STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (Agreement) is made and entered into
as of August 1, 2001, by and among REN CORPORATION, an Oklahoma
corporation (Ren), and RENTECH, INC., a Colorado corporation (Rentech).
The following circumstances precede the execution of this Agreement:
A. Ren is a privately owned corporation that is engaged in the
manufacture of complex, computer controlled test systems sold to
industrial customers to test the specifications and quality of hydraulics
and many additional variables of automated equipment produced by them.
B. Rentech is a publicly owned energy corporation that owns
technology useful for converting gases derived from carbon-bearing
materials into synthetic liquid hydrocarbons such as clean burning diesel
fuel. Rentech also owns a subsidiary that produces environmentally clean
and biodegradable stains and sealers, and it owns another subsidiary that
provides well logging services to the oil and gas industry.
C. Ren and Rentech have agreed that Rentech will purchase 56% of
the issued and outstanding shares of common stock of Ren.
D. Ren is authorized to issue 50,000 shares of its common stock,
of which 5,600 are now issued and outstanding. The issued and
outstanding shares are owned in the following amounts by the following
persons (Shareholders):
Xxxx X. Xxxxxxx 4,100 shares
Xxxxx X. Xxxxxxx 1,000 shares
Xx. Xxxxxx X. Xxxxxxx 500 shares
Total: 5,600 shares
E. As of the date of this Agreement, Rentech has loaned to Ren
$623,899.39 as cash advances against the Purchase Price subsequently
described in this Agreement. Total accrued interest on the cash advances
is $116,704.91.
F. As of the date of this Agreement, Rentech has issued 400,000
shares of its common stock to Ren equal to $644,000.00 as advances of the
Purchase Price. The total of advances against the Purchase Price,
including cash and common stock, is $1,384,604.30.
G. On or about June 13, 2000, Ren purchased the real property it
had leased at 0000 Xxxxx Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx for its
office, with a portion of the loan proceeds.
NOW THEREFORE, in consideration of the background circumstances and
the mutual covenants and agreements herein set forth, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I.
SALE AND PURCHASE
1.1 Purchase. Subject to the terms and conditions set forth in
this Agreement, at the Closing, (as defined in Section 3.1), Ren will
sell and transfer 7,127 shares of its common stock (the Ren Shares) to
Rentech, and Rentech will purchase the Ren Shares from Ren.
1.2 Purchase Price. The entire purchase price (Purchase Price) to
be paid by Rentech for the Ren Shares is $1,384,604.30, of which
$623,899.39 will be credited against the indebtedness owed by Ren to
Rentech for the cash advances, $116,704.91 will be credited against the
indebtedness owed by Ren to Rentech for interest on the cash advances,
and $644,000 will be credited to the purchase price for the shares of
common stock of Rentech previously issued to Ren (the Rentech Shares).
(a) Description of Ren's Indebtedness to Rentech. Ren's
indebtedness to Rentech is subject to a Loan Agreement between them dated
May 11, 1999, as amended. The indebtedness is evidenced by a promissory
note dated May 12, 1999 in the original principal amount of $200,000,
made by Ren payable to Rentech, which has been amended as of July 21,
1999, February 29, 2000 and May 12, 2000 (Promissory Note I). The
principal balance of Promissory Note I is $573,899.39 as of the date of
this Agreement. A second promissory note was executed by Ren in favor of
Rentech dated July 13, 2000 in the principal amount of $200,000
(Promissory Note II). A third promissory note was executed by Ren in
favor of Rentech dated October 17, 2000 in the principal amount of
$200,000 (Promissory Note III). A fourth promissory note was executed by
Ren in favor of Rentech dated February 16, 2001 in the principal amount
of $122,000 (Promissory Note IV). In addition, Rentech advanced Stock to
Ren in the amount of $122,000 on or about February 16, 2001(Stock Advance
I), and advanced cash in the amount of $50,000 on or about July 20, 2001
(Cash Advance I).
(b) Application of Purchase Price to Indebtedness. The
Purchase Price shall be credited to pay in full the principal and
interest due as of the Closing on Promissory Note I, Promissory Note II,
Promissory Note III, Promissory Note IV, Stock Advance I, and Cash
Advance I, all of which shall be cancelled at Closing.
ARTICLE II
THE CLOSING
2.1 Place and Time. The closing of the transaction to be completed
under this Agreement shall take place as soon as reasonably practical
after the execution of this Agreement by both parties by completion of
the actions and delivery of the documents described in Sections 2.2, 2.3
and 2.4 at the offices of Rentech's attorneys, Brega & Xxxxxxx P.C.,
located at 0000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, XX 00000 (the
Closing). Regardless of the actual time of the Closing, the Closing
shall be effective as of 12:01 a.m. local time on August 1, 2001 (the
Effective Time).
2.2 Payment and Delivery by Rentech. At or before the Closing, and
subject to the terms and conditions set forth herein, Rentech shall:
(a) execute and deliver a cancellation of Promissory Notes I,
II, III and IV; and
(b) execute and deliver the certificate required by Section
8.1 hereof.
