Exhibit 2.2
PURCHASE OF MEMBERSHIP INTERESTS AGREEMENT
AMONG
U S LIQUIDS INC.
AND
RE-CLAIM ENVIRONMENTAL LOUISIANA LLC
AND
XXXX X. XXXX AND REYNCOR INDUSTRIAL ALCOHOL, INC.
TABLE OF CONTENTS
SECTION PAGE
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1. DELIVERY OF MEMBERSHIP INTERESTS . . . . . . . . . . . . . . . . . . . . .1
1.1 DELIVERY OF MEMBERSHIP INTERESTS. . . . . . . . . . . . . . . . . . 1
1.2 DELIVERY OF MEMBERSHIP INTERESTS. . . . . . . . . . . . . . . . . . 2
2. PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
2.1 PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 AGREED VALUE OF PARENT STOCK. . . . . . . . . . . . . . . . . . . . 2
2.3 ASSUMPTION OF DEBT. . . . . . . . . . . . . . . . . . . . . . . . . 2
2.4 ADJUSTMENT TO PURCHASE PRICE. . . . . . . . . . . . . . . . . . . . 3
2.5 DEFERRED ADDITIONAL CONSIDERATION . . . . . . . . . . . . . . . . . 4
3. TITLE ASSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
3.1 OWNERS TITLE POLICY. . . . . . . . . . . . . . . . . . . . . . . . .7
3.2 PERMITTED ENCUMBRANCES . . . . . . . . . . . . . . . . . . . . . . .7
3.3 SURVEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
4. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
5. REPRESENTATIONS AND WARRANTIES OF MEMBERS AND COMPANY. . . . . . . . . . .8
5.1 ORGANIZATION; AUTHORITY. . . . . . . . . . . . . . . . . . . . . . .9
5.2 OWNERSHIP OF MEMBERSHIP INTERESTS; ABSENCE OF ADVERSE CLAIMS . . . .9
5.3 CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.4 PREDECESSOR ENTITIES; TRADE NAMES. . . . . . . . . . . . . . . . . 10
5.5 NO SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.6 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . 11
5.7 NON-BALANCE SHEET LIABILITIES. . . . . . . . . . . . . . . . . . . 12
5.8 ACCOUNTS RECEIVABLE. . . . . . . . . . . . . . . . . . . . . . . . 12
5.9 PROPRIETARY RIGHTS; ENVIRONMENTAL DOCUMENTS. . . . . . . . . . . . 13
5.10 REAL PROPERTY; REPORTING . . . . . . . . . . . . . . . . . . . . . 14
5.11 PERSONAL PROPERTY; NEW PROJECTS. . . . . . . . . . . . . . . . . . 16
5.12 CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.13 INSURANCE POLICIES . . . . . . . . . . . . . . . . . . . . . . . . 18
5.14 OFFICERS AND EMPLOYEES; COMPENSATION . . . . . . . . . . . . . . . 18
5.15 EMPLOYEE PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.16 COMPLIANCE WITH ERISA. . . . . . . . . . . . . . . . . . . . . . . 18
5.17 COMPLIANCE WITH LAW; NO CONFLICTS. . . . . . . . . . . . . . . . . 20
5.18 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.19 LITIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.20 ABSENCE OF PRICE RENEGOTIATION CONTRACTS . . . . . . . . . . . . . 21
5.21 CONDUCT OF BUSINESS SINCE BALANCE SHEET DATE . . . . . . . . . . . 21
5.22 BANK ACCOUNTS; DEPOSITORIES. . . . . . . . . . . . . . . . . . . . 23
5.23 HAZARDOUS MATERIALS. . . . . . . . . . . . . . . . . . . . . . . . 23
5.24 STORAGE TANKS. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.25 ABSENCE OF CERTAIN BUSINESS PRACTICES. . . . . . . . . . . . . . . 25
5.26 COMPLETE DISCLOSURE. . . . . . . . . . . . . . . . . . . . . . . . 25
6. REPRESENTATIONS AND WARRANTIES OF PARENT.. . . . . . . . . . . . . . . . 25
6.1 CORPORATE ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . 26
6.2 PARENT STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.3 CORPORATE AUTHORITY. . . . . . . . . . . . . . . . . . . . . . . . 26
6.4 NO CONFLICTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.5 BINDING AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . 27
6.6 SEC FILINGS AND FINANCIAL INFORMATION. . . . . . . . . . . . . . . 27
6.7 FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 27
6.8 TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7. COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.1 ACCESS TO LAND AND RECORDS . . . . . . . . . . . . . . . . . . . . 28
7.2 COMPANY ACTIVITIES PRIOR TO CLOSING. . . . . . . . . . . . . . . . 28
7.3 PROHIBITED ACTIVITIES PRIOR TO CLOSING . . . . . . . . . . . . . . 29
7.4 CONTACT WITH GOVERNMENT OFFICIALS. . . . . . . . . . . . . . . . . 30
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF COMPANY AND MEMBERS . . . . . . . 30
8.1 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . 31
8.2 CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.3 NO ADVERSE PROCEEDING. . . . . . . . . . . . . . . . . . . . . . . 31
8.4 NONCOMPETITION AGREEMENT . . . . . . . . . . . . . . . . . . . . . 31
8.5 TEXLINE NOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.6 NEW REAL ESTATE LEASE. . . . . . . . . . . . . . . . . . . . . . . 31
8.7 ANCILLARY DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . . 31
8.8 CERTAIN PERSONALTY . . . . . . . . . . . . . . . . . . . . . . . . 32
8.9 RULE 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT. . . . . . . . . . . . . . 32
9.1 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . 32
9.2 COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.3 NO ADVERSE PROCEEDING. . . . . . . . . . . . . . . . . . . . . . . 33
9.4 GENERAL RELEASE. . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.5 CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.6 RESIGNATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.7 GOOD STANDING CERTIFICATES . . . . . . . . . . . . . . . . . . . . 33
9.8 UPDATED AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 33
9.9 NONCOMPETITION AGREEMENT . . . . . . . . . . . . . . . . . . . . . 34
9.10 TERMINATION OF EXISTING LEASE. . . . . . . . . . . . . . . . . . . 34
9.11 REAL ESTATE LEASE. . . . . . . . . . . . . . . . . . . . . . . . . 34
9.12 ASSIGNMENT OF MEMBERSHIP INTERESTS . . . . . . . . . . . . . . . . 34
9.13 ENVIRONMENTAL REVIEW . . . . . . . . . . . . . . . . . . . . . . . 34
9.14 TRANSFERABILITY OF PERMITS . . . . . . . . . . . . . . . . . . . . 34
9.15 GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10. ADDITIONAL COVENANTS.. . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.1 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.2 POST CLOSING BALANCE SHEET . . . . . . . . . . . . . . . . . . . . 35
10.3 CLOSING DATE ACTIONS . . . . . . . . . . . . . . . . . . . . . . . 36
10.4 TRADE PAYABLES . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.5 RELEASE OF PERSONAL GUARANTIES . . . . . . . . . . . . . . . . . . 36
10.6 HAZARDOUS MATERIALS EXPANSION. . . . . . . . . . . . . . . . . . . 36
10.7 XXXX PERSONAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . 37
10.8 FURTHER ASSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . 37
10.9 TRANSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.10 SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11. FEDERAL SECURITIES ACT RESTRICTIONS ON STOCK. . . . . . . . . . . . . . 38
11.1 REGISTERED STOCK . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.2 GENERAL LEGEND . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.3 COMPLIANCE WITH LAW. . . . . . . . . . . . . . . . . . . . . . . . 38
12. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. . . . . . . 38
12.2 LIMITATION ON LIABILITY. . . . . . . . . . . . . . . . . . . . . . 39
12.3 INDEMNIFICATION BY MEMBERS . . . . . . . . . . . . . . . . . . . . 39
12.4 INDEMNIFICATION BY PARENT. . . . . . . . . . . . . . . . . . . . . 40
12.5 PROCEDURE FOR INDEMNIFICATION WITH RESPECT TO THIRD PARTY CLAIMS . 40
13. TERMINATION OF AGREEMENT.. . . . . . . . . . . . . . . . . . . . . . . . 43
13.1 TERMINATION BY BUYER . . . . . . . . . . . . . . . . . . . . . . . 43
13.2 TERMINATION BY MEMBERS . . . . . . . . . . . . . . . . . . . . . . 43
13.3 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. . . . . . . . . . . . . . . . 43
14.1 NONDISCLOSURE BY MEMBERS . . . . . . . . . . . . . . . . . . . . . 43
14.2 NONDISCLOSURE BY PARENT. . . . . . . . . . . . . . . . . . . . . . 44
15. GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
15.1 ASSIGNMENT; BINDING EFFECT; AMENDMENT. . . . . . . . . . . . . . . 45
15.2 ENTIRE AGREEMENT.. . . . . . . . . . . . . . . . . . . . . . . . . 45
15.3 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
15.4 NO BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
15.5 EXPENSES OF TRANSACTION. . . . . . . . . . . . . . . . . . . . . . 46
15.6 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
15.7 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
15.8 APPOINTMENT OF AGENT . . . . . . . . . . . . . . . . . . . . . . . 48
15.9 NO WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
15.10 TIME OF THE ESSENCE. . . . . . . . . . . . . . . . . . . . . . . . 48
15.11 CAPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
15.12 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
15.13 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
15.14 STANDSTILL AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . 49
15.15 PERIODIC REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . 49
PURCHASE OF MEMBERSHIP INTERESTS AGREEMENT
THIS PURCHASE OF MEMBERSHIP INTERESTS AGREEMENT (the "Agreement") is
executed and delivered as of September 30, 1997, among U S LIQUIDS INC., a
Delaware corporation ("Buyer" or "Parent"); RE-CLAIM ENVIRONMENTAL LOUISIANA
LLC, a Louisiana limited liability company ("Company"); and XXXX X. XXXX and
REYNCOR INDUSTRIAL ALCOHOL, INC., a Louisiana corporation, the sole members
of Company ("Members");
W I T N E S S E T H:
WHEREAS, Company operates a non-hazardous commercial liquids waste
processing and treatment facility in the Shreveport, Louisiana area (the
"Business");
WHEREAS, as part of the Business, Company leases certain real property
located in Shreveport, Louisiana and more fully described on Exhibit A,
attached hereto and made a part hereof (the "Land"), and operates thereon a
fully permitted facility for the treatment and processing of non-hazardous
commercial liquid waste (the "Facility");
WHEREAS, Members own all of the membership interests of Company;
WHEREAS, Buyer desires to acquire all of the membership interests of Company
from Members and Members desire to sell such interests to Buyer as set forth
herein;
NOW, THEREFORE, in consideration of Ten Dollars ($10) in hand paid, the
premises and of the mutual agreements, representations, warranties and
obligations herein contained, the parties hereby agree as follows:
1. DELIVERY OF MEMBERSHIP INTERESTS.
1.1 DELIVERY OF MEMBERSHIP INTERESTS. Upon the terms and subject to the
conditions set forth in this Agreement, Members shall, at the Closing
(hereinafter defined), sell, assign, transfer and deliver to Buyer all of
such Members' membership interests in Company as set forth on Annex I
attached hereto and made a part hereof (the "Membership Interests"), which
Membership Interests represent 100% of the interests of all Members of
Company. Members shall transfer the Membership Interests to Buyer free and
clear of all liens, security interests, encumbrances, adverse claims,
pledges, charges, voting trusts, equities and other restrictions on transfer
of any nature whatsoever (collectively, "Adverse Claims").
1.2 DELIVERY OF MEMBERSHIP INTERESTS. Members (and the spouse of Xxxx
X. Xxxx) shall deliver at Closing an assignment of their Membership Interests
in form and substance satisfactory to Buyer (the "Assignment of Membership
Interests"). Further, Members, at their sole expense, agree to cure (both
before and after Closing) any deficiencies with respect to the assignment of
the Membership Interests or other documents of conveyance with respect to the
Membership Interests.
