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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
CMI CORPORATION
AND
REXWORKS INC.
OCTOBER 1, 1997
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TABLE OF CONTENTS
PAGE
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ARTICLE I
TRANSFER OF ASSETS
1.01 Purchase and Sale of Assets................................. 1
1.02 Excluded Assets............................................. 2
ARTICLE II
LIABILITIES
2.01 Assumed Liabilities......................................... 3
2.02 Excluded Liabilities........................................ 3
2.03 Right to Contest............................................ 3
ARTICLE III
PURCHASE PRICE
3.01 Consideration............................................... 3
3.02 Amount and Payment of Purchase Price........................ 3
3.03 Closing Date Balance Sheet.................................. 4
3.04 Allocation of Purchase Price................................ 4
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
4.01 Organization and Qualification; Subsidiaries................ 5
4.02 Authority; Vote Required.................................... 5
4.03 No Conflict; Required Filings and Consents.................. 5
4.04 Permits; Compliance......................................... 6
4.05 Absence of Certain Changes or Events........................ 6
4.06 Absence of Litigation....................................... 7
4.07 Contracts; No Default....................................... 7
4.08 Intellectual Property Rights................................ 8
4.09 Insurance................................................... 9
4.10 Brokers..................................................... 9
4.11 Title to Properties......................................... 9
4.12 Proxy Statement............................................. 9
4.13 Inventory................................................... 9
4.14 Condition of Purchased Assets............................... 9
4.15 Accounts Receivable......................................... 10
4.16 Major Customers and Suppliers............................... 10
4.17 Product Warranty............................................ 10
4.18 Legal Compliance............................................ 10
4.19 Excluded Assets............................................. 10
4.20 Assigned Contracts.......................................... 10
4.21 Product Liability........................................... 10
4.22 Employee Benefit Plans; Labor Matters....................... 10
4.23 Taxes....................................................... 11
4.24 Environmental, Health and Safety............................ 11
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
5.01 Organization and Qualification.............................. 12
5.02 Authority................................................... 12
5.03 No Conflict; Required Filings and Consents.................. 13
5.04 Brokers..................................................... 13
5.05 Financing................................................... 13
ARTICLE VI
COVENANTS
6.01 Affirmative Covenants of Seller............................. 13
6.02 Negative Covenants of Seller................................ 14
6.03 Confidentiality Agreement................................... 14
6.04 Acquisition Proposals....................................... 14
6.05 Merger Agreement............................................ 15
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 Proxy Statement............................................. 15
7.02 Meeting of Stockholders..................................... 16
7.03 Appropriate Action; Consents; Filings....................... 16
7.04 Update Disclosure........................................... 17
ARTICLE VIII
CLOSING
8.01 Closing..................................................... 17
ARTICLE IX
CLOSING CONDITIONS
9.01 Conditions to Obligations of Each Party Under This
Agreement................................................... 17
9.02 Additional Conditions to Obligations of Purchaser........... 18
9.03 Additional Conditions to Obligations to Seller.............. 20
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.01 Termination................................................. 21
10.02 Effect of Termination....................................... 22
10.03 Expenses.................................................... 22
ARTICLE XI
INDEMNIFICATION
11.01 Indemnification by Seller................................... 23
11.02 Indemnification by Purchaser................................ 23
11.03 Arbitration Procedures...................................... 23
11.04 Matters Involving Third Parties............................. 25
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ARTICLE XII
GENERAL PROVISIONS
12.01 Non-Survival of Representations and Warranties.............. 25
12.02 Notices..................................................... 26
12.03 Amendment................................................... 26
12.04 Waiver...................................................... 27
12.05 Headings.................................................... 27
12.06 Severability................................................ 27
12.07 Entire Agreement............................................ 27
12.08 Assignment.................................................. 27
12.09 Parties in Interest......................................... 27
12.10 Governing Law............................................... 27
12.11 Counterparts................................................ 27
12.12 Press Releases and Public Announcements..................... 27
12.13 Construction................................................ 28
12.14 Employees................................................... 28
12.15 WARN........................................................ 28
12.16 Access...................................................... 28
12.17 Bulk Sales.................................................. 28
12.18 Litigation Support.......................................... 28
12.19 Use of Marketing Materials.................................. 28
12.20 Further Assurances.......................................... 28
EXHIBITS
Exhibit A Balance Sheet of the Divisions as of June 28, 1997
Exhibit B General ▇▇▇▇ of Sale
Exhibit C Assignment and Assumption Agreement
INDEX OF SCHEDULES
SCHEDULE DESCRIPTION
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1.01(a) Personal Property
1.01(b) Assigned Contracts
1.01(c) Vehicles
1.01(d) Intangible Assets
1.01(e) Licenses and Permits
1.01(i) Prepaid Items
1.01(k) Additional Personal Property
1.02(b) Excluded Real Property
1.02(g) Other Excluded Assets
2.01(e) Other Assumed Liabilities
4.00(a) Changes or Events Which Shall Not Constitute a Seller
Material Adverse Effect
4.00(b) Persons With Knowledge
4.01(a) Organization and Qualification
4.01(b) Subsidiaries
4.03(a) Consents, Approvals, Authorizations or Permits
4.04 Permits; Compliance
4.05 Absence of Certain Changes or Events
4.06(a) Litigation
4.06(b) Orders, Decrees, etc.
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SCHEDULE DESCRIPTION
-------- -----------
4.07 Contracts
4.08 Intellectual Property Rights
4.09 Insurance
4.13 Inventory
4.14 Condition of the Purchased Assets
4.15 Accounts Receivable
4.16 Customers and Suppliers
4.17 Product Warranty
4.19 Excluded Assets
4.20 Assigned Contracts
4.21 Product Liability
4.22 Employee Benefit Plans; Labor Matters
4.23 Taxes
9.02(c) Third Party Consents
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT dated as of October 1, 1997 (the
"Agreement"), is made and entered into between CMI CORPORATION, an Oklahoma
corporation ("Purchaser"), and REXWORKS INC., a Delaware corporation ("Seller").
RECITALS
A. Seller operates, among other things, two divisions which are engaged in
the business of manufacturing and selling landfill and embankment compactors and
material reduction grinders (the "Divisions").
B. Seller desires to sell to Purchaser and Purchaser desires to buy from
Seller substantially all assets and rights of Seller relating to the Divisions
on the terms and conditions set forth in this Agreement (the "Asset Sale").
AGREEMENTS
In consideration of the premises and the mutual agreements herein
contained, the parties agree as follows:
ARTICLE I
TRANSFER OF ASSETS
1.01 Purchase and Sale of Assets. Subject to the terms and conditions of
this Agreement, Seller agrees to sell and deliver to Purchaser and Purchaser
agrees to purchase from Seller as of the Closing Date all of Seller's right and
title to and interest in all of the following assets, properties and rights (the
"Purchased Assets") relating to the Divisions (but expressly excluding therefrom
the Excluded Assets):
(a) Personal Property. All machinery, equipment, leasehold
improvements, supplies, tools, fixtures, spare parts, furniture,
furnishings and other personal property listed on Schedule 1.01(a)
("Personal Property").
(b) Contracts and Leases. All rights of Seller under (including,
without limitation, all Seller's right to receive goods and services and to
assert claims and to take other action with respect to breaches, defaults
and other violations pursuant to) the contracts and leases listed on
Schedule 1.01(b) (the "Assigned Contracts").
(c) Vehicles. All automobiles, trucks, trailers, automotive equipment
and other vehicles owned or leased by Seller and listed on Schedule 1.01(c)
(the "Vehicles").
(d) Intangible Assets. All of Seller's and its Subsidiaries'
intangible assets solely relating to the Divisions or used exclusively in
the operation of the Divisions (collectively, the "Intangible Assets")
including, without limitation, all of the following Intangible Assets to
the extent that they relate solely to the Divisions or are used exclusively
in the operation of the Divisions: (i) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications and patent disclosures,
together with all reissuances, continuations, continuations-in-part,
revisions, extensions and reexaminations thereof, (ii) all trademarks,
service marks, trade dress, logos, tradenames and corporate names, together
with all translations, adaptations, derivations and combinations thereof
and including all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith, (iii) all copyrightable
works, all copyrights and all applications, registrations and renewals in
connection therewith, (iv) all mask works and all applications,
registrations and renewals in connection therewith, (v) all trade secrets
and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information
and business and marketing plans and proposals), (vi) all
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assignable computer software (including data and related documentation),
(vii) all data bases, compilations and directories (in whatever form or
medium), (viii) all copies and intangible embodiments thereof (in whatever
form or medium), and (ix) all Intangible Assets listed on Schedule 1.01(d).
(e) Licenses and Permits. All of Seller's rights in all government
licenses, approvals, permits and authorizations (and all applications,
registrations and renewals for the foregoing) listed on Schedule 1.01(e)
("Licenses and Permits").
(f) Inventory. All of Seller's inventories, spare parts and supplies
solely relating to the Divisions and all such items that Seller has ordered
but not physically received by the Closing Date ("Inventory").
(g) Records and Documents. All records, computer software and
documents, books, customer and member lists, sales leads and all other
sales and marketing information, credit information and correspondence,
plans and specifications, drawings and all other records and documents used
exclusively by Seller in connection with the operation of the Divisions
("Documents").
(h) Accounts and Notes Receivable. All of Seller's accounts and notes
receivable relating solely to the Divisions ("Accounts Receivable").
(i) Prepaids. All prepaid rents, utilities, deposits and other prepaid
items listed on Schedule 1.01(i).
(j) Certain Claims. All rights to causes of action, suits,
proceedings, judgments, claims and demands of any nature, whenever maturing
or asserted, solely relating to or arising directly out of (a) the
Purchased Assets, (b) the Assumed Liabilities, or (c) the operations of the
Divisions (or either of them).
(k) Additional Personal Property. At Purchaser's option, which may be
exercised by providing written notice to Seller not less than 10 days prior
to the Closing Date, Seller will replace each of the assets listed on
Schedule 1.01(k) with comparable used equipment of equal or better quality
and include such replacement equipment in the Purchased Assets without an
increase in the Net Value (as defined in section 3.03). The book value of
the equipment listed on Schedule 1.01(k) shall be included in the
calculation of the Net Value regardless of whether Purchaser exercises its
option with respect to replacement equipment pursuant to this section
1.01(k).
To the extent that any Purchased Asset is not assignable without the
consent of another person or entity, and to the extent such consent is not
obtained prior to Closing, this Agreement shall, subject to the rights of
any such person or entity, constitute an assignment of Seller's interest in
such Purchased Asset. Seller agrees, at its expense, to use its reasonable
best efforts to obtain the consent of such other person or entity to the
assignment of any such Purchased Asset to the Purchaser.
1.02. Excluded Assets. There shall be excluded from sale by Seller under
this Agreement all assets, properties and rights of Seller other than the
Purchased Assets specifically identified in section 1.01 above (the "Excluded
Assets"). The Excluded Assets shall include, without limitation, the following:
(a) Mixer Assets. All of Seller's right and title to and interest in
all assets, properties and rights relating to the Seller's division which
is engaged in the business of manufacturing and selling concrete mixers.
(b) Real Property. Seller's interest in the real estate listed on
Schedule 1.02(b).
(c) Cash. All cash (currency and coin), negotiable instruments,
securities, bank deposits and similar cash equivalents on hand at the
Closing Date ("Cash").
(d) Certain Contracts. All rights of Seller under any contracts,
agreements or commitments other than the Assigned Contracts specifically
identified on Schedule 1.01(b).
(e) Certain Claims. All rights to causes of action, suits,
proceedings, judgments, claims and demands of any nature, whenever maturing
or asserted, relating to or arising directly out of the Excluded Assets or
the Excluded Liabilities.
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(f) Corporate Records. All corporate records, including but not
limited to, stockholder records, stock records, stock transfer journals,
board of directors and stockholder minutes, payroll and financial
information necessary for the preparation of Seller's tax returns and
satisfaction of other reporting requirements.
(g) Scheduled Assets. All assets listed on Schedule 1.02(g).
