EXHIBIT 10.28
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement"), dated as of the 31st
day of October, 1997, is by and among NORTH AMERICAN TECHNOLOGIES GROUP, INC., a
Delaware corporation ("North American"), INDUSTRIAL PIPE FITTINGS, INC., a Texas
corporation ("Seller"), and HOUSTON IPF, L.L.C., a Texas limited liability
company ("Purchaser").
W I T N E S S E T H:
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WHEREAS, Seller owns and operates a fabrication and distribution
business (the "Business") located in Houston, Texas that is conducted under the
name of "Industrial Pipe Fittings, Inc.";
WHEREAS, North American is the sole shareholder of Seller;
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, substantially all of the assets of Seller utilized in
connection with the operation of the Business, and Seller and Purchaser desire
to set forth the terms and conditions of their agreement;
NOW THEREFORE, for and in consideration of the premises, and the mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Seller and Purchaser hereby agree as follows:
1. PURCHASE AND SALE.
1.1 PURCHASE AND SALE. On the terms and subject to the conditions
of this Agreement, Seller, at the Closing referred to in Section 12, agrees to
grant, sell, transfer, convey and deliver to Purchaser, free and clear of all
liens, claims, encumbrances and interests (except as specifically set forth
herein), and Purchaser agrees to purchase from Seller, substantially all of the
assets of Seller utilized in connection with the Business (collectively, the
"Assets"), which Assets shall consist of the following:
(a) all of Seller's inventory related to its operations (as more
completely defined in Section 10, herein referred to as the "Inventory");
(b) the furniture, fixtures, equipment, machinery (including
vehicles, if any), supplies and other tangible personal property owned by
Seller in connection with its operations, including, but not limited to,
those assets described on SCHEDULE 1.1(B) attached hereto (the "Seller
Personal Property");
(c) all Accounts (as hereinafter defined), as set forth on
SCHEDULE 1.1(C) attached hereto;
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(d) the goodwill of the business of Seller, together with all
benefits naturally incident thereto, including all rights Seller may have
to use the name "Industrial Pipe" or "Industrial Pipe Fittings" (the
"Goodwill");
(e) to the extent transferable, (i) all licenses and permits of
Seller relating to its operations; (ii) all agreements and contracts to
which Seller is a party relating to the its operations, but only to the
extent Purchaser has determined in its sole discretion to assume such
agreements and contracts, which agreements and contracts are listed on
SCHEDULE 1.1(E) attached hereto (the "Assigned Contracts"); and (iii)
all warranties and guarantees, if any, originally given to Seller relating
to all or any portion of any Inventory and Seller Personal Property;
(f) to the extent they exist and are in Seller's possession,
originals or copies of all employee records, customer lists, supplier
lists, cost and pricing information, business plans, ad valorem and sales
tax records and environmental records used in connection with its
operations and the Assets (the "Books and Records");
(g) all customer lists, supplier lists, patents, trademarks,
service marks, licenses, computer software and source codes, inventions,
processes, trade secrets, designs, drawings and all other proprietary,
technical and other information and intellectual property and all licenses,
permits and other rights to use the foregoing, whether patentable or
unpatentable, used in connection with the its operations, including that
which is set forth on SCHEDULE 1.1(G) attached hereto; provided, however,
that the Assets shall not include the computer software and source codes
used by North American in connection with Seller's accounting and
bookkeeping activities and any notebook computer;
(h) all right, title and interest of Seller in and to the
telephone and facsimile numbers utilized by Seller in connection with its
operations, including (000) 000-0000 and (000) 000-0000, as well as any
post office box utilized by Seller in connection with the Business; and
(i) all cash and cash equivalents, utility deposits, trade
credits, prepaid items and other amounts, deposits or credits, paid by
Seller through the Closing Date (as hereinafter defined) that relate to the
its operations, as set forth on SCHEDULE 1.1(I) attached hereto.
Purchaser and Seller agree that SCHEDULES 1.1(C) and 1.1(I) shall be amended by
Seller (subject, however, to the approval of Purchaser) at the time of delivery
of the Final Closing Date Balance Sheet (as hereinafter defined) to take into
consideration changes that occur in the ordinary course of business between the
date of the execution of this Agreement and the Closing Date. In addition,
SCHEDULE 1.1(E) may be amended on the Closing Date by Purchaser to take into
consideration changes in the selection of agreements and contracts that
Purchaser has determined to assume. For purposes hereof, the term "Accounts"
shall mean all accounts receivable and notes receivable (except as specifically
excluded below) of Seller, whether billed or unbilled.
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1.2 ASSUMED LIABILITIES. Subject to and in accordance with this
Agreement, at the Closing, Purchaser will assume all liabilities accruing on or
after the Closing Date on the Assigned Contracts, and in addition thereto, shall
assume all accounts payable and accrued liabilities accruing prior to the
Closing Date, but only to the extent the accounts payable and accrued
liabilities are specifically set forth on SCHEDULE 1.2 hereto, as well as all ad
valorem taxes (which are currently estimated by Seller to be approximately
$1,067.89) accruing with respect to calendar year 1997 and prior to the Closing
(collectively, the "Assumed Obligations"). Purchaser and Seller agree that sales
tax payable, property tax payable (other than the ad valorem taxes included in
the Assumed Obligations), insurance payable, accruals relating to the property
at 0000 Xxxxx Xxxxxx in Houston, Texas, 401(k) liabilities and employee benefits
specifically are not being assumed by Purchaser, and thus will not be included
on SCHEDULE 1.2 (the foregoing list not being an exhaustive list of excluded
liabilities, but intended to provide only specific examples of excluded
liabilities). Purchaser and Seller agree that SCHEDULE 1.2 shall be amended by
Seller (subject, however, to approval of Purchaser) at the time of delivery of
the Final Closing Date Balance Sheet to take into consideration changes in
payables of Seller that occur in the ordinary course of business between the
date of the execution of this Agreement and the Closing Date. Such amended
SCHEDULE 1.2 shall take the place of the original schedule, and the accounts
payable and accrued liabilities thereon shall constitute a portion of the
Assumed Liabilities.
1.3 EXCLUDED ASSETS AND EXCLUDED LIABILITIES. Purchaser shall not
acquire the employment agreements between North American and any of Xxxx X.
