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ASSET PURCHASE AGREEMENT
BY AND AMONG
▇▇▇▇▇▇▇▇ EQUIPMENT, INC.,
AS THE "SELLER"
▇▇▇▇ ▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
AS THE "SAHLBERGS"
R AND J PARTNERS,
AS THE "PARTNERSHIP"
AND
WESTERN POWER & EQUIPMENT CORP.,
AS THE "PURCHASER"
DATED
JANUARY ___, 1997
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TABLE OF CONTENTS
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1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Meaning of "Knowledge" . . . . . . . . . . . . . . . . . . . 3
2. SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Delivery of the Assets . . . . . . . . . . . . . . . . . . . 3
2.2 ▇▇▇▇▇▇▇ Money Deposit. . . . . . . . . . . . . . . . . . . . 4
2.3 Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Assumed Contracts. . . . . . . . . . . . . . . . . . . . . . 4
3. PURCHASE PRICE AND PAYMENT . . . . . . . . . . . . . . . . . . . . . . 4
4. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.1 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . 5
4.2 Deliveries by Purchaser. . . . . . . . . . . . . . . . . . . 6
4.3 Possession . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.4 Taxes and Fees . . . . . . . . . . . . . . . . . . . . . . . 6
5. REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . . . . . . . . 6
5.1 Authorizations and Enforceability. . . . . . . . . . . . . . 6
5.2 Effect of Agreement, Etc. . . . . . . . . . . . . . . . . . 7
5.3 Restrictions; Burdensome Agreements. . . . . . . . . . . . . 7
5.4 Government and Other Consents. . . . . . . . . . . . . . . . 7
5.5 Permits, Licenses, Compliance with Applicable Laws and
Court Orders . . . . . . . . . . . . . . . . . . . . . . . . 7
5.6 Financial Statements; Absence of Undisclosed Liabilities . . 8
5.7 Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . 8
5.8 Title to Properties; Absence of Liens and
Encumbrances, Etc. . . . . . . . . . . . . . . . . . . . . . 8
5.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.10 Intangible Property. . . . . . . . . . . . . . . . . . . . . 9
5.11 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . 9
5.12 Licenses and Agreements. . . . . . . . . . . . . . . . . . . 10
5.13 Customers. . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.14 Environmental Compliance . . . . . . . . . . . . . . . . . . 11
5.15 No Finder. . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.16 Performance Bonds, Bid Bonds and Deposits. . . . . . . . . . 11
6. COVENANTS OF THE SELLER. . . . . . . . . . . . . . . . . . . . . . . . 11
6.1 Conduct of Business Until Closing Date . . . . . . . . . . . 11
6.2 Access to Properties and Records . . . . . . . . . . . . . . 12
6.3 Advice of Changes. . . . . . . . . . . . . . . . . . . . . . 12
6.4 Conduct. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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6.5 Fulfillment of Conditions; Bankruptcy Order. . . . . . . . . 12
6.6 Covenant of Confidentiality. . . . . . . . . . . . . . . . . 12
7. OTHER COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.1 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . 13
7.2 Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.3 Kent Facility. . . . . . . . . . . . . . . . . . . . . . . . 13
7.4 Subleases. . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.5 Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.6 Personnel Matters. . . . . . . . . . . . . . . . . . . . . . 14
8. CONDITIONS TO PURCHASER'S OBLIGATIONS. . . . . . . . . . . . . . . . . 14
8.1 Accuracy of Representations and Warranties . . . . . . . . . 14
8.2 Performance of Covenants . . . . . . . . . . . . . . . . . . 14
8.3 Litigation, Etc. . . . . . . . . . . . . . . . . . . . . . . 14
8.4 Approval of Bankruptcy Court . . . . . . . . . . . . . . . . 15
8.5 Certificate. . . . . . . . . . . . . . . . . . . . . . . . . 15
8.6 Facility Agreements. . . . . . . . . . . . . . . . . . . . . 15
8.7 Terms of Employment and Non-Competition Agreements.. . . . . 15
8.8 Inventory Audit. . . . . . . . . . . . . . . . . . . . . . . 15
8.9 Environmental Review . . . . . . . . . . . . . . . . . . . . 15
9. CONDITIONS TO SELLER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . 16
9.1 Performance of Covenants . . . . . . . . . . . . . . . . . . 16
9.2 Litigation, Etc. . . . . . . . . . . . . . . . . . . . . . . 16
9.3 Certificate. . . . . . . . . . . . . . . . . . . . . . . . . 16
9.4 Terms of Employment and Non-Competition Agreements.. . . . . 16
9.5 Facility Agreements. . . . . . . . . . . . . . . . . . . . . 16
10. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.1 Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . 16
10.2 Survival of Representations and Warranties . . . . . . . . . 16
10.3 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.4 Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.5 Announcements. . . . . . . . . . . . . . . . . . . . . . . . 17
10.6 Binding Effect; Benefits . . . . . . . . . . . . . . . . . . 17
10.7 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.8 Further Assurances . . . . . . . . . . . . . . . . . . . . . 19
10.9 Entire Agreement; Amendment. . . . . . . . . . . . . . . . . 19
10.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . 19
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10.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 19
10.13 Gender; Singular and Plural. . . . . . . . . . . . . . . . . 19
10.14 Third Parties. . . . . . . . . . . . . . . . . . . . . . . . 19
10.15 Jurisdiction, Venue and Governing Law. . . . . . . . . . . . 19
10.16 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . 20
10.17 Time of Essence. . . . . . . . . . . . . . . . . . . . . . . 20
EXHIBITS
Exhibit A Allocation of Purchase Price
Exhibit B Form of ▇▇▇▇ of Sale
Exhibit C Form of Sale Order
Exhibit D Officers' Certificate
Exhibit E Form of Real Property Purchase and Sale Agreement
Exhibit F Form of Sublease
Exhibit G Form of Terms of Employment and Noncompetition Agreement
Exhibit H Agreement Regarding 450 Hyundai
SCHEDULES (Provided separately but simultaneously with this Agreement)
Schedule 1.1 Excluded Assets
Schedule 1.2 Fixed Assets
Schedule 1.3 Inventory
Schedule 1.4 Work in Process
Schedule 2.4 Assumed Contracts
Schedule 5.2 Corporate Documents
Schedule 5.5 Permits, Licenses, Compliance with Laws
Schedule 5.6 Financial Statements; Liabilities
Schedule 5.8 Title to Machinery and Vehicles
Schedule 5.9 Litigation
Schedule 5.11 Employees
Schedule 5.12 Licenses and Agreements
Schedule 5.13 Customers
Schedule 5.16 Performance Bonds and Bid Bonds
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is made and entered into as of this ____ day
of January, 1997, by and among WESTERN POWER & EQUIPMENT CORP., an Oregon
corporation (the "Purchaser"), ▇▇▇▇▇▇▇▇ EQUIPMENT, INC., a Washington
corporation (the "Seller"), ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (together, the
"Sahlbergs") and R AND J PARTNERS, a Washington general partnership of the
Sahlbergs (the "Partnership"). ▇▇▇▇▇▇▇▇ GROUP COMPANIES, INC. is executing this
Agreement for purposes of Section 7.5 only.
