MERGER AGREEMENT

Agreement and Plan of Merger

You are currently viewing:

This Agreement and Plan of Merger involves

ASV INC /MN/ | LMI MERGER CORP., | LOEGERING MFG. INC.,

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: MERGER AGREEMENT
Governing Law: North Dakota Date: 10/7/2004
Industry: Constr. and Agric. Machinery Law Firm: Dorsey & Whitney LLP; Ohnstad Twichell, P.C Sector: Capital Goods

MERGER AGREEMENT, Parties: asv inc /mn/ , lmi merger corp. , loegering mfg. inc.

<PAGE>

Exhibit 2.1

MERGER AGREEMENT

among

A.S.V., INC.,

LMI MERGER CORP.,

LOEGERING MFG. INC.,

THE MARILYN A. LOEGERING REVOCABLE TRUST

and

MARILYN A. LOEGERING

dated

October 1, 2004

Execution Copy

<PAGE>

TABLE OF CONTENTS

<TABLE>

<S> <C>

Recitals.......................................................................................................... 1

I. Definitions.................................................................................................... 1

II. The Merger.................................................................................................... 7

2.1 The Merger.......................................................................................... 7

2.2 Conversion of Securities............................................................................ 7

2.3 Escrow.............................................................................................. 8

2.4 The Closing......................................................................................... 8

2.5 Stock Certificates.................................................................................. 10

2.6 Effect of Merger.................................................................................... 11

2.7 Taking of Necessary Action; Further Action.......................................................... 11

2.8 Tax-Free Reorganization............................................................................. 11

2.9 Buyer Common Stock.................................................................................. 12

III. Representations and Warranties of Shareholder................................................................ 12

3.1 Power and Authority................................................................................. 12

3.2 Valid and Binding Agreement......................................................................... 12

3.3 No Breach; Consents................................................................................. 12

3.4 Stock Ownership..................................................................................... 12

3.5 Investment.......................................................................................... 13

IV. Representations and Warranties of the Company and Shareholder................................................. 13

4.1 Incorporation; Power and Authority.................................................................. 13

4.2 Valid and Binding Agreement......................................................................... 13

4.3 No Breach; Consents................................................................................. 13

4.4 Capitalization...................................................................................... 14

4.5 Subsidiaries........................................................................................ 14

4.6 Financial Statements................................................................................ 14

4.7 Absence of Undisclosed Liabilities.................................................................. 15

4.8 Books and Records................................................................................... 15

4.9 Absence of Certain Developments..................................................................... 15

4.10 Property............................................................................................ 17

4.11 Accounts Receivable................................................................................. 18

4.12 Inventory........................................................................................... 18

4.13 Tax Matters......................................................................................... 18

4.14 Intellectual Property Rights........................................................................ 20

4.15 Material Contracts.................................................................................. 23

4.16 Litigation.......................................................................................... 24

4.17 Insurance........................................................................................... 24

4.18 Compliance with Laws; Government Authorizations..................................................... 25

4.19 Environmental Matters............................................................................... 25

4.20 Warranties.......................................................................................... 27

4.21 Employees........................................................................................... 28

4.22 Employee Benefits................................................................................... 29

</TABLE>

Execution Copy

<PAGE>

<TABLE>

<S> <C>

4.23 Customers........................................................................................... 31

4.24 Suppliers........................................................................................... 31

4.25 Affiliate Transactions.............................................................................. 31

4.26 Brokerage........................................................................................... 32

4.27 Availability of Documents........................................................................... 32

4.28 Disclosure.......................................................................................... 32

V. Representations and Warranties of Buyer........................................................................ 32

5.1 Incorporation; Power and Authority.................................................................. 32

5.2 Valid and Binding Agreement......................................................................... 32

5.3 No Breach; Consents................................................................................. 33

5.4 Certain Tax Matters................................................................................. 33

5.5 Brokerage........................................................................................... 33

5.6 Investment Intent................................................................................... 33

5.7 Buyer Common Stock.................................................................................. 33

5.8 SEC Filings; Financial Statements................................................................... 33

VI. Agreements of the Company..................................................................................... 34

6.1 Tax Matters......................................................................................... 34

VII. Agreements of Buyer.......................................................................................... 34

7.1 Tax Matters......................................................................................... 35

7.2 Board of Directors.................................................................................. 35

7.3 Registration Statement.............................................................................. 35

7.4 Listing............................................................................................. 36

7.5 Employment; Employee Benefits....................................................................... 37

7.6 Litigation.......................................................................................... 37

VIII. Indemnification............................................................................................. 37

8.1 Indemnification Obligation.......................................................................... 37

8.2 Basket.............................................................................................. 38

8.3 Cap................................................................................................. 38

8.4 Buyer Claims........................................................................................ 38

8.5 Third Party Action.................................................................................. 39

8.6 Escrow Fund......................................................................................... 41

8.7 Survival............................................................................................ 41

IX. General....................................................................................................... 41

9.1 Press Releases and Announcements.................................................................... 41

9.2 Expenses............................................................................................ 41

9.3 Amendment and Waiver................................................................................ 42

9.4 Notices............................................................................................. 42

9.5 Assignment.......................................................................................... 43

9.6 No Third Party Beneficiaries........................................................................ 43

9.7 Severability........................................................................................ 43

9.8 Complete Agreement.................................................................................. 43

9.9 Schedules........................................................................................... 43

</TABLE>

Execution Copy

<PAGE>

<TABLE>

<S> <C>

9.10 Signatures; Counterparts............................................................................ 44

9.11 Governing Law....................................................................................... 44

9.12 Specific Performance................................................................................ 44

9.13 Jurisdiction........................................................................................ 44

9.14 Waiver of Jury Trial................................................................................ 44

9.15 Construction........................................................................................ 45

9.16 Time of Essence..................................................................................... 45

9.17 LBW Release......................................................................................... 45

9.18 Steve and George Loegering.......................................................................... 45

9.19 George Loegering's Intellectual Property............................................................ 46

9.20 S Corp.............................................................................................. 46

</TABLE>

Exhibit A - Form of Escrow Agreement

Exhibit B - Form of Release

Exhibit C - Form of Articles of Merger

Exhibit D - Form of Plan of Merger

Exhibit E - Form of Real Property Transfer Agreement - Plant

Exhibit F - Form of Real Property Transfer Agreement - Lot

Exhibit G - Form of Employment Agreement - Wanda Mangin

Exhibit H - Form of Employment Agreement - Steve Loegering

Exhibit I - Release of LBW Management, LLC

Execution Copy

iii

<PAGE>

MERGER AGREEMENT

This MERGER AGREEMENT (this "Agreement") is made as of October 1, 2004,

among A.S.V., Inc., a Minnesota corporation ("Buyer"), LMI Merger Corp., a North

Dakota corporation and wholly owned subsidiary of Buyer ("Merger Subsidiary"),

Loegering Mfg. Inc., a North Dakota corporation (the "Company"), Marilyn A.