2.3 Delivery by Ren. At or before the Closing, and subject to the
terms and conditions set forth herein, Ren shall:
(a) present at the Closing full releases and other evidence of
full payment of each indebtedness described in Section 2.4;
(b) execute and deliver a certificate representing the Ren
Shares, duly issued and executed by the authorized officers of the Ren;
(c) deliver a recorded copy of the general warranty deed to
Ren conveying the Real Property located at 0000 Xxxxx Xxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx to Ren;
(d) deliver a copy of the title insurance policy insuring
Ren's title to the real property located at 0000 Xxxxx Xxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx, insuring title in Ren without exceptions other than
those previously approved by Rentech at the time of the closing of the
real property;
(e) deliver, if not previously delivered, all documents and
certificates required from Ren by the provisions of Article VII of this
Agreement;
(f) deliver an executed copy of the Employment Agreement of
Xxxx Xxxxxxx attached hereto as Exhibit A;
(g) execute and deliver the Agreement Between Shareholders
attached hereto as Exhibit B, which is also executed by each of the
Shareholders;
(h) execute and deliver the Confidentiality Agreements,
attached hereto as Exhibit C, executed by each of the employees of Ren
listed in Schedule 3.2;
(i) execute and deliver a certified resolution of the
shareholders and board of directors of Ren, duly signed by its president
and secretary, authorizing the execution of this Agreement, the execution
and delivery of the Ren Shares, and the actions to be taken by Ren
according to the terms of this Agreement, as set forth in Section 7.6.
Ren will from time to time after the Closing Date, at Rentech's
request, execute such further instruments as Rentech reasonably deems
necessary to carry out the sale of the Ren Shares pursuant to this
Agreement.
2.4 Indebtedness of Ren. Because the debts of Ren described below
have not been paid in full as originally contemplated by the parties, the
Shareholders shall agree in the Shareholder Agreement to assign to
Rentech their rights to an allocation of profits from Ren until an amount
of profits are allocated to Rentech equal to $229,561.16, plus 6%
interest on the outstanding balance accruing on August 1, 2001.
Remaining
Approximate Amount
Amount as of as of
Item April 16, 1999 August 1, 2001
---- -------------- --------------
Accrued commission
payable to Ren's sales
representative $ 235,000 $146,036.05
KAMO Economic Development
Corporation 160,000 -0-
CDBG/Xxxxx Co. Trust
Promissory Note 4,200 -0-
COEDD Promissory Note
(generator) 33,000 19,403.23
Xxxxxx Supply Company
Promissory Note 41,000 -0-
Accounts Payable 300,000 64,176.20
Loans from officers of Ren
to Ren 30,000 30,600.00
Panamet (trade payable -0- 69,375.00
Less:
Cash of Ren (-0-) ( 21,099.36)
Accounts Receivable of Ren (-0-) ( 78,929.96)
---------- ------------
Total: $1,003,200 $229,561.16
ARTICLE III.
REPRESENTATIONS OF REN
Ren represents, promises and warrants to the Rentech as follows:
3.1 Organization. Ren is a corporation duly organized, validly
existing, and in good standing under the laws of the state of Oklahoma
and has all power and authority to own its property and carry on its
business as now conducted and has all necessary licenses, permits and
government approvals.
3.2 Authorization. The execution, delivery and performance of this
Agreement and any other documents or instruments contemplated hereby have
been duly authorized by all necessary action of Ren, and this Agreement
has been executed and delivered by Ren and constitutes a legal, valid and
binding obligation of Ren enforceable in accordance with its terms.
3.3 Financial Reports. True and correct copies of the financial
statement (including a balance sheet and statement of income) of Ren for
each of the last five (5) years, and for a current month (collectively,
the Reports) will be provided to Rentech by separate delivery. At
Closing Ren shall deliver to Rentech a true and correct copy of the
financial statements including a balance sheet and statement of income of
Ren as of the last day of the most current month for which available,
prepared from the books of Ren without audit since January 2001 (the
Interim Reports). (Collectively, the Reports and the Interim Reports
shall be referred to as the Financial Reports). All such Financial
Reports are in accordance with the books and records of Ren, have
been prepared consistently throughout the periods indicated, reflect all
material assets and, to Ren's knowledge, material liabilities of Ren, and
present fairly and completely, in all material respects, the financial
condition of Ren and its Business at such dates and results of its
operations for the periods then ended, subject only, in the case of the
Interim Reports, to normal year end adjustments.
3.4 Absence of Adverse Changes. Except as reflected in Financial
Reports, and as disclosed on Schedule 3.4, since January 1, 2001, Ren,
its business and its assets have not suffered or undergone any change
that is reasonably likely to have an adverse effect on the business,
condition (financial or otherwise), or prospects (whether as a result of
any change as to inventory or other assets, any loss of a competitive
position, any natural disaster, accident, strike, or any other event or
condition affecting or relating to its business, Ren or its assets,
whether or not related to any of the foregoing), experienced any labor
difficulty or suffered any damage, destruction or loss (whether or not
insured). Except as reflected in Financial Reports and as disclosed on
Schedule 3.4, as of the date of this Agreement, since April 16, 1999, Ren
and its business have not:
(a) incurred any obligations or liabilities (whether absolute,
accrued, contingent, or otherwise and whether due or to become due),
except current liabilities in the ordinary course of business and
consistent with past practice;
(b) written down or written up the value of any inventory or
equipment;
(c) canceled or waived any claim of right of substantial value
or sold, assigned, transferred or encumbered any of its properties or
assets, real, personal, or mixed, tangible or intangible, except for fair
consideration and in the ordinary course of business and consistent with
past practice;
(d) granted any increase in compensation, rate of compensation
or commission payable or to become payable, or made any loan, advance or
other extension of credit to any of its employees or agents except merit
increases made in the usual and ordinary course of business.
