EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made effective as of
November 30, 2001, by Xxxxxxx Xxx, an individual resident in Xxxxxx County,
Texas ("BUYER") and Mountain Compressed Air, Inc., a Texas
corporation("SELLER").
R E C I T A L S
Seller desires to sell, and Buyer desires to purchase, all of the issued
and outstanding shares (the "Shares") of capital stock of Houston Dynamic
Service, Inc., a Texas corporation (the "Company"), for the consideration and on
the terms set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"ACQUIRED COMPANY"--the Company.
"BEST EFFORTS"--the efforts that a prudent Person desirous of achieving
a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible.
"BREACH"--a "Breach" of a representation, warranty, covenant,
obligation, or other provision of this Agreement or any instrument
delivered pursuant to this Agreement will be deemed to have occurred if
there is or has been (a) any inaccuracy in or breach of, or any failure
to perform or comply with, such representation, warranty, covenant,
obligation, or other provision, or (b) any claim (by any Person) or
other occurrence or circumstance that is or was inconsistent with such
representation, warranty, covenant, obligation, or other provision, and
the term "Breach" means any such inaccuracy, breach, failure, claim,
occurrence, or circumstance.
"BUYER"--as defined in the first paragraph of this Agreement.
"CLOSING"--as defined in Section 2.3.
"CLOSING DATE"--the date and time as of which the Closing actually takes
place.
"COMPANY"--as defined in the Recitals of this Agreement.
"CONSENT"--any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"CONTEMPLATED TRANSACTIONS"--all of the transactions contemplated by
this Agreement, including:
(a) the sale of the Shares by Seller to Buyer;
(b) the execution, delivery, and performance of the Promissory Note
and the Amendment;
(c) the performance by Buyer and Seller of their respective
covenants and obligations under this Agreement; and
(a) Buyer's acquisition and ownership of the Shares and exercise of
control over the Company.
"CONTRACT"--any agreement, contract, obligation, promise, or undertaking
(whether written or oral and whether express or implied) that is legally
binding.
"ENCUMBRANCE"--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.
"FACILITIES"--any real property, leaseholds, or other interests
currently or formerly owned or operated by the Company and any
buildings, plants, structures, or equipment (including motor vehicles,
tank cars, and rolling stock) currently or formerly owned or operated by
the Company.
"GOVERNMENTAL BODY"--any:
(d) nation, state, county, city, town, village, district, or other
jurisdiction of any nature;
(a) federal, state, local, municipal, foreign, or other government;
(a) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department,
official, or entity and any court or other tribunal);
(a) multi-national organization or body; or
(a) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
"KNOWLEDGE"--an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
(b) such individual is actually aware of such fact or other matter;
or
(c) a prudent individual could be expected to discover or otherwise
become aware of such fact or other matter in the course of
conducting a reasonably comprehensive investigation concerning
the existence of such fact or other matter.
A Person (other than an individual) will be deemed to have "Knowledge"
of a particular fact or other matter if any individual who is serving,
or who has at any time served, as a director, officer, partner,
executor, or trustee of such Person (or in any similar capacity) has, or
at any time had, Knowledge of such fact or other matter.
"LEGAL REQUIREMENT"--any federal, state, local, municipal, foreign,
international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation,
statute, or treaty.
"ORDER"--any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"ORDINARY COURSE OF BUSINESS"--an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if:
(b) such action is consistent with the past practices of such Person
and is taken in the ordinary course of the normal day-to-day
operations of such Person;
(c) such action is not required to be authorized by the board of
directors of such Person (or by any Person or group of Persons
exercising similar authority); and
(d) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of
directors (or by any Person or group of Persons exercising
similar authority), in the ordinary course of the normal
day-to-day operations of other Persons that are in the same line
of business as such Person.
"ORGANIZATIONAL DOCUMENTS"--(a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership
agreement and any statement of partnership of a general partnership; (c)
the limited partnership agreement and the certificate of limited
partnership of a limited partnership; (d) any charter or similar
document adopted or filed in connection with the creation, formation, or
organization of a Person; and (e) any amendment to any of the foregoing.