Loegering and her successors in trust, as trustees of The Marilyn A. Loegering

Revocable Trust March 28, 1996, the sole shareholder of the Company (the

"Loegering Trust"), and Marilyn A. Loegering, an individual resident of the

State of North Dakota (the Loegering Trust and Marilyn A. Loegering are

collectively referred to in this Agreement as the "Shareholder").

RECITALS

WHEREAS, the respective Boards of Directors of Buyer, Merger Subsidiary

and the Company have determined that it is advisable and in the best interests

of the respective corporations and their shareholders that Merger Subsidiary be

merged with and into the Company (the "Merger") in accordance with the North

Dakota Business Corporation Act (the "NDBCA") and the terms of this Agreement,

pursuant to which the Company will be the surviving corporation and will be a

wholly owned subsidiary of Buyer.

WHEREAS, for United States federal income tax purposes, the parties intend

that the Merger will qualify as a "reorganization" under Section 368(a) of the

Internal Revenue Code of 1986, as amended (the "Code"), and that this Agreement

constitutes a "plan of reorganization" within the meaning of the Code.

WHEREAS, Buyer, Merger Subsidiary, the Company and Shareholder desire to

make certain representations, warranties and agreements in connection with, and

establish various conditions precedent to, the Merger.

NOW, THEREFORE, in consideration of the mutual representations, warranties

and agreements contained in this Agreement, and for other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged, the

parties agree as follows:

I. DEFINITIONS

The following terms not defined below are defined in the sections of

Articles II through V, inclusive, and Articles VII through VIII, inclusive,

indicated below:

<TABLE>

DEFINITION DEFINED

---------- -------

<S> <C>

Accredited Investor 3.5

Admitted Claim 8.4(a)

Agreement Preamble

Annual Financial Statements 4.6

Basket Amount 8.2

Buyer Preamble

Buyer Claim 8.4(a)

Buyer Common Stock 2.2(a)

</TABLE>

Execution Copy

<PAGE>

<TABLE>

DEFINITION DEFINED

---------- -------

<S> <C>

Buyer Common Stock Price 2.2(a)

Buyer Indemnified Parties 8.5(a)

Buyer SEC Reports 5.8(a)

Cap Amount 8.3

Closing 2.4(a)

Closing Date 2.4(a)

Code Recitals

Company Preamble

Company Common Stock 2.2(a)

Continuing Employee 7.5(a)

Converted Company Common Stock 2.2(a)

Environmental Costs 4.19(a)(i)

Environmental Law 4.19(a)(ii)

Escrow Account 2.3(a)

Escrow Amount 2.3(a)

Escrow Agent 2.3(a)

Escrow Agreement 2.3(a)

Escrow Cash 2.3(a)

Escrow Shares 2.3(a)

Escrow Fund 2.3(a)

Exchange Ratio 2.2(a)

Form S-3 Registration Statement 7.3(a)

Hazardous Materials 4.19(a)(iii)

Last Fiscal Year End 4.6

Latest Balance Sheet 4.6

Latest Balance Sheet Date 4.6

Latest Financial Statements 4.6

Leased Real Property 4.10(b)

List 4.19(a)(iv)

Loegering Trust Preamble

Loss 8.1

Material Contracts 4.15(a)

Merger Recitals

Merger Consideration 2.2(a)

Merger Subsidiary Preamble

NDBCA Recitals

Property 4.19(a)(v)

Real Property 4.10(b)

Regulatory Action 4.19(a)(vi)

Release 4.19(a)(vii)

Shareholder Preamble

Surviving Corporation 2.1

Surviving Corporation Common Stock 2.2(b)

Third Party Action 8.5(a)

Third-Party Environmental Claim 4.19(a)(viii)

</TABLE>

Execution Copy

<PAGE>

"Acquisition Proposal" means any offer, proposal, inquiry or indication of

interest (other than by Buyer) contemplating or otherwise relating to any

Acquisition Transaction.

"Acquisition Transaction" means any transaction or series of transactions

involving (a) any merger, consolidation, share exchange, business combination,

issuance of securities, acquisition of securities, tender offer, exchange offer

or other similar transaction (i) in which the Company is a constituent

corporation, (ii) in which a Person or "group" (as defined in the Exchange Act

and the rules promulgated thereunder) of Persons directly or indirectly acquires

beneficial or record ownership of securities representing more than 15% of the

outstanding securities of any class of voting securities of the Company or (iii)

in which the Company issues or sells securities representing more than 20% of

the outstanding securities of any class of voting securities of the Company; or

(b) any sale (other than sales of inventor in the ordinary course of business),

lease (other than in the ordinary course of business), exchange, transfer (other

than sales of inventory in the ordinary course of business), license (other than

nonexclusive licenses in the ordinary course of business), acquisition or

disposition of any business or businesses or assets that constitute or account

for 20% or more of the consolidated net revenues, net income or assets of the

Company.

"Affiliate" means a Person that directly, or indirectly through one or

more intermediaries, controls, or is controlled by, or is under common control

with, the Person specified.

"Ancillary Agreements" means the Escrow Agreement, the Releases, the

Employment Agreements with Wanda Mangin and Steve Loegering, the Real Property

Transfer Agreements and the Release of LBW Management, LLC.

"Capital Lease" means a lease to which the Company is a party that is a

capital lease as determined in accordance with GAAP.