ARTICLE II
LIABILITIES
2.01 Assumed Liabilities. On the terms and subject to the conditions of
this Agreement, Purchaser shall, by written instrument, assume as of the Closing
Date and thereafter shall be obligated to pay and fully satisfy the liabilities
and obligations specifically identified below, and only such specifically
identified liabilities and obligations (collectively, the "Assumed
Liabilities"):
(a) The liabilities and obligations of Seller arising under the
Assigned Contracts.
(b) The liabilities of Seller for trade accounts payable solely
relating to the Divisions.
(c) Any and all liabilities and obligations of Seller arising from any
claims (whether known or unknown, asserted or unasserted, accrued or
unaccrued) with respect to any injury to individuals or property as a
result of the ownership, possession or use of any landfill and embankment
compactors or material reduction grinders manufactured by the Divisions
("Product Liabilities").
(d) Any and all liabilities and obligations of Seller arising from any
express or implied warranties (whether known or unknown, asserted or
unasserted, accrued or unaccrued) with respect to landfill and embankment
compactors or material reduction grinders manufactured by the Divisions
("Warranty Liabilities").
(e) The liabilities described on Schedule 2.01(e).
2.02 Excluded Liabilities. Notwithstanding anything to the contrary
contained in this Agreement, Purchaser will have no responsibility and will not
assume or be liable for any debts, liabilities or obligations of Seller or any
of its affiliates or any debts, liabilities or obligations of any kind or nature
relating to the respective businesses of Seller and its Subsidiaries, whenever
arising, and whether primary or secondary, direct or indirect, absolute or
contingent, contractual, tortuous or otherwise, other than the Assumed
Liabilities identified in section 2.01 above (all such liabilities other than
the Assumed Liabilities are collectively referred to as the "Excluded
Liabilities").
2.03 Right to Contest. The assumption and agreement of Purchaser to pay the
Assumed Liabilities when due will not prohibit Purchaser from contesting with
the obligee, in good faith and at Purchaser's expense, the amount, validity or
enforceability of any of the Assumed Liabilities.
ARTICLE III
PURCHASE PRICE
3.01 Consideration. In consideration of the sale, assignment, transfer and
conveyance of the Purchased Assets and the other undertakings of Seller in this
Agreement, and subject to the terms and conditions of this Agreement, Purchaser
shall (a) pay the Purchase Price as provided in this Article III, and (b) assume
the Assumed Liabilities as of the Closing Date as provided in section 2.01
above.
3.02 Amount and Payment of Purchase Price. The purchase price for the
Purchased Assets (the "Purchase Price") shall equal the sum of (a) the Net Value
(as defined in section 3.03 below), and (b) $3,167,000. At Closing, Purchaser
shall pay the Purchase Price to Seller by wire transfer of immediately available
funds.
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3.03 Closing Date Balance Sheet.
(a) Prior to Closing, the parties will cooperate in preparing a
balance sheet dated as of the Closing Date (the "Closing Date Balance
Sheet") reflecting the amount by which the value of the Purchased Assets as
of the Closing Date exceeds the Assumed Liabilities as of the Closing Date
(the "Net Value"). Purchaser and Seller agree that the Closing Date Balance
Sheet will be prepared in a manner consistent with the balance sheet as of
June 28, 1997 attached hereto as Exhibit A and will reflect an update of
the Preliminary Balance Sheet (as defined in Section 3.03(b) below).
Purchaser and Seller will endeavor in good faith to resolve any disputes in
the determination of the Net Value and the preparation of the Preliminary
Balance Sheet and the Closing Date Balance Sheet.
(b) Seller shall take a physical inventory (the "Closing Inventory")
of the Divisions as of the last day of the most recent month that is not
more than 30 days prior to the Closing Date (or such other date as Seller
and Purchaser shall mutually agree) and will prepare a preliminary balance
sheet as of the date of the Closing Inventory (the "Preliminary Balance
Sheet") reflecting the value of the Purchased Assets and the Assumed
Liabilities as of the date of the Preliminary Balance Sheet. Purchaser and
its representatives will have the right to participate in the taking of the
Closing Inventory. Not less than five days prior to Closing, Seller will
deliver a copy of the Preliminary Balance Sheet to Purchaser for its
review. Seller and Purchaser will cooperate to determine a method
reasonably acceptable to each party to make adjustments to and update the
Preliminary Balance Sheet for purposes of preparing the Closing Date
Balance Sheet.
3.04 Allocation of Purchase Price. The Purchase Price shall be assigned and
allocated to the Purchased Assets in the manner mutually agreed upon by the
parties. Purchaser and Seller agree to reflect such allocations in all reports
to governmental authorities, including, without limitation, with respect to all
taxes.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
The term "Seller Material Adverse Effect" as used in this Agreement shall
mean any change or effect that, individually or when taken together with all
other changes or effects, is materially adverse to the condition (financial or
otherwise), results of operations, businesses, properties, assets, or
liabilities of Seller relating to the Divisions; provided, however, that the
occurrence of any or all of the changes or events described on Schedule 4.00(a)
shall not, individually or in the aggregate, constitute a "Seller Material
Adverse Effect."
The term "Person" as used in this Agreement shall mean an individual,
corporation, partnership, association, trust, limited liability company,
unincorporated organization, other entity or group (as defined in section 13(d)
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the "Exchange Act")).
The term "Affiliate" as used in this Agreement shall mean, with respect to
any Person, a Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
first mentioned Person. The term "control" (including the terms "controlled by"
and "under common control with") means the possession, directly or indirectly or
as trustee or executor, of the power to direct or cause the direction of the
management or policies of a Person whether through the ownership of stock or as
trustee or executor, by contract or credit arrangement or otherwise.
The term "Subsidiary" (or its plural) as used in this Agreement with
respect to Seller, Purchaser or any other Person shall mean any corporation,
partnership, joint venture or other legal entity of which Seller, Purchaser or
such other Person, as the case may be (either alone or through or together with
any other Subsidiary), owns, directly or indirectly, greater than 50% of the
stock or other equity interests the holders of which are generally entitled to
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
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With respect to any representation, warranty or statement of Seller in this
Agreement that is qualified by or to Seller's knowledge, such knowledge shall be
deemed to exist only if, at the time as of which such representation, warranty
or statement was made, any of the individuals listed on Schedule 4.00(b) had
actual knowledge, after reasonable investigation, of the matter to which such
qualification applies.
Except as set forth in the disclosure schedules delivered by Seller to
Purchaser prior to the execution of this Agreement, Seller represents and
warrants to Purchaser that the statements contained in this Article IV are true
and correct as of the date of this Agreement. The disclosure of any matter in
the disclosure schedules shall not necessarily be deemed an indication that such
matter is material or is required to be disclosed.
4.01 Organization and Qualification; Subsidiaries. Except as set forth on
Schedule 4.01(a), Seller is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as it is now being conducted and is duly qualified and in
active status in each jurisdiction in which the nature of the business conducted
by it or the ownership or leasing of its properties makes such qualification
necessary, except such jurisdictions if any, where the failure to be so
qualified would not have a Seller Material Adverse Effect. A true and complete
list of all Seller's directly or indirectly owned Subsidiaries together with the
jurisdiction of incorporation or organization of each Subsidiary and the
percentage of each Subsidiary's outstanding capital stock or other equity
interest owned by Seller or another Subsidiary of Seller, is set forth on
Schedule 4.01(b).
4.02 Authority; Vote Required.
(a) Seller has the requisite corporate power and authority to execute
and deliver this Agreement, to perform its obligations under this Agreement
and to consummate the transactions contemplated by this Agreement, subject
to required approval of the holders of the common stock, par value $.12 per
share, of Seller ("Seller Common Stock"). The execution and delivery of
this Agreement by Seller and the consummation by Seller of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action, including such corporate action as may be required by
section 271 of the Delaware General Corporation Law (the "Delaware Law"),
and no other corporate proceedings on the part of Seller are necessary to
authorize this Agreement or to consummate the transactions contemplated by
this Agreement (other than with respect to the approval of this Agreement
by the holders of Seller Common Stock in accordance with the Delaware Law
and Seller's Certificate of Incorporation and By-Laws). This Agreement has
been duly executed and delivered by Seller and constitutes the valid and
binding obligation of Seller, enforceable against Seller in accordance with
its terms, except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, receivership, moratorium
and other similar laws relating to or affecting the rights and remedies of
creditors generally and by general principles of equity including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance, injunctive
relief or other equitable remedies, regardless of whether enforceability is
considered in a proceeding in equity or at law.
(b) The affirmative vote of the holders of at least a majority of the
outstanding shares of Seller Common Stock is the only vote of the holders
of any class or series of capital stock of Seller necessary to approve the
Asset Sale.
4.03 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Seller do not, and
the performance of this Agreement by Seller will not: (i) violate the
Certificate of Incorporation or By-Laws of Seller or any of its
Subsidiaries; (ii) subject to (x) obtaining the requisite approval of this
Agreement by the holders of at least a majority of the outstanding shares
of Seller Common Stock in accordance with the Delaware Law and Seller's
Certificate of Incorporation and By-Laws, (y) obtaining the consents,
approvals, authorizations and permits of, and making filings with or
notifications to, any governmental or regulatory authority, domestic or
foreign ("Governmental Entities"), pursuant to the applicable requirements,
if any, of the Exchange Act, the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and the rules
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and regulations thereunder (the "HSR Act"), the applicable provisions of
the Delaware Law, and the requirements of the National Association of
Securities Dealers, Inc. ("NASD") or the NASDAQ National Market System, and
(z) giving the notices and obtaining the consents, approvals,
authorizations or permits described on Schedule 4.03(a), violate any
constitution, statute, regulation, rule, injunction, decree, ruling,
judgment, order or other restriction of any Governmental Entity or court to
which Seller or any of its Subsidiaries is subject or by which any of their
respective properties is bound, other than a potential violation under any
federal or state antitrust or similar laws, rules or regulations; or (iii),
except as set forth on Schedule 4.03(a), result in any material breach of
or constitute a material default (or an event that with notice or lapse of
time or both would become a material default) under, or give to any Person
any rights of termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of the properties or
assets of Seller or any of its Subsidiaries, or require any notice pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument, arrangement or obligation
to which Seller or any of its Subsidiaries is a party or by which Seller or
any of its Subsidiaries or any of their respective properties is bound.
(b) The execution and delivery of this Agreement by Seller do not, and
the performance of this Agreement by Seller shall not, require any consent,
approval, authorization or permit of, or filing with or notification to,
any Governmental Entity, except for applicable requirements, if any, of (i)
the Exchange Act, the HSR Act, and the requirements of the NASD and the
NASDAQ National Market System, and (ii) the consents, approvals,
authorizations or permits described on Schedule 4.03(a).
4.04 Permits; Compliance. Except as set forth on Schedule 4.04, Seller is
in possession of all franchises, authorizations, licenses, permits, easements,
variances, exemptions, consents, certificates, approvals and orders necessary
for Seller or any of its Subsidiaries to own, lease and operate its properties
or to carry on the business of the Divisions as it is now being conducted (the
"Seller Permits"), except for any Seller Permits the absence of which would not
have a Seller Material Adverse Effect. No suspension, revocation or cancellation
of any of the Seller Permits is pending or, to the knowledge of Seller, is
threatened. Neither Seller nor any of its Subsidiaries is operating in material
default under or material violation of (i) any constitution, statute,
regulation, rule, injunction, decree, ruling, judgment, order or other
restriction of any Governmental Entity or court to which Seller or any of its
Subsidiaries is subject or by which any of their respective properties is bound
or (ii) any of the Seller Permits.
