SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) March 5, 1999
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TOP AIR MANUFACTURING, INC.
An Iowa Corporation
0-10571 42-1155462
Commission File Number I.R.S. Employer Identification No.
317 Savannah Park Road
CEDAR FALLS, IOWA 50613
Registrant's telephone number: (319) 268-0473
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<PAGE>
Item 2. Acquisition or Disposition of Assets.
On March 5, 1999, Top Air Manufacturing, Inc. ("Top Air" or
"Registrant") acquired all of the assets of Parker Industries ("Parker"), a
division of Owosso Corporation ("Owosso") pursuant to an Asset Purchase
Agreement dated March 3, 1999 (the "Agreement").
Top Air acquired the assets of Parker with an approximate book value of
$8.7 million in exchange for a cash payment of $3.3 million, a non-interest
bearing note for $3.6 million and the assumption of current liabilities in the
amount of $550,000 (the "Transaction"). According to the terms of the Agreement,
the purchase price will be adjusted upward, or downward, by a percentage of the
change in the book value of the assets between the valuation date and the date
of the closing of the Transaction.
The total purchase price for the assets acquired by the Registrant was
determined by arm's length negotiation and was based upon, among other factors,
(i) the current and historical financial results of Parker, and (ii) the book
value of the assets acquired. The Registrant obtained new financing from its
commercial lender, Mercantile Bank, National Association, St. Louis, Missouri,
with respect to the cash payment made at closing, pursuant to a five year credit
facility bearing interest at 7.75% per annum.
Other than in connection with the acquisition contemplated by the
Agreement, neither Owosso nor any of its affiliates has had any material
relationship with the Registrant or any of its affiliates, any director or
officer of the Registrant or any associate of any such director or officer.
Top Air effected the Transaction through its wholly-owned subsidiary
established for the Transaction, and to be named Parker Industries, Inc. Parker
manufactures grain handling and other equipment. The Registrant currently
intends to continue the business of Parker in substantially the manner as before
the Transaction. Parker's 1998 sales were $11.7 million with operating income of
$750,000, which compares to Top Air's 1998 sales and operating income of $16.6
million and $1.9 million, respectively. The combined entity is expected to have
approximately $23 million in assets and $7 million in equity.
The Company has been awarded $300,000 from the state of Iowa Community
Economic Betterment Account program to retain and create jobs in connection with
the acquisition. In addition, the local development authority has agreed to
acquire certain Parker fixed assets and lease them to Top Air on favorable
terms.
<PAGE>
Item 7. Financial Statements and Exhibits.
(a) Financial Statements - It is currently impracticable to
provide the required financial statements. The required
financial statements will be filed as an amendment to this
Form 8-K as soon as practicable, but in no event later than
May 19, 1999.
(b) Pro forma financial information - It is currently
impracticable to provide any pro forma financial information
that may be required to be filed. If required, pro forma
financial information will be filed as an amendment to this
Form 8-K as soon as practicable, but in no event later than
May 19, 1999.
(c) Exhibits - The following exhibits are filed with this
report:
Exhibit
No. Document
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2.1 Asset Purchase Agreement by and among Top Air
Manufacturing, Inc., Parker Acquisition Sub, Inc.,
Owosso Corporation, and DWZM, Inc. dated as of March
3, 1999.
<PAGE>
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: March 8, 1999
TOP AIR MANUFACTURING, INC.
By: /s/ Steven R. Lind
--------------------------------------
Steven R. Lind
President and Chief Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
2.1 Asset Purchase Agreement by and among Top Air Manufacturing,
Inc., Parker Acquisition Sub, Inc., Owosso Corporation, and DWZM,
Inc. dated as of March 3, 1999.
ASSET PURCHASE AGREEMENT
By and Among
TOP AIR MANUFACTURING, INC.
and
PARKER ACQUISITION SUB, INC.
as Buyers
and
OWOSSO CORPORATION
and
DWZM, INC.
as Sellers
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS....................................................1
SECTION 2. SALE AND TRANSFER OF ASSETS; ASSUMPTION OF
ASSUMED LIABILITIES; CLOSING.................................7
2.1 PURCHASE AND SALE..............................................7
2.2 PURCHASE PRICE.................................................7
2.3 ASSUMPTION OF ASSUMED LIABILITIES..............................8
2.4 EXCLUDED ASSETS................................................8
2.5 CLOSING........................................................8
2.6 TRANSACTIONS AT CLOSING........................................9
2.7 TAXES.........................................................10
2.8 ESTIMATED ADJUSTMENT AMOUNT...................................10
2.9 REAL PROPERTY.................................................12
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLERS.....................12
3.1 ORGANIZATION AND GOOD STANDING................................12
3.2 AUTHORITY; NO CONFLICT........................................12
3.3 LEASED PROPERTY...............................................13
3.4 GOOD TITLE TO ASSETS..........................................13
3.5 CONDITION AND SUFFICIENCY OF ASSETS; WARRANTY.................13
3.6 INVENTORY.....................................................13
3.7 INTANGIBLES...................................................14
3.8 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL
AUTHORIZATIONS..............................................14
3.9 LEGAL PROCEEDINGS; ORDERS.....................................15
3.10 CONTRACTS; NO DEFAULTS........................................16
3.11 ENVIRONMENTAL MATTERS.........................................16
3.12 LABOR RELATIONS; COMPLIANCE...................................17
3.13 SUPPLIERS.....................................................18
3.14 EMPLOYEE BENEFIT PLANS AND SIMILAR ARRANGEMENTS...............18
3.15 FINANCIAL STATEMENTS..........................................19
3.16 ACCOUNTS RECEIVABLE...........................................19
3.17 RECALLS.......................................................19
3.18 SYSTEMS AND EQUIPMENT YEAR 2000 COMPLIANT.....................19
3.19 INVESTMENT REPRESENTATION.....................................20
3.20 DISCLOSURE....................................................20
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER.......................20
4.1 ORGANIZATION AND GOOD STANDING................................20
4.2 AUTHORITY; NO CONFLICT........................................20
4.3 ACCOUNTS RECEIVABLE...........................................21
SECTION 5. COVENANTS OF SELLER...........................................21
5.1 ACCESS AND INVESTIGATION......................................21
5.2 MAINTENANCE OF ASSETS.........................................21
5.3 REQUIRED APPROVALS............................................22
5.4 NOTIFICATION..................................................22
5.5 NO NEGOTIATION................................................22
5.6 BEST EFFORTS..................................................22
SECTION 6. COVENANTS OF BUYERS...........................................23
6.1 NOTIFICATION..................................................23
6.2 REQUIRED APPROVALS............................................23
6.3 BEST EFFORTS..................................................23
SECTION 7. EMPLOYMENT MATTERS............................................23
7.1 EMPLOYEES.....................................................23
7.2 EMPLOYEE RECORDS..............................................23
7.3 TERMINATION AND SEVERANCE PAY.................................23
SECTION 8. CONDITIONS PRECEDENT TO BUYERS' OBLIGATION TO CLOSE...........24
8.1 ACCURACY OF REPRESENTATIONS...................................24
8.2 PERFORMANCE BY SELLERS........................................24
8.3 CONSENTS......................................................24
8.4 TITLE INSURANCE...............................................24
8.5 SURVEY OF REAL PROPERTY.......................................24
8.6 ACQUISITION OF LEASED EQUIPMENT AND LEASED REAL
PROPERTY....................................................25
8.7 ADDITIONAL DOCUMENTS..........................................25
8.8 NO PROCEEDINGS................................................25
8.9 MATERIAL ADVERSE CHANGE.......................................25
SECTION 9. CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLERS
TO CLOSE....................................................26
9.1 ACCURACY OF REPRESENTATIONS...................................26
9.2 BUYERS' PERFORMANCE...........................................26
9.3 CONSENTS......................................................26
9.4 ADDITIONAL DOCUMENTS..........................................26
9.5 NO PROCEEDINGS................................................26
SECTION 10. POST-CLOSING COVENANTS........................................27
10.1 MAINTENANCE OF ACCOUNTS RECEIVABLE............................27
10.2 NO ADDITIONAL PLEDGES.........................................27
10.3 INFORMATION...................................................27
10.4 BROKER SETTLEMENT.............................................27
10.5 ENVIRONMENTAL REMEDIATION.....................................27
10.6 PERMITS.......................................................27
SECTION 11. TERMINATION...................................................28
11.1 TERMINATION EVENTS............................................28
11.2 EFFECT OF TERMINATION.........................................28
SECTION 12. INDEMNIFICATION; REMEDIES.....................................29
12.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED
BY KNOWLEDGE; EXCEPTIONS....................................29
12.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLERS.............29
12.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYERS..............30
12.4 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS.............30
12.5 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS...................31
12.6 LEGAL FEES AND EXPENSES.......................................31
12.7 LIMIT OF INDEMNIFICATION......................................31
12.8 RIGHT OF SET-OFF..............................................31
SECTION 13. ARBITRATION...................................................32
13.1 ARBITRATION...................................................32
SECTION 14. GENERAL PROVISIONS............................................32
14.1 EXPENSES......................................................32
14.2 PUBLIC ANNOUNCEMENTS..........................................32
14.3 CONFIDENTIALITY...............................................32
14.4 NOTICES.......................................................33
14.5 WAIVER........................................................33
14.6 BULK SALES LAWS...............................................34
14.7 ENTIRE AGREEMENT AND MODIFICATION.............................34
14.8 INCONSISTENCIES...............................................34
14.9 ASSIGNMENTS; SUCCESSORS; NO THIRD-PARTY RIGHTS................34
14.10 SEVERABILITY..................................................34
14.11 SECTION HEADINGS; CONSTRUCTION................................34
14.12 TIME OF ESSENCE...............................................34
14.13 GOVERNING LAW.................................................35
14.14 COUNTERPARTS..................................................35
14.15 WAIVER OF JURY TRIAL..........................................35
EXHIBITS
- --------
Exhibit 2.2(a)(ii)(1) Form of Note
Exhibit 2.2(a)(ii)(2) Form of Security Agreement
Exhibit 2.2(a)(ii)(3) Form of Guaranty Agreement
Exhibit 2.2(b) Allocation of Purchase Price
Exhibit 2.6(a)(i) Form of Bill of Sale
Exhibit 2.6(a)(iv) Form of Assignment and Assumption of Contracts
Exhibit 2.6(a)(vi) Form of Transition Services Agreement
Exhibit 2.6(a)(vii) Form of Reimbursement Agreement
Exhibit 8.7(a) Form of Opinion of Pepper Hamilton, LLP
Exhibit 9.4(a) Form of Opinion of Gallop, Johnson & Neuman, L.C.
DISCLOSURE SCHEDULES
- --------------------
Disclosure Schedule 1 Equipment and Real Property
Disclosure Schedule 2.3(a) Assigned Contracts
Disclosure Schedule 2.4 Excluded Assets
Disclosure Schedule 3.2(b) Authority; No Conflict
Disclosure Schedule 3.3 Leased Property
Disclosure Schedule 3.4 Good Title to Assets
Disclosure Schedule 3.5 Condition and Sufficiency of Assets; Warranty
Disclosure Schedule 3.6 Inventory
Disclosure Schedule 3.7 Intangibles
Disclosure Schedule 3.8(a) Compliance with Legal Requirements
Disclosure Schedule 3.8(b) Governmental Authorization
Disclosure Schedule 3.9(a) Legal Proceedings
Disclosure Schedule 3.9(b) Orders
Disclosure Schedule 3.9(c) Compliance with Orders
Disclosure Schedule 3.10(a) Contracts
Disclosure Schedule 3.10(b) Enforceability of Contracts
Disclosure Schedule 3.10(c) Compliance with Contracts
Disclosure Schedule 3.10(d) Renegotiation of Contracts
Disclosure Schedule 3.11 Environmental Matters
Disclosure Schedule 3.13 Suppliers
Disclosure Schedule 3.14(a) Employee Benefit Plans and Similar Arrangements
Disclosure Schedule 3.15 Financial Statements
Disclosure Schedule 3.18 Year 2000 Compliance
Disclosure Schedule 7.1 Employees
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made and entered into as
of March 3, 1999, by and between Top Air Manufacturing, Inc., an Iowa
corporation ("Top Air") and Parker Acquisition Sub, Inc., an Iowa corporation
("Parker Sub") (Top Air and Parker Sub being referred to collectively as
"Buyers"), on the one hand, and Owosso Corporation, a Pennsylvania corporation
("Owosso") and DWZM, Inc., a Pennsylvania corporation ("DWZM") (Owosso and DWZM
being referred to collectively as "Sellers"), on the other hand.