RECITALS
A. The Seller is the owner and operator of a construction equipment
sales, service and leasing business (the "Business").
B. Seller is a debtor in possession under Chapter 11 of the United States
Bankruptcy Code, 11 U.S.C. Section 1101 ET SEQ. (the "Bankruptcy Code") in Case
No. 96-02787 (the "Bankruptcy Case") filed on March 13, 1996 (the "Filing Date")
in the United States Bankruptcy Court for the Western District of Washington
(the "Bankruptcy Court").
C. The Purchaser desires to purchase from the Seller certain of the
properties and assets relating to the Business, and the Seller is willing to
sell such assets and properties, on the terms and conditions hereinafter set
forth.
D. On or about September 20, 1996, Purchaser executed a Letter of Intent,
which the Seller, the Sahlbergs and Partnership accepted and agreed to. The
Letter of Intent was amended by the First Amendment to Letter of Intent on or
about October 10, 1996.
E. The Letter of Intent has been approved by the Bankruptcy Court
pursuant to the Order Approving Sale of Substantially All of the Debtor's Assets
Free and Clear of Liens, Claims and Interests dated October 11, 1996 (the "Sale
Order").
F. On November 1, 1996, the Bankruptcy Court signed the Order Confirming
Fourth Amended Plan of Reorganization (the "Plan Confirmation Order"), which
provides for the sale approved by the Sale Order.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:
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1. DEFINITIONS
1.1 DEFINED TERMS. In addition to the terms defined elsewhere in
this Agreement, the following terms shall have the meanings set forth below:
"ASSETS" shall have the meaning set forth in Section 2.1.
"ASSUMED CONTRACTS" shall have the meaning set forth in
Section 2.4.
"BANKRUPTCY CASE" shall have the meaning set forth in Recital
B
"BUSINESS" shall have the meaning set forth in Recital A.
"CLOSING" shall have the meaning set forth in Section 4.
"CLOSING DATE" shall have the meaning set forth in Section 4.
"COMMITMENTS" shall have the meaning set forth in
Section 5.12.
"CONFIDENTIALITY AGREEMENT" shall mean the agreement signed by
Purchaser during its due diligence period.
"DEALER AGREEMENTS" shall mean those contracts to which the
Seller was a party before and after the Filing Date with Equipment Inventory
Manufacturers.
"ENVIRONMENTAL LAWS" shall mean any applicable federal, state
or local law, rule or regulation in effect on the date hereof: (a) relating to
releases or threatened releases of Hazardous Materials; (b) relating to the
manufacture, handling, transport, use, treatment, storage or disposal of
hazardous Materials or materials containing Hazardous Materials; or
(c) otherwise relating to pollution of the environment or the protection of
human health.
"EQUIPMENT INVENTORY MANUFACTURERS" shall mean the
manufacturers of the equipment and parts that the Seller is authorized to sell
in its dealership.
"EXCLUDED ASSETS" means those items described on Schedule 1.1.
"FIXED ASSETS" means all tangible assets, other than
Inventory, used in the Business (such as shop tools, furniture, fixtures and
equipment, and vehicles), including without limitation those items described on
Schedule 1.2.
"HAZARDOUS MATERIALS" shall mean materials that contain
substances defined as hazardous or toxic substances under the following
statutes, as well as such statutes' implementing regulations as in effect on the
date hereof: the Hazardous Materials Transportation Act, the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
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Compensation and Liability Act, the Clean Water Act, the Safe Drinking Water
Act, the Atomic Energy Act, the Toxic Substances Control Act, the Federal
Insecticide, Fungicide, and Rodenticide Act, and the Clean Air Act and any other
materials that a federal, state or local agency requires to be remediated
pursuant to any Environmental Law.
"INVENTORY" means the Seller's inventory of new equipment,
used equipment and parts described on Schedule 1.3, which reflects whether such
equipment and parts are new or used and the value of such equipment and parts.
"LETTER OF INTENT" means the September 20, 1996 Letter of
Intent amended as of October 10, 1996 approved by the Sale Order.
"PARTNERSHIP" means R and J Partners, a Washington general
partnership of the Sahlbergs.
"PLAN" means the Plan of Reorganization of the Seller
confirmed by the Plan Confirmation Order.
"PURCHASE PRICE" shall have the meaning set forth in
Section 3.1.
"PURCHASER" means Western Power & Equipment Corp., an Oregon
corporation.
"SALE ORDER" means the October 11, 1996 Order of the
Bankruptcy Court which approved the sale of substantially all of the Seller's
assets to Purchaser pursuant to the terms of the Letter of Intent.
"SCHEDULES" means all of the disclosure schedules required by
this Agreement, dated as of the date hereof, which are simultaneously delivered
to Purchaser and initialed by Purchaser for identification.
"SELLER" means ▇▇▇▇▇▇▇▇ Equipment, Inc., a Washington
corporation.
"SAHLBERGS" means ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
1.2 MEANING OF "KNOWLEDGE". Whenever any representation or
warranty of the Seller is expressed to be "to the knowledge" or "to the best
knowledge" of such party, or as being based upon facts or circumstances of which
the Seller or the Sahlbergs have knowledge, the knowledge of such party shall be
(a) the actual knowledge of such party or any executive officer or director of
such party or (b) the knowledge that such party would obtain after diligent
inquiry as to the matters represented or warranted.