4.05 Absence of Certain Changes or Events. Except as set forth on
Schedule 4.05 or as contemplated by this Agreement, since December 31, 1996:
(a) Seller conducted the business of the Divisions in the ordinary
course and consistent with Seller's past practice;
(b) there has not been any Seller Material Adverse Effect;
(c) there has not been any change in the accounting methods or
practices followed by Seller or any Subsidiary, except as required by
generally accepted accounting principles ("GAAP");
(d) there has not been any sale, lease, transfer, assignment,
abandonment or other disposition of (including, without limitation, any
grant of an option or similar right to purchase) any asset which would be a
Purchased Asset other than for a fair consideration in the ordinary course
of business;
(e) Seller has not entered into any material transaction with any of
its officers, directors or employees;
(f) No party (including any of Seller and its Subsidiaries) has
accelerated, terminated, modified or canceled (prior to the expiration of
its term) any material agreement, contract, lease or license (or series of
related agreements, contracts, leases and licenses) relating to the
business of the Divisions and to which any of Seller and its Subsidiaries
is a party or by which any of its assets is bound;
(g) None of Seller and its Subsidiaries has delayed or postponed the
payment of accounts payable or other liabilities of any kind or nature
relating to the Divisions or the Purchased Assets outside the ordinary
course of business;
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(h) None of Seller and its Subsidiaries has canceled, compromised,
waived, or released any right or claim (or series of related rights and
claims) relating to the Divisions or the Purchased Assets outside the
ordinary course of business;
(i) None of Seller and its Subsidiaries has granted any license or
sublicense of any rights under or with respect to any Intangible Assets;
(j) None of Seller and its Subsidiaries has experienced any damage,
destruction or loss (whether or not covered by insurance) to any material
assets of the Divisions, ordinary wear and tear excepted;
(k) None of Seller and its Subsidiaries has granted any increase in
the base compensation of, or made any other change in the employment terms
for, any employees of the Divisions outside the ordinary course of
business;
(l) None of Seller and its Subsidiaries has adopted, amended, modified
or terminated any bonus, profit-sharing, incentive, severance or other
plan, contract or commitment for the benefit of any of the employees of the
Divisions (or taken any such action with respect to any other employee
benefit plan);
(m) None of Seller and its Subsidiaries has sold or otherwise
transferred any Intangible Asset; and
(n) neither Seller nor any Subsidiary has entered into any commitment
or other agreement to do any of the foregoing.
4.06 Absence of Litigation.
(a) Schedule 4.06(a) lists all claims, actions, suits, litigation, or
arbitrations or, to the knowledge of Seller, investigations or proceedings
relating to the Divisions (or either of them) or any of the Purchased
Assets, at law or in equity, which are pending or, to the knowledge of
Seller, threatened, and which involve in excess of $25,000. There is no
action pending seeking to enjoin or restrain any of the transactions
contemplated by this Agreement.
(b) Except as set forth on Schedule 4.06(b), neither Seller nor any of
its Subsidiaries is subject to any continuing order of, consent decree,
settlement agreement or other similar agreement (oral or written) with or,
to the knowledge of Seller, continuing investigation by, any Governmental
Entity with respect to the business of the Divisions.
4.07 Contracts; No Default.
(a) Schedule 4.07 lists:
(i) each contract or agreement to which Seller or any of its
Subsidiaries is a party concerning a partnership, joint venture or
similar arrangement with another Person or materially limiting the right
of Seller or any of its Subsidiaries prior to the Closing Date, or
Purchaser or any of its Subsidiaries at or after the Closing Date, to
engage in, or to compete with any Person in, any business of the
Divisions including each contract or agreement containing exclusivity
provisions restricting the geographical area in which, or the method by
which, any business may be conducted by Seller or any of its
Subsidiaries prior to the Closing Date, or by the Purchaser or any of
its Subsidiaries after the Closing Date;
(ii) each distributorship or other dealer or distribution agreement
which Seller or any of its Subsidiaries is a party relating to the
Divisions or any of the products manufactured or sold by either of the
Divisions;
(iii) each contract relating to the Divisions or the Purchased
Assets that would be required to be filed pursuant to Item 601(10) of
Regulation S-K under the Securities Act if Seller were filing a
Registration Statement on Form S-1 on the date of this Agreement.
(b) None of the distributors or former distributors identified in
Schedule 4.07 paid to Seller any fee or other consideration of any kind for
the right to become a distributor of any products manufactured by Seller.
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4.08 Intellectual Property Rights.
(a) To the knowledge of Seller, (i) Seller owns or has the right to
use pursuant to license, sublicense or other agreement all Intangible
Assets, without any conflict or alleged conflict with the rights of any
other Person, and (ii) Seller has taken all necessary action to maintain
and protect each Intangible Asset. Each Intangible Asset owned or used by
Seller immediately prior to the Closing hereunder will be owned or
available for use by Purchaser on substantially similar terms and
conditions immediately subsequent to the Closing hereunder.
(b) To the knowledge of Seller, with respect to the operation of the
Divisions, none of Seller and its Subsidiaries has infringed upon or
misappropriated any intellectual property rights of third parties, and none
of Seller and the directors and officers (and employees with responsibility
for intellectual property matters) of Seller and its Subsidiaries has
received any charge, complaint, claim, demand or notice alleging any such
infringement or misappropriation (including any claim that any of Seller
and its Subsidiaries must license or refrain from using any intellectual
property rights of any third party). To the knowledge of Seller, no third
party has infringed upon or misappropriated in any material respect any
intellectual property rights included in the Intangible Assets.
(c) Schedule 4.08(c) identifies each patent or registration which has
been issued to Seller with respect to any of the Intangible Assets,
identifies each pending patent application or application for registration
which Seller has made with respect to any of the Intangible Assets,
identifies each copyright, trade name, service name, unregistered trademark
and unregistered service ▇▇▇▇ used by Seller in connection with the
operation of the Divisions and the manufacture, marketing and distribution
of the products manufactured by the Divisions and identifies each license,
agreement or other permission which Seller has granted to any third party
with respect to any of its Intangible Assets (together with any
exceptions). Seller has made available to Purchaser correct and complete
copies of all such patents, registrations, applications, licenses,
agreements and permissions (as amended to date) and all other written
documentation evidencing ownership and prosecution (if applicable) of each
such item. With respect to each Intangible Asset required to be identified
in Schedule 4.08(c), except as set forth on Schedule 4.08(c):
(i) Seller possesses all right, title and interest in and to the
Intangible Asset, free and clear of any security interest, lien,
license, or other encumbrance;
(ii) the Intangible Asset is not subject to any outstanding
injunction, judgment, order, decree or ruling;
(iii) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand is pending or, to the knowledge of Seller, is
threatened which challenges the legality, validity, enforceability, use
or ownership of the Intangible Asset; and
(iv) none of Seller and its Subsidiaries has ever agreed to
indemnify any Person for or against any infringement or misappropriation
with respect to the Intangible Asset.
(d) Schedule 4.08(d) identifies each Intangible Asset that any third
party owns and that Seller and its Subsidiaries use in the operation of the
Divisions pursuant to license, sublicense, agreement or permission. Seller
has made available to Purchaser correct and complete copies of all such
licenses, sublicenses, agreements and permissions (as amended to date).
With respect to each Intangible Asset required to be identified in Schedule
4.08(d), except as set forth on Schedule 4.08(d):
(i) the license, sublicense, agreement or permission covering the
Intangible Asset is legally valid, binding, enforceable and in full
force and effect;
(ii) the license, sublicense, agreement or permission will continue
on substantially similar terms following the consummation of the
transaction contemplated hereby;
(iii) Seller is not in breach or default of the license,
sublicense, agreement or permission and has not repudiated any
provisions thereof;
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(iv) to Seller's knowledge, no other party to the license,
sublicense, agreement or permission is in breach or default or has
repudiated any provision thereof and no event has occurred which with
notice or lapse of time would constitute a breach or default or permit
termination, modification or acceleration thereunder;
(v) with respect to each sublicense, the representations and
warranties set forth in subsections (i) through (iv) above are true and
correct with respect to the underlying license;
(vi) the underlying Intangible Asset is not subject to any
outstanding injunction, judgment, order, decree, ruling or charge;
(vii) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand is pending or, to the knowledge of Seller, is
threatened which challenges the legality, validity or enforceability of
the underlying Intangible Asset; and
(viii) none of Seller and its Subsidiaries has granted any
sublicense or similar right with respect to the license, sublicense,
agreement or permission.
4.09 Insurance. All policies and binders of insurance for professional
liability, directors and officers, property and casualty, fire, liability,
worker's compensation and other customary matters held by or on behalf of Seller
or its Subsidiaries ("Insurance Policies") are identified on Schedule 4.09 and
have been made available to Purchaser. The Insurance Policies are in full force
and effect. To the knowledge of Seller, neither Seller nor any of its
Subsidiaries has failed to give any notice of any claim under any Insurance
Policy in due and timely fashion, nor to the knowledge of Seller, has any
coverage for claims been denied, which failure or denial has had or would have a
Seller Material Adverse Effect.
4.10 Brokers. No broker, finder or investment banker other than ABN AMRO
Chicago Corporation is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon any arrangements made by or on behalf of Seller.
4.11 Title to Properties. Seller has or will have at Closing good and
marketable title to, or a valid leasehold or contractual interest in, all
Purchased Assets, free and clear of all mortgages, liens, security interests,
rights of first refusal, easements or other similar encumbrances ("Liens"),
except Liens (a) for taxes not yet due and payable, or (b) which relate to any
of the Assumed Liabilities.
4.12 Proxy Statement. The definitive Proxy Statement and related materials
will comply with the Exchange Act in all material respects. The definitive proxy
materials will not contain an untrue statement of material fact or omit a
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they will be made, not misleading; provided,
however, that Seller makes no representation or warranty with respect to any
information that the Purchaser supplies to Seller in writing for use in
connection with such proxy materials.
4.13 Inventory. The Inventory consists of raw materials and supplies,
manufactured and purchased parts, goods in process and finished goods, all of
which are merchantable and fit for the purpose for which they were procured or
manufactured, subject only to the reserve for inventory writedown set forth on
the balance sheet attached hereto as Exhibit A (as adjusted for the passage of
time through the Closing Date in accordance with the past custom and practice of
the Divisions). Except as described on Schedule 4.13, no Inventory has been
consigned to others. The quantity of Inventory is sufficient and adequate for,
but is not materially in excess of the level appropriate to, the conduct of the
business of the Divisions as it previously has been conducted. Seller has not
made any purchase commitments in excess of normal, ordinary and usual
requirements.
4.14 Condition of Purchased Assets. No maintenance outside the ordinary
course of business is needed with respect to the Purchased Assets. None of the
Purchased Assets or other assets owned, leased, occupied or operated by Seller
in connection with the business of the Divisions, or the ownership, leasing or
operation thereof, is in violation of any law, ordinance, code, rule or
regulation. Except as set forth on Schedule 4.14, the Purchased Assets are in
all respects in good condition and working order (reasonable wear and tear
excepted) and are adequate, in quality and quantity, for the operation of the
business of the Divisions.
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4.15 Accounts Receivable. All Accounts Receivable of the Seller and those
existing as of the Closing Date represent valid claims for bona fide,
arms-length sales of goods and services actually made by Seller in the ordinary
course of its business. All of the Accounts Receivable are valid receivables
subject to no setoffs or counterclaims, and are current (within 180 days) and
collectible (or have been collected) in the ordinary course of business using
normal collection practices at the aggregate recorded amounts thereof, net of an
allowance for doubtful account in the amount of $83,800 as of August 23, 1997.
Schedule 4.15 sets forth an aging schedule of the Accounts Receivable as of
August 23, 1997, and such schedule is correct and complete in all material
respects.
4.16 Major Customers and Suppliers. Schedule 4.16 sets forth (a) a list of
the ten largest customers of the Divisions for each of the fiscal years ended
December 31, 1995 and December 31, 1996 (determined on the basis of the total
dollar amount of net revenues) showing the dollar amount of net revenues from
each such customer during each such year, (b) a list of the ten largest
suppliers of the Divisions in terms of dollar volume of purchases during such
fiscal years, and (c) a list as of a recent date of all purchase orders for
finished goods accepted by the Company with respect to products manufactured by
either of the Divisions.
4.17 Product Warranty. Schedule 4.17 sets forth a general description of
all warranty, guaranty and indemnity provisions provided by Seller with respect
to the business of the Divisions. There are no claims pending or, to Seller's
knowledge, threatened against Seller or any of its Subsidiaries for warranty
obligations relating to the business of the Divisions, except claims which in
the aggregate involve an amount that is consistent with Seller's past practice.