"PERSON"--any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company,
joint venture, estate, trust, association, organization, labor union, or
other entity or Governmental Body.
"PROCEEDING"--any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by
or before, or otherwise involving, any Governmental Body or arbitrator.
"PROMISSORY NOTE"--as defined in Section 2.4(b)(ii).
"REPRESENTATIVE"--with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial
advisors.
"SELLER"--as defined in the first paragraph of this Agreement.
"SHARES"--as defined in the Recitals of this Agreement.
"THREATENED"--a claim, Proceeding, dispute, action, or other matter will
be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in
writing), or if any other event has occurred or any other circumstances
exist, that would lead a prudent Person to conclude that such a claim,
Proceeding, dispute, action, or other matter is likely to be asserted,
commenced, taken, or otherwise pursued in the future.
3. SALE AND TRANSFER OF SHARES; CLOSING
2.1 SHARES
Subject to the terms and conditions of this Agreement, at the Closing,
Seller will sell and transfer the Shares to Buyer, and Buyer will purchase the
Shares from Seller.
2.2 PURCHASE PRICE
The purchase price (the "Purchase Price") for the Shares will be: (a)
$930,000.00, (b) the accounts receivable of the Company which shall total at
least $530,000.00 and which are listed on Exhibit "A" hereto, and (c) any excess
cash of the Company over $100,000.00 on the Closing Date.
2.3 CLOSING
The purchase and sale (the "Closing") provided for in this Agreement
will take place at the offices of Buyer's counsel at the offices of Wilson,
Cribbs, Xxxxx & Xxxxx, P.C. 000 Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx, at 10:00
a.m. (local time) on December 4, 2001, or at such other time and place as the
parties may agree. Subject to the provisions of Section 9, failure to consummate
the purchase and sale provided for in this Agreement on the date and time and at
the place determined pursuant to this Section 2.3 will not result in the
termination of this Agreement and will not relieve any party of any obligation
under this Agreement.
2.4 CLOSING OBLIGATIONS
At the Closing:
(a) Seller will deliver to Buyer:
(i) certificates representing the Shares, duly endorsed for
transfer to Buyer;
(ii) the Amendments to Key Employee and Severance Agreements
between the Company and Xxxxxxx Xxx and Xxxxxx X. Xxxx in the form of
Exhibit "B", (collectively, the "Amendments");
(iii) Seller will retain all the accounts receivable (which shall
total at least $530,000.00) as listed on Exhibit "A" hereto;
(iv) Seller will retain the accrued payroll, accrued commissions
and all other accruals and the accounts payable on the books of the
Company through November 30, 2001, listed on the books of the Company,
but in no event shall such amount exceed $275,000.00;
(v) The Company will transfer and assign to Seller any cash of
the Company in excess of $100,000.00 at Closing. In the event that the
Company does not have $100,000.00 in cash at Closing, Seller will
contribute any shortfall at Closing to the Company;
(vi) The Seller will retain and assume all indebtedness of the
Company to Xxxxx Fargo Bank Texas, National Association and Xxxxx Fargo
Energy Capital, Inc. and release in writing the Company from any
liability thereunder, except Buyer will retain the real estate note on
the Company's Facilities and real estate with Frost Bank; and
(vii) Seller will except as provided in this Agreement cause all
indebtedness previously owed to the Company by Seller to be cancelled as
of the Closing and all indebtedness of Seller to the Company to be
cancelled as of the Closing.
