ASSET
PURCHASE AGREEMENT
THIS
ASSET PURCHASE AGREEMENT (this
"Agreement") is
dated as of the 5th day of September, 2007, by and among ART'S WAY
MANUFACTURING CO., INC., a Delaware corporation ("
Purchaser "),
MILLER-ST. NAZIANZ, INC., a Wisconsin corporation ("Seller"), and
only with respect to Section 1.01, Non-Competition Agreement and
with respect to Section 5.01 and Section 703 Bulk Sales compliance
and indemnity, JOHN C. MILLER ("Miller").
BACKGROUND
A.
Seller
is engaged in the business of manufacturing and distributing
agricultural equipment (the "
Business ").
B.
The
Business consists of multiple product lines including, but not
limited to, the Miller Pro, Victor, and Badger product lines.
For purposes of this Agreement, the Miller Pro, Victor, and
Badger product lines are hereinafter referred to collectively
as the
"Product Lines ".
C.
Seller
wishes to sell to Purchaser, and Purchaser wishes to purchase
from Seller, certain assets comprising or related to the
Product Lines (the "
Purchased Product Lines "),
all upon the terms and subject to the conditions set forth
herein.
D.
John
C. Miller is the sole voting shareholder of Seller and in
order to induce Buyer to purchase the Purchased Assets (as the
term is hereinafter defined) has agreed to execute and deliver
to Purchaser a Non-Competition agreement as provided in
Section 1.01 and further agreed to certain indemnities as
provided in Section 5.01 and Section 7.03.
TERMS
AND CONDITIONS
In
consideration of the premises and the mutual agreements and
covenants hereinafter set forth, and intending to be legally
bound, and for other good and valuable consideration the
sufficiency of which is hereby acknowledged, Seller and
Purchaser hereby agree as follows:
Article
I
DEFINITIONS
1.01.
Certain Defined Terms. For
purposes of this Agreement:
"Action" means
any claim, action, suit, arbitration, inquiry, proceeding or
investigation by or before any Governmental Authority.
"Agreement"
shall have the meaning set forth in the Preamble
above.
"Ancillary Agreements" means
the Warranty Bill of Sale, the Intellectual Property Assignment,
the Badger Intellectual Property License Agreement, and the
Non-Competition Agreements.
"Badger Intellectual Property License Agreement
"
means the license agreement between Purchaser and Seller attached
hereto as
Exhibit A, under
which Seller shall grant to Purchaser a limited license to use
Seller's "Badger" trade name in connection with Purchaser's
post-Closing manufacture and sale of the Badger Product
Line.
"Badger Product Line" means,
exclusively, those items listed on
Disclosure Schedule 1.
"
Bill of Sale" means
the Warranty Bill of Sale to be executed by Seller at the Closing,
substantially in the form attached hereto as
Exhibit B.
"Claims" means
any and all administrative, regulatory or judicial actions, suits,
petitions, appeals, demands, demand letters, claims, liens, notices
of noncompliance or violation, investigations, proceedings, consent
orders or consent agreements, including any Product Warranty Claims
or Product Liability Claims.
"Closing" means
the Closing of the transaction contemplated by this Agreement
pursuant to the terns and conditions of this
Agreement.
"Closing Date" shall
have the meaning set forth in Section 2.08(a) of this
Agreement.
"Customer Lists" shall
have the meaning set forth in Section 2.01(a)(iv) of this
Agreement.
"Dealer Agreements" shall
have the meaning set forth in Section 2.01(a)(x).
"Distribution Agreements" shall
have the meaning set forth in Section 2.01(a)(ix).
"Finished Goods Inventory" shall
have the meaning set forth in Section 2.01(a)(v).
"Governmental Authority" means
(whether foreign or domestic) any federal, national, state,
provincial, local or similar government, governmental, regulatory
or administrative authority, agency or commission or any court,
tribunal or judicial or arbitral body.
"Governmental Order" means
any order, writ, judgment, injunction, decree, stipulation,
determination or award entered by or with any Governmental
Authority.
"Intellectual Property" shall
have the meaning set forth in Section 2.01(a)(iii);
"
Intellectual Property Assignment" means
the Intellectual Property Assignment to be executed by Purchaser
and Seller at the Closing, substantially in the form attached
hereto as
Exhibit C, pursuant
to which, Seller will transfer, convey, and assign the Intellectual
Property to Purchaser.
"Law" means
any federal, national, state, provincial, local or similar statute,
law, ordinance, regulation, rule, code, order, requirement or rule
of law (including common law), and any permit, approval,
identification number, license or other authorization required or
issued thereunder.