4.18 Legal Compliance. Each of the Divisions has complied in all material
respects with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings and charges thereunder of
federal, state, local and foreign governments (and all agencies thereof)), and
no material action, suit, proceeding, hearing, investigation, charge, complaint,
claim, demand or notice has been filed or commenced against Seller or, to the
knowledge of Seller, threatened against Seller alleging any failure so to
comply.
4.19 Excluded Assets. Schedule 4.19 lists all material machinery, equipment
and intangible assets not included in the Purchased Assets that are used
primarily in the operation of the Divisions and the manufacture, marketing and
distribution of landfill and embankment compactors and material reduction
grinders.
4.20 Assigned Contracts. With respect to each Assigned Contract, except as
set forth on Schedule 4.20:
(a) the contract or lease is legal, valid, binding, enforceable and in
full force and effect;
(b) the benefits and burdens of such contract or lease will continue
on substantially similar terms following consummation of the transactions
contemplated hereby;
(c) Seller is not in breach or default under the contract or lease and
has not repudiated any provision of the contract or lease; and
(d) to Seller's knowledge, no other party is in breach or default
under the contract or lease, no other party has repudiated any provision of
the contract or lease, and no event has occurred which, with notice or
lapse of time, would constitute a breach or default or permit termination,
modification or acceleration under the contract or lease.
4.21 Product Liability. To the knowledge of Seller, except as set forth on
Schedule 4.21, there is no present (and Seller has no knowledge of any facts
which could reasonably be expected to result in any future) action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
Seller or either of the Divisions giving rise to any liability arising out of
any injury to individuals or property as a result of the ownership, possession
or use of any product manufactured, sold, leased or delivered by either of the
Divisions.
4.22 Employee Benefit Plans; Labor Matters.
(a) Schedule 4.22(a) lists or describes any pension, retirement,
savings, disability, medical, dental, health, life (including any
individual life insurance policy as to which Seller is the owner,
beneficiary or
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both), death benefit, group insurance, profit sharing, deferred
compensation, stock option, bonus incentive, vacation pay, severance pay,
"cafeteria" or "flexible benefit" plan under section 125 of the Internal
Revenue Code of 1986 as amended (the "Code"), or other employee benefit
plan, trust, arrangement, contract, agreement, policy or commitment, under
which employees of Seller or its Subsidiaries are entitled to participate
by reason of their employment with Seller or its Subsidiaries, (i) to which
Seller or a Subsidiary is a party or a sponsor or a fiduciary thereof or
(ii) with respect to which Seller or a Subsidiary has made payments,
contributions or commitments, or has any liability (collectively, the
"Employee Benefit Plans").
(b) The Employee Benefit Plans have been operated and administered by
Seller in compliance in all material respects with all applicable laws
relating to employment or labor matters, including without limitation, the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and
the Code and all contributions required under such plans have been made as
required.
(c) Each Employee Benefit Plan that is intended to be tax qualified
under section 401(a) of the Code has received, or Seller has applied for or
will in a timely manner apply for, a favorable determination letter from
the Internal Revenue Service (the "IRS") stating that the Plan meets the
requirements of the Code and that any trust or trusts associated with the
plan are tax exempt under section 501(a) of the Code.
(d) Neither Seller nor any of its Subsidiaries maintains, and neither
Seller nor any of its Subsidiaries has maintained or contributed to, any
defined benefit plan covering employees of Seller or its Subsidiaries
within the meaning of section 3(35) of ERISA or any multiemployer plan.
(e) Schedule 4.22(e) sets forth a list of all written employment
agreements, employment contracts or understandings relating to employment
(other than relating to "at-will" employment) to which Seller or any of its
Subsidiaries is a party.
4.23 Taxes. Seller and its Subsidiaries have filed or caused to be filed
with the appropriate Governmental Entity, all federal, state, municipal, and
local income, franchise, excise, sales, real and personal property, and other
tax returns and reports that are required to be filed, and neither Seller nor
any of its Subsidiaries is delinquent in the payment of any material taxes shown
on such returns or reports or on any material assessments for any such taxes
received by it and has otherwise complied in all material respects with all
legal requirements applicable to Seller and its Subsidiaries with respect to all
income, sales, use, real or personal property, excise or other taxes. Except as
set forth on Schedule 4.23, neither Seller nor any of its Subsidiaries has
executed or filed with the Internal Revenue Service any agreement extending the
period for assessment and collection of any federal tax. Neither Seller nor any
of its Subsidiaries is a party to any pending action or proceeding, nor, to the
knowledge of Seller, has any action or proceeding been threatened, by any
Governmental Entity for assessment or collection of taxes, and no claim for
assessment or collection of taxes has been asserted against Seller or any of its
Subsidiaries. Each of Seller and its Subsidiaries has withheld and paid all
taxes required to have been withheld and paid in connection with all amounts
paid or owing to any employee, independent contractor, creditor, stockholder or
other third party.
4.24 Environmental, Health and Safety.
(a) To the knowledge of Seller, each of Seller, its Subsidiaries and
their respective predecessors and Affiliates has complied with all
Environmental, Health, and Safety Laws (defined below), and no action,
suit, proceeding, hearing, investigation, charge, complaint, claim, demand,
or notice has been filed or commenced against any of them alleging any
failure so to comply. Without limiting the generality of the preceding
sentence, to the knowledge of Seller, each of Seller, its Subsidiaries and
their respective predecessors and Affiliates has obtained and been in
compliance in all material respects with all of the terms and conditions of
all permits, licenses, and other authorizations which are required under,
and has complied with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules, and
timetables which are contained in, all Environmental, Health, and Safety
Laws.
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(b) To the knowledge of Seller, none of Seller and its Subsidiaries
has any liability for damage to any site, location, or body of water
(surface or subsurface), for any illness of or personal injury to any
employee or other individual or for any reason under any Environmental,
Health and Safety Law.
(c) All properties and equipment used in the operation of the
Divisions have been free of asbestos, PCBs, methylene chloride,
trichloroethylene, 1,2-trans-dichloroethylene, dioxins, dibenzofurans, and
other hazardous substances or wastes.
(d) There is no pending audit known to Seller by any foreign, federal,
state, or local governmental authority with respect to groundwater, soil,
or air monitoring; the storage, burial, release, transportation, or
disposal of hazardous substances or wastes; or the use of underground
storage tanks by any of Seller, its Subsidiaries and their respective
predecessors and Affiliates or relating to the facilities of any of Seller,
its Subsidiaries and their respective predecessors and Affiliates. None of
Seller and its Subsidiaries has any agreement with any foreign, federal,
state, or local governmental authority or any other third party relating to
any such environmental matter or environmental cleanup.
(e) For purposes of this Agreement, the term "Environmental, Health,
and Safety Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Resource Conservation and
Recovery Act of 1976, and the Occupational Safety and Health Act of 1970,
each as amended, together with all other laws (including rules,
regulations, codes, plans, injunctions, judgments, orders, decrees,
rulings, and charges thereunder) of federal, state and local governments
(and all agencies thereof) concerning pollution or protection of the
environment, public health and safety, or employee health and safety,
including laws relating to emissions, discharges, releases, or threatened
releases of pollutants, contaminants, or chemical, industrial, hazardous,
or toxic materials or wastes into ambient air, surface water, groundwater
or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous. or toxic
materials or wastes.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The term "Purchaser Material Adverse Effect" as used in this Agreement
shall mean any change or effect that, individually or when taken together with
all such other changes or effects, is materially adverse to the condition
(financial or otherwise), results of operations, business, properties, assets or
liabilities of Purchaser and its Subsidiaries, taken as a whole.
Purchaser represents and warrants to Seller that the statements contained
in this Article V are true and correct as of the date of this Agreement.
5.01 Organization and Qualification. Purchaser is a corporation, duly
incorporated, validly existing and in good standing under the laws of the State
of Oklahoma, and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as it is now being
conducted.
5.02 Authority. Purchaser has the requisite corporate power and authority
to execute and deliver this Agreement, to perform its obligations hereunder, and
to consummate the transactions contemplated hereby. The execution and delivery
of this Agreement by Purchaser, and the consummation by Purchaser of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action and no other corporate proceedings on the part of Purchaser are
necessary to authorize this Agreement or to consummate the transactions
contemplated by this Agreement. This Agreement has been duly executed and
delivered by Purchaser and constitutes a legal, valid and binding obligation of
Purchaser enforceable against Purchaser in accordance with its terms, except to
the extent that enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, moratorium and other similar laws
relating to or affecting the rights and remedies of creditors generally and by
general principles of equity including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the possible
unavailability of specific
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performance, injunctive relief or other equitable remedies, regardless of
whether enforceability is considered in a proceeding in equity or at law.
5.03 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Purchaser do not,
and the performance of this Agreement by Purchaser will not, (i) violate
the Certificate of Incorporation or By-Laws or equivalent organizational
documents of Purchaser, (ii) subject to obtaining the consents, approvals,
authorizations and permits of, and making filings with or notifications to,
any Governmental Entity pursuant to the applicable requirements, if any, of
the Exchange Act and the HSR Act, conflict with or violate any laws
applicable to Purchaser or by which any of its properties is bound or
affected, except such as would not have a Purchaser Material Adverse
Effect.
(b) The execution and delivery of this Agreement by Purchaser do not,
and the performance of this Agreement by Purchaser shall not, require any
consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Entities, except as described in section
5.03(a) above.
5.04 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Purchaser.
5.05 Financing. Purchaser has the ability to and intends to finance the
aggregate of the Purchase Price pursuant to Article III with cash on hand and
utilization of existing credit facilities. Purchaser will use its best efforts
to ensure the continued availability of such financing and pay such amounts in
accordance with the terms of this Agreement and will not take any action between
the date hereof and the Closing Date which would impair its ability to obtain
such financing.
ARTICLE VI
COVENANTS
6.01 Affirmative Covenants of Seller. Seller covenants and agrees that
prior to the Closing Date, unless otherwise contemplated by this Agreement or
consented to in writing by Purchaser, Seller will and will cause each of its
Subsidiaries to:
(a) operate the Divisions in the ordinary course of business and
consistent with its past practice (provided, however, that Seller will not
cause or permit the Divisions to engage in any practice, take any action or
enter into any transaction of the sort described in Section 4.05 above);
(b) use reasonable efforts to preserve intact the Divisions and the
assets thereof, and maintain its rights and franchises, retain the services
of its respective officers and key employees and maintain the relationships
with its respective key customers, lessors, licensors and suppliers with
respect to the Divisions;
(c) subject to the provisions of the Purchaser Confidentiality
Agreement (as hereinafter defined), confer with Purchaser at its reasonable
request to report operational matters of a material nature relating to the
Divisions and to report the general status of the ongoing operations of the
Divisions;
(d) maintain compliance with all permits, laws, rules, regulations and
orders applicable to the Divisions; and
(e) maintain the Purchased Assets in good working order and condition,
ordinary wear and tear excepted.
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6.02 Negative Covenants of Seller. Except as contemplated by this Agreement
or consented to in writing by Purchaser, from the date of this Agreement until
the Closing Date, Seller shall not do, and shall not permit any of its
Subsidiaries to do, any of the following:
(a) increase the compensation payable to any employee of either of the
Divisions, except for increases in salary or wages payable or to become
payable in the ordinary course of business and consistent with the policies
currently in effect;
(b) enter into or establish any new compensation plan or employee
benefit plan;
(c) acquire or agree to acquire, by merging or consolidating with, by
purchasing an equity interest in or a portion of the assets of, or by any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof, or otherwise acquire or
agree to acquire any assets of any other Person (other than the purchase of
assets from suppliers or vendors in the ordinary course of business and
consistent with Seller's past practice);
(d) sell, lease, exchange, mortgage, pledge, transfer or otherwise
dispose of, or agree to sell, lease, exchange, mortgage, pledge, transfer
or otherwise dispose of, any assets of the Divisions, except for
dispositions of inventory and supplies in the ordinary course of business
and consistent with Seller's past practice;
(e) change any of its methods of accounting in effect at December 31,
1996 or make or rescind any express or deemed election relating to taxes,
settle or compromise any claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to taxes, or
change any of its methods of reporting income or deductions for federal
income tax purposes from those employed in the preparation of the federal
income tax returns for the taxable year ending December 31, 1996, except in
either case as may be required by law, the IRS, or GAAP or in the ordinary
course of business consistent with past practice; provided, however, that
Seller shall immediately notify Purchaser of any such change or other
action;
(f) incur any obligation for borrowed money or purchase money
indebtedness, whether or not evidenced by a note, bond, debenture or
similar instrument, except as approved by Purchaser in advance;
(g) guarantee any debts or obligations of any Person; or
(h) agree in writing or otherwise to do any of the foregoing.