(b) Buyer will deliver to Seller:
(i) a promissory note payable to Seller in the principal amount
of $930,000.00 in the form of Exhibit "C" (the "Promissory Note")
secured by the assets, inventory, machinery and equipment of the Company
as described in that certain Security Agreement in the form of Exhibit
"D" ("Security Agreement");
(ii) the Amendments executed by Xxxxxxx Xxx and Xxxxxx X. Xxxx,
respectively;
(iii) the Company will assign, transfer and convey all accounts
receivable (which shall total at least $530,000.00) as described on
Exhibit "A" hereto and that the
General Conveyance, Transfer and Assignment in the form of Exhibit "E"
hereto, ("General Conveyance"),
(iv) and any cash of the Company over $100,000.00 on the Closing
Date; and
(v) allow Seller to use the three (3) existing offices currently
used by Seller's employees at the Company's Facilities, including phone,
fax and computer network support until January 31, 2002, and Seller will
pay to the Company $500.00 per month for the lease of such offices.
Both Seller and Buyer will cooperate and use their Best Efforts to obtain the
written consent of Xxxxx Fargo Bank Texas, National Association, Xxxxx Fargo
energy Capital, Inc. and Frost Bank to the Contemplated Transaction.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 ORGANIZATION AND GOOD STANDING
Seller is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware, with full corporate power
and authority to conduct its business as it is now being conducted, to own or
use the properties and assets that it purports to own or use, and to perform all
its obligations under this Agreement. Seller is duly qualified to do business as
a foreign corporation and is in good standing under the laws of Texas.
3.2 AUTHORITY; NO CONFLICT
(b) This Agreement constitutes the legal, valid, and binding obligation
of Seller, enforceable against Seller in accordance with its terms. Upon
the execution and delivery by Seller of the endorsed share certificate,
Agreement, Amendments and release of the Xxxxx Fargo indebtedness
(collectively, the "Seller's Closing Documents"), the Seller's Closing
Documents will constitute the legal, valid, and binding obligations of
Seller, enforceable against Seller in accordance with their respective
terms. Seller have the absolute and unrestricted right, power,
authority, and capacity to execute and deliver this Agreement and the
Seller' Closing Documents and to perform their obligations under this
Agreement and the Seller's Closing Documents.
(c) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions
will, directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation of any
provision of the Organizational Documents of the Seller, or any
resolution adopted by the board of directors or the stockholders
of the Company;
(ii) contravene, conflict with, or result in a violation of, or
give any Governmental Body or other Person the right to
challenge any of the Contemplated Transactions or to exercise
any remedy or obtain any relief under, any Legal Requirement or
any Order to which the Company or either Seller, or any of the
assets owned or used by the Company, may be subject;
Neither Seller or the Company is or will be required to give any notice to or
obtain any Consent from any Person in connection with the execution and delivery
of this Agreement or the consummation or performance of any of the Contemplated
Transactions except the Xxxxx Fargo Bank Texas, National Association, Xxxxx
Fargo Energy Capital, Inc. and Frost Bank which has been obtained.
3.3 CAPITALIZATION
Seller is, and will be on the Closing Date, the record and beneficial
owners and holders of the Shares, free and clear of all Encumbrances. There are
a total of 1,000 shares that have been issued, all of which will be conveyed to
Buyer.
3.4 FINANCIAL STATEMENTS
Seller have delivered to Buyer: unaudited consolidated balance sheets of
the Company as at December 31 in each of the years 1998 through 2000, and the
related unaudited consolidated statements of income, changes in stockholders'
equity, and cash flow for each of the fiscal years then ended. Such financial
statements and notes fairly present the financial condition and the results of
operations, changes in stockholders' equity, and cash flow of the Company as at
the respective dates of and for the periods referred to in such financial
statements.
3.5 BOOKS AND RECORDS
The books of account, minute books, stock record books, and other
records of the Company, all of which have been made available to Buyer, are
complete and correct and have been maintained in accordance with sound business
practices. At the Closing, all of those books and records will be in the
possession of the Company.