2. PURCHASE PRICE.
2.1 PURCHASE PRICE. Subject to Sections 2.3 and 2.4 below, in
consideration of the sale to Buyer in accordance with this Agreement of the
Membership Interests, Buyer shall pay to Members at Closing the aggregate sum
of $2,510,000 in immediately available funds. Buyer shall also pay the sums
set forth in Section 2.5 if, as and when they become due in accordance with
such Section. The shares of Parent Stock to be issued and distributed
pursuant to Section 2.5 below shall be determined pursuant to Section 2.2.
All of the consideration set forth in this Article 2 shall be allocated among
the Members in accordance with Annex I attached hereto and made a part hereof.
2.2 AGREED VALUE OF PARENT STOCK. For purposes of this Agreement, the
"Agreed Value" per share of Parent Stock shall be the average of the closing
prices of a share of the common stock of Parent, $.01 par value per share, on
the American Stock Exchange as reported in THE WALL STREET JOURNAL for the
five trading days immediately preceding the five trading days immediately
prior to the date the payment is due.
2.3 ASSUMPTION OF DEBT. In addition to the other consideration payable
pursuant to this Article 2, Parent shall pay:
(a) to Texline Gas Company a portion of the outstanding balance
existing on the Closing Date of the promissory notes from Xxxx X. Xxxx to
Texline Gas Company
dated October 21, 1996, and in the original principal
amount of $250,000, of which Buyer shall pay $156,131 on the Closing Date;
and
(b) the actual debt of Company consisting of(i) the outstanding balance
on the Xxxxx Fargo debt in the amount of $65,770; and (ii)the Metro Bank
debt in the amount of $8,097 (collectively, the "Assumed Debt"). Attached
hereto as Schedule 2.3 is a listing of all Assumed Debt and evidence
establishing the Assumed Debt. Buyer agrees to pay all Assumed Debt as
promptly after the Closing Date as possible, but in no event later than 10
days after the Closing Date and to indemnify, defend and hold harmless
Members from all Assumed Debt in accordance with Article 12 hereof during
the time period prior to payment. Buyer agrees that all lease debt
(including lease end buy-out payments) are specifically excluded from the
Assumed Debt, but will remain the obligation of Company after Closing and
Parent shall indemnify, defend and hold harmless Members in accordance with
Article 12 from same.
2.4 ADJUSTMENT TO PURCHASE PRICE. The parties agree that the purchase
price was determined as if the net working capital of Company was going to be
-$140,000 at the close of business on the Closing Date. Accordingly, the
parties agree that the purchase price set forth in this Article 2 shall be
adjusted (up or down) on the Adjustment Date (as defined in Section 10.2) to
reflect the actual net working capital of Company on the Closing Date (the
"Actual Net Working Capital"), as shown on the balance sheet to be prepared
in accordance with Section 10.2 hereof. If the Actual Net Working Capital of
Company so reflected is greater than -$140,000 on the Closing Date, then the
purchase price paid pursuant to Section 2.1 shall be increased dollar for
dollar for each dollar the Actual Net Working Capital exceeds -$140,000 on
the Closing Date. If the Actual Net Working Capital of Company so reflected
is less than -$140,000 on the Closing Date, then the purchase price paid
pursuant to Section 2.1 shall be decreased dollar for dollar for each
dollar the Actual Net Working Capital falls below -$140,000 on the
Closing Date. For purposes of this Agreement, Actual Net Working Capital
shall mean
the aggregate current assets of Company on the Closing Date minus the
aggregate of all current liabilities (excluding leases and any lease buy out
penalties or fees) of Company on the Closing Date (not including the Assumed
Debt or any lease debt), calculated in accordance with generally accepted
accounting principles ("GAAP"). In computing the adjustment amounts provided
for in this Section, the party owing payment to the other pursuant to this
Section shall make such payment in shares of Parent Stock having a value
equal to the amount owed calculated in accordance with Section 2.2.
In order to facilitate the contemplated adjustment to purchase price on
the Adjustment Date, between the date hereof and the Closing Date the parties
will prepare and agree upon an estimated net working capital balance for
Company as of August 31, 1997 (the "Estimated Working Capital") which shall
be an adjustment to the Purchase Price on the Closing Date to be attached as
Exhibit B and will thereafter calculate the Actual Net Working Capital
consistent therewith.
In the event of a dispute between the parties as to the Actual Net
Working Capital, the parties will have 30 days to resolve the dispute among
themselves. If the parties have not resolved such dispute within such 30-day
period, then the parties shall select an arbitrator who shall decide the
dispute within 30 days after being selected. If the parties cannot agree on
an arbitrator, then Buyer and Members (as a group) shall each select an
arbitrator and the two arbitrators so selected shall select a third
arbitrator. The parties hereto each agree to be bound by the decision of the
arbitrator(s). In the event that three arbitrators are chosen, a majority
decision will be required. Each arbitrator can be any natural person above
the age of 18 and need not have any specific qualification. All costs of the
arbitration shall be split equally between Buyer and Members (as a group).
2.5 DEFERRED ADDITIONAL CONSIDERATION. (a) In addition to the
consideration payable pursuant to Section 2.1 above, Buyer shall pay to
Members additional consideration for the sale of the Membership Interests,
if, as and when the operations of Company after closing generate a certain
amount of earnings before taxes (as defined below) ("Pre-Tax Earnings") as
set forth below. Buyer would pay to Members:
(i) (A) an aggregate of $500,000 (subject to clause [e] below) if
Pre-Tax Earnings exceeds $1,350,000 during any of calendar years
1998, 1999 or 2000; and
(B) an aggregate of $4,000,000 if Pre-Tax Earnings exceeds
$4,500,000 during any of calendar years 1998, 1999 or 2000;
(ii) (A) an aggregate of $6,000,000 if Pre-Tax Earnings exceeds
$7,300,000 during any of calendar years 1999, 2000 or 2001; and
(B) an aggregate of $4,800,000 if Pre-Tax Earnings exceeds
$11,000,000 during any of calendar years 1999, 2000 or 2001;
(iii) (A) an aggregate of $5,400,000 if Pre-Tax Earnings exceeds
$13,000,000 during any of calendar years 2000, 2001 or 2002; and
(B) an aggregate of $5,800,000 if Pre-Tax Earnings exceeds
$15,000,000 during any of calendar years 2000, 2001 or 2002.
(b) Pre-Tax Earnings will be calculated on an annual basis within 60 days
after the end of each applicable calendar year and any payments owed to
Members shall be paid on March 31st (or the next business day if March 31st
is not a business day) after the end of each applicable calendar year.
Payment shall be made in either (i) cash; (ii) shares of the common stock,
$.01 par value, of Parent (the "Parent Stock") having an Agreed Value
(calculated in accordance with Section 2.2) equal to the amount of the
required payment; or (iii) any combination of cash and Parent Stock, at the
option of Buyer. All Parent Stock will comply with the requirements of
Section 6.2 hereof.
(c) For purposes of this Agreement, "Pre-Tax Earnings" shall mean the
gross revenues of Company calculated in accordance with generally accepted
accounting principles ("GAAP") minus (i) all costs incurred in operating the
Business (including, without limitation, all payroll costs,
equipment operating costs, insurance costs, maintenance costs, legal,
accounting and other professional fees, all depreciation, depletion and
amortization expenses, all selling, general and administrative costs,
interest and all other operating expenses); (ii) all taxes on operations such
as franchise taxes, real and personal property taxes, use taxes and sales
taxes (but specifically excluding all federal, state (if any) and local
income taxes); (iii) reasonable reserves for financial assurance, closure and
post closure costs and doubtful accounts; and (iv) 1% of such gross revenues
constituting a charge for corporate overhead. All of the foregoing shall be
determined by Company's regular independent accounting firm.
(d) Buyer and Members agree that the payments set forth in Section 2.5(a)
above must be earned in order (if at all) and that payment from only one
category (i.e., Section 2.5(a)(i), (ii) or (iii)) shall be owed for any one
calendar year. Consequently, no payments set forth in Section 2.5(a)(ii) or
(iii) shall be owed until payment under Section 2.5(a)(i) has been earned and
paid. Similarly, no payment set forth in Section 2.5(a) (iii) shall be owed
until payments under both Section 2.5(1) (i) and (ii) have been earned and
paid. For purposes of example only, if Pre-Tax Earnings is $7,400,000 in
1998, then Buyer will owe Members a total of $4,500,000. If Pre-Tax Earnings
is again $7,400,000 in 1999, then Buyer will owe Members a total of
$6,000,000 for that year. However, (continuing the original example) if
Pre-Tax Earnings is less than $7,300,000 in 1999, then Buyer will owe nothing
to Members for that year.
(e) If, as and when the amounts set forth in Section 2.5(a)(i)(A) become
payable to Members, Parent and Members agree that Parent shall pay directly
to Texline Gas Company the then remaining outstanding balance (together with
accrued but unpaid interest) of the promissory note to Texline in the
original principal amount of $147,101.05 of even date herewith out of the
proceeds otherwise payable to Members pursuant to (i)(A). Parent agrees that
if such amounts have not yet become payable by December 31, 2000,
then Parent shall pay (and hereby unconditionally guarantees payment of) the
then remaining
outstanding balance (together with accrued but unpaid interest) to Texline
Gas Company.
3. TITLE ASSURANCE.
3.1 OWNERS TITLE POLICY. On the Closing Date, Members shall furnish to
Buyer (at Buyer's sole cost) an extended coverage leasehold policy of title
insurance from Xxxxxxx Title Insurance Company (the "Title Company") in the
amount of $8,640,000 and satisfactory to Buyer, insuring leasehold title to
the Land to be in Buyer subject only to the exceptions permitted by Section
3.2 hereof (the "Title Policy"). Prior to the Closing, Members shall deliver
to Buyer a preliminary title commitment in respect of the Land, together with
copies of all exception instruments referenced therein, and any unrecorded
leases, option agreements, contracts and any other items affecting title
which are in the possession of, or known to, Members.
3.2 PERMITTED ENCUMBRANCES. The Title Policy shall insure Buyer's
interest in the Land to be free and clear of all encumbrances whatsoever
except: (i) zoning ordinances and regulations which do not, in Buyer's
judgment, adversely affect its use of the Land for its current uses after
Closing; (ii) real estate taxes and assessments, both general and special,
which are a lien but are not yet due and payable at the Closing Date; (iii)
easements, encumbrances, covenants, conditions, reservations and restrictions
of record, if any, as have been approved in writing by Buyer; and (iv) the
rights of the landlord under the Real Estate Lease (hereinafter defined).
Buyer shall pay all of the costs associated with the delivery of the Title
Policy to Buyer.
3.3 SURVEY. Members shall obtain for Buyer's use and for the use of the
Title Company in connection with the issuance of the Title Policy a current
and complete survey of the Land, made on the ground by a competent registered
surveyor, showing: (a) the exact boundary lines of the Land; (b) the
location thereon of all, if any, buildings, improvements, and easements now
existing;
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(c) the number of acres in the Land; (d) the location of any buildings,
fences or other improvements which encroach on the Land; (e) the location of
any improvements on the Land which encroach on any neighboring property or on
any property which is subject to any easement or right-of-way; (f) all
building lines established in respect of the Land; and (g) all public access
to the Land, and representing that the boundaries of the Land are contiguous
with the boundaries of all adjoining parcels (the "Survey"). Prior to the
Closing, a copy of the Survey complying with the above requirements shall be
delivered to Buyer and the Title Company, together with certification to each
entity by the surveyor, which certification complies with American Land Title
Association guidelines, and also together with such additional supporting
reports and other certificates as the Title Company may require to enable the
Title Company to delete its standard survey exceptions from the Title Policy.
Company shall pay all of the costs of the Survey, which cost shall be
considered as an additional current liability subject to Section 2.4 above.
4. CLOSING. Unless the parties agree otherwise, the closing of the within
contemplated transaction (the "Closing") shall take place on the date that is
within five business days after the completion, satisfaction or waiver of
each of the conditions to Closing set forth in Articles 8 and 9. The Closing
shall take place at a location mutually agreeable to Buyer and Members. The
date on which the Closing occurs shall be referred to as the "Closing Date."