6.03 Confidentiality Agreement. The parties will, and will cause their
respective officers, employees, accountants, consultants, legal counsel and
other representatives to, comply with all of their respective obligations under
the Confidentiality Agreement dated December 3, 1996 between Seller and
Purchaser concerning Seller's confidential information (the "Purchaser
Confidentiality Agreement").
6.04 Acquisition Proposals. Upon execution of this Agreement, Seller and
its Subsidiaries and their respective officers, directors, employees, agents and
advisors (a) will immediately cease any existing discussions or negotiations
with any parties conducted heretofore with respect to any Acquisition Proposal
(as hereinafter defined), and (b) (except as described in the next sentence)
shall not participate in any new discussions or negotiations with respect to any
Acquisition Proposal. Seller may, directly or indirectly, furnish information
and access, in each case only in response to requests that were not solicited by
Seller (or any officer, director, employee, agent or advisor on its behalf)
after the date of this Agreement, to any corporation, partnership, person or
other entity or group (each, a "Potential Purchaser") pursuant to
confidentiality agreements, and may participate in discussions and negotiate
with a Potential Purchaser concerning any Acquisition Proposal, if such
Potential Purchaser has submitted a written proposal to the Board of Directors
relating to any such transaction, and the Board of Directors determines in good
faith after consultation with independent legal counsel that the failure to
provide such information or access or to engage in such discussions or
negotiations would be inconsistent with their fiduciary duties to Seller's
stockholders under applicable law. Seller shall notify Purchaser immediately if
any such request or proposal, or any inquiry or contact with any Person with
respect thereto, is made and shall keep Purchaser apprised of all developments
that could reasonably be expected to culminate in the Board withdrawing,
modifying or amending its
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recommendation of the Asset Sale and the other transactions contemplated by this
Agreement. Seller has entered into confidentiality agreements with other third
parties substantially in the form of the Purchaser Confidentiality Agreement.
Seller agrees not to release any third party from, or waive any provision of,
any confidentiality or standstill agreement to which Seller is a party unless,
in the opinion of the Board of Directors after consultation with independent
legal counsel, the failure to provide such release or waiver would be
inconsistent with its fiduciary duties to Seller's stockholders under applicable
law. For purposes of this section 6.04, the term "Acquisition Proposal" means
any proposal or offer for a merger, asset acquisition or other business
combination involving the acquisition, directly or indirectly, of the Divisions
or any assets of the Divisions.
6.05 Merger Agreement. Notwithstanding anything else in this Agreement to
the contrary, the parties agree that on or prior to the Closing Date Seller may
take such actions as are contemplated in the Agreement and Plan of Merger, dated
as of August 15, 1997 (the "Merger Agreement"), by and among Seller, ▇▇▇▇▇▇▇
Bros. Cranes, Inc. ("▇▇▇▇▇▇▇") and ▇▇▇▇ ▇▇▇▇▇▇ Acquisition Corp. ("▇▇▇▇▇▇▇
Sub"). On the Closing Date, Seller may consummate the transactions contemplated
by the Merger Agreement.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01 Proxy Statement.
(a) As promptly as practicable after the execution of this Agreement,
Seller shall prepare and file with the SEC, and shall use all reasonable
efforts to have promptly cleared by the SEC, and promptly thereafter shall
mail to its stockholders, a proxy statement and a form of proxy
(collectively, the "Proxy Statement"), as may be amended and supplemented,
to be used in connection with the special meeting (the "Stockholders'
Meeting") of Seller's stockholders to consider the Asset Sale (the
"Stockholders' Meeting"). Seller shall provide Purchaser with a reasonable
opportunity to review and comment upon the Proxy Statement prior to its
filing with the SEC and distribution to Seller's stockholders, and
Purchaser shall use reasonable efforts to provide its comments thereon as
promptly as practicable after delivery of the Proxy Statement to Purchaser
and its legal counsel. Seller shall notify Purchaser promptly of the
receipt of any comments of the SEC with respect to the Proxy Statement and
of any requests by the SEC for amendments or supplements to the Proxy
Statement and will supply Purchaser with copies of all correspondence
between Seller and its representatives, on the one hand, and the SEC or the
members of its staff, on the other hand, with respect to the Proxy
Statement. Seller and Purchaser shall each use reasonable efforts to obtain
and furnish information required to be included in the Proxy Statement; and
Seller, after consultation with Purchaser, shall use reasonable efforts
(and Purchaser agrees to reasonably cooperate with Seller in connection
therewith) to respond promptly to any comments made by the SEC with respect
to the Proxy Statement and cause the Proxy Statement to be mailed to its
stockholders at the earliest practicable time. Seller shall notify
Purchaser of its intention to mail the Proxy Statement to the stockholders
of Seller at least 48 hours prior to the intended time of such mailing. The
Proxy Statement shall include the recommendation of Seller's Board of
Directors in favor of the Asset Sale and approval of this Agreement, unless
independent outside legal counsel to Seller shall advise Seller's Board of
Directors and the directors' fiduciary duties under applicable law make
such recommendation inappropriate.
(b) The information included in the Proxy Statement shall not, at the
date the Proxy Statement (or any amendment thereof or supplement thereto)
is first mailed to stockholders or at the time of the Stockholders'
Meeting, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
are made, not misleading. If at any time prior to the Stockholders'
Meeting, any event or circumstance relating to Seller or any of its
Subsidiaries, or its or their respective officers or directors, is
discovered by Seller which should be set forth in a supplement to the Proxy
Statement, Seller shall promptly inform Purchaser. All documents that
Seller is responsible for filing with the SEC in connection with the
transactions contemplated herein will comply as to form and substance in
all material respects with the applicable requirements of the Exchange Act.
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(c) Each of the parties will file (and Seller will cause each of its
Subsidiaries to file) any Notification and Report Forms and related
material that it may be required to file with the Federal Trade Commission
and the Antitrust Division of the United States Department of Justice under
the HSR Act, will use its reasonable best efforts to obtain (and Seller
will cause each of its Subsidiaries to use its reasonable best efforts to
obtain) an early termination of the applicable waiting period, and will
make (and Seller will cause each of its Subsidiaries to make) any further
filings pursuant thereto that may be necessary, proper, or advisable.
7.02 Meeting of Stockholders. As promptly as practicable after the
execution of this Agreement, Seller shall take all action necessary or
appropriate in accordance with the Delaware Law and its Certificate of
Incorporation and By-Laws to convene the Stockholders' Meeting, and Seller shall
consult with Purchaser in connection therewith. Seller shall use reasonable
efforts to solicit from the stockholders of Seller proxies in favor of the Asset
Sale and shall take all other actions necessary or advisable to secure the vote
or consent of stockholders required by the Delaware Law to approve this
Agreement, including the retention of proxy solicitation agents if requested by
Purchaser, unless otherwise required by the applicable fiduciary duties of
directors or officers of Seller.
7.03 Appropriate Action; Consents; Filings.
(a) Subject to the terms and conditions herein provided, Seller and
Purchaser shall use all reasonable efforts to (i) take, or cause to be
taken, all appropriate action, and do or cause to be done, all things
necessary, proper or advisable under applicable law or otherwise to
consummate and make effective the transactions contemplated by this
Agreement as promptly as practicable, (ii) obtain from all Governmental
Entities all consents, licenses or orders required to be obtained by
Purchaser or Seller or any of their respective Subsidiaries in connection
with the authorization, execution and delivery of this Agreement and the
consummation of the transactions contemplated by this Agreement, including,
without limitation, the Asset Sale, and (iii) make all necessary
notifications and filings and thereafter make any other required
submissions with respect to this Agreement and the Asset Sale required
under (A) the Exchange Act and any other applicable federal or state
securities laws, (B) the HSR Act and (C) any other applicable law; provided
that Purchaser and Seller shall cooperate with each other in connection
with the making of all such filings. Seller and Purchaser shall furnish to
each other all information required for any application or other filing to
be made pursuant to the rules and regulations of any applicable law
(including all information required to be included in the Proxy Statement)
in connection with the transactions contemplated by this Agreement.
(b) (i) Seller and Purchaser shall give (or cause their respective
Subsidiaries to give) any notices to third parties, and use, and cause
their respective Subsidiaries to use, all reasonable efforts to obtain any
third-party consents, (A) necessary to consummate the transactions
contemplated in this Agreement, (B) disclosed or required to be disclosed
in the disclosure schedules to this Agreement, or (C) required to prevent a
Seller Material Adverse Effect from occurring prior to the Closing Date.
(ii) In the event that any party shall fail to obtain any third-party
consent described in subsection (b)(i) above, such party shall use
reasonable efforts, and shall take any such actions reasonably requested by
the other party to minimize any adverse effect upon the other party, its
Subsidiaries and its businesses resulting, or which could reasonably be
expected to result after the Closing Date, from the failure to obtain such
consent.
(c) From the date of this Agreement until the Closing Date, Seller
shall promptly notify Purchaser in writing of any pending or, to the
knowledge of Seller, threatened action, proceeding or investigation by any
Governmental Entity or any other Person (i) challenging or seeking damages
in connection with the Asset Sale, (ii) alleging that the consent of such
Governmental Entity or Person may be required in connection with the Asset
Sale or this Agreement, (iii) seeking to restrain or prohibit the
consummation of the Asset Sale or otherwise limit the right of Purchaser or
its Subsidiaries to own or operate all or any portion of the businesses or
assets of the Divisions, or (iv) involving any of the Purchased Assets or
either of the Divisions.
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(d) From the date of this Agreement until the Closing Date, Purchaser
shall promptly notify Seller in writing of any pending or, to the knowledge
of Purchaser, threatened action, proceeding or investigation by any
Governmental Entity or any other Person (i) challenging or seeking material
damages in connection with the Asset Sale or (ii) seeking to restrain or
prohibit the consummation of the Asset Sale or otherwise limit the right of
Purchaser or its Subsidiaries to own or operate all or any portion of the
business or assets of the Divisions.
(e) From the date of this Agreement until the Closing Date, Seller
shall promptly notify Purchaser in writing of (i) any amendments made to
the Merger Agreement, and (ii) any additional agreements between Seller and
▇▇▇▇▇▇▇.
7.04 Update Disclosure. From and after the date of this Agreement until the
Closing Date, each party shall promptly notify the other party hereto by written
update to its disclosure schedules ("Update Schedule") of (i) the occurrence or
non-occurrence of any event the occurrence or non-occurrence of which would be
reasonably likely to cause any condition to the obligations of any party to
effect the Asset Sale and the other transactions contemplated by this Agreement
not to be satisfied, (ii) the failure of Seller or Purchaser, as the case may
be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it pursuant to this Agreement which would be
reasonably likely to result in any condition to the obligations of any party to
effect the Asset Sale and the other transactions contemplated by this Agreement
not to be satisfied, or (iii) of any changes to the information contained in its
disclosure schedules (including any change to any representations or warranties
herein as to which no schedule has been created as of the date hereof but as to
which a schedule would have been required hereunder to have been created on or
before the date hereof if such change had existed on the date hereof). No
disclosure by any party pursuant to this Section 7.04, however, shall cure any
breach of any representation or warranty made by such party as of the date of
this Agreement.
