees at
comparable compensation levels and on substantially the same terms and
conditions of employment in effect as of the Closing Date.
19. Products Liability. With respect to products liability claims,
other than warranty claims, Seller shall be responsible for all such claims with
respect to products manufactured by Seller prior to the Closing Date. Buyer
shall be responsible for all products liability claims for products manufactured
after the Closing Date.
20. Warranty Claims. With respect to "warranty claims," Buyer shall be
responsible for any claims made after the Closing Date. For purposes of this
Agreement the term "warranty claims" shall mean claims seeking return,
replacement and/or repair of products pursuant to express warranties extended by
Seller to its customers prior to the Closing, pursuant to either product
warranties extended by Seller or warranties implied by law.
21. Non-warranty Running Gear Repair Program. Purchaser agrees to
reimburse Seller, upon receipt of written invoice, in an aggregate amount of up
to One Hundred Sixty Two Thousand Dollars ($162,000) for all direct repair
expenses incurred by Seller in performing a non- warranty based running gear
repair program to reinforce and strengthen the front running gear by the use of
welded rectangular gussets of all running gear model numbers 1689, 2089, and
2589 produced prior to the Closing by Seller. Seller agrees to notify all
distributors who, in accordance with Seller's business records. have marketed
the products prior to the Closing and to use its best efforts to accomplish all
such repair work by no later than December 31, 1998.
22. Survival of Representations and Warranties. All representations and
warranties made by Seller and Buyer in this Agreement or pursuant hereto shall
survive the Closing hereunder for a period of five (5) years with respect to
representations and warranties concerning taxes, for a period of ten (10) years
with respect to representations and warranties concerning environmental matters
and for a period of one (1) year for all other representations and warranties.
23. Non-Competition. For a period of three (3) years from the date of
this Agreement, Seller shall not act, either individually or in partnership, or
jointly or in conjunction with any other
18
person or business entity as principal, agent, stockholder, officer, director,
employee, consultant, independent contractor, owner, member, partner, holder,
advisor or in any other manner whatsoever, directly or indirectly, carry or be
engaged in or be concerned with or interested in or advise, manage, own,
participate in, encourage, support, lend money to, guarantee the debts or
obligations of or permit Seller's name to be used or employed by any person
engaged in or concerned with or interested in the business of manufacturing
commercial mowing, bale handling or turf maintenance equipment or vehicle
mounted hydraulic systems; provided, however, Seller may have a one percent (1%)
or less stock ownership in a publicly traded company engaged in the business of
Seller; provided, further, Seller may, nevertheless, sell components and
accessories to whomsoever.
24. Conduct of Seller and Buyer after Closing. Buyer and Seller will
cooperate upon and after the Closing Date in effecting the orderly transfer of
the operations of Seller to Buyer. Without limiting the generality of the
foregoing, Seller shall, if deemed necessary by Buyer, use its best efforts to
cause the United States government, and every agency and department and
instrumentality thereof, to agree with Seller to have contracts between each of
them and Seller novated in the name of Buyer, and to the execution of
appropriate documents thereto. In addition, after the Closing Date, at the
request of either Party and at the requesting Party's expense, but without
additional consideration, the other Party shall execute and deliver from time to
time such further instruments of assignment, conveyance and transfer, shall
cooperate in the conduct of litigation and the processing and collection of
insurance claims, and shall take such other actions as may reasonably be
required to convey and deliver more effectively to Buyer the Assets or to
confirm and perfect the Buyer's title to the Assets, and otherwise to accomplish
the orderly transfer of ownership of the Assets to Buyer and the business assets
and operations of Seller as contemplated by this Agreement.
25. Fees and Expenses. Seller and Buyer agree to bear their own
expenses for any and all attorneys' fees and other costs involved in the
preparation or negotiation of this Agreement and any other documents relating to
the implementation and consummation of this transaction.