"Liabilities" means
any and all debts, liabilities and obligations, whether accrued or
fixed, absolute or contingent, matured or unmatured or determined
or determinable, including those arising under any Law, Action or
Governmental Order and those arising under any contract, agreement,
arrangement, commitment or undertaking.
"Manufacturing Fixtures and Equipment" shall
have the meaning set forth in Section 2.01(a)(ii) of this
Agreement.
"Non-Competition Agreements" means
the Non-Competition Agreements between (i) Seller and Purchaser and
(ii) Mr. John C. Miller and Purchaser, substantially in the forms
attached hereto as
Exhibits D and E, respectively.
"Miller Pro Product Line" means,
exclusively, those items listed on
Disclosure Schedule 2.
"Product Liability Claims" means
all claims (whether asserted or unasserted as of the Closing Date
and whether any such claim is stated in tort, breach of warranty or
otherwise) for bodily injury, property damage, or both, resulting
from any actual or alleged defect in the design, assembly or
manufacture of a product or performance of a service of the
Business prior to the Closing Date (whether or not such product is
sold prior to the Closing Date) or resulting from any act or
omission relating to such a product, including, without limitation,
failure to warn of hazards, improper instruction in the use of the
product or failure to modify, correct or improve such
product.
"Product Lines" shall
have the meaning set forth in the recitals of this
Agreement.
"Product Warranty Claims" shall
have the meaning of all claims for repair or replacement or goods
or products or to re-perform services and/or to return or credit
all or a portion of the sale price of such goods or services,
pursuant to Seller's standard express written product warranties,
but not including any Product Liability Claims.
"
Purchase Price "
shall have the meaning set forth in Section 2.03(a) of this
Agreement.
"Purchased Assets" shall
have the meaning set forth in Section 2.01(a) of this
Agreement.
"Purchase Price Allocation" shall
have the meaning set forth in Section 2.03(a).
"Purchased Product Lines" shall
have the meaning set forth in the Recitals of this
Agreement.
"Purchaser" shall
have the meaning set forth in the introduction of this
Agreement.
"Raw Material and Completed Manufactured Parts
Inventory" shall
have the meaning set forth in Section 2.01(a)(vii).
"Seller" shall
have the meaning set forth in the introduction of this
Agreement.
"Seller's Knowledge" or
"Knowledge of Seller" or
similar terms used in this Agreement means the actual or
constructive knowledge of John C. Miller, any officer or director
of Seller, or any employee of Seller with management
authority.
"Spare Parts Inventory" shall
have the meaning set forth in Section 2.01(a)(vi).
"Standard Cost" shall
mean the carrying value of each item of inventory on the books of
Seller as the same are kept and maintained in the ordinary course
of business, determined in a manner consistent with Seller's past
practices.
"Trade Names" shall
have the meaning set forth in Section 2.01(a)(viii)
"Transaction" means
the purchase and sale of the Purchased Assets pursuant to this
Agreement and other transactions or related agreements contemplated
hereby.
"Victor Product Line" means,
exclusively, those items listed on
Disclosure Schedule 3.
Article
II
PURCHASE
AND SALE
2.01.
Purchase and Sale of Purchased Assets.