ARTICLE VIII
CLOSING
8.01 Closing. Unless this Agreement shall have been terminated pursuant to
Section 10.01 and subject to the fulfillment or waiver of each of the conditions
set forth in Article IX, the closing ("Closing") of the transactions pursuant to
this Agreement shall take place at (a) the offices of Reinhart, Boerner, Van
Deuren, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, s.c., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, at the same time as the effective time of the merger pursuant to the
Merger Agreement or (b) at such other time and place as the parties hereto shall
mutually agree. Notwithstanding anything to the contrary herein, without the
prior written consent of Purchaser, the Closing shall not occur prior to
December 15, 1997.
ARTICLE IX
CLOSING CONDITIONS
9.01 Conditions to Obligations of Each Party Under This Agreement. The
respective obligations of each party to effect the transactions contemplated by
this Agreement shall be subject to the satisfaction on or prior to the Closing
Date of the following conditions, any or all of which may be waived by the
parties hereto, in whole or in part, to the extent permitted by applicable law:
(a) Stockholder Approval. This Agreement and the Asset Sale shall have
been approved by the requisite vote of the stockholders of Seller in
accordance with the Delaware Law and the Certificate of Incorporation and
By-Laws of Seller.
(b) No Action or Proceeding. There shall not have been instituted and
there shall not be pending any action or proceeding by a Governmental
Entity, and no such action or proceeding shall have been approved by a
Governmental Entity with authority to institute such an action or
proceeding, before any court of competent jurisdiction or governmental
agency or regulatory or administrative body, and no order or decree shall
have been entered in any action or proceeding before such court, agency or
body of
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competent jurisdiction: (i) imposing or seeking to impose limitations on
the ability of Purchaser to acquire or hold or to exercise full rights of
ownership of any of the Purchased Assets; (ii) imposing or seeking to
impose limitations on the ability of Purchaser to combine and operate the
business and assets of the Divisions with any of Purchaser's Subsidiaries
or other operations; (iii) imposing or seeking to impose other sanctions,
damages or liabilities arising out of the Asset Sale on Purchaser, Seller
or any of their officers or directors; (iv) requiring or seeking to require
divestiture by Purchaser of all or any material portion of the Divisions or
the assets thereof; or (v) restraining, enjoining or prohibiting or seeking
to restrain, enjoin or prohibit the consummation of the Asset Sale, in each
case, with respect to clauses (i) through (iv) above, which would or is
reasonably likely to result in a Seller Material Adverse Effect on or prior
to or after the Closing Date or, with respect to clauses (i) through (v)
above, which would or is reasonably likely to subject any of their
respective officers or directors to any penalty or criminal liability.
Notwithstanding the foregoing, prior to invoking the condition set forth in
this section 9.01(b), the party seeking to invoke it shall have used its
reasonable efforts to have any such pending or approved action or
proceeding withdrawn or dismissed or such order or decree vacated.
(c) HSR Act. The applicable waiting period, together with any
extensions thereof, under the HSR Act shall have expired or been
terminated.
(d) Other Approvals or Notices. All other consents, waivers, approvals
and authorizations required to be obtained from, and all filings or notices
required to be made with, any Governmental Entity by Purchaser or Seller or
any Subsidiary prior to consummation of the transactions contemplated in
this Agreement shall have been obtained from and made with all required
Governmental Entities, except for such consents, waivers, approvals or
authorizations which the failure to obtain, or such filings or notices
which the failure to make, would not have a Seller Material Adverse Effect
prior to or after the Closing Date or a Purchaser Material Adverse Effect
before or after the Closing Date or be reasonably likely to subject Seller,
Purchaser, or any of their respective Subsidiaries or any of their
respective officers, directors, employees, agents or representatives to
substantial penalty or criminal liability.
9.02 Additional Conditions to Obligations of Purchaser. The obligations of
Purchaser to effect the transactions contemplated in this Agreement are also
subject to the satisfaction on or prior to the Closing Date of the following
conditions, any or all of which may be waived, in whole or in part, by Purchaser
in its sole discretion:
(a) Representations and Warranties. Each of the representations and
warranties of Seller contained in this Agreement shall have been true and
correct in all material respects when made and the information contained
therein, as updated by any Update Schedule, taken as a whole, shall not
have materially adversely changed; and each of the representations and
warranties of Seller contained in this Agreement shall be true and correct
in all material respects as of the Closing Date. Purchaser shall have
received a certificate of the Chief Executive Officer and Chief Financial
Officer of Seller to that effect.
(b) Agreements and Covenants. Seller shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Closing
Date, except to the extent failure to perform is caused by or is consented
to by Purchaser. Purchaser shall have received a certificate of the Chief
Executive Officer and Chief Financial Officer of Seller to that effect.
(c) Consents Under Agreements. Seller shall have obtained the third
party consents described on Schedule 9.02(c)(i). Seller shall have obtained
a third party consent with respect to each agreement described on Schedule
9.02(c)(ii) that Seller and Purchaser reasonably agree is required pursuant
to applicable law to effectively assign to Purchaser all of Seller's rights
under any such agreement. Seller shall have obtained all other third-party
consents described in subsection 7.03(b)(i), except those for which the
failure to obtain such consents and approvals would not have a Seller
Material Adverse Effect prior to or after the Closing Date or a Purchaser
Material Adverse Effect before or after the Closing Date, other than as
contemplated by subsection 7.03(b)(ii).
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(d) Opinion of Counsel. The Purchaser shall have received an opinion
of Reinhart, Boerner, Van Deuren, ▇▇▇▇▇▇ & Rieselbach, s.c. counsel to
Seller, addressed to Purchaser, dated as of the Closing Date, and
reasonably satisfactory in form and substance to Purchaser and its counsel,
to the following effect:
(i) Seller is a corporation existing under the laws of the State of
Delaware and, based solely on a certificate of the Secretary of State of
Delaware, (a) has filed with the Secretary of State during its most
recently completed report year the required annual report; (b) is not
the subject of a proceeding under the Delaware Law to cause its
administrative dissolution; (c) no determination has been made by the
Secretary of State that grounds exist for such action with respect to
Seller; (d) no filing has been made with the Secretary of State of a
decree of dissolution with respect to Seller; and (e) no Certificate of
Dissolution of Seller has been filed with the Secretary of State. Seller
and its Subsidiaries have the corporate power to carry on their
respective businesses as currently being conducted.
(ii) This Agreement is a legal, valid and binding obligation of
Seller (a) except as this Agreement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b)
subject to general principles of equity including, without limitation,
concepts of materiality, reasonableness, good faith and fair dealing and
the possible unavailability of specific performance, injunctive relief
or other equitable remedies, regardless of whether considered in a
proceeding in equity or at law. Counsel expresses no opinion with
respect to section 10.03(e), section 10.03(g) or section 10.03(h) of
this Agreement. The execution, delivery and performance by Seller of the
Agreement have been duly authorized by all necessary corporation action,
including the requisite approval of the stockholders of Seller. Under
the Delaware Law and Seller's Certificate of Incorporation and By-Laws,
Seller's stockholders and Board of Directors properly approved the Asset
Sale in accordance with the terms of the Agreement.
(iii) The execution and delivery of the Agreement and the
performance by Seller of its terms do not [a] contravene or conflict
with any provision of the Certificate of Incorporation or By-Laws of
Seller; or [b] violate any order, judgment or decree of any court or
governmental instrumentality to which Seller or any of its assets is
subject and of which such counsel has knowledge.
(iv) To the knowledge of such counsel, there is no action, suit,
investigation or proceeding pending or threatened against Seller or any
assets, properties or rights of Seller by or before any court,
arbitrator or administrative or governmental body which questions the
validity of this Agreement or any action which has been or is to be
taken by Seller hereunder.
(e) Deliveries on or Prior to Closing. Seller shall have delivered or
cause to be delivered to Purchaser the following documents at or prior to
Closing:
(i) A General ▇▇▇▇ of Sale duly executed by Seller, in the form
attached hereto as Exhibit B.
(ii) A written consent to the transfer or assignment to Purchaser
of any of the Purchased Assets, including the Assigned Contracts, where
the consent of any other party may be required for such assignment or
transfer.
(iii) Assignments of all United States and foreign patents, patent
applications, trademarks and trade names and other similar Intangible
Assets to be transferred in accordance with section 1.01(d), duly
executed by Seller.
(iv) Titles and registrations to all Vehicles, duly executed by
Seller.
(v) Certificate of status of Seller issued by the Secretary of
State of Delaware and other appropriate jurisdictions within one week of
the Closing Date.
(vi) The Assignment and Assumption Agreement duly executed by
Seller, in the form attached hereto as Exhibit C (the "Assignment and
Assumption Agreement").
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(vii) Releases of mortgages, liens and/or financing statements to
reflect the termination of any Liens against, or security interest in,
any of the Purchased Assets.
(viii) Such other documents as Purchaser reasonably deems necessary
or appropriate to vest in it good and marketable title to all or any
part of the Purchased Assets, free and clear of all liens, encumbrances
and other rights as provided in this Agreement.
(f) Toll Manufacturing Agreement. Seller, ▇▇▇▇▇▇▇ and Purchaser shall
have entered into a Toll Manufacturing Agreement in a form reasonably
satisfactory to Seller, ▇▇▇▇▇▇▇ and Purchaser.
(g) No Material Adverse Change. Since the date of this Agreement, no
condition or fact shall have occurred which, as of the Closing Date, is or
may have a Seller Material Adverse Effect.
(h) Bulk Sales. The parties shall have complied in all material
respects with the provisions of the Wisconsin Bulk Sales Act.
(i) Non-Competition Agreements. Seller and ▇▇▇▇▇▇▇ each shall have
entered into a Non-Competition Agreement with Purchaser in a form
reasonably satisfactory to Purchaser, Seller and ▇▇▇▇▇▇▇.
9.03 Additional Conditions to Obligations of Seller. The obligation of
Seller to effect the transactions contemplated in this Agreement is also subject
to the satisfaction on or prior to the Closing Date of the following conditions,
any or all of which may be waived, in whole or in part, by Seller in its sole
discretion:
(a) Representations and Warranties. Each of the representations and
warranties of Purchaser contained in this Agreement shall have been true
and correct in all material respects when made and the information
contained therein, as updated by any Update Schedule, taken as a whole,
shall not have materially adversely changed; and each of the
representations and warranties of the Purchaser contained in this Agreement
shall be true and correct in all material respects as of the Closing Date.
Seller shall have received a certificate of the Chief Executive Officer and
Chief Financial Officer of Purchaser to that effect.
(b) Agreements and Covenants. Purchaser shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Closing Date. Seller shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of Purchaser to that
effect.
(c) Fairness Opinion. Seller shall have received from ABN AMRO Chicago
Corporation an opinion, dated as of the date of the Proxy Statement, to the
effect that the Purchase Price is fair to Seller's stockholders from a
financial point of view.
(d) Opinion of Counsel. Seller shall have received an opinion of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to Purchaser, addressed to Seller, dated as
of the Closing Date, and reasonably satisfactory in form and substance to
Seller and its counsel, to the following effect:
(i) Purchaser is a corporation existing in good standing under the
laws of the State of Oklahoma, based solely on a certificate of the
Oklahoma Secretary of State.
(ii) The execution, delivery and performance of this Agreement has
been duly authorized by all requisite corporate action on the part of
Purchaser. The Agreement constitutes the legally valid and binding
obligations of Purchaser, enforceable in accordance with its terms,
subject to the following qualifications: [a] the enforceability against
Purchaser of the Agreement in accordance with its terms may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally; [b] the enforceability of the
Agreement is subject to the effect of general principles of equity
including, without limitation, the possible unavailability of specific
performance or injunctive relief or other equitable remedies regardless
of whether considered in a proceeding in equity or at law; and [c] no
opinion is expressed as to any provision of the Agreement providing for
the indemnification of persons for liability under federal or other
securities laws or with respect to section 10.03(h).
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(iii) Execution and delivery of the Agreement and the performance
of the Purchaser of its terms do not [a] contravene or conflict with any
provision of the Certificate of Incorporation or By Laws of the
Purchaser; or [b] violate any order, judgment or decree of any Oklahoma
or federal court or governmental instrumentality to which Purchaser or
any of its assets is subject and of which such counsel has knowledge.