RECITALS
A. Sellers collectively own assets necessary for the manufacture of
grain handling and other equipment and the operation of the Business through a
division of DWZM known as "Parker Industries."
B. Sellers desire to sell the Parker Assets, and Parker Sub desires to
purchase the Parker Assets, for the consideration and on the terms and
conditions set forth in this Agreement.
C. Parker Sub is a wholly owned subsidiary of Top Air, recently
established solely for the purpose of effecting the Contemplated Transactions as
the buyer of the Parker Assets, and consequently Top Air is willing to guarantee
certain obligations of Parker Sub in connection with the Contemplated
Transactions.
AGREEMENT
The parties, in consideration of the recitals and the mutual covenants
contained herein, intending to be legally bound, agree as follows:
SECTION 1.
DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section1:
"Accounts Receivable" -- all trade accounts receivable arising from the
operation of the Business.
"Accounts Receivable Amount" -- the dollar amount equal to ninety-five
percent (95%) of the Accounts Receivable (net of reserves for bad debts) of
Parker Industries as shown on the Closing Balance Sheet, less $200,000.
"Adjustment Amount" -- ninety percent (90%) of the difference,
expressed as either a positive or negative value, between the Net Asset Value of
Parker Industries shown on the Closing Balance Sheet and $3,911,133 (such amount
being the Net Asset Value of Parker Industries as shown on the Balance Sheet).
"Affiliate" or "Affiliates" -- any Person controlled by, controlling or
under common control with a party to this Agreement, including (without
limitation) any subsidiary of a party to this Agreement. For purposes of this
definition, "control," when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.
"Assignment and Assumption of Contracts" -- as defined in Section
2.6(a)(iv).
"Assigned Contracts" -- as defined in Section 2.3(a).
"Assumed Liabilities" -- as defined in Section 2.3(a).
"Authority" -- either the City of Jefferson, Iowa, or the Greene County
Economic Development Corporation, whichever entity is the party acquiring the
Real Property pursuant to the Authority Transaction.
"Authority Transaction" -- as defined in Section 2.9.
"Balance Sheet" -- the unaudited balance sheet of Parker Industries at
October 25, 1998 included in the financial statements referred to in Section
3.15.
"Best Efforts" -- the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible.
"Bill of Sale" -- as defined in Section 2.6(a)(i).
"Breach" -- a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument delivered
pursuant to this Agreement will be deemed to have occurred if there is or has
been (a) any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation, or other provision,
or (b) any claim (by any Person) or other occurrence or circumstance that is or
was inconsistent with such representation, warranty, covenant, obligation, or
other provision, and the term "Breach" means any such inaccuracy, breach,
failure, claim, occurrence, or circumstance.
"Business" -- the manufacture of grain handling and other equipment and
the general operation of the business of Parker Industries, as conducted on the
date hereof.
"Buyers" -- as defined in the first paragraph of this Agreement.
"Buyer Closing Documents" -- as defined in Section 4.2.
"Cleanup" -- as defined in the definition of "Environmental, Health and
Safety Liabilities" below.
"Closing" -- the consummation of the Contemplated Transactions.
"Closing Balance Sheet" -- The balance sheet of Parker Industries
setting forth the assets and liabilities of the Business as of the close of
business on the Closing Date.
"Closing Date" -- the date and time as of which the Closing occurs.
"Code" -- the Internal Revenue Code of 1986, as amended.
"Consent" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contemplated Transactions" --the sale of the Parker Assets by Sellers
to Buyers.
"Contracts" -- as defined in Section 3.10(a).
"Current Liabilities" -- those liabilities of the Business accrued and
reflected as current liabilities on the Closing Balance Sheet in an amount not
to exceed the aggregate amount reflected as current liabilities on the Closing
Balance Sheet, but not including that portion of long term liabilities due
within a year, inter-company payables, and any other category of current
liability not shown on the Balance Sheet.
"Damages" -- as defined in Section 12.2.
"Encumbrance" -- any charge, claim, community property interest,
condition, equitable interest, lien, option, pledge, security interest, right of
first refusal, easement, covenant, condition, which materially adversely affects
the use of the subject asset for its then-current purpose, including any
restriction on use, voting, transfer, receipt of income, or exercise of any
other material attribute of ownership.
"Environment" -- soil, land surface or subsurface strata, surface
waters (including navigable waters, ocean waters, streams, ponds, drainage
basins, and wetlands), groundwaters, drinking water supply, stream sediments,
ambient air (including indoor air), plant and animal life, and any other
environmental medium or natural resource.
"Environmental, Health and Safety Liabilities" -- any cost, expense,
liability, obligation, or other responsibility arising from or under
Environmental, Health and Safety Requirements and consisting of or relating to:
(a) any environmental, health, or safety matters or conditions (including
on-site or off-site contamination, occupational safety and health, and
regulation of chemical substances or products); (b) fines, penalties, judgments,
awards, settlements, legal or administrative proceedings, damages, losses,
claims, demands and response, investigative, remedial, or inspection costs and
expenses; (c) financial responsibility for cleanup costs or corrective action,
including any investigation, cleanup, removal, containment, or other remediation
or response actions ("Cleanup") (whether or not such Cleanup has been required
or requested by any Governmental Body or any other Person) and for any natural
resource damages; (d) liability for personal injury, property damage or natural
resource damage; or (e) any other compliance, corrective, investigative, or
remedial measures under Environmental, Health and Safety Requirements. The terms
"removal," "remedial," and "response action," include the types of activities
covered by the United States Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. ss.9601 et seq., as amended ("CERCLA").
"Environmental, Health and Safety Requirements" -- all federal, state,
local and foreign statutes, regulations, ordinances and other provisions having
the force or effect of law, all judicial and administrative orders and
determinations, all contractual obligations and all common law concerning public
health and safety, worker health and safety, and pollution or protection of the
Environment, including without limitation all those relating to the presence,
use, production, generation, handling, transportation, treatment, storage,
disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control, or cleanup of any hazardous materials, substances
or wastes, chemical substances or mixtures, pesticides, pollutants,
contaminants, toxic chemicals, petroleum products or byproducts, asbestos,
polychlorinated biphenyls, noise or radiation, each as amended and as now or
hereafter in effect.
"Environmental Report" -- as defined in Section 11.1(b).
"Equipment" -- that machinery and equipment owned by Sellers, necessary
for the operation of the Business, and described on Disclosure Schedule 1
including the Leased Equipment.
"Estimated Adjustment Amount" -- as defined in Section 2.8.
"Excluded Assets" - as defined in Section 2.4.
"Excluded Basket Items" - as defined in Section 12.1
"Expenses" -- as defined in Section 12.2.
"Facilities"-- the plants, buildings and structures located on the Real
Property described in Disclosure Schedule 1.
"Fiscal 1998 Financial Statements" -- the audited balance sheet and
related statement of operations and statement of cash flows of Parker Industries
at and for the twelve month period ended October 25, 1998.
"GAAP" -- generally accepted accounting principles applied on a
consistent basis.
"Governmental Authorization" -- any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"Governmental Body" -- any: (a) nation, state, county, city, town,
village, district, or other jurisdiction of any nature; (b) federal, state,
local, municipal, foreign, or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal).
"Guaranty Agreement" - as defined in Section 2.2.
"Hazardous Activity" -- the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
Release, storage, transfer, transportation, treatment, or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about, or from the Facilities or any part thereof into the Environment.
"Hazardous Materials" -- any waste or other substance that is listed,
defined, designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
environmental law, including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.
"Indemnified Persons" -- as defined in Section 12.2.
"Intangibles" -- all patents, patent applications, patent rights, trade
secrets, inventions, know-how, processes, formulas, product requirements,
specifications, research data, trademarks, trademark applications, trademark
rights, trade names and all derivations thereof (including, without limitation,
all rights to the name Parker Industries to be used in connection with the
Business by Sellers or any Affiliate of Sellers), fictitious business names,
service mark, logos, copyrights, uncopyrighted work, trade secrets, designs,
discoveries, technology, production techniques, software and related source
code, customer distributor files and lists which are used or held for use in the
Business, and all licenses and rights to use the same, and all applications
therefore, and all other proprietary rights and confidential information used in
connection with the Business including, but not limited to, all claims and
benefits of any kind against third parties in connection with the operation of
the Business.
"Inventory" -- all grain handling equipment, partially manufactured
grain handling equipment and weigh carts and the raw materials required to
manufacture grain handling equipment and weigh carts, and all other raw
materials work in process and finished goods of Parker Industries used in
connection with the Business, in each case owned by Sellers at closing.
"Knowledge" -- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if: (a) such individual is or, if such
individual is a corporation, such corporation's officers and directors are,
actually aware of such fact or other matter; or (b) a prudent individual could
be expected to discover or otherwise become aware of such fact or other matter
in the course of conducting a reasonable investigation concerning the existence
of such fact or other matter.
"Leased Equipment" -- that machinery and equipment described on
Disclosure Schedule 1 and designated thereon as being subject to a Lease.
"Leased Real Property" -- that real property described on Disclosure
Schedule 1 and designated thereon as being subject to a Lease.
"Legal Requirement" -- any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.
"Manufactured" -- a product the production of which has been completed
to such an extent that a serial number has been affixed to such product.
"Net Asset Value" -- at any time, the sum of the amounts reflected on a
balance sheet representing the Inventory, Real Estate and Equipment less
accumulated depreciation and less the amount of the Current Liabilities, in each
case determined in accordance with Sellers' current accounting procedures,
consistently applied.
"Note" - as defined in Section 2.2.
"Order" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business" -- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if: (a) such
action is consistent with the past practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person; or (b) such
action is similar in nature and magnitude to actions customarily taken in the
ordinary course of the normal day-to-day operations of other Persons that are in
the same line of business as such Person.
"Parker Assets" -- the Accounts Receivable, Inventory, Equipment,
leasehold interests in Leased Equipment, leasehold interests in Leased Real
Property and Intangibles.
"Parker Industries" -- a division of DWZM which operates the Business.
"Person" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
"Proceeding" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, or investigative)
commenced, brought, conducted, or heard by or before any Governmental Body or
arbitrator.
"Product Warranty Cap Amount" -- an amount equal to the product
obtained by multiplying (i) the amount of the reserves for warranty claims, as
shown on the Closing Balance Sheet, by (ii) 125%.
"Purchase Price" -- as defined in Section 2.2(a);
"Real Property" -- the real property described on Disclosure Schedule
1.
"Reimbursement Agreement" -- as defined in Section 2.6(a)(vii).
"Release" -- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment, whether
intentional or unintentional.
"Retained Liabilities" - as defined in Section 2.3.
"Seller Closing Documents" -- as defined in Section 3.2(a).
"Sellers" -- as defined in the first paragraph of this Agreement.
"Survey" -- as defined in Section 8.5.
"Termination Date" -- as defined in Section 5.1.
"Threatened" -- a claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in writing)
to a Person, or if such Person is a corporation, to an officer or director of
such Person or of which such officer or director has actual knowledge, that such
a claim, Proceeding, dispute, action, or other matter is likely to be asserted,
commenced, taken, or otherwise pursued in the future.
"Title Commitment" -- as defined in Section 8.4.
"Title Company" -- as defined in Section 8.4.
"Transition Services Agreement" - as defined in Section 2.6(a)(vi).
"Year 2000 Compliant" -- as defined in Section 3.18.
SECTION 2.