(e) changed the methods of accounting or accounting principles
or practices of Ren set forth in or reflected in the Financial Reports;
(f) lost any key employees;
(g) terminated or been advised of the termination of its
relationship with any material customer or supplier;
(h) changed in any material respect the business policies or
practices of Ren or failed to operate the business of Ren in good faith
and in the ordinary course; and
(i) agreed, whether in writing or not, to do any of the
foregoing.
3.5 Title to Assets. Ren has good and marketable title to all its
assets, including, without limitation, those reflected in the Financial
Reports or acquired since the date thereof (except for property disposed
of since such date in the ordinary course of business consistent with
past practice), in each case free and clear of liens, easements or title
imperfections except that, as of the date of this Agreement, its assets
may be subject to liens for current taxes not yet due and payable. As of
the Closing Date, Ren's assets shall be subject to no liens and Ren shall
have good and marketable title to all assets free and clear of liens.
3.6 Compliance With Other Instruments. Ren has complete and
unrestricted power to undertake and perform all of the obligations
contained in this Agreement. Neither the execution and delivery, nor the
consummation of the transactions provided for in this Agreement, will
violate the Articles of Incorporation of Ren or any material agreement,
mortgage, indenture, license, franchise, permit, judgment, decree, order,
law or regulation by which Ren is bound.
3.7 Litigation. Except as set forth in Schedule 3.7, there are no
actions, claims, suits, investigations, litigation or proceedings
pending, or, to the knowledge of Ren, threatened against or relating to
Ren or its business, including any that would question the validity of
this Agreement or any other agreements contemplated hereunder or any
action taken or to be taken pursuant to or in connection with the
provisions of this Agreement or any other agreement contemplated
hereunder, nor is there any reasonable basis for any such action, claim,
suit, proceeding or investigation. There are no judgments, orders,
decrees, citations, fines or penalties heretofore assessed (and not
discharged or otherwise satisfied) against Ren under any United States
federal, state, local or foreign law, and there are no unsatisfied
judgments against Ren.
3.8 Environmental Matters. Ren is and has at all times been in
compliance with all applicable United States, federal, state, local, and
foreign laws and regulations relating to environmental, land use,
welfare, natural resources, health and safety matters. There is no suit,
claim, action or proceeding pending or threatened against Ren or any
reasonable basis therefor, in respect of (a) noncompliance by Ren with
any such laws or regulations, (b) personal injury, wrongful death or
other tortious conduct arising out of or resulting from materials,
commodities or products held, used, sold, transferred, manufactured or
disposed of by or on behalf of Ren or one of its shareholders, containing
or incorporating any hazardous or toxic materials commodities or
substances, or (c) the presence or release or threatened release into
the environment of any pollutant, contaminant or toxic or hazardous
material, substance or waste, whether solid, liquid or gas (each a
Hazardous Substance), whether generated by Ren or located at or about a
site currently owned, leased or otherwise used by Ren or heretofore
owned, leased or otherwise used by Ren or any predecessor entity and for
which Ren would have liability. There have been no Hazardous Substances
generated by Ren that have been disposed of or come to rest at any site
that has been included in any published United States federal, state or
local "superfund" site list or any other list of hazardous or toxic waste
sites published by any governmental authority in the United States.
Except as set forth on Schedule 3.8, there are and have been no
underground storage tanks located on, no polychlorinated biphenyls (PCBs)
or PCB-containing equipment used or stored on, and no hazardous waste, as
defined by the Resource Conservation and Recovery Act, as amended, 42
U.S.C. Section 6901 et seq, stored on, any site owned, leased or
otherwise used by Ren. No such Hazardous Substance is stored by or on
behalf of Ren at any site at which Ren provides services. There has been
no release or threatened release by Ren of Hazardous Substances on, upon,
into or from (x) any site currently owned, leased or otherwise used by
Ren, (y) any site heretofore owned, leased or otherwise used by Ren or
any predecessor entity or (z) any other site at which Ren provides
services.
3.9 Tax Returns. Ren has duly filed all tax reports and returns
required to be filed by it and has duly paid all taxes and other charges
due as shown thereon or claimed to be due from it by written notice from
any federal, state, or local taxing authorities, including, without
limitation, those due in respect of its properties, income, franchise,
licenses, sales, and payrolls; there are no tax liens upon any of its
assets (other than liens for current taxes not yet due); there are no
agreements, waivers or other arrangements providing for an extension of
time with respect to the assessment of any tax or deficiency against its
assets or Ren nor are there any actions, suits, proceedings,
investigations or claims now pending against Ren or relating to its
business; and, there are no pending discussions or questions relating to,
or claims asserted for taxes or assessments against Ren.
3.10 Leases. Ren is not bound to any leases pursuant to which Ren
leases real or personal property except as identified on Schedule 3.10.