2. SALE OF ASSETS
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2.1 DELIVERY OF THE ASSETS. On the terms and subject to the
conditions of this Agreement, including the payment of the Purchase Price as set
forth in Section 3, the Seller will, on the Closing Date, sell, assign, convey,
transfer and deliver to the Purchaser all right, title and interest in and to
the assets used or useful in the conduct of the Business, including, without
limitation, the Fixed Assets, the Inventory, work in process, customer orders,
contract rights, and goodwill, but excluding the Excluded Assets (the "Assets"),
free and clear of all liens, security interests, claims, charges and
encumbrances of any nature whatsoever, together with any other documents
necessary or reasonably requested by the Purchaser to transfer to the Purchaser
good and marketable title to the Assets.
2.2 ▇▇▇▇▇▇▇ MONEY DEPOSIT. The Purchaser has deposited $25,000
(the "Deposit") in a trust account of ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Lubersky ("LPSL"), to
be held by LPSL pending the Closing IN TRUST for the benefit of the Purchaser in
accordance with this Section. At the Closing, the Deposit shall be disbursed in
accordance with the joint instructions of the Seller and the Purchaser, and the
amount of the Deposit, with all interest earned thereon, shall be credited
against the Purchase Price. In the event that one of the contingencies set
forth in the Letter of Intent is not met, LPSL shall, promptly upon receipt of
the Purchaser's written notice to that effect, remit the Deposit and all
interest earned thereon to the Purchaser.
2.3 LIABILITIES. Except as specifically provided in this
Agreement, the Purchaser assumes no liabilities or debts of the Seller of any
nature whatsoever, whether absolute, accrued, contingent or otherwise, or
whether due or to become due, including any liability for taxes.
2.4 ASSUMED CONTRACTS. At Closing, the Seller shall assign and
the Purchaser shall assume all of Seller's rights and obligations under the
contracts described on Schedule 2.4 (the "Assumed Contracts").
3. PURCHASE PRICE AND PAYMENT
3.1 The purchase price for the Assets (the "Purchase Price") shall
be calculated as set forth in this Section 3. The Purchase Price shall be
allocated to the Assets as set forth on Exhibit A. The parties shall report
consistently with the allocation set forth on Exhibit A for all tax purposes.
3.2 The Purchase Price, which shall be paid in cash at Closing,
shall be equal to the sum of the purchase prices for each of the items making up
the Assets as follows:
(a) INVENTORY. Subject to adjustment as hereinafter
provided, the purchase price for the Inventory shall be $4,641,066 (the
"Inventory Purchase Price"), which shall be paid in cash at Closing. The
Inventory Purchase Price is the sum of $3,844,152 (the "Equipment Inventory
Purchase Price") and $796,914, which is the book value of the parts inventory as
set forth in the Letter of Intent. The Purchaser and the Seller have agreed
that the value of the equipment inventory purchased shall be as set forth on
Schedule 1.3 for purposes of
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establishing the Equipment Inventory Purchase Price. The Purchaser and the
Seller have further agreed that the Equipment Inventory Purchase Price reflects
a $25,000 reduction for warranty reserves. The Inventory Purchase Price also
reflects the agreement between the Purchaser and the Seller regarding the 450
Hyundai attached as Exhibit H. The final purchase price for parts has been
determined pursuant to the physical inventory performed jointly by Purchaser and
Seller immediately before Closing in accordance with the terms of the Letter of
Intent. Attached as Schedule 1.3 is a list of the parts inventory which
reflects the physical inventory referenced above. The Inventory Purchase Price
may be adjusted after Closing to correct any mistakes, errors or omissions in
accordance with the Letter of Intent by written agreement between the Purchaser
and the Seller.
(b) Fixed Assets. The purchase price for the Fixed Assets
shall be the sum of $625,326 for shop tools, furniture, fixtures and equipment,
and vehicles, which shall be paid in cash at Closing. The purchase price of the
Fixed Assets may be adjusted after Closing by written agreement between the
Purchaser and the Seller to correct any mistakes, errors or omissions in
accordance with the Letter of Intent. A list of the Fixed Assets is set forth
on Schedule 1.2.
(c) Work in Process. The Purchaser will assume at Closing
all service work orders of work just finished or in process, except for those
work orders for which Seller has filed a warranty claim. The purchase price for
the foregoing shall be eighty percent (80%) of the customer hourly rate of the
aggregate labor hours invested in such work in process. To the extent work in
process includes parts, the purchase price therefor shall be eighty percent
(80%) of the retail purchase price of such parts. See Schedule 1.4.
4. CLOSING. The closing of the transactions contemplated by Section 2
hereof (the "Closing") shall take place at the offices of ▇▇▇▇▇▇ Pepper &
Shefelman, in Seattle, Washington, at noon, local time, on January 17, 1997, or
at such other time or place as the Purchaser and the Seller shall mutually agree
in writing (such date being hereinafter referred to as the "Closing Date") upon
payment of the Purchase Price. Upon payment of the Purchase Price, conveyance,
transfer, assignment and delivery of the Assets shall be by bills of sale,
certificates of transfer, endorsements, assignments and other instruments of
transfer and conveyance in such form as the Purchaser may request. The Seller
and the Purchaser will from time to time after the Closing make such further
conveyances, transfers, assignments and deliveries, and execute such further
instruments and documents, as the parties deem reasonably necessary in order to
effectuate and confirm the sale of the Assets and other transactions
contemplated by this Agreement.
4.1 Deliveries by Seller. At the Closing and upon payment of the
Purchase Price, the Seller will deliver to the Purchaser:
(a) A ▇▇▇▇ of sale in form attached hereto as Exhibit B;
(b) Assignments of the Assumed Contracts in form and
substance satisfactory to the Purchaser;
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(c) A final order of the Bankruptcy Court in the form of
Exhibit C (the "Sale Order"), all rights to appeal from which shall have expired
with no appeal having been filed;
(d) Any other documents required hereunder to be executed
or delivered by the Seller; and
(e) Such other documents and instruments as counsel for the
Purchaser may reasonably require to effectuate or evidence the transactions
contemplated hereby.
4.1.1 After Closing, the Seller shall be responsible
for providing the Purchaser with releases of financing statements and other
recorded encumbrances terminating recorded liens and encumbrances against, and
security interests in, any of the Assets. The Seller shall be responsible for
obtaining such releases from secured creditors as part of the claims resolution
process in the Bankruptcy Case.
4.2 Deliveries by Purchaser. At the Closing, the Purchaser will
deliver:
(a) A certified or cashier's check in the amount of the
Purchase Price, reflecting a credit for the ▇▇▇▇▇▇▇ Money Deposit described in
Section 2.2;
(b) Any other documents or instruments required hereunder
to be executed or delivered by the Purchaser; and
(c) Such other documents and instruments as counsel for the
Seller may reasonably require to effectuate or evidence the transactions
contemplated hereby.