"Consent" means any authorization, consent, approval, filing, waiver,

exemption or other action by or notice to any Persons.

"Constituent Corporations" means the Company and Merger Subsidiary as the

parties to the Merger.

"Contract" means a contract, agreement, commitment or binding

understanding, whether oral or written, that is in effect as of the date of this

Agreement or any time after the date of this Agreement.

"Disclosure Schedule" means the schedules referred to in the Agreement,

and delivered by the Company to Buyer on the date of this Agreement.

"Encumbrance" means any charge, claim, community property interest,

condition, equitable interest, lien, option, pledge, security interest, right of

first refusal or restriction of any kind, including any restriction on use,

voting, transfer, receipt of income or exercise of any other attribute of

ownership.

Execution Copy

<PAGE>

"ERISA" means the Employee Retirement Income Security Act of 1974, as

amended, and the rules and regulations thereunder.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and

the rules and regulations thereunder.

"GAAP" means United States generally accepted accounting principles, as in

effect from time to time prior to the Closing Date.

"Governmental Authorization" means any approval, consent, license, permit,

waiver, registration or other authorization issued, granted, given, made

available or otherwise required by any Governmental Entity or pursuant to Law.

"Governmental Entity" means any federal, state, local, foreign,

international or multinational entity or authority exercising executive,

legislative, judicial, regulatory, administrative or taxing functions of or

pertaining to government.

"Governmental Order" means any judgment, injunction, writ, order, ruling,

award or decree by any Governmental Entity or arbitrator.

"Insider" means (i) a shareholder, officer, director or employee of the

Company, (ii) any Member of the Immediate Family of any shareholder, officer,

director or employee of the Company or (iii) any entity in which any of the

Persons described in clause (i) or (ii) owns any beneficial interest (other than

less than one percent of the outstanding shares of capital stock of any

corporation whose stock is listed on a national securities exchange or publicly

traded on The NASDAQ National Market).

"Intellectual Property" means all rights in patents, patent applications,

trademarks, service marks, trade names, corporate names, copyrights, Software,

mask works, trade secrets, know-how and other intellectual property rights.

"Intellectual Property Rights" means (i) rights in patents, patent

applications and patentable subject matter, whether or not the subject of an

application, (ii) rights in trademarks, service marks, trade names, trade dress

and other designators of origin, registered or unregistered, (iii) rights in

copyrightable subject matter or protectable designs, registered or unregistered,

(iv) trade secrets, (v) rights in Internet domain names, uniform resource

locators and e-mail addresses, (vi) rights in semiconductor topographies (mask

works), registered or unregistered, (vii) know-how and (viii) all other

intellectual and industrial property rights of every kind and nature and however

designated, whether arising by operation of Law, Contract, license or otherwise.

"IRS" means the United States Internal Revenue Service.

"Knowledge of the Company" and "Knowledge of the Shareholder" means the

knowledge of the Company, Shareholder, or any director or officer of the

Company.

"Law" means any constitution, law, ordinance, principle of common law,

regulation, statute or treaty of any Governmental Entity.

Execution Copy

<PAGE>

"Liability" means any liability or obligation whether accrued, absolute,

contingent, unliquidated or otherwise, whether due or to become due, whether

known or unknown, and regardless of when asserted; provided, however,

"liability" specifically excludes deferred tax liabilities, in connection with

past timing differences, which have not been recorded during the time that the

Company was an S corporation, as Shareholder was responsible for taxes on the

Company's income.

"Licensed-In Intellectual Property Rights" means Third-Party Intellectual

Property Rights used or held for use by the Company with the permission of the

owner.

"Litigation" means any claim, action, arbitration, mediation, audit,

hearing, investigation, proceeding, litigation or suit (whether civil, criminal,

administrative, investigative or informal) commenced, brought, conducted or

heard by or before, or otherwise involving, any Governmental Entity or

arbitrator or mediator.

"Material Adverse Effect" means any change, effect, event or condition,

individually or in the aggregate, that has had, or, with the passage of time,

could have, a material adverse effect on the business, assets, properties,

condition (financial or otherwise), results of operations, prospects or

customer, supplier or employee relationships of the Company (which, for purposes

of this Agreement, shall be deemed to mean matters involving a value in excess

of $25,000).

"Member of the Immediate Family" of Persons means a spouse, parent, child,

sibling, mother- or father-in-law, son- or daughter-in-law, and brother- or

sister-in-law of such Persons.

"Off-the-Shelf Software" means Software that is widely commercially

available.

"Ordinary Course of Business" means the ordinary course of business of the

Company consistent with past custom and practice (including with respect to

quantity and frequency) as it has been conducted since the Last Fiscal Year End.

"Organizational Documents" means the articles or certificate of

incorporation and the bylaws of a corporation, including any amendments.

"Owned Intellectual Property Rights" means Intellectual Property Rights

owned by the Company.

"Permitted Encumbrances" means (i) Encumbrances for Taxes and other

governmental charges and assessments that are not yet due and payable or which

are being contested in good faith by appropriate proceedings, (ii) Encumbrances

of carriers, warehousemen, mechanics' and materialmen and other like

Encumbrances arising in the ordinary course of business, (iii) easements, rights

of way, title imperfections and restrictions, zoning ordinances and other

similar encumbrances affecting the real property and which do not unreasonably

restrict the use thereof in the ordinary course of business, (iv) statutory

Encumbrances in favor of lessors arising in connection with any property leased

to the Company, (v) Encumbrances reflected in the Financial Statements or

arising under Material Contracts and (vi) Encumbrances that will be removed

prior to or in connection with the Closing.

Execution Copy

<PAGE>

"Person" means any individual, corporation, general or limited

partnership, limited liability company, joint venture, estate, trust,

association, organization, labor union, Governmental Entity or other entity.