26. Brokerage: Expenses. Neither of the Parties has employed or will
employ any broker, agent, finder, or consultant or has incurred or will incur
any liability for any brokerage fees, commissions, finders' fees, or other fees,
in connection with the negotiation or consummation of the transactions
contemplated by this Agreement.
27. Taxes. Seller shall pay any and all applicable local, city, county,
state and/or federal sales, documentary, use, filing, transfer and other taxes
payable as a result of the transfer of the Assets.
28. Entire Agreement; Amendments. This Agreement constitutes the entire
understanding among the Parties with respect to the subject matter contained
herein and supersedes any prior understandings and agreements among them
respecting such subject matter. This Agreement may be amended, supplemented, and
terminated only by a written instrument duly executed by all of the Parties.
29. Waiver. At any time prior to the Closing, the parties hereto may be
mutual agreement (i) extend the time for the performance of any of the
obligations or other acts of the other party
19
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, and/or (iii)
waive compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in an instrument in writing, signed by both parties
hereto.
30. Counterparts and Facsimile Signatures. This Agreement may be
executed simultaneously in two (2) or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. Facsimile signatures of the parties hereto shall be binding.
31. Headings. The headings contained in this Agreement are for
convenience and reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
32. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Kansas. Any legal action brought to
enforce or construe this Agreement shall be brought in the courts located in
▇▇▇▇▇▇ County, Kansas; and Seller and Buyer hereby agree to the jurisdiction of
such courts and agree that they will not invoke the doctrine of forum non
conveniens or other similar defenses.
33. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
34. Gender; Number. Words of gender may be read as masculine, feminine,
or neuter, as required by context. Words of number may be read as singular or
plural, as required by context.
35. Exhibits and Schedules. Each Exhibit and Schedule referred to
herein is incorporated into this Agreement by such reference.
36. Severability. If any provision of this Agreement is held illegal,
invalid, or unenforceable, such illegality, invalidity, or unenforceability will
not affect any other provision hereof. This Agreement shall, in such
circumstances, be deemed modified to the extent necessary to render enforceable
the provisions hereof.
37. Notices. All notices hereunder shall be deemed giving if in
writing, delivered personally or sent by registered mail or certified mail,
return receipt requested, to the parties at the following addresses or at such
other addresses as shall be specified by like notice:
If to Buyer, to: ▇▇▇▇▇▇ Industries, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇, President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
20
With a copy to: Klenda, Mitchell, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, L.L.C.
1600 Epic Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller to: DewEze Mfg., Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
3000 Two ▇▇▇▇▇ Square
Eighteenth and Arch Streets
Philadelphia, Pennsylvania 19103
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice given by mail shall be effective two days after deposit in the United
States mail. Any notice given by facsimile or overnight delivery shall be
effective upon the day after transmission or deposit.
38. Public Announcements. The parties agree that all statements and/or
public announcements, including those to the media, concerning this transaction
shall be subject to the parties mutual written approval.
39. No Benefit to Others. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and their successors and assigns, and they shall not be construed
as conferring and are not intended to confer any rights on any other persons.
40. Definition of Knowledge. Wherever the representations and
warranties of paragraph 11 hereof are limited by knowledge, knowledge shall mean
actual knowledge, obtained after reasonable inquiry, consisting of the review of
records of Seller considered pertinent and discussions with key employees and
officers of Seller considered necessary in order to refresh the recollection of
Seller as to Seller and its affairs, and focus the attention of the Seller on
pertinent facts relevant to the representations and warranties. As to Buyer, it
is acknowledged that the actual knowledge of ▇▇. ▇▇▇ ▇▇▇▇▇▇ and/or ▇▇. ▇▇▇▇
▇▇▇▇▇▇▇ shall be attributed to Buyer.
21
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
▇▇▇▇▇▇ INDUSTRIES, INC.