(iv) To the knowledge of such counsel, there is no action, suit,
investigation or proceeding pending or threatened against the Purchaser
or any assets, properties or rights of Purchaser by or before any court,
arbitrator or administrative or governmental body which questions the
validity of the Agreement or any action which has been or is to be taken
by the Purchaser thereunder.
(e) Deliveries on or Prior to Closing. Purchaser shall have delivered
or cause to be delivered to Seller the following documents at or prior to
Closing:
(i) Wire transfer of immediately available funds in the amount of
the Purchase Price.
(ii) A certificate of status for Purchaser issued by the Secretary
of State of Oklahoma within one week of the Closing Date.
(iii) The Assignment and Assumption Agreement duly executed by
Purchaser.
(iv) Such other documents as Seller reasonably deems necessary and
appropriate to document the transfer of the Purchased Assets and the
assumption of the Assumed Liabilities.
(f) Effectiveness of the Merger. The transactions contemplated by the
Merger Agreement shall have closed simultaneously with the Closing under
this Agreement.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.01 Termination. This Agreement may be terminated upon written notice by
the terminating party at any time prior to the Closing, whether before or after
approval of this Agreement and the Asset Sale by the stockholders of Seller:
(a) by mutual written consent of Purchaser and Seller;
(b) by either Purchaser or Seller in the event the conditions to such
party's (the "Nonfailing Party") obligations under Article IX shall not
have been met or waived by the Nonfailing Party on or prior to January 31,
1998, but only if the party terminating has not caused the condition giving
rise to termination to be not satisfied through its own action or inaction;
(c) by either Purchaser or Seller if any decree, permanent injunction,
judgment, order or other action by any court of competent jurisdiction or
any Governmental Entity preventing or prohibiting consummation of the Asset
Sale shall have become final and nonappealable;
(d) by Purchaser, if (A) the Proxy Statement does not include the
recommendation of Seller's Board of Directors in favor of this Agreement
and the Asset Sale, or (B) the Board of Directors of Seller withdraws,
modifies or changes in a manner materially adverse to Purchaser its
recommendation of this Agreement or the Asset Sale or shall have resolved
to do any of the foregoing, or (C) the Board of Directors of Seller shall
have recommended to the stockholders of Seller any proposed acquisition of
the Divisions by any Person or any "group" (as such term is defined under
section 13(d) of the Exchange Act) other than Purchaser and its Affiliates
by (i) merger, consolidation, share exchange, business combination or other
similar transaction providing for the acquisition of the Divisions or a
substantial part of the assets of the Divisions, (ii) purchase of all or a
substantial part of the assets of Seller relating to the Divisions, or
(iii) the acquisition of more than 50% of Seller's outstanding equity
securities (other than pursuant to the Merger) (a "Competing Transaction")
or resolved to do so, or (D) a tender offer or exchange offer for 50% or
more of the outstanding shares of capital stock of Seller is commenced, and
the Board of Directors of Seller, within 10 business days after such tender
offer or exchange offer is so
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commenced, either fails to recommend against acceptance of such tender
offer or exchange offer by its stockholders or takes no position with
respect to the acceptance of such tender offer or exchange offer by its
stockholders;
(e) by Seller if, in the exercise of its judgment as to its fiduciary
duties to its stockholders as imposed by applicable law and, after
consultation with and receipt of advice from outside legal counsel,
Seller's Board of Directors determines that such termination is required by
reasons of any Competing Transaction being made or proposed;
(f) by either Purchaser or Seller, if any Update Schedule of the other
party contains disclosures of any fact or condition which makes untrue, or
shows to have been untrue, any representation or warranty by the other
party in this Agreement, unless concurrently with the delivery of the
Update Schedule, the other party represents and warrants that the disclosed
fact or condition can and will be corrected at the other party's expense
prior to the Closing Date (but in no event more than 30 days after the
delivery of the Update Schedule); provided that the effect of the fact or
condition so disclosed upon the representation or warranty so affected
constitutes a Seller Material Adverse Effect or Purchaser Material Adverse
Effect, as applicable; or
(g) by either Purchaser or Seller, at any time after the Stockholders'
Meeting, in the event this Agreement and the Asset Sale are not approved by
the requisite vote of the stockholders of Seller in accordance with the
Delaware Law and the Certificate of Incorporation and By-Laws of Seller.
10.02 Effect of Termination. Subject to the remedies of the parties set
forth in section 10.03(c), in the event of the termination of this Agreement
pursuant to section 10.01, this Agreement shall forthwith become void, and,
subject to sections 10.03(c), (d), (e), (f), (g) and (h), there shall be no
liability under this Agreement on the part of Purchaser or Seller or any of
their respective officers or directors and all rights and obligations of each
party hereto shall cease.
The Purchaser Confidentiality Agreement shall survive any termination of this
Agreement.
10.03 Expenses.
(a) Except as provided in section 10.03(c), section 10.03(d), section
10.03(f), section 10.03(g) and section 10.03(h), all Expenses incurred by
the parties shall be borne solely and entirely by the party which has
incurred the same. Seller shall pay for all Expenses related to printing,
filing and mailing the Proxy Statement and all SEC and other regulatory
filing fees incurred in connection with the Proxy Statement.
(b) "Expenses" as used in this Agreement shall include all reasonable
out-of-pocket expenses (including, without limitation, all fees and
expenses of counsel, accountants, investment bankers, experts and
consultants to a party and its Affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement, the preparation,
printing, filing and mailing of the Proxy Statement, the solicitation of
stockholder approvals and all other matters related to the closing of the
transactions contemplated by this Agreement.
(c) Seller and Purchaser each agree that with respect to any
termination of this Agreement pursuant to section 10.01(b) as a direct
result of a material intentional breach by a party of any of its covenants
or agreements contained in this Agreement, all remedies available to the
other party either in law or equity shall be preserved and survive the
termination of this Agreement.
(d) If all conditions to the obligations of a party at Closing
contained in Article IX of this Agreement have been satisfied (or waived by
the party entitled to waive such conditions), and the other party does not
proceed with the Closing, all remedies available to the party seeking to
proceed, either at law or in equity, on account of such failure to close,
including, without limitation, the right to seek specific performance of
this Agreement as well as the right to pursue a claim for damages on
account of a breach of this Agreement, shall be preserved and shall survive
any termination of this Agreement.
(e) Notwithstanding anything to the contrary herein, Seller agrees
that if this Agreement is terminated pursuant to section 10.01(d) or
section 10.01(e), Seller shall pay to Purchaser an amount
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equal to the greater of (i) $400,000, and (ii) 20% of the amount by which
the aggregate consideration with respect to the Divisions in any Competing
Transaction exceeds the Purchase Price, provided that, solely for purposes
of this section 10.03(e)(ii), the Purchase Price shall be computed based on
the balance sheet attached hereto as Exhibit A and, if the Competing
Transaction involves the acquisition of all of Seller, whether by merger,
tender offer or otherwise, then the consideration with respect to the
Divisions in the Competing Transaction shall equal 66.8% of the total
consideration in the Competing Transaction. Such payment shall be made as
promptly as practicable but in no event later than the third business day
following termination of this Agreement and shall be made by wire transfer
of immediately available funds to an account designated by Purchaser.
(f) Seller and Purchaser shall share equally the filing fee for any
required filing under the HSR Act.
(g) Notwithstanding anything herein to the contrary, Seller agrees
that if this Agreement is terminated pursuant to section 10.01(b) as a
direct result of the failure to satisfy the condition to Seller's
obligations contained in section 9.03(f), then Seller shall reimburse
Purchaser for its Expenses up to $200,000. Such payment shall be made not
later than the third business day following receipt by Seller of written
notice from Purchaser describing in reasonable detail the amount of
Expenses to be reimbursed by Seller pursuant to this section 10.03(g).
(h) Notwithstanding anything herein to the contrary, Seller and
Purchaser each agree that if this Agreement is terminated pursuant to
section 10.01(b) as a direct result of a material breach by a party of any
of its representations or warranties contained in this Agreement, the
breaching party shall reimburse the nonbreaching party for its Expenses up
to $200,000. Such payment shall be made not later than the third business
day following receipt by the breaching party of written notice from the
nonbreaching party describing in reasonable detail the amount of Expenses
to be reimbursed by the breaching party pursuant to this section 10.03(h).
ARTICLE XI
INDEMNIFICATION
11.01 Indemnification By Seller. Seller shall indemnify and hold harmless
Purchaser and its shareholders, directors, officers, employees and other agents
(collectively, the "Purchaser Indemnitees") in respect of any and all damages,
losses, liabilities, payments, obligations, penalties, claims, litigation,
demands, defenses, judgments, suits, proceedings, costs, disbursements or
expenses (including, without limitation, reasonable fees, disbursements and
expense of attorneys, accountants and other professional advisors and of expert
witnesses and costs of investigation and preparation) of any kind or nature
whatsoever (collectively, "Losses") asserted against or incurred by any
Purchaser Indemnitee as a result of, in connection with or arising out of (a)
any of the Excluded Liabilities, or (b) any claims made under the provisions of
the Worker Adjustment and Retraining Notification Act (29 U.S.C. sec.sec.
2101-2109) and the regulations promulgated thereunder ("WARN") arising in
connection with the transactions contemplated by this Agreement.
11.02 Indemnification by Purchaser. Purchaser shall indemnify and hold
harmless Seller and its stockholders, directors, officers, employees and other
agents (collectively, the "Seller Indemnitees") in respect of any and all Losses
asserted against or incurred by any Seller Indemnitee as a result of, in
connection with, or arising out of any of the Assumed Liabilities.
11.03 Arbitration Procedure.
(a) Purchaser and the Seller agree that the arbitration procedure set
forth below shall be the sole and exclusive method for resolving and
remedying claims for Losses arising out of the provisions of section 11.01
and section 11.02 (the "Disputes"). Nothing in this section 11.03 shall
prohibit a party hereto from instituting litigation to enforce any Final
Determination (as defined below) or availing itself of the other remedies
set forth in this Agreement. The parties hereby agree and acknowledge that,
except as otherwise provided in this section 11.03 or in the Commercial
Arbitration Rules of the American Arbitration Association as in effect from
time to time, the arbitration procedures and any Final
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Determination hereunder shall be governed by, and shall be enforced
pursuant to the Uniform Arbitration Act and applicable provisions of,
Delaware law.
(b) In the event that any Purchaser Indemnitee or Seller Indemnitee
(the "Indemnified Party") asserts that there exists a Dispute, such
Indemnified Party shall deliver a written notice to the party alleged to
have indemnification obligations pursuant to this Agreement (the
"Indemnifying Party") specifying the nature of the asserted Dispute and
requesting a meeting to attempt to resolve the same. If no such resolution
is reached within ten business days after such delivery of such notice, the
Indemnified Party delivering such notice of Dispute (the "Disputing
Person") may, within 30 business days after delivery of such notice,
commence arbitration hereunder by delivering to the Indemnifying Party
involved therein a notice of arbitration (a "Notice of Arbitration") and by
filing a copy of such Notice of Arbitration with the Chicago office of the
American Arbitration Association. Such Notice of Arbitration shall specify
the matters as to which arbitration is sought, the nature of any Dispute,
the claims of each party to the arbitration and shall specify the amount
and nature of any Losses, if any, sought to be recovered as a result of any
alleged claim, and any other matters required by the Commercial Arbitration
Rules of the American Arbitration Association as in effect from time to
time to be included therein, if any.
(c) The Indemnified Party on the one hand and the Indemnifying Party
on the other hand each shall select one independent arbitrator expert in
the subject matter of the Dispute (the arbitrators so selected shall be
referred to herein as "Seller's Arbitrator" and "Purchaser's Arbitrator"
respectively). In the event that either party fails to select an
independent arbitrator as set forth herein within 20 days from delivery of
a Notice of Arbitration, then the matter shall be resolved by the
arbitrator selected by the other party. Seller's Arbitrator and Purchaser's
Arbitrator shall select a third independent arbitrator expert in the
subject matter of the dispute, and the three arbitrators so selected shall
resolve the matter according to the procedures set forth in this section
11.03. If Seller's Arbitrator and Purchaser's Arbitrator are unable to
agree on a third arbitrator within 20 days after their selection, Seller's
Arbitrator and Buyer's Arbitrator shall each prepare a list of three
independent arbitrators. Seller's Arbitrator and Purchaser's Arbitrator
shall each have the opportunity to designate as objectionable and eliminate
one arbitrator from the other arbitrator's list within seven days after
submission thereof, and the third arbitrator shall then be selected by lot
from the arbitrators remaining on the lists submitted by Seller's
Arbitrator and Purchaser's Arbitrator.