(a)
Upon
the terms and subject to the conditions of this Agreement, at
the respective Closings, and simultaneously with receipt by
Seller of the purchase price described in Section 2.03, Seller
shall sell, assign, transfer, convey and deliver, or cause to
be sold, assigned, transferred, conveyed and delivered, to
Purchaser, and Purchaser shall purchase from Seller, all of
the assets, properties, goodwill and business of every kind
and description and wherever located, whether tangible or
intangible, real, personal or mixed, which are owned by Seller
and, in any case, belonging to or used or intended to be used
in the manufacture, sale or distribution of the Product Lines
(the
"Purchased Assets "),
including the following:
(i)
the
Purchased Product Lines;
(ii)
All
tooling, dyes, jigs, patterns, specialized equipment necessary
or used for the Product Lines ("Manufacturing Fixtures and
Equipment"); for purposes of this Agreement specialized
equipment includes without limitation that certain 20' foot
Press Break shown on the information referred to in paragraph
3.05 of this agreement, side punching machine, roof punching
machine, blower band roller, corrugated shear, roof edge
protector bender, and all assembly line racks and
bins;
(iii)
All
patents, applications therefor and unpatented inventions
applicable to any product within the Product Lines; all
designs, drawings, blue prints, computer data, engineering
data or studies, manufacturing data, prototypes, stampings,
projects in progress, formulas, processes, technical
information and knowhow related to or used in the production
of any product within the Product Lines ("Intellectual
Property");
(iv)
All
customer lists, customer backlogs, pending orders, pending
purchase contracts, customer files, vendor lists, purchase
records, sales records or data (electronic or otherwise)
relating to any of the products in the Product Lines
("Customer Lists");
(v)
Inventories
of finished goods and work in process related to any products
in the Product Lines as further described below ("Finished
Goods Inventory");
(vi)
All
inventories of spare parts related to any product in the
Product Lines as further described below ("Spare Parts
Inventory");
(vii)
Inventories
of raw materials and completed manufactured parts related to
products in the Product Lines as further described below ("Raw
Material and Completed Manufactured Parts
Inventory");
(viii)
All
logos, trademarks, trade names, service marks, copyrights,
applications for and registrations pertaining to any of the
Product Lines and the marketing thereof, including without
limitation the names Miller Pro, Victor, Hay Buddy and Badger
("Trade Names") provided however Purchaser's rights to use the
"Badger" trade name shall be expressly limited to rights of
use in connection with the production or sale of the Badger
Product Line, as more particularly set forth in the Badger
Intellectual Property License Agreement.;
(ix)
All
distribution agreements with manufacturers pertaining to the
Product Lines including without limitation such agreements
with John Deere and Tonutti Spa ("Distribution
Agreements");
(x)
All
dealership, dealer or distributor agreements or contracts
pertaining to any of the Product lines with dealers handling
any of the Product Lines ("Dealer Agreements"),provided,
Purchaser will have no repurchase obligations under such
agreements with respect to sales prior to closing;
and
(xi)
the
goodwill of Seller relating to the Product Lines.
(b)
Seller
shall retain and the Purchased Assets shall specifically
exclude all assets of Seller that are not described in the
foregoing paragraph 2.01(a).
2.02.
Assumption and Exclusion of Liabilities. Purchaser
assumes no liabilities or obligations of Seller as a result of the
proposed transaction except as provided in Section 2.05. Any
security interest, liens or encumbrances with respect to any of the
assets shall be released at or prior to Closing.
2.03.
Purchase Price. The
total combined purchase price for the Assets to be purchased
hereunder shall be the sum of Eight Hundred Seventy-Five Thousand
Dollars ($875,000.00), plus the sum of the following
amounts:
(a)
The
amount of the Finished Goods Inventory (valued at Seller's
Standard Cost) on hand, but the amount of Finished Goods
Inventory shall not contain a greater number of any item than
the number of such item sold in the 12 month period ending on
July 31, 2007.
(b)
The
amount of the Raw Materials and Completed Manufactured Parts
Inventory (valued at Seller's Standard Cost on hand, but the
amount of Raw Materials and Completed Manufactured Parts
Inventory shall not contain a greater number of any item than
the number of such item sold or used in manufacturing by
Seller in the 12 month period ending on July 31,
2007.
(c)
The
amount of the Spare Parts Inventory (valued at Seller's
Standard Cost) on hand, provided however, any such Spare Parts
Inventory that is used, damaged, otherwise not marketable as a
new repair part or is in excess of a two year supply (based
sales of such part during the 24 month period ending July 31,
2007) shall be valued at $0.00 (all such Spare Parts Inventory
that is valued at zero shall be conveyed to Purchaser along
with all such inventory as shall be assigned a value greater
than zero).
2.04.
Allocation of Purchase Price. The
allocation of the Purchase Price among the Purchased Assets shall
be reflected on the purchase price allocation attached hereto
as
Exhibit F (the
"Purchase Price Allocation"). Purchaser
and Seller agree that the transactions contemplated in this
Agreement shall he reported in a manner consistent with the terms
of this Agreement, including the Purchase Price Allocation, and
that neither of them will take any position inconsistent therewith
in any tax return, in any refund claim, in any litigation, or
otherwise. Seller and Purchaser agree to cooperate with the other
in preparing IRS Form 8594, and to furnish the other with a copy of
such document prepared in draft form within a reasonable period
before its filing due date.
2.05
Assumption of Warranty Obligations. Purchaser
will assume all of Seller's warranty obligations to customers for
warranty claims made after the Date of Closing with respect to
products included within the Purchased Product Lines for the repair
or replacement of defective products under Seller's standard
limited warranty, provided however, Purchaser does not assume any
obligation for Product Liability or other liability for property
damage, consequential damages or personal injury (or any other
liability other than for the repair or replacement of defective
products) arising out of products sold by Seller prior to Closing.