3.11 Intellectual Property. Ren has no pending applications for
registration of any rights in Intellectual Property. No licenses,
sublicenses or covenants have been granted or entered into by Ren in
respect of any Intellectual Property. "Intellectual Property" means,
collectively: (a) all registered, unregistered and pending (i) trade
names, trade dress, trademarks, service marks, assumed names, business
names and logos, and all registrations and applications therefor, (ii)
all computer software, data files, manuals and other specifications and
documentation and all know-how related thereto, (iii) technical
information, data, process technology, technical papers, plans, drawings
and blue prints, (iv) all patents, patent applications, and inventions
and discoveries that may be patentable, registered designs and invention
disclosures, (v) all know-how, trade secrets, proprietary inventions,
proprietary processes, proprietary formulas, proprietary know-how,
proprietary concepts, proprietary ideas, proprietary research and
development, and proprietary designs, and (vi) all other intellectual
property, and (b) all licenses, sublicenses, assignments in respect
thereto and rights thereunder, remedies against infringements thereof and
rights to protection of interest therein relating to the items set forth
in clause (a) above.
3.12 Employee Matters. Schedule 3.12 lists all employees employed
by Ren (collectively, the Employees), including for each such Employee:
(i) his or her position and title; (ii) his or her date of hire; (iii)
his or her salary; (iv) his or her unpaid wages, accrued vacation
time and accrued personal time; and (v) any bonuses paid to him or her
with respect to the fiscal year ended December 31, 2000 or earned by him
or her with respect to the current fiscal year. Ren shall as soon as
reasonably practicable, but in any event within five days after the
Closing, provide to Rentech the foregoing information with respect to any
other Employees hired prior to the Closing. There are no continuing
contracts of employment with any employees of Ren. Ren has complied with
all applicable laws relative to employee benefits, including COBRA and
the Employee Retirement Income Security Act of 1974, as amended (ERISA),
and there are no unfunded liabilities relating to any pension or welfare
benefit plan for which Ren could be liable. Ren is not a party to any
collective bargaining agreement and there is no existing dispute or
controversy between Ren and any of the Employees. None of the Employees
are represented by a labor union and, to Ren's knowledge, there is no
labor union organizing activity by or among such Employees. Ren does not
maintain or contribute to, nor has it ever maintained or contributed to,
any employee benefit plan (as defined in ERISA) that is an employee
pension benefit plan (as defined in ERISA). Ren does not maintain or
contribute to, nor has it ever maintained or contributed to, an employee
benefit plan that is an employee welfare benefit plan (as defined in
ERISA).
3.13 Contracts and Commitments. The only continuing contract,
agreement, plan, arrangement, or commitment for the benefit of or
relating to Ren's business that it holds and that will continue past the
Closing are those described on Schedule 3.13.
3.14 Compliance with Law. Ren has not received any notice of any
violation of and, to the best of Ren's knowledge, has complied in all
material respects with all laws, regulations, and orders applicable to
its business including all rules and regulations of the Occupational
Health and Safety Administration, and all federal, state and local
environmental laws, rules and regulations.
3.15 Licenses and Permits. Ren holds all licenses and permits
which, to the best of Ren's knowledge, are required for Ren's operation
of its business, all of which are in full force and effect. Ren has all
governmental and regulatory licenses and permits necessary for the
conduct of the business as presently conducted for the ownership of its
assets. All such licenses and permits are set forth on Schedule 3.15,
are in full force and effect, and except as set forth on Schedule 3.15,
no written notice of any violations has been received by Ren relating to
such licenses or permits. Ren is not in violation of any such license or
permit, and no proceeding or investigation is pending or, to Ren's
knowledge, threatened that would have the effect, directly or indirectly,
of revoking or limiting in any way such license or permits. To the
extent that any such license or permit cannot be obtained independently
by Rentech without condition other than application and the payment of
applicable fees, such licenses and permits are fully assignable to
Rentech.
3.16 Disclosure. No material representation or warranty by Ren
contained in this Agreement and no statement contained in any exhibit,
schedule certificate, list, or other writing furnished to Rentech
pursuant to the provision hereof, to the best knowledge of Ren, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements therein not materially
misleading.
3.17 Certain Agreements. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby
will (i) result in any payment (including, without limitation,
severance, unemployment compensation, parachute payment, bonus or
otherwise) becoming due to any employee of Ren or any other person from
Ren under any plan, agreement or otherwise, (ii) increase any benefits
otherwise payable to any Employee under any plan or agreement, or (iii)
result in the acceleration of the time of payment or vesting of any such
benefits.
3.18 Books and Records. Ren has made available to Rentech true and
correct copies of the books and of all corporate (including minute books
and stock record books) and financial records of Ren.
3.19 Standstill. Neither Ren nor any shareholder of Ren has entered
into any arrangement or understanding with any person other than Rentech
regarding this sale, exchange or other disposition of any of its common
stock.
3.20 Capitalization. As of the date of this Agreement, the
authorized common stock of Ren consists of 50,000 shares of common stock
of which 5,600 shares were issued and outstanding. All of such
outstanding shares have been validly issued and are fully paid and
nonassessable. No shares of common stock of Ren are subject to
preemptive rights or any other similar rights or any liens or
encumbrances. Except as disclosed in Schedule 3.20: (i) there are
no outstanding options, warrants, script, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or
rights convertible into, any shares of capital stock of Ren, or
arrangements by which Ren is or may become bound to issue additional
shares of capital stock of Ren, and (ii) there are no outstanding debt
securities. If requested by Rentech, Ren has furnished to Rentech, and
Rentech acknowledges receipt of same by its signature hereafter, true and
correct copies of Ren's Articles of Incorporation, as amended, as in
effect on the date hereof (Articles of Incorporation), and Ren's Bylaws,
as in effect on the date hereof (the Bylaws).