Xxxxx, Xxxxxx Xxxxx or Xxxxx Xxxxxxx, or the note receivable, account receivable
or accrued interest receivable due from Messrs. Xxxxx, Xxxxx or Xxxxxxx.
Purchaser shall not assume or be subject to, or in any way be liable or
responsible for any liabilities or obligations of Seller of any kind or nature,
known or unknown, relating to the ownership or operation of the Assets or the
Business prior to the Closing, except as specifically provided in Section 1.2.
1.4 SUBLEASE OF PROPERTY. At the Closing, North American shall
sublease to Purchaser the real property described on SCHEDULE 1.4 hereto (the
"Leased Premises") owned by Xxxxx Xxxxxxx and leased to North American, which
sublease shall be in the form of EXHIBIT 1.4 attached hereto.
2. PURCHASE PRICE.
2.1 PURCHASE PRICE. The purchase price for the Assets (the
"Purchase Price") shall be the Adjusted Book Value, as hereinafter defined, for
Seller as of the Closing Date. For purposes hereof, Adjusted Book Value of
Seller shall mean the book value of the Assets as of the Closing Date, as
reflected on the Final Closing Date Balance Sheet, as hereinafter defined, plus
$14,111.17, minus the following:
(a) the amount of the accounts payable and accrued liabilities
included in the Assumed Obligations;
(b) $34,065.89 as the excess employment cost for Xx. Xxxxx;
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(c) prepaid rent adjustment of $800;
(d) inventory adjustment of $50,000;
(e) an amount (the "Additional Allowance") equal to the
difference, if greater than zero, between the actual amount
of the outstanding balance of the Accounts Receivable
identified on SCHEDULE 2.1(E), as of the date the Final
Closing Balance Sheet is delivered, less $11,200; provided,
however, that for purposes of the estimated Purchase Price
to be paid at the Closing in accordance with Section 2.2
hereof, the adjustment described in this clause (e) shall
be equal to $9,964.13;
(f) adjustment for ad valorem taxes in the amount of $1,067.89;
and
(g) adjustment for the non-competition agreements of Messrs.
Xxxxx, Xxxxxxx and Xxxxx in the amount of $72,333.52.
While the amount as of the Closing Date of the notes receivables and accrued
interest owed by Messrs. Xxxxx, Xxxxx and Xxxxxxx to Seller is not included in
clauses (a) (g) above, it is also not included in the definition of Assets
above, and therefore its value is not included within the Adjusted Book Value.
2.2 DETERMINATION OF AND PAYMENT OF ESTIMATED PURCHASE PRICE.
Attached hereto as SCHEDULE 2.2 is a balance sheet of Seller as of September 30,
1997 (the "Estimated Closing Date Balance Sheet"). At the Closing, Purchaser
shall pay to Seller by wire transfer an amount equal to the estimated Purchase
Price less $50,000 (the "Deferred Portion"), which estimated Purchase Price
shall be based upon the book value of the Assets as reflected on the Estimated
Closing Date Balance Sheet, as adjusted in the manner described in clauses (a)-
(g) of Section 2.1 above. The parties hereto agree that the estimated Purchase
Price, based upon the foregoing as of the date of this Agreement, is
$944,957.56.
2.3 POST CLOSING DETERMINATION OF ACTUAL PURCHASE PRICE. On or
before thirty (30) calendar days following the Closing, Seller shall prepare a
balance sheet of Seller as of October 31, 1997 (the "Final Closing Date Balance
Sheet") and from such Final Closing Date Balance Sheet, the parties hereto shall
compute the actual Purchase Price. The Final Closing Date Balance Sheet shall be
prepared using accounting principles consistent with those used during prior
periods in the preparation of Seller's interim, unaudited financial statements,
except as to inventory which shall be determined as provided in Section 10
below. In the event the actual Purchase Price, less the Deferred Portion, is
greater than the amount paid to Seller pursuant to Section 2.2 above, Purchaser
shall immediately pay to Seller by check the difference between the actual
Purchase Price, less the Deferred Portion, and the amount paid pursuant to
Section 2.2 above. In the event the actual Purchase Price, less the Deferred
Portion, is less than the amount paid pursuant to Section 2.2 above, Seller
shall immediately pay by check to Purchaser the difference between the Purchase
Price, less the Deferred Portion, and the amount paid pursuant to Section 2.2
above. Purchaser agrees to make its relevant employees, the Books
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and Records and the other Assets reasonably available and to cooperate in all
other respects in connection with Seller's preparation of the Final Closing Date
Balance Sheet.
2.4 ALLOCATION OF PURCHASE PRICE. The total consideration for the
Assets shall be allocated in a manner consistent with SCHEDULE 2.4 attached
hereto, and the parties hereto agree to use such allocation for federal and
state income tax purposes.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. North American and
Seller, jointly and severally, represent and warrant to and agree with Purchaser
that:
3.1 SELLER'S AND NORTH AMERICAN'S AUTHORITY RELATIVE TO THIS
AGREEMENT. This Agreement has been duly executed and delivered by Seller and
North American, and no further corporate or shareholder action is necessary with
respect to Seller or North American to make this Agreement (or any other
agreement contemplated hereby that is to be executed by Seller or North
American) a valid and binding obligation of Seller and North American,
enforceable in accordance with its terms. Neither the execution, delivery nor
performance of this Agreement by Seller or North American will:
(a) result in a violation or breach of any term or provision
under the Articles of Incorporation or Bylaws or any resolution of the
Board of Directors or shareholders of Seller ;
(b) violate any order, writ, injunction or decree of any court,
administrative agency or governmental body;
(c) require any consent, authorization or approval of any
person, entity or governmental authority, other than certain consents,
authorizations or approvals that have been or will be secured prior to
the Closing;
(d) violate or constitute a default under any note, indenture,
mortgage, deed of trust or other material contract, agreement or
commitment of Seller or result in the loss or adverse modification of
any material license, franchise, permit or other authorization granted
to or otherwise held by Seller and related to its operations; or
(e) result in the creation or imposition of any lien, charge or
encumbrance upon the property of Seller.
3.2 ORGANIZATION AND EXISTENCE. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas and has all requisite corporate power to carry on its business as now
conducted and to enter into and perform this Agreement.
3.3 NO INSURANCE COMPANY REQUESTS. Seller has not received any
written or verbal notice or request from any insurance company or board of fire
underwriters (or any organization exercising functions similar thereto)
requesting the performance of any work or alterations with respect to the Leased
Premises.