3.6 TITLE TO PROPERTIES; ENCUMBRANCES
The Company owns (with good and marketable title in the case of real
property, subject only to the matters permitted by the following sentence) all
the properties and assets (whether real, personal, or mixed and whether tangible
or intangible) that they purport to own located in the Facilities owned or
operated by the Company. All material properties and assets are free and clear
of all Encumbrances except for liens on the real property to Frost Bank. All
assets, equipment and machinery of the Company are being transferred AS IS,
WHERE IS, WITH NO
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE. Buyer is purchasing
the equipment and machinery of the Company based on their own knowledge and no
warranties of fitness, repair or capability.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION AND GOOD STANDING
Buyer is an individual resident in Houston, Xxxxxx County, Texas.
4.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer and the Company in
accordance with its terms. Upon the execution and delivery by Buyer and
the Company of the Agreement, Amendments, General Conveyance and the
Promissory Note (collectively, the "Buyer's Closing Documents"), the
Buyer's Closing Documents will constitute the legal, valid, and binding
obligations of Buyer, enforceable against Buyer in accordance with their
respective terms. Buyer has the absolute and unrestricted right, power,
and authority to execute and deliver this Agreement and the Buyer's
Closing Documents and to perform its obligations under this Agreement
and the Buyer's Closing Documents.
(b) Neither the execution and delivery of this Agreement by Buyer
nor the consummation or performance of any of the Contemplated
Transactions by Buyer will give any Person the right to prevent, delay,
or otherwise interfere with any of the Contemplated Transactions.
4.3 INVESTMENT INTENT
Buyer is acquiring the Shares for its own account and not with a view to
their distribution within the meaning of Section 2(11) of the Securities Act.
4.4 CERTAIN PROCEEDINGS
There is no pending Proceeding that has been commenced against Buyer and
that challenges, or may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the Contemplated Transactions. To Buyer's
Knowledge, no such Proceeding has been Threatened.
4.5 BROKERS OR FINDERS
Buyer and its officers and agents have incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement and will
indemnify and hold Seller harmless from any such
payment alleged to be due by or through Buyer as a result of the action of Buyer
or its officers or agents.
5. COVENANTS OF SELLER PRIOR TO CLOSING DATE
5.1 ACCESS AND INVESTIGATION
Between the date of this Agreement and the Closing Date, Seller will,
and will cause the Company and its Representatives to afford Buyer and its
Representatives and prospective lenders and their Representatives (collectively,
"Buyer's Advisors") full and free access to the Company's personnel, properties,
contracts, books and records, and other documents and data.
5.2 BEST EFFORTS
Between the date of this Agreement and the Closing Date, Seller will use
their Best Efforts to cause the conditions in Section 7 and 8 to be satisfied.
6. COVENANTS OF BUYER PRIOR TO CLOSING DATE
6.1 APPROVALS
Between the date of this Agreement and the Closing Date, Buyer will, and
will cause each Related Person to, cooperate with Seller and the Company with
respect to all filings that Seller is required by Legal Requirements to make in
connection with the Contemplated Transactions, and cooperate with Seller in
obtaining all consents necessary to consummate this Agreement.
6.2 BEST EFFORTS
Buyer will use its Best Efforts to cause the conditions in Sections 7
and 8 to be satisfied.
7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Shares and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Buyer, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS
All of Seller's representations and warranties in this Agreement, and
each of these representations and warranties, must have been accurate in all
material respects as of the date of this Agreement, and must be accurate in all
material respects as of the Closing Date.
7.2 SELLER'S PERFORMANCE
All of the covenants and obligations that Seller are required to perform
or to comply with pursuant to this Agreement at or prior to the Closing, and
each of these covenants and obligations must have been duly performed and
complied with in all material respects.
Each document required to be delivered pursuant to Section 2.4 must have
been delivered, and each of the other covenants and obligations in Section 2.4
must have been performed and complied with in all respects.
7.3 CONSENTS
Any Consent necessary to consummate the Contemplated Transaction must be
in full force and effect.