3.21 Issuance of Securities. At or prior to Closing, the Ren Shares
shall be duly authorized and reserved for issuance and shall be validly
issued, fully paid and non-assessable, free from all taxes, liens and
charges with respect to the issue thereof, and will not be subject to
preemptive rights or other similar rights of stockholders of Ren.
3.22 No Brokers; No General Solicitation. Ren has taken no action
that would give rise to any claim by any person for brokerage
commissions, finder's fees or similar payments relating to this Agreement
and the transactions contemplated hereby. Ren and Rentech both
acknowledge that no broker was involved with respect to the transactions
contemplated hereby.
ARTICLE IV.
CONDUCT OF BUSINESS PRIOR TO CLOSING
Ren covenants and agrees that prior to the Closing, except as Rentech
shall have consented in writing:
4.1 Operation in Ordinary Course. Ren's business will be conducted
only in the ordinary course of business consistent with past practice.
4.2 Operation of the Business. Ren shall use its best efforts to
keep its business intact and to preserve the goodwill of suppliers,
customers and others having business relations with Ren.
4.3 Employees. Ren shall pay all salaries, wages, payroll taxes,
benefits, vacation pay, all other fringe benefit costs, and all other
costs of every nature whatsoever as they become due.
4.4 Payment of Liabilities. Ren shall pay as the same become due
all of its liabilities.
4.5 Payment of Taxes. Ren shall promptly file all tax returns and
pay all federal, state and local tax assessments and governmental charges
which are or may be lawfully levied or assessed against Ren, its business
its assets, including, but not limited to, ad valorem, sales, use,
excise, franchise, and personal property taxes.
4.6 Maintenance of Properties. Ren will maintain all its assets in
customary repair, order and condition, reasonable wear and use and damage
by fire or other casualty excepted.
4.7 Maintenance of Books. Ren will maintain its books, accounts
and records in the usual manner on a basis consistent with prior periods.
Ren will duly comply in all material respects with all laws and decrees
applicable to it.
4.8 Update Schedules. Ren shall advise Rentech of any changes in
the information provided in the schedules attached to this Agreement.
4.9 Exclusivity; Acquisition Proposals. Unless and until this
Agreement shall have been terminated by either party pursuant to Article
IX, except as required by law, Ren shall not (and shall instruct their
officers, directors, agents, representatives or affiliates not to take or
cause, directly or indirectly, any of the following actions with any
person other than Rentech and its designees or agents: (i) solicit,
encourage, initiate or participate in any negotiations, inquiries
or discussions with respect to any offer or proposal to acquire all or
any substantial part of Ren's assets or capital stock (Acquisition
Transaction); (ii) disclose any information not customarily disclosed to
any person concerning its business or its assets except in the ordinary
course of business consistent with past practice and as required pursuant
to a governmental request for information; (iii) enter into or execute
any agreement relating to an Acquisition Transaction, or other agreement
calling for the sale, directly or indirectly, of all or any significant
part of Ren's business or its assets; or (iv) make or authorize any
public statement, recommendation or solicitation with respect to any
Acquisition Transaction or any offer or proposal relating to an
Acquisition Transaction other than with respect to the transactions
contemplated hereby.
ARTICLE V.
PRE-CLOSING COVENANTS OF REN AND RENTECH
5.1 Environmental Survey. If Rentech elects to obtain an
environmental survey of Ren's real property, Ren and Rentech shall
cooperate in obtaining, at Rentech's expense, a Phase I environmental
survey of the Real Property on which Ren's business is operated. The
Phase I survey shall be ordered from an environmental consultant by
Rentech, at its expense, no later than ten (10) days after the date
hereof and shall be completed as promptly as possible. If a Phase II
environmental survey is required by the environmental consultant
preparing the Phase I survey, Ren shall be responsible for the cost of
the Phase II survey.
5.2 Cooperation. Each of Ren and Rentech shall use its best
efforts to cause the sale contemplated by this Agreement to be
consummated, and, without limiting the generality of the foregoing, to
make all filings with and give notices to third parties which may be
necessary or reasonably required in order to effect the transactions
contemplated hereby.
5.3 Access to Premises. Between the date hereof and the Closing
Date, Ren will afford to the officers and authorized representatives of
Rentech access during normal business hours to the premises, properties,
and to the books and records of Ren in order that Rentech shall
have the opportunity to make such investigations as it shall desire and
to permit Rentech to review such financial and operating data and other
information regarding Ren's business as Rentech shall from time to time
reasonably request. Neither party shall make public disclosure of this
Agreement prior to the Closing except as required in connection with
transfer of permits, licenses and other such transactions.
5.4 Confidentiality.
(a) Until the Closing has been completed, Rentech agrees to
keep confidential the non-public information that Ren provides to Rentech
and not to use such information for any purpose whatsoever other than
evaluating the transactions contemplated in this Agreement. Rentech
further agrees that during such time it will not make any oral or written
disclosures concerning the information provided to it to any person
without the prior approval of Ren; provided, however, Rentech may
disclose such confidential information to persons subject to Rentech's
control who have a need to know such confidential information in
connection with the negotiations between Rentech and Ren, to Rentech's
affiliates, to existing or prospective lenders of or investors in
Rentech, all of whom will be directed and required to maintain such
information in the strictest confidence at all times.