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3.4 CONDITION AND SUFFICIENCY OF ASSETS. Except as set forth on
SCHEDULE 3.4 attached hereto or as disclosed in the Sublease Agreement (as
hereafter defined), (a) there are no material defects known to Seller in the
foundations, roofs, walls, superstructures, plumbing, air conditioning,
refrigeration and heating equipment, electrical wiring, boilers, water heaters
or any other portions of any of the Leased Premises, (b) the buildings contained
on the Leased Premises are structurally sound, and (c) the Assets, to the extent
applicable and other than inventory (as to which the matters in this clause (c)
shall not apply), are in good working order, and in a state of good repair with
no deferred maintenance, ordinary wear and tear excepted. The Assets, together
with the Leased Premises, include all real and personal property and property
rights now used for the conduct of the business and operation of the Business in
the manner and to the extent as currently being conducted other than certain
administrative and accounting services and other than certain computer-related
assets described in the proviso of clause 1.1(g) above.
3.5 NO RESTRICTIVE COVENANTS. To the knowledge of Seller, there are
no restrictive covenants, zoning or other similar ordinances, rules, statutes,
or governmental laws or regulations being violated by the continued operations
of any of the Assets or the Leased Premises .
3.6 NO CONDEMNATION NOTICES. Seller has received no notice (and
has no knowledge) of condemnation or contemplated condemnation proceedings
affecting any part of any of the Assets or the Leased Premises.
3.7 UTILITIES. Seller has sufficient utilities for the Leased
Premises for existing improvements thereon, including drainage, water supply,
sanitary sewer and sewage treatment capacity.
3.8 RIGHTS TO ACQUIRE THE ASSETS. Other than Purchaser, no person,
firm or entity has any right to acquire any of the Assets or any part thereof,
and to the knowledge of Seller, no person, firm or entity has any right to
acquire any of the Leased Premises.
3.9 ENVIRONMENTAL MATTERS.
(a) DEFINITIONS. For the purposes of this Agreement, unless
the context otherwise specifies or requires, the following terms shall have the
meaning herein specified:
(i) "Governmental Requirements" shall mean all laws,
ordinances, rules and regulations of the United States, the State, the
County, the city, or any other political subdivision, agency, or
instrumentality exercising jurisdiction over Seller, or the Leased Premises
described on SCHEDULE 1.4, which laws, ordinances, rules and regulations
are applicable to Seller or the Leased Premises, including, without
limitation, the Resource Conservation and Recovery Act of 1976 (42 U.S.C.
Section 6901 et seq.) ("RCRA"), as amended from time to time, and the
Comprehensive Environmental Response Compensation and Liability Act of 1980
(42 U.S.C. Section 9601 et seq.) ("CERCLA"), as amended from time to
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time, the Federal Water Pollution Control Act, the Federal Environmental
Pesticides Act, the Clean Water Act, the Clean Air Act, the Texas Natural
Resource Code, the Texas Water Code, the Texas Solid Water Disposal Act,
and the Texas Hazardous Substances Spill Prevention and Control Act.
(ii) "Hazardous Materials" shall mean (1) any "hazardous
waste" as defined by RCRA, and regulations promulgated thereunder; (2) any
"hazardous substance" as defined by CERCLA, and regulations promulgated
thereunder; (3) asbestos; (4) polychlorinated biphenyls; (5) underground
storage tanks, whether empty, filled or partially filled with any
substance, (6) any substance the presence of which on the Leased Premises
is prohibited by any Governmental Requirements; and (7) any other substance
which by any Governmental Requirements requires special handling or
notification of any federal, state or local governmental entity in its
collection, storage, treatment, or disposal.
(iii) "Hazardous Materials Contamination" shall mean
any presently existing contamination of the facilities, soil, groundwater,
air or other elements on or of the Leased Premises by Hazardous Materials,
or any contamination of the buildings, facilities, soil, groundwater, air
or other elements on or of any other property as a result of Hazardous
Materials emanating from the Leased Premises before the date of this
Agreement.
(b) HAZARDOUS MATERIALS WARRANTIES. Seller hereby represents
and warrants that except as set forth on SCHEDULE 3.9 attached hereto:
(i) To the knowledge of Seller, no Hazardous Materials are
located on the Leased Premises;
(ii) To the knowledge of Seller, neither Seller nor any
other person has caused or permitted any Hazardous Materials to be placed,
held, located or disposed of on, under or at the Leased Premises or any
part thereof;
(iii) Neither Seller nor any person known to Seller has
used the Leased Premises at any time for the disposal, storage, treatment,
processing or other handling of Hazardous Materials, nor to Seller's
knowledge, information or belief is any part of the Leased Premises
affected by any Hazardous Materials Contamination;
(iv) To the knowledge of Seller, no property adjoining
the Leased Premises is being used or has ever been used at any previous
time for the disposal, storage, treatment, processing or other handling of
Hazardous Materials nor, to the knowledge of Seller, is any other property
adjoining the Leased Premises affected by Hazardous Materials
Contamination;
(v) To the knowledge of Seller, no investigation,
administrative order, consent order and agreement, litigation or settlement
with respect to Hazardous Materials or Hazardous Materials Contamination is
proposed, threatened, anticipated or in existence with respect to the
Leased Premises. To the knowledge of Seller, the Leased Premises is not
currently on, and has never been on, any federal or state "Superfund" or
"Superlien" list; and
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(vi) Seller does not use any Hazardous Materials in
any of its processes.
3.10 FINANCIAL STATEMENTS. Seller has previously delivered
financial statements (including income statements and balance sheets) with
respect to Seller at and for the years ended December 31, 1995 and 1996 and the
nine month period ended September 30, 1997. The year-end financial statements
have been prepared in the ordinary course of business in conformity with
generally accepted accounting principles consistently applied by Seller
throughout the periods indicated, and the interim financial statements have been
prepared in the ordinary course of business in conformity with the principles
customarily applied by Seller in connection with the preparation of its interim
internally prepared financial statements, consistently applied throughout the
period indicated. All such financial statements present fairly, in all material
respects, the financial position of Seller as of the date of such financial
statements and the results of the operations of Seller for the period then
ended.