By /s/ ▇▇▇ ▇▇▇▇▇▇
--------------------------------------
▇▇▇ ▇▇▇▇▇▇, President
"Buyer"
DEWEZE MFG., INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Vice President
"Seller"
22
LISTS OF EXHIBITS AND SCHEDULES
-------------------------------
EXHIBITS
--------
A Assets
B Excluded Assets
C Promissory Note
D Assumed Liabilities
E Excluded Liabilities
F Purchase Price Allocation
SCHEDULES
---------
4.1 Net Book Value Calculation Principles
9 Prepaid Expenses, Deposits and Other Fees
11.4 Real Property
11.5 Secured Creditors
11.8 Litigation
11.9 Employee Benefits
11.10 Insurance
11.11 Patents and Trademarks
11.13 Contracts
11.14 Other Transactions
11.15 Product Liability Insurance
11.16 Changes in Events
11.19 Hazardous Substances
14.6 Required Consents and Authorizations
23
Exhibit A
ASSETS
Current Assets including but not limited to:
--------------------------------------------
o Accounts Receivable Trade less reserve for Bad Debt
o Accounts Receivable - Other
o Inventory, which includes: Stock Room/Raw Material, Work in Process,
Finish Goods, Less Reserve for Obsolete Inventory
o Prepaid Expenses and Other
o An amount equal to one-half of the Deferred Bond Issuance Cost, less
amortization, in the approximate amount of $22,000.00
Other Assets including but not limited to:
------------------------------------------
o Patents, Designs, less Amortization
o Goodwill less Amortization Goodwill
Property, Plant and Equipment
-----------------------------
o Land and Improvements
o Building and Improvements
o Machinery and Equipment
o Automobiles, Trucks and Trailers
o Tools, Dies and Fixtures
o Construction in Progress
o Less Accumulated Depreciation
Exhibit B
EXCLUDED ASSETS
o Cash on Hand and Restricted Cash
o Accounts Receivable - Interco
o Deferred Tax Asset (short term and long term)
o Deferred Tax Valuation (short term and long term)
o Non-Compete less Amortization Non-Compete
o One-half of the Deferred Bond Issuance Cost, less amortization, in the
approximate amount of $22,000.00
o Investment ▇▇▇▇▇▇ (a.k.a. ▇▇▇▇▇▇ Industries), including U.S. Patent No.
5,538,388, issued July 23, 1996 and relating to a grain cart equipped with
independent hydraulically driven discharge augers.
Exhibit C
PROMISSORY NOTE
---------------
$700,000.00 Harper, Kansas
July 24, 1998
FOR VALUE RECEIVED, ▇▇▇▇▇▇ INDUSTRIES, INC., a Kansas corporation,
("Maker") hereby promises to pay to OWOSSO CORPORATION, a Pennsylvania
corporation, ("Holder") the principal sum of Seven Hundred Thousand Dollars
($700,000.00) plus interest thereon until October 31, 2001 at the rate of nine
percent (9.0%) per annum; thereafter until October 31, 2002 at the rate of
twelve percent (12.0%) per annum; thereafter until October 31, 2003 at the rate
of thirteen percent (13.0%) per annum; thereafter until October 31, 2004 at the
rate of fourteen percent (14.0%) per annum; and thereafter until maturity at the
rate of fifteen percent (15.0%). Any overdue principal installment under this
Note shall bear interest, to the extent permitted by law, at a rate equal to
eighteen percent (18%). Principal shall be payable in quarterly installments as
follows:
2001 2002 2003 2004 2005
January 31 $25,000 $37,500 $37,500 $37,500 $37,500
April 30 $25,000 $37,500 $37,500 $37,500 $37,500
July 31 $25,000 $37,500 $37,500 $37,500 $37,500
October 31 $25,000 $37,500 $37,500 $37,500 $37,500
Interest shall be payable quarterly in arrears, commencing on January 31, 1999,
and thereafter on the 31st day of each succeeding January through October 31,
2005. (The above-described principal and interest payments are referred to as
the "Minimum Note Payments.")