The foregoing notwithstanding Purchaser does not assume any
liability or obligation for any product recall with respect to
products sold by Seller prior to Closing.
2.06
Payment of Purchase Price. The
Purchase Price shall be paid by Purchaser in certified funds, wire
transfer, or other immediately available funds at the
Closing.
2.07.
Determination of Inventory, Post Closing Adjustment.
No
more than five (5) calendar days prior to the Closing Date, Seller
shall determine the amount and value of the Finished Goods
Inventory, the Raw Materials and Completed Manufactured Parts
Inventory and Spare Parts Inventory and certify the amounts arid
counts thereof to Purchaser prior to Closing. All such inventories
shall be tagged with tags indicating the respective items of such
inventory are "Conveyed to Art's-Way". Purchaser shall have the
right to observe the determinations of amount and value of the
various inventories called for herein, but no such right or
exercise thereof shall constitute a defense to any discrepancy that
may be raised by Purchaser in a Discrepancy Notice as hereinafter
provided for. The closing shall take place based upon said amounts
unless Purchaser shall notify Seller of a disagreement with said
numbers prior to closing. After shipment of the Finished Goods
Inventory, the Raw Materials and Completed Manufactured Parts
Inventory and the Spare Parts Inventory to Purchaser, Purchaser
shall notify Seller of any discrepancy in count, condition or
valuation of such inventories actually received with the
inventories used for closing (Discrepancy Notice). Seller shall
refund to Purchaser the amount of such discrepancy set forth in the
Discrepancy Notice within 5 days of receipt of same by Seller,
provided however, in the event of a disagreement by Seller with the
Discrepancy Notice Seller may request binding arbitration under the
rules of the American Arbitration Association. During such time as
any such disagreement shall exist, Seller shall pay the amount of
the discrepancy over to an escrow agent mutually agreeable to the
parties to be held pending resolution of the disagreement in the
manner set forth herein.
2.08.
Closing. Subject
to the terms and conditions of this Agreement, the sale and
purchase of the Purchased Assets shall take place on September 5,
2007, at 2:00 p.m. Central Time (the
"Closing Date"), or
at such alternate time and date as may be mutually agreed upon by
the parties.
2.09.
Closing Deliveries by Seller. At
the Closing, Seller shall deliver to Purchaser:
(a)
Executed
counterparts of each Ancillary Agreement to which Seller is a
party;
(b)
A
true and complete copy, certified by the Secretary of Seller,
of the resolutions duly and validly adopted by Seller's Board
of Directors evidencing its authorization of the execution and
delivery of this Agreement and the Ancillary Agreements
to
which
it is a party and the consummation of the transactions contemplated
hereby and thereby;
(c)
All
necessary third-party consents as more particularly described
in Section 3.13 of this Agreement; and
(d)
A
certificate, dated as of the Closing Date and in a form
reasonably acceptable to Purchaser, executed by a duly
authorized officer of Seller certifying (i) that all
conditions to Closing have been satisfied, (ii) as to the
incumbency arid signature of the officers of Seller executing
any agreements or documents in connection with the
transactions contemplated by this Agreement and (iii) that all
representations and warranties contained herein on the part of
the Seller are true as of the Closing;
(e)
In
the event any of the inventories to be transferred hereunder
shall be consigned to a third party, Seller shall deliver at
closing written acknowledgment of the person or entity having
possession of the consigned goods, that Seller is the owner of
same, that Seller has the right to remove same at any time
free of any claim or interest of such person or
entity;
(f)
An
opinion of Seller's counsel in form reasonably satisfactory to
attorney for
Buyer giving the opinions that
(i)
Seller
is a corporation duly formed and in existence under the laws
of the State of Wisconsin.
(ii)
Seller
has full corporate power and authority to make, execute,
deliver and perform its obligations under this
Agreement.
(iii)
Seller
has authorized the execution, delivery and performance of its
obligations under this agreement and the documents related
thereto by all necessary company action on its part and has
duly executed and delivered this agreement and the documents
related thereto.
(e)
All
such other instruments and documents as Purchaser or its
counsel may reasonably request to transfer effectively to
Purchaser all of Seller's right, title and interest in and to
the Purchased Assets as provided by this
Agreement.
2.10.