5. REPRESENTATIONS AND WARRANTIES OF MEMBERS AND COMPANY. Company, as to
the time period before Closing only, and each Member, jointly and severally,
represent and warrant to Buyer that the statements contained in this Section
5 except as set forth in the schedules to the subsections of this Section 5
delivered by Members to Buyer on the date hereof (such schedules hereinafter
collectively referred to as the "Disclosure Schedules" and, individually, as
a "Disclosure Schedule"): (i) are correct and complete as of the date of
this Agreement; (ii)
-9-
will be correct and complete as of the Closing Date (as though made then and
as though the Closing Date were substituted for the date of this Agreement
throughout this Section 5); and (iii) shall survive the Closing in accordance
with Article 12 hereof. Nothing in the Disclosure Schedules shall be deemed
adequate to disclose an exception to a representation or warranty made
herein, however, unless the Disclosure Schedule identifies the exception with
reasonable particularity and describes the relevant facts in reasonable
detail.
Wherever a representation or warranty herein is qualified as having been
made "to the best of Members' knowledge", such phrase shall mean the
knowledge of any Member, after reasonable inquiry.
5.1 ORGANIZATION; AUTHORITY.
(i) Company is a Louisiana limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Louisiana and is now and has been at all times since its creation, duly
authorized, qualified and licensed under all laws, regulations, ordinances
and orders of public authorities to carry on its businesses in the places
and in the manner as conducted at the time such activities were conducted
except for where failure to be so authorized, qualified or licensed would
not have a material adverse affect on the Business. Copies of Company's
[Certificate of Formation] (certified by the Secretary of State of
Louisiana and Operating Agreement (certified by the Secretary of Company),
each as amended, are attached hereto as Schedule 5.1(i).
(ii) Company has full legal right, power and authority (corporate and
otherwise) to enter into this Agreement and to consummate the transactions
contemplated by this Agreement. All corporate action of Company necessary
to approve the sale of the Membership Interests has been taken, including
member approvals, if necessary.
(iii) Each Member is competent and under no legal
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restraint or duress and has the full legal right and capacity to enter into
and perform his obligations under this Agreement.
5.2 OWNERSHIP OF MEMBERSHIP INTERESTS; ABSENCE OF ADVERSE CLAIMS. All
of the interests of members in the Company are owned of record and
beneficially by Members as set forth on Annex I and are free and clear of all
liens, security interests, encumbrances, adverse claims, pledges, charges,
voting trusts, equities and other restrictions on transfer whatsoever
(collectively, "Adverse Claims"). This Agreement is the valid and binding
obligation of Company and Members, enforceable against each of them in
accordance with its terms.
5.3 CAPITALIZATION. Membership Interests have been duly authorized and
validly issued, are fully paid and nonassessable. The records of Company
provided by Members and Company to Buyer correctly set forth all issuances,
acquisitions and retirements of Membership Interests since the inception of
Company. Company has never acquired any treasury stock. No subscriptions,
options, warrants, puts, calls, conversion rights or other commitments of any
kind exist which obligate Company to issue any equity interests or otherwise
relate to the sale or transfer by Company of any equity interests of Company
(whether debt or equity). In addition, Company has no obligation (contingent
or otherwise) to purchase, redeem or otherwise acquire any of its equity
interests or any interests therein or to pay any dividend or make any
distribution in respect thereof. Company has not agreed to register any
securities under the Securities Act of 1933, as amended (the "Act"), or under
any state securities law.
5.4 PREDECESSOR ENTITIES; TRADE NAMES. Except as set forth on Schedule
5.4, Company has never directly or indirectly participated in any manner in
any joint venture, partnership or other noncorporate entity. Company was
formed solely to operate the Business and has never conducted any other
business or activity. Also set forth on Schedule 5.4 is a list of the names
of all predecessors of Company, all prior corporate names of
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Company, and all trade names and "doing business as" names of Company,
including the names of all entities substantially all of the assets of which
were previously acquired by Company.
5.5 NO SUBSIDIARIES. Company has never owned or controlled and does not
now own, of record or beneficially, or control, directly or indirectly, any
capital stock, securities convertible into capital stock or any other equity
interest in any partnership, corporation, association or other business entity
other than those of Company, except as may be disclosed on Schedule 5.4.
5.6 FINANCIAL STATEMENTS. Attached as Schedule 5.6 are copies of the
following financial statements of Company (together, the "Financial
Statements"):
(a) Company's balance sheet as of December 31, 1996, and a statement of
income, cash flow and retained earnings for the year then ended;
(b) Company's balance sheet as of June 30, 1997, and a statement of
income for the quarter then ended;
(c) Company's monthly interim balance sheets and statements of income
commencing for the month ended July 31, 1997, and continuing for each month
end until the end of the month immediately preceding the month in which the
Closing Date occurs; and
(d) Company's balance sheet and income statement as of August 31, 1997
(the "Balance Sheet Date"), prepared and audited by Xxxxxx Xxxxxxxx.
Except as set forth on Schedule 5.6, each of the Financial Statements
described in (d) above (including all footnotes thereto) has been prepared,
to the best of Stockholders' knowledge, in accordance with GAAP, applied on a
consistent basis throughout the periods indicated. Each of the Financial
Statements (including all footnotes thereto) is true, complete and correct in
all material respects. Each of the balance sheets presents fairly the
financial condition of Company as of the date indicated thereon and each of
such statements of income presents
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fairly on an accrual basis the results of the operations of Company for the
period indicated thereon. To the best of Stockholders' knowledge, the
Financial Statement described in (d) above includes all footnotes required by
GAAP, each such footnote is complete and accurate, and contains all
information required by GAAP to be contained therein. To the best of
Stockholders' knowledge, all reserves for contingent risks have been
estimated in accordance with GAAP and are appropriate and sufficient to cover
all costs reasonably expected to be incurred from such risks. Since its
inception Company has not (a) made any material change in its accounting
policies or (b) effected any prior period adjustment to, or other restatement
of, its financial statements for any period. The Financial Statements are
consistent with the books and records of Company (which books and records are
materially correct and complete).
5.7 NON-BALANCE SHEET LIABILITIES. Attached hereto as Schedule 5.7 is a
complete and accurate list as of the date hereof of all liabilities and
obligations of Company, excluding obligations arising under this Agreement,
which are not individually reflected in the Financial Statements dated the
Balance Sheet Date, but which would have been so reflected in a full GAAP
accounting (whether or not incurred in the ordinary course of business) of
any kind, character and description, accrued or unaccrued, absolute or
contingent, secured or unsecured, liquidated or unliquidated, due or to
become due, together with, in the case of those liabilities and other
obligations the amounts of which are not fixed, a reasonable best estimate of
the maximum amount which may be payable. For each liability or obligation
for which the amount is not fixed or is contested, Members shall provide the
following information:
(a) a summary description of the liability or other obligation together
with the following:
(1) copies of all relevant documentation relating thereto;
(2) amounts claimed and any other action or
-13-
relief sought; and
(3) name of claimant and all other parties to the claim, suit or
proceeding, if any.
(b) the name of each court or agency before which a claim, suit or
proceeding is pending;
(c) the date such claim, suit or proceeding was instituted;
(d) a reasonable best estimate by Members of the maximum amount, if
any, which is likely to become payable with respect to each such liability
or the cost of performance with respect to each such other obligation.
5.8 ACCOUNTS RECEIVABLE. Attached as Schedule 5.8 is a complete and
accurate list of all accounts and notes receivable of Company as of the date
hereof, including receivables from and advances to employees and Members and
also including all such accounts and notes receivable which are not reflected
in the Financial Statements, if any. Also attached as Schedule 5.8 is an
aging of all accounts and notes receivable showing amounts due in 30 day
aging categories. Neither Company nor any Member are guarantying the
collectibility of any account or note receivable and no reduction for same
shall be taken from any sums otherwise owed to Members.
5.9 PROPRIETARY RIGHTS; ENVIRONMENTAL DOCUMENTS. (i) Attached as Schedule
5.9(i) is a reasonably complete and accurate list and summary description as
of the date hereof of all permits, titles (including motor vehicle titles and
current registrations), fuel permits, licenses, franchises, certificates,
trademarks, trade names, patents, patent applications and copyrights owned or
held by Company, none of which permits, titles, licenses, franchises and
certificates, trademarks, tradenames, patents, patent applications and
copyrights, has been claimed to or, to the best of Members' knowledge, infringe
on the rights of others and all of which are now valid, in good standing and
in full force and effect. Except as set forth on Schedule 5.9(i),
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such permits, titles, licenses, franchises, certificates, trademarks, trade
names, patents, patent applications and copyrights are adequate for the
operation of the Business as presently constituted;
(ii) Members have, as of the date of this Agreement, made available
to Buyer for its inspection all presently held records, correspondence,
reports, notifications, permits, pending permit applications, licenses
and pending license applications, environmental impact studies,
assessments and audits and all notifications from governmental agencies
and any other person or entity and any other documents of Company
relating to: (a) each actual and threatened violation of Applicable
Laws (hereinafter defined) by Company or otherwise relating to the Land
and all, if any, claims thereof; (b) the present or past environmental
compliance by Company; (c) the present or past environmental condition
of the Land; (d) the discharge, leakage, spillage, transport, disposal
or release of any material into the environment by Company or otherwise
relating to the Land; and (e) land use and access approvals relative to
any portion of the Land (collectively, the "Environmental Documents").
5.10 REAL PROPERTY; REPORTING. (i) Company has never owned, leased or
otherwise occupied, had an interest in or operated any real property other
than the Land and that certain property surrounding the Land as described in
Exhibit C (the "Additional Land"). Company currently leases the Land from
Reyncor Industrial Alcohol, Inc. pursuant to a valid written lease and by
virtue of such lease has good, leasehold title to the Land except as
permitted under Article 3 hereof. Except as set forth on Schedule 5.10(i):
(a) The Land is, and at all times during operation of the Facility
has been, fully licensed, permitted and authorized for the operation of
the
-15-
Facility under all Applicable Laws relating to the protection of the
environment, the Land and the conduct of the Facility thereon
(including, without limitation, all zoning restrictions and land use
requirements).
(b) The Land is usable for its current uses and can be used by
Buyer after the Closing for such uses without violating any
Applicable Law or private restriction, and such uses are legal
conforming uses. There are no proceedings or amendments pending and
brought by or, to the best of Members' knowledge, threatened by, any
third party which would result in a change in the allowable uses of
the Land or which would modify the right of Buyer to use the Land
for its current uses after the Closing Date (subject to Schedule
5.19).
(c) Members and Company have made available to Buyer all
engineering, geologic and other similar reports, documentation and
maps relating to the Land in the possession or control of Members or
Company.
(d) To the best of Stockholders' knowledge, no third parties
have any rights to drill or explore for, collect, produce, mine,
excavate, deliver or transport oil, gas, coal, or other minerals in,
on, beneath, across, over, through, from or to any portion of the
Land, other than as set forth in the Title Policy.
(e) Neither Company, Members nor the Land now is or ever has
been involved in any litigation or administrative proceeding seeking
to impose fines, penalties or other liabilities or seeking
injunctive relief for violation of any Applicable Laws relating to
the environment, other than as set forth on Schedule 5.19.
(f) Other than pursuant to the Real Estate Lease, no third party
has a present or future right to possession of all or any part of
the Land.
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(g) No portion of the Land contains any areas that could be
characterized as disturbed, undisturbed or man made wetlands or as
"waters of the United States" pursuant to any Applicable Laws or the
procedural manuals of the Environmental Protection Agency, U.S. Army
Corps of Engineers or the Department of Natural Resources of the
applicable state, whether such characterization reflects current
conditions or historic conditions which have been altered without
the necessary permits or approvals.
(h) There are no mechanic's liens affecting the Land and no work
has been performed on the Land within 120 days of the date hereof
for which a mechanic's lien could be filed.
(i) To the best of Members' knowledge, there are no levied or
pending special assessments affecting all or any part of the Land
and none is threatened.