In addition to the Minimum Note Payments, and provided that such
additional payments will not result in the breach of any financial covenants to
which Maker may be subject to with regard to any financing with NationsBank,
N.A., Maker shall remit to Holder by no later than January 31st of each year,
commencing January 31, 2000 ("Additional Note Payment Date") through the term of
the Note an additional payment of principal in an amount equal to one half (50%)
of the Excess Cash Flow of Maker. For purposes of this Note, the term "Excess
Cash Flow" shall mean an amount equal to the sum of: (i) the sum of (A) the net
income (exclusive of extraordinary items) of Maker for the fiscal year ending
the preceding October, as reflected on Maker's audited financial statements for
that fiscal year; plus (B) depreciation, amortization and other non-cash charges
which were deducted in computing Marker's net income for such fiscal year; plus
(C) an amount equal to any decrease in the amount of inventory and/or accounts
receivable in comparison to the then prior fiscal year less an amount equal to
(ii) the sum of (A) the Minimum Note Payments which were both payable and paid
during such fiscal year and any required principal payments of Maker which were
both payable and paid pursuant to its outstanding debt obligations, including,
without limitation, the payment required pursuant to the City of ▇▇▇▇▇▇, Kansas,
Industrial Revenue Bonds (▇▇▇▇▇▇ Industries, Inc.) Series A, 1998, ("Bonds")
during such fiscal year; plus (B) an amount, not to exceed One Hundred Thousand
Dollars ($100,000), equal to all capital expenditures during such fiscal year
not funded by the Bonds; plus (C) an amount equal to Two Hundred Fourteen
Thousand Two Hundred Eighty-Five Dollars ($214,285.00); plus (D) an amount equal
to any increase in the amount of Maker's inventory and/or accounts receivable at
the end of such fiscal year versus the corresponding amount for the prior fiscal
year. Additional Note Payments shall be applied to the prepayment of principal
hereunder in the inverse order of the maturities set forth above without
premium.
From time to time the maturity date of this Note may be extended or this
Note may be renewed, in whole or in part, and the Holder, from time to time, may
waive any guaranty given for the benefit
of the Holder securing the payment of this Note; but no such occurrence shall in
any manner effect, limit, modify or otherwise impair any rights or guaranty of
the Holder not specifically waived, released or surrendered in writing, nor
shall any maker, guarantor, endorser or any person who is or might be liable
hereon, either primarily or contingently, be released from such liability by
reason of the occurrence of any such events.
If Maker shall fail to make any payment of principal of or interest due to
Holder under this Note as and when due, unless such failure to make payment is
not cured within five (5) days after Maker's receipt of written notice from
Holder of such default, the entire sum of the principal and accrued interest
payable hereunder, shall immediately become due and payable at the option of the
Holder, and the Holder shall have the right to proceed immediately to enforce
the rights of the Holder for the entire amount of this Note without any notice
to the Maker or any other act by the Holder and without presentment, demand,
protest, notice of intent to accelerate or any other notice of any kind, all of
which are hereby waived by Maker. Provided, enforcement of Holder's rights
hereunder is subject to the terms and conditions of a certain Subordination
Agreement in the favor of NationsBank, N.A., of even date herewith.
Holder shall be entitled to recover from Maker all costs of enforcement of
its rights under this Note, including, without limitation, costs of collection
and attorneys fees.
This Note shall be secured by a second priority security interest in all
now existing or hereafter acquired inventory and accounts receivable of Maker.
Each payment shall first be applied to interest and then principal. At any
time prepayment in full or in part may be made at any time without penalty or
fee, in which event such prepayment shall be applied to the payments last due.
This Note may not be changed orally, but only by an agreement in writing,
signed by the party against whom enforcement of any waiver, change, modification
or discharge is sought. This Note shall extend to, and be binding upon the Maker
and the Holder, and their respective heirs, personal representatives, successors
and permitted assigns.