Closing Deliveries by Purchaser. At
the Closing, Purchaser shall deliver to Seller:
(a)
The
Purchase Price in certified funds, wire transfer or other
immediately available funds;
(b)
Executed
counterparts of each Ancillary Agreement to which Purchaser is
a party; and
(c)
A
true and complete copy of the resolutions duly and validly
adopted by Purchaser's
Board of Directors evidencing its authorization of the
execution and delivery of this Agreement and the Ancillary
Agreements to which it is a party and the consummation of the
transactions contemplated hereby and thereby.
2.11
Sales and Transfer Taxes .
Seller shall be responsible for and agrees to pay when due all
sales, use and transfer taxes imposed by the United States or the
State of Wisconsin arising out of the transfer of the Purchased
Assets by Seller and the other transactions contemplated
hereunder.
Article
III
REPRESENTATIONS
AND WARRANTIES
OF
SELLER
As
an inducement to Purchaser to enter into this Agreement,
Seller hereby represents and warrants to Purchaser now and as
of Closing, as follows:
3.01.
Organization, Authority and Qualification of Seller.
Seller
is a corporation duly organized, validly existing and in good
standing under the laws of the State of Wisconsin and has all
necessary power and authority to enter into this Agreement and the
Ancillary Agreements, to carry out its obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby
and thereby.
3.02.
No Conflict. Neither
the execution and delivery of this Agreement, nor the consummation
or performance of any obligation of Seller hereunder will, directly
or indirectly, with or without notice or the lapse of time, (i)
violate or conflict with. Seller's articles of incorporation or
bylaws (or other organizational documents) or any agreement or any
resolution of Seller's shareholders or directors, (ii) violate or
conflict with any law or regulation or the terms or conditions of
any permit, certificate or other authorization to which Seller is
subject or (iii) require Seller to obtain or make any waiver,
consent, action, approval, or authorization of, or registration,
declaration, notice of filing with, any private non-governmental
third party or any governmental authority,
3.03
Binding Effect. This
Agreement constitutes the legal, valid and binding obligation of
Seller, enforceable against it in accordance with its terms. Upon
the execution and delivery by Seller of this Agreement and each
other instrument to be executed and delivered at the Closing by
Seller pursuant to this Agreement (collectively, the
"Seller's Closing Documents"), each
of Seller's Closing Documents will constitute the legal, valid and
binding obligation of Seller, enforceable against it in accordance
with its terms.
3.04.
Title to Purchased Assets; Location;
Seller shall have and shall transfer to Purchaser at Closing good
and marketable title to all the Purchased Assets, free and clear of
any claim, lien, liability or encumbrance whatsoever. All of the
Purchased assets are located at the Seller's plant facility in St.
Nazianz, Wisconsin except as set forth on
Schedule 3.04.
3.04.
Brokers .
No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with
the transactions contemplated by this Agreement or the Ancillary
Agreements based upon arrangements made by or on behalf of
Seller.
3.05
Financial and Product Information .
Seller has delivered to Purchaser an information package a copy of
which is attached hereto as
Schedule 3.05 concerning
the Purchased Product Lines including the historical sales and
gross margins experienced by Seller with respect to the Purchased
Product Lines all of which information is substantially correct and
accurately reflects the matters described therein.
3.06
Standard Cost. Standard
Cost as used by Seller in the compiling the financial information
set forth in Schedule 3.05 above, or that may be used in the
valuation of any of the Purchased Assets under this agreement, is
computed in accordance with Generally Accepted Accounting
Principals, consistently applied.
3.07
Absence of Certain Events. Since
January 1, 2007, the business of Seller with respect to the Product
Lines has been operated only in the ordinary and normal course of
business and in particular:
(a)
There
has been no material adverse change in the Purchased Assets or
in the financial condition, results of operations, prospects
or condition (financial or otherwise), of Seller with respect
to the Product Lines or the Purchased Assets;
(b)
There
has been no damage, destruction or loss adversely affecting
the Purchased Assets or the Purchased Product Lines;
and
(c)
No
significant customer, supplier, dealer or distributor with
respect the Purchased Product Lines or a part thereof has
ceased or given notice that it was going to cease or curtail
its dealings with the Seller with respect to any of the
Product Lines.
3.08.
Intellectual Property.
(a)
Disclosure Schedule 4 sets
forth a complete and accurate list of the Intellectual Property
being assigned from Seller to Purchaser pursuant to the
Intellectual Property Assignment.
(b)
Seller
owns and possesses, free and clear of all security interests,
encumbrances or liens, all right, title and interest in or to,
or has the right to use pursuant to a License Agreement or
otherwise, all the Intellectual Property. No Government entity
has rendered any holding, decision, or judgment that would
limit, cancel or question the validity of any of Intellectual
Property.