4.3 Possession. The Purchaser shall take possession of the Assets
as of the Closing.
4.4 Taxes and Fees
(a) Any state transfer, sales, use or other tax, including
any transfer, filing or recording fees, payable on or with respect to the sale
of the Assets shall be paid when due by the Purchaser; provided however, that
the Real Property Purchase and Sale Agreement, Exhibit E, shall govern payment
of taxes in connection with the purchase of the Kent facility described in
Section 7.3.
(b) Any personal property taxes attributable to any of the
Assets shall be prorated as of the Closing Date.
5. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents
and warrants to the Purchaser as follows:
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5.1 AUTHORIZATIONS AND ENFORCEABILITY. The Seller has all
requisite power and authority to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby as set forth in the corporate
documents in Schedule 5.2, the Officers' Certificate attached as Exhibit D, the
Plan and the Sale Order. This Agreement has been duly and validly authorized,
executed and delivered by the Seller and constitutes the valid and binding
obligation of the Seller fully enforceable in accordance with its terms.
5.2 EFFECT OF AGREEMENT, ETC. The execution, delivery and
performance of this Agreement by the Seller and the consummation of the
transactions contemplated hereby will not, with or without the giving of notice
of the lapse of time, or both: (a) violate any provision of law, statute, rule
or regulation to which the Seller is subject; (b) violate any judgment, order,
writ or decree of any court, arbitrator or governmental agency applicable to the
Seller; (c) have any effect on any of the permits, licenses, orders or approvals
referred to in Section 5.5 hereof or the ability of the Seller to make use of
such permits, licenses, orders or approvals; or (d) result in the breach of or
conflict with any term, covenant, condition or provision of, result in the
modification or termination of, constitute a default under, or result in the
creation or imposition of, any lien, security interest, charge or encumbrance
upon any of the Assets pursuant to any charter, bylaw, commitment, contract or
other agreement or instrument to which the Seller is a party or by which any of
the Assets is or may be bound or affected or from which the Seller derives
benefit, except for the Dealer Agreements, which Purchaser acknowledges must be
renegotiated with the Equipment Inventory Manufacturers.
5.3 RESTRICTIONS; BURDENSOME AGREEMENTS. None of the Assets are
subject to or bound or affected by any charter, bylaw or other corporate
restriction, or any order, judgment, decree, law, statute, ordinance, rule,
regulation or other restriction of any kind or character, which would (a)
prevent the Seller from entering into this Agreement or from consummating the
transactions contemplated hereby or (b) materially and adversely affect, the
Assets or the ability or prospects of the Purchaser to carry on a business
similar to that presently conducted by the Seller, or the ability of the
Purchaser to utilize the Assets in the manner in which they are presently
utilized, except for the Dealer Agreements, which Purchaser acknowledges must be
renegotiated with the Equipment Inventory Manufacturers.
5.4 GOVERNMENT AND OTHER CONSENTS. With the exception of the
approval of the Bankruptcy Court pursuant to the Sale Order, no consent,
authorization or approval of, or exemption by, or filing with any governmental,
public or self-regulatory body or authority is required in connection with the
execution, delivery and performance by the Seller of this Agreement or any of
the instruments or agreements herein referred to, or the taking of any action
herein contemplated.
5.5 PERMITS, LICENSES, COMPLIANCE WITH APPLICABLE LAWS AND COURT
ORDERS. The Seller has all requisite corporate power and authority, and all
permits, licenses, orders and approvals of governmental and administrative
authorities, to own, lease and operate its properties and to carry on its
business as presently conducted; all such permits, licenses, orders and
approvals material to the conduct of the business of the Seller are listed in
Schedule 5.5, are in
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full force and effect, and no suspension or cancellation of any of them is
pending or, to the knowledge of the Seller threatened. The Seller's conduct of
its business does not violate or infringe any domestic or foreign law, statute,
ordinance or regulation currently in effect, scheduled to come into effect or,
to the knowledge of the Seller and the Sahlbergs, proposed to be adopted, the
enforcement of which would adversely affect the financial condition, results of
operations, properties or business of the Seller. The Seller is not in default
in any respect under any executive, legislative, judicial, administrative or
private (such as arbitration) ruling, order, writ, injunction or decree.
5.6 FINANCIAL STATEMENTS; ABSENCE OF UNDISCLOSED LIABILITIES. The
Seller's fiscal year ends December 31. A true and correct copy of the financial
statements of the Seller with a balance sheet as of December 31, 1995 and
December 31, 1994, including the related statements of operations for the
periods then ended and the accompanying notes to financial statements, are set
forth as Schedule 5.6. To the best of Seller's knowledge, the foregoing
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with that of prior years or
periods, are correct and complete and fairly present the financial position and
results of operations of the Seller as of said dates and for the periods
indicated, in accordance with generally accepted accounting principles, and no
event has occurred since the preparation of these statements which would render
either of them misleading in any respect. The Seller acknowledges that the
financial statements for the year ended December 31, 1995 have not been audited.
The financial statements of the Seller for the period ended December 31, 1995,
referred to above, are referred to herein as the "Financial Statements," and the
balance sheet of the Seller included therein is referred to herein as the
"Balance Sheet." Except as set forth in Schedule 5.6 and the bankruptcy
schedules filed in the Bankruptcy Case, the Seller has no debts or liabilities
of any nature whatsoever, whether accrued, absolute or contingent, whether due
or to become due (including without limitation liability for taxes of any nature
whatsoever, penalties, fees or interest).
5.7 TAX MATTERS. The Seller has prepared and filed, with the
appropriate United States, state and local governmental agencies and foreign
governmental agencies, all tax returns required to be filed and has paid all
taxes shown on such tax returns to be payable or which have become due pursuant
to any assessment, deficiency notice, thirty (30) day letter or similar notice
received by it. There are no pending open audits of any of the Seller's tax
returns for any of its taxable years. The Seller has not executed or filed with
the Internal Revenue Service or any other domestic or foreign taxing authority
any agreement extending the period for assessment or collection of any taxes and
is not a party to any pending action or proceeding by any governmental authority
for assessment or collection of taxes, and no claim for assessment or collection
of taxes has been asserted or threatened against the Seller for which provision
has not been made in the Financial Statements. The Seller has never consented
to have the provisions of Section 341(f) of the Code apply to it. Complete and
correct copies of the income tax returns of the Seller for the three (3) fiscal
years ending in 1995, 1994 and 1993, as filed with the Internal Revenue Service
and all state taxing authorities, together with all related correspondence and
notices, have previously been delivered to the Purchaser.