In the event that a voluntary case is commenced by, or an involuntary case
is commenced against the Maker seeking liquidation, reorganization or other
relief with respect to the Maker's debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect, this Note (together with accrued
interest thereon), without any notice to the Maker or any other act by the
Holder, shall become immediately due and payable without presentment, demand,
protest, notice of intent to accelerate or other notice of any kind, all of
which are hereby waived by the Maker.
This Note is governed by and shall be construed in accordance with the
laws of the State of Kansas.
The Maker, endorsers, and all parties to this Note and all who may become
liable for same, jointly and severally, waive presentment for payment, protest,
notice of protest, notice of non-payment of this Note, demand and all legal
diligence in enforcing collection, and hereby expressly agree that the lawful
owner or holder of this Note may defer or postpone collection of the whole or
any part thereof, either principal and/or interest, or may extend or renew the
whole or any part thereof, either principal and/or interest, or may accept
collateral for security for the payment of this Note, or may release the whole
or any part of any collateral security and/or liens given to secure the payment
of this Note or may release from liability on account of this Note the Maker,
endorsers and/or other parties thereto, all without notice to them or any of
them; and such deferment, postponement, renewal, extension, acceptance of
additional collateral or security and/or release shall not in any way affect or
change the obligation of any such maker, endorser, or other party to this Note,
or of anyone who may become liable for the payment thereof.
No liability shall arise against any holder or holders hereof from any
act, or the omission of any act, pertaining to the collection of, or failure to
collect, any collateral which said holder or holders may hold to secure this
obligation of the undersigned.
THE PAYMENT AND PERFORMANCE OF THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS
OF THAT CERTAIN SUBORDINATION AGREEMENT ("AGREEMENT") DATED JULY 24, 1998, BY
▇▇▇▇▇▇ INDUSTRIES, INC., OWOSSO CORPORATION AND NATIONSBANK, N.A. THE PAYMENT
AND PERFORMANCE OF THIS NOTE IS ALSO SUBORDINATE AND SUBJECT TO THE PAYMENT AND
PERFORMANCE OF ALL SECURED OBLIGATIONS AS DEFINED IN THE AGREEMENT. THIS
PROVISION IS SUPPORTED BY ADEQUATE CONSIDERATION, IS AN INTEGRAL PART OF THIS
NOTE AND IS INCORPORATED HEREIN.
▇▇▇▇▇▇ INDUSTRIES, INC.
By
-----------------------------
▇▇▇ ▇▇▇▇▇▇, President
Exhibit D
ASSUMED LIABILITIES
o Accounts Payable -Trade
o Accrued Vacation and Employer Payroll Taxes
o Accrued Holiday and Employer Payroll Taxes
o Accrued Property Tax
o Accrued Salary Wages and Employer Payroll Taxes
o Accrued Interest only for personal note to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
o Accrued Commissions and Employer Payroll Taxes
o Accrued other Liabilities and Employer Payroll Taxes
o Warranty Accrual
o Non-Warranty Running Gear Repair Program Accrual
o Garnishment Payable
o Note Payable to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
o Royalty contract payable to ▇▇▇ ▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇ Services v. DewEze Manufacturing, Inc. et al, Case number 97-CV-1662
in the circuit court of ▇▇▇▇▇▇▇▇ County, Tennessee.
Exhibit E
EXCLUDED LIABILITIES
o Accounts Payable - Inter Company
o Accounts Payable - AHAB
o Accounts Payable - Inter Company ▇▇▇▇▇▇ and Great Bend Mfg.
o Accrued Interest for IRB
o Accrued Interest Corporation
o Accrued Workers Compensation
o Accrued Interest AHAB and OWOSSO
o Accrued Insurance
o Accrued Bonus and Accrued FICA Employer
o Accrued 3% Supplement and 401k withholding and matching payable
o Any State or Federal Income Tax
o Industrial Revenue Bonds (long term and short term)
o Note Payable AHAB
o State and Federal withholding tax
o State and Federal unemployment tax
o FICA Tax Employer and Employee
o Sales Tax Payable
Exhibit F
PURCHASE PRICE ALLOCATION
The Purchase Price shall be allocated based on the "net book value" of the
Assets and Liabilities as of Closing, except that any excess Purchase Price over
the "net book value" of the Assets shall be allocated to property, plant and
equipment; provided, a mutually acceptable schedule shall be prepared at Closing
in accordance with the terms of the Agreement.