SALE AND TRANSFER OF ASSETS; ASSUMPTION OF
ASSUMED LIABILITIES; CLOSING
2.1 Purchase and Sale. Subject to the terms and conditions of this
Agreement, at the Closing, Sellers will sell, transfer, convey and assign the
Parker Assets to Parker Sub, and Parker Sub will purchase the Parker Assets from
Sellers free and clear of all Encumbrances.
2.2 Purchase Price.
(a) The purchase price (the "Purchase Price") for the Parker Assets
will be the sum of (x) Two Million, Four Hundred Ten Thousand Dollars
($2,410,000), as adjusted by the Adjustment Amount (whether a positive or
negative amount), (y) the Accounts Receivable Amount, and (z) the amount of the
Current Liabilities, which Purchase Price shall be payable as follows:
(i) Two Million, Four Hundred Ten Thousand Dollars ($2,410,000) of
the Purchase Price, as adjusted by the Estimated Adjustment Amount in
accordance with Section 2.8, shall be payable at Closing by wire
transfer of immediately available funds pursuant to wire transfer
instructions delivered by Sellers to Buyers no less than three (3) days
prior to closing;
(ii) the Accounts Receivable Amount, as estimated by Sellers,
shall be payable by means of Parker Sub's delivery of its non-interest
bearing promissory note (the "Note") in the principal amount of such
estimated Accounts Receivable Amount payable to DWZM in the form
Exhibit 2.2(a)(ii)(1), secured by a first priority interest in the
accounts receivable of Parker Sub pursuant to a security agreement in
the form attached as Exhibit 2.2(a)(ii)(2); provided, however, that if
the amount of the Accounts Receivable Amount, as shown on the Closing
Balance Sheet, is different from the amount estimated, then the Note
delivered by Parker Sub at Closing will be replaced with a new note of
like tenor in the principal amount of the Accounts Receivable Amount
shown on the Closing Balance Sheet; which Note, in either case, will be
unconditionally guaranteed by Top Air pursuant to the guaranty
agreement attached as Exhibit 2.2(a)(ii)(3) hereto (the "Guaranty
Agreement"); and
(iii) the assumption of the Current Liabilities.
(b) The purchase price as determined for federal income tax purposes
shall be allocated among the Parker Assets as set forth on Exhibit 2.2(b), to be
prepared jointly by Buyers and Sellers and delivered by Buyers at Closing, and
such allocation shall be used by the parties in preparing (i) Form 8594, Asset
Acquisition Statement, for Buyers and Sellers and (ii) all tax returns. Buyers
and Sellers shall file Form 8594 prepared in accordance with this Section with
its federal income tax return for its tax period which includes the Closing
Date. All allocations made pursuant to this Section shall be binding upon the
parties and upon each of their successors and assigns, and the parties shall
report the transactions contemplated by this Agreement in accordance with such
allocations. The parties will make appropriate adjustments to Exhibit 2.2(b)
following any adjustments to the Purchase Price pursuant to the terms hereof.
2.3 Assumption of Assumed Liabilities.
(a) From and after the Closing, Parker Sub shall assume, pay, perform,
fulfill and discharge those obligations of Parker Industries (i) that are
required to be performed under those contracts, leases of Leased Equipment and
Real Property identified on Disclosure Schedule 2.3(a) (collectively, the
"Assigned Contracts"); (ii) that are accrued for on the Closing Balance Sheet as
a Current Liability, to the extent of such accrual (including without limitation
properly accrued vacation pay); and (iii) for product warranty claims now
pending or subsequently asserted regarding products of the Parker Division
Manufactured prior to the Closing Date, to the extent of the Product Warranty
Cap Amount. The liabilities assumed under this Section 2.3(a) are referred to
herein as the "Assumed Liabilities."
(b) Except for the Assumed Liabilities, in no event shall Buyers assume
or incur any liability or obligation hereunder of Sellers' or any of their
subsidiaries or Affiliates (collectively, the "Retained Liabilities"). Without
limiting the generality of the foregoing, Buyers assume no liability hereunder
with respect to (i) liabilities or obligations arising out of Sellers' failure
to perform any agreement, contract, commitment or lease in accordance with its
terms prior to the Closing, (ii) any product liability, claim of defective
products or similar claim for injury to person (including death) or property or
for recall of a defective product for products Manufactured prior to the Closing
Date, regardless of when made or asserted, except for product warranty claims,
to the extent provided for hereunder, (iii) any federal, state or local income
tax of Sellers', and (iv) any other obligation or liability (and all costs and
expenses relating thereto) arising in connection with or resulting from, in
whole or in part, events or conditions occurring or existing in connection with
or arising out of the operation of the Business by Sellers or the ownership,
possession, use or sale of the Parker Assets prior to the Closing Date.
2.4 Excluded Assets. Sellers shall retain the following assets of
Parker, which assets shall not be transferred to Buyers in the Contemplated
Transactions: The Real Property (including the Facilities thereon), all
corporate and tax records relating to the Business, cash and cash equivalents,
tax assets (including refunds) and those additional assets listed on Disclosure
Schedule 2.4 hereto (collectively, the "Excluded Assets").
2.5 Closing. The purchase and sale (the "Closing") provided for in this
Agreement will take place at the offices of Gallop, Johnson & Neuman, L.C., 101
South Hanley, Suite 1600, St. Louis, Missouri 63105 at 2:00 p.m. on March 5,
1999 or at such other time and place as the Buyers and Sellers may agree in
writing.
2.6 Transactions at Closing. At the Closing, and on the basis of the
representations, warranties, covenants and agreements made herein and in the
Exhibits hereto and in the certificates and other instruments delivered pursuant
hereto, and subject to the terms and conditions hereof:
(a) Sellers will deliver to Buyers:
(i) a Bill of Sale and any other title transfer documents
requested by Buyer with respect to all Accounts Receivable, Inventory,
Intangibles and Equipment that is not Leased Equipment executed by
Owosso and/or DWZM in the form attached hereto as Exhibit 2.6(a)(i)
(the "Bill of Sale") and security interest and lien terminations with
respect to all liens, pledges, changes, encumbrances, claims, security
interests, easements, covenants, conditions and restriction on such
Accounts Receivable, Inventory, Intangibles and Equipment;
(ii) subsistence certificates regarding each of Owosso and DWZM,
issued as of a recent date by the Secretary of State of such
corporations' states of organization;
(iii) resolutions duly adopted by the directors of Sellers, and
the shareholder(s) of DWZM authorizing execution, delivery and
performance of the terms of this Agreement and consummation of the
transactions contemplated by this Agreement, certified to Buyers'
satisfaction;
(iv) an Assignment and Assumption of Contracts and such other
instruments pursuant to which Sellers assign to Parker Sub the Assigned
Contracts and Parker Sub assumes Sellers' obligations thereunder, in
the form attached hereto as Exhibit 2.6(a)(iv) (the "Assignment and
Assumption of Contracts");
(v) a certification that neither Seller is a foreign person;
(vi) an agreement pertaining to Parker Sub's use of Sellers'
computer systems currently used in the operation of the Business, in
the form attached hereto as Exhibit 2.6(a)(vi) (the "Transition
Services Agreement");
(vii) an agreement pertaining to certain dealer buy-back
obligations of Sellers imposed by law with regard to the repurchase of
inventory in connection with the termination of Parker Industries
dealerships and the indemnification of Buyers with respect to, among
other things, profits on the sale of such inventory repurchased, in the
form attached hereto as Exhibit 2.6(a)(vii) (the "Reimbursement
Agreement");
(viii) the books and records maintained by Sellers and relating to
the Business; and
(ix) such other documents required pursuant to the terms of this
Agreement or as reasonably requested by Buyers in order to facilitate
or effect the transfer and conveyance of the Parker Assets to Parker
Sub.
(b) Buyers will deliver to Sellers:
(i) By wire transfer of immediately available funds, an amount
equal to Two Million, Four Hundred Ten Thousand Dollars ($2,410,000),
as adjusted by the Estimated Adjustment Amount;
(ii) the Note;
(iii) the Security Agreement;
(iv) the Guaranty Agreement;
(v) an Assignment and Assumption of Contracts in form and
substance acceptable to Buyer;
(vi) the Transition Services Agreement;
(vii) the Reimbursement Agreement;
(viii) a good standing certificate with respect to each Buyer,
issued as of a recent date by the Secretary of State of each
corporation's state of organization;
(ix) resolutions duly adopted by the directors of each Buyer
authorizing execution, delivery and performance of the terms of this
Agreement and consummation of the transactions contemplated by this
Agreement, certified to Sellers' satisfaction; and
(x) any such other documents required pursuant to the terms of
this Agreement.
2.7 Taxes. Except to the extent expressly provided for hereunder,
Sellers shall be responsible for all taxes with respect to the Parker Assets
that accrue prior to the Closing Date and Buyers shall be responsible for all
such taxes that accrue from and after the Closing Date. All real estate and
other transfer taxes which are payable or arise as a result of this Agreement or
the Closing pursuant to this Agreement shall be paid by Sellers and Buyers
together in equal amounts notwithstanding how such taxes are imposed by statute.
2.8 Estimated Adjustment Amount.
(a) On or before the fifth business day preceding the Closing Date,
Sellers shall provide Buyers, in writing, their estimate of the Net Asset Value
of Parker Industries as of the Closing Date, for purposes of estimating the
Adjustment Amount (the "Estimated Adjustment Amount") together with the balance
sheet and income statement of Parker Industries for the then most-recently
completed calendar month and such other information in support of such estimated
Net Asset Value. Buyers shall notify Sellers in writing within three business
days of its receipt of such estimate as to whether or not Buyers agree with
Sellers' estimate and if Buyers disagree with such estimate, the parties will
negotiate in good faith in an effort to agree upon an estimated Net Asset Value.
If the parties can agree upon an estimated Net Asset Value, then the Adjustment
Amount shall be calculated based upon such estimated Net Asset Value and the
amount thus calculated shall be and constitute the Estimated Adjustment Amount
for purposes of Section 2.2(a)(i). If the parties are unable to agree as to an
estimated Net Asset Value, then, for purposes of this agreement, the Sellers'
estimate shall be used to determine the Estimated Adjustment Amount. As soon as
practicable, but in any event within thirty (30) days after the Closing Date,
Sellers shall prepare and deliver to Buyers the Closing Balance Sheet, which
Closing Balance Sheet shall be prepared in the same manner as the balance sheet
included in the Fiscal 1998 Financial Statements and in accordance with GAAP,
but without an audit report or footnotes. Inventory shall be valued in
accordance with the foregoing and based upon a joint physical inventory taken on
the Closing Date by Buyers, Sellers, and their respective accountants. To the
extent that the Adjustment Amount derived from the Net Asset Value shown on the
Closing Balance Sheet is more or less than the Estimated Adjustment Amount,
Buyers shall pay to Sellers or Sellers shall pay to Buyers, as the case may be,
the amount of such difference on a dollar-for-dollar basis and the Purchase
Price shall be deemed to be increased or decreased, as the case may be,
accordingly. Any amount due under this Section 2.8(a) shall be due within five
(5) business days of the completion of the Closing Balance Sheet and the
resolution of any disputes with respect thereto pursuant to Section 2.8(b).
Interest shall accrue from the Closing Date on the payment amount due at the
rate charged by Mercantile Bank on the Closing Date as its base rate on the
Closing Date, and shall be payable simultaneously with the Purchase Price
adjustment under this Section 2.8(a).