8
5.8 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES, ETC.
The Seller owns no real property. Since entry of the Sale Order, the Seller is
in a position to transfer to the Purchaser good and marketable title to the
Assets, free and clear of all mortgages, security interests, claims, liens,
charges, encumbrances, restrictions on use or transfer or other defects in title
as set forth in the Sale Order. No default or event of default exists, and no
event which, with notice or lapse of time or both, would constitute a default,
has occurred and is continuing, under the terms or provisions, express or
implied, of any agreement or other instrument or under the terms or provisions
of any agreement to which any of such properties is subject, nor has the Seller
received notice of any claim of such default, nor has the Seller failed to
comply in any respect with any provision or condition of any such agreement or
other instrument except for the Dealer Contracts, which Purchaser acknowledges
it must renegotiate with the Equipment Inventory Manufacturers. The Seller has
not received a notice of violation of any applicable law, ordinance, regulation,
order or requirement relating to its operations or its owned or leased
properties. Schedule 5.8 is copies of all titles to all Seller's titled
machinery and vehicles.
5.9 LITIGATION. Except as set forth in Schedule 5.9, there is no
claim, action, suit, proceeding, arbitration, investigation or inquiry pending
before any federal, state, municipal, foreign or other court or any
governmental, administrative or self-regulatory body or agency, or any private
arbitration tribunal, or threatened against, relating to or affecting the Seller
or any of the assets, properties or businesses of the Seller, or the
transactions contemplated by this Agreement, nor is there any basis for any such
claim, action, suit, proceeding, arbitration, investigation or inquiry which may
have any adverse effect upon the assets, properties or business of the Seller or
the transactions contemplated by this Agreement. There is not in existence at
present any order, judgment or decree of any court or other tribunal or any
agency or self-regulatory body to which the Seller or the business, properties
or assets of the Seller are subject or by which they are bound, except the
orders entered in the Bankruptcy Case. The Seller is not in default under any
order, license, regulation or demand of any Federal, state or municipal or other
governmental agency or self-regulatory body or with respect to any order, writ,
injunction or decree of any court, except for a technical default under the Plan
related to the delay in Closing.
5.10 INTANGIBLE PROPERTY. The conduct of the Business as now
conducted does not and will not conflict with patents, patent rights, licenses,
trademarks, trademark rights, trade names, trade name rights, service marks,
service ▇▇▇▇ rights or copyrights of others in any way likely to affect
adversely the Business, Assets or the condition, financial or otherwise, of the
Seller. To the best knowledge of the Seller, no other person or entity has
heretofore used or now uses any trademark, trade name or other intangible
property owned by or licensed to the Seller. Seller represents and warrants
that the ▇▇▇▇▇▇▇▇ trademark is owned by ▇▇▇▇▇▇▇▇ Group Companies, Inc., a
Washington corporation. Purchaser is being granted the right to use the said
trademark for a period of two (2) years pursuant to Section 7.5. No material
infringement of any proprietary right owned by or licensed by or to the Seller
is known to the Seller.
5.11 LABOR MATTERS. Schedule 5.11 is a list of the names, starting
dates of employment, salary or wage rate and functions of each employee of
Seller. The Seller is not a
9
party to any collective bargaining agreement or other contract or agreement with
any labor organization or other representative of any of the Seller's employees,
nor is any such contract or agreement presently being negotiated. There are no
organizational activities or other labor controversies pending or, to the
knowledge of the Seller, threatened with respect to the Business, and there are
no grievances outstanding, or unfair labor practice charges and/or complaints
pending before the National Labor Relations Board, against the Seller in respect
of employees who are employed in the Business.
5.12 LICENSES AND AGREEMENTS. Except as set forth in Schedule 5.12
or another Schedule hereto, the Seller is not a party to, nor or any of the
Assets bound or affected by, any oral or written:
(a) lease agreement (whether as lessor or lessee) relating
to real or personal property;
(b) license agreement, assignment or other contract
(whether as licensor or licensee, assignor or assignee) relating to trademarks,
trade names, patents, copyrights (or applications therefor), unpatented designs
or styles, know-how or technical assistance;
(c) agreement with any supplier, distributor, franchisor,
dealer, sales agent or representative;
(d) agreement with any manufacturer, supplier or customer
with respect to discounts, allowances or buy-back options;
(e) joint venture or partnership agreement with any other
person;
(f) agreement for the borrowing or lending of money, or
guaranteeing, indemnifying or otherwise becoming liable for the obligations or
liabilities of another;
(g) agreement with any bank, factor, finance company or
similar organization regarding the financing of accounts receivable or other
extensions of credit;
(h) agreement granting any lien, security interest or
mortgage on any property or asset of the Seller, including, without limitation,
any factoring agreement for the assignment of accounts receivable;
(i) advertising agreement of any kind;
(j) agreement which restricts it from doing business
anywhere in the world;
(k) agreement, statute or regulation giving any party the
right to renegotiate or require a reduction in prices or the repayment of any
amount previously paid;
10
(l) other agreement involving the payment or receipt in any
period of twelve consecutive months of more than $1,000 in any one case or of
more than $3,000 in the aggregate, or having a term of more than six (6) months;
(m) any agreement to defend, indemnify and/or hold harmless
any person; or
(n) warranties or implied warranties on any sold or leased
equipment.
Correct and complete copies of all such agreements, plans, policies and
arrangements (or, where they are oral, true and complete written summaries
thereof) (collectively referred to herein as the "Commitments") have been
delivered to the Purchaser or made available for the Purchaser's inspection
prior to the date hereof. Schedule 5.12 contains a true and correct listing of
all of the Commitments. Seller acknowledges that on or about October 30, 1996,
Purchaser notified Seller in writing of which leases Purchaser wishes Seller to
seek the appropriate Bankruptcy Court approval for their assumption and
assignment to Purchaser. Purchaser acknowledges that it must negotiate new
agreements with the Equipment Inventory Manufacturers.
5.13 CUSTOMERS. A list of the Seller's customers is attached in
Schedule 5.13.