(c)
No claim of infringement has been made or asserted by or
against Seller relating to any patent, trademark, trade name
or copyright included in the Purchased Assets and no claim of
misappropriation or misuse of any invention, trade secret or
other proprietary rights has been made or asserted by or
against Seller with respect to the foregoing, and to the
knowledge of Seiler, no valid basis for any such claim or
allegation exists.
(d)
That
Disclosure Schedule 4 sets
forth all Intellectual Property applicable or pertaining to any of
the Product Lines and/or Purchased Assets and is all Intellectual
Property needed for the production and marketing of any products
included in the Product Lines without payment of any royalty,
license or other fee whatsoever, and free of any claim of
infringement.
3.09.
Compliance with Laws. The
methods and means employed by it in the operation of its business
and its ownership of the Purchased Assets are in compliance with
all applicable federal, state and local laws, regulations or orders
of any court, or federal, state, municipal or other governmental
department, commission, board, agency or other
instrumentality.
3.10.
Litigation and Proceedings. There
is no action, suit or proceeding pending or, to the Knowledge of
the Seller, threatened against the Seller, that would prevent the
consummation of the transactions contemplated by this Agreement.
There is no suit, action or legal, administrative, arbitrative or
other proceeding pending, nor does Seller have written notice or
actual notice of any threatened suit, action or legal,
administrative, arbitrative or other proceeding in connection with
the Purchased Assets; and to Seller's Knowledge, Seller is not
under governmental investigation with respect to any violation of
any law or administrative regulation, federal, local or state, with
respect to its design, manufacture or sale of any of the items sold
and Seller has no Knowledge of any existing facts or circumstances
which would constitute a basis for such action, proceeding,
investigation, suit or arbitration.
3.11.
Taxes. Seller
has duly filed or caused to be filed all federal, state and local
tax returns, reports and declarations required to be filed by it,
and has paid or made adequate provisions to be filed by it, and has
paid or made adequate provisions on the books and records of Seller
for the payment of all Taxes (as hereinafter defined) due in
respect thereof. As used herein, "Taxes" shall mean all taxes,
fees, levies or other assessments, including but not limited to
income, excise, property, sales, social security and unemployment
compensation taxes imposed by the United States, any state, county
or local government, and any interest or penalty relating to such
taxes or other assessments, in each case that relate to the
Purchased Assets or could become a lien thereon..
3.12.
Condition of Purchased Assets. All
of the Purchased Assets shall be, as of the Closing Date, in good
working condition. The foregoing notwithstanding the 20' press
brake referred to in Section 2.01(a)(ii) of this agreement is sold
"as is" "where is".
3.13.
Third-Party Agreements.
Disclosure Schedule 5 sets
forth a complete and accurate list and brief description of any
arrangements or agreements with third-parties concerning the
Purchased Assets, which (i) necessitate any such third-party's
consent to the consummation of the transactions contemplated by
this Agreement, (ii) require payment of any sums by Purchaser upon
sales of Inventory or (iii) are related in
any
manner to the design, manufacture, sale or distribution of any
product included as a part of the Purchased Product
Lines.
3.14
Reliance. The
representations and warranties of Seller made in this Article III
are made by Seller with the knowledge and expectation that
Purchaser is placing complete reliance thereon in entering into,
and performing each of their obligations under this
Agreement.
Article
IV
REPRESENTATIONS
AND WARRANTIES
OF
PURCHASER
As
an inducement to Seller to enter into this Agreement,
Purchaser hereby represents and warrants to Seller as
follows:
4.01
Organization and Authority of Purchaser .
Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all
necessary corporate power and authority to enter into this
Agreement and the Ancillary Agreements and to carry out its
obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby.
4.02.
No Conflict. The
execution, delivery and performance of this Agreement and the
Ancillary Agreements by Purchaser does not and will not violate,
conflict with or result in the breach of any provision of its
articles of incorporation or bylaws (or other organizational
documents similar thereto).
4.03.
Brokers .
No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with
the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Purchaser.
Article
V
ADDITIONAL
AGREEMENTS AND ACKNOWLEDGMENTS
5.01.
Bulk Sales Compliance. Purchaser
hereby waives Seller's compliance with the requirements of any bulk
sales law that may apply with respect to the proposed transaction
and, correspondingly, Seller and Miller, jointly and severally
agree to indemnify Purchaser with respect to any liability incurred
by Purchaser on account of non-compliance with any applicable bulk
sales law including without limitation Wis. Stats, Chapter
406.