Schedule 4.1
NET BOOK VALUE CALCULATION PRINCIPLES
o Accounts Receivable - Trade booked at full value less reserve for bad debt
o Accounts Receivable - Other booked at value of advances to employees and
Danville Coop Stock value
o Inventory booked at standard cost less reserve for slow and/or non-moving
inventory
o Property, Plant and Equipment booked at cost less accumulated depreciation
o Other Assets to include patents and designs at cost less amortization
o Deposits for pressure cylinders booked at cost
o Remaining Balance of Notes Payable
o Accounts Payable booked at full value
o Accrued Expenses to include the following
Salary and Wages and Employer Payroll Taxes
Vacation Pay and Employer Payroll Taxes
Holiday Pay and Employer Payroll Taxes
Property Tax
Warranty Expense
Garnishments Payable
o Accrued Interest for Notes Payable
o Accrued Commission, Royalties and Employer Taxes
o Other Accrued Liabilities and Employer Taxes
Schedule 9
PREPAID EXPENSES, DEPOSITS AND OTHER FEES
Deposit on Pressure Cylinders
Schedule 11.4
REAL PROPERTY
None
Scheduled 11.5
SECURED CREDITORS
None of Seller's Assets secure obligations of Owosso Corporation. Accordingly,
any security interests in the Assets (e.g., for the Industrial Revenue Bonds,
copy machine, and voice mail system) have been granted at the subsidiary level
by management, namely by ▇▇. ▇▇▇ ▇▇▇▇▇▇ and/or ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇.
11.8
LITIGATION
Pending litigation:
▇▇▇▇▇▇ Services v. DewEze Manufacturing, Inc. et al, Case number 97-CV-1662 in
the circuit court of ▇▇▇▇▇▇▇▇ County, Tennessee.
The parties have agreed to submit this case to mediation in an effort to avoid
the expense of preparing for and attending trial. The case will be mediated
before a neutral third party at 10:00 a.m. on Thursday, July 16, 1998, in
Chattanooga, Tennessee.
Schedule 11.9
EMPLOYEE BENEFITS
o Accrued Vacation and FICA Employer
o Accrued Holiday and FICA Employer
o Accrued Commission and FICA Employer
o Accrued Bonus Hourly Employees and FICA Employer
o Hospital, Surgical, Medical, Dental and Prescription Drug Benefits
o Life and Long Term Disability Insurance
o 401k Pension Plan
o Safety Glasses and Safety Shoe Benefit Program
o Sick Leave, Bereavement and Jury Duty Compensation
o Uniforms
o Educational Assistance
o Service Awards
o Bonus for staff members of the DewEze Division
o Owosso Corporation Stock Options for certain employees of the DewEze Division
Schedule 11.10
INSURANCE
Attached listing from Powers, Craft, ▇▇▇▇▇▇ and ▇▇▇▇▇ Inc.