"Plan" means every plan, fund, contract, program and arrangement (whether

written or not) for the benefit of present or former employees, including those

intended to provide (i) medical, surgical, health care, hospitalization, dental,

vision, workers' compensation, life insurance, death, disability, legal

services, severance, sickness or accident benefits (whether or not defined in

Section 3(1) of ERISA), (ii) pension, profit sharing, stock bonus, retirement,

supplemental retirement or deferred compensation benefits (whether or not tax

qualified and whether or not defined in Section 3(2) of ERISA) or (iii) salary

continuation, unemployment, supplemental unemployment, severance, termination

pay, change-in-control, vacation or holiday benefits (whether or not defined in

Section 3(3) of ERISA), (w) that is maintained or contributed to by the Company,

(x) that the Company has committed to implement, establish, adopt or contribute

to in the future, (y) for which the Company is or may be financially liable as a

result of the direct sponsor's affiliation with the Company or the Company's

shareholders (whether or not such affiliation exists at the date of this

Agreement and notwithstanding that the Plan is not maintained by the Company for

the benefit of its employees or former employees) or (z) for or with respect to

which the Company is or may become liable under any common law successor

doctrine, express successor liability provisions of Law, provisions of a

collective bargaining agreement, labor or employment Law or agreement with a

predecessor employer. Plan does not include any arrangement that has been

terminated and completely wound up prior to the date of this Agreement and for

which the Company has no present or potential liability.

"Real Property Transfer Agreements" means the agreement providing for the

purchase by Buyer of the Real Property upon which the Loegering plant is

located, in the form of Exhibit E, and the agreement providing for the purchase

by Buyer of the Real Property used by the Company as a parking lot for the

Loegering plant, in the form of Exhibit F.

"Registered Intellectual Property Rights" means Intellectual Property

Rights that are the subject of a pending application or an issued patent,

trademark, copyright, design right or other similar registration formalizing

exclusive rights.

"Remedies Exception," when used with respect to any Person, means except

to the extent enforceability may be limited by applicable bankruptcy,

insolvency, reorganization, moratorium or other laws affecting the enforcement

of creditors' rights generally and by general equitable principles.

"Return" means any return, declaration, report, estimate, information

return and statement pertaining to any Taxes.

"SEC" means the United States Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended, and the

rules and regulations thereunder.

"Software" means computer programs or data in computerized form, whether

in object code, source code or other form.

Execution Copy

<PAGE>

"Subsidiary" means any Person in which any ownership interest is owned,

directly or indirectly, by another Person.

"Taxes" means all taxes, charges, fees, levies or other assessments,

including all net income, gross income, gross receipts, sales, use, ad valorem,

transfer, franchise, profits, license, withholding, payroll, employment, social

security, unemployment, excise, estimated, severance, stamp, occupation,

property or other taxes, customs duties, fees, assessments or charges of any

kind whatsoever, including all interest and penalties thereon, and additions to

tax or additional amounts imposed by any Governmental Entity upon the Company or

any Tax Affiliate.

"Third-Party Intellectual Property Rights" means Intellectual Property

Rights in which a Person other than the Company has any ownership interest.

"Treasury Regulations" means the rules and regulations under the Code.

II. THE MERGER

2.1 The Merger. On the terms and subject to the conditions set forth in

this Agreement, on the Closing Date, Merger Subsidiary will be merged with and

into the Company, the separate existence of Merger Subsidiary will cease, and

the Company will continue as the surviving corporation under the corporate name

it possesses immediately prior to the Closing Date. The Company, in its capacity

as the corporation surviving the Merger, is sometimes referred to as the

"Surviving Corporation."

2.2 Conversion of Securities.

(a) On the Closing Date, by virtue of the Merger and without any action on

the part of Buyer, Merger Subsidiary, the Company, the Surviving Corporation or

the holder of any of the following securities, the shares of the Company's

common stock, $1.00 par value ("Company Common Stock"), issued and outstanding

immediately prior to the Closing Date ("Converted Company Common Stock") will be

canceled and extinguished and be converted into and become a right on the part

of the Shareholder to receive at the Closing in the aggregate (i) a cash payment

of $3,380,000, (ii) Merger Consideration deposited into the Escrow Account,

consisting of (A) that number of shares of the common stock, par value $.01 per

share, of Buyer ("Buyer Common Stock") equal to $1,400,000 divided by the Buyer

Common Stock Price and (B) $100,000 and (iii) that number of shares of Buyer

Common Stock equal to $13,350,000 divided by the Buyer Common Stock Price (the

"Exchange Ratio"). The Exchange Ratio is subject to equitable adjustment in the

event that, prior to the Closing Date, there is any share split, subdivision,

combination, share dividend, extraordinary dividend or reorganization involving

the Buyer Common Stock. "Buyer Common Stock Price" means the average closing

sale price of Buyer Common Stock at the end of regular trading on the NASDAQ

Stock Market for the 15 trading days ending on the trading day immediately

preceding the Closing Date. The term "Merger Consideration" means the

consideration into which any capital stock of the Company will be converted

pursuant to this subsection 2.2(a).

(b) Each share of common stock, $.01 par value, of Merger Subsidiary

issued and outstanding immediately prior to the Closing Date will be converted

into one fully paid and

Execution Copy

<PAGE>

nonassessable share of common stock, $.01 par value, of the Surviving

Corporation ("Surviving Corporation Common Stock").

"reorganization" within the meaning of Section 368(a)(1)(A) of the Code pursuant

to Section 368(a)(2)(E) of the Code. Therefore, notwithstanding anything

provided for in subsection 2.2(a) above to the contrary, the final allocation of

cash and Buyer Common Stock to be transferred and conveyed to Shareholder in

connection with the Merger will be adjusted, if and to the extent necessary, to

comply with the requirement of the Code that no more than 20% of the aggregate

consideration be in the form of consideration other than voting common stock of

Buyer. The decision as to whether such an adjustment is to be made is the

Shareholder's only, and shall be made prior to Closing.

2.3 Escrow.

(a) An amount of unregistered shares of Buyer Common Stock from the Merger

Consideration equal to $1,400,000 divided by the Buyer Common Stock Price (the

"Escrow Shares") and the sum of $100,000 cash from the Merger Consideration (the

"Escrow Cash" and, together with the Escrow Shares, the "Escrow Amount") will be

deposited by Shareholder with Wells Fargo Bank, N.A., as escrow agent (the

"Escrow Agent"), to be held in escrow (the "Escrow Fund") in an account (the

"Escrow Account") pursuant to the terms of the Escrow Agreement (the "Escrow

Agreement") among Buyer, Shareholder and the Escrow Agent in the form of Exhibit

A. All cash in the Escrow Account shall be deposited in an interest-bearing

account.