5.14 ENVIRONMENTAL COMPLIANCE. The Business has, to the knowledge
of the Seller, been conducted in accordance with applicable Environmental Laws,
except as otherwise disclosed to the Purchaser in writing prior to the Closing
Date.
5.15 NO FINDER. The Seller has not taken any action which would
give to any firm, corporation, agency or other person a right to a consultant's
or finder's fee or any type of brokerage commission in relation to or in
connection with the transactions contemplated by this Agreement.
5.16 PERFORMANCE BONDS, BID BONDS AND DEPOSITS. A list of the
Seller's performance bonds and bid bonds is attached in Schedule 5.16. The
bonds and deposits are Excluded Assets.
6. COVENANTS OF THE SELLER. The Seller shall observe the following
covenants:
6.1 CONDUCT OF BUSINESS UNTIL CLOSING DATE. Except as the
Purchaser may otherwise consent in writing or as permitted by Section 6.4 or
required pursuant to terms of this Agreement, between the date hereof and the
Closing Date, the Seller shall:
(a) duly comply with all laws, ordinances and regulations
applicable to it, its properties and to the conduct of its business;
11
(b) give the Purchaser prompt written notice of any offers
received regarding the acquisition of any of the Assets;
(c) neither: (i) encumber, mortgage, or voluntarily
subject to lien any of the Assets nor (ii) sell, lease or otherwise dispose of
any of the Assets; and
(d) not: (i) solicit, directly or indirectly, or cause any
other person to solicit any offer to acquire any of the Assets of the Seller;
(ii) afford any third party which may be considering the acquisition of any of
the assets of the Seller access to its properties, books or records; or (iii)
enter into any negotiations for, or enter into, any agreement or understanding
which provides for the acquisition of any assets of the Seller or any part
thereof to a person other than in connection with the transactions contemplated
herein.
6.2 ACCESS TO PROPERTIES AND RECORDS. The Seller shall give to
the Purchaser and to its counsel, accountants and other representatives full
access at any reasonable time to such of its properties, personnel, books, tax
returns, contracts, commitments and records as relate to the business of the
Seller and shall furnish to the Purchaser and its representatives all such
additional information and documents concerning the Seller as the Purchaser or
its representatives may from time to time request.
6.3 ADVICE OF CHANGES. Between the date hereof and the Closing
Date, the Seller shall advise the Purchaser promptly in writing of any fact,
which, if known at the date hereof, would have been required to be set forth or
disclosed in or pursuant to this Agreement, or which constitutes a breach of any
provision of this Section 6.
6.4 CONDUCT. Pending the Closing the Seller shall conduct the
Business in the ordinary course in compliance with applicable law and
regulation; PROVIDED that the Seller shall not enter into any transaction or
take any action which would result in any of the representations and warranties
of the Seller contained in this Agreement not being true and correct at and as
of (a) the time immediately after such action or transaction was entered into or
event has occurred with the same force and effect as though made on such date
and (b) the Closing Date with the same force and effect as though made on such
date.
6.5 FULFILLMENT OF CONDITIONS; BANKRUPTCY ORDER. Purchaser
acknowledges that the condition of approval of the Bankruptcy Court of the
Letter of Intent set forth in Section 8.4 has been fulfilled by the Sale Order.
6.6 COVENANT OF CONFIDENTIALITY. The Seller will not at any time
publish or disclose, or authorize or permit any of its agents or representatives
or any third party to publish or disclose, any information or other data,
including without limitation financial information, or business or financial
books, records or other information of or pertaining to the Purchaser which has
been furnished by or on behalf of the Purchaser in connection with this
Agreement or the discussions leading to this Agreement, and which is not
otherwise publicly available, except as required by law.
12
7. OTHER COVENANTS
7.1 CONFIDENTIALITY. From the date hereof through Closing, the
Purchaser shall not publish or disclose and shall not authorize or permit any of
its officers, employees, directors, agents or representatives or any third party
to publish or disclose any trade secrets, or other confidential information or
any data or business or financial books, records or other information of or
pertaining to the Seller, which has been furnished to it by the Seller or to
which it or any of its officers, employees, directors, agents, attorneys or
accountants has had access during any investigation made in connection with this
Agreement, and which is not otherwise available to it, except as required by
law. Purchaser further acknowledges that until Closing, it is bound by the
terms of the Confidentiality Agreement.
7.2 INVENTORY. The Purchaser performed a final physical inventory
of inventory and fixed assets using methods acceptable to the Purchaser and the
Seller immediately prior to the Closing. The Seller observed and participated
in the Inventory.
7.3 KENT FACILITY. At the Closing, the Purchaser or its designee,
▇▇▇▇▇▇-▇▇▇▇▇ Realty Co. LLC, and the Partnership shall enter into a Purchase and
Sale Agreement in the form of Exhibit E. Except as provided in such Lease, the
Purchaser and its designee shall not acquire any other assets of the
Partnership, nor shall the Purchaser and its designee assume any liabilities of
the Partnership.
7.4 SUBLEASES. At Closing, the Purchaser and the Seller shall
enter into subleases with respect to the Seller's Spokane, Portland and
Anchorage facilities in substantially the form of Exhibit F. Except as provided
in such subleases, the Purchaser shall not assume any liability of the Seller
with respect to such facilities. The terms of each sublease shall be as
follows:
(a) The sublease of the Spokane facility shall provide for
a monthly rental rate of $3,800, and shall expire on September 1, 1999.
(b) The sublease of the Portland facility shall provide for
a monthly rental rate of $6,475, and shall expire on May 1, 1998.
(c) The sublease of the Anchorage facility shall provide
for a monthly rental rate of $7,850, and shall expire on the earlier to occur of
two (2) years from the Closing Date or the date of the sale of such facility by
its owner.
7.5 TRADEMARKS. The Seller and ▇▇▇▇▇▇▇▇ Group Companies, Inc.
("SGC") hereby grant the Purchaser a license to use (i) the "▇▇▇▇▇▇▇▇" name and
▇▇▇▇, and (ii) the registered "S DESIGN ▇▇▇▇" without additional compensation
for a period of two (2) years from the Closing Date. The rights to the
"▇▇▇▇▇▇▇▇" name and ▇▇▇▇ and the registered "S DESIGN ▇▇▇▇" shall revert to
Seller and SGC at the end of such two (2) year period; PROVIDED
13
that Seller and SGC agree to negotiate in good faith for an extension of the use
of such name and marks at that time.