(b) Except to the extent that Rentech has made public
announcements about this Agreement and its loans to and acquisition of
stock of Ren, which Rentech is expressly permitted to do, Ren agrees to
keep in strictest confidence and to refrain from disclosing to any
person, except to its legal counsel, any aspect of the transactions
contemplated in this Agreement, including (without limitation) the
identify of Rentech, the existence of this Agreement, the terms and
conditions set forth in this Agreement, the contents of any discussions
and negotiations that already have taken place and that may take place in
the future, and the fact that Ren or Rentech is contemplating a
transaction of the type set forth in this Agreement, as well as any other
matter relating to this Agreement or relating to the transactions
contemplated thereby.
ARTICLE VI.
REPRESENTATIONS BY RENTECH
Rentech represents, promises and warrants to Ren as follows:
6.1 Organization. Rentech is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Colorado,
and has all corporate power and authority to own its property and carry
on its business as now conducted.
6.2 Authorization. The execution, delivery and performance of this
Agreement and any other documents or instruments contemplated hereby has
been duly authorized by all necessary corporate actions of Rentech, and
this Agreement has been executed and will be delivered by Rentech and
will constitute a legal, valid and binding obligation of Rentech
enforceable in accordance with their terms.
6.3 Compliance With Other Instruments. Rentech has complete and
unrestricted power to undertake and perform all of the obligations
contained in this Agreement. Neither the execution and delivery, nor the
consummation of the transactions provided for in this Agreement, will
violate the Articles of Incorporation or the bylaws of Rentech or any
material agreement, mortgage, indenture, license, franchise, permit,
lease or other instrument, judgment, decree, order, law or regulation by
which Rentech is bound.
6.4 Litigation. There is no action, suit, litigation or proceeding
pending, or, to the best knowledge of Rentech, threatened against or
relating to Rentech which could adversely affect the ability of Rentech
to perform the transactions contemplated by this Agreement.
ARTICLE VII.
CONDITIONS PRECEDENT TO RENTECH'S OBLIGATIONS
The obligation of Rentech to consummate the transactions
contemplated in this Agreement is subject to the fulfillment to its
satisfaction or the following conditions prior to or at the Closing
(unless expressly waived in writing by Rentech).
7.1 Representations, Warranties and Covenants. The representations
and warranties made by Ren shall be true and correct in all material
respects at and as of the Closing Date; and Ren shall have performed and
complied in all material respects with all covenants, agreements and
conditions contained in this Agreement required to be performed or
complied with by it prior to the Closing, and Ren shall provide to
Rentech at the Closing a certificate to such effect executed by Ren.
7.2 Closing Documents. Ren shall have taken all the actions and
delivered all the documents required of it according to the provisions of
Article II.
7.3 Litigation. There shall be no litigation pending or threatened
against Ren with respect to the consummation of this Agreement or which
could adversely affect the ability of Ren to transfer the Ren Shares to
Rentech.
7.4 No Adverse Effect, etc. No material adverse effect shall have
occurred between the date of this Agreement and completion of the
Closing, nor shall any other fact or circumstance have occurred that
could be expected to have a material adverse effect, and Ren shall
certify to that effect. Ren shall not have become aware of any fact or
circumstance materially adversely affecting or that could be expected to
materially adversely affect Ren's right to conduct its business
substantially as it was being conducted as of the date of this Agreement.
7.5 Rentech's Due Diligence. Rentech shall have completed its due
diligence with respect to Ren, its business and its assets and the
results of such due diligence shall be satisfactory to Rentech.
7.6 Charter Documents, etc. Ren shall have delivered (i) a copy of
its Articles of Incorporation certified by the Secretary of State of the
State of Oklahoma and a good standing certificate for Ren issued by the
Secretary of State of the State of Oklahoma and (ii) a certificate of
the Secretary of Ren certifying that attached thereto is a copy of Ren's
bylaws as in effect on the date thereof, copies of directors' and
shareholders' resolutions authorizing the transactions contemplated by
this Agreement and certifying the incumbency of the officers authorized
to execute this Agreement and the documents and instruments delivered by
Ren in connection therewith.
7.7 Agreements Between Shareholders. The Shareholders shall have
executed the Agreement Between Shareholders attached hereto as Exhibit B
and incorporated herein by this reference.
7.8 Confidentiality Agreements. The employees of Ren listed on
Schedule 3.2 shall have executed Confidentiality Agreements in the form
attached hereto as Exhibit C, which is incorporated herein by this
reference.
7.9 Resignation of Officers and Directors. Rentech shall have
received the resignation, effective as of the Closing, of Xxxxx X.
Xxxxxxx as Secretary and Treasurer of Ren, a form of which is attached
hereto as Exhibit F and incorporated herein by this reference.