(b) Buyers and their accountants shall be entitled to observe and
consult with Sellers and their accountants in connection with the preparation of
the Closing Balance Sheet. Sellers' independent auditing firm shall make its
workpapers available to Buyers and their accountants. If Buyers object to the
Closing Balance Sheet, they must notify Sellers in writing of each adjustment
item, specifying the amount thereof and setting forth, in reasonable detail, the
basis for such adjustment, no later than 20 days after Buyers' receipt of the
Closing Balance Sheet. If Buyers do not so notify Sellers, the Closing Balance
Sheet, as prepared by Sellers, shall be final, binding and conclusive on the
parties. In the event of a dispute with respect to a proposed adjustment, Buyers
and Sellers shall attempt to reconcile their differences, and any resolution by
them as to any disputed amounts shall be final, binding and conclusive on the
parties. If Buyers and Sellers are unable to resolve such dispute(s) within 20
days after Buyers deliver written notice thereof, Buyers or Sellers may submit
the items remaining in dispute for resolution to an independent accounting firm
of national reputation mutually appointed by Buyers and Sellers, or if the
parties are unable to agree upon such accounting firm, then Arthur Andersen (Des
Moines office) shall be selected (the "Independent Accounting Firm"). The
Independent Accounting Firm shall resolve any such dispute by sole reference to
Sellers' historic practice of maintaining the books and records of the Business;
provided, however, that all issues of materiality with regard to the Closing
Balance Sheet shall be determined with reference to Parker Industries as a stand
alone entity, conducting the Business, and not with reference to Owosso on a
consolidated basis. The Independent Accounting Firm shall not apply or be bound
by any other policies, practices or principles. The Independent Accounting Firm
shall, within 20 days after submission, determine and report in writing to the
parties upon such disputed items, and such report shall be final, binding and
conclusive on the parties hereto. Buyers and Sellers shall share equally the
fees and charges of the Independent Accounting Firm. The parties acknowledge and
agree that no adjustments shall be made to the accumulated depreciation and
inventory line items reflected on the Closing Balance Sheet so long as such line
items are determined in accordance with Sellers' current accounting procedures,
consistently applied. The parties also acknowledge and agree that appropriate
adjustments will be made on the Closing Balance Sheet for cash discounts on
receivables paid by or credited to customers of Parker postmarked no later than
March 5, 1999, under the Sellers' "8% Prepayment Program" so that Buyers are not
adversely affected by any such discounts.
2.9 Real Property. The parties hereto acknowledge the proposed sale by
Sellers of the Real Property (including the Facilities) to the Authority,
subject to the lease thereof by the Authority to Buyers (the "Authority
Transaction"). The Real Property (and the Facilities thereon) shall therefore be
excluded from the Parker Assets being acquired by Buyers hereunder.
Notwithstanding anything in this Agreement to the contrary, Sellers shall not be
responsible for any of the costs of the Authority Transaction.
SECTION 3.
REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers represent and warrant to Buyer, jointly and severally, as
follows:
3.1 Organization and Good Standing. Owosso is a corporation, duly
organized, validly existing, and in good standing under the laws of the State of
Pennsylvania, with full corporate power and authority to conduct its business as
it is now being conducted, and to own or use the properties and assets that it
purports to own or use. DWZM is a corporation, duly organized, validly existing,
and in good standing under the laws of the State of Pennsylvania, with full
corporate power and authority to conduct its business as it is now being
conducted, and to own or use the properties and assets that it purports to own
or use. Owosso owns all of the outstanding capital stock of DWZM.
3.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding obligation
of Sellers, enforceable against each Seller in accordance with its terms. Upon
the execution and delivery by Sellers of the documents described in Section
2.6(a) (collectively, the "Seller Closing Documents"), the Seller Closing
Documents will constitute the legal, valid, and binding obligations of Sellers
enforceable against Sellers in accordance with their respective terms. Sellers
have the absolute and unrestricted right, power, authority, and capacity to
execute and deliver this Agreement and the Seller Closing Documents and to
perform their respective obligations under this Agreement and the applicable
Seller Closing Documents.
(b) Except as set forth on Disclosure Schedule 3.2(b), neither the
execution and delivery of this Agreement nor the consummation or performance of
any of the Contemplated Transactions will (with or without notice or lapse of
time):
(i) contravene, conflict with, or result in a violation of (A) any
provision of the Sellers' articles of incorporation or by-laws, or (B)
any resolution adopted by the boards of directors or the stockholders
of Sellers;
(ii) contravene, conflict with, or result in a violation of, or
give any Governmental Body or other Person the right to challenge any
of the Contemplated Transactions, or to exercise any remedy or obtain
any relief in respect of the Contemplated Transactions, under any Legal
Requirement or any Order to which Sellers, any Parker Asset or any
Leased Equipment is or would be bound;
(iii) contravene, conflict with, or result in a violation of any
of the terms or requirements of, or give any Governmental Body the
right to revoke, withdraw, suspend, cancel, terminate, or modify, any
Governmental Authorization that is held by either Seller and that
otherwise relates to, or affects, any Parker Asset or any Leased
Equipment;
(iv) to the Knowledge of Sellers, cause either Buyer to become
subject to, or to become liable for the payment of, any tax (including,
but not limited to, transfer, sales, income, gross receipts, license,
payroll, employment, excise, severance, stamp occupation, premium,
windfall profit, environmental, customs, duties, capital stock,
franchise, real property, registration, including any interest or
penalty interest or addition thereto) with the exception of those
incurred in the ordinary course of such Buyer's business after the
Closing Date and unrelated to the Contemplated Transactions; or
(v) result in the imposition or creation of any Encumbrance upon
or with respect to any Parker Asset or any Leased Equipment, which will
not be removed prior to Closing, except for Sellers' rights under this
Agreement.
3.3 Leased Property. Disclosure Schedule 3.3 contains a complete and
accurate list of all leasehold interests in real property and all leasehold
interests in personal property held by either Seller and related to the
Business. Sellers have delivered or made available to Buyers copies of such
leases, and copies of all title insurance polices, opinions, abstracts, and
surveys in the possession of Sellers or Sellers' agents and relating to such
property interests.
3.4 Good Title to Assets. Except as set forth on Disclosure Schedule
3.4, (a) Sellers have good title to all of the Parker Assets and the Real
Property, (b) all of the Parker Assets and Real Property are free and clear of
restrictions on or conditions to transfer or assignment, and (c) all of the
Parker Assets and Real Property are, and at Closing will be, free and clear of
all Encumbrances except those easements and restrictions of record that are not
material to Buyers' ownership and use of such assets, and otherwise acceptable
to Buyers in Buyers' sole discretion.
3.5 Condition and Sufficiency of Assets; Warranty. Except as set forth
on Disclosure Schedule 3.5, to Sellers' Knowledge each piece of Equipment is
mechanically or structurally sound, is in good operating condition and repair,
and is adequate for the uses to which it is being put, and none of such
Equipment is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost. All buildings,
plants, and structures owned or leased by Sellers in connection with the
Business are structurally sound, are in good repair, are clean and in good
housekeeping order, lie wholly within the boundaries of the Real Property and do
not encroach upon the property of, or conflict with the property rights of, any
other Person. The Parker Assets, the Real Property, and the Leased Equipment
constitute all of the assets material to the conduct of the Business as it is
presently operated by Sellers.
3.6 Inventory. Disclosure Schedule 3.6 is a complete and accurate list
of the Inventory as of the last day of the most recently completed fiscal month
of Parker Industries and the location(s) of the Inventory. All Inventory is
located at the Facilities unless otherwise indicated on such Schedule. Except to
the extent disclosed thereon, all items included in the Inventory are of good,
merchantable and usable quality. All items included in the Inventory are the
property of Sellers except for subsequent valid sales made in the Ordinary
Course of Business since the date hereof. Disclosure Schedule 3.6 is based on
quantities determined in accordance with past practices of the Business with the
Inventory valued at the lower of cost or market, and cost is determined using
the FIFO method, applied on a basis consistent with that used to prepare the
Fiscal 1998 Financial Statements.
3.7 Intangibles. Disclosure Schedule 3.7 contains a complete and
accurate list of all patents, registered trademarks and registered copyrights
used by Sellers in the operation of the Business. Except as set forth on
Disclosure Schedule 3.7, (a) no claim respecting any Intangible materially
adverse to the interests of the Business is pending, or to the Knowledge of
Sellers, has been threatened, (b) Sellers have received no notice of any
infringement or other violation arising out of Sellers' use of any Intangible,
(c) no litigation is pending wherein any Intangible is alleged to infringe or
violate the rights of another, and (d) Sellers own or use each of the
Intangibles free and clear of any Encumbrance, except for Encumbrances of the
owners of commercially available computer software used in the Business.
3.8 Compliance With Legal Requirements; Governmental Authorizations.
(a) Except as set forth on Disclosure Schedule 3.8(a):
(i) Sellers are, and at all times since January 1, 1994, have
been, in full compliance with each Legal Requirement that is or was
applicable to the use of any the Parker Assets;
(ii) No event has occurred or circumstance exists that (with or
without notice or lapse of time) may give rise to any obligation on the
part of Sellers to undertake, or to bear all or any portion of the cost
of, any remedial action of any nature; and
(iii) Sellers have not received any notice or other communication
(whether oral or written) from any Governmental Body or any other
Person regarding any actual, alleged, possible, or potential violation
of, or failure to comply with, any Legal Requirement that may give rise
to an obligation on the part of either Seller to undertake, or to bear
all or any portion of the cost of, any remedial action of any nature.
(b) Disclosure Schedule 3.8(b) contains a complete and accurate list of
each Governmental Authorization that is held by Sellers or that otherwise
relates to the operation of the Facilities and the manufacture of grain handling
equipment therein. Each Governmental Authorization listed or required to be
listed on Disclosure Schedule 3.8(b) is valid and in full force and effect.
Except as set forth on Disclosure Schedule 3.8(b):
(i) Sellers are, and at all times since January 1, 1994 have been,
in full compliance with all of the terms and requirements of each
Governmental Authorization identified or required to be identified on
Disclosure Schedule 3.8(b);
(ii) to the best of Sellers' Knowledge, no event has occurred or
circumstance exists that may (with or without notice or lapse of time)
(A) constitute or result directly or indirectly in a violation of or a
failure to comply with any term or requirement of any Governmental
Authorization listed or required to be listed on Disclosure Schedule
3.8(b) or (B) result directly or indirectly in the revocation,
withdrawal, suspension, cancellation, or termination of, or any
modification to, any Governmental Authorization listed or required to
be listed on Disclosure Schedule 3.8(b);
(iii) Sellers have not received, at any time since January 1,
1994, any notice or other communication (whether oral or written) from
any Governmental Body or any other Person regarding (A) any actual,
alleged, possible, or potential violation of or failure to comply with
any term or requirement of any Governmental Authorization, or (B) any
actual, proposed, possible, or potential revocation, withdrawal,
suspension, cancellation, termination of, or modification to any
Governmental Authorization; and
(iv) all applications required to have been filed for the renewal
of the Governmental Authorizations listed or required to be listed on
Disclosure Schedule 3.8(b) have been duly filed on a timely basis with
the appropriate Governmental Bodies, and all other filings required to
have been made with respect to such Governmental Authorizations have
been duly made on a timely basis with the appropriate Governmental
Bodies.
The Governmental Authorizations listed on Disclosure Schedule 3.8(b)
collectively constitute all of the Governmental Authorizations necessary to
permit Sellers to lawfully operate the Parker Assets in conjunction with the
operation of the Business.
3.9 Legal Proceedings; Orders.
(a) Except as set forth on Disclosure Schedule 3.9(a) there is no
pending Proceeding: (i) that has been commenced by or against either Seller or
that otherwise relates to or may affect the Parker Assets, the Real Property, or
the Leased Equipment; or (ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Sellers' Knowledge, no such Proceeding has been
Threatened, and no event has occurred or circumstance exists that may give rise
to or serve as a basis for the commencement of any such Proceeding. Sellers have
made available to Buyer copies of all pleadings, correspondence, and other
documents relating to each Proceeding listed on Disclosure Schedule 3.9(a).
(b) Except as set forth on Disclosure Schedule 3.9(b): (i) there is no
Order to which Sellers, or any of the Parker Assets, Real Property, or any of
the Leased Equipment, is subject; and (ii) Sellers are not subject to any Order
that relates to the Parker Assets, Real Property, or the Leased Equipment.
(c) Except as set forth on Disclosure Schedule 3.9(c): (i) Sellers are,
and at all times since January 1, 1994, have been, in full compliance with all
of the terms and requirements of each Order listed or required to be listed on
Disclosure Schedule 3.9(b); (ii) to Sellers' Knowledge, no event has occurred or
circumstance exists that may constitute or result in (with or without notice or
lapse of time) a violation of or failure to comply with any term or requirement
of any Order to which any of the Parker Assets, Real Property, or any Leased
Equipment is subject; and (iii) Sellers have not received, at any time since
January 1, 1994, any notice or other communication (whether oral or written)
from any Governmental Body or any other Person regarding any actual, alleged,
possible, or potential violation of, or failure to comply with, any term or
requirement of any Order to which any of the Parker Assets, Real Property, or
any of the Leased Equipment is subject.