(b) The Escrow Amount will be distributed out by the Escrow Agent in

accordance with the terms and conditions set forth in the Escrow Agreement.

2.4 The Closing.

(a) The closing of the transactions contemplated by this Agreement (the

"Closing") will take place at the offices of Dorsey & Whitney LLP at 50 South

Sixth Street, Suite 1500, Minneapolis, Minnesota 55402, at 9:00 a.m. on October

1, 2004 (the "Closing Date") or at such other place and on such other date as

may be mutually agreed by the Company and Buyer, in which case Closing Date

means the date so agreed.

(b) On the Closing Date:

(i) the Company and Shareholder will deliver and/or cause to be

delivered to Buyer:

(A) certificates representing all of the outstanding Company

Common Stock, free and clear of all Encumbrances, duly endorsed or

accompanied by duly executed stock powers with requisite stock

transfer tax stamps, if any, attached;

(B) a copy of the text of the resolutions adopted by the board

of directors of the Company authorizing the execution, delivery and

performance of

Execution Copy

<PAGE>

this Agreement and declaring its advisability, certified by an

appropriate officer of the Company;

Shareholder approving the Merger, certified by an appropriate

officer of the Company;

(D) resignations in writing (effective as of the Closing Date)

from each member of the board of directors of the Company, and each

corporate officer of the Company (solely in their capacity as board

members and/or corporate officers, and not as employees);

(E) a copy of each Ancillary Agreement to which the Company or

Shareholder is a party, duly executed by the Company and

Shareholder, respectively;

(F) a copy, duly executed by Shareholder, of the Escrow

Agreement;

(G) duly executed copies of all Required Consents;

(H) a duly executed FIRPTA statement for purposes of

satisfying Buyer's obligations under Section 1.1445-2(b)(2) of the

Treasury Regulations, such that no withholding is required under

such Treasury Regulations;

(I) duly executed copies of the Real Property Transfer

Agreements;

(J) a Release of the Company to be signed by Shareholder and

each other officer and director of the Company that Buyer may

request prior to the Closing, each substantially in the form of

Exhibit B, as of the Closing Date;

(K) a statement from the holder of each note and mortgage

listed on Schedule 2.4(b)(i)(K), if any, dated the Closing Date,

setting forth the principal amount then outstanding on the

indebtedness represented by such note or secured by such mortgage,

the interest rate thereon and a statement to the effect that the

Company, as obligor under such note or mortgage, is not in default

under any of the provisions thereof, or that the holder of such note

or mortgage waives any defaults;

(L) releases of all Encumbrances on the Real Property, other

than Permitted Encumbrances, including releases of each mortgage of

record and reconveyances of each deed of trust with respect to each

parcel of Real Property;

(M) certificates dated as of a date not earlier than the third

business day prior to the Closing as to the good standing of the

Company, executed by the appropriate officials of the State of North

Dakota; and

(N) such other certificates, documents and instruments that

Buyer reasonably requests not later than two (2) business days

before the Closing for the purpose of (1) evidencing the accuracy of

the Company's representations and

Execution Copy

<PAGE>

warranties, (2) evidencing the performance and compliance by the

Company with agreements contained in this Agreement or (3) otherwise

facilitating the consummation of the transactions contemplated by

this Agreement;

(ii) Buyer and Merger Subsidiary will deliver to the Company:

(A) a copy of the texts of the resolutions adopted by the

boards of directors of Buyer and Merger Subsidiary authorizing the

execution, delivery and performance of this Agreement, certified by

an appropriate officer of Buyer and Merger Subsidiary, respectively;

(B) a copy of the text of resolutions adopted by the sole

shareholder of Merger Subsidiary approving the Merger, certified by

an appropriate officer of Merger Subsidiary;

party, duly executed by Buyer;

(D) a copy, duly executed by Buyer, the Surviving Corporation

and the Escrow Agent, of the Escrow Agreement; and

(E) such other certificates, documents and instruments that

the Company reasonably requests not later than two (2) business days

before the Closing for the purpose of (1) evidencing the accuracy of

Buyer's and Merger Subsidiary's representations and warranties, (2)

evidencing the performance and compliance by Buyer and Merger

Subsidiary with agreements contained in this Agreement or (3)

otherwise facilitating the consummation of the transactions

contemplated by this Agreement.

Date, Buyer will deposit the Escrow Amount in the Escrow Fund to be held by the

Escrow Agent in accordance with the terms of the Escrow Agreement.

(d) All items delivered by the parties at the Closing will be deemed to

have been delivered simultaneously, and no items will be deemed delivered or

waived until all have been delivered.

(e) The consummation of the Merger will be effected as promptly as

practicable on the Closing Date. The parties will cause a copy of the Articles

of Merger in the form of Exhibit C to which a copy of the Plan of Merger will be

attached in the form of Exhibit D to be executed, delivered and filed with the

Secretary of State of the State of North Dakota in accordance with the NDBCA.

The Merger will become effective immediately upon the filing of such Articles of

Merger with the Secretary of State.

2.5 Stock Certificates.

(a) On the Closing Date, Shareholder shall surrender to Buyer such

Shareholder's stock certificates canceled and extinguished on the Closing Date

pursuant to Section 2.2 in order

Execution Copy

<PAGE>

to effect the exchange of such certificates on such holder's behalf. After

surrender to Buyer of Shareholder's stock certificates, Buyer will distribute to

Shareholder that portion of the Merger Consideration into which such shares of

Company Common Stock will have been converted at the Closing Date pursuant to

subsections 2.2(a)(i) and 2.2(a)(iii).

(b) Thereafter, the Escrow Agent will distribute to Shareholder that

portion of the Merger Consideration referenced in subsection 2.2(a)(ii) and

represented by the Escrow Fund as and to the extent payable in accordance with

the terms of the Escrow Agreement.

2.6 Effect of Merger.

(a) The effect of the Merger will be as set forth in Section 10-19.1-102

of the NDBCA.