(j) There are no pending or, to the best of Members' knowledge,
threatened condemnation or eminent domain proceedings affecting all
or any part of the Land.
(ii) To the best of Members' knowledge, Company has provided to the
government agencies requiring the same, all material reports, notices,
filings and other disclosures required by Applicable Laws and all such
reports, notices, filings and other documents were complete and accurate
in all material respects at the time provided to said government
agencies.
5.11 PERSONAL PROPERTY; NEW PROJECTS. (i) Attached as Schedule
5.11(i) is a complete and accurate list and a complete description as of
the date hereof of all personal property of Company including true and
correct copies of leases for equipment and other personal property, if
any, used in the operation of the Business and including an indication
as to which assets were formerly owned by
-17-
business or personal affiliates of Company. All of the vehicles, machinery and
other equipment of Company are in good working order and repair;
(ii) Company has good title to, or a valid leasehold interest in, the
properties and assets used by it shown on its balance sheet dated the Balance
Sheet Date or acquired after the date thereof, whether or not located on the
Land, including, without limitation, the items of personal property listed on
Schedules 5.11(i), free and clear of all security interests, liens or other
Adverse Claims, except for the Assumed Debt (including security interests
related thereto), the personal property listed on Schedule 8.8 and the rights of
owners of any leased assets;
(iii) all leases set forth on Schedule 5.11(i) are in full force and effect
and constitute valid and binding agreements of the parties thereto (and their
successors) in accordance with their respective terms. No default by Company,
or, to the best of Members' knowledge, any other party to any of such leases,
exists or would exist except for the passage of time or delivery of a notice or
both;
(iv) all fixed assets used by Company in the operation of the Business are
either owned by Company or leased by Company under an agreement indicated on
Schedule 5.11(i). Company's combined fixed assets (together with the real
property assets) constitute all of the real and personal property necessary for
the operation of the Business both by Company and by Buyer immediately following
the Closing and include all of the permits, licenses, franchises, consents and
other approvals necessary to operate the Business both before and immediately
after Closing; and
(v) at the Closing, Company shall have good and marketable title to all
personal property, subject to all listed debts and lease payments (including
lease end buy-out payments) and the Assumed Debt.
5.12 CONTRACTS. Attached as Schedule 5.12 is a complete
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and accurate list as of the date hereof of all of the following types of
contracts, commitments and other agreements to which Company is a party or by
which Company or its properties are bound, which list shall include, at a
minimum, the full names of each party to each agreement and the date of
execution thereof: waste treatment and processing contracts, joint venture
or partnership agreements, contracts or collective bargaining arrangements
with any labor organizations, loan agreements, powers of attorney (each of
which shall be cancelled at the Closing), indemnity or guaranty agreements,
bonds, mortgages, options to purchase land, liens, pledges or other security
agreements, agreements for the employment of any individual, agreements under
which Company has advanced or loaned any amount to one another or to Members
or any employee, officer or director of Company, any guaranties by Company,
any agreement concerning confidentiality or noncompetition and any other
agreement under which the consequences of a default or termination could have
an adverse effect on the business, financial condition, operations or
prospects of Company. None of the agreements listed on Schedule 5.12 have
been modified, altered, terminated or otherwise amended and there have been
no waivers, oral agreements, representations or other statements with
relation to any such agreements except as described in Schedule 5.12.
Company has complied with all obligations pertaining to it contained in such
contracts, commitments and other agreements, is not in default thereunder and
no notice of default has been received nor will the consummation of the
transactions contemplated by this Agreement result in such a default. To the
best of Members' knowledge, there is no default by any other party to any
contract, commitment or other agreement attached as Schedule 5.12.
5.13 INSURANCE POLICIES. Attached as Schedule 5.13 are complete and
accurate copies as of the date hereof of all insurance policies carried by
Company and an accurate list of all insurance loss runs and workers'
compensation claims received for
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the past three policy years. All insurance policies are in full force and
effect and shall remain in full force and effect through the Closing Date.
Company's insurance has never been cancelled and Company has never been
denied coverage.
5.14 OFFICERS AND EMPLOYEES; COMPENSATION. Attached as Schedule 5.14 is a
complete and accurate list of all officers and employees of Company and the rate
of compensation of each as of the date hereof (including a breakdown of the
portion thereof attributable to salary, bonus and other compensation,
respectively). Except as set forth in Schedules 5.12 and 5.14 as to Xxxxx Xxxx,
each employee of Company is an employee at will and there are no collective
bargaining agreements affecting any employee of Company. There is no pending
or, to the best of Members' knowledge, threatened labor dispute involving
Company and any group of its employees nor has Company experienced any labor
interruptions over the past three years.
5.15 EMPLOYEE PLANS. Except as set forth on Schedule 5.15, Company has no
group health plans, employee benefit plans, employee welfare benefit plans,
employee pension benefit plans, multi-employer plans or multiple-employer
welfare arrangements (as defined in Sections 3(3), (1), (2), (37) and (40),
respectively, of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) (collectively, "Plans"), which are currently maintained and/or
sponsored by Company, or to which Company currently contributes, or has an
obligation to contribute in the future (including, without limitation,
employment agreements and any other agreements containing "golden parachute"
provisions and deferred compensation agreements). No such Plans have been
terminated within the past three years.
5.16 COMPLIANCE WITH ERISA. Neither Company, any Controlled Group Member
(as defined in Code Section 414(n)(6)(B)), nor any business, subsidiary,
division or operation acquired by Company or a Controlled Group Member in the
last five years, ever have maintained or sponsored, or contributed to, an
employee pension benefit plan (as defined in
-00-
XXXXX Xxxxxxx 3(2)) which is subject to the provisions of Title IV of ERISA.
Except as set forth on Schedule 5.15, Company does not maintain or sponsor,
nor is a contributing employer to, a pension, profit-sharing, deferred
compensation, stock option, employee stock purchase or other employee benefit
plan, employee welfare benefit plan, or any other arrangement with its
employees. Further:
(i) With respect to Plans which qualify as "group health plans" under
Section 4980B of the Internal Revenue Code and Section 607(1) of ERISA and
related regulations (relating to the benefit continuation rights imposed
by "COBRA"), Company and Members have complied (and on the Closing Date will
have complied), in all respects with all reporting, disclosure, notice,
election and other benefit continuation requirements imposed thereunder as
and when applicable to such plans, and Company has no (and will incur no)
direct or indirect liability and is not (and will not be) subject to any
loss, assessment, excise tax penalty, loss of federal income tax deduction
or other sanction, arising on account of or in respect of any direct or
indirect failure by Company and Members or any of them, any time prior to
the Closing Date to comply with any such federal or state benefit
continuation requirement, which is capable of being assessed or asserted
before or after the Closing Date directly or indirectly against Company or
Members, or any of them with respect to such group health plans.
(ii) With respect to any Plan which qualifies as a group health plan,
such plan is insured by third parties and all premiums have been paid on a
timely basis and are paid in full as of the Closing Date or, to the extent
such plan is not fully insured, all self insured obligations have been met
as of the Closing Date and are fully reflected in the plan's financial
statements. To the extent that any of the Company's group health plans
are retrospectively rated,
-21-
there are no liabilities capable of assertion against the Company in respect
of claims already incurred and present.
5.17 COMPLIANCE WITH LAW; NO CONFLICTS.
(i) Except as disclosed in Schedule 5.19, Company has in the past
complied with, and is now in compliance with, all federal, state and local
statutes, laws, rules, regulations, orders, licenses, permits (including,
without limitation, zoning restrictions and land use requirements) and all
administrative and judicial judgments, rulings, decisions and orders of any
body having jurisdiction over Company, the Business or the Land (the
"Applicable Laws"), except to the extent that non-compliance would not have
a material adverse effect on Company and neither Company nor Members have
received any notice Company is under investigation or other form of review
with respect to any Applicable Law; and
(ii) the execution, delivery and performance of this Agreement, the
consummation of any transactions herein referred to or contemplated hereby
and the fulfillment of the terms hereof and thereof will not:
(a) conflict with, or result in a breach or violation of the
Articles of Incorporation or Bylaws of Company;
(b) conflict with, or result in a breach under any document,
agreement or other instrument to which Company, or Members is a
party, or result in the creation or imposition of any lien, charge or
encumbrance on any properties of Company or Members pursuant to: (A)
any law or regulation to which Company or Members, or any of their
respective properties are subject, or (B) any judgment, order or
decree to which Company or Members is bound or any of their respective
properties are subject;
(c) result in termination or any impairment of any permit,
license, franchise, contractual right or
-22-
other authorization of Company; or
(d) require the consent of, or the filing with any governmental
authority or agency or any other third party in order to remain in full
force and effect.
5.18 TAXES. Company has filed, or will file, in a timely manner all
requisite federal, state, local and other tax returns due for all fiscal
periods ended on or before the date hereof and, as of the Closing, shall have
filed or will file in a timely manner all such returns due for all periods
ended on or before the Closing Date. There are no agreements to extend the
statutory period for the assessment of any taxes, examinations in progress or
claims against Company for federal, state, local and other taxes (including
penalties and interest) for any period or periods prior to and including the
date hereof and none shall exist as of the Closing Date. No notice of any
claim for taxes, whether pending or threatened, has been received. Copies
of: (i) all tax examinations; (ii) extensions of statutory limitations; and
(iii) the federal, state, local and other income tax returns and franchise
tax returns of Company for its last three fiscal years are attached hereto as
Schedule 5.18. Company has a taxable year ended December 31. Company
currently utilizes the cash method of accounting for income tax purposes and
has not changed its method of accounting since its initial creation.
5.19 LITIGATION. Except as set forth on Schedule 5.19, there is no claim,
litigation, action, suit or proceeding, investigation, formal arbitration,
informal arbitration or mediation, administrative, judicial or other review,
pending or, to the best of Members' knowledge, threatened against Company or
Members, or otherwise relating to the business or affairs of Company, at law or
in equity, before any federal, state or local court or regulatory agency, or
other governmental or private authority; no notice of any of the above has been
received by Company or Members; and no facts or circumstances exist which would
give rise to any of the foregoing. Also listed on Schedule 5.19 are all
instances where Company is the plaintiff, or
-23-
complaining or moving party, under any of the above types of proceedings or
otherwise.
5.20 ABSENCE OF PRICE RENEGOTIATION CONTRACTS. Company is not now nor
has ever been a party to any governmental contracts subject to price
redetermination or renegotiation.
5.21 CONDUCT OF BUSINESS SINCE BALANCE SHEET DATE. Since the Balance Sheet
Date, there has not been any:
(i) material adverse change in the financial condition, assets,
liabilities (contingent or otherwise), income and business or prospects of
Company;
(ii) damage, destruction or loss (whether or not covered by insurance)
which, singly or in the aggregate, materially and adversely affects the
properties (whether owned or leased) or business of Company;
(iii) change in the membership interests of Company, any change in its
equity ownership or any grant by it of any subscriptions, options, warrants,
puts, calls, conversion rights or other commitments related to its equity
interests;
(iv) declaration or payment of any dividend or distribution in respect
of the membership interests of Company or any direct or indirect redemption,
purchase or other acquisition of any of the membership interests of Company;
(v) any increase in the compensation, bonus, sales commissions or
fee arrangements payable or to become payable by Company to any of its
officers, directors, employees, consultants or agents above those disclosed
on Schedule 5.14;
(vi) work interruption, labor grievance or claim filed;
(vii) sale or transfer of, or any agreement to sell or transfer, any
material assets, property or rights of Company to any person not in the
ordinary course of the business of Company, including, without limitation,
all agreements with Members or with affiliates of Company;
(viii) cancellation or agreement to cancel any
-24-
indebtedness or other obligation owing to Company, including, without
limitation, any indebtedness or other obligation of Members or with any
affiliate of Company;
(ix) plan, agreement or arrangement granting any preferential right
to purchase or acquire any interest in any of the assets, property or rights
of Company or requiring consent of any party to the transfer and assignment
of any such assets, property or rights;
(x) purchase or acquisition by any third party of, or any agreement,
plan or other arrangement by any third party to purchase or acquire, any
property, rights or assets of Company other than in the ordinary course of
business;
(xi) waiver of any rights or claims of Company;
(xii) breach, amendment or termination of any contract, license, permit
or other agreement to which Company is a party other than in the ordinary
course of business;
(xiii) transaction by Company outside the ordinary course of its
business;
(xiv) amendment to the [Certificate of Formation] or Operating
Agreement of Company;
(xv) any other material occurrence, event, incident, action or failure
to act outside the ordinary course of business of Company; or
(xvi) any action by Company, Members, or any employee, officer or agent
of Company or Members committing to do any of the foregoing.