(d) The arbitrator(s) selected pursuant to section 11.03(c) will
determine the allocation of the costs and expenses of arbitration based
upon the percentage which the portion of the contested amount not awarded
to each party bears to the amount actually contested by such party. For
example, if Purchaser submits a claim for $1,000, and if the Seller
contests only $500 of the amount claimed by Purchaser, and if the
arbitrator(s) ultimately resolves the dispute by awarding Purchaser $300 of
the $500 contested, then the costs and expenses of arbitration will be
allocated 60% (i.e., 300 - 500) to the Seller and 40% (i.e., 200 - 500) to
Purchaser.
(e) The arbitration shall be conducted under the Commercial
Arbitration Rules of the American Arbitration Association as in effect from
time to time, except as otherwise set forth herein or as modified by the
agreement of all of the parties to this Agreement. The arbitrator(s) shall
so conduct the arbitration that a final result, determination finding,
judgment and/or award (the "Final Determination") is made or rendered as
soon as practicable, but in no event later than 90 business days after the
delivery of the Notice of Arbitration nor later than 10 days following
completion of the arbitration. The Final Determination must be agreed upon
and signed by the sole arbitrator or by at least two of the three
arbitrators (as the case may be). The Final Determination shall be final
and binding on all parties and there shall be no appeal from or
reexamination of the Final Determination, except for fraud, perjury,
evident partiality or misconduct by an arbitrator prejudicing the rights of
any party and to correct manifest clerical errors.
(f) The Purchaser Indemnitees and the Seller Indemnitees may enforce
any Final Determination in any state or federal court having jurisdiction
over the Dispute. For the purpose of any action or
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proceeding instituted with respect to any Final Determination, each party
hereto hereby irrevocably submits to the jurisdiction of such courts,
irrevocably consents to the service of process by registered mail or
personal service and hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may have or hereafter have as to
personal jurisdiction, the laying of the venue of any such action or
proceeding brought in any such court and any claim that any such action or
proceeding brought in such court has been brought in an inconvenient forum.
11.04 Matters Involving Third Parties.
(a) If any third party shall notify any Indemnified Party with respect
to any matter (a "Third Party Claim") which may give rise to a claim for
indemnification against any Indemnifying Party under this section 11, then
the Indemnified Party shall promptly (and in any event within ten business
days after receiving notice of the Third Party Claim) notify the
Indemnifying Party in writing; provided, however, that no delay on the part
of the Indemnified Party in notifying the Indemnifying Party shall relieve
the Indemnifying Party from any obligation hereunder, except to the extent
the Indemnifying Party thereby is materially prejudiced. Such notice shall
describe the claim, the amount thereof (to the extent then known and
quantifiable), and the basis thereof, in each case to the extent known to
the Indemnified Party.
(b) The Indemnifying Party will have the right at any time to assume
and thereafter conduct the defense of the Third Party Claim with counsel of
his or its choice reasonably satisfactory to the Indemnified Party; so long
as (i) the Indemnifying Party notifies the Indemnified Party in writing
within 15 days after the Indemnified Party has given notice of the Third
Party Claim that the Indemnifying Party will indemnify the Indemnified
Party from and against the entirety of any Losses the Indemnified Party may
suffer resulting from or in connection with the Third Party Claim, (ii) the
Indemnifying Party will have the financial resources to defend against the
Third Party Claim and fulfill its indemnification obligations hereunder,
(iii) the Third Party Claim involves only money damages and does not seek
an injunction or other equitable relief, and (iv) the Indemnifying Party
conducts the defense of the Third Party Claim actively and diligently.
(c) Unless and until the Indemnifying Party assumes the defense of the
Third Party Claim as provided in section 11.04(b) above, however, the
Indemnified Party may defend against the Third Party Claim in any manner it
reasonably may deem appropriate.
(d) If the Indemnifying Party has the right, but does not assume
control of defense of any claim in accordance with this section 11.04, then
the Indemnifying Party may nonetheless participate (at its own expense) in
the defense of such claim and the Indemnified Party will consult with the
Indemnifying Party in respect of such defense. If the Indemnifying Party
has the right and does assume control of defense of any claim in accordance
with this section 11.04, then the Indemnified Party may nonetheless
participate (at its own expense) in the defense of such claim and the
Indemnifying Party will consult with the Indemnified Party in respect of
such defense.
(e) So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with paragraph 11.04(b) above, (i) the
Indemnified Party will not consent to the entry of any judgment or enter
into any settlement with respect to the Third Party Claim without the prior
written consent of the Indemnifying Party (not to be withheld
unreasonably), and (ii) the Indemnifying Party will not consent to the
entry of any judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of the Indemnified
Party (not to be withheld unreasonably).
ARTICLE XII
GENERAL PROVISIONS
12.01 Non-Survival of Representations, Warranties and Certain
Covenants. The respective representations, warranties and covenants of the
parties in this Agreement shall expire with, and be terminated and extinguished
upon, consummation of the Asset Sale or termination of this Agreement, and,
except as otherwise provided in Section 10.03(c), thereafter neither Seller,
Purchaser nor any of their respective
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officers, directors or employees shall have any liability whatsoever with
respect to any such representation, warranty or covenant. Notwithstanding
anything to the contrary herein, the obligations of the parties set forth in
Article X, Article XI and Article XII shall survive the consummation of the
Asset Sale. This section 12.01 shall have no effect upon any other obligation of
the parties hereto, whether to be performed before or after consummation of the
transactions contemplated by this Agreement.
12.02 Notices. All notices and other communications given or made pursuant
to this Agreement shall be in writing and shall be deemed to have been duly
given or made upon receipt, if delivered personally, on the third business day
following deposit in the U.S. mail if mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
changes of address) or when sent by electronic transmission to the telecopier
number specified below with receipt acknowledged:
(a) If to Purchaser:
CMI Corporation
I-40 and ▇▇▇▇▇▇ Road
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No. ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
1600 Bank of Oklahoma Plaza
▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No. ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
(b) If to Seller:
Rexworks Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President and
Chief Executive Officer
With a copy to:
Reinhart, Boerner, Van Deuren,
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, s.c.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No: 414-298-8097
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
12.03 Amendment. This Agreement may be amended by the parties by action
taken by or on behalf of their respective Boards of Directors at any time prior
to the Closing; provided, however, that after approval of this Agreement by the
stockholders of Seller, no amendment may be made without further approval of
such stockholders, which amendment would reduce the amount or change the type of
consideration to be received by Seller upon consummation of the Asset Sale. This
Agreement may not be amended except by an instrument in writing signed by each
of the parties hereto.
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12.04 Waiver. At any time prior to the Closing, any party may (a) extend
the time for the performance of any of the obligations or other acts of any
other party, (b) waive any inaccuracies in the representations and warranties of
any other party contained in this Agreement or in any document delivered
pursuant to this Agreement, or (c) waive compliance by any other party with any
of the agreements or conditions contained in this Agreement. Notwithstanding the
foregoing, no failure or delay by either party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law. Any such
extension or waiver shall be valid if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
12.05 Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
12.06 Severability. If any term or other provision of this Agreement is
finally adjudicated by a court of competent jurisdiction to be invalid, illegal
or incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party.
Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
12.07 Entire Agreement. This Agreement (together with the Purchaser's
Confidentiality Agreement, the Exhibits, the disclosure schedules to this
Agreement and the other documents delivered pursuant hereto), constitutes the
entire agreement of the parties and supersedes all prior agreements and
undertakings, both written and oral, between the parties, or any of them, with
respect to the subject matter hereof including, without limitation, that certain
letter of intent dated August 15, 1997 between Purchaser and Seller.
12.08 Assignment. This Agreement shall not be assigned, whether by
operation of law or otherwise, without the prior written consent of the parties
hereto. Notwithstanding the preceding sentence, Purchaser may (i) assign any or
all of its rights and interests hereunder to one or more of its Affiliates and
(ii) designate one or more of its Affiliates to perform its obligations
hereunder (in any or all of which cases Purchaser nonetheless shall remain
responsible for the performance of all of its obligations hereunder).
12.09 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of and be enforceable by each party and its respective
successors and permitted assigns, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
12.10 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law,
provided, however, that if any court of competent jurisdiction determines not to
construe this Agreement in accordance with the laws of the State of Delaware,
then this Agreement shall be governed by, and construed in accordance with, the
laws of the State of Oklahoma, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law.
12.11 Counterparts. This Agreement may be executed by facsimile and in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
12.12 Press Releases and Public Announcements. No party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of the other party; provided,
however, that any party may make any public disclosure it believes in good faith
is required by applicable law or any listing or trading agreement concerning its
publicly-traded securities (in
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which case the disclosing party will use its reasonable best efforts to advise
the other party prior to making the disclosure).
12.13 Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires. The
word "including" shall mean including without limitation.
12.14 Employees. Purchaser shall not assume and shall not be deemed to have
assumed any obligation in respect of any employee of Seller or its Subsidiaries,
any employee benefit plans or any other similar obligations (including, but not
limited to wages, severance pay and vacation pay) of Seller or its Subsidiaries
to their employees who are employed at or in connection with the Divisions or
otherwise. Purchaser shall not assume and shall not be deemed to have assumed
any employee insurance or benefit plan or formal or informal practice maintained
by or contributed to by Seller or its Subsidiaries.
12.15 WARN. Seller shall be responsible for all notices and liabilities
required under WARN.
12.16 Access. From the date of this Agreement until the Closing Date,
Seller shall, and Seller shall cause each of its Subsidiaries to, afford
Purchaser and its representatives full and complete access to the books and
records, financial statements, tax returns and tax records, facilities,
employees and such other information of Seller and its Subsidiaries as Purchaser
may reasonably request to evaluate the business, operations, properties, assets,
liabilities and prospects of the Divisions. In connection therewith,
representatives of Purchaser shall be entitled to consult with the
representatives, officers and employees of Seller and its Subsidiaries. Such
access to information and any such consultations shall be conducted in a manner
not to unreasonably interfere with the operation of the business of Seller and
its Subsidiaries.
12.17 Bulk Sales. The parties acknowledge that it is the intent of the
parties to comply with the terms of the Wisconsin Bulk Sales Act. Seller shall
use all reasonable efforts to take or cause to be taken all appropriate action,
and do or cause to be done all things necessary, proper or advisable, to comply
with the terms of the Wisconsin Bulk Sales Act.
12.18 Litigation Support. In the event and for so long as Purchaser is
contesting or defending any action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand in connection with any of the Assumed
Liabilities, Seller will use reasonable efforts to cooperate with Purchaser and
its counsel in the contest or defense, make available its personnel and provide
such testimony and access to its books and records that shall be reasonably
necessary in connection with the contest or defense, all at the sole cost and
expense of Purchaser.
12.19 Use of Marketing Materials. For a period of one year after the
Closing Date, Purchaser shall be entitled to use without charge any and all of
the current stock of sales and marketing materials used by Seller in connection
with the operation of the Divisions, but solely to the extent permitted by the
Agreement regarding trademarks dated April 23, 1982 between Rexnord, Inc. and
Seller.
12.20 Further Assurances. After the Closing, Seller shall from time to
time, at the request of Purchaser and at Purchaser's sole cost and expense,
execute and deliver to Purchaser such other instruments of conveyance and
transfer and take such other action as Purchaser may reasonably request so as to
more effectively transfer, assign and deliver and vest in Purchaser title to the
Purchased Assets as provided in this Agreement.
REXWORKS INC.
BY /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
Administration and Chief Financial
Officer
CMI CORPORATION
BY /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
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