(b) From and after the Closing and until further amended in accordance

with applicable law, the Articles of Incorporation of Merger Subsidiary as in

effect immediately prior to the Closing will be the Articles of Incorporation of

the Surviving Corporation. From and after the Closing and until further amended

in accordance with law, the Bylaws of Merger Subsidiary as in effect immediately

prior to the Closing will be the Bylaws of the Surviving Corporation.

Corporation will be the Persons who were the directors of Merger Subsidiary

immediately prior to the Closing Date and the officers of the Surviving

Corporation will be the Persons who were the officers of Merger Subsidiary

immediately prior to the Closing Date. Such directors and officers of the

Surviving Corporation will hold office for the term specified in, and subject to

the provisions contained in, the Articles of Incorporation and Bylaws of the

Surviving Corporation and applicable law.

2.7 Taking of Necessary Action; Further Action. Buyer, Merger Subsidiary,

Shareholder and the Company will each take all such action as may be necessary

or appropriate to effectuate the Merger under the NDBCA. If, at any time after

the Closing Date, any further action is necessary or desirable to carry out the

purposes of this Agreement and to vest the Surviving Corporation with full

right, title and possession to all properties, rights, privileges, immunities,

powers and franchises of either of the Constituent Corporations, the officers of

the Surviving Corporation are authorized in the name of each Constituent

Corporation or otherwise to take all such lawful and necessary action.

2.8 Tax-Free Reorganization. The acquisition contemplated by this

Agreement is intended to be a reorganization within the meaning of Section

368(a) of the Code and this Agreement is intended to be a "plan of

reorganization" within the meaning of the Treasury Regulations promulgated under

Section 368 of the Code. Each party to this Agreement agrees to treat this

acquisition as a reorganization within the meaning of Section 368(a) of the Code

and agrees to treat this Agreement as a "plan of reorganization" within the

meaning of the Treasury Regulations under Section 368 of the Code, unless and

until there is a determination, within the meaning of Section 1313 of the Code,

that such treatment is not correct. Each party acknowledges and agrees that it

is relying solely on the advice of its own tax advisors regarding the tax

treatment of the Merger and the other transactions contemplated by this

Agreement.

Execution Copy

<PAGE>

2.9 Buyer Common Stock. Each certificate representing Buyer Common Stock

will be imprinted with a legend substantially in the following form:

The shares represented by this certificate have not been registered under

the Securities Act of 1933, as amended, and may not be transferred without

registration or an exemption therefrom.

If Shareholder desires to transfer unregistered shares of Buyer Common Stock,

Shareholder first must furnish Buyer with (i) a written opinion reasonably

satisfactory to Buyer in form and substance from counsel reasonably satisfactory

to Buyer by reason of experience to the effect that Shareholder may transfer

such unregistered shares of Buyer Common Stock as desired without registration

under the Securities Act and (ii) a written undertaking executed by the desired

transferee reasonably satisfactory to Buyer in form and substance agreeing to be

bound by the restrictions on transfer contained herein.

III. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER

Shareholder represents and warrants to Buyer that:

3.1 Power and Authority. Shareholder has all necessary power and authority

to execute, deliver and perform this Agreement and the Ancillary Agreements to

which Shareholder will become a party.

3.2 Valid and Binding Agreement. This Agreement has been duly executed and

delivered by Shareholder and constitutes the valid and binding obligation of

Shareholder, enforceable against Shareholder in accordance with its terms,

subject to the Remedies Exception. Each Ancillary Agreement to which Shareholder

will become a party, when executed and delivered by or on behalf of Shareholder,

will constitute the valid and binding obligation of Shareholder, enforceable

against Shareholder in accordance with its terms, subject to the Remedies

Exception.

3.3 No Breach; Consents. The execution, delivery and performance of this

Agreement and the Ancillary Agreements to which Shareholder will become a party

by Shareholder will not (a) violate or conflict with any Law, Governmental Order

or Governmental Authorization; (b) conflict with, result in any breach of any of

the provisions of, constitute a default (or any event which would, with the

passage of time or the giving of notice or both, constitute a default) under,

result in a violation of, increase the burdens under, result in the termination,

amendment, suspension, modification, abandonment or acceleration of payment (or

any right to terminate) or require a Consent under any Contract or Governmental

Authorization that is either binding upon or enforceable against Shareholder;

owned by Shareholder; or (d) require any Governmental Authorization.

3.4 Stock Ownership. As of the date of this Agreement, the Loegering Trust

owns 1,200 shares of Company Common Stock, which shares represent all of the

issued and outstanding shares of Company Capital Stock.

Execution Copy

<PAGE>

3.5 Investment. Shareholder (a) understands that the shares of Buyer

Common Stock being acquired by Shareholder have not been, and, except as

specifically described in Section 7.3, will not be, registered under the

Securities Act or under any state securities laws, are being offered and sold in

reliance upon federal and state exemptions for transactions not involving any

public offering and will contain a legend restricting transfer; (b) is acquiring

such shares of Buyer Common Stock solely for Shareholder's own account for

investment purposes, and not with a view to the distribution thereof; (c) is a

sophisticated investor with knowledge and experience in business and financial

matters; (d) has received certain publicly available information concerning

Buyer and has had the opportunity to obtain additional information as desired in

order to evaluate the merits and the risks inherent in holding the Buyer Common

Stock; (e) is able to bear the economic risk and lack of liquidity inherent in

holding the Buyer Common Stock; and (f) is an "Accredited Investor" as that term

is defined under Rule 501 of the Securities Act.

IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SHAREHOLDER

The Company and Shareholder represent and warrant to Buyer that, except as

described in the Disclosure Schedule:

4.1 Incorporation; Power and Authority.

(a) The Company is a legal entity duly organized, validly existing and in

good standing under the laws of the State of North Dakota, and has all necessary

power and authority necessary to own, lease and operate its assets and to carry

on its business as now conducted and presently proposed to be conducted. The

Company is duly qualified to do business as a foreign corporation in each

jurisdiction in which the nature of its business or its ownership of property

requires it to be so qualified, except where the absence to be so qualified in

any single jurisdiction would not have a Material Adverse Effect. The Company

has all necessary power and authority to execute, deliver and perform this

Agreement and any Ancillary Agreements to which it will become a party.