5.22 BANK ACCOUNTS; DEPOSITORIES. Attached as Schedule 5.22 is a complete
and accurate list as of the date of this Agreement, of:
(i) the name of each financial institution in which Company has any
account or safe deposit box;
(ii) the names in which each account or box is held;
(iii) the type of each account; and
(iv) the name of each person authorized to draw on or have access to each
account or box.
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5.23 HAZARDOUS MATERIALS. Environmental Laws means any applicable
statute, code, enactment, or ordinance, rule, regulation, permit, consent,
approval, authorization, license, judgment, order, writ, decree, injunction,
or other requirement having the force and effect of law, whether local, state
or national relating to: (i) emissions, discharges, spills, releases or
threatened releases of Hazardous Substances into ambient air, surface water,
groundwater, watercourses, publicly or privately owned treatment works,
drains, sewer systems, wetlands septic systems or onto land; (ii) the use,
treatment, storage, disposal, handling, manufacturing, transportation, or
shipment of Hazardous Materials; (iii) the regulation of storage tanks; and
(iv) otherwise relating to pollution or protection of the environment.
Hazardous Materials means any hazardous or toxic material, substance or waste
designated as such under the Resource Conservation and Recovery Act of 1976;
the Comprehensive Environmental Response Compensation and Liability Act
("CERCLA"); the Clean Water Act; the Toxic Substances Control Act; and any
comparable or similar state statute affecting the Business; any other
applicable law or the rules and regulations promulgated under any of the
foregoing, as each of the foregoing may have been amended. The definition of
a Hazardous Materials as used herein, specifically excludes petroleum, as
that term is defined under the Resource Conservation and Recovery Act of 1976
and CERCLA.
Except as set forth on Schedules 5.23 or 5.10, Company is not in material
violation of any Environmental Laws and Company has not received any notice
of alleged violation of Environmental Laws from any governmental agency.
No Hazardous Materials have been used, stored, manufactured or processed
on the Land except as necessary to the conduct of Company's business and in
compliance with all applicable laws.
To the best of Company's knowledge, subject to Schedule 5.10, there has
been no disposal release or threatened release of Hazardous Materials from or
to the Land.
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No liens, with respect to environmental liability, have been imposed against
Company or the Land under CERCLA, any comparable state statute affecting the
Business or other Applicable Law.
No portion of the Land is listed on the CERCLIS list or the National
Priorities List of Hazardous Waste Sites or any similar list maintained by
the State of Texas.
Neither Company nor any Member has received a notice of potential
responsibility or letter of inquiry from any private party or government
agency for any off-site facility under CERCLA or state counterpart thereof.
Set forth on Schedule 5.23 is a complete list of the names and addresses of
all disposal sites at any time now or in the past utilized by Company.
5.24 STORAGE TANKS. Except as set forth on Schedule 5.24, the Land does
not contain any underground or above-ground storage tanks containing Hazardous
Materials, petroleum products or wastes or other hazardous substances regulated
by 40 CFR 280 or other Applicable Laws. All above and below ground tanks
currently in use on the Land are being used and maintained in accordance with
all Applicable Laws.
5.25 ABSENCE OF CERTAIN BUSINESS PRACTICES. Neither Company nor Members
have ever made, offered or agreed to offer anything of value to any employees
of any customers of Company for the purpose of attracting business to Company
or any foreign or domestic governmental official, political party or candidate
for government office or any of their respective employees or representatives,
nor have they otherwise taken any action which would cause it to be in
violation of the Foreign Corrupt Practices Act of 1977, as amended.
5.26 COMPLETE DISCLOSURE. This Agreement and the schedules hereto and all
other documents and information furnished to Buyer and its representatives
pursuant hereto or pursuant to the negotiation of this transaction or the
investigations of Buyer or the employees or representatives of either of
them, do not and will not include any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein
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not misleading. If Members, or, prior to Closing, Company, becomes aware of
any fact or circumstance which would change a representation or warranty of
Company or Members in this Agreement or any other statement made or document
provided to Buyer, the party with such knowledge shall promptly give written
notice of such fact or circumstance to Buyer. None of (i) such notification,
(ii) any pre-Closing investigation made by Buyer of Company, its properties,
businesses or assets, or (iii) the Closing contemplated by this Agreement,
shall relieve Members or Company of their obligations under this Agreement,
including their representations and warranties made in this Section 5.
6. REPRESENTATIONS AND WARRANTIES OF PARENT. Parent represents and warrants
that the statements contained in this Section 6: (i) are correct and complete
as of the date of this Agreement; (ii) will be correct and complete as of the
Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 6); and (iii)
shall survive the Closing in accordance with Article 12 hereof.
6.1 CORPORATE ORGANIZATION. Parent is duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
Parent is duly authorized, qualified and licensed under all applicable laws,
regulations and ordinances of public authorities to carry on its businesses
in the places and in the manner as now conducted except for where the failure
to be so authorized, qualified or licensed would not have a material adverse
affect on such businesses.
6.2 PARENT STOCK. The Parent Stock to be delivered to Members in
connection with this Agreement, when delivered in accordance with the terms
of this Agreement, will constitute valid and legally issued shares, fully
paid and nonassessable and will be registered and free from any lien, claim
encumbrance or restriction on transfer other than restrictions imposed by the
Act or the regulations promulgated thereunder. Buyer is not a party to any
agreement creating rights in any person or entity
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with respect to such Parent Stock (other than this Agreement) or relating to
the voting thereof.
6.3 CORPORATE AUTHORITY. The officers of Parent executing this
Agreement have the corporate authority to enter into and bind Parent to the
terms of this Agreement and Parent has taken all necessary corporate action
(including, without limitation, approval by its Board of Directors) to
authorize the execution, delivery and, subject to receipt of required
regulatory approvals, performance of this Agreement. All corporate action by
Parent necessary to approve the transaction, including both director and (if
required) shareholder approvals, has been taken.
6.4 NO CONFLICTS. The execution, delivery and performance of this
Agreement, the consummation of any transactions herein referred to or
contemplated hereby and the fulfillment of the terms hereof and thereof,
including, without limitation, the provisions of Article 2, will not:
(i) conflict with, or result in a breach or violation of the Articles of
Incorporation or Bylaws of Parent;
(ii) conflict with, or result in a breach under any document, agreement or
other instrument to which Parent is a party, or result in the creation or
imposition of any lien, charge or encumbrance on any properties of Parent
pursuant to: (A) any law or regulation to which Parent, or its property is
subject, or (B) any judgment, order or decree to which Parent is bound or
its property is subject; or
(iii) result in termination or any impairment of any material permit,
license, franchise, contractual right or other authorization of Parent.
6.5 BINDING AGREEMENT. This Agreement is the binding and valid
obligation of Parent, enforceable against it in accordance with its terms.
6.6 SEC FILINGS AND FINANCIAL INFORMATION. Parent has timely made all
filings required to be made by it with the SEC. None of such filings
contains any untrue statement of material fact or omits to state a material
fact necessary to make the
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statements therein not misleading in light of the circumstances in which they
were made.
6.7 FINANCIAL INFORMATION. Parent has delivered to Company true copies
of the following: (i) its filings under the Act; (ii) all reports on Form
8-K's for the past twelve months, if any; (iii) all exhibits filed with such
forms or reports, if any. The foregoing filings and reports, as of their
respective dates, did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. Since the date of filing of
Parent's Form S-1, there has not been any material adverse change in the
business, properties, financial condition or prospects of Parent.
6.8 TAXATION. Parent has prepared and filed with the appropriate
governmental agencies all federal, state and local tax returns required to be
filed by it and has paid all taxes shown thereon to be payable or which have
become due pursuant to any assessment, deficiency notice or similar notice
received by it. Parent is not a party to any pending action or proceeding by
any governmental authority for assessment or collection of taxes and no claim
therefor has been asserted against it.
7. COVENANTS.
7.1 ACCESS TO LAND AND RECORDS. Between the date of this Agreement and
the Closing Date, Members will cause Company to afford to or obtain for the
officers and authorized representatives of Buyer access to all of the Land
(including, without limitation, for the purpose of performing all testing,
inspections and other procedures considered desirable by Buyer), sites, books
and records, including, without limitation, the Environmental Documents, at
all reasonable times and upon reasonable notice and will furnish Buyer with
such additional financial and operating data and other information as to the
business and properties, both current and former, of Company as
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Buyer may from time to time reasonably request. Buyer agrees to repair all
damage, if any, caused by Buyer's entry onto the Land prior to Closing.
Members will cooperate, and will cause Company to cooperate, with Buyer, its
representatives, engineers, auditors and counsel in the preparation of any
documents or other material which may be required in connection with any
documents or materials required by any governmental agency. Buyer will cause
all information obtained in connection with the negotiation and performance
of this Agreement to be treated as confidential in accordance with the
provisions of Article 14 hereof.
7.2 COMPANY ACTIVITIES PRIOR TO CLOSING. Between the date of this
Agreement and the Closing Date, Members will cause Company:
(i) to carry on its business in substantially the same manner as it has
heretofore and not to introduce any material new method of management,
operation or accounting;
(ii) to maintain its properties and facilities, including those held under
leases, in as good working order and condition as at present, ordinary wear
and tear excepted;
(iii) to perform its obligations under agreements relating to or affecting
its assets, properties or rights, including payment of debts as they become
due;
(iv) to keep in full force and effect present insurance policies or other
comparable insurance coverage with reputable insurers;
(v) to use reasonable efforts to maintain and preserve its business
organization intact, retain employees and maintain relationships with
suppliers, customers, consultants, independent contractors and others
having business relations with Company;
(vi) to maintain compliance with all Applicable Laws;
(vii) to maintain and perform present debt and lease instruments in
accordance with their terms and not enter into new or amended debt or lease
instruments, without the
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prior written consent of Buyer;
(viii) to pay and provide salaries and commissions for all officers,
directors, employees and agents at levels no higher than those disclosed on
Schedule 5.14;
(ix) to provide the interim financial statements required by Section
5.6; and
(x) to provide all reasonable assistance to Buyer to provide for an
orderly transfer of operating control of Company to Buyer.
7.3 PROHIBITED ACTIVITIES PRIOR TO CLOSING. Between the date of this
Agreement and the Closing Date, Members will cause Company not, without the
prior written consent of Buyer:
(i) to amend the [Certificate of Formation] or Operating Agreement of
Company;
(ii) to change the membership interests of Company or the equity ownership
of Company or grant any options, warrants, puts, calls, conversion rights or
commitments relating to the equity interests of Company;
(iii) to declare or pay any dividend of Company or directly or indirectly
purchase, redeem or otherwise acquire or retire for value or issue any
membership interests of Company;
(iv) to enter into any contract or commitment or incur or agree to incur
any liability or make any capital expenditures in excess of an aggregate of
$5,000;
(v) to increase the compensation payable or to become payable to any
officer, director, stockholder, employee, consultant or agent, or make any
bonus or management fee payment to any such person;
(vi) to create or assume any mortgage, pledge or other lien or encumbrance
upon any assets or properties whether now owned or hereafter acquired;
(vii) to sell, assign, lease or otherwise transfer or dispose of any
property or equipment;
(viii) to negotiate to acquire any business or begin any
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new business or project;
(ix) to merge or consolidate or agree to merge or consolidate with or into
any other corporation;
(x) to waive any of its rights or claims;
(xi) to breach or permit a breach of, amend or terminate, any material
agreement, or any permit, license or other agreement or right to which
Company is a party;
(xii) to enter into any other transaction outside the ordinary course of
its business or otherwise prohibited hereunder;
(xiii) to make any oral or written public announcement concerning this
transaction except as may be required by law, all of which announcements,
if any, shall be forwarded to Buyer for review and comment at least seven
days prior to dissemination; or
(xiv) to allow any other action or omission, or series of actions or
omissions, by Company or Members that would cause a representation and
warranty of Company and Members made in Section 5.21 of this Agreement to
be untrue on the Closing Date.