7.4 NO PROCEEDINGS
Since the date of this Agreement, there must not have been commenced or
Threatened against Buyer, or against any Person affiliated with Buyer, any
Proceeding (a) involving any challenge to, or seeking damages or other relief in
connection with, any of the Contemplated Transactions, or (b) that may have the
effect of preventing, delaying, making illegal, or otherwise interfering with
any of the Contemplated Transactions.
8. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Shares and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Seller, in whole or in part):
8.1 ACCURACY OF REPRESENTATIONS
All of Buyer's representations and warranties in this Agreement, and
each of these representations and warranties, must have been accurate in all
material respects as of the date of this Agreement and must be accurate in all
material respects as of the Closing Date as if made on the Closing Date.
8.2 BUYER'S PERFORMANCE
All of the covenants and obligations that Buyer is required to perform
or to comply with pursuant to this Agreement at or prior to the Closing
(considered collectively), and each of these covenants and obligations
(considered individually), must have been performed and complied with in all
material respects.
Buyer must have delivered each of the documents required to be delivered
by Buyer pursuant to Section 2.4 and must have performed all actions required to
be made by Buyer pursuant to Sections 2.4(b).
8.3 CONSENTS
Any Consents necessary to consummate the Contemplated Transaction must
be in full force and effect.
8.4 NO INJUNCTION
There must not be in effect any Legal Requirement or any injunction or
other Order that (a) prohibits the sale of the Shares by Seller to Buyer, and
(b) has been adopted or issued, or has otherwise become effective, since the
date of this Agreement.
9. TERMINATION
9.1 TERMINATION EVENTS
This Agreement may, by notice given prior to or at the Closing, be
terminated:
(a) by either Buyer or Seller if a material Breach of any
provision of this Agreement has been committed by the other party and
such Breach has not been waived;
(b) (i) by Buyer if any of the conditions in Section 7 has not
been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of
Buyer to comply with its obligations under this Agreement) and Buyer has
not waived such condition on or before the Closing Date; or (ii) by
Seller, if any of the conditions in Section 8 has not been satisfied of
the Closing Date or if satisfaction of such a condition is or becomes
impossible (other than through the failure of Seller to comply with
their obligations under this Agreement) and Seller have not waived such
condition on or before the Closing Date;
(c) by mutual consent of Buyer and Seller; or
(d) by either Buyer or Seller if the Closing has not occurred
(other than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on
or before December 31, 2001, or such later date as the parties may agree
upon.
9.2 EFFECT OF TERMINATION
Each party's right of termination under Section 9.1 is in addition to
any other rights it may have under this Agreement or otherwise, and the exercise
of a right of termination will not be an election of remedies. If this Agreement
is terminated pursuant to Section 9.1, all further obligations of the parties
under this Agreement will terminate, except that the obligations in Sections
11.1 and 11.3 will survive; provided, however, that if this Agreement is
terminated by a
party because of the Breach of the Agreement by the other party or because one
or more of the conditions to the terminating party's obligations under this
Agreement is not satisfied as a result of the other party's failure to comply
with its obligations under this Agreement, the terminating party's right to
pursue all legal remedies will survive such termination unimpaired.
10. INDEMNIFICATION; REMEDIES
10.1 SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY
KNOWLEDGE
All representations, warranties, covenants, and obligations in this
Agreement, and any other certificate or document delivered pursuant to this
Agreement will survive the Closing for a period of six (6) months.
10.2 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER
Seller, jointly and severally, will indemnify and hold harmless Buyer
and his respective Representatives (collectively, the "Indemnified Persons")
for, and will pay to the Indemnified Persons the amount of, any loss, liability,
claim, damage (including incidental and consequential damages), expense
(including costs of investigation and defense and reasonable attorneys' fees) or
diminution of value, whether or not involving a third-party claim (collectively,
"Damages"), arising, directly or indirectly, from or in connection with any
Breach of any representation or warranty made by Seller in this Agreement, or
any other certificate or document delivered by Seller pursuant to this
Agreement.