3.10 Contracts; No Defaults.
(a) Disclosure Schedule 3.10(a) contains a complete and accurate list,
and Sellers have delivered to Buyer true and complete copies, of each lease,
rental or occupancy agreement, license, installment and conditional sale
agreement, and other contract affecting the ownership of, leasing of, title to,
use of, or any leasehold or other interest in, any Parker Asset, Real Property,
and any Leased Equipment and each amendment, supplement, and modification
(whether oral or written) in respect of any of the foregoing (collectively, the
"Contracts").
(b) Except as set forth on Disclosure Schedule 3.10(b), each Contract
identified or required to be identified on Disclosure Schedule 3.10(a) is in
full force and effect and is valid and enforceable in accordance with its terms.
(c) Except as set forth on Disclosure Schedule 3.10(c):
(i) Sellers are, and at all times have been, in full compliance
with all applicable terms and requirements of each Contract;
(ii) Sellers have not given to or received from any other Person,
any notice or other communication (whether written or oral) regarding
any actual, alleged, possible, or potential violation or breach of, or
default under, any Contract.
(d) Except as set forth on Disclosure Schedule 3.10(d), there are no
renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate
any material amounts payable by Sellers under current or completed Contracts
with any Person and no such Person has made written demand for such
re-negotiation.
3.11 Environmental Matters. Except as set forth on Disclosure Schedule
3.11 and in connection with the Parker Assets, Real Property and/or Business:
(a) Sellers are, and at all times have been, in full compliance with,
and have not been and are not in violation of or liable under, any
Environmental, Health and Safety Requirements.
(b) Neither Sellers nor any of their Affiliates nor, to Sellers'
Knowledge, any of their predecessors, has received any written or oral notice,
report or other information regarding any actual or alleged violation of
Environmental, Health and Safety Requirements, or any liabilities or potential
liabilities (whether accrued, absolute, contingent, unliquidated or otherwise),
including any investigatory, remedial or corrective obligations, relating to any
past or current facility (including the Facilities) or operation of the Business
and arising under Environmental, Health and Safety Requirements.
(c) There are no pending or to Sellers' Knowledge, Threatened claims,
Encumbrances, or other restrictions of any nature arising under or pursuant to
any Environmental, Health and Safety Requirements, with respect to or affecting
the Parker Assets, Real Property, or the Leased Equipment.
(d) None of the following exists on the Real Property: (1) underground
storage tanks; (2) asbestos-containing material in any form or condition; (3)
materials or equipment containing polychlorinated biphenyls; or (4) landfills,
surface impoundments, or disposal areas.
(e) Sellers have not treated, stored, disposed of, arranged for or
permitted the disposal of, transported, handled, or released any substance,
including without limitation any Hazardous Material, or owned or conducted any
operation on the Real Property (and the Real Property is not contaminated by any
such substance) in a manner that has given or would give rise to liabilities,
including any liability for response costs, corrective action costs, personal
injury, property damage, natural resources damages or attorney fees, pursuant to
CERCLA or any other Environmental, Health and Safety Requirement.
(f) Neither this Agreement nor the consummation of the transaction that
is the subject of this Agreement will result in any obligations for site
investigation or cleanup, or notification to or consent of government agencies
or third parties, pursuant to any of the so-called "transaction-triggered" or
"responsible property transfer" Environmental, Health and Safety Requirements.
(g) Sellers have not, nor have any of their predecessors or Affiliates,
either expressly or by operation of law, assumed or undertaken any liability
including, without limitation, any obligation for corrective or remedial action,
of any other Person relating to Environmental, Health and Safety Requirements
with respect to any Parker Asset, Real Property, or any Leased Equipment.
(h) To the Knowledge of Seller, no facts, events or conditions relating
to the past or present facilities, properties or operations of Sellers, or any
of their predecessors or Affiliates, will prevent, hinder or limit continued
compliance with Environmental, Health and Safety Requirements, give rise to any
investigatory, remedial or corrective obligations pursuant to Environmental,
Health and Safety Requirements, or give rise to any other liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise) pursuant to
Environmental, Health and Safety Requirements including, without limitation, any
relating to on-site or offsite Releases or threatened Releases of Hazardous
Materials, substances or wastes, personal injury, property damage or natural
resources damage.
(i) Sellers have delivered to Buyers true and complete copies and
results of any reports, studies, analyses, tests, or monitoring possessed or
initiated by Sellers pertaining to Hazardous Materials or Hazardous Activities
in, on, or under the Real Property, or concerning compliance by, or liabilities
of, Sellers, or any other Person for whose conduct Sellers are or may be held
responsible, with or under Environmental, Health and Safety Requirements in
connection with the Business of the Real Property.
3.12 Labor Relations; Compliance. Since January 1, 1994, Sellers have
not been and are not a party to any collective bargaining or other labor
Contract which affects the Business. Since January 1, 1994, there has not been,
there is not presently pending or existing, and to Sellers' Knowledge, there is
not Threatened, (a) any strike, slowdown, picketing, work stoppage, or employee
grievance process, (b) any Proceeding against or affecting either Seller
relating to the alleged violation of any Legal Requirement pertaining to labor
relations or employment matters, including any charge or complaint filed by an
employee or union with the National Labor Relations Board, the Equal Employment
Opportunity Commission, or any comparable Governmental Body, organizational
activity, or other labor or employment dispute against or affecting Sellers or
Sellers' premises, or (c) any application for certification of a collective
bargaining agent. No event has occurred or circumstance exists that could
provide the basis for any work stoppage or other labor dispute. There is no
lockout of any employees by Sellers, and no such action is contemplated by
Sellers. Sellers have in respect to the Business complied in all respects with
all Legal Requirements relating to employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar taxes, occupational safety and
health, and plant closing. Sellers are not liable for the payment of any
compensation, damages, taxes, fines, penalties, or other amounts, however
designated, for failure to comply with any of the foregoing Legal Requirements.
3.13 Suppliers. Disclosure Schedule 3.13 includes a list of those
material suppliers of services and materials required to operate the Equipment
and the Facilities. None of such suppliers has given notice that it intends to
terminate or modify in any material respect its relationship with Sellers, and
Sellers agree to notify Buyer immediately of any such change or prospective
change in any such relationship occurring prior to Closing.
3.14 Employee Benefit Plans and Similar Arrangements.
(a) Disclosure Schedule 3.14(a) lists all employee benefit plans and
other similar arrangements to which Sellers are or ever have been a party or by
which Seller are or ever have been bound, legally or otherwise, including,
without limitation, (i) any profit-sharing, deferred compensation, bonus, stock
option, stock purchase, pension, retainer, consulting, retirement, severance,
welfare or incentive plan, agreement or arrangement, (ii) any plan, agreement or
arrangement providing for "fringe benefits" or perquisites to employees,
officers, directors or agents, including but not limited to benefits relating to
Seller automobiles, clubs, vacation, child care, parenting, sabbatical, sick
leave, medical, dental, hospitalization, life insurance and other types of
insurance, and (iii) any other "employee benefit plan" (within the meaning of
Section 3(3) of ERISA).
(b) Sellers have delivered to Buyer true and complete copies of all
documents and summary plan descriptions with respect to such plans, agreement
and arrangements, or summary descriptions of any such plans, agreements or
arrangements not otherwise in writing.
(c) There are no negotiations, demands or proposals that are pending or
have been made which concern matters now covered, or that would be covered, by
plans, agreements or arrangements of the type described in this section.
(d) Sellers are in full compliance with the applicable provisions of
ERISA (as amended through the date of this Agreement), the regulations and
published authorities thereunder, and all other Legal Requirements applicable
with respect to all such employee benefit plans, agreements and arrangements.
Sellers have performed all their obligations under all such plans, agreements
and arrangements including, but not limited to, the full payment when due of all
amounts required to be made as contributions thereto or otherwise. To the best
Knowledge of Sellers, there are no actions, suits or claims (other than routine
claims for benefits) pending or Threatened against such plans or their assets,
or arising out of such plans, agreements or arrangements, and, to the best
Knowledge of Sellers, no facts exist which could give rise to any such actions,
suits or claims.
(e) With respect to each such plan which is an "employee benefit plan"
(within the meaning of Section 3(3) of ERISA) or a "Plan" (within the meaning of
Section 4975(e)(1) of the Code), there has occurred no transaction prohibited by
Section 406 of ERISA and no "prohibited transaction" within the meaning of
Section 4975(c) of the Code).
(f) All group health plans of Sellers and any ERISA Affiliate have been
operated in compliance with the group health plan continuation coverage
requirements of Part 6 Subtitle B of Title I of ERISA and 4980B of the Code to
the extent such requirements are applicable. Except to the extent required under
Section 4980B of the Code, Sellers do not provide health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employees.
(g) There has been no act or omission by Sellers or any ERISA Affiliate
that has given rise to or any give rise to fines, penalties, taxes, or related
changes under Section 502(c), or Section 4071 of ERISA or Chapter 43 of the
Code.
3.15 Financial Statements. The unaudited financial statements of Parker
Industries at and for the 12-month period ended October 25, 1998 attached hereto
as Disclosure Schedule 3.15, have been prepared in accordance with the past
practices of the Business and on a consistent basis throughout the period
covered by such financial statements. The financial statements referred to in
this Section 3.15 fairly present the financial position of Parker Industries as
of the date thereof and the results of operations and cash flows for the period
indicated. The books and records of the Business to be transferred to Buyer
properly reflect in all material respects all income and expense items
(including accruals) and all assets and liabilities relating to the Business.
The financial statements constituting Disclosure Schedule 3.15 disclose or
adequately reserve for all liabilities or obligations of Sellers with respect to
the Business of any nature, whether known or unknown, due or to become due,
fixed or contingent, which, singly or in the aggregate, are material to the
operations, prospects or financial condition of the Business and which are
required by GAAP to be reflected thereon, other than liabilities arising under
this Agreement or described in the Schedules hereto.
3.16 Accounts Receivable. All Accounts Receivable (other than Accounts
Receivable collected since October 25, 1998) reflected on the balance sheet
included in the financial statements referred to in Section 3.15 are, and all
Accounts Receivable arising from or otherwise relating to the Business as of the
Closing Date will be, valid and genuine. To the Knowledge of Sellers, the
reserve for doubtful accounts reflected on the balance sheet included in the
financial statements referred to in Section 3.15 has been determined in
accordance with GAAP and is adequate. All Accounts Receivable arising out of or
relating to the Business as of the Closing Date will be included in the Closing
Balance Sheet in accordance with GAAP.
3.17 Recalls. Sellers have no Knowledge of any production problems or
other matters relating to the Business that could reasonably be expected to lead
to recall of products, whether voluntary or mandatory.
3.18 Systems and Equipment Year 2000 Compliant. Except as set forth on
Disclosure Schedule 3.18, to Sellers' Knowledge, the computer systems and
equipment containing embedded microchips necessary to enable the Business and
its operations (including systems and equipment supplied by others or with which
the systems of Parker Industries interface) are in all material respects Year
2000 Compliant. Sellers have furnished to Buyer copies of description of all
programs and plans of Parker Industries, if any currently exist, relating to
making such systems and equipment Year 2000 Compliant. For purposes of this
Section 3.18, the term "Year 2000 Compliant" means that such systems and
equipment shall be able accurately to process (including, without limitation,
calculate, compare and sequence) date and time data from, into and between the
years 1999 and 2000 and any other years in the twentieth and twenty-first
centuries. Except as set forth on Disclosure Schedule 3.18, Sellers know of no
inability on the part of any supplier or customer of, or service provider to,
Parker Industries to timely insure that its systems and equipment are Year 2000
Compliant.