7.4 CONTACT WITH GOVERNMENT OFFICIALS. Company and Members shall each use
their best efforts to cooperate with Buyer in making contact with the
appropriate governmental agencies and officials having information about or
jurisdiction over Company, the Members or the Land, including, without
limitation, environmental and land use agencies and officials in order to assist
Buyer in completing its regulatory evaluation of Company and the Land.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF COMPANY AND MEMBERS. The obligations
of Members and Company hereunder are subject to the completion, satisfaction,
or at their option, waiver, on or prior to the Closing Date, of the following
conditions.
8.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Buyer and Parent contained in this Agreement shall be accurate on and as of the
Closing Date with the same
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effect as though such representations and warranties had been made on and as
of such date; and each and all of the terms, covenants and conditions of this
Agreement to be complied with and performed by Buyer or Parent on or before
the Closing Date shall have been duly complied with and performed.
8.2 CONSENTS. All necessary notices to, consents of and filings with any
governmental authority or agency or other third party relating to the
consummation of the Closing or the other transactions contemplated herein to be
made or obtained by Buyer shall have been obtained and made.
8.3 NO ADVERSE PROCEEDING. No action or proceeding before a court or
any other governmental agency or body shall have been instituted or, to the
best of Members's knowledge, threatened to restrain or prohibit any of the
transactions contemplated by this Agreement.
8.4 NONCOMPETITION AGREEMENT. Buyer shall have executed and delivered at
the Closing the Noncompetition Agreement with Xxxx X. Xxxx and Xxxxx Xxxxxxxx
and their spouses (the "Noncompetition Agreement"), in form and substance
satisfactory to Buyer and Members.
8.5 TEXLINE NOTE. Buyer shall have paid the then outstanding principal
balance (and accrued but unpaid interest) of the Texline and Houston Grain
promissory notes on the Closing Date and agrees to pay the Assumed Debt as
set forth in Section 2.3.
8.6 NEW REAL ESTATE LEASE. Buyer and Reyncor Industrial Alcohol, Inc.
shall have entered into a lease for the Land for a ten-year initial term, at
a rental of $18,000 per month, with three separate 10-year renewals at the
option of Buyer and containing such other terms as are acceptable to Buyer
and Company (the "Real Estate Lease").
8.7 ANCILLARY DOCUMENTS. On the Closing Date, Buyer shall have executed
and delivered that certain Executive Employment Agreement with Xxxx X. Xxxx,
that certain Plan of Reorganization relating to Re-Claim Environmental, Inc.
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8.8 CERTAIN PERSONALTY. Notwithstanding other provisions hereof, the
parties acknowledge that the personalty described in Schedule 8.8 hereto is
owned by Xxxx X. Xxxx, individually and used by the Company (some pursuant to
leases and rental paid by Company to Xxxx X. Xxxx). Parent agrees that all
such personalty shall either be purchased by Company from Xxxx at Closing,
continue to be leased by Company (with Company assuming such lease and
releasing Xxxx from any liability or guaranty); all in accordance with
Schedule 8.8 hereto.
8.9 RULE 144. Parent shall use its best efforts to cause all filings
required with the SEC to be made of Parent's current public information so
that Stockholders shall have available Rule 144 for the resale of the Parent
Stock as soon as practicable under Rule 144. As soon as resales are possible
under Rule 144, at the written request of Stockholders proposing to sell
securities in compliance with Rule 144, Company shall (i) forthwith furnish
to Stockholders a written statement of compliance with the filing
requirements of the SEC as set forth in Rule 144, as such rule may be amended
from time to time, and (ii) timely file and make available to the public and
Stockholders all such reports and other information as will enable
Stockholders to make sales, subject to the express limitations of this
Agreement, pursuant to Rule 144 beginning one year after the date of the
acquisition of the Parent Stock.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT. The obligations of Parent
hereunder are subject to the completion, satisfaction or, at their option,
waiver, on or prior to the Closing Date, of the following conditions.
9.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Members and Company contained in this Agreement shall be accurate on and as of
the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date, and Buyer shall have received a
certificate from Members to that effect, or setting forth any discrepancies in
such representations and warranties which have
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arisen since the date of this Agreement. The foregoing notwithstanding,
Company and Members agree that no limitation of any representation or
warranty concerning the knowledge of Company or Members or any qualification
of such representations and warranties set forth in the certificate
contemplated in the first sentence of this Section 9.1 shall restrict Buyer's
right to terminate this Agreement if any representation or warranty of
Members or Company is inaccurate as of the Closing Date.
9.2 COVENANTS. Each and all of the terms, covenants and conditions of this
Agreement to be complied with and performed by Members and Company on or before
the Closing Date shall have been duly complied with and performed.
9.3 NO ADVERSE PROCEEDING. No action or proceeding before a court or
any other governmental agency or body shall have been instituted or, to the
best of Buyer's knowledge, threatened to restrain or prohibit any of the
transactions contemplated by this Agreement, and no governmental agency or
body shall have taken any other action or made any request of Buyer as a
result of which the management of Buyer deems it inadvisable to proceed with
the transactions hereunder.
9.4 GENERAL RELEASE. Members shall have delivered to Parent an instrument
dated the Closing Date releasing Company and Parent from any and all claims of
Members against Company and Parent arising out of events which occurred prior to
the Closing (but not including any claims pursuant to this Agreement).
9.5 CONSENTS. All necessary notices to, consents of and filings with
any governmental authority or agency or other third party relating to the
consummation of the Closing or the other transactions contemplated herein to
be made or obtained by Company or Members shall have been obtained and made.
9.6 RESIGNATIONS. Each officer and director of Company shall have
delivered to Buyer their written resignation.
9.7 GOOD STANDING CERTIFICATES. Members shall have delivered to Buyer
certificates, dated as of a date no earlier than 10 days prior to the Closing
Date, duly issued by the
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appropriate governmental authority or authorities showing that Company is in
good standing in its state of incorporation.
9.8 UPDATED AGREEMENTS. Members shall have delivered to Buyer a schedule
(Schedule 9.8) dated the Closing Date, listing all material agreements entered
into by Company since the date of Schedule 5.12, which new agreements must have
been determined to be acceptable to Buyer in its sole discretion.
9.9 NONCOMPETITION AGREEMENT. The Noncompetition Agreement shall have been
executed and delivered by all parties thereto at the Closing.
9.10 TERMINATION OF EXISTING LEASE. Company shall have terminated its
currently existing lease for the Land without liability to Buyer.
9.11 REAL ESTATE LEASE. Buyer and Company shall have entered into the Real
Estate Lease.
9.12 ASSIGNMENT OF MEMBERSHIP INTERESTS. Members shall have delivered to
Buyer the Assignment of Membership Interests.
9.13 ENVIRONMENTAL REVIEW. Buyer, through its authorized
representatives, must have completed a review (including, without limitation,
all testing, inspections and other procedures, review of existing files of,
and discussions with, governmental agencies and officials having jurisdiction
over Company) of the Land and the environmental and land use practices,
procedures, operations and activities of Company; the results of which
review, without limiting the generality of the foregoing, reflects compliance
with all Applicable Laws governing the Land and the operations of Company,
discloses no actual or probable violations, compliance problems, required
capital expenditures or other substantive environmental, land use or real
estate related concerns and are otherwise satisfactory in all respects to
Buyer in its sole discretion.
9.14 TRANSFERABILITY OF PERMITS. Buyer shall have determined, in its
sole discretion, that prior to, or as a result of, this transaction, all of
the permits required for the operation of the Business and the Facility have
been transferred
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to Buyer (as a matter of law or otherwise) or can be transferred to
Buyer without a public hearing before any governmental body and that all
consents or other approvals necessary for Buyer's continued use of such permits
after the Merger have been obtained.
9.15 GENERAL. All actions taken by Members and Company in connection
with the consummation of the transactions contemplated hereby and all
certificates, opinions and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to Buyer.
10. ADDITIONAL COVENANTS.
10.1 TAXES. (i) Members irrevocably agree to indemnify Buyer against, and
to hold Buyer harmless from:
(a) any and all federal, state, local, and other taxes of Company
arising from the audit, examination, review or other adjustment of tax
liabilities for periods ending on or prior to the Closing Date;
(b) any and all taxes, interest, penalties, additions to tax (or
additional amounts imposed with respect to any such interest, penalties,
or additions to tax) imposed with respect to any federal, state, local, or
other taxes of Company for periods ending on or before the Closing Date; and
(c) any and all federal, state, local, or other taxes of Buyer arising
as the result of any payment by the Members to Buyer in fulfillment of his
obligation pursuant to this Section 10.1(i).
(ii) Members agree that they shall be responsible, at their sole expense,
for the preparation of Company's federal, state, local and other income and
franchise tax returns for the tax periods beginning January 1, 1997 and ending
on the Closing Date. Buyer agrees to cooperate with Members in the preparation
of such returns. Members further agree that they shall pay all taxes (including
all penalties and interest, if any) due for such tax period. Prior to
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filing the returns provided for in this paragraph, Members agree to allow
Buyer 20 business days to review and approve such returns, approval of
which will not unreasonably be withheld.
10.2 POST CLOSING BALANCE SHEET. On the date which is 60 days after the
Closing Date (the "Adjustment Date") the parties shall adjust the Purchase Price
in accordance with Section 2.4 based on a balance sheet of Company for the
period ending on the close of business on the Closing Date, prepared by Parent's
regular independent accountant in accordance with GAAP and delivered to Parent
and Members, together with the supporting documentation for all current assets
and liabilities used to prepare such balance sheet, at least seven days prior to
the Adjustment Date. No accounts receivable shall be written off in whole or in
part in connection with preparing such balance sheet. Any dispute between the
parties as to this Section 10.2 shall be resolved in accordance with the
procedure set forth in Section 2.4.
10.3 CLOSING DATE ACTIONS. Buyer and Members mutually agree that they
shall not, and shall cause Company not to, engage in an transaction outside
the normal course of business on the Closing Date.
10.4 TRADE PAYABLES. Parent agrees to pay all of the trade payables of
Company existing on the Closing Date within 30 days after Closing.
10.5 RELEASE OF PERSONAL GUARANTIES. Parent agrees to use its reasonable
efforts to have each of the Members released from any personal guaranties and
lease obligations entered into by such Member in connection with a Company debt
or lease that is not being paid off within 60 days after the Closing Date.
Parent shall indemnify, defend and hold harmless Members for any loss or other
matter suffered as a result of such personal guaranties prior to release. If
Parent cannot obtain a release with 60 days, Parent will pay off the underlying
obligation in full.
10.6 HAZARDOUS MATERIALS EXPANSION. All parties hereto
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acknowledge that Company intends to expand its business to implement a
hazardous waste recycling program and make necessary improvements to the
plant and equipment of Company to accommodate the handling and processing of
hazardous materials, including, without limitation, necessary improvements to
the tank farm, additional tanks, improvements to the containment area
foundation, driveways to be paved with concrete and guttered and implement
necessary safety programs and equipment upgrades, adding additional personnel
as necessary, additional monitoring equipment and upgrade laboratory
equipment (the "Hazardous Program"). Buyer agrees to do all things necessary
in its reasonable business judgment to implement the Hazardous Program and
Buyer shall contribute capital to Company necessary in its reasonable
business judgment to fully implement the Hazardous Program, the cost of which
shall be treated in the same manner as similar costs are treated by Parent as
to its other subsidiaries, in accordance with good accounting practices.