3.11 ABSENCE OF CERTAIN CHANGES. Since September 30, 1997, (a)
there has not been any event or condition of any character affecting Seller that
has or might reasonably be expected to have a material adverse effect on the
financial condition, business, assets or prospects of the Business, and (b)
Seller has operated only in the ordinary course of business.
3.12 TAXES. Within the times and in the manner prescribed by
law, Seller has filed all federal, state, local and foreign tax returns with
respect to the Assets and its operations and has paid all taxes, assessments and
penalties due and payable with respect to the Assets. All ad valorem tax
liabilities related to the Assets have been discharged except those not yet due
and payable. There are no present disputes as to taxes of any nature payable by
Seller with respect to the Assets nor any tax liens whether existing or inchoate
with respect to the Assets.
3.13 TITLE TO ASSETS. Other than liens, security interests and
encumbrances that will have been removed or released at or before the Closing,
Seller has good and marketable title to the Assets, is in possession of all of
the Assets, and will convey the Assets to Purchaser, free and clear of all
liens, claims, security interests and encumbrances other than under the Assumed
Obligations. Such Assets are located on the Leased Premises.
3.14 COMPLIANCE WITH LAWS. Seller has fully complied and is in
full compliance in all material respects
with all applicable federal, state and local laws, regulations and ordinances.
3.15 LITIGATION. Except as described on SCHEDULE 3.15, there are
no claims, actions, suits, proceedings or investigations pending, or, to the
best knowledge of Seller, threatened against Seller or its assets or properties,
at law or in equity or before any court or federal, state, municipal or other
governmental department, commission, board, agency or instrumentality.
3.16 INVENTORIES. The value at which the Inventory is reflected
on the Balance Sheet has been computed at actual cost and has been determined in
accordance with generally
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accepted accounting principles consistent with those applied in prior periods.
Notwithstanding the foregoing or any other representation or warranty of North
American or Seller in this Agreement, neither Purchaser nor any party claiming
through it shall have a claim against Seller or North American regarding
inventory unless and only to the extent that such claim exceeds, in the
aggregate with all other claims as to inventory, $50,000 .
3.17 AGREEMENTS. SCHEDULE 3.17 attached hereto contains a list
and brief description of all contracts, and agreements related to any of the
Assets or the Business and to which Seller is a party or by which Seller or the
Assets are bound, other the Assigned Contracts. Except as set forth on SCHEDULE
1.1(E), each of the Assigned Contracts can be assigned without consent. Each of
the Assigned Contracts is valid and binding and in full force and effect and the
parties thereto are not in default thereunder.
3.18 ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND ACCRUED PAYROLL.
Attached hereto as SCHEDULE 1.2 is a list and description of all accounts
payable, accrued liabilities and accrued payroll owed by the Seller at September
30, 1997 with respect to Seller. All of the accounts payable, accrued
liabilities and accrued payroll reflected on SCHEDULE 1.2 are, and those arising
from October 1, 1997 through the Closing Date, will represent bona fide accounts
payable to others arising in the ordinary course of business and in a manner
consistent with the past practices of Seller. The Purchaser will not assume any
accounts payable, accrued liabilities or accrued payroll of the Seller, except
as set forth on SCHEDULE 1.2 attached hereto (as that Schedule may be amended as
contemplated in Section 1.2 hereof).
3.19 EMPLOYEE BENEFIT PLANS. Except as set forth on SCHEDULE 3.19
attached hereto, there are no employee benefit plans (within the meaning of
ERISA Section 3(3)) and any other pension, profit sharing, savings, bonus,
incentive, option, insurance, welfare, stock purchase, stock option, fringe
benefit or other employee benefit, deferred compensation or funding plan or
arrangement maintained by Seller or to which Seller contributes or is required
to contribute.
3.20 LABOR MATTERS. Seller is not a party to any collective
bargaining agreement with any labor union or association. There are no
discussions, negotiations, demands or proposals that are pending or have been
made with or by any labor union or association. Seller is in compliance in all
material respects with all federal, state and other laws respecting employment
and employment practices, terms and conditions of employment and wages and
hours, and is not engaged in any unfair labor practices. Except as set forth on
SCHEDULE 3.20, Seller has no knowledge of any pending or threatened worker's
compensation claims against Seller.
3.21 PERSONAL PROPERTY. Attached hereto as SCHEDULE 1.1(B) is a
list of all furniture, fixtures, equipment, machinery (including vehicles),
supplies and other tangible personal property utilized by the Seller in
connection with its operations.
3.22 INTELLECTUAL PROPERTY. Attached hereto as SCHEDULE 1.1(G) is
a list of all Intellectual Property utilized by Seller in connection with its
operations.
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3.23 ACCOUNTS RECEIVABLE. The Accounts, less the reserve for bad
debt included in the Final Closing Date Balance Sheet and the additional reserve
described in Section 2.1(e), are collectible in the ordinary course of business.
3.24 MISCELLANEOUS. Other than Purchaser, no person, firm or entity
has any right to acquire any of the Assets. All agreements, reports and other
documents furnished by Seller to Purchaser are true, accurate and complete
copies of the agreements, reports and other documents they purport to be.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents
and warrants to and agrees with Seller that:
4.1 PURCHASER'S AUTHORITY RELATIVE TO THIS AGREEMENT. This
Agreement has been duly executed and delivered by Purchaser, and no further
corporate action is necessary with respect to Purchaser to make this Agreement
(or any other agreement contemplated hereby, including without limitation the
Note and the Xxxx of Sale, Assignment and Assumption Agreement that is to be
executed by Purchaser) a valid and binding obligation of Purchaser, enforceable
in accordance with its terms. Neither the execution, delivery nor performance of
this Agreement by Purchaser will result in a violation or breach of any term or
provision under the Articles of Organization or Regulations or any resolution of
the Board of Directors or shareholders of Purchaser or constitute a default or
breach of, or accelerate the performance required under, or require the consent
of any person or entity under any indenture, mortgage, deed of trust or other
contract or agreement to which Purchaser is a party or by which it or any of its
assets are bound, or violate any order, writ, injunction or decree of any court,
administrative agency or governmental body. Upon its execution and delivery by
Xxxx Xxxxxxx at the Closing, the Guaranty Agreement will be a valid and binding
obligation of Xx. Xxxxxxx, enforceable in accordance with its terms.
4.2 ORGANIZATION AND EXISTENCE. Purchaser is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Texas and has all requisite corporate power to carry on its
business as now conducted and to enter into and perform this Agreement.
5. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
5.1 NATURE OF STATEMENTS. All statements contained in any
Schedule hereto or in any supplemental Schedule or in any certificate or other
document executed in connection with these transactions delivered by or on
behalf of Seller or Purchaser pursuant to this Agreement, or in connection with
the transactions contemplated hereby, shall be deemed representations and
warranties by Seller or Purchaser, as the case may be.
5.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Regardless of any
investigation at any time made by or on behalf of any party hereto or of any
information any party may have in respect thereof, all representations and
warranties made hereunder or pursuant hereto shall survive the Closing and for a
period of three years thereafter.
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6. COVENANTS OF SELLER. Seller covenants with Purchaser that:
6.1 AGREEMENT CONCERNING EMPLOYEES. Except for the individuals
which Purchaser chooses not to hire, retain or employ (the individuals Purchaser
does not intend to hire, retain or employ to include, among others, Xxx
Xxxxxxxxxx, Xxxxxx Xxxxxxx and Xxxxx Xxxxxxx), without the consent of Purchaser,
each of North American and Seller agree that during the two-year period
commencing on the Closing Date, it will not directly or indirectly, through a
subsidiary, affiliate or otherwise, hire, retain, employ or otherwise provide
compensation for or to any employee of Seller if such action will result in the
employee terminating his then existing employment with Purchaser.
6.2 EMPLOYEES. On the Closing Date, Seller shall terminate all
personnel employed by Seller (other than Xxx Xxxxxxxxxx, Xxxxxx Xxxxxxx and
Xxxxx Xxxxxxx) and Seller will bear the cost of the termination of any such
employees. SCHEDULE 6.2 contains a complete and accurate schedule of the names
of all persons employed by Seller in connection with the Business and the
current rates of compensation paid by Seller to such persons. Seller will pay,
on or before the Closing Date, all outstanding liability for the payment of
wages, vacation pay (whether accrued or otherwise), salaries, bonuses or any
other compensation with respect to all persons employed by Seller prior to the
Closing Date (other than wages and salaries with respect to such persons not yet
due and payable, which will be paid not later than November 14, 1997). Purchaser
shall assume no liability, obligation or responsibility under any bonus, life
insurance, health insurance, or other plan whereby Seller provides benefits for
any of the employees or their beneficiaries, and Purchaser shall be permitted,
but not obligated, to hire any of the employees of Seller.
6.3 CONDUCT OF BUSINESS. From the date hereof through the Closing
Date, Seller will use its best efforts to operate the Assets and the Leased
Premises only in the ordinary course of business and consistent with past
practices of Seller. Seller shall use its best efforts to preserve its business
and the goodwill of its customers, suppliers and others with whom it has
business relationships.
6.4 ACCESS TO INFORMATION. From the date hereof until the Closing
or the earlier termination of this Agreement, Seller will permit Purchaser and
Purchaser's agents and representatives, at Purchaser's risk and during regular
business hours, to enter upon and inspect the Assets and the Leased Premises,
including, without limitation, all equipment, systems, furniture and fixtures
forming a part thereof, so long as such entry and inspection provides minimal
interference with the operations of Seller, and to review financial statements,
books and records and contracts of Seller.
6.5 NO TAX DUE CERTIFICATE. Promptly after the Closing, Seller
will order a certificate from the Comptroller of the State of Texas as to no
sales taxes being due and unpaid by Seller, and Seller will deliver such
certificate to Purchaser as soon thereafter as practicable.
6.6 CHANGE OF NAME. At Closing, Seller agrees to provide
Purchaser with a fully executed and duly authorized Articles of Amendment to its
Articles of Incorporation, such amendment changing the name of Seller so as not
to include "Industrial Pipe Fittings" or any
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portion thereof. Seller shall also provide Purchaser with a check payable to the
Secretary of State in the amount of $160.00 as the filing fee therefor.
Purchaser agrees that it will promptly file such Articles of Amendment with the
Secretary of State of the State of Texas and promptly deliver to Seller the
Articles of Amendment stamped "filed" by the Secretary of State of Texas.
6.7 TAIL INSURANCE. At Closing, Seller agrees to provide to
Purchaser with a current and valid one year policy of products liability tail
insurance, with a $5,000 deductible per occurrence, which policy must be in form
and substance acceptable to Purchaser and will show Purchaser as a loss payee.
In the event any claims have been filed against Seller during the one year
period following the Closing that would come within the items to be covered
under such policy for more than $5,000 in the aggregate, Seller agrees to renew
such policy for an additional one year period.
6.8 LITIGATION. Seller agrees that it will take full
responsibility for and defend the litigation set forth on Exhibit 3.15 (as well
as any other litigation against Seller related to the ownership of the Assets or
the operation of the Business prior to the Closing) and any worker's
compensation claims asserted against Seller. In connection therewith, Purchaser
agrees to cooperate reasonably with Seller by providing reasonable access to the
Books and Records and by making its relevant employees reasonably available to
Seller, so long as such cooperation does not result in a material hardship or
material cost to Purchaser. Seller agrees in connection therewith to minimize
any time such employees must be away from their job, and to pay any out-of-
pocket costs associated therewith.
6.9 ACCOUNTING ASSISTANCE. Seller agrees that, for a period of
up to thirty (30) days following the Closing, at the request of and at no
additional cost to Purchaser (other than reasonable, documented out-of-pocket
cost incurred by Seller, all of which will be promptly paid by Purchaser),
Seller will continue to maintain the accounts receivable and accounts payable
ledgers of the Business (based on information delivered to it by Purchaser) as
conducted by Purchaser and will provide reasonable cooperation to Purchaser in
connection with Purchaser's creation of an accounting system relating to the
Business.