Schedule 11.11
PATENTS AND TRADEMARKS
U.S. Patent # Patented Item Date of Issue
------------- ------------- -------------
5588325 Auxiliary power take off 12-31-96
assembly and method (for
Ford '94 - '98 model years)
5368238 Adjustable rotary drum bale 11-29-94
cutter apparatus and method
(Rotocut)
5340042 Reciprocating blade bale 8-23-94
cutter (Super Slicer)
5161353 Slope mower with improved 11-10-92
blade housing floatation
5085042 Slope mower with rear drive 2-4-92
assembly
5012631 Bale wrapper 05-07-91
4869054 Slope mower with side frames 9-26-89
4707971 Slope Mower 11-24-87
4594041 Truck bed bale lift (flatbed) 6-10-86
4519325 Grain drill suspension system 05-28-85
4411572 Bale transfer carrier 10-25-83
4044963 Round bale loader, unloader 08-30-77
and unroller
Foreign No. Foreign Patent Issue Date
----------- -------------- ----------
1452877 - Canada Auxiliary power take-off 05-23-96
assembly and method
(Serial No. 2,170,578)
1277500 - Canada Slope mower with side frames 12-11-90
1290153 - Canada Slope ▇▇▇▇▇ ▇▇-▇-▇▇
▇▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇ mower with side frames 3-4-91
Registration No. Trademark Registration Date
---------------- --------- -----------------
1751014 ATM 2-9-93
1106606 DewEze 11-21-78
1104196 Bale Pikup 10-17-78
1105920 Bale Hugger 11-14-78
Application No. Patent Pending Filing Date
--------------- -------------- -----------
09/020,834 Rotary drum bale cutter with 02-09-98
reprocessing chamber
Docket No. 98,170 Auxiliary power take off Docket Date
assembly and method (for Ford 05-15-98
'99 model year and beyond)
Docket No. PTO-1449 Flatbed improvement; Docket Date
synchronized squeeze arms 04-16-98
(Improved large bale lift
#08/941,404)
Schedule 11.13
CONTRACTS
Royalty due to ▇▇▇ ▇▇▇▇▇▇▇ of 1% on the first $1,000,000 of ATM sales and 1/2%
on balance of ATM sales for a fiscal year.
Schedule 11.14
OTHER TRANSACTIONS
o Non-warranty Running Gear Repair Program
Schedule 11.15
PRODUCT LIABILITY INSURANCE
See Attached listing on Schedule 11.10
Schedule 11.16
CHANGES IN EVENTS
None, except for any liability that might have accrued or might accrue
pursuant to Section 21 hereof.
Schedule 11.19
HAZARDOUS SUBSTANCES
For the metal fabrication that the DewEze plant carries out in ▇▇▇▇▇▇, Kansas,
the following materials are monitored and/or stored on the premises:
Waste Water: DewEze is permitted to discharge its wash and rinse water/solution
(for paint preparation) through KDHE permit number M-AR40-0001. In this process
there are trace amounts of metals present in the waste water stream. The
following metals are monitored on a quarterly basis with a grab sample:
Cadmium Cyanide Chromium
Copper Lead Nickel
Selenium Silver Zinc
Mercury
Metals: This is primarily hot rolled and cold rolled steel. Some aluminum is
also present on the property. Both steel and aluminum are also used in castings.
In addition, we purchase switches for use in the leveling system for the mowers
that contain mercury.
Liquids: Various liquids are stored for use on the property:
1. Motor oil
2. Hydraulic oil
3. pH Plus: A pH adjuster for use when the Annihilate product is
used to clean metal.
Sodium Carbonate
4. Annihilate: A metal preparation solution used to remove rust.
Hydrochloric acid
Air Emissions: DewEze uses a high solids, low VOC alkyd, enamel paint and are
permitted under KDHE Source number 0770035. The paint solids are removed by
Safety Kleen, and they process the manifests for disposal. The paint MSDS list
the following ▇▇▇▇ title 313 reportable chemicals:
1. Xylene
2. MIBK
3. Methyl Amyl Ketone MAK
4. Ektasolv EP (100% ethylene glycol ether)
5. Aromatic 100 (7% xylene)
6. Methyl Ethyl Keton MEK
7. Toluene
8. Isopropyl Alcohol, anhydrous
9. Barium Salfate
10. Zinc Phosphate
Schedule 14.6
REQUIRED CONSENTS AND AUTHORIZATIONS
▇ ▇▇▇▇▇▇ Copier Lease
o Voice Mail Lease
o Warehouse Lease
o Transamerica Contract