3.19 Investment Representation. Sellers have no intention of selling
the Note or any interest therein in violation of federal securities laws of any
applicable state securities laws. Prior to the date of this Agreement, each
Seller has reviewed all information provided to it by Buyers and has had the
opportunity to ask questions of and receive answers from representatives of
Buyers concerning Buyers and to obtain certain additional information requested
of Buyers.
3.20 Disclosure.
(a) No representation or warranty of Sellers in this Agreement and no
statement in a Schedule to this Agreement contains any untrue statement of
material fact or omits to state a material fact necessary in order to make the
statements made herein or therein, in the light of the circumstances under which
they were made, not misleading. No notice given pursuant to Section 5.4 will
contain any untrue statement or omit to state a material fact necessary to make
the statements therein or in this Agreement, in the light of the circumstances
under which they were made, not misleading. There is no fact known to Sellers
that has specific application to Sellers (other than general economic or
industry conditions) and that materially adversely affects any of the Parker
Assets, the Real Property or any Leased Equipment that has not been set forth in
this Agreement or a Disclosure Schedule.
(b) Sellers have conducted a thorough investigation and inquiry with
respect to the representations and warranties contained in this Agreement.
SECTION 4.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyers represent and warrant to Sellers as follows:
4.1 Organization and Good Standing. Each Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Iowa.
4.2 Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding obligation
of each Buyer, enforceable against each such Buyer in accordance with its terms.
Upon the execution and delivery by Buyers (or one of them) of the documents
described in Section 2.6(b) (collectively, the "Buyer Closing Documents"), the
Buyer Closing Documents will constitute the legal, valid, and binding obligation
of each Buyer signatory thereto, enforceable against each such Buyer in
accordance with its terms. Buyers have the absolute and unrestricted right,
power, and authority to execute and deliver this Agreement and the Buyer Closing
Documents and to perform their respective obligations under this Agreement and
the Buyer Closing Documents.
(b) Neither the execution and delivery of this Agreement by either
Buyer nor the consummation or performance of any of the Contemplated
Transactions by either Buyer will give any Person the right to prevent, delay,
or otherwise interfere with any of the Contemplated Transactions pursuant to:
(i) any provision of Buyer's articles of incorporation or by-laws;
(ii) any resolution adopted by the shareholder of Buyer;
(iii) any Legal Requirement or Order to which Buyer may be
subject; or
(iv) any Contract to which Buyer is a party or by which Buyer may
be bound.
4.3 Accounts Receivable. At Closing, there will be no pledges of,
security interests in, or liens on the Accounts Receivable, other than to
Sellers as contemplated herein, on account of prior obligations of Buyers.
Neither the execution and delivery of the Note, or the execution and delivery of
the Guaranty Agreement, nor the granting to Sellers of a security interest in
the Accounts Receivable will contravene, conflict with, or result in a violation
of any agreement to which either of the Buyers is a party.
SECTION 5.
COVENANTS OF SELLER
5.1 Access and Investigation. Between the date of this Agreement and
the earlier of the date this Agreement is terminated pursuant to Section11 (the
"Termination Date") and the Closing Date, Sellers will permit representatives,
agents, employees, surveyors, contractors, lenders, appraisers and engineers
designated by Buyers reasonable access to and entry upon the Real Property and
the Facilities during normal business hours to examine, sample, inspect, measure
and test any of the Parker Assets.
5.2 Maintenance of Assets. Between the date of this Agreement and the
earlier of the Termination Date and the Closing Date, Sellers will:
(a) maintain the Parker Assets, the Real Property and the Leased
Equipment in customary repair, order and condition, maintain all insurance with
respect to the Parker Assets in effect on the date of this Agreement, and, in
the event of casualty, loss or damage to any Parker Asset, any of the Facilities
or any Leased Equipment prior to the Closing Date for which it is insured,
either repair or replace such damaged property or, at the Buyer's option,
transfer the proceeds of such insurance to Buyers at the Closing;
(b) comply in all material respects with all Legal Requirements and
contractual obligations applicable to the Parker Assets, the Real Property and
the Leased Equipment including, without limitation, the Leases; and
(c) continue to conduct the Business in the Ordinary Course of
Business, except for actions contemplated by, required, or prohibited under this
Agreement. Without limiting the generality of the foregoing and consistent
therewith, Sellers shall continue to maintain and service the Parker Assets in
the same manner as has been its consistent past practice, use its commercially
reasonable efforts to keep available the services of present employees and
agents of the Business and to maintain the relations and goodwill with the
suppliers, customers, and distributors of the Business. Sellers will not expend
in excess of $10,000 in any calendar month on capital expenditures or on orders
for raw materials without Buyers' prior written approval. Sellers will provide
Buyers with information regarding any open customer order in excess of $50,000
that will not be completed prior to Closing, and will not undertake any such
order without Buyer's prior written approval.
5.3 Required Approvals. As promptly as practicable after the date of
this Agreement, Sellers will make all filings required by Legal Requirements to
be made by them in order to consummate the Contemplated Transactions. Between
the date of this Agreement and the earlier of the Termination Date and the
Closing Date, on a Best Efforts basis, Sellers will cooperate with Buyers with
respect to all filings that Buyers elect to make or are required by Legal
Requirements to make in connection with the Contemplated Transactions.
5.4 Notification. Between the date of this Agreement and the Closing
Date, Sellers will promptly notify Buyers in writing if Sellers become aware of
any fact or condition that causes or constitutes a Breach of any of the
representations and warranties of Sellers as of the date of this Agreement, or
if Sellers become aware of the occurrence after the date of this Agreement of
any fact or condition that would cause or constitute a Breach of any such
representation or warranty had such representation or warranty been made as of
the time of occurrence or discovery of such fact or condition. Should any such
fact or condition require any change in a Disclosure Schedule hereto if the
Disclosure Schedule were dated the date of the occurrence or discovery of any
such fact or condition, Sellers will promptly deliver to Buyers a supplement to
such Schedule specifying such change. During the same period, Sellers will
promptly notify Buyers of the occurrence of any Breach of any covenant of
Sellers in this Section5 or of the occurrence of any event that may make the
satisfaction of the conditions in Section8 impossible or unlikely.
5.5 No Negotiation. Until such time, if any, as this Agreement is
terminated pursuant to Section11, neither Sellers nor any of their shareholders
will, and Sellers will cause each of their Representatives not to, directly or
indirectly solicit, initiate, or encourage any inquiries or proposals from,
discuss or negotiate with, provide any non-public information to, or consider
the merits of any unsolicited inquiries or proposals from, any Person (other
than Buyers) relating to any transaction involving the sale of the Parker Assets
or the Leased Equipment (other than in the Ordinary Course of Business), or any
of the capital stock of DWZM, or any merger, consolidation, business
combination, or similar transaction involving DWZM.
5.6 Best Efforts. Between the date of this Agreement and the earlier of
the Termination Date and the Closing Date, Sellers will use their Best Efforts
to cause the conditions in Section8 and Section9 to be satisfied.
SECTION 6.
COVENANTS OF BUYERS
6.1 Notification. Between the date hereof and the Closing Date, Buyers
will promptly notify Sellers in writing if Buyers become aware of any fact or
condition that causes or constitutes a Breach of any of the representations and
warranties of buyers as of the date of this Agreement, or if buyers become aware
of the occurrence after the date of this Agreement or any fact or condition that
would cause or constitute a Breach of any such representation or warranty had
such representation or warranty been made as of the time of occurrence or
discovery of such fact or condition. Should any fact or condition require any
change in a Disclosure Schedule hereto if the Disclosure Schedule were dated the
date of the occurrence or discovery of any such fact or condition, Buyers prior
to Closing deliver to Sellers a supplement to such Schedule specifying such
change. During the same period, Buyers will promptly notify Sellers of the
occurrence of any Breach of any covenants of Buyers in this Section 6.1 or of
the occurrence of any event that may make the satisfaction of the conditions in
Section9 impossible or unlikely.
6.2 Required Approvals. As promptly as practicable after the date of
this Agreement, Buyers will make all filings required by Legal Requirements to
be made by them in order to consummate the Contemplated Transactions. Between
the date of this Agreement and the earlier of the Termination Date and the
Closing Date, on a Best Efforts basis, Buyers will cooperate with Sellers in
respect to all filings that Sellers elect to make or are required by Legal
Requirements to make in connection with the Contemplated Transactions.
6.3 Best Efforts. Between the date hereof and the earlier of the
Termination Date and the Closing Date, Buyers will use their Best Efforts to
cause the conditions in Section 9 to be satisfied.
SECTION 7.
EMPLOYMENT MATTERS
7.1 Employees. Buyers will offer employment as of the Closing Date to
all full-time employees of the Business and who are employed by Sellers on the
Closing Date, except for those employees listed on Disclosure Schedule 7.1
(which shall be provided by Buyers to Sellers prior to the Closing Date). Each
employee who accepts Buyers' offer of employment shall be referred to herein as
a "Continuing Employee."
7.2 Employee Records. Sellers shall make available to the Buyers all
personnel records, including names, Social Security Numbers, performance
reviews, evaluations and ratings, dates of hire by Sellers or any of their
Affiliates, dates of birth, number of hours worked each calendar year, and
salary histories, for all Continuing Employees.
7.3 Termination and Severance Pay. Sellers will be responsible for any
termination and severance pay in connection with the termination of any
employee's employment with any Seller, whether or not any such employee becomes
a Continuing Employee, provided, Buyers shall in no event be responsible for, or
obligated to pay, any amounts owing by either Seller to any Continuing Employee,
whether by contract or otherwise, as a result of the termination of any
employee's employment with Parker Sub or any affiliate thereof.
SECTION 8.
CONDITIONS PRECEDENT TO BUYERS' OBLIGATION TO CLOSE
Buyers' obligation to purchase the Parker Assets, assume the Contracts
and to take the other actions required to be taken by Buyers at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Buyers, in whole or in
part):
8.1 Accuracy of Representations. All of the representations and
warranties of Sellers in this Agreement (considered collectively), and each of
these representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement, and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date, without giving effect to any supplement to the Disclosure
Schedules; provided that each of the representations and warranties of Sellers
in Sections 3.4 and 3.14 must have been accurate in all respects as of the date
of this Agreement, and must be accurate in all respects as of the Closing Date
as if made on the Closing Date, without giving effect to any supplement to the
Disclosure Schedules.
8.2 Performance by Sellers. All of the covenants and obligations that
Sellers are required to perform or to comply with pursuant to this Agreement at
or prior to the Closing (considered collectively), and each of these covenants
and obligations (considered individually), must have been duly performed and
complied with in all material respects. Each document required to be delivered
pursuant to Section 2.5(a) must have been delivered, and each of the other
covenants and obligations in Section5 must have been performed and complied with
in all respects.
8.3 Consents. Each of the Consents identified on Disclosure Schedule
3.2(b) must have been obtained and must be in full force and effect.
8.4 Title Insurance. Receipt of a commitment for title insurance policy
(the "Title Commitment") from a title insurance company of Buyers' choice (the
"Title Company") insuring Buyer's interest in the Real Property, in an amount
satisfactory to Buyers, subject only to exceptions reasonably acceptable to
Buyers and containing endorsements requested by Buyers. Buyers shall pay the
search charges, copying charges and title insurance premium associated with the
Title Commitment.
8.5 Survey of Real Property. Receipt of a survey (the "Survey") with
respect to the Real Property of a recent date, reasonably acceptable to Buyers
and consisting of a plat and field notes, prepared by a licensed surveyor
reasonably acceptable to Buyers, and the Title Company, which Survey shall: (a)
reflect the actual dimensions, the gross area and the net area of the Real
Property, the location of any easements, rights-of-way, setback lines or other
matters referred to in the Title Commitment; (b) include the surveyor's
registration number and seal and the date of the Survey; (c) include a
certification to Buyers and the Title Company reasonably acceptable to each; (d)
reflect that the Real Property has access to and from a publicly dedicated
street, roadway or highway; (e) be sufficient to cause the Title Company to
delete any "survey exception" in Schedule B of the Title Policy to the extent
permitted by the rules of ALTA; and (f) to reflect the area within the Real
Property, if any, that has been designated by any governmental agency or body as
being subject to special or increased flood hazards; and (g) comply with the
most recent Minimum Standard Detail Requirements of ALTA/ACSM Legal Title Survey
as required by Buyers. Buyers and Sellers shall each pay one-half of the cost of
obtaining the Survey.