7. COVENANT OF PURCHASER. At Closing, Purchaser agrees to deliver to
Seller a promissory note (the "Promissory Note") in the form of EXHIBIT 7-1
hereto in the amount of the Deferred Portion. The Promissory Note shall be
guaranteed by Xxxx Xxxxxxx pursuant to a guaranty agreement (the "Guaranty
Agreement") in the form of EXHIBIT 7-2. Purchaser shall be permitted to set off
from the Promissory Note any accrued, but unpaid indemnification obligations of
Seller and/or North American under Section 17 below. In addition, at such six-
month anniversary date, Purchaser shall pay to Seller an amount equal to the
difference, if greater than zero, of the amount of all Accounts collected on or
before such six-month anniversary date and the amount of the Accounts as of
October 31, 1997, as set out on the Final Closing Balance Sheet (net of the
deduction for reserves, which reserves the parties agree shall be $11,200);
provided, however, that in no event shall Purchaser be required to pay more than
the Additional Allowance (as defined in SECTION 2.1(E) as a result of the
provisions of this sentence. Purchase agrees to use reasonable efforts to
collect, on or before such six-month anniversary date, all of the Accounts;
provided, however, Purchaser shall have no obligation to commence litigation
against any such account debtors. All right, title and interest in and to such
Accounts
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that are not collected in full on or before such six-month anniversary date
shall be re-conveyed to Seller or its nominee at the six-month anniversary date,
and all records related thereto shall be promptly delivered to Seller. In the
event the total dollar amount of Accounts collected by Purchaser (without regard
to the Accounts described on SCHEDULE 2.1(E)) as of the six-month anniversary
date is less than the amount of the Accounts reflected on the Final Closing Date
Balance Sheet (net of both the $11,200 reserve to be set forth thereon as
provided in this Section 7 and the Additional Allowance), such amount being
referred to herein as the "Account Deficiency", Purchaser shall set off from the
Promissory Note the amount of the Account Deficiency. Such set off shall be in
furtherance of the set off of accrued and unpaid indemnification obligations
provided for herein and not in addition thereto.
8. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. All obligations of
Purchaser under this Agreement are subject to the fulfillment of each of the
following conditions:
8.1 REPRESENTATIONS AND WARRANTIES. Seller's representations and
warranties contained in this Agreement shall be true in all material respects at
the time of Closing, and all obligations and agreements required by this
Agreement to be performed by Seller shall have been performed in all material
respects.
8.2 SUBLEASE AGREEMENT. North American shall have entered into the
Sublease of the Leased Premises with Purchaser in the form attached hereto as
EXHIBIT 1.4.
8.3 NON-COMPETITION AGREEMENT. Seller and North American shall
have entered into the Non-Competition Agreement (the "Non-Competition
Agreement") with Purchaser in the form attached hereto as EXHIBIT 8.3.
8.4 TERMINATION IF CONDITIONS PRECEDENT NOT SATISFACTORY OR WAIVED.
Each of the conditions precedent to performance of Purchaser's obligations
hereunder shall be satisfied. If, in the exercise of its reasonable discretion,
Purchaser believes that all conditions precedent hereunder have not been
satisfied, Purchaser shall provide written notice to Seller at least three (3)
business days prior to the Closing of those conditions precedent to the
performance of Purchaser's obligations hereunder which Purchaser believes have
not been satisfied, along with the reasons therefor. If any of the conditions
precedent to the performance of Purchaser's obligations hereunder have not been
satisfied within the time period required therefor or duly waived in writing by
Purchaser, then Purchaser may, by written notice delivered to the Seller,
terminate this Agreement. If Purchaser does not timely elect to terminate this
Agreement, Purchaser shall be deemed to have waived any such condition
precedent. Notwithstanding the foregoing, the waiver provisions contained
herein shall not apply to agreements to be executed and delivered at the
Closing.
9. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS. All obligations of
Seller under this Agreement are subject to the fulfillment of each of the
following conditions:
9.1 REPRESENTATIONS AND WARRANTIES. Purchaser's representations
and warranties contained in this Agreement shall be true in all material
respects at the time of
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Closing, and all obligations and agreements required by this Agreement to be
performed by Purchaser shall have been performed in all material respects.
9.2 SUBLEASE AGREEMENT. Purchaser shall have entered into the
sublease of the Leased Premises with North American in the form attached hereto
as EXHIBIT 1.4.
9.3 NON-COMPETITION AGREEMENT. Each of North American and Seller
shall have entered into a Non-competition Agreement with Purchaser in the form
attached hereto as EXHIBIT 8.3.
9.4 TERMINATION IF CONDITIONS PRECEDENT NOT SATISFACTORY OR
WAIVED. Each of the conditions precedent to performance of Seller's obligations
hereunder shall be satisfied. If, in the exercise of its reasonable discretion,
Seller believes that all conditions precedent hereunder have not been satisfied,
Seller shall provide written notice to Purchaser at least three (3) business
days prior to the Closing of those conditions precedent to the performance of
Seller's obligations hereunder which Seller believes have not been satisfied,
along with the reasons therefor. If any of the conditions precedent to the
performance of Seller's obligations hereunder have not been satisfied within the
time period required therefor or duly waived in writing by Seller, then Seller
may, by written notice delivered to Purchaser, terminate this Agreement. If
Seller does not timely elect to terminate this Agreement, Seller shall be deemed
to have waived any such condition precedent. Notwithstanding the foregoing, the
waiver provisions contained herein shall not apply to agreements to be executed
and delivered at the Closing.
9.5 CONFIDENTIALITY AND RETURN OF INFORMATION. With respect to
information concerning North American, Seller, their assets, liabilities,
operations or business, or the transactions proposed by this Agreement that is
made available to Purchaser or its affiliates or assigns, Purchaser agrees that
in the event the transaction contemplated hereby does not close, it shall hold
such information in strict confidence, shall not make further use of such
information (any prior use having been limited to evaluating the transactions
proposed hereby) and shall not further disseminate or disclose any of such
information (any prior disclosure having been only to its directors, officers,
employees, shareholders, affiliates, agents and representatives who needed to
know such information for the sole purpose of evaluating the transaction
proposed hereby and each of whom were informed by Purchaser in writing to treat
such information confidentially) and shall not use (or permit any of its
directors, officers, employees, shareholders, affiliates, agents or
representatives to use) such information to the detriment of North American or
Seller, their directors, officers, employees or shareholders. If this Agreement
is terminated without consummation of a purchase transaction involving the
parties hereto, Purchaser shall immediately return all such information, all
copies thereof and all information prepared by Purchaser based upon the same,
upon North American's request. The above limitations on use, dissemination and
disclosure shall not apply to information that (i) is learned by Purchaser from
a third party entitled to disclose it; (ii) becomes known publicly other than
through Purchaser or any party who received the same through Purchaser; (iii) is
required by law or court order to be disclosed by Purchaser; or (iv) is
disclosed with the express prior written consent thereto of North American.