10.7 XXXX PERSONAL PROPERTY. On the Closing Date, Buyer shall purchase
from Xxxx X. Xxxx, certain personal property personally owned by Xxxx X. Xxxx
for the amounts, in cash, set forth on Schedule 8.8 attached hereto. The
parties acknowledge that such purchase price amounts are intended to
approximate the book cost or, in the case of the white trailer house, the
amount owing on the purchase debt. In the event any such equipment listed on
said Schedule 8.8 is being leased in the name of Xxxx X. Xxxx, Company agrees
to either pay off such lease, or have such lease modified so that Xxxx X.
Xxxx will no longer have any personal liability with regard to such leases or
equipment, whatsoever, in accordance with Section 10.5 hereof.
10.8 FURTHER ASSURANCE. From time to time on and after the Closing and
without further consideration, the parties hereto shall each deliver or cause
to be delivered to any other party at such times and places as shall be
reasonably requested, such additional instruments as any of the others may
reasonably request for the purpose of carrying out this Agreement and the
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transaction contemplated hereby. Members, also without further
consideration, agree to cooperate with Buyer and to use his reasonable
efforts to have the present officers and employees of Company cooperate on
and after the Closing Date in furnishing to Buyer information, evidence,
testimony, and other assistance in connection with obtaining all necessary
permits and approvals and in connection with any actions, proceedings,
arrangements or disputes of any nature with respect to matters pertaining to
all periods prior to the Closing Date. Members acknowledge and agree that,
from and after the Closing, Buyer shall be entitled to possession of all
documents, books, records (including tax records), agreements and financial
and operating data of any sort of Company; provided that all such material
shall be made available to Members for their preparation of tax returns,
audits and other matters.
10.9 TRANSITION. Members will not take any action that is designed or
intended to have the effect of discouraging any customer or business
associate of Company from maintaining the same business relationships with
Buyer after the Closing that it maintained with Company before the Closing.
Members will refer all customer inquiries relating to the Business to Buyer
from and after the Closing. Further, Members agree that for a period of 90
days following the Closing Date, Members will assist Buyer, at Buyer's
request and expense, with the orderly transition of the operations of Company
from Members to Buyer (including, without limitation, recommendations, advice
and interaction with customers and potential customers of Company, and
governmental agencies).
10.10 SURVIVAL. The covenants in this Article 10 shall survive the
Closing in accordance with Article 12 hereof.
11. FEDERAL SECURITIES ACT RESTRICTIONS ON STOCK.
11.1 REGISTERED STOCK. Parent covenants, represents and warrants to
Members and Members acknowledge that all of the shares of Parent Stock to be
delivered to Members pursuant to this Agreement will be registered under the
Act prior to delivery
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to Members.
11.2 GENERAL LEGEND. All Parent Stock shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS
OF RULE 145(D) PROMULGATED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT BE
TRANSFERRED OR DISPOSED OF BY THE HOLDER WITHOUT COMPLIANCE WITH SAID RULE.
11.3 COMPLIANCE WITH LAW. Members covenant, warrant and represent that
none of the shares of Parent Stock will be offered, sold, assigned, pledged,
hypothecated, transferred or otherwise disposed of except in full compliance
with the Act and the rules and regulations promulgated thereunder.
12. INDEMNIFICATION.
12.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All of the
representations, warranties and covenants of any party hereto contained in this
Agreement and the liabilities and obligations of the parties with respect
thereto shall survive the Closing for a period of five year from the Closing
Date; provided, however, the representations set forth in Sections 5.6, 5.7,
5.8, 5.18 and 6.2 (concerning ownership, financial statements and taxes) shall
survive until the expiration of the applicable statute of limitations (in each
case, the "Expiration Date").
12.2 LIMITATION ON LIABILITY. Any claims to be made under this Agreement,
including, without limitation, the indemnification obligations set forth in this
Agreement shall apply only after the aggregate amount of such obligations exceed
$25,000, at which time the indemnification obligations shall be effective as to
all amounts, including the initial $25,000. In addition, the aggregate
liability of Members shall not exceed the Purchase Price set forth in Article 2
hereof.
12.3 INDEMNIFICATION BY MEMBERS. Members agree that they will, jointly and
severally, indemnify, defend (as to third party claims only), protect and hold
harmless Buyer, Buyer, Company and
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their respective officers, shareholders, directors, divisions, subdivisions,
affiliates, subsidiaries, parent, agents, employees, successors and assigns
at all times from and after the date of this Agreement until the Expiration
Date from and against all liabilities claims, damages, actions, suits,
proceedings, demands, assessments, adjustments, penalties, losses, costs and
expenses whatsoever (including specifically, but without limitation, court
costs, reasonable attorneys' fees and reasonable expenses, and reasonable
expenses of investigation) ("Claims") whether equitable or legal, matured or
contingent, known or unknown, foreseen or unforeseen, ordinary or
extraordinary, patent or latent, whether arising out of occurrences prior to,
at or after the date of this Agreement, incurred as a result of or incident
to: (a) any breach of, misrepresentation in, untruth in or inaccuracy in the
representations and warranties by Company or Members (including, without
limitation, those relating to the environmental condition of the Land and
Company's environmental compliance), set forth herein or in the Schedules,
Exhibits or certificates attached hereto or delivered pursuant hereto; (b)
nonfulfillment or nonperformance of any agreement, covenant or condition on
the part of Members made in this Agreement; (c) nonfulfillment or
nonperformance of any agreement, covenant or condition on the part of Company
made in this Agreement and to be performed on or before the Closing Date; (d)
the existence of liabilities of Company in excess of the liabilities
represented by Members and Company consistent with Sections 2.4 and 10.2; (e)
all real estate taxes related to the Land for years prior; and (f) any claim
by a third party that, if true, would mean that a condition for
indemnification set forth in subsections (a) through (e) of this Section 12.3
had been satisfied.
12.4 INDEMNIFICATION BY PARENT. Parent agrees that it will indemnify,
defend, protect and hold harmless Members, their respective heirs, executors,
assigns and personal representatives, at all times from and after the date of
this
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Agreement from and against all liabilities, claims, damages, actions, suits,
proceedings, demands, assessments, adjustments, penalties, losses costs and
expenses whatsoever (including specifically, but without limitation, court
costs, reasonable attorneys' fees and expenses and reasonable expenses of
investigation) whether equitable or legal, matured or contingent, known or
unknown, foreseen or unforeseen, ordinary or extraordinary, patent or latent
arising out of occurrences after the date hereof, incurred as a result of or
incident to: (i) any breach of, misrepresentation in, untruth in or inaccuracy
in the representations and warranties set forth herein, or in the Schedules or
certificates attached hereto or delivered pursuant hereto by Buyer; (ii)
nonfulfillment or nonperformance of any agreement, covenant or condition on the
part of Buyer made in this Agreement; (iii) the operation of Company after the
Closing Date (other than stockholder indemnification matters set forth herein);
and (iv) any claim by a third party that, if true, would mean that a condition
for indemnification set forth in subsections (i) or (ii) of this Section 12.4
had been satisfied.
12.5 PROCEDURE FOR INDEMNIFICATION WITH RESPECT TO THIRD PARTY CLAIMS. (a)
If any third party shall notify a party to this Agreement (the "Indemnified
Party") with respect to any matter (a "Third Party Claim") that may give
rise to a claim for indemnification against any other party to this
Agreement (the "Indemnifying Party") or if any party who may make a claim
for indemnification under this Agreement otherwise becomes aware of any
matter that may give rise to such a claim or wishes to make such a claim
(whether or not related to a Third Party Claim), then the Indemnified
Party shall promptly notify each Indemnifying party thereof in writing;
provided, however, that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the Indemnifying Party from
any obligation hereunder unless (and then solely to the extent) the
Indemnifying Party is thereby prejudiced.
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(b) Any Indemnifying Party will have the right to defend the
Indemnified Party against a Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party so long as (i) the
Indemnifying Party notifies the Indemnified Party in writing within a
reasonable time after the Indemnified Party has given notice of the Third
Party Claim that the Indemnifying Party will indemnify the Indemnified
Party from and against the entirety of any adverse consequences (which
will include, without limitation, all losses, claims, liens, and attorneys'
fees and related expenses) the Indemnified Party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by the Third Party
Claim, to the extent covered by Sections 12.3 and 12.4, (ii) the
Indemnifying Party provides the Indemnified Party with evidence reasonably
acceptable to the Indemnified Party that the Indemnifying Party will have
the financial resources to defend against the Third Party Claim and fulfill
its indemnification obligations hereunder, (iii) the Third Party Claim
involves principally non-monetary damages and does not seek as a primary
focus an injunction or temporary or permanent restraining order or involve
the possibility of criminal penalties, (iv) settlement of, or adverse
judgment with respect to the Third Party Claim is not, in the good faith
judgment of the Indemnified Party, likely to establish a precedential custom
or practice adverse to the continuing business interests of the Indemnified
Party, and (v) the Indemnifying Party conducts the defense of the Third
Party Claim actively and diligently.
(c) So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with Section 12.5(b) above, (i) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the Third Party Claim, (ii) the
Indemnified Party will not consent to the entry of any
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judgment or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying Party (which
will not be unreasonably withheld) and (iii) the Indemnifying Party will
not consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of the
Indemnified Party (which will not be unreasonably withheld).
(d) In the event or to the extent that any of the conditions set forth
in Section 12.5(b) above is or becomes unsatisfied, however, (i) the
Indemnified Party may defend against, and consent to the entry of any
judgment or enter into any settlement with respect to, the Third Party Claim
and any matter it may deem appropriate in its sole discretion and the
Indemnified Party need not consult with, or obtain any consent from, any
Indemnifying Party in connection therewith (but will keep the Indemnifying
Party reasonably informed regarding the progress and anticipated cost
thereof), (ii) the Indemnifying Party will reimburse the Indemnified Party
promptly and periodically for the cost of defending against the Third Party
Claim (including reasonable attorneys' fees and reasonable expenses) and
(iii) the Indemnifying Party will remain responsible for any adverse
consequences the Indemnified Party may suffer resulting from, arising out
of, relating to, in the nature of, or caused by the Third Party Claim to the
fullest extent provided in this Article 12; and (iv) the Indemnifying Party
shall be deemed to have waived any claim that its indemnification obligation
should be reduced because of the manner in which the counsel for the
Indemnified Party handled the Third Party Claim. The Indemnifying Party
may retain separate co-counsel at its sole cost and participate in the
defense of the Third Party Claim, but shall not be entitled to direct the
course of such defense. In such instance, the Indemnified Party shall
not agree to a
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settlement of the defense without the consent of the Indemnifying Party,
which consent shall not be unreasonably withheld. If the Indemnifying
Party refuses to consent to a settlement and the resulting judgment or
later settlement exceeds the previously proposed settlement, then the
Indemnifying Party will be responsible for the entire excess amount of the
judgment or settlement without reference to any limitation on indemnity set
forth in this Agreement.
13. TERMINATION OF AGREEMENT.
13.1 TERMINATION BY BUYER. Buyer, by notice in the manner hereinafter
provided on or before the Closing Date, may terminate this Agreement in the
event of a breach by Members or Company in the observance or in the due and
timely performance of any of the agreements or conditions contained herein on
their part to be performed, and such breach shall not have been cured on or
before the Closing Date.
13.2 TERMINATION BY MEMBERS. Members may, by notice in the manner
hereinafter provided on or before the Closing Date, terminate this Agreement
in the event of a breach by Buyer in the observance or in the due and timely
performance of any of the covenants, agreements or conditions contained
herein on their part to be performed, and such breach shall not have been
cured on or before the Closing Date.
13.3 TERMINATION. Either party may terminate this Agreement by written
notice to the other if the Closing has not occurred by October 31, 1997.
14. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
14.1 NONDISCLOSURE BY MEMBERS. Members recognize and acknowledge that
they have in the past, currently has, and in the future may possibly have,
access to certain confidential information of Company, such as lists of
customers, operational policies, and pricing and cost policies that are
valuable, special and unique assets of Company and its businesses. Members
agree that, except as may be required by Applicable Laws or other legal
process, they will not disclose such confidential
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information to any person, firm, corporation, association or other entity for
any purpose or reason whatsoever, except to authorized representatives of
Parent unless such information becomes known to the public generally through
no fault of Members. In the case of a disclosure required by Applicable Laws
or other legal process, Members shall make no disclosure without prior
written notice to Parent. In the event of a breach or threatened breach by
Members of the provisions of this Section, Parent shall be entitled to an
injunction restraining Members from disclosing, in whole or in part, such
confidential information. Nothing herein shall be construed as prohibiting
Parent from pursuing any other available remedy for such breach or threatened
breach, including, without limitation, the recovery of damages. The
provisions of this Section shall apply at all times prior to the Closing Date
and for a period of one year following the Closing.
14.2 NONDISCLOSURE BY PARENT. Parent recognizes and acknowledges that
it has in the past, currently has, and prior to the Closing Date, will have
access to certain confidential information of Company and Members, such as
lists of customers, operational policies, financial information and pricing
and cost policies that are valuable, special and unique assets of Company and
Members and its businesses. Parent agrees that, except as may be required by
Applicable Laws or other legal process, it will not disclose such
confidential information to any person, firm, corporation, association, or
other entity for any purpose or reason whatsoever (prior to the Closing Date
as to Company information) without Members's prior written consent. In the
case of a disclosure required by Applicable Laws or other legal process,
Parent shall make no disclosure without prior written notice to Members. In
the event of a breach or threatened breach by Parent of the provisions of
this Section, Members shall be entitled to an injunction restraining Parent
from disclosing, in whole or in part, such confidential information. Nothing
contained herein shall be construed as prohibiting Members from
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pursuing any other available remedy for such breach or threatened breach,
including, without limitation, the recovery of damages. The provisions of
this Section shall apply at all times prior to the Closing Date and for a
period of one year following the Closing or the termination of this Agreement
without a Closing having occurred.
15. GENERAL.
15.1 ASSIGNMENT; BINDING EFFECT; AMENDMENT. This Agreement and the
rights and obligations of the parties hereunder may not be assigned (except
by operation of law, by will, succession or probate) and shall be binding
upon and shall inure to the benefit of the parties hereto, the successors of
the corporate parties hereto, and the respective heirs and legal
representatives of Members. This Agreement, upon execution and delivery,
constitutes a valid and binding agreement of the parties hereto enforceable
in accordance with its terms and may be modified or amended only by a written
instrument executed by all parties hereto. For the first five years after
the Closing Date, Parent agrees not to sell, assign or otherwise transfer any
of its interests in the Company or the Business without the prior written
consent of Members unless Parent remains fully obligated under its
obligations set forth in this Agreement, documented by an instrument
reasonably satisfactory to Members.
15.2 ENTIRE AGREEMENT. This Agreement is the final, complete and
exclusive statement and expression of the agreement among the parties hereto
with relation to the subject matter of this Agreement, it being understood
that there are no oral representations, understandings or agreements covering
the same subject matter as this Agreement. This Agreement supersedes, and
cannot be varied, contradicted or supplemented by evidence of any prior or
contemporaneous discussions, correspondence, or oral or written agreements of
any kind.
15.3 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original and all of
which together shall constitute
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but one and the same instrument.
15.4 NO BROKERS. Company and Members represent and warrant to Buyer and
Buyer represents to Members and Company that the warranting party has had no
dealings with any broker or agent so as to entitle such broker or agent to a
commission or fee in connection with the within transaction; provided that
Shareholders have agreed to and shall pay a commission to Xxxxxxx Xxxxxxxx.
If for any reason a commission or fee shall become due, the party dealing
with such agent or broker shall pay such commission or fee and agrees to
indemnify and save harmless each of the other parties from all claims for
such commission or fee and from all attorneys' fees, litigation costs and
other expenses relating to such claim.
15.5 EXPENSES OF TRANSACTION. Whether or not the transactions herein
contemplated shall be consummated: (i) Buyer will pay the fees, expenses and
disbursements of Buyer and its agents, representatives, accountants
(including, without limitation, any cost of the audit of Company currently
being performed by Xxxxxx Xxxxxxxx above $10,000) and counsel incurred in
connection with the subject matter of this Agreement and any amendments
hereto and all other costs and expenses incurred in the performance and
compliance with all conditions to be performed by Buyer under this Agreement;
and (ii) Company will pay the fees, expenses and disbursements of Members and
Company and their respective agents, representatives, accountants and counsel
incurred in connection with the subject matter of this Agreement and any
amendments hereto and all other costs and expenses incurred in the
performance and compliance with all conditions to be performed by Members and
Company under this Agreement. All such fees, expenses and disbursements of
Members and Company shall be paid by Company prior to the Closing so as not
to become an obligation of Buyer or shall be included as a current liability
for purposes of the calculation of Actual Net Working Capital set forth in
Section 2.4. Members represents and warrants to Buyer that Members has
relied on his own advisors for
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all legal, accounting, tax or other advice whatsoever with respect to this
Agreement and the transactions contemplated hereby.
15.6 NOTICES. All notices or other communications required or permitted
hereunder shall be in writing and may be given by depositing the same in
United States mail, addressed to the party to be notified, postage prepaid
and registered or certified with return receipt requested, by overnight
courier or by delivering the same in person to such party.
(a) If to Buyer, addressed to it at:
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
ATTN: W. Xxxxxxx Xxx
with a copy to:
U S Liquids Inc.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
ATTN: Xxxxx Xxxxxx
and a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxx & Xxxxxxxxx LLP
3200 National City Center
0000 X. 0xx Xxxxxx
Xxxxxxxxx, XX 00000-0000
(b) If to Members, addressed to them at:
c/o Xxxx X. Xxxx
00000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
with a copy to:
Reyncor Industrial Alcohol, Inc.
0000 Xxxx Xxx Xxxx.
Xxxxx 000
Xxxxxxx, XX 00000
and a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Dow, Xxxxxxx & Xxxxxxxx, P.C.
0 Xxxxxxxx Xxxxx
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Xxxxx 0000
Xxxxxxx, XX 00000
Notice shall be deemed given and effective the day personally delivered, the
day after being sent by overnight courier, subject to signature verification,
and three business days after the deposit in the U.S. mail of a writing
addressed as above and sent first class mail, certified, return receipt
requested, or when actually received, if earlier. Any party may change the
address for notice by notifying the other parties of such change in
accordance with this Section.
15.7 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Texas, without giving
effect to any choice or conflict of law provision or rule (whether of the
State of Texas or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Texas.
15.8 APPOINTMENT OF AGENT. Members agree to maintain an agent in the
State of Texas to accept and acknowledge service of process. Each Member
initially hereby appoints Xxxx X. Xxxx, 13511 Lindsay, Xxxxxxx, Xxxxx 00000,
and Xxxxx Xxxxxxxx, 0000 Xxxx Xxx Xxxx., Xxxxx 000, Xxxxxxx, Xxxxx 00000,
jointly, as such agent and agrees to notify Buyer in the manner set forth in
Section 15.6 of any change in agent. Each party agrees that service of
process or notice in any such action, suit or proceeding shall be effective
if in writing and delivered to the address provided in Section 15.7 for such
party or to any other address provided to Parent in accordance with Section
15.6 and as set forth, in the manner prescribed in such Section.
15.9 NO WAIVER. No delay of or omission in the exercise of any right,
power or remedy accruing to any party as a result of any breach or default by
any other party under this Agreement shall impair any such right, power or
remedy, nor shall it be construed as a waiver of or acquiescence in any such
breach or default, or of or in any similar breach or default occurring later;
nor shall any waiver of any single breach or default be
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deemed a waiver of any other breach of default occurring before or after that
waiver.
15.10 TIME OF THE ESSENCE. Time is of the essence of this Agreement.
15.11 CAPTIONS. The headings of this Agreement are inserted for convenience
only, shall not constitute a part of this Agreement or be used to construe or
interpret any provision hereof.
15.12 SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall, to the extent possible, be
modified in such manner as to be valid, legal and enforceable but so as most
nearly to retain the intent of the parties. If such modification is not
possible, such provision shall be severed from this Agreement. In either
case the validity, legality and enforceability of the remaining provisions of
this Agreement shall not in any way be affected or impaired thereby.
15.13 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 shall be
construed as if drafted jointly by the parties and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement. Any reference to any
federal, state, local or foreign statute shall be deemed to refer to all
rules and regulations promulgated thereunder, unless the context requires
otherwise. The word "including" means including, without limitation. The
parties intend that representation, warranty and covenant contained herein
shall have independent significance. If any party has breached 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)
that the party has not breached shall not detract from or mitigate the fact
the party is in breach of the
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first representation, warranty or covenant.
15.14 STANDSTILL AGREEMENT. Unless and until this Agreement is
terminated pursuant to Article 13 hereof without the Closing having taken
place, Members will not directly or indirectly solicit offers for any equity
interests of Company or the assets of Company or a merger or consolidation
involving Company from, or respond to inquiries from, share information with,
negotiate with or in any way facilitate inquiries or offers from, third
parties who express or who have heretofore expressed an interest in acquiring
Company by merger, consolidation or other combination or acquiring any of
Company's assets; nor will they permit Company to do any of the foregoing.
15.15 PERIODIC REPORTS. Parent agrees to deliver to Members copies of
the periodic financial statements and reports that are produced by Company in
the normal course of its business.
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15.16 THIRD PARTY BENEFICIARY. Parent agrees that Texline Gas Company
shall be a third party beneficiary to this Agreement for purposes of Section
2.5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
U S LIQUIDS INC.
By: /s/ W. Xxxxxxx Xxx
-------------------------------------
Its: President
------------------------------------
RE-CLAIM ENVIRONMENTAL LOUISIANA LLC
(EIN: )
------------
By:
-------------------------------------
Its:
------------------------------------
/s/ Xxxx X. Xxxx
----------------------------------------
Xxxx X. Xxxx
(SSN: ###-##-####)
REYNCOR INDUSTRIAL ALCOHOL, INC.
(EIN: 00-0000000)
By:
-------------------------------------
Its:
------------------------------------
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LIST OF SCHEDULES
Exhibit A -- Legal Description of the Land
Exhibit B -- Legal Description of Additional Land
Exhibit C -- Estimated Net Working Capital
Schedule 2.3 -- Assumed Debt
Schedule 5.1(i) -- Certificate of Formation and
Operating Agreement of Company
Schedule 5.4 -- Predecessor Entities; Trade Names
Schedule 5.6 -- Financial Statements
Schedule 5.7 -- Non-Balance Sheet Liabilities
Schedule 5.8 -- Accounts Receivable
Schedule 5.9(i) -- Proprietary Rights
Schedule 5.10(i) -- Real Property Disclosure
Schedule 5.11(i) -- Personal Property of Company
Schedule 5.12 -- Contracts
Schedule 5.13 -- Insurance Policies
Schedule 5.14 -- Employees
Schedule 5.15 -- Employee Plans
Schedule 5.18 -- Tax Returns of Company
Schedule 5.19 -- Litigation
Schedule 5.22 -- Bank Accounts
Schedule 5.23 -- Hazardous Materials; List of Disposal
Sites
Schedule 5.24 -- Storage Tanks
Schedule 8.8 -- Xxxx Property
Schedule 9.9 -- Updated Agreements
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ANNEX I
TO THAT CERTAIN PURCHASE OF MEMBERSHIP INTERESTS AGREEMENT
Among
U S LIQUIDS INC.
and
RE-CLAIM ENVIRONMENTAL, INC.
and
XXXX XXXX and REYNCOR INDUSTRIAL ALCOHOL, INC.
DATED AS OF September 30, 1997.
MEMBERSHIP ALLOCATION
SHAREHOLDERS INTERESTS OWNED OF CONSIDERATION
Xxxx X. Xxxx 40% See Attached
Reyncor Industrial 60% See Attached
Alcohol, Inc.
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