8.6 Acquisition of Leased Equipment and Leased Real Property. Sellers
shall be capable of transferring to Buyers all right, title and interest in and
to the Leased Equipment and the Leased Real Property (by exercise of option or
otherwise), on terms reasonably acceptable to Buyers, free and clear of all
Encumbrances, except those easements and restrictions of record that are not
material to Buyers' ownership and use of such leased assets.
8.7 Additional Documents. Each of the following documents must have
been delivered to Buyers:
(a) an opinion of Pepper Hamilton LLP, counsel to Sellers, dated the
Closing Date, substantially in the form of Exhibit 8.7(a), which shall also be
directed to and may be relied upon by any financial institution or institutions
providing the financing to Buyers;
(b) a certificate of Sellers representing and warranting to Buyers that
the conditions set forth in Sections 8.1, 8.2 and 8.8 have been fulfilled;
(c) such other documents as Buyers may reasonably request for the
purpose of (i) evidencing the accuracy of any of the representations and
warranties of Sellers and their shareholders, (ii) evidencing the performance by
Sellers of, or the compliance by Sellers with, any covenant or obligation
required to be performed or complied with by the Sellers, (iii) evidencing the
satisfaction of any condition referred to in this Section8, or (iv) otherwise
facilitating the consummation or performance of any of the Contemplated
Transactions;
(a) Sellers shall have provided Buyers with such financial or other
information with respect to Parker Industries and/or the Business required by
Buyers in order to comply with the requirements of the Securities and Exchange
Act of 1934, as amended, including, without limitation, Item 2 of Form 8-K
promulgated thereunder; and
(b) a fully-executed lease of the Real Property in recordable form from
the Authority to Buyer having an initial term of seven years and at such rental
and containing such other terms as are reasonably satisfactory to Buyer.
8.8 No Proceedings. Since the date of this Agreement, there must not
have been commenced or Threatened against Buyer, or against any Person
affiliated with Buyer, any Proceeding involving any challenge to, or seeking
damages or other relief in connection with, any of the Contemplated Transactions
including any claim asserting that such Person is entitled to all or any portion
of the Purchase Price payable for the Parker Assets.
8.9 Material Adverse Change. There shall not have occurred any material
adverse change to the Business or the financial condition or properties of
Parker Industries.
SECTION 9.
CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLERS TO CLOSE
The obligation of Sellers to sell the Parker Assets and the obligations
of Sellers to take such other actions required to be taken by Sellers at the
Closing are subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by in whole or in part):
9.1 Accuracy of Representations. All of Buyers' representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date.
9.2 Buyers' Performance. All of the covenants and obligations that
Buyers are required to perform or to comply with pursuant to this Agreement at
or prior to the Closing (considered collectively), and each of these covenants
and obligations (considered individually), must have been performed and complied
with in all material respects. Buyers must have delivered each of the documents
required to be delivered by Buyers pursuant to Section 2.6(b) and must have made
the cash payments as required pursuant to Section 2.6(b), and each of the other
covenants and obligations in Section6 must have been performed and complied with
in all respects.
9.3 Consents. Each of the Consents identified on Disclosure Schedule
3.2(b) must have been obtained and must be in full force and effect.
9.4 Additional Documents. Buyers must have caused the following
documents to be delivered to Seller:
(a) an opinion of Gallop, Johnson & Neuman, L.C., counsel to Buyers,
dated the Closing Date, substantially in the form of Exhibit 9.4(a);
(b) a certificate of Buyers representing and warranting to Sellers that
the conditions set forth in Sections 9.1, 9.2 and 9.5 have been fulfilled;
(c) the Note;
(d) the Security Agreement;
(e) the Guaranty Agreement; and
(f) such other documents as Sellers may reasonably request for the
purpose of (i) evidencing the accuracy of any representation or warranty of
Buyers, (ii) evidencing the performance by Buyers of, or the compliance by
Buyers with, any covenant or obligation required to be performed or complied
with by Buyers, (iii) evidencing the satisfaction of any condition referred to
in this Section9, or (iv) otherwise facilitating the consummation or performance
of any of the Contemplated Transactions.
9.5 No Proceedings. Since the date of this Agreement, there must not
have been commenced or Threatened against Buyer, or against any Person
affiliated with Buyer, any Proceeding involving any challenge to, or seeking
damages or other relief in connection with, any of the Contemplated Transactions
including any claim asserting that such Person is entitled to all or any portion
of the Purchase Price payable for the Parker Assets.
9.6 Authority Transaction. The Authority transaction shall have been
consummated.
SECTION 10.
POST-CLOSING COVENANTS
10.1 Maintenance of Accounts Receivable. After the Closing Date and
until the Note is satisfied in full, Buyers shall maintain the Accounts
Receivable of the Business in the same manner and at the same level consistent
with Top Air's practice prior to the Closing Date with regard to its own
receivables. From time to time and upon Sellers' reasonable request, Buyers
shall provide Sellers with evidence of the Account Receivables.
10.2 No Additional Pledges. After the Closing Date and until the Note
is satisfied in full, Buyers shall not grant any other security interest in or
otherwise dispose of in any manner other than collection thereof in the Ordinary
Course of Business any of the Accounts Receivable, other than a security
interest which is subordinate to that of Sellers.
10.3 Information. After the Closing Date and until the Note is
satisfied in full, Buyers shall provide Sellers a copy of any public reports
filed by Buyers with the Securities and Exchange Commission pursuant to
requirements of the Securities Exchange Act of 1934, as amended, including
reports on form 10-K, 10-Q and any proxy statements filed with the Securities
and Exchange Commission and distributed to shareholders of Buyers, in each case
within a reasonable amount of time after the filing of such public report.
10.4 Broker Settlement. Buyers and Sellers acknowledge the claims of
Mega Capital Corporation and Peter Wright (collectively, the "Brokers")
concerning the right to receive a brokerage fee upon consummation of the
Contemplated Transactions. Pursuant to a letter dated February 24, 1999,
addressed to Owosso and signed by Brokers concerning such claim, Buyers and
Sellers have agreed to pay a total of $75,000, of which no more than $25,000
shall be paid by Sellers, to Brokers in exchange for a total release. Buyers and
Sellers covenant and agree to pursue a final settlement with Brokers on these
terms as expeditiously as possible.
10.5 Environmental Remediation. Sellers acknowledge that Buyers will
arrange and pay for soil testing on the Real Property in the vicinity of the
existing above-ground storage tanks with respect to the presence of potential
Hazardous Materials. If Hazardous Materials are discovered, Sellers covenant and
agree that, upon notice from Buyers, Sellers will promptly and diligently
remediate the Real Property consistent with Iowa Risk-Based Corrective Action
Standards/Tier I level, at Sellers' sole cost and expense.
10.6 Permits. Sellers acknowledge that State of Iowa Department of
Natural Resources Permit No. 95-A-006-S1 with respect to Spray Booth EP1 has
been issued subject to certain testing of emissions from the exhaust stacks. At
Sellers' sole cost and expense, Sellers shall obtain such testing and make any
alterations so that the exhaust stacks satisfy the requirements for the issuance
of such permit.
SECTION 11.
TERMINATION
11.1 Termination Events. This Agreement may, by notice given prior to
or at the Closing, be terminated:
(a) by Buyers, if a material Breach of any provision of this Agreement
has been committed by Sellers and by Sellers if a material Breach of any
provision of this Agreement has been committed by Buyers, provided that the
other party and such Breach has not waived such Breach;
(b) by Buyers, if Buyers, in their sole discretion, determine to have a
Phase I and/or a Phase II environmental investigation of the Real Property
conducted and if the report of such investigations (the "Environmental Report")
discloses any environmental conditions which have not previously identified to
Buyers and are not reasonably satisfactory to Buyers, in their sole discretion;
(c) (i) by Buyers if any of the conditions in Section8 have not been
satisfied as of the Closing Date or if satisfaction of such a condition is or
becomes impossible (other than through the failure of Buyers to comply with its
obligations under this Agreement) and Buyers have not waived such condition on
or before the Closing Date; or (ii) by Sellers if any of the conditions in
Section9 have not been satisfied as of the Closing Date or if satisfaction of
such a condition is or becomes impossible (other than through the failure of
Sellers to comply with its obligations under this Agreement) and Sellers have
not waived such condition on or before the Closing Date;
(d) by Buyers, in their sole discretion, if Sellers' updated Disclosure
Schedule (pursuant to Section 8.1) are not satisfactory to Buyers.
(e) by mutual written consent of Buyer and Sellers; or
(f) by Buyers or Sellers if the Closing has not occurred (other than
through the failure of any party seeking to terminate this Agreement to comply
fully with its obligations under this Agreement) on or before March 5, 1999, or
such later date as the parties may agree upon.
11.2 Effect of Termination. Each party's right of termination under
Section 11.1 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination will not be an election
of remedies. If this Agreement is terminated pursuant to Section 11.1, all
further obligations of the parties under this Agreement will terminate, except
that the obligations in Sections 14.1 and 14.3 will survive; provided, however,
that if this Agreement is terminated by a party because of the Breach of the
Agreement by another party or because one or more of the conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of another party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
SECTION 12.
INDEMNIFICATION; REMEDIES
12.1 Survival; Right to Indemnification Not Affected by Knowledge;
Exceptions. All representations, warranties, covenants, and obligations to be
performed prior to Closing in this Agreement, the Exhibits, the Disclosure
Schedules, the supplements to the Disclosure Schedules, and any other
certificate or document delivered pursuant to this Agreement will survive the
Closing for a period of two (2) years; provided, however, that notwithstanding
the foregoing, Sellers' indemnification obligations, with respect to a breach of
the representations and warranties (a) under Section 3.2(a) shall survive for
the maximum time period permitted by law, (b) under Section 2.3 and 2.7 shall
survive the Closing until the expiration of the applicable statute of
limitations, (c) under Section 3.11 shall survive for a period of 7 years
following the Closing Date, and (d) under Section 12.2(b) shall survive for 5
years (such items referred to in this Section 12.1(a), (b), (c) and (d) and in
Section 12.2(a)(iv) are collectively referred to herein as the "Excluded Basket
Items"). The right to indemnification, payment of Damages or other remedy based
on such representations, warranties, covenants, and obligations will not be
affected by any investigation conducted with respect to, or any Knowledge
acquired (or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, and the
determination of the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation will be determined as if all
references to "material" and "materially" were deleted from any representation.
12.2 Indemnification and Payment of Damages by Sellers. Subject to
Section 12.7, Sellers, jointly and severally, will indemnify and hold harmless
Buyers, and its respective Representatives, stockholders, controlling persons,
and Affiliates (collectively, the "Indemnified Persons") for, and will pay to
the Indemnified Persons the amount of, any loss, liability, claim, damage
(including incidental and consequential damages), expense (including costs of
investigation and defense and reasonable attorney's fees) ("Expenses") or
diminution of value, whether or not involving a third-party claim (collectively,
"Damages"), arising, directly or indirectly, from or in connection with:
(a) General.
(i) any Breach of any representation or warranty made by Sellers
in this Agreement, the Disclosure Schedules, or any other certificate
or document delivered by Sellers or their shareholders pursuant to this
Agreement;
(ii) any Breach of any representation or warranty made by Sellers
in this Agreement together with any supplement to the Disclosure
Schedule prepared by Sellers as if such representation or warranty were
made on and as of the Closing Date;
(iii) any Breach by Sellers of any covenant or obligation of
Sellers in this Agreement; or
(iv) any claim against Buyers by any Person with respect to any
Retained Liability.