Purchaser shall undertake all reasonable steps to ensure that the secrecy and
confidentially of such information will be maintained in accordance with the
provisions of this Section 9.5.
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10. TAKING OF INVENTORY. Beginning Saturday, November 1, 1997, Seller
and Purchaser shall jointly take an inventory of the Assets consisting of the
items sellable in the ordinary course of business of the Business (including all
of the inventory subject to the inventory adjustment set forth in Section 2.1(d)
above, collectively, the "Inventory"), such inventory to be priced at Seller's
cost in accordance with the normal methods and practices of Seller. The parties
agree to use reasonable efforts to have the inventory count completed within two
business days after the Closing. Purchaser agrees to make the Leased Premises
and Purchaser's relevant employees reasonably available for such inventory
procedures. Each party shall pay its own cost incurred in connection therewith.
11. INTERVIEW OF EMPLOYEES. Beginning on the date of this Agreement,
Purchaser shall be permitted to interview the employees of Seller.
12. THE CLOSING. Seller and Purchaser hereby agree to consummate the
closing of the sale and purchase of the Assets (the "Closing") at the offices of
Xxxxx, Xxxxx & Xxxxxx, 0000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 (or
such other place as Purchaser and Seller so determine) at 10:00 a.m. on October
31, 1997 (the "Closing Date"). The effective time and date of the Closing shall
be the close of business on October 31, 1997 (the "Effective Date"). At the
Closing, the following shall occur:
12.1 DELIVERY OF PURCHASE PRICE. Purchaser shall deliver to
Seller's account a wire transfer in the amount of the estimated Purchase Price,
less the Deferred Portion, as contemplated by Section 2.2 above. In addition,
Purchaser shall deliver to North American, in the form of one or more cashier's
checks or other method of payment acceptable to North American, the amount of
$10,000 as consideration for entering into the Non-Competition Agreement
referred to in Section 12.4 hereof.
12.2 XXXX OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT. Seller
and Purchaser shall execute a Xxxx of Sale, Assignment and Assumption Agreement,
in the form attached hereto as EXHIBIT 12.2, (a) conveying good and marketable
title to the Assets to Purchaser free and clear of all liens, claims,
encumbrances and interests, (b) assigning to Purchaser all of Seller's rights in
the Assigned Contracts, and (c) effecting the assumption by Purchaser of the
Assigned Contracts, and the Assumed Obligations.
12.3 SUBLEASE AGREEMENT. North American and Purchaser shall
execute and deliver to each other the Sublease Agreement.
12.4 NON-COMPETITION AGREEMENT. North American and Seller shall
execute and deliver to Purchaser the Non-Competition Agreement in the form
attached hereto as EXHIBIT 8.3.
12.5 PROMISSORY NOTE AND GUARANTY AGREEMENT. Purchaser shall
deliver to Seller the executed Promissory Note in the form of EXHIBIT 7-1 and
the executed Guaranty Agreement in the form of EXHIBIT 7-2.
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12.6 RECORDS. To the extent not previously delivered to
Purchaser, Seller shall deliver to Purchaser the Books and Records; provided,
however, that Seller may retain a copy of the Books and Records, and Purchaser
agrees to provide, at the sole cost and expense of Seller, access to the Books
and Records after the Closing for any proper purpose. The parties acknowledge
that the Books and Records do not constitute all of the books and records that
may be relevant to Purchaser, and Seller agrees to provide, at the sole cost and
expense of Purchaser, access to such other books and records related to the
Business after the Closing for any proper purpose.
12.7 APPORTIONMENT. All ad valorem taxes shall be prorated
through the date of Closing, with such prorations based on tax rates and
assessments for the calendar year during which the Closing occurs unless such
rates and assessments are unavailable, in which event such prorations shall be
made based on the rates and assessments for the prior year. At the Closing,
Purchaser agrees to assume Seller's pro rated portion of the ad valorem taxes,
and Seller's share of ad valorem taxes shall be off set from the payments to be
made at the Closing.
13. DEFAULTS AND REMEDIES.
13.1 DEFAULT BY SELLER. If Seller fails to perform or abide by
any of the Seller's obligations or covenants set forth in this Agreement for any
reason other than (i) the termination of this Agreement by the Seller or the
Purchaser pursuant to any right to terminate expressly set forth in this
Agreement, or (ii) Purchaser's failure to perform Purchaser's obligations under
this Agreement, or if any of Sellers's representations or warranties set forth
in Section 3 hereof are materially inaccurate or materially untrue, then
Purchaser, as Purchaser's sole and exclusive remedy, shall have the right:
(a) To terminate this Agreement by giving written notice
thereof to Seller, and neither Purchaser nor Seller shall have any
further rights or obligations hereunder other than as provided in
Section 9.5 hereof; or
(b) To pursue all other remedies available in law or at
equity, including, without limitation, the right to enforce specific
performance of the obligations of Seller under this Agreement.
13.2 DEFAULT BY PURCHASER. If Purchaser fails to perform any of
Purchaser's obligations at the Closing for any reason other than (i) the
termination of this Agreement by Seller or Purchaser pursuant to any right to
terminate expressly set forth in this Agreement, or (ii) Seller's failure to
perform Seller's obligations under this Agreement, or if any of Purchaser's
representations or warranties set forth in Section 4 hereof are inaccurate or
materially untrue, then Seller, as Seller's sole and exclusive remedy, shall
have the right:
(a) To terminate this Agreement by giving written notice
thereof to Purchaser, and neither Purchaser nor Seller shall have any
further rights or obligations hereunder; or
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(b) To pursue all other remedies available in law or at
equity, including, without limitation, the right to enforce specific
performance of the obligations of Purchaser under this Agreement.
14. FURTHER ACTS. Each of Purchaser and Seller covenants and agrees
that, from time to time on and after the Closing Date, at the request and
expense of the other party, it will execute and deliver all consummatory bills
of sale, assignments and other documents that may reasonably be required to
confirm and assure Purchaser of its title and interest in the entirety of the
Assets and the completion of the other transactions contemplated hereby.
15. POSSESSION. At the Closing, Seller shall be obligated to deliver
to Purchaser at the Leased Premises all tangible items constituting the Assets.