7.10 Election of New Directors and Appointment of New Officers. The
Shareholders shall have executed a written consent increasing the number
of directors of Ren to seven, and shall have appointed Xxxxxx X. Xxxx,
Xxxxx X. Xxxxxxx, Xxxxxxx Xxxx Xxxxxxxxxx and Xxxxxx X. Xxxxxxxx, to fill
the vacancies in the Board of Directors. The directors of Ren shall have
executed a written consent to appoint the following persons to the
offices set forth next to their names:
Xxxx X. Xxxxxxx President
Xxxxx X. Xxxxxxx Vice President and Treasurer
Xxxxxx X. List Vice President - Manufacturing
Xxxxxx X. Xxxx Secretary
Forms of the Written Consent of Shareholders and Written Consent of
Directors are attached hereto as Exhibits D and E, respectively.
7.11 General. All instruments and legal and corporate proceedings
in connection with the transactions contemplated by this Agreement shall
be reasonably satisfactory in form and substance to Rentech, and Rentech
shall have received counterpart originals, or certified or other copies,
of all documents that it may reasonably request in connection therewith.
ARTICLE VIII.
CONDITIONS PRECEDENT TO REN'S OBLIGATIONS
The obligation of Ren to consummate the transactions contemplated by
this Agreement is subject to the fulfillment to its satisfaction of the
following conditions prior to at the Closing (unless expressly waived in
writing by Ren):
8.1 Representations Warranties and Covenants. The representations
and warranties made by Rentech shall be true and correct in all material
respects at and as of the Closing Date and Rentech shall have performed
and complied in all material respects with all covenants, agreements and
conditions contained in this Agreement required to be performed or
complied with by it prior to the Closing, and Rentech shall provide to
Ren at the Closing a certificate to such effect executed by an officer of
Rentech.
8.2 Closing Documents. Rentech shall have taken all the actions
and delivered all the documents required of it according to the
provisions of Article II.
8.3 Employment Contracts. Ren shall employ Xxxx X. Xxxxxxx as
president of Ren for a period of three years from the Closing Date
pursuant to the terms and conditions of the employment contract attached
hereto as Exhibit A.
8.4 Litigation. There shall be no litigation pending or threatened
against Rentech with respect to the consummation of this Agreement.
8.5 Consideration. Rentech shall have paid to Ren the Purchase
Price.
8.6 General. All instruments and legal and corporate proceedings
in connection with the transactions contemplated by this Agreement shall
be reasonably satisfactory in form and substance to Ren, and Ren shall
have received counterpart originals, or certified or other copies, of all
documents that it may reasonably request in connection therewith.
ARTICLE IX.
FAILURE OF CONDITIONS: REMEDIES
9.1 Failure of Conditions Precedent - No Breach. In the event any
condition precedent to the obligations of either party are not satisfied
as of the Closing and the failure to satisfy the condition precedent is
not due to a breach of this Agreement by the other party, the party whose
conditions precedent have not been satisfied shall have the option of
terminating this Agreement or waiving the unsatisfied condition precedent
and closing hereunder (and, in either event, waiving any claim for
damages or indemnity relating thereto).
9.2 Failure of Conditions Precedent of Ren - Breach. In the event
any condition precedent to the obligations of Ren is not satisfied on the
Closing Date and the failure to satisfy the condition precedent is due to
a breach of this Agreement by Rentech, or in the event of any other
breach of this Agreement by Rentech, Ren shall have the right to
terminate this Agreement, and Rentech shall pay to Ren $10,000 as
liquidated damages. The parties agree that the foregoing liquidated
damages are reasonable considering all the circumstances existing as of
the date of this Agreement and constitute the good faith estimate of the
parties of the actual damages reasonably expected to result from the
termination of this Agreement by Ren due to Rentech's breach of this
Agreement. Ren agrees that, to the fullest extent permitted by law,
Ren's right to payment of such liquidated damages shall be its sole and
exclusive remedy, if the Closing does not occur, with respect to any
damages whatsoever that Ren may suffer or allege to suffer as a result of
any claim or cause of action asserted by Ren relating to or arising from
breaches of this Agreement by Rentech. Upon any termination of this
Agreement for any reason, the entire unpaid balance of principal and
interest due on the Promissory Notes shall become due at once.
ARTICLE X.
INDEMNIFICATION
10.1 Survival of Representations Warranties and Covenants. All of
Ren's representations, covenants and warranties contained herein and in
any documents delivered pursuant to this Agreement (except those waived
pursuant to Section 9.1) shall survive the Closing hereunder.
10.2 Indemnity by Ren. Ren shall indemnify, save, and hold harmless
Rentech from any damages as hereinafter defined. Damages, as used
herein, shall mean and include any loss, cost, expense, or other
liability, including counsel fees, which Rentech may incur or suffer, by
reason of the inaccuracy of any of Ren's representations contained in
this Agreement.
10.3 Indemnity by Rentech. Rentech shall indemnify, save, and hold
harmless Ren from any damages as hereinafter defined. Damages, as used
herein, shall mean and include any loss, cost, expense, or other
liability, including counsel fees, which Ren may incur or suffer by
reason of the inaccuracy of any representation of Rentech contained in
this Agreement.