(b) The Company is in full compliance with all provisions of its

Organizational Documents.

4.2 Valid and Binding Agreement. The execution, delivery and performance

by the Company of this Agreement and any Ancillary Agreements to which it will

become a party have been duly and validly authorized by all necessary corporate

action. This Agreement has been duly executed and delivered by the Company and

constitutes the valid and binding obligation of the Company, enforceable in

accordance with its terms, subject to the Remedies Exception. Each Ancillary

Agreement to which the Company will become a party, when executed and delivered

by the Company, will constitute the valid and binding obligation of the Company,

enforceable against the Company in accordance with its terms, subject to the

Remedies Exception.

4.3 No Breach; Consents. The execution, delivery and performance of this

Agreement and the Ancillary Agreements to which it will become a party will not

(a) contravene any provision of the Organizational Documents of the Company; (b)

violate or conflict with any

Execution Copy

<PAGE>

Law, Governmental Order or Governmental Authorization; (c) conflict with, result

in any breach of any of the provisions of, constitute a default (or any event

that would, with the passage of time or the giving of notice or both, constitute

a default) under, result in a violation of, increase the burdens under, result

in the termination, amendment, suspension, modification, abandonment or

acceleration of payment (or any right to terminate) or require a Consent under

any Contract or Governmental Authorization that is either binding upon or

enforceable against the Company or any Subsidiary or any Governmental

Authorization that is held by the Company; (d) result in the creation of any

Encumbrance upon the Company or any of the assets of the Company; (e) require

any Governmental Authorization; (f) 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 under any Legal Requirement, Order or Governmental

Authorization; or (g) cause Buyer to become subject to, or to become liable for

the payment of, any Tax.

4.4 Capitalization. The authorized capital stock of the Company consists

solely of 50,000 shares of Company Common Stock, of which 1,200 shares of

Company Common Stock are issued and outstanding, none of which are held in

treasury. All issued and outstanding shares of Company Common Stock are owned by

Shareholder. All issued and outstanding shares of Company Common Stock are duly

authorized, validly issued, fully paid and nonassessable, free of preemptive

rights or any other third party rights and in certificated form, and have been

offered, sold and issued by the Company in compliance with applicable securities

and corporate Laws, Contracts applicable to the Company and the Company's

Organizational Documents and in compliance with any preemptive rights, rights of

first refusal or similar rights. The rights and privileges of the Company Common

Stock are set forth in the Company's Organizational Documents or otherwise

provided by Law. There is no option, warrant, call, subscription, convertible

security, right (including preemptive right) or Contracts of any character to

which the Company is a party or by which it is bound obligating the Company to

issue, exchange, transfer, sell, repurchase, redeem or otherwise acquire any

shares of capital stock of the Company or obligating the Company to grant,

extend, accelerate the vesting of or enter into any such option, warrant, call,

subscription, convertible security, right or Contract. There are no outstanding

or authorized stock appreciation, phantom stock or similar rights with respect

to the Company. Except as contemplated by this Agreement, there are no

registration rights agreements, no voting trust, proxy or other Contract and no

restrictions on transfer with respect to any capital stock of the Company.

4.5 Subsidiaries. The Company does not own any Subsidiary.

4.6 Financial Statements. The unaudited balance sheet as of August 31,

2004 ("Latest Balance Sheet Date") of the Company (the "Latest Balance Sheet")

and the unaudited statements of income, changes in shareholders' equity and cash

flows of the Company for the eight-month period then ended (such statements and

the Latest Balance Sheet, the "Latest Financial Statements") and the audited

balance sheet, as of December 31, 2003 (the "Last Fiscal Year End") and for each

of the prior three fiscal year ends, of the Company and the audited statements

of income, changes in shareholders' equity and cash flows, including the notes,

of the Company for each of the four years ended on the Last Fiscal Year End

(collectively, the "Annual Financial Statements") are based upon the books and

records of the Company, and except to the extent disclosed in Schedule 4.7 have

been prepared in accordance with GAAP consistently applied during the periods

indicated and present fairly the financial position, results of operations and

Execution Copy

<PAGE>

cash flows of the Company at the respective dates and for the respective periods

indicated, except that the Latest Financial Statements may not contain all notes

and are subject to year-end adjustments, none of which are material.

Notwithstanding anything provided for in this Section 4.6 to the contrary, the

representations and warranties of the Company and Shareholder made in this

Section 4.6 are subject to the exceptions disclosed in Schedule 4.6.

4.7 Absence of Undisclosed Liabilities. Except for the disclosure made in

Schedule 4.7, and except as reflected or expressly reserved against in the

Latest Balance Sheet, the Company has no Liability, and there is no basis for

any present or future Litigation, charge, complaint, claim or demand against the

Company giving rise to any Liability, except (a) a Liability that has arisen

after the date of the Latest Balance Sheet in the Ordinary Course of Business

and that is not a Liability for breach of Contract, breach of warranty, tort,

infringement, Litigation or violation of Governmental Order, Governmental

Authorization or Law or (b) obligations under any Contract listed on a Schedule

to this Agreement or under a Contract not required to be listed on such a

Schedule.

4.8 Books and Records. The books of account of the Company are complete

and correct and have been maintained in accordance with sound business

practices. Each transaction is properly and accurately recorded on the books and

records of the Company, and each document upon which entries in the Company's

books and records are based is complete and accurate in all respects. The

Company maintains a system of internal accounting controls adequate to insure

that it maintains no off-the-books accounts and that its assets are used only in

accordance with its management directives. The minute books and stock or equity

records of the Company, all of which have been made available to Buyer, are

complete and correct. The minute books of the Company contain accurate records

of all meetings held and actions taken by the holders of stock or equity

interests, the boards of directors and committees of the boards of directors or

other governing body of the Company, and no meeting of any such holders, boards

of directors or other governing body or committees has been held for which

minutes are not contained in such minute books. At the Closing, all such books

and records will be in the possession of the Company.