10.3 INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER
Buyer will indemnify and hold harmless Seller, and will pay to Seller
the amount of any Damages arising, directly or indirectly, from or in connection
with (a) any Breach of any representation or warranty made by Buyer in this
Agreement or in any certificate delivered by Buyer pursuant to this Agreement,
(b) any Breach by Buyer of any covenant or obligation of Buyer in this
Agreement, or (c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by such Person with Buyer (or any Person acting on its
behalf) in connection with any of the Contemplated Transactions.
10.4 TIME LIMITATIONS
If the Closing occurs, Seller will have no liability (for
indemnification or otherwise) with respect to any representation or warranty, or
covenant or obligation to be performed and complied with prior to the Closing
Date, unless on or before May 1, 2002, Buyer notifies Seller of a claim
specifying the factual basis of that claim in reasonable detail to the extent
then known by Buyer. If the Closing occurs, Buyer will have no liability (for
indemnification or otherwise) with respect to any representation or warranty, or
covenant or obligation to be performed and complied with prior to the Closing
Date, unless on or before May 1, 2002, Seller notifies Buyer
of a claim specifying the factual basis of that claim in reasonable detail to
the extent then known by Seller.
10.5 LIMITATIONS ON AMOUNT
Seller will have no liability (for indemnification or otherwise) with
respect to the matters described in Section 10.2 until the total of all Damages
with respect to such matters exceeds $50,000.00, and then only for $100,000.00
and no more. Buyer will have no liability (for indemnification or otherwise)
with respect to the matters described in Section 10.3 until the total of all
Damages with respect to such matters exceeds $50,000.00, and then only for
$100,000.00 and no more.
10.6 PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS
(a) Promptly after receipt by an indemnified party under Section
10.2 or Section 10.3 of notice of the commencement of any Proceeding
against it, such indemnified party will, if a claim is to be made
against an indemnifying party under such Section, give notice to the
indemnifying party of the commencement of such claim, but the failure to
notify the indemnifying party will not relieve the indemnifying party of
any liability that it may have to any indemnified party, except to the
extent that the indemnifying party demonstrates that the defense of such
action is prejudiced by the indemnifying party's failure to give such
notice.
(b) If any Proceeding referred to in Section 10.6(a) is brought
against an indemnified party and it gives notice to the indemnifying
party of the commencement of such Proceeding, the indemnifying party
will, unless the claim involves Taxes, be entitled to participate in
such Proceeding and, to the extent that it wishes (unless (i) the
indemnifying party is also a party to such Proceeding and the
indemnified party determines in good faith that joint representation
would be inappropriate, or (ii) the indemnifying party fails to provide
reasonable assurance to the indemnified party of its financial capacity
to defend such Proceeding and provide indemnification with respect to
such Proceeding), to assume the defense of such Proceeding with counsel
satisfactory to the indemnified party and, after notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such Proceeding, the indemnifying party will not, as long
as it diligently conducts such defense, be liable to the indemnified
party under this Section 10 for any fees of other counsel or any other
expenses with respect to the defense of such Proceeding, in each case
subsequently incurred by the indemnified party in connection with the
defense of such Proceeding, other than reasonable costs of
investigation. If the indemnifying party assumes the defense of a
Proceeding, (i) it will be conclusively established for purposes of this
Agreement that the claims made in that Proceeding are within the scope
of and subject to indemnification; (ii) no compromise or settlement of
such claims may be effected by the indemnifying party without the
indemnified party's consent unless (A) there is no finding or admission
of any violation of Legal Requirements or any violation of the rights of
any Person and no effect on any other claims that may be made against
the indemnified party, and (B) the sole relief provided is monetary
damages that are paid in full by the indemnifying party; and (iii) the
indemnified party will have no liability with respect to any compromise
or settlement of such claims effected without its consent. If notice is
given to an indemnifying party of the commencement of any Proceeding and
the indemnifying party does not, within ten days after the indemnified
party's notice is given, give notice to the indemnified party of its
election to assume the defense of such Proceeding, the indemnifying
party will be bound by any determination made in such Proceeding or any
compromise or settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a
result of monetary damages for which it would be entitled to
indemnification under this Agreement, the indemnified party may, by
notice to the indemnifying party, assume the exclusive right to defend,
compromise, or settle such Proceeding, but the indemnifying party will
not be bound by any determination of a Proceeding so defended or any
compromise or settlement effected without its consent (which may not be
unreasonably withheld).