7.6 PERSONNEL MATTERS
(a) Compensation of, and bonuses for, all employees of the
Seller owed for all periods of employment of such employees through and
including the Closing Date shall be borne and paid for by the Seller.
Compensation of and any bonuses for all employees hired by the Purchaser for all
periods of employment subsequent to the Closing Date shall be borne and paid for
by the Purchaser. All vacation, sick day and holiday pay of all employees of
the Seller that have accrued or were earned prior to the Closing Date shall be
the sole responsibility of the Seller and shall be paid in full prior to the
Closing Date or accrued on the books of the Seller and remitted by the Seller to
the employee at the time of his or her vacation or holiday.
(b) Effective as of Closing, the Seller will have
terminated the employment of all hourly and salaried employees (collectively,
the "Employees"). At the Purchaser's sole option, it may offer employment to
Employees at rates, and terms and conditions, to be determined solely by the
Purchaser. The Purchaser shall NOT be liable for any severance pay or any other
obligations to any Employee of Seller. The Purchaser shall have no authority
prior to the Closing Date to hire, fire, discipline, manage or otherwise direct
or supervise employees of the Seller.
(c) Prior to Closing, the Seller must not assure any
employees of the Seller, whether or not in writing, (i) that nothing will change
with the Purchaser's purchase of the Assets, (ii) that such employees will be
hired by the Purchaser, (iii) that if any of such employees are employed by the
Purchaser the terms of their employment will remain the same and (iv) that the
Purchaser has agreed to honor the terms of any agreement covering such
Employees.
8. CONDITIONS TO PURCHASER'S OBLIGATIONS. The obligations of the
Purchaser hereunder are subject to the fulfillment, at or prior to the Closing,
of each of the following conditions, any or all of which may be waived in
writing by the Purchaser, in its sole discretion:
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of the Seller contained in this Agreement shall
be true on and as of the Closing Date with the same force and effect as though
made on and as of the Closing Date, except as affected by transactions
contemplated hereby.
8.2 PERFORMANCE OF COVENANTS. The Purchaser acknowledges that the
Seller has performed and complied with all covenants, obligations and agreements
to be performed or complied with as set forth in the Letter of Intent.
8.3 LITIGATION, ETC.
14
(a) NO CLAIMS, ETC. No claim, action, suit, proceeding,
arbitration, investigation or hearing or notice of hearing is pending or
threatened against or affecting the Seller which: (i) might result, or has
resulted, either in an action to enjoin or prevent or delay the consummation of
the transactions contemplated by this Agreement or in such an injunction or (ii)
could have a materially adverse effect on any of the Assets, except as provided
for herein.
(b) NO VIOLATIONS. No violation shall exist, or be alleged
by any governmental authority to exist, of any law, statute, ordinance or
regulation, the enforcement of which would materially adversely affect the
properties or business of the Seller.
(c) LAWS, ETC. No law, regulation or decree shall have
been proposed, adopted or promulgated, or have become effective, the enforcement
of which would materially adversely affect the ability of the Seller to
consummate the transactions contemplated by this Agreement.
8.4 APPROVAL OF BANKRUPTCY COURT. The Seller shall have obtained
from the Bankruptcy Court a final and non-appealable Sale Order providing for
the transfer of the Assets to the Purchaser pursuant to the Letter of Intent,
together with such final and non-appealable orders as may be necessary to
approve this Agreement and to authorize the Seller to perform all of its
obligations to the Purchaser hereunder. Furthermore, no stay pending appeal of
the Sale Order or other order of the Bankruptcy Court referred to above shall
have been obtained and be outstanding and no determination of any appeal shall
have been made with respect to the Sale Order or any order of the Bankruptcy
Court relating to this Agreement, that would prevent or hinder the consummation
of the transactions contemplated by this Agreement.
8.5 CERTIFICATE. As set forth in Exhibit D, the Purchaser shall
have received an accurate certificate signed by two officers of the Seller,
dated the Closing Date, satisfactory in form and substance to the Purchaser and
its counsel, certifying as to the fulfillment of the conditions specified in
Sections 8.1 through 8.3.
8.6 FACILITY AGREEMENTS. The Purchaser or its designee, ▇▇▇▇▇▇-
▇▇▇▇▇ Realty Co. LLC, shall have entered into a binding agreement with the
Partnership with respect to the Kent facility as described in Section 7.3, and
the Purchaser shall have entered into binding agreements to sublease the other
facilities as described in Section 7.4 in form and substance satisfactory to the
Purchaser.
8.7 TERMS OF EMPLOYMENT AND NON-COMPETITION AGREEMENTS. Each of
the Sahlbergs shall have entered into terms of employment and non-competition
agreements with the Purchaser in the form of Exhibit G.
8.8 INVENTORY AUDIT. The Purchaser shall have completed a closing
physical inventory and audit of the Inventory.
15
8.9 ENVIRONMENTAL REVIEW. The Purchaser shall have received and
reviewed environmental assessment data provided by the Seller. The Purchaser
acknowledges that it has received and reviewed environmental assessment data as
to the Spokane, Portland, Anchorage and Kent facilities.
9. CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of the Seller
hereunder are subject to the fulfillment, at or prior to the Closing, of each of
the following conditions:
9.1 PERFORMANCE OF COVENANTS. The Seller acknowledges that, upon
payment of the Purchase Price, the Purchaser has performed and complied with all
covenants, obligations and agreements to be performed or complied with by it
pursuant to this Agreement and the Letter of Intent.
9.2 LITIGATION, ETC. No claim, action, suit, proceeding,
arbitration, investigation or hearing or notice of hearing shall be pending or
threatened against or affecting the Purchaser which might result, or has
resulted, either in an action to enjoin or prevent or delay the consummation of
the transactions contemplated by this Agreement or in such an injunction.
9.3 CERTIFICATE. The Seller shall have received an accurate
certificate signed by the Purchaser, dated the Closing Date, satisfactory in
form and substance to the Seller and its counsel, certifying as to the
fulfillment of the conditions specified in Sections 9.1 and 9.2.
9.4 TERMS OF EMPLOYMENT AND NON-COMPETITION AGREEMENTS. The
Purchaser shall have entered into terms of employment and non-competition
agreements with the Sahlbergs in the form of Exhibit G.