16. EXPENSES AND COMMISSIONS. Each of Seller and Purchaser will pay
their own expenses incident to the transaction contemplated by this Agreement,
whether or not such transaction is consummated. Purchaser and Seller each
represent to the other that there are no agents or brokers entitled to a
commission in connection with this purchase and sale of the Assets. Seller
hereby agrees to pay all such commissions and to indemnify and hold harmless
Purchaser against any and all claims of any agent, broker, finder or similar
party claiming through Seller, and Purchaser hereby agrees to indemnify and hold
harmless Seller against any and all claims of any agent, broker, finder, or
other similar party claiming through Purchaser.
17. INDEMNIFICATION.
17.1 INDEMNIFICATION OF PURCHASER. Seller and North American,
jointly and severally, hereby agree to indemnify Purchaser against and agrees to
defend and hold Purchaser harmless from all fees, charges, fines, penalties,
losses, expenses, (including reasonable attorneys' fees and costs of
litigation), claims, demands, liabilities, causes of action and suits of any
nature whatsoever, arising out of (i) the ownership or operation of the Business
and the Assets prior to the Closing Date (other than with respect to the Assumed
Liabilities and any other obligation or liability expressly assumed by Purchaser
pursuant to this Agreement), including any claims made relating to products sold
by Seller prior to the Closing Date, even though the claims or the alleged
damages occurred on or after the Closing Date; (ii) any and all activities
related to Seller or the ownership or operation of the Business and the Assets
prior to the Closing Date; (iii) any debts, obligations or liabilities of the
Seller (including, but not limited to any state sales tax liability) that are
not specifically assumed by Purchaser in accordance with the terms hereof; (iv)
any breach or default in a representation, warranty or covenant made by Seller
herein or in any certificate or writing furnished pursuant hereto; and (v) any
liability or claim arising out of a transaction or undertaking by Seller in
violation of this Agreement. Upon notice to Seller of a valid claim by Purchaser
pursuant to this Section 17 and the failure of Seller to pay such valid claim
within thirty (30) days following such notice, Purchaser shall be permitted to
offset such claim against the Promissory Note; however, if it is ultimately
determined in a court of competent jurisdiction that Purchaser's claim was not
valid, Seller shall be entitled to interest on the offset portion and payment by
Purchaser of attorney's fees incurred by Seller in connection with any
litigation arising out of such offset.
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17.2 INDEMNIFICATION OF SELLER. Purchaser hereby agrees to
indemnify Seller against and agrees to defend and hold Seller harmless from all
fees, charges, fines, penalties, losses, expenses, (including reasonable
attorneys' fees and costs of litigation), claims, demands, liabilities, causes
of action and suits of any nature whatsoever, arising out of (i) the ownership
or operation of the Business and the Assets after the Closing Date; (ii) any and
all activities related to Purchaser or the ownership or operation of the
Business and the Assets after the Closing Date; (iii) any of the Assumed
Obligations; (iv) any breach or default in a representation, warranty or
covenant made by Purchaser herein or in any certificate or writing furnished
pursuant hereto; and (v) any liability or claim arising out of a transaction or
undertaking by Purchaser in violation of this Agreement.
18. MISCELLANEOUS.
18.1 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
given if personally delivered or mailed, first class, registered or certified
mail, postage prepaid to the following:
If to Seller, to: Xxx Xxxxxxxxxx, Chairman
North American Technologies Group, Inc.
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxx 00000
With a copy to: Xxxxxxxx X. Xxx, Attorney at Law
0000 Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
If to Purchaser, to: Xxxx Xxxxxxx
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
With a copy to: Xxxx X. Xxxxxx
Xxxxx, Xxxxx & Xxxxxx
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
or to such other address as shall be given in writing by any party to the
others. If sent by U. S. mail in accordance with this Section 18.1, such
notices shall be deemed given and received on the earlier to occur of (a) actual
receipt at the above specified address of the mailed addressee, or (b) the third
(3rd) business day after deposit with the U.S. Postal Service in the manner
herein provided. Notices delivered by any other means shall be deemed given and
received upon actual receipt of the above specified address of the addressee.
18.2 ASSIGNMENT. This Agreement may not be assigned by either
party without the prior written consent of the other. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, personal legal representatives, successors and permitted assigns.
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18.3 ENTIRE AGREEMENT. This Agreement (including the Exhibits and
Schedules attached hereto) is the entire agreement among the parties hereto
regarding the subject matter dealt with herein and supersedes all prior
agreements and understandings whether written or oral.
18.4 SCHEDULES AND EXHIBITS. All schedules and exhibits attached
to and referenced in this Agreement are incorporated in this Agreement and made
a part hereof.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties as of the date first set forth above.
NORTH AMERICAN:
--------------
NORTH AMERICAN TECHNOLOGIES
GROUP, INC.
By:_______________________________
Xxx Xxxxxxxxxx, President
SELLER:
-------
INDUSTRIAL PIPE FITTINGS, INC.
By:_______________________________
Xxx Xxxxxxxxxx, Executive Vice
President
PURCHASER:
---------
HOUSTON IPF, L.L.C.
By:_______________________________
Xxxx Xxxxxxx, President
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SCHEDULES AND EXHIBITS:
----------------------
Schedule 1.1(b) Seller Personal Property
---------------
Schedule 1.1(c) Accounts Receivable
---------------
Schedule 1.1(e) Assigned Contracts
---------------
Schedule 1.1(g) Intellectual Property
---------------
Schedule 1.1(i) Prepaid Items
---------------
Schedule 1.2 Assumed Obligations
------------
Schedule 1.4 Leased Premises
------------
Schedule 2.1(e) Accounts Constituting Additional Reserve
---------------
Schedule 2.2 September 30, 1997 Balance Sheet
------------
Schedule 2.4 Allocation of Purchase Price
------------
Schedule 3.4 Adequacy of Assets
------------
Schedule 3.9 Environmental Schedule
------------
Schedule 3.15 Litigation
-------------
Schedule 3.17 Agreements other than Assigned Contracts
-------------
Schedule 3.19 Employee Benefit Plans
-------------
Schedule 3.20 Worker's Compensation Claims
-------------
Schedule 6.2 Employees
------------
Exhibit 1.4 Sublease Agreement
-----------
Exhibit 7-1 Promissory Note
-----------
Exhibit 7-2 Guaranty Agreement
-----------
Exhibit 8.3 Non-Competition Agreement--North American and Seller
-----------
Exhibit 12.2 Xxxx of Sale, Assignment and Assumption Agreement
------------
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