(d) Seller hereby consent to the non-exclusive jurisdiction of
any court in which a Proceeding is brought against any Indemnified
Person for purposes of any claim that an Indemnified Person may have
under this Agreement with respect to such Proceeding or the matters
alleged therein, and agree that process may be served on Seller with
respect to such a claim anywhere in the world.
10.7 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS
A claim for indemnification for any matter not involving a third-party
claim may be asserted by notice to the party from whom indemnification is
sought.
11. GENERAL PROVISIONS
11.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents, representatives,
counsel, and accountants. Seller will pay reasonable attorneys fees to counsel
for Buyer.
11.2 PUBLIC ANNOUNCEMENTS
Any public announcement or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Seller determines. Unless consented to by Seller in
advance or required by Legal Requirements, prior to the Closing Buyer shall, and
shall cause the Company to, keep this Agreement strictly confidential and may
not make any disclosure of this Agreement to any Person. Seller and Buyer will
consult with each other concerning the means by which the Company's employees,
customers, and suppliers and others having dealings with the Company will be
informed of the
Contemplated Transactions, and Seller will have the right to be present for any
such communication.
11.3 CONFIDENTIALITY
Between the date of this Agreement and the Closing Date, Buyer and
Seller will maintain in confidence, and will cause the directors, officers,
employees, agents, and advisors of Buyer and the Company to maintain in
confidence any written, oral, or other information obtained in confidence from
another party or the Company in connection with this Agreement or the
Contemplated Transactions, unless (a) such information is already known to such
party or to others not bound by a duty of confidentiality or such information
becomes publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the Contemplated
Transactions, or (c) the furnishing or use of such information is required by
legal proceedings.
11.4 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
SELLER: Mountain Compressed Air, Inc.
0000 Xxxxxxxx Xxxx.
Xxxxx Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxxxx
Facsimile No: (000) 000-0000
with a copy to: Wilson, Cribbs, Xxxxx & Xxxxx, P.C.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxxx X. Pound III
Facsimile No: (000) 000-0000
BUYER: Xxxxxxx Xxx
0000 Xxxxxxxx
Xxxxxxx, Xxxxx 00000
Facsimile No: (000) 000-0000
With a copy to: Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone No: (000) 000-0000
Facsimile No: (000) 000-0000
11.5 JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of Texas, County of Xxxxxx, or, if it has or
can acquire jurisdiction, in the United States District Court for the Southern
District of Texas, and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
11.6 FURTHER ASSURANCES
The parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents, and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
documents referred to in this Agreement.
11.7 WAIVER
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by any party in
exercising any right, power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
11.8 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior agreements between the parties with
respect to its subject matter and constitutes (along with the documents referred
to in this Agreement) a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This Agreement
may not be amended except by a written agreement executed by the party to be
charged with the amendment.
11.9 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
Neither party may assign any of its rights under this Agreement without
the prior consent of the other parties. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable right, remedy,
or claim under or with respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the parties to this Agreement and their successors
and assigns.
11.10 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
11.11 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
11.12 TIME OF ESSENCE
With regard to all dates and time periods set forth or referred to in
this Agreement, time is of the essence.
11.13 GOVERNING LAW
This Agreement will be governed by the laws of the State of Texas
without regard to conflicts of laws principles.
11.14 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
SELLER:
MOUNTAIN COMPRESSED AIR, INC.
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Xxxxxxx X. Xxxxxxxxxxxx,
Chief Executive Officer
BUYER:
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