5.02.
Survival of Representations and Warranties. Each
of the representations and warranties of each of the parties of
this Agreement shall be deemed to be made by each party again at
and as of the Closing (or, where the representation or warranty by
its terms is expressly made as of the date of this Agreement or any
other specified date, then as of the date of this Agreement or
other specified date) and shall survive the closing of this
transaction. Any investigation made at any time by Purchaser or
Purchaser's representatives shall not constitute a waiver of
Purchaser's rights under any representation or warranty or any
indemnity set forth in this Agreement
5.03.
Post-Closing Storage and Loading. Seller
agrees that, following the Closing, Purchaser may store the
Inventory at Seller's facility in St-Nazianz, WI. Further, Seller
agrees that, upon Purchaser's request, Seller shall, at Seller's
expense, load Finished Goods Inventory for shipment to customers or
to Purchaser. The Inventory will be shipped F.O.B. Seller's
facility, St-Nazianz, WI. Storage of Inventory at Seller's premises
shall be at no cost to Purchaser. All Manufacturing Fixtures and
Equipment And Spare Parts Inventory shall immediately after
closing, be loaded for shipment by Seller at no cost to Purchaser,
and will be shipped to Purchaser F.O.B. Seller's facility,
St-Nazianz, WI.
5.04.
Post-Closing Startup Assistance. Following
the Closing, Seller shall provide Purchaser access to such of
Seller's employees with the necessary skills as may be reasonably
necessary to assist Purchaser in establishing its operations with
respect to the Purchased Product Lines. The services shall run over
a three week period during which period Seller shall furnish one
person for the entire first week, two persons for the entire second
week and one person for the entire third week, said three week
period to commence when requested by Purchaser upon 7 days notice
by Purchaser to Seller. Seller shall also provide such assistance
as may be reasonably needed to load Seller's computer data related
to the Product Lines onto Purchaser's computer systems. All of such
assistance shall be furnished at no cost to Purchaser except that
Purchaser shall pay the actual travel costs and expenses for
Seller's employees traveling to Purchaser's facility.
5.05.
Collection of Accounts Receivable. Following
the Closing, Purchaser and Seller shall cooperate in the collection
of any outstanding balances due from customers that purchased
products in the Purchased Product Lines. Purchaser shall have full
power and authority to collect for its account all receivables, and
to endorse, without recourse to the Seller, in the name of the
Seller, any checks or other instruments of payment received on
account of payment of any such receivables; provided, further, that
any payments received by either Purchaser or Seller shall be
applied to the particular invoice designated by the customer paying
such invoice and shall promptly be delivered to the party owning
such receivable.
5.06.
Further Action. Each
of the parties hereto shall use all reasonable efforts to take or
cause to be taken all appropriate action, do or cause to be done
all things necessary, proper or advisable under applicable Law and
to execute and deliver such documents and other papers as may be
required to carry out the provisions of this Agreement and the
Ancillary Agreements to which it is a party and consummate and make
effective the transactions contemplated hereby and
thereby.
5.07
Regular Course of Business; Continuation of Ordering.
From
the date hereof until the Closing Date, Seller will operate its
business pertaining to the Purchased Product Lines in the ordinary
course, diligently and in good faith, consistent with past
management practices; will maintain (except for expiration due to
lapse of time) all contracts pertaining to the Purchased Product
Lines in effect without change except as expressly provided herein;
will comply with the provisions of all Laws, applicable to the
conduct of its business pertaining to the Purchased Product Lines;
will not engage in any significant or unusual transaction not in
the ordinary course of business that in any manner pertains to the
Purchased Product Lines; From the date hereof until the Closing
Date, Seller will not create or permit to become effective any
mortgage, pledge, lien, encumbrance or charge of any kind upon its
assets pertaining to the Purchased Product Lines other than in the
ordinary course of business. The parties acknowledge that certain
of the materials used in the manufacturing process have a long
order lead time Prior to Closing Seller shall continue ordering
said items as has been its past practice (notifying the Purchaser
of each such order) and upon closing such orders (and the
obligation to pay for same) shall be assigned to
Purchaser.