10.4 Procedures for Indemnification. The party entitled to
indemnification (Indemnitee) shall, as promptly as is reasonably
practicable after it becomes aware thereof, notify the other party
(Indemnitor) of the existence of any claim, demand or other matter to
which Indemnitor's indemnification obligations apply and shall give
Indemnitor a reasonable opportunity to defend the same at its own expense
and with counsel of its own selection reasonably acceptable to
Indemnitee; provided, that Indemnitee shall at all times, also have the
right to fully participate in the defense at its own expense. Indemnitor
may, at its own discretion, settle any dispute, demand or claim defended
by it hereunder; provided, any such settlement shall be solely for
Indemnitor's account and Indemnitee shall not be liable for any amounts
whatsoever payable in connection with any such settlement. If Indemnitor
shall, within a reasonable time after notice to it, fail to so defend,
Indemnitee shall have the right, but not the obligation, to undertake the
defense of, and to compromise or settle (exercising reasonable business
judgment), the claim or other matter on behalf, and at the risk of,
Indemnitor.
ARTICLE XI.
GENERAL
11.1 Notice. All notices, requests, demands and other
communications hereunder shall be furnished to the other party at its
address listed below (or such other address as provided in accordance
with this Section 11.1), shall be in writing, and shall be sent either by
telecopy, hand delivery, or reputable overnight courier, addressed as
follows or to such other address or addresses of which the respective
party shall have notified the other party. Each such notice or other
communication shall be effective (a) if given by telecopy, when such
telecopy is transmitted and the transmission thereof is confirmed by the
sender's telecopier, (b) if given by reputable overnight courier, one
business day after being delivered to such courier or (c) if given by
any other means, when actually received.
(a) If to Rentech, to:
Rentech, Inc.
Attention: Xxxxxx X. Xxxx, Vice President
0000 00xx Xx., Xxxxx 000
Xxxxxx, XX 00000
FAX: (000) 000-0000
(b) If to Rentech, to:
Ren Corporation
Attention: Xxxx X. Xxxxxxx, President
0000 X. Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
FAX: (000) 000-0000
11.2 Amendment. This Agreement may be amended or modified only by a
written instrument executed by the party hereto against which it is to be
enforced.
11.3 Expense of Parties. Except as otherwise specifically provided
herein, each party to this Agreement shall pay its own expenses
(including, without limitation, the fees and expenses of their respective
agents, representatives, counsel and accountants) incidental to the
preparation and carrying out of this Agreement. In the event a party
commences legal action against another party to enforce its rights under
this Agreement, the prevailing party in such action shall be entitled to
recover all of its costs and expenses in connection therewith, including
reasonable attorneys' fees and costs.
11.4 Brokers. Ren agrees to indemnify Rentech, and Rentech agrees
to indemnify Ren, against any claim by any third person for any
commission, brokerage, finder's fee or other payment based upon any
alleged agreement or understanding between such party and such third
person, whether expressed or implied from the actions of such party.
11.5 Governing Law. This Agreement is being delivered in and shall
be construed in accordance with and governed by the laws of the State of
Colorado.
11.6 Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. Terms used with initial capital
letters shall not in any way affect the meaning or interpretation of this
Agreement. Terms used with initial capital letters will have the
meanings specified, applicable to both singular and plural forms, for all
purposes of this Agreement. All pronouns (and any variation) will be
deemed to refer to the masculine, feminine or neuter, as the identify of
the person may require. The singular or plural includes the other, as
the context requires or permits. The word include (and any variation) is
used in an illustrative sense rather than a limiting sense. The word
"day" means a calendar day. All references to "Sections" are to sections
of this Agreement unless indicated otherwise.
11.7 Prior Agreements; Counterparts. This Agreement, with its
Exhibits and Schedules, merges and integrates all prior agreements and
representations respecting this transaction, whether written or oral, and
constitutes the sole agreement of the parties in connection therewith.
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.8 Assignment. This Agreement shall not be assignable by Ren or
Rentech, except that Rentech may assign this Agreement to a corporation
of which Rentech is the sole shareholder provided Rentech remains fully
liable to Ren hereunder. Subject to the foregoing, this Agreement shall
be binding upon, and inure to the benefit of, and be enforceable by, the
respective successors and permitted assigns of Ren and Rentech. Nothing
in this Agreement, express or implied, is intended to confer upon any
other person any rights or remedies under or by reason of this Agreement.
11.9 Waiver. The failure of any party to enforce any right arising
under this Agreement on one or more occasions shall not operate as a
waiver of that or any other right on that or any other occasion.
11.10 Exclusivity of Representations. Ren shall not be deemed
to have made to Rentech any representation or warranty other than as
expressly made by Ren in Section 3. Rentech shall not be deemed to have
made to Ren any representation or warranty other than as expressly made
by Rentech in Section 6.
11.11 Severability. Any term or provision of this Agreement
that is invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining terms
and provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other jurisdiction.
11.12 Construction. The parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement
will be construed as if drafted jointly by the parties, and no
presumption or burden of proof will arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this
Agreement. The parties intend that each representation, warranty and
covenant contained herein will have independent significance. If any
party breaches any representation, warranty or covenant contained herein
in any respect, the fact that there exists another representation,
warranty or covenant relating to the same subject matter (regardless of
the relative levels of specificity) which the party has not breached will
not detract from or mitigate the fact that the party is in breach of the
first representation, warranty or covenant.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date given in the opening paragraph.
SELLER: BUYER:
REN CORPORATION RENTECH, INC.
By: By:
---------------------------- --------------------------
Xxxx X. Xxxxxxx, President Xxxxx X. Xxxxxxx,
Vice President - Finance