(b) Product Warranty. In addition to the provisions of Section 10.2(a),
Sellers will indemnify and hold harmless Buyers, and the other Indemnified
Persons for, and will pay to Buyers, and the other Indemnified Persons the
amount of, any Damages (including appropriate labor and overhead costs) in
connection with product warranty claims by third parties with respect to
products Manufactured by the Business prior to the Closing Date solely to the
extent such Damages exceed the Product Warranty Cap Amount.
12.3 Indemnification and Payment of Damages by Buyers. Buyers will
indemnify and hold harmless Sellers and will pay to Sellers and Sellers'
Representatives, partners, stockholders, controlling person and Affiliates, the
amount of any Expenses and Damages arising, directly or indirectly, from or in
connection with (a) any Breach of any representation or warranty made by Buyers
in this Agreement, the Disclosure Schedules prepared by Buyers, or in any
certificate delivered by Buyers pursuant to this Agreement, and (b) any Breach
of a representation or warranty made by Buyers in this Agreement together with
any supplement to the Disclosure Schedule prepared by Buyers as if such
representation or warranty were made on and as of the Closing Date; (c) any
Breach of any covenants or obligation of Buyers in this Agreement; and (d) any
claim relating to the Assumed Liabilities.
12.4 Procedure for Indemnification--Third Party Claims.
(a) Promptly after receipt by an indemnified party under Section 12.2
or 12.3 of notice of the commencement of any Proceeding against it, such
indemnified party will, if a claim is to be made against an indemnifying party
under such Section, give notice to the indemnifying party of the commencement of
such claim, but the failure to notify the indemnifying party will not relieve
the indemnifying party of any liability that it may have to any indemnified
party, except to the extent that the indemnifying party demonstrates that the
defense of such action is prejudiced by the indemnifying party's failure to give
such notice.
(b) If any Proceeding referred to in Section 12.4(a) is brought against
an indemnified party and it gives notice to the indemnifying party of the
commencement of such Proceeding, the indemnifying party will be entitled to
participate in such Proceeding and, to the extent that it wishes (unless (i) the
indemnifying party is also a party to such Proceeding and the indemnified party
determines in good faith that joint representation would be inappropriate, (ii)
the indemnifying party fails to provide reasonable assurance to the indemnified
party of its financial capacity to defend such Proceeding and provide
indemnification with respect to such Proceeding, or (iii) the outcome of the
Proceeding will have a continuing effect the indemnified party), to assume the
defense of such Proceeding with counsel satisfactory to the indemnified party
and, after notice from the indemnifying party to the indemnified party of its
election to assume the defense of such Proceeding, the indemnifying party will
not, as long as it diligently conducts such defense, be liable to the
indemnified party under this Section 12.4(c)(b) for any fees of other counsel or
any other expenses with respect to the defense of such Proceeding, in each case
subsequently incurred by the indemnified party in connection with the defense of
such Proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a Proceeding, (i) it will be
conclusively established for purposes of this Agreement that the claims made in
that Proceeding are within the scope of and subject to indemnification; (ii) no
compromise or settlement of such claims may be effected by the indemnifying
party without the indemnified party's consent unless (A) there is no finding or
admission of any violation of Legal Requirements or any violation of the rights
of any Person and no effect on any other claims that may be made against the
indemnified party, and (B) the sole relief provided is monetary Damages that are
paid in full by the indemnifying party; and (iii) the indemnified party will
have no liability with respect to any compromise or settlement of such claims
effected without its Consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not, within ten
days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will be bound by any determination made in such Proceeding or
any compromise or settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party determines
in good faith that there is a reasonable probability that a Proceeding may
adversely affect it or its affiliates other than as a result of monetary Damages
for which it would be entitled to indemnification under this Agreement, the
indemnified party may, by notice to the indemnifying party, assume the exclusive
right to defend, compromise, or settle such Proceeding, but the indemnifying
party will not be bound by any determination of a Proceeding so defended or any
compromise or settlement effected without its Consent (which may not be
unreasonably withheld).
(d) Sellers hereby consent to the non-exclusive jurisdiction of any
state or federal court situated in Iowa in which a Proceeding is brought against
any Indemnified Person for purposes of any claim that an Indemnified Person may
have under this Agreement with respect to such Proceeding or the matters alleged
therein, and agree that process may be served on Sellers and their shareholders
with respect to such a claim anywhere in the world.
12.5 Procedure for Indemnification--Other Claims. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
12.6 Legal Fees and Expenses. Except as expressly set forth in this
Section12, each party shall pay its own legal expenses with respect to all
matters arising under this Section12.
12.7 Limit of Indemnification. Notwithstanding any provision in this
Section12 to the contrary, no claim for indemnification may be made unless and
until the aggregate of all indemnifiable claims suffered by the potential
indemnified parties exceeds $100,000 and thereafter only for amounts in excess
of said $100,000 threshold; provided, however, that Sellers' obligation to
indemnify with respect to breaches of its representations, warranties or
agreements with respect to the Excluded Basket Items shall not be subject to
said $100,000 limitation. The indemnifiable claims required to be paid by
Sellers pursuant to this Section12 shall in no event exceed the amount of the
Purchase Price. Indemnification pursuant to this Section12 shall be the sole
remedy to any party hereto for Breaches by another party prior to Closing of the
representation and warranties contained in this Agreement.
12.8 Right of Set-Off. Buyers shall have the right to set-off against
its payment obligations under the Note made and delivered pursuant to Section
2.2(a)(ii) for any amount Buyers may be entitled in accordance with the
provisions of this Section12 or otherwise pursuant to this Agreement, provided,
however, any amounts proposed by Buyers to be set-off pursuant to this Section
12.8 and contested by Sellers shall be paid when due into an interest-bearing
escrow account with instructions to disburse such funds (and accrued interest
thereon) to Buyers if Buyers prevail in the subject dispute, to Sellers if
Seller prevail in the subject dispute, and pursuant to the joint instructions of
Buyers and Sellers if an accommodation is attained between Buyers and Sellers.
SECTION 13.
ARBITRATION
13.1 Arbitration. Any dispute arising under this Agreement shall be
settled by arbitration in Chicago, Illinois, before a single arbitrator pursuant
to the rules of the American Arbitration Association. Arbitration may be
commenced at any time by any party hereto giving written notice to each party to
a dispute that such dispute has been referred to arbitration. The arbitrator
shall be selected by the joint agreement of Buyer and Seller, but if they do not
so agree within twenty (20) days after the date of the notice referred to above,
the selection shall be made pursuant to the rules from the panels of arbitrators
maintained by such Association. Any award rendered by the arbitrator shall be
conclusive and binding upon the parties hereof; provided, however, that any such
award shall be accompanied by a written opinion of the arbitrator giving the
reasons for the award. This provision for the arbitration shall be specifically
enforceable by the parties and the decision of the arbitrator in accordance
herewith shall be final and binding and there shall be no right of appeal
therefrom. The submission of any dispute to arbitration shall not relieve the
parties hereto from the respective obligations under this Agreement that are not
the specific subject matter of such dispute.
SECTION 14.
GENERAL PROVISIONS
14.1 Expenses. Except as otherwise expressly provided in this
Agreement, each party to this Agreement will bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the Contemplated Transactions, including all fees and expenses of
agents, representatives, counsel, and accountants. In the event of termination
of this Agreement, the obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a Breach of this Agreement by
another party.
14.2 Public Announcements. Any public announcement or similar publicity
with respect to this Agreement or the Contemplated Transactions will be issued,
if at all, at such time and in such manner as Top Air and Owosso jointly agree.
Unless consented to by the other parties hereto in advance, or unless required
by Legal Requirements, prior to the Closing, all parties shall keep this
Agreement strictly confidential and may not make any disclosure of this
Agreement to any Person other than their attorneys, accountants, banks, brokers
or other professionals who have an obligation to maintain the confidentiality of
information relating to this Agreement.
14.3 Confidentiality. Between the date of this Agreement and the
Closing Date, Buyers and Sellers will maintain in confidence, and will cause the
directors, officers, partners, employees, agents, and advisors of Buyers and
Sellers to maintain in confidence, and not use to the detriment of another party
any written, oral, or other information obtained in confidence from another
party in connection with this Agreement or the Contemplated Transactions, unless
(a) such information is already known to such party or to others not bound by a
duty of confidentiality or such information becomes publicly available through
no fault of such party, (b) the use of such information is necessary or
appropriate in making any filing or obtaining any consent or approval required
for the consummation of the Contemplated Transactions, or (c) the furnishing or
use of such information is required by legal proceedings.
If the Contemplated Transactions are not consummated, each party will
return or destroy as much of such written information as the other party may
reasonably request.
14.4 Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Sellers: Owosso Corporation
The Triad Building
2200 Renaissance Boulevard
Suite 150
King of Prussia, Pennsylvania 19406
Attention: George B. Lemmon, Jr.
Facsimile No.: (610) 275-5122
with a copy to: Pepper Hamilton LLP
3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia, Pennsylvania 19103-2799
Attention: Elam M. Hitchner, III, Esq.
Facsimile No.: (215) 981-4750
Buyer: Parker Acquisition Sub, Inc.
317 Savannah Park Road
Cedar Falls, Iowa 50613
Attention: Steven R. Lind
Facsimile No.: (319) 268-1435
with a copy to: Gallop, Johnson & Neuman, L.C.
Interco Corporate Tower
101 South Hanley Road, Suite 1600
St. Louis, Missouri 63105
Attention: Robert H. Wexler, Esq.
Facsimile No.: (314) 862-1219
14.5 Waiver. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by any
party in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
14.6 Bulk Sales Laws. The parties hereto waive compliance with the
requirements of any applicable Bulk Sales Law in connection with the
consummation of the Contemplated Transactions.
14.7 Entire Agreement and Modification. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter
(including the Letter of Intent between Top Air and Owosso dated December 2,
1998) and constitutes (along with the documents referred to in this Agreement) a
complete and exclusive statement of the terms of the agreement between the
parties with respect to its subject matter. This Agreement may not be amended
except by a written agreement executed by each of the parties hereto.
14.8 Inconsistencies. In the event of any inconsistency between the
statements in the body of this Agreement and those in the Schedules, the
statements in the body of this Agreement will control.
14.9 Assignments; Successors; No Third-Party Rights. No party may
assign any of its rights under this Agreement without the prior consent of the
other parties except that Buyers may assign any of their rights under this
Agreement to any Subsidiary or Affiliate of Buyers. Subject to the preceding
sentence, this Agreement will apply to, be binding in all respects upon, and
inure to the benefit of the successors and permitted assigns of the parties.
Nothing expressed or referred to in this Agreement will be construed to give any
Person other than the parties to this Agreement any legal or equitable right,
remedy, or claim under or with respect to this Agreement or any provision of
this Agreement. This Agreement and all of its provisions and conditions are for
the sole and exclusive benefit of the parties to this Agreement and their
successors and assigns.
14.10 Severability. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
14.11 Section Headings; Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
14.12 Time of Essence. With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.
14.13 Governing Law. This Agreement will be governed by the internal,
substantive laws of the State of Iowa applicable to contracts executed and
performed entirely within such state.
14.14 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
14.15 Waiver of Jury Trial. ALL PARTIES TO THIS AGREEMENT HEREBY WAIVE
ANY RIGHT TO A JURY TRIAL IN ANY LITIGATION ARISING OUT OF OR WITH RESPECT TO
THIS AGREEMENT.
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<PAGE>
THIS AGREEMENT CONTAINS BINDING ARBITRATION PROVISIONS WHICH MAY BE
ENFORCED BY THE PARTIES.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
BUYER: SELLERS:
TOP AIR MANUFACTURING, INC. OWOSSO CORPORATION
By: /s/ Steven R. Lind By: /s/ George B. Lemmon, Jr.
--------------------------------- ----------------------------------
Name: Steven R. Lind Name: George B. Lemmon, Jr.
Title: President and Chief Executive Title: President and Chief Executive
Officer Officer
PARKER ACQUISITION SUB, INC. DWZM, INC.
By: /s/ Steven R. Lind By: /s/ George B. Lemmon, Jr.
--------------------------------- ---------------------------------
Name: Steven R. Lind Name: George B. Lemmon, Jr.
Title: President and Chief Executive Title: Vice President
Officer