5.08
Access to Information and. Assets. Seller
shall permit Purchaser and Purchaser's authorized employees,
agents, accountants, legal counsel and other representatives to
have access to the books, records, employees, counsel, accountants,
engineers and other representatives of Seller at all times
reasonably requested by Purchaser for the purpose of conducting an
investigation of the Purchased Assets and the accuracy of the
information furnished by Seller to Purchaser. Seller shall have the
right to have access to inspect the Purchased Assets. In the event
the purchase transaction subject to this Agreement does not close
for any reason Purchaser as well as its authorized agents,
employees, counsel, accountants, legal counsel, and other
representatives shall immediately return to Seller any and all
copies of documents as well as data and other information obtained
pursuant to this provision and they shall not publish, utilize, or
cause the same to be utilized directly or indirectly in Purchaser's
or any other third party's business.
5.09
Seller Fulfillment of Conditions. Seller
will take all commercially reasonable steps necessary or desirable
and proceed diligently and in good faith to satisfy each condition
to the obligations of Purchaser contained in this Agreement and
will not take or fail to take any action that could reasonably be
expected to result in the nonfulfillment of any such
condition,
5.10
Purchaser Fulfillment of Conditions. Purchaser will take all
commercially reasonable steps necessary or desirable and proceed
diligently and in good faith to satisfy each condition to the
obligations of Seller contained in this Agreement and will not take
or fail to take any action that could reasonably be expected to
result in the nonfulfillment of any such condition.
Article
VI
CONDITIONS TO CLOSING
6.01
Conditions Precedent to Obligations of Seller
.
The obligation of Seller to effect the transactions contemplated by
this Agreement shall be subject to the satisfaction at or prior to
the Closing of the following conditions (compliance with which or
the occurrence of which may be waived in whole or in part in a
writing executed by Seller):
(a)
Purchaser
shall have performed in all material respects its obligations
under this Agreement required to be performed by it at or
prior to the Closing;
(b)
All
of the representations and warranties of Purchaser contained
in this Agreement shall have been true and correct in all
material respects on the date hereof and shall be true and
correct in all material respects as of the Closing Date as if
such representations and warranties were made on and as of
that date;
(c)
As
of the Closing Date, no litigation, proceeding, investigation
or inquiry shall be pending or threatened seeking to enjoin or
prevent the consummation of, or to obtain damages or other
material relief by reason of, the transactions contemplated by
this Agreement;
(d)
Purchaser
shall have paid all amounts, delivered all items and satisfied
all obligations required to be paid, delivered or satisfied by
Purchaser pursuant to paragraph 2.10 of this
agreement.
6.01
Conditions Precedent to Obligation of Purchaser.
The
obligation of Purchaser to effect the transactions contemplated by
this Agreement shall be subject to the satisfaction at or prior to
the Closing of the following conditions (compliance with which or
the occurrence of which may be waived in whole or in part in a
writing executed by Purchaser):
(a)
Seller
shall have performed in all material respects the obligations
under this Agreement required to be performed by it at or
prior to the Closing;
(b)
All
of the representations and warranties of Seller contained in
this Agreement shall have been true and correct in all
material respects on the date hereof and shall be true and
correct in all material respects as of the Closing Date as if
such representations and warranties were made on and as of
that date;
(c)
As
of the Closing Date, no litigation, proceeding, investigation
or inquiry shall be pending or threatened seeking to enjoin or
prevent the consummation of, or to obtain damages or other
material relief by reason of the transactions contemplated by
this Agreement;
(d)
Seller
shall have delivered all items and satisfied all obligations
required to be delivered or satisfied by Seller pursuant to
paragraph 2.09 of this agreement; and
(e)
The
execution of this agreement arid the closing of the
transaction called for herein shall have been duly approved by
the board of directors of Seller.
Article
VII
INDEMNIFICATION
7.01
Seller's Indemnity. Subject
to the provisions of this Article VII, Seller from and after the
Closing Date agrees to, indemnify and hold Purchaser and its
directors, officers, agents, employees, representatives, successors
and assigns, harmless from and against any and all damage, loss,
cost, obligation, claims, demands, assessments, judgments or
liability (whether based on contract, tort, product liability,
strict liability or otherwise), including taxes, and all expenses
(including interest, penalties and attorneys' and accountants' fees
and disbursements) (collectively "Damages") incurred in litigation
or otherwise, and any investigation relating thereto, by any of the
above-named persons, directly or indirectly, resulting from or in
connection with:
(a)
Any
misrepresentation, breach of warranty or failure to perform
any covenant or agreement made or undertaken by Seller in this
Agreement or in any other agreement, certificate, schedule,
exhibit or writing delivered to Purchaser pursuant to this
Agreement;
(b)
All
debts, liabilities and obligations of Seller o
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