9.5 FACILITY AGREEMENTS. The Purchaser or its designee,
▇▇▇▇▇▇-▇▇▇▇▇ Realty Co. LLC, shall have entered into a binding agreement with
the Partnership with respect to the Kent facility as described in Section 7.3,
and the Purchaser shall have entered into binding agreements to sublease the
other facilities as described in Section 7.4.
10. GENERAL
10.1 EXPENSES, ETC. Except as otherwise provided herein, whether
or not the transactions contemplated by this Agreement are consummated, each
party hereto shall pay its own expenses and the fees and expenses of its counsel
and accountants and other experts.
10.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations, warranties, covenants and agreements of the Seller shall
terminate effective upon Closing.
10.3 ASSIGNMENT. The Purchaser may assign its rights or a portion
of its rights under this Agreement to a wholly-owned subsidiary, provided that
no such assignment shall relieve Purchaser of its obligations hereunder.
16
10.4 WAIVERS. No action taken pursuant to this Agreement,
including any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representation, warranty, covenant or agreement contained here. The waiver by
any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a waiver of any subsequent breach.
10.5 ANNOUNCEMENTS. Each party hereto agrees that it shall not,
except as otherwise required by applicable law or regulations, make or release
any statement, announcement or publicity with respect to this Agreement or the
transactions contemplated hereby or permit any of its officers, directors or
employees to do so unless the form and content of any such statement,
announcement or publicity and the time of release thereof shall have been
approved by the Purchaser.
10.6 BINDING EFFECT; BENEFITS. This Agreement shall inure to the
benefit of the parties hereto and shall be binding upon the parties hereto and
their respective heirs, personal representatives, successors and assigns.
10.7 NOTICES. All notices, requests, demands and other
communications which are required to be or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
in person or transmitted by telex or on receipt after dispatch by certified or
registered first class mail, postage prepaid, return receipt requested, to the
party to whom the same is so given or made.
(a) if to the Purchaser: Western Power & Equipment Corp.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇, Pepper & Shefelman
▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Seller: ▇▇▇▇▇▇▇▇ Equipment, Inc.
▇▇▇ ▇▇. ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
17
with a copy to: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Lubersky
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to the Sahlbergs: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇. ▇.▇.
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with copies to: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇ ▇▇▇-▇▇▇▇
(d) if to the Partnership: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
R and J Partners
▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇
R and J Partners
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▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with copies to: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ L.L.P.
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party may designate by giving notice to the
other parties hereto.
10.8 FURTHER ASSURANCES. The Seller shall, from time to time at or
after the Closing, at the request of the Purchaser, and without further
consideration, execute and deliver such other instruments and take such other
actions as may be required to confer to the Purchaser and its assignees the
benefits contemplated by this Agreement.
10.9 ENTIRE AGREEMENT; AMENDMENT. This Agreement (including the
Exhibits and Schedules hereto) constitutes the entire agreement and supersedes
all prior agreements and understandings, oral and written, between the parties
hereto with respect to the subject matter hereof. This Agreement (including the
Exhibits and Schedules hereto) may not be amended, modified or terminated
(except as provided in Section 10) unless in a written instrument executed by
the party or parties sought to be bound.
10.10 HEADINGS. The section and other headings contained in this
Agreement are for reference purposes only and shall not be deemed to be a part
of this Agreement or to affect the meaning or interpretation of this Agreement.
10.11 SEVERABILITY. The invalidity of all or any part of any section
of this Agreement shall not render invalid the remainder of this Agreement or
the remainder of such section. If any provision of this Agreement is so broad
as to be unenforceable, such provision shall be interpreted to be only so broad
as is enforceable.
10.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when executed, shall be deemed to be an original
and all of which together shall be deemed to be one and the same instrument.
10.13 GENDER; SINGULAR AND PLURAL. Any reference in this Agreement
in the masculine gender shall include the feminine and neuter genders, and vice
versa, as appropriate. Any reference in this Agreement in the singular shall
mean the plural, and vice versa, as appropriate.
10.14 THIRD PARTIES. Nothing in this Agreement, whether expressed
or implied, is intended to confer any rights or remedies on any person other
than the parties to this Agreement, nor is anything in this Agreement intended
to relieve or discharge the obligation or liability of any third party, nor
shall any provision give any third party any right of subrogation or action
against any party to this Agreement.
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10.15 JURISDICTION, VENUE AND GOVERNING LAW. In the event of any
action or proceeding arising out of this Agreement or the transactions
contemplated hereby, the parties agree that exclusive jurisdiction and venue
shall lie in either the United States District Court for the Western District of
Washington at Seattle, inclusive of the United States Bankruptcy Court, or the
Superior Court of the State of Washington for King County. This Agreement shall
be construed as to both validity and performance and enforced in accordance with
and governed by the internal laws of the state of Washington.
10.16 ATTORNEYS' FEES. In the event of any action or proceeding
arising out of or in connection with this Agreement, the prevailing party will
be entitled to all costs, expenses and reasonable attorneys' fees incurred with
or without suit and on appeal.
10.17 TIME OF ESSENCE. Time is of the essence of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Asset Purchase Agreement
as of the date first above written.
SELLER: ▇▇▇▇▇▇▇▇ EQUIPMENT, INC.
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By:
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[Print Name]
Its:
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PURCHASER: WESTERN POWER & EQUIPMENT CORP.
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By:
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[Print Name]
Its:
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PARTNERSHIP: R AND J PARTNERS
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By:
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[Print Name]
Its:
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By:
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[Print Name]
Its:
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For purposes of acknowledging the Seller's agreement to enter into this
Agreement, but not for the purpose of making any individual representations or
warranties or for assuming any personal obligations or liability:
SAHLBERGS:
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▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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FOR PURPOSES OF
SECTION 7.5 ONLY: ▇▇▇▇▇▇▇▇ GROUP COMPANIES, INC.
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By:
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[Print Name]
Its:
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Schedule 1.1
EXCLUDED ASSETS
Accounts receivable
Cash on hand and on deposit at Key Bank
Prepaid expenses and deposits, including performance bonds and bid bonds,
including certificate of deposit for the State of Alaska
Warranty claims
Deferred income tax benefit
The note receivable in the approximate amount of $196,000 (principal) from the
Partnership
Key man life insurance
Seller's right to recover preferences, fraudulent conveyance and other causes of
action pursuant to Section 5 of the Bankruptcy Code and the claims against Key
Bank of Washington, N.A.
Receivables from employees for travel advances and commissions
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