4.9 Absence of Certain Developments. Since the Latest Balance Sheet Date,

and except for the disclosures and exceptions in Schedule 4.9, there has not

been any Material Adverse Effect and:

(a) the Company has not sold, leased, transferred or assigned any of

its assets, tangible or intangible, other than for a fair consideration in

the Ordinary Course of Business;

(b) the Company has not entered into any Contract (or series of

related Contracts) outside the Ordinary Course of Business;

canceled any Contract (or series of related Contracts) to which the

Company is a party or by which it is bound;

(d) no Encumbrance has been imposed on any assets of the Company;

Execution Copy

<PAGE>

(e) the Company has not made any capital expenditure (or series of

related capital expenditures) outside the Ordinary Course of Business;

(f) the Company has not made any capital investment in, any loan to,

or any acquisition of the securities or assets of, any other Person (or

series of related capital investments, loans and acquisitions) outside the

Ordinary Course of Business or acquired (by merger, exchange,

consolidation, acquisition of stock or assets or otherwise) any Person;

(g) the Company has not issued any note, bond or other debt security

or created, incurred, assumed or guaranteed any indebtedness for borrowed

money or capitalized lease obligation outside the ordinary course of

business;

(h) the Company has not delayed, postponed or accelerated the

payment of accounts payable or other Liability or the receipt of any

accounts receivable, in each case outside the Ordinary Course of Business;

(i) the Company has not canceled, compromised, waived or released

any right or claim (or series of related rights or claims) outside the

Ordinary Course of Business;

(j) except incidental to the sale of products or services, the

Company has not granted any license or sublicense of any rights under or

with respect to any Intellectual Property;

(k) there has been no change made or authorized in the

Organizational Documents of the Company;

(l) the Company has not issued, sold or otherwise disposed of any of

its capital stock or equity interests, or granted any options, warrants or

other rights to purchase or obtain any of its capital stock;

(m) the Company has not declared, set aside or paid any dividend or

made any distribution with respect to its capital stock or equity

interests (whether in cash or in kind) or redeemed, purchased or otherwise

acquired any of its capital stock or split, combined or reclassified any

outstanding shares of its capital stock;

(n) the Company has not experienced any material damage, destruction

or loss (whether or not covered by insurance) to its property;

(o) the Company has not entered into any employment or collective

bargaining agreement, written or oral, or modified the terms of any such

existing agreement;

(p) the Company has not granted any increase in the base

compensation or made any other change in employment terms of any of its

directors, officers or employees outside the Ordinary Course of Business;

Execution Copy

<PAGE>

(q) the Company has not adopted, amended, modified or terminated any

bonus, profit-sharing, incentive, severance or other plan, Contract or

commitment for the benefit of any of its directors, officers or employees

(or taken any such action with respect to any other Plan);

(r) the Company has not discharged or satisfied any Encumbrance or

paid any liability other than current liabilities paid in the Ordinary

Course of Business;

(s) the Company has not disclosed, to any Person other than Buyer

and authorized representatives of Buyer, any proprietary confidential

information, other than pursuant to a confidentiality agreement

prohibiting the use or further disclosure of such information, which

agreement is listed on Schedule 4.9 and is in full force and effect on the

date of this Agreement;

(t) the Company has not made any change in accounting principles or

practices from those utilized in the preparation of the Annual Financial

Statements; and

(u) the Company has not committed to take any of the actions

described in this Section 4.9.

4.10 Property.

(a) The Company owns no real properties. The real properties leased by the

Company listed on Schedule 4.10 constitute all of the real property leased

(whether or not occupied and including any leases assigned or leased premises

sublet for which the Company remains liable), used or occupied by the Company.

(b) The leases of real property listed on Schedule 4.10 as being leased by

the Company (the "Leased Real Property" sometimes referred to as the "Real

Property") are in full force and effect, and the lessee holds a valid and

existing leasehold interest under each of the leases for the term listed on

Schedule 4.10.

Property has access, sufficient for the conduct of the business as now conducted

or as presently proposed to be conducted by the Company on such parcel or Real

Property, to public roads and to all utilities used in the operation of the

business at that location. The zoning for each parcel of Real Property permits

the presently existing improvements and the continuation of the business

presently being conducted thereon. The Company is not in violation of any

applicable zoning ordinance or other Law relating to the Real Property, and the

Company has not received any notice of any such violation, or the existence of

any condemnation proceeding with respect to any of the Real Property. The

buildings and other improvements are located within the boundary lines of each

parcel of Real Property and do not encroach over applicable setback lines.

(d) To the knowledge of the Company and Shareholder, there are no

improvements made or contemplated to be made by any Governmental Entity, the

costs of which are to be assessed as special Taxes or charges against any of the

Real Property, and there are no present assessments.

Execution Copy

<PAGE>

(e) The Company has good and marketable title to, or a valid leasehold

interest in, the buildings, machinery, equipment and other tangible assets and

properties used by the Company, located on its premises or shown in the Latest

Balance Sheet or acquired after the date thereof, free and clear of all

Encumbrances, except for Encumbrances listed on Schedule 4.10 and properties and

assets disposed of in the Ordinary Course of Business since the date of the

Latest Balance Sheet.

(f) The buildings, machinery, equipment and other tangible assets and

properties used in the conduct of the business of the Company are in good

condition and repair, ordinary wear and tear excepted, and are usable in the

Ordinary Course of Business. Each such asset is suitable for the purposes for

which it presently is used and presently is proposed to be used, is free from

known defects, and has been maintained in accordance with normal industry

practices. The Company owns, or leases under valid leases, all buildings,

machinery, equipment and other tangible assets and properties necessary for the

conduct of its respective business as presently conducted and as presently

proposed to be conducted.

(g) The Company owns or leases all of the assets, tangible and intangible,

of any nature whatsoever, necessary to operate the businesses of the Company in

the manner presently operated by the Company.

4.11 Accounts Receivable. All notes and accounts receivable of the Company

are reflected properly on its books and records, are valid, have arisen from

bona fide transactions in the Ordinary Course of Business, are subject to no

setoff or counterclaim, and are current and collectible. Such notes and accounts

receivable will be collected in accordance with their terms at their recorded

amounts, subject only to the reserve for bad debts on the face of the Latest

Balance Sheet as adjusted for the passage of time through the Closing Date in

the Ordinary Course of Business.

4.12 Inventory. The inventory of raw materials, work in process, supplies

and finished goods of t

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates