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EXHIBIT 10.16
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT is entered into on this 24th day of
April, 1997, among Xxxxxxx X. Xxxxxx, Xxx X. Xxxxx, Xxxxxx X. Xxxxxxxxx, XX,
Xxxxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxxx Xxxxx and Xxxxxx Xxxxxxxxx, III
(collectively, the "Sellers" or the "Shareholders"), the holders of 100% of the
capital stock of Exell, Inc., a Texas corporation ("Exell"), and ITEQ, Inc., a
Delaware corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Exell is engaged in the business of manufacturing and
repairing heat exchangers and providing related products and services (the
"Business"); and
WHEREAS, Sellers are the general partners of Babel, Xxxxxx & Xxxxxxxxx
Partnership (the "Partnership"), the owner of certain real property and
improvements (the "Real Estate"), and as of the date hereof, the Partnership
and Buyer have entered into a Purchase and Sale Agreement (the "Real Estate
Contract") with respect to the acquisition by Buyer of the Real Estate; and
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to
purchase from Sellers, all of the issued and outstanding capital stock of Exell
on the terms and conditions herein set forth.
NOW, THEREFORE, for and in consideration of the premises, and the
mutual and dependent promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1 CERTAIN DEFINITIONS. As used in this Agreement, each
parenthetically capitalized term in the introduction, recitals and other
Sections of this Agreement has the meaning assigned to it, and other
capitalized terms have the meaning given them in Section 9.1.
1.2 PURCHASE AND SALE OF EXELL STOCK. Subject to the terms and
conditions of this Agreement, at the Closing, Sellers agree to sell and convey
to Buyer, free and clear of all Encumbrances, and Buyer agrees to purchase and
accept from Sellers, all of the Exell Shares, as hereinafter provided. In
consideration of the sale of the Exell Shares, Buyer shall pay to Sellers an
aggregate of __________ (the "Consideration") [$10,364,958, less the amount
allocated to purchase of Real Estate]. Subject to the terms of Sections 1.3
and 1.4 hereof, the Consideration shall be paid by wire transfer of
immediately available funds to the Sellers in the percentages set forth in
Schedule A hereto. Not less than one day prior to the Closing, Sellers shall
provide wire transfer instructions to Buyer.
1.3 POST-CLOSING ADJUSTMENT WITH RESPECT TO EXELL NET ASSETS.
(a) Preparation of Closing Balance Sheet. Not later than
60 days following the Closing Date, Buyer shall prepare and deliver to
the Shareholders for their review in accordance with this section a
balance sheet (the "Closing Balance Sheet") of Exell prepared as of
the Closing Date and
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prepared in accordance with generally accepted accounting principles
("GAAP") in a manner consistent with the financial statements
described in Section 2.6(a) hereof. All of the parties hereto shall
cooperate fully with each other in the preparation of the Closing
Balance Sheet, and the Shareholders shall have access at all
reasonable times to review workpapers, books and records relating to
the preparation of the Closing Balance Sheet.
(b) Right to Dispute Closing Balance Sheet. Any
Shareholder shall have the right to dispute the Closing Balance Sheet
by giving notice of dispute to Buyer within 30 days after the Closing
Balance Sheet has been given to that Shareholder. Such notice shall
set forth in detail the reasons for the dispute and the Shareholder's
proposed adjustments to the Closing Balance Sheet. If a Shareholder
does not give notice of dispute to Buyer within such 30 day period in
accordance with the foregoing, the Closing Balance Sheet as prepared
by Buyer shall become final and binding upon that Shareholder. If a
Shareholder does give notice of dispute to Buyer within such 30 day
period, Buyer and the Shareholder shall endeavor in good faith to
reach agreement on all of the disputed items. If the parties are
unable to reach an agreement on the disputed items during such 30 day
period, then the disputed items which have not been resolved shall be
submitted to the accounting firm of Coopers & Xxxxxxx or Price
Waterhouse, Houston, Texas (and if for any reason it is unwilling or
unable to serve, then another independent accounting firm mutually
agreed upon by the Shareholders and Buyer will serve) for
determination and resolution on the basis of such procedures as such
accounting firm, in its sole judgement, deems applicable and
appropriate, taking into account GAAP and the terms of this Agreement.
Such accounting firm shall review the disputed matters and as promptly
as practicable deliver to Buyer and to the Shareholder a statement
setting forth its determination as to the proper treatment of the
matters in dispute, and such determination shall be final and binding
upon that Shareholder and Buyer without any further right of appeal;
provided, however, neither such determination nor any other provisions
of this Section 1.3 shall affect Buyer's right to seek indemnification
for any breaches of representations and warranties by Sellers pursuant
to Article 7 hereof. In the event all Shareholders give notices of
disputed items and those notices are in any way in conflict or
inconsistent with each other as to any disputed item, then such items
shall not be considered as disputed hereunder unless the Shareholders
resolve the conflict or inconsistency between themselves and give a
new notice to Buyer with respect to that item. All charges of such
accounting firm and other expenses directly incurred in making such
determination shall be borne equally by Buyer and the Shareholders.
The Shareholders shall determine among themselves how the charges of
such accounting firm shall be borne.
(c) Adjustment of Consideration. In the event that
Exell's tangible assets net of liabilities ("Net Assets") as shown on
the Closing Balance Sheet, as finally prepared and binding upon the
parties in accordance with Sections 1.3(a) and (b) is less than
$2,750,000, then Buyer shall have the right to give notice thereof to
the Shareholders, whereupon the Shareholders shall have 10 days to
refund to Buyer a cash amount equal to the amount by which $2,750,000
exceeds the amount of the Net Assets as shown on the Closing Balance
Sheet. In order to secure the Shareholders' obligations under this
Section 1.3, at Closing Buyer shall withhold $200,000 of the
Consideration. In the event of a post-closing adjustment hereunder,
the Shareholders may elect to have any amount owed to Buyer applied
from such withholding by written notice to Buyer. Any balance
remaining of the withheld amount shall be immediately paid over to the
Shareholders upon final resolution of the post-closing adjustment,
together with interest on the balance at a rate of 10% per annum. The
withholding described herein is not the exclusive remedy or security
of Buyer with respect to satisfaction by the Shareholders of the
post-closing adjustment; the Shareholders agree that they
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shall be jointly and severally liable for all amounts owed to Buyer
under this section, including any amounts in excess of those withheld
hereunder.
1.4 ESCROW AGREEMENT. At the Closing, Buyer shall deposit the
amount of $500,000 of the Consideration in an interest-bearing account with
Xxxxxxxx Xxxxxxxxx Xxxxx Xxxxx & Co., Beaumont, Texas, as escrow agent, in
order to secure the indemnification obligation of Sellers contained in Article
7 hereof. The form of escrow agreement (the "Escrow Agreement") shall be
mutually agreed upon by the parties prior to Closing, which shall provide that
in the event there are no unresolved claims for indemnification by Buyer upon
the expiration of one year from the Closing Date, the escrowed funds shall be
distributed to Sellers.
1.5 PAYMENT OF CERTAIN OBLIGATIONS. On or prior to the Closing
Date, Sellers shall cause Exell to pay and discharge the indebtedness for
borrowed money of Exell as set forth on Schedule B, and Sellers shall cause
Exell to be released from any liens granted to secure such indebtedness.
1.6 CLOSING. Consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Xxxxxx &
Xxxxxx, L.L.P., 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, on or
prior to June 30, 1997, or at such other time and place as all parties hereto
may mutually agree in writing. The date upon which the Closing occurs is
referred to herein as the "Closing Date."
1.7 CLOSING DELIVERIES. At the Closing, (a) Sellers shall deliver
to Buyer duly and validly issued certificates representing all the Exell
Shares, each such certificate to be duly endorsed in blank and in good form for
transfer, or accompanied by stock powers duly executed in blank, sufficient and
in good form to properly transfer such shares to Buyer as set forth in Section
1.2, (b) Buyer shall deliver the Consideration to Sellers (subject to the
provisions of Section 1.3), and (c) Sellers and Buyer shall deliver to one
another all other documents, instruments and agreements required under this
Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF SELLERS
Sellers jointly and severally represent and warrant to Buyer that the
following representations and warranties are true and correct as of the date
hereof, except with respect to representations and warranties which are made
with reference to another specific date and except as otherwise described in
the Disclosure Schedule by reference to the applicable section of this Article
2. The Disclosure Schedule shall be delivered by Sellers to Buyer within 20
days of the date hereof. Sellers acknowledge that Buyer may reject any
disclosure contained therein for any reason within 30 days after receipt
thereof, and unless the parties agree in writing on the contents of the
Disclosure Schedule within 15 days after the expiration of such 30 day period,
Buyer shall have the right to terminate this Agreement as provided in Article
6. If Buyer does not reject the Disclosure Schedule during such 30-day period,
Buyer's right to terminate pursuant to Section 6(c) shall cease, and Buyer
shall be deemed to have approved the Disclosure Schedule.
2.1 ORGANIZATION. Exell is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Texas. Exell has
all necessary corporate power and authority to own, operate, and lease its
properties and to carry on its business as now owned or leased and operated by
it. Exell is qualified to do business under the laws of any jurisdiction in
which such qualification is required. Exell does
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not own, directly or indirectly, any interest or investment (whether debt or
equity) in any other Person. True, correct and complete copies of the charter
documents, and the bylaws of Exell, as amended, will be attached as Exhibit 2.1
to the Disclosure Schedule.
2.2 AUTHORITY AND CONSENT. Sellers have the requisite power and
authority to enter into, and perform their obligations under this Agreement,
and no approval or consent of any Person is necessary in connection therewith.
This Agreement, together with all other agreements, documents and instruments
executed in connection herewith by Sellers constitute valid and legally-binding
obligations of Sellers, and are enforceable against Sellers in accordance with
their terms, subject to bankruptcy, receivership, insolvency, reorganization,
moratorium or other similar laws affecting or relating to creditors' rights
generally and subject to general principles of equity.
2.3 NO VIOLATIONS OR CONFLICTS. Neither the execution and
delivery of this Agreement by Sellers nor the performance by Sellers of their
obligations hereunder will (a) violate or conflict with any provision of the
charter documents, or bylaws, as amended, of Exell; (b) violate or conflict
with any provision of any Laws applicable to Exell or its business or assets;
(c) result in a breach of, or constitute a default (or with notice or lapse of
time or both result in a breach of or constitute a default) under or otherwise
give any Person the right to terminate or accelerate payment under or
performance of any note, bond, loan agreement, contract, lease, license,
franchise, permit, or other agreement or instrument to which Sellers or Exell
is a party or to which any of their respective assets are subject; or (d)
result in, or require the creation or imposition of any Encumbrance of any
nature upon or with respect to any of the assets of Sellers or Exell.
2.4 CAPITALIZATION OF EXELL. The authorized capital stock of
Exell consists of 500,000 shares of common stock, $1.00 par value per share,
67,500 of which are issued and outstanding, and none of which are held as
treasury shares. All the Exell Shares are validly issued, fully paid and
non-assessable and are owned beneficially and of record by Sellers. No shares
of Exell Stock have been issued in violation of Exell's charter documents or
bylaws, or the preemptive rights of any Person. There are no outstanding
subscriptions, options, rights, warrants, calls, preemptive rights, convertible
securities, or other agreements or commitments of any kind obligating Sellers
or Exell to sell, convey, issue, exchange, transfer from treasury, or otherwise
dispose of, any additional shares of any class of Exell's capital stock, or any
other equity or debt security of Exell.
2.5 TITLE TO EXELL SHARES. Sellers hold good and valid title to
all of the Exell Shares, free and clear of all Encumbrances. Sellers possess
full authority and legal right to sell, transfer and assign to Buyer the Exell
Shares, free and clear of all Encumbrances. Upon transfer to Buyer by Sellers
of the Exell Shares, Buyer will own the Exell Shares free and clear of all
Encumbrances. There are no Claims pending or, to Sellers' knowledge,
threatened against Exell or Sellers that concern or affect title to any of
Exell's capital stock, or that seek to compel the issuance of capital stock or
other securities of Exell.
2.6 FINANCIAL INFORMATION.
(a) Attached as Section 2.6 of the Disclosure Schedule
will be a true and correct copy of the balance sheets and related
statements of income and changes in stockholders equity for Exell,
which have been compiled by Xxxxxxxx Xxxxxxxxx Xxxxx Xxxxx & Co., as
of and for each of the periods ended September 30, 1995 and 1996 (the
"Annual Statements"), and the unaudited balance sheet and related
statement of income as of and for March 31, 1997 (the "1997
Statement," and
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together with the Annual Statements collectively referred to as the
"Financial Information"). The Financial Information (a) is true,
correct and complete and fairly presents the financial position of
Exell as of and for the periods indicated and (b) has been prepared in
accordance with GAAP applied on a basis consistent with prior periods.
Since December 31, 1996, Exell has not changed any significant
accounting method or practice.
(b) Exell's accounts receivable as reflected in the 1997
Statement or which have been thereafter acquired by Exell are valid
and existing, represent invoices due for goods sold and delivered or
services rendered, have been collected or are fully collectible within
90 days of the respective invoice date without resort to legal
proceedings, and are not subject to any refunds or other adjustments,
defenses, rights of setoff, assignments, Encumbrances, or conditions
enforceable by third parties, except to the extent reserved against in
the 1997 Statement.
(c) Exell's inventories reflected in the 1997 Statement,
or which thereafter have been acquired by Exell, consist of items of a
quality and quantity usable and salable in the normal course of its
business, except to the extent reserved against in the 1997 Statement.
2.7 LIABILITIES. Exell has no liabilities or obligations, whether
absolute, accrued, contingent or otherwise, except (a) as reflected or reserved
against in the 1997 Statement, (b) obligations to perform services or deliver
goods in the ordinary course of business that are not delinquent, (c)
obligations or liabilities incurred in accordance with the terms of this
Agreement after the date of the 1997 Statement and prior to the Closing Date,
(d) warranty claims not inconsistent with Exell's prior operating experience,
and (e) as disclosed in the Disclosure Schedule or any such other liabilities
or obligations not exceeding $5,000 individually or $25,000 in the aggregate.
2.8 DEFAULTS. Exell is not in default under, or in breach or
violation of, and no event has occurred which, with notice or lapse of time or
action by a third party, could reasonably be expected to result in a default
under, breach or violation of, or conflict with: (a) Exell's charter
documents, or bylaws, as amended; (b) any lease, license, permit, Encumbrance,
or other agreement or instrument to which Exell is a party, or to which any of
its assets is subject; or (c) any Laws applicable to Exell or its business or
assets, including, without limitation, Business Laws and Laws respecting labor,
employment and employment practices. Exell has all permits, certificates,
licenses, approvals and other authorizations required in connection with the
operation of its business.
2.9 LITIGATION. There is no lawsuit, action, arbitration,
mediation, administrative proceeding, investigation by a Governmental
Authority, or other legal proceeding pending or, to the knowledge of Sellers,
threatened against Exell. Exell is not subject to any court order, writ,
injunction, court decree, settlement agreement or judgment.
2.10 ADDITIONAL INFORMATION. Section 2.10 of the Disclosure
Schedule will set forth a true, complete and correct list and/or summary of the
following items:
(a) Real Property. A legal description of all real
property owned in fee or leased by Exell or for which it has an option
to purchase, and includes, with respect to each property whether such
property is owned or leased and, a description of each Encumbrance to
which such property is subject (excluding Permitted Encumbrances);
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(b) Vehicles, Equipment and Machinery. All vehicles,
tractors, trailers, material equipment and machinery owned by Exell,
indicating whether such item is owned or leased, and if leased, the
name of the lessor;
(c) Intellectual Property. All patents, trademarks,
service marks, copyrights and other intellectual property rights, and
applications therefor or registrations thereof, wherever issued or
pending; and all trade names used by Exell, and with respect to each
of the foregoing, whether is same owned, licensed or used by Exell;
(d) Licenses and Permits. All governmental licenses,
governmental permits, and similar rights held by Exell and relating to
Exell's business;
(e) Material Contracts. All material contracts to which
Exell is a party, by which it is bound or to which its assets or
properties are subject, and any other single contract pursuant to
which any party thereto is obligated to make payments after the date
of this Agreement aggregating more than $10,000, whether or not any of
the foregoing were made in the ordinary course of business
(collectively "MATERIAL CONTRACTS");
(f) Employee Agreements. Any collective bargaining
agreements of Exell with any labor union or other representative of
employees, including amendments, supplements, and all employment and
consulting agreements of Exell, specifically identifying any
arrangement which cannot be terminated on notice of 30 or fewer days
without liability to Exell or that entitles the beneficiary thereof to
receive any salary continuation or severance payment or retain any
position with Exell;
(g) Receivables. All accounts, notes and contracts
receivables of Exell in a 30, 60, 90 and over 90 day aged receivables
format as of March 31, 1997;
(h) Payables. All accounts and notes payable by Exell in
a 30, 60, 90 and over 90 day aged payables format as of March 31,
1997;
(i) Indebtedness. All indebtedness for borrowed money
owed by Exell or to which any of its assets are subject, and
specifying all assets collateralizing such indebtedness;
(j) Guaranties. All indebtedness, liabilities and
commitments of others and as to which Exell is a guarantor, endorser,
co-maker, surety, or accommodation maker, or is contingently liable
therefor (excluding liabilities as an endorser of checks and the like
in the ordinary course of business) and all letters of credit, whether
stand-by or documentary, issued by any third party;
(k) Insurance. All insurance policies or bonds carried
by Exell or for its benefit or the benefit of its employees,
including, without limitation, property, casualty, liability, workers
compensation and auto policies;
(l) Personnel. A corporate organizational chart and the
name, current salary, current bonus arrangements, last bonus date and
amount, and any other compensation arrangements with Exell (excluding
employee insurance and benefit plans described pursuant to Section
2.12(k)), of each employee of Exell;
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(m) Employee Plans. All bonus, incentive compensation,
deferred compensation, profit-sharing, retirement, pension, welfare,
group insurance, death benefit, or other fringe benefit plans,
arrangements or trust agreements of Exell together with copies of the
most recent reports with respect to such plans, arrangements, or trust
agreements filed with any Governmental Authority; and
(n) Bank Accounts. The name, address and contact person
of each bank or other financial institution in which Exell has an
account or safe deposit box, the account number, account name and type
of account, the names of all persons authorized to draw thereon or
have access thereto.
2.11 TITLE TO AND QUIET POSSESSION OF ASSETS. Exell has good and
valid title to all of its respective assets and interests in assets, whether
real, personal, mixed, tangible or intangible, that are disclosed herein, are
reflected in the 1997 Statement, or that are acquired after March 31, 1997,
except for inventory items sold or consumed in the ordinary course of business
after March 31, 1997. All such assets are free and clear of all Encumbrances
other than Permitted Encumbrances. Without limiting the generality of the
foregoing, Exell has the exclusive right, title and interest in and to any
trademarks, service marks, trade names, and copyrights currently used, and the
continued use of any logo, trade name, license, or other intangible by Exell
does not and will not violate or infringe upon the rights of any third party.
2.12 CONDITION OF ASSETS.
(a) Exell's buildings, premises, fixtures, vehicles, and
material equipment and machinery are in a condition satisfactory to
continue to operate Exell's business in the manner conducted prior to
the Closing. There is no change in the zoning or building ordinances
directly affecting the real property or leasehold interests of Exell,
pending or, to the knowledge of Sellers, threatened.
(b) All material contracts, leases, plans or other
arrangements to which Exell is a party, by which it is bound or to
which it or its assets are subject are in full force and effect, and
constitute valid and binding obligations of Exell. Exell is not, and
to the knowledge of Sellers, no other party to any such material
contract, lease, plan or other arrangement is in default thereunder,
and no event has occurred which (with or without notice, lapse of
time, or the happening of any other event) would constitute a default
thereunder. Sellers have received no information which would cause
Sellers to conclude that any customer of Exell will (or is likely to)
cease doing business with Exell as a result of the consummation of the
transactions contemplated hereby.
2.13 ENVIRONMENTAL MATTERS. With respect to Exell's use, operation
or ownership of property used, owned or leased by it (the "Property"), (a) all
handling, manufacture, processing, distribution, use, treatment, storage,
transport and disposal of Hazardous Substances and non-hazardous waste has been
conducted in accordance with applicable Environmental Laws; (b) all emissions,
discharges or releases into the environment of Hazardous Substances have either
been made in accordance with applicable Environmental Laws, including without
limitation all permits, licenses, exemptions, variances and other
authorizations thereunder, or have been reported to the appropriate
Governmental Authority in accordance with applicable Environmental Laws, and
the Disclosure Schedule will set forth a list of all such written reported
releases; (c) there are not underground storage tanks on any Property; (d) all
permits, licenses, exemptions, variances and other authorizations required
under applicable Environmental Laws for the use of the Property and the
operation of the business thereon have been obtained, are being complied with,
and
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all fees and assessments in association therewith have been timely paid and, to
the knowledge of Sellers, no additional permits or licenses are or will be
required by Exell to continue the operation of its business; and (e) with
respect to the disposal of any Hazardous Substance generated on, or removed
from, any Property, neither the Sellers nor Exell have received notice of an
administrative proceeding, violation, citation, administrative or consent
order, lawsuit, action, claim, demand, or decree which allege any violation of
any applicable Environmental Law, and have no knowledge that such disposal or
removal has been conducted without compliance with any applicable Environmental
Law.
2.14 TAXES.
(a) Proper and accurate federal, state and local income,
sales, use, franchise, gross revenue, turnover, excise, payroll,
property, employment, customs duties and any and all other tax
returns, reports, and estimates have been filed with appropriate
governmental agencies, domestic and foreign, by Exell for each period
for which any returns, reports, or estimates were due. All taxes
shown by such returns to be payable have been paid. All sales taxes
have been properly collected and accounted for through the date hereof
by Exell, and Exell has made all required deposits of such taxes with
all taxing authorities. The tax provision reflected in Exell's
financial statements as of March 31, 1997 is adequate to cover
liabilities of Exell at the date thereof for all taxes of any
character whatsoever applicable to Exell or its assets or business.
No waiver of any statute of limitations executed by Exell with respect
to federal or state income or other tax is in effect for any period.
(b) No deficiencies for any taxes have been proposed,
asserted or assessed against Exell and no requests or waivers of the
time to assess any such tax are pending. Except as set forth on in
the Disclosure Schedule, the federal and state income tax returns of
Exell have never been audited by the Internal Revenue Service or state
income tax authority. No audit of any federal or state or other tax
return of Exell is presently in process nor has an appointment for or
notice of any such audit been requested or given by any taxing
authority.
2.15 COMPLIANCE WITH ERISA. Each benefit plan set forth in the
Disclosure Schedule (the "Benefit Plans") complies currently, and has complied
in the past, in form and operation, with the applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the
Internal Revenue Code of 1986, as amended (the "Code"), and other applicable
laws. All contributions required to be made to each Benefit Plan under the
terms of such Benefit Plans, ERISA or other applicable laws have been timely
made.
(a) Prohibited Transactions. Exell has not engaged in a
transaction in connection with which it could be subject (either
directly or indirectly) to a material liability for either a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed
by Section 4975 of the Code.
(b) Plan Termination; Material Liabilities. There has
been no termination of an "employee pension benefit plan" as defined
in ERISA which is subject to Title IV of ERISA (a "Statutory Plan") or
trust created under any Statutory Plan that would give rise to a
material liability to the Pension Benefit Guaranty Corporation
("PBGC") on the part of Exell. All Statutory Plans intended to be
tax-qualified under Section 401(a) or 403(a) of the Code have complied
in the past, both in form and operation, with every provision of the
Code, regulation promulgated pursuant thereto, and every ruling,
notice or announcement issued by the Internal Revenue Service
necessary
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to maintain the qualified status of such Statutory Plans. No material
liability to the PBGC has been or is expected to be incurred with
respect to any Statutory Plan. The PBGC has not instituted
proceedings to terminate any Statutory Plan. There exists no
condition or set of circumstances that presents a material risk of
termination or partial termination of any Statutory Plan by the PBGC.
(c) Accumulated Funding Deficiency. Full payment has
been made of all amounts that are required under the terms of each
Statutory Plan, ERISA or other applicable laws to have been paid as
contributions to such Statutory Plan as of March 31, 1995, and no
accumulated funding deficiency (as defined in Section 302 of ERISA and
Section 412 of the Code), whether or not waived, exists with respect
to any Statutory Plan.
(d) Relationship of Benefits to Pension Plan Assets. The
current value of all accrued benefits, both vested and unvested, under
all Statutory Plans does not exceed the current value of the assets of
such Statutory Plans allocable to such accrued benefits, except as
disclosed in the Financial Information. For purposes of the
representation in this paragraph, the term "current value" has the
meaning specified in Section 4062(b)(1)(A) of ERISA, the term "accrued
benefit" has the meaning specified in Section 3 of ERISA and "current
value" is based on the same actuarial assumptions used by Exell for
funding.
(e) Execution of Agreements. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby will not involve any transaction that is subject
to the prohibitions of Section 406 of ERISA or in connection with
which a tax could be imposed pursuant to Section 4975 of the Code.
(f) Fiduciary Liability. There have been no acts,
failures to act, omissions or transactions involving a Statutory Plan
or the assets thereof that could result in imposition on Exell
(whether direct or indirect) of damages or liability in actions
brought under Section 502 or Sections 404 through 409 of ERISA.
(g) Pending Claims. There are no claims, pending or
overtly threatened, involving any of the Benefit Plans by any current
or former employee (or beneficiary thereof) of Exell that allege any
violation of ERISA or the terms of the Benefit Plans, nor is there any
reasonable basis to anticipate any claims involving such Benefit Plans
that would likely be successfully maintained against Exell.
(h) Multiemployer Plans. Neither Exell nor any trade or
business (whether or not incorporated) which, together with Exell,
would be deemed to be a "single employer" within the meaning of
Section 4001(b) of ERISA or Subsections 414(b), (c), (m) or (o) of the
Code sponsors, maintains, or contributes to, or has at any time in the
six-year period preceding the date of this Agreement sponsored,
maintained or contributed to, any plan (not exempt from the provisions
of ERISA), including, but not limited to, any plan which is a
"multiemployer plan" as such term is defined in Section 3(37) or
4001(a)(3) of ERISA.
(i) No Reportable Event. There has been no "reportable
event" (within the meaning of Section 4043(b) of ERISA with respect to
a Statutory Plan) or any "prohibited transaction" (as such term is
defined in Section 406 of ERISA and Section 4975(c) of the Code) with
respect to any
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of the Employee Plans. All reporting and disclosure requirements
under Title I of ERISA have been met.
2.16 BROKERS. Neither Sellers nor Exell nor any of their
respective Affiliates have employed any broker, agent or finder, or incurred
any liability for any brokerage fees, agent's fees, commissions or finder's
fees in connection with the transactions contemplated by this Agreement.
2.17 UNTRUE STATEMENTS. This Agreement, the agreements and
instruments to be entered into in connection herewith and the Disclosure
Schedule furnished by Sellers do not include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements made
herein and therein not misleading in any material respect.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Sellers that as of the date
hereof and the Closing Date:
3.1 ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, and has all the
necessary powers to own its business as now owned and operated by it.
3.2 AUTHORITY. Buyer has the requisite power and authority to
enter into and perform its obligations under this Agreement, and except as
otherwise provided herein, no approval or consent of any Person is necessary in
connection therewith. This Agreement, together with all other agreements,
documents, certificates and instruments executed by Buyer in connection
herewith, constitute valid and legally-binding obligations of Buyer, and are
enforceable against Buyer in accordance with their terms, subject to
bankruptcy, receivership, insolvency, reorganization, moratorium or other
similar Laws affecting or relating to creditors' rights generally and subject
to general principles of equity.
3.3 NO VIOLATIONS OR CONFLICTS. Neither the execution and
delivery of this Agreement by Buyer nor the performance by Buyer of its
obligations hereunder will: (a) violate or conflict with any provision of the
charter documents, or bylaws, as amended, of Buyer; (b) violate or conflict
with any provision of any Laws applicable to Buyer, or its businesses or
assets; (c) except as otherwise provided herein, result in a breach of, or
constitute a default (or with notice or lapse of time or both result in a
breach of or constitute a default) under or otherwise give any Person the right
to terminate or accelerate payment under or performance of any note, bond, loan
agreement, contract, lease, license, franchise, permit, or other agreement or
instrument to which Buyer is a party or to which any of its assets are subject;
or (d) result in, or require the creation or imposition of any Encumbrance of
any nature upon or with respect to any of the assets of Buyer.
3.4 BROKERS. Neither Buyer nor any of its respective Affiliates
have employed any broker, agent, or finder, or incurred any liability for any
brokerage fees, agent's fees, commissions or finder's fees in connection with
the transactions contemplated herein.
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ARTICLE 4
OBLIGATIONS PENDING CLOSING
From the date hereof through the Closing or earlier termination of
this Agreement pursuant to ARTICLE 6:
4.1 INSPECTION OF EXELL. Buyer and its respective officers,
attorneys, accountants and authorized representatives shall have the right,
during normal business hours, to inspect Exell's properties, books and records,
and to consult with Exell's officers, directors, employees, suppliers,
customers, lenders, agents and attorneys concerning the ownership and operation
of Exell. Such inspections may reasonably include, for example, environmental
and other physical inspections of Exell's properties; review of Exell's books,
records of account and tax records; and a review of records of corporate
proceedings, contracts, trademarks, licenses, permits, and other business
activities and matters in which Buyer may have an interest in light of the
transactions contemplated by this Agreement. Buyer agrees to maintain all
information it learns from such inspections and consultations in confidence and
will not disclose such information except to its officers, directors,
employees, bankers, investors, attorneys, accountants and other authorized
representatives unless such information is or becomes public knowledge through
no fault of Buyer and prior to Closing will not use such information except in
connection with this Agreement. In the event that the transaction contemplated
hereby is not consummated, Buyer shall return all materials obtained in its due
diligence investigation without retaining any copies of such materials.
4.2 ACQUISITION PROPOSALS. Sellers shall not, and shall not
permit Exell, any of Sellers' Affiliates or any of their respective officers,
directors or representatives to directly or indirectly (i) solicit, initiate or
encourage any inquiries or Acquisition Proposals from any Person or (ii)
participate in any discussions or negotiations regarding, furnish to any person
other than Buyer or its representatives any information with respect to, or
otherwise assist, facilitate or encourage any Acquisition Proposal by any other
Person. "Acquisition Proposal" means any proposal for a merger, consolidation
or other business combination involving Exell or the Business or for the
acquisition or purchase of any equity interest in, or a material portion of the
assets of, Exell or the Business. Sellers shall promptly communicate to Buyer
the terms of any such Acquisition Proposals which it may receive or any
inquiries made to it or its directors, officers, representatives or agents.
4.3 ADDITIONAL AGREEMENTS OF SELLERS. Sellers agree that from the
date hereof until the Closing Date, Sellers will cause Exell to:
(a) Maintenance of Present Business. Except as
contemplated by this Agreement or set forth on the Disclosure
Schedule, operate its business only in the usual, regular, and
ordinary manner so as to maintain the goodwill it now enjoys and, to
the extent consistent with such operation, preserve intact its present
business organization, keep available the services of its present
officers and employees, and preserve its relationship with customers,
suppliers, jobbers, distributors and others having business dealings
with it;
(b) Maintenance of Properties. At its expense, maintain
all of its material properties and assets in customary repair, order
and condition, reasonable wear and use excepted;
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(c) Maintenance of Books and Records. Maintain its books
of account and records in the usual, regular, and ordinary manner, in
accordance with its customary accounting principles applied on a
consistent basis;
(d) Compliance with Law. Comply with all Laws applicable
to, and having a material effect on, it and to the conduct of its
business;
(e) Prohibition of Certain Contracts. Except as set
forth on the Disclosure Schedule and for orders made and contracts
entered into in the ordinary course of business, not enter into any
contracts which involve the payment of more than $25,000 each;
(f) Prohibition of Loans. Except with respect to
borrowings in the ordinary course of business under its revolving
credit facility not exceeding $1,000,000, not incur any obligations
for borrowed money, except for loans in the usual and ordinary course
of business;
(g) Prohibition of Certain Commitments. Except as set
forth on the Disclosure Schedule (which shall include a list of
planned capital expenditures) and for orders made and contracts
entered into in the ordinary course of business, not enter into a
commitment for expenditures or incur any liability exceeding $100,000
in the aggregate;
(h) Disposal of Assets. Except for the assignment of
term life insurance policies as described in the Disclosure Schedule
and except as otherwise set forth in the Disclosure Schedule, not
sell, dispose of, or encumber any property or assets having a value in
excess of $50,000 in the aggregate, except in the usual and ordinary
course of business;
(i) Maintenance of Insurance. Maintain insurance upon
all its properties and with respect to the conduct of its business of
such kinds and in such amounts as is not less than that presently
carried by it, which is adequate for the business operated by Exell,
which insurance may be added to from time to time in its discretion;
(j) No Amendment to Charter Documents and Related
Matters. Not amend its charter documents, or merge or consolidate
with or into any Person, change in any manner the rights of its
capital stock or the character of its business;
(k) No Issuance, Sale, or Purchase of Securities. Not
issue or sell, or issue options or rights to subscribe to, or enter
into any contract or commitment to issue or sell (upon conversion or
otherwise), any shares of its capital stock, or subdivide or in any
way reclassify any shares of its capital stock, or acquire, or agree
to acquire, any shares of its capital stock;
(l) Prohibition on Dividends. Not declare any dividend
which is payable after Closing on shares of its capital stock or make
any other non-cash distribution of assets to the holders thereof; and
(m) Employment Matters. Except as set forth on the
Disclosure Schedule, not (i) increase its compensation expense for
officers, directors, employees and consultants from the level of such
expense on the date hereof, (ii) hire or employ any additional
management personnel, without the consent of the Buyer, or (iii) enter
into any severance arrangement with any officer,
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director, employee or consultant; provided, the foregoing shall not
prohibit Exell from repaying indebtedness owed to Sellers as of
December 31, 1996, in the amount of $450,000.
4.4 H-S-R ACT COMPLIANCE. Each of Buyer and Sellers shall file,
within 20 days after the date of this Agreement, such materials as are required
under the H-S-R Act and shall (a) cooperate with the other party to the extent
necessary to assist the other party in the preparation of such filings, and (b)
request early termination of the waiting period required by the H-S-R Act.
4.5 ENVIRONMENTAL INVESTIGATION. Prior to the Closing Date, at
the equally shared cost of Buyer and Sellers, the parties shall engage a
mutually acceptable environmental auditing firm to conduct an investigation and
study of the real property upon which the operations of Exell are conducted
(herein, a "Phase I Investigation"). If, as a result of the Phase I
Investigation, the engaged firm shall recommend further investigation, the
parties will similarly cause to be conducted such additional environmental
analysis, which may include such work as is typically involved in a Phase II
Investigation. If the recommended remedial work (a) exceeds an estimated
$300,000, then either Buyer or Sellers shall have the right to terminate this
Agreement, (b) is greater than an estimated $150,000 but less than $300,000,
then Buyer shall have the option of (i) terminating this Agreement or (ii)
notifying Sellers that the remedial work shall be completed with the first
$150,000 of expense being paid by Sellers, with any additional cost being borne
by Buyer, or (c) is less than an estimated $150,000, then Sellers shall cause
the remedial work to be completed at their expense.
ARTICLE 5
CONDITIONS
5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. The obligations
of Buyer to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of the following conditions, or to the waiver
thereof by Buyer in the manner contemplated by Section 6.2 at or before the
Closing:
(a) Representations and Warranties of Sellers True on
Closing Date. The representations and warranties of Sellers herein
contained shall be true as of and at the Closing Date in all material
respects with the same effect as though made at such date, except as
affected by transactions permitted or contemplated by this Agreement;
no event or events shall have occurred since the date hereof which,
individually or in the aggregate, will have a material adverse effect
upon the financial condition or results of operations of Exell;
Sellers shall have performed and complied in all material respects
with all covenants required by this Agreement to be performed or
complied with by Sellers before the Closing Date; and Sellers shall
have delivered to Buyer a certificate, dated the Closing Date, to such
effects;
(b) Certificates of Public Officials. Sellers shall have
delivered to Buyer certificates of existence and good standing of a
recent date with respect to Exell in each jurisdiction where such
company owns property or conducts operations;
(c) No Litigation. No suit, action, or other proceeding
brought by any Person shall be pending or threatened in which it will
be, or it is, sought to restrain or prohibit or to obtain damages or
other relief in connection with this Agreement or the consummation of
the transactions
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contemplated hereby or which could reasonably be expected to result in
a material adverse effect on the financial condition or results of
operations of Exell.;
(d) Opinion of Sellers' Counsel. Buyer shall have
received a favorable opinion, dated as of the Closing Date, from
Xxxxxx, Xxxx & Xxxxxx, L.L.P., counsel for the Sellers, in form and
substance reasonably acceptable to Buyer;
(e) Tender of Stock. Sellers shall have delivered to
Buyer all certificates or other documents or instruments representing
all of the Exell Shares, duly endorsed for transfer or accompanied by
duly executed stock powers, free and clear of any Encumbrance;
(f) Resignations. All directors and officers of Exell
shall have tendered their written resignations as such effective upon
the Closing;
(g) Financing. Buyer shall have obtained financing to
fund the payment of the Consideration on the Closing Date;
(h) Real Property Transaction. Buyer and the Partnership
shall have concurrently closed the Real Property Contract;
(i) H-S-R Compliance. The waiting period (and any
extension thereof) under the H-S-R Act applicable to the transactions
contemplated hereby shall have expired or been terminated;
(j) Consents and Approvals. Sellers shall have provided
any consents or approvals from third parties (including Governmental
Authorities) which are required in order to consummate the
transactions contemplated hereby, and Buyer shall have obtained the
consent of its senior and subordinated debt lenders with respect to
the transactions contemplated by this Agreement;
(k) Repayment of Debt. Exell shall have satisfied the
provisions of Section 1.5 hereof;
(l) Escrow Agreement. The parties shall have entered
into the Escrow Agreement described in Section 1.4 hereof; and
(m) Other. All other items required to be delivered
hereunder or as may be reasonably requested by Buyer to facilitate the
Closing, in form and substance reasonably satisfactory to Buyer and
its financing sources.
5.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS. The
obligations of Sellers to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction of the following conditions, or
to the waiver thereof by Sellers in the manner contemplated by Section 6.2 at
or before the Closing:
(a) Representations and Warranties of Buyer True on
Closing Date. The representations and warranties of Buyer herein
contained shall be true as of and at the Closing Date in all material
respects with the same effect as though made at such date, except as
affected by transactions permitted or contemplated by this Agreement;
Buyer shall have performed and complied in all material respects with
all covenants required by this Agreement to be performed or
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complied with by it before the Closing Date; and Buyer shall have
delivered to the Sellers a certificate, dated the Closing Date and
signed by a duly authorized officer of Buyer, to both such effects;
(b) Tender of Consideration. On the Closing Date, Buyer
shall have tendered to the Sellers the Consideration, subject to the
provisions of Section 1.3 hereof;
(c) H-S-R Compliance. The waiting period (and any
extension thereof) under the H-S-R Act applicable to the transactions
contemplated hereby shall have expired or been terminated;
(d) Consents and Approvals. Any consents and approvals
required under any Laws in order to legally consummate the
transactions contemplated by this Agreement shall have been obtained;
and
(e) Other. All other items required to be delivered
hereunder or as may be reasonably requested by Sellers to facilitate
the Closing, in form and substance reasonably satisfactory to Sellers.
ARTICLE 6
TERMINATION AND ABANDONMENT OR WAIVER
6.1 TERMINATION. Anything contained in this Agreement to the
contrary notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned at any time before the Closing Date:
(a) By Mutual Consent. By mutual consent of Buyer and
Sellers; or
(b) By Buyer or Sellers. By Buyer or Sellers if the
terminating party is not in material breach of any of its obligations
hereunder and if the transactions contemplated by this Agreement have
not been consummated on or before June 30, 1997, except such date
shall be extended for an additional 60 days to the extent necessary to
comply with the H-S-R Act; or
(c) As a Result of Disclosure Schedule Matters. By Buyer
in accordance with Article 2 hereof with respect to the approval by
Buyer of the Disclosure Schedule during the time period provided
therein; or
(d) As a Result of Environmental Matters. By Buyer or
Sellers in accordance with Section 4.5 hereof.
6.2 WAIVER. Subject to the requirements of any applicable Law,
any of the terms or conditions of this Agreement may be waived at any time by
the party which is entitled to the benefit thereof. The failure of any party
at any time or times to require performance of any provision hereof shall in no
manner affect the right to enforce the same. No waiver by any party of any
condition, or of the breach of any provision of this Agreement in one or more
instances shall be deemed to be or construed as a further or continuing waiver
of any such condition or breach or a waiver of any other condition or the
breach of any other provision.
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6.3 EXPENSE ON TERMINATION. If the transactions contemplated
hereby are abandoned pursuant to and in accordance with the provisions of
Section 6.1 hereof, all expenses will be paid by the party incurring them;
provided, this provision shall not limit any claim resulting from the breach of
this Agreement by any party hereto.
ARTICLE 7
INDEMNIFICATION
7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained herein or any instrument or document
delivered or to be delivered pursuant to or in connection with this Agreement,
shall survive the execution and delivery of this Agreement and the Closing
notwithstanding any investigation or due diligence theretofore made by or on
behalf of any party hereto; provided, however, that all representations and
warranties of Sellers and Buyer shall terminate on the one year anniversary of
the Closing Date except (a) as to the representations and warranties contained
in Sections 2.5 (Title to Stock) and 2.11 (Title to and Quiet Possession of
Assets) which shall continue and survive indefinitely, and (b) as to the
representations and warranties contained in 2.14 (Taxes), which shall continue
and survive for the full period of the applicable statutes of limitations
(giving effect to any waiver, mitigation or extension thereof). All claims for
indemnification by Sellers or Buyer with respect to a breach of a
representation or warranty must be asserted prior to the expiration of the
applicable survival period. All covenants and agreements contained herein
shall survive the Closing without limitation, except as otherwise provided
herein.
7.2 INDEMNIFICATION OF BUYER. In addition to any other remedies
available to Buyer under this Agreement, at law or in equity, Sellers shall
indemnify, defend and hold harmless Buyer and its Affiliates against and in
respect of any and all Claims that such indemnified persons shall incur or
suffer, which arise, result from or relate to any breach of, or failure by
Sellers to perform, any of their representations, warranties, covenants or
agreements in or under this Agreement.
7.3 INDEMNIFICATION OF SELLERS. In addition to any other remedies
available to Sellers under this Agreement, at law or in equity, Buyer shall
indemnify, defend and hold harmless Sellers against and in respect of any and
all Claims that Sellers shall incur or suffer, which arise, result from or
relate to any breach of, or failure by Buyer to perform, any of its
representations, warranties, covenants or agreements in or under this
Agreement.
7.4 INDEMNIFICATION PROCEDURE. Promptly upon the discovery of
facts giving rise to a claim for indemnity under this Article 7 or the receipt
of notice of any Claim, judicial or otherwise, with respect to any matter as to
which indemnification may be claimed under this Article 7, the indemnified
party shall give written notice thereof to the indemnifying party together with
such information respecting such matter as the indemnified party shall then
have; provided, however, that the failure of the indemnified party to give
notice as provided herein shall not relieve the indemnifying party of any
obligations, to the extent the indemnifying party is not materially prejudiced
thereby. If indemnification is sought with respect to a third-party (i.e., one
who is not a party to this Agreement) Claim asserted or brought against an
indemnified party, the indemnifying party shall be entitled to participate in
and to assume the defense thereof, jointly with any other indemnifying party
similarly notified, to the extent that it may wish, with counsel reasonably
satisfactory to such indemnified party. After such notice from the
indemnifying party to such indemnified party of its election to so assume the
defense of such a third-party Claim, the indemnifying party shall not
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be liable to such indemnified party for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof,
other than reasonable and necessary costs of investigation, unless the
indemnifying party has failed to assume and diligently prosecute the defense of
such third-party Claim and to employ counsel reasonably satisfactory to such
indemnified person. An indemnifying party who elects not to assume the defense
of a third-party Claim shall not be liable for the fees and expenses of more
than one counsel in any single jurisdiction for all parties indemnified by such
indemnifying party with respect to such Claim or with respect to Claims
separate but similar or related in the same jurisdiction arising out of the
same general allegations. Notwithstanding any of the foregoing to the
contrary, the indemnified party will be entitled to select its own counsel and
assume the defense of any action brought against it if the indemnifying party
fails to select counsel reasonably satisfactory to the indemnified party or if
counsel fails to diligently defend, the expenses of such defense to be paid by
the indemnifying party. No indemnifying party shall consent to entry of any
judgment or enter into any settlement with respect to a claim without the
consent of the indemnified party, which consent shall not be unreasonably
withheld. No indemnified party shall consent to entry of any judgment or enter
into any settlement of any such action the defense of which has been assumed by
an indemnifying party without the consent of such indemnifying party, which
consent shall not be unreasonably withheld.
ARTICLE 8
NON-COMPETITION AGREEMENTS
8.1 COVENANTS NOT TO COMPETE OR INTERFERE. In consideration of
the agreement of the Buyer contained herein, for a period of (i) one year
following from the Closing Date for any Seller not employed by Exell
immediately following the Closing, and (ii) for one year following the
termination of employment for any reason of any Seller who is employed by Exell
subsequent to the Closing Date, none of such Sellers or any of their Affiliates
shall:
(a) directly or indirectly, engage or invest in, finance,
own, manage, operate, control or participate in the ownership,
management, operation or control of, any Competing Business (as
defined below);
(b) directly or indirectly, either as principal, agent,
independent contractor, consultant, advisor (whether paid or unpaid),
stockholder, partner or in any other representative capacity
whatsoever, either for his own benefit or for the benefit of any other
Person, solicit, divert or take away from Exell or Buyer any Persons
who, at any time prior to the Closing Date, were customers or clients
of Exell with respect to any Competing Business;
(c) for himself or on behalf of any other Person use or
disclose to any Person any of the following relating in any way to
Exell, Buyer or their respective businesses: trade secrets;
proprietary information; "know-how;" marketing, distribution and
advertising plans and techniques; the existence or terms of contracts
or potential contracts with, or other information identifying or
relating to past, existing or prospective customers, distributors or
vendors; cost data, pricing policies, and financial and accounting
information; or matters pertaining to pending or threatened
litigation; provided, however, that (after reasonable measures have
been taken to maintain confidentiality and after giving reasonable
notice to Buyer specifying the information involved and the manner and
extent of the proposed disclosure thereof) any disclosure of such
information may be made to the extent required by applicable Laws or
judicial or regulatory process.
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"Competing Business" means any Person (other than Buyer and its Affiliates)
engaged, in whole or in part, in any business that involves the design,
manufacture, maintenance, field service or repair of shell and tube heat
exchangers.
8.2 NECESSITY AND REASONABLENESS. Sellers hereby specifically
acknowledge, agree and represent to Buyer as a material inducement for Buyer to
enter into this Agreement:
(a) the covenants and agreements of Sellers in this
Article 8 are necessary and essential to the protection of the
business which will be conducted by Exell and Buyer after the Closing
Date, and to enable Buyer to realize and derive all of the benefits,
rights and expectations associated with this Agreement;
(b) Buyer will suffer great loss and irreparable harm if
Sellers directly or indirectly enters into a Competing Business;
(c) the restrictions contained in this Article 8 are in
all respects reasonable and necessary to protect the business
goodwill, trade secrets, prospects and other business interests of
Buyer in respect of Exell;
(d) the enforcement of this Agreement in general, and of
this Article 8 in particular, will not work an undue or unfair
hardship on Sellers or otherwise be oppressive to them;
(e) the enforcement of this Agreement in general, and of
this Article 8 in particular, will neither deprive the public of
needed goods or services nor otherwise be injurious to the public; and
(f) good, independent and valuable consideration exists
for the agreement of Sellers to be bound by the covenants and
agreements contained in this Article 8.
8.3 ENFORCEMENT. Sellers agree that Buyer shall, in addition to
any other remedies available to it at law or in equity, be entitled to
temporary, preliminary, and permanent injunctive relief and specific
performance to enforce the terms of this Article 8 without the necessity of
proving inadequacy of legal remedies or irreparable harm, or posting bond.
ARTICLE 9
MISCELLANEOUS
9.1 CERTAIN DEFINITIONS. As used in this Agreement, each of the
following terms has the meanings set forth below:
(a) "Affiliate" when used to indicate a relationship
with any Person, means: (i) any corporation or organization of which
such Person is an officer, director or partner or is directly or
indirectly the beneficial owner of at least 10% of the outstanding
shares of any class of equity securities or financial interest
therein; (ii) any trust or other estate in which such Person has a
beneficial interest or as to which such Person serves as trustee or in
any similar fiduciary capacity; or (iii) any Person that directly, or
indirectly through one or more intermediaries, controls, or is
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controlled by, or is under common control with, or is acting as agent
on behalf of, or as an officer or director of, such Person. As used
in the definition of Affiliate, the term "control" (including the
terms "controlling," "controlled by" or "under common control with")
means the possession, direct or indirect, of the power to direct,
cause the direction of or influence the management and policies of a
Person, whether through the ownership of voting securities, by
contract, through the holding of a position as a director or officer
of such Person, or otherwise.
(b) "Agreement" means and includes this Agreement and
the schedules and exhibits hereto, including the Disclosure Schedule.
(c) "Business Laws" means all Laws relating to the
establishing, owning, operating, managing, maintaining, improving or
conducting the business operated by Exell prior to the Closing.
(d) "Claims" means any claims, demands, actions, costs,
damages, losses, diminution in value, expenses, obligations,
liabilities, recoveries, judgments, settlements, suits, proceedings,
causes of action or deficiencies, including interest, penalties
(including civil and criminal penalties) and reasonable attorneys'
fees.
(e) "Encumbrance" means any security interest,
mortgage, deed of trust, pledge, lien, or other encumbrance of any
nature whatsoever.
(f) "Environmental Laws" mean all Laws relating to
protection of the environment, including, without limitation, health
and chemical use Laws, and Laws governing the on or off-site use,
storage, treatment, recycling, generation, transportation, processing,
handling, production or disposal of Hazardous Substances or sanitary
(non-hazardous) substances or waste, including, without limitation,
garbage, refuse or other similar substances.
(g) "Exell Shares" means at any date all of the shares of
Exell Stock issued and outstanding on such date.
(h) "Exell Stock" means the capital stock of Exell as
authorized by its charter documents, as amended.
(i) "Governmental Authority" means any federal, state,
county, municipal, or other local governmental body, legislature,
agency, commission, board, department, court or other governmental
authority, and includes, without limitation, the Federal Trade
Commission, the Environmental Protection Agency, the Interstate
Commerce Commission, the Occupational Safety and Health
Administration, and the Internal Revenue Service.
(j) "Hazardous Substance" means, without limitation, (i)
any flammable explosives, radon, radioactive materials, asbestos,
polychlorinated biphenyls, benzene, petroleum and petroleum products,
methane, or (ii) hazardous materials, hazardous wastes, biomedical
wastes, hazardous or toxic substances or related materials defined as
such in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Sections 9601 et seq.),
the Resource Conservation and Recovery Act, as amended (42 U.S.C.
Sections 6901 et seq.), or any other Environmental Laws.
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(k) "H-S-R Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
(l) "Laws" mean any applicable statute, law, code,
ordinance, rule, regulation, order, permit, license, certificate,
writ, judgment, injunction or decree promulgated by any Governmental
Authority.
(m) "Person" means an individual, corporation, limited
liability company, partnership, limited partnership, joint venture,
joint stock company, firm, company, syndicate, trust, estate,
association, Governmental Authority, business, organization or any
other incorporated or unincorporated entity.
(n) "Permitted Encumbrances" means:
(i) Encumbrances described in the Disclosure
Schedule;
(ii) inchoate common law, statutory or
constitutional liens, and liens for taxes and assessments
which are not due or are being contested in good faith; and
(iii) Encumbrances set forth on the Disclosure
Schedule.
9.2 FURTHER ASSURANCES. From time to time, as and when requested
by any party hereto, any other party hereto shall execute and deliver, or cause
to be executed and delivered, such documents and instruments and shall take, or
cause to be taken, such further or other actions as may be reasonably necessary
to effectuate the transactions contemplated hereby, including, without
limitation, the transfer to Buyer of the entire legal and beneficial ownership
of the Exell Shares, free and clear of all Encumbrances.
9.3 PUBLIC ANNOUNCEMENTS. Neither Sellers nor any of their
respective Affiliates or agents shall issue any press release or public
announcement regarding the execution of this Agreement or the transactions
contemplated hereby.
9.4 EXPENSES. Each of Buyer and Sellers shall bear their own
legal and accounting fees, and other costs and expenses with respect to the
negotiation, execution and delivery of this Agreement, and consummation of the
transactions contemplated hereby.
9.5 NOTICES AND WAIVERS. Any notice, instruction, authorization,
request, demand or waiver hereunder shall be in writing, and shall be delivered
either by personal delivery, by telegram, telex, telecopy or similar facsimile
means, by certified or registered mail, return receipt requested, or by courier
or delivery service, addressed to the parties hereto at the address indicated
beneath their respective signatures on the execution pages of this Agreement,
or at such other address and number as a party shall have previously designated
by written notice given to the other parties in the manner hereinabove set
forth. Notices shall be deemed given when received, if sent by facsimile means
(confirmation of such receipt by confirmed facsimile transmission being deemed
receipt of communications sent by facsimile means); and when delivered and
receipted for (or upon the date of attempted delivery where delivery is
refused), if hand-delivered, sent by express courier or delivery service, or
sent by certified or registered mail, return receipt requested.
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9.6 CERTAIN REFERENCES. Whenever the context requires, the gender
of all words used herein shall include the masculine, feminine and neuter.
References to Articles or Sections shall be to Articles or Sections of this
Agreement unless otherwise specified. The headings and captions used in this
Agreement are solely for convenient reference and shall not affect the meaning
or interpretation of any article, section or paragraph herein, or this
Agreement. The terms "hereof," "herein" or "hereunder" shall refer to this
Agreement as a whole and not to any particular article, section or paragraph.
The terms "including" or "include" are used herein in an illustrative sense and
not to limit a more general statement. When computing time periods described
by a number of days before or after a stated date or event, the stated date or
date on which the specified event occurs shall not be counted and the last day
of the period shall be counted.
9.7 SUCCESSORS AND ASSIGNS. This Agreement shall bind, inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns, and if an individual, by his executors,
administrators, and beneficiaries of his estate by will or the laws of descent
and distribution. This Agreement and the rights and obligations hereunder
shall not be assignable or delegable by any party.
9.8 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas and of the United
States applicable in Texas. Each party hereto hereby acknowledges and agrees
that it has consulted legal counsel in connection with the negotiation of this
Agreement and that it has bargaining power equal to that of the other parties
hereto in connection with the negotiation and execution of this Agreement.
Accordingly, the parties hereto agree that the rule that an agreement shall be
construed against the draftsman shall have no application in the construction
or interpretation of this Agreement.
9.9 AMENDMENT AND ENTIRETY. This Agreement may be amended,
modified, or superseded only by written instrument executed by all parties
hereto. This Agreement and the exhibits and schedules hereto (including the
Disclosure Schedule) sets forth the entire agreement and understanding of the
parties with respect to the transactions contemplated hereby and supersedes all
prior agreements, arrangements, and understandings relating to the subject
matter hereof. In the event of any conflict or inconsistency between the
provisions of this Agreement and the contents or provisions of any schedule or
exhibit hereto, the provisions of this Agreement shall control.
9.10 RIGHTS OF PARTIES. Nothing in this Agreement, whether express
or implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any Persons other than the parties hereto and their
respective successors and assigns, nor shall any provision give any third
Persons any right of subrogation or action over against any party to this
Agreement. Without limiting the generality of the foregoing, it is expressly
understood that this Agreement does not create any third party beneficiary
rights.
9.11 TIME OF ESSENCE. Time is of the essence in the performance of
this Agreement.
9.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all which together
shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Stock Purchase Agreement is executed and
delivered as of the date first above written.
BUYER:
ITEQ, INC.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
Address: 0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000
SELLERS:
---------------------------------------------
Xxxxxxx X. Xxxxxx
Address: P. O. Xxx 0000
Xxxxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000
---------------------------------------------
Xxx X. Xxxxx
Address: P. O. Xxx 0000
Xxxxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000
---------------------------------------------
Xxxxxx X. Xxxxxxxxx, XX, by Xxxxx Xxx
Xxxxxxxxx, Individually and as Surviving
Marital Partner
Address: P. O. Xxx 0000
Xxxxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000
---------------------------------------------
Xxxxxxx Xxxxxx Xxxxxx
Address: P. O. Xxx 0000
Xxxxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000
---------------------------------------------
Xxxxxx Xxxxxx Babel
Address: P. X. Xxx 0000
Xxxxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000
---------------------------------------------
Xxxxxx Xxxxxxxxx, III
Address: P. X. Xxx 0000
Xxxxxxxx, Xxxxx 00000
Telecopy No. (000) 000-0000
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("AGREEMENT") is entered into as of the
Effective Date (as hereinafter defined) between BABEL, XXXXXX & XXXXXXXXX
PARTNERSHIP, a Texas general partnership ("SELLER") and ITEQ, INC., a Delaware
corporation ("PURCHASER").
W I T N E S S E T H:
In consideration of the mutual covenants set forth herein and in
consideration of the xxxxxxx money deposit herein called for, the receipt and
sufficiency of which are hereby acknowledged by Seller, the parties hereto
hereby agree as follows:
Section 1. Sale and Purchase. Seller shall sell, convey, and assign
to Purchaser, and Purchaser shall purchase and accept from Seller, for the
Purchase Price (hereinafter defined) and on and subject to the terms and
conditions herein set forth, the following:
a. the tracts or parcels of land situated in Jefferson
County, Texas described in EXHIBIT A hereto together with all rights and
interests appurtenant thereto, including all of Seller's right, title,
and interest in and to adjacent streets, alleys, rights-of-way, and any
adjacent strips or gores of real estate (the "LAND"); all fixtures and
improvements located on the Land (the "IMPROVEMENTS"); and all rights,
titles, and interests appurtenant to the Land and Improvements;
b. all (i) contracts or agreements, such as maintenance,
service, or utility contracts (the, "PROPERTY AGREEMENTS"), to the
extent Purchaser elects to take assignment thereof, (ii) warranties,
guaranties, indemnities and claims, (iii) licenses, permits or similar
documents, (iv) telephone exchanges, trade names, marks and other
identifying material, (v) plans, drawings, specifications, surveys,
engineering reports and other technical information, (vi) insurance
contracts or policies, to the extent Purchaser elects to take assignment
thereof, and (vii) other property (real, personal, or mixed), owned or
held by Seller that relates, in any way, to the design, construction,
ownership, use, leasing, maintenance, service or operation of the Land
or Improvements.
The above listed items are herein collectively called the "PROPERTY". All of
the Property shall be conveyed, assigned, and transferred to Purchaser at
Closing (hereinafter defined) free and clear of all liens, claims, easements,
and encumbrances whatsoever except for the Permitted Encumbrances (hereinafter
defined).
Section 2. Purchase Price. The price for which Seller shall sell and
convey the Property to Purchaser, and which Purchaser shall pay to Seller, is
[$10,364,958, less amount allocated to purchase price under stock purchase
agreement] Dollars ($__________) ("PURCHASE PRICE"). The Purchase Price shall
be payable in cash or cash equivalent at the Closing (hereinafter defined).
Section 3. Xxxxxxx Money. Within five (5) business days after the
execution hereof, Purchaser shall deliver to Xxxxxxx Title Company, 0000 Xxxxx
Xxxxxx Xxxx, Xxxxxxxx, Xxxxx
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77706 Attn: ____________________ ("TITLE COMPANY") a check in the amount of
$100.00 which the Title Company shall immediately deposit for collection. As
used in this Agreement, the term "XXXXXXX MONEY" shall mean the amount so
deposited by Purchaser, together with all interest earned thereon while in the
custody of Title Company. The "EFFECTIVE DATE" of this Agreement shall be the
date the Xxxxxxx Money and a fully executed copy of this Agreement is delivered
to the Title Company and such delivery is acknowledged by the Title Company.
Section 4. Independent Consideration. Contemporaneously with the
delivery of the Xxxxxxx Money, Purchaser shall deliver to Seller and Seller
hereby acknowledges the receipt of, a check in the amount of FIFTY AND NO/100
DOLLARS ($50.00) ("INDEPENDENT CONSIDERATION"), which amount the parties
bargained for and agreed to as consideration for the Seller's grant to
Purchaser of Purchaser's exclusive right to purchase the Property pursuant to
the terms hereof and for Seller's execution, delivery and performance of this
Agreement. This Independent Consideration is in addition to and independent of
any other consideration or payment provided in this Agreement, is nonrefundable
under any circumstances, and shall be retained by Seller notwithstanding any
other provisions of this Agreement.
Section 5. Delivery of Information by Seller.
a. Within THIRTY (30) DAYS after the Effective Date, Seller,
at its sole cost and expense, shall deliver or cause to be delivered to
Purchaser the following:
i. commitment for Title Insurance ("TITLE COMMITMENT")
from the Title Company setting forth the status of the title of
the Land and Improvements and showing all liens, claims,
encumbrances, easements, rights-of-way, encroachments,
reservations, restrictions, and all other matters of record
affecting the Land or Improvements; and
ii. a true, complete, and legible copy of all documents
referred to in the Title Commitment ("TITLE COMMITMENT
DOCUMENTS").
b. Within thirty (30) days after the Effective Date of this
Agreement, Seller, at the equally shared cost and expense of Seller and
Purchaser, shall deliver to Purchaser a survey ("SURVEY") consisting of
a plat and field notes prepared by a licensed surveyor acceptable to
Purchaser and Title Company, which Survey shall (i) reflect the actual
dimensions of, and area within, the Land, the location of any easements,
setback lines, encroachments, or overlaps thereon or thereover, and the
outside boundary lines of all Improvements, (ii) identify by recording
reference all easements, set back lines, and other matters referred to
in the Title Commitment, (iii) include the surveyor's registered number
and seal, the date of the Survey, and a certificate satisfactory to
Purchaser, (iv) reflect that there is access to and from the Land from a
publicly dedicated street or road, (v) be sufficient to cause the Title
Company to delete (except for "shortages in area") the printed exception
for "discrepancies, conflicts or shortages in area or boundary lines, or
encroachments, or any overlapping of improvements" in the Owner's Title
Policy to be delivered pursuant to Section
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9 hereof, (vi) reflect any area within the Land that has been designated
by the Federal Insurance Administration, the Army Corps of Engineers, or
any other governmental agency or body as being subject to special or
increased flooding hazards, and (vii) in general, comply with the
requirements of the Texas Surveyor's Association for a Category 1A
Condition II. For purposes of the property description to be included in
the general warranty deed to be delivered pursuant to Section 9 hereof,
the field notes prepared by the surveyor shall control any conflicts or
inconsistencies with EXHIBIT A hereto, and such field notes shall be
incorporated herein by this reference upon their completion and approval
by Purchaser.
c. Within thirty (30) days after the Effective Date of this
Agreement, Seller, at its sole cost and expense, shall deliver to
Purchaser current searches of all Uniform Commercial Code financing
statements filed with the Office of the Secretary of State of Texas and
the County Clerk of Jefferson County, Texas against Seller and Seller's
predecessors in title reflecting all effective financing statements then
of record relating to the Property or any part thereof.
d. Within thirty (30) days after the Effective Date of this
Agreement, Seller, at its sole cost and expense, shall deliver to
Purchaser (i) legible copies of all Property Agreements; (ii) copies of
all engineering and technical reports in the possession of Seller or its
representatives that concern the Land or Improvements, including oils
testing reports and reports of environmental or hazardous waste
inspections or surveys; (iii) copies of all plans and specifications
that describe or relate to the Improvements; and (iv) profit and loss
statements reflecting the results of operation of the Property for the
preceding year. The documents described in this Section 5(d) are herein
collectively called the "DOCUMENTS", and the information contained in
the Documents is herein collectively called the "INFORMATION".
Section 6. Right of Inspection; Contingency Period.
a. From the Effective Date to the Closing Date, Seller shall
afford Purchaser and its representatives a continuing right to inspect,
at reasonable hours, the Property, and all books, records, contracts,
and other documents or data pertaining to the ownership, operation, or
maintenance of the Property; provided, however, that in conducting its
inspection Purchaser shall not unreasonably interfere with the business
and operations of the Seller.
b. If for any reason Purchaser, in its sole and absolute
discretion, is not satisfied with the physical condition of the
Improvements, or any matter in the Documents, or any part of the
Information, or is otherwise not satisfied with the Property, then
Purchaser shall have the right to terminate this Agreement in accordance
with Section 12(b) hereof by delivering to Seller a notice of
termination at any time within 30 days after receipt by Purchaser of the
Title Commitment, Title Commitment Documents and Survey. If Purchaser
does not so terminate this Agreement prior to the expiration of the
Contingency Period, Purchaser shall have waived its right to terminate
this Agreement under this Section 6.
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Section 7. Title. Purchaser shall have the right, at any time during
the Contingency Period, to object in writing to any liens and encumbrances
reflected by the Title Commitment or Survey. All liens and encumbrances to
which Purchaser so objects are hereinafter referred to as the "NON-PERMITTED
ENCUMBRANCES"; if no such notice of objection is given during the Contingency
Period, then it shall be deemed that all matters reflected by the Survey and
Title Commitment are "PERMITTED ENCUMBRANCES". Seller shall use reasonable
efforts, at its sole cost, to cure or remove all Non-Permitted Encumbrances and
give Purchaser written notice thereof before the end of the Contingency Period;
provided, however, that Seller, at its sole cost, shall be obligated to cure or
remove at or before Closing all mortgages, deeds of trust, judgment liens,
mechanics and materialmen's liens, and other liens against the Property,
whether or not Purchaser objects thereto during the Contingency Period.
Further, Seller shall cause any leases relating to the Land and Improvements to
be terminated on or before Closing. If Seller does not timely cause all of the
Non-Permitted Encumbrances to be removed or cured, and timely written notice
thereof to be given to Purchaser, then Purchaser shall have the right to either
(i) terminate this Agreement in accordance with Section 12(b) hereof by
delivering notice to Seller, or (ii) attempt to remove or cure the Non-
Permitted Encumbrances and deduct the cost of such removal or cure from the
Purchase Price, or (iii) elect to purchase the Property subject to the Non-
Permitted Encumbrances, other than liens that Seller is obligated to cure or
remove, and the Non-Permitted Encumbrances (other than liens that Seller is
obligated to cure or remove) subject to which Purchaser elects to purchase the
Property shall thereafter be Permitted Encumbrances.
Section 8. Seller's Representations, Warranties, and Covenants.
Seller hereby represents and warrants to, and covenants with, Purchaser that:
a. Seller has full right, power, and authority to execute and
deliver this Agreement and to consummate the purchase and sale
transactions provided for herein without obtaining any further consents
or approvals from, or the taking of any other actions with respect to,
any third parties. This Agreement, when executed and delivered by Seller
and Purchaser, will constitute the valid and binding agreement of
Seller, enforceable against Seller in accordance with its terms.
b. Seller has good, marketable and indefeasible title in fee
simple to the Land and Improvements, free and clear of all liens (except
those liens that will be released at or before Closing), and no party,
except as herein set forth, has or shall have on the Closing Date any
rights in, or to acquire, the Property.
c. The Land is not located within an area that has been
designated by the Federal Insurance Administration, the Army Corps of
Engineers, or any other governmental agency or body as being subject to
special flooding hazards.
d. The Improvements (i) have been constructed in a good and
workmanlike manner, free from defects in workmanship and material and,
to the best of Seller's knowledge, do not require any repair or
replacement other than minor, routine maintenance not aggregating in
excess of $100,000; and (ii) have been constructed and are being
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occupied, maintained, and operated in compliance with all applicable
laws, regulations, insurance requirements, contracts, leases, permits,
licenses, ordinances, restrictions, building setback lines, covenants,
reservations, and easements, and Seller has received no notice, written
or oral, claiming any violation of any of the same or requesting or
requiring the performance of any repairs, alterations, or other work in
order to so comply.
e. The copies of all Documents, Title Commitment Documents,
and other documents delivered by or on behalf of Seller to Purchaser
pursuant to this Agreement shall be true and complete in all material
respects and, to the best of Seller's knowledge and belief, the
information shall be true and complete in all material respects.
f. There are no actions, suits, claims, assessments, or
proceedings pending or, to the knowledge of Seller, threatened that
could materially adversely affect the ownership, operation, or
maintenance of the Property or Seller's ability to perform hereunder.
g. All bills and other payments due with respect to the
ownership, operation, and maintenance of the Property have been paid or
to be paid prior to Closing in the ordinary course of business.
h. From the Effective Date until the Closing Date, Seller
shall: (i) maintain and operate the Property in a good and businesslike
manner in accordance with good and prudent business practices; (ii)
continue all Property Agreements, and insurance policies or contracts
relative to the Property in full force and effect and neither cancel,
amend, nor renew any of the same without Purchaser's prior written
consent; (iii) not commit or permit to be committed any waste to the
Property; and (iv) not, without the prior written consent of Purchaser,
enter into any agreement or instrument or take any action that would
encumber the Property after Closing, that would bind Purchaser or the
Property after Closing, or that would be outside the normal scope of
maintaining and operating the Property.
i. There are no labor disputes, organizational campaigns, or
union contracts existing or under negotiation with respect to the
Property or the operation thereof. There are no employees engaged in the
operation or maintenance of the Property for whom Purchaser will be
responsible after Closing.
j. Attached hereto as EXHIBIT B is a complete and correct
list of all Property Agreements setting forth the identity of the
parties thereto, the date of such agreement, the consideration payable
thereunder, the services to be rendered thereunder, and the expiration
date thereof. Except as otherwise expressly indicated on EXHIBIT B, all
of the Property Agreements are cancelable on thirty (30) or fewer days
notice, without payment of any cancellation consideration.
k. All financial statements, reports and other data,
including but not limited to information concerning gross rental income,
operating expenses, debt service, and cash flow statements heretofore
furnished by Seller to Purchaser relative to the Property are true and
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correct in all material respects and fully and accurately present the
financial condition, the financial results, or other subject matter
thereof as of the dates thereof. All such statements, reports,
information, and other data hereafter furnished by Seller to Purchaser
shall be true and correct in all material respects and shall fully and
accurately present the financial condition, the financial results, or
other subject matter thereof as of the dates thereof.
l. During the period that Seller has owned the Property, the
Property has not been the site of any activity that would violate any
past or present environmental law or regulation of any governmental body
or agency having jurisdiction over the Property. Specifically, but
without limitation, (i) solid waste, petroleum, or petroleum products
have not been handled on the Property such that they may have leaked or
spilled onto the Property or contaminated the Property, (ii) there is no
on-site contamination resulting from activities on the Property or
adjacent tracts, and (iii) the Property contains no "hazardous
materials" which shall mean any flammables, explosives, radioactive
materials, asbestos, or other hazardous waste including without
limitation substances defined as "hazardous substances", "hazardous
materials", or "toxic substances" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980; the Hazardous
Materials Transportation Act; and the Resources Conversation and
Recovery Act, all as amended.
m. The current zoning classification of the Property is LI
(Light Industrial); the Improvements have been constructed and are being
occupied and maintained in compliance therewith; and there are no
proceedings pending or contemplated to alter such zoning classification.
If (i) any of Seller's representations and warranties set forth in this Section
8 are untrue in any material respect, or (ii) at any time at or before Closing
there is any material change with respect to the matters represented and
warranted by Seller pursuant to this Section 8, then Seller shall give
Purchaser prompt written notice thereof, and Purchaser shall have the right to
terminate this Agreement in accordance with Section 12(b) hereof by delivering
notice to Seller at any time at or before the Closing. All of Seller's
representations and warranties shall survive the Closing.
Section 9. Closing. The closing ("CLOSING") of the sale of the
Property by Seller to Purchaser shall occur on or before June 30, 1997
("CLOSING DATE"). Time is of the essence with regard to the Closing Date. The
Closing shall occur in the offices of Xxxxxx & Xxxxxx, L.L.P., 000 Xxxxxxxxx,
00xx Xxxxx, Xxxxxxx, Xxxxx 00000 commencing at 10:00 AM on the Closing Date.
At the Closing the following, which are mutually concurrent conditions, shall
occur:
a. Purchaser, at its sole cost and expense, shall deliver or
cause to be delivered to Seller the following:
i. Cashier's check, or the check of the Title Company,
made payable to the order of Seller, or immediately available
cash funds, in the amount of the Purchase Price as specified in
Section 2 hereof, adjusted in accordance with Section 9(c)
hereof; and
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ii. Evidence satisfactory to Seller and Title Company
that the person executing the Closing documents on behalf of
Purchaser has full right, power, and authority to do so.
b. Seller, at its sole cost and expense, shall deliver or
cause to be delivered to Purchaser the following:
i. Special Warranty Deed in the form of EXHIBIT C
hereto, fully executed and acknowledged by Seller, conveying to
Purchaser the Land and Improvements, subject only to the
Permitted Encumbrances;
ii. Owner's Policy of Title Insurance in the amount of
the Purchase Price issued by Title Company (with such reinsurance
as Purchaser may require), insuring that Purchaser is the owner
of the Land and Improvements subject only to the Permitted
Encumbrances and the standard printed exceptions included in a
Texas standard form owner's policy of title insurance; provided,
however, that (A) the standard exception for discrepancies,
conflicts, or shortages in area shall be deleted except for
"shortages in area"; (B) such policy shall have "None of Record"
endorsed regarding restrictions except for restrictions that are
Permitted Encumbrances; (C) the rights of parties in possession
shall be limited only to those holding under written leases; and
(D) the standard exception for taxes shall be limited to the year
in which the Closing occurs, marked "not yet due and payable",
and subsequent years and subsequent assessments for prior years
due to change in land usage or ownership;
iii. Current certificate issued by company acceptable to
Purchaser reflecting that since the date of the searches
furnished pursuant to Section 5(c) hereof no Uniform Commercial
Code filings, chattel mortgages, assignments, pledges, or other
encumbrances have been filed in the offices of the Secretary of
State of the State of Texas or the County Clerk of Jefferson
County with reference to the Property;
iv. Certificates issued by the applicable taxing
authorities, pursuant to Section 31.08 of the Texas Tax Code,
stating that no delinquent taxes, penalties and interest are due
and payable on the Property;
v. Evidence satisfactory to Purchaser and the Title
Company that the persons executing and delivering the Closing
documents on behalf of Seller have full right, power and
authority to do so;
vi. Certificate executed by Seller stating that, as of
the Closing Date, each of Seller's representations and warranties
set forth in Section 8 hereof is true and correct;
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vii. Certificate meeting the requirements of Section
1445 of the Internal Revenue Code of 1986, as amended, executed
and sworn to by Seller; and
viii. Such other instruments as are customarily executed
in Texas to effectuate the conveyance of property similar to the
Property, with the effect that, after the Closing, Purchaser will
have succeeded to all of the rights, titles, and interests of
Seller related to the Property and Seller will no longer have any
rights, titles, or interests in and to the Property.
c. All normal and customarily proratable items, including
without limitation real estate and personal property taxes, utility
bills, rents, interest, and Property Agreement payments shall be
prorated as of the Closing Date, Seller being charged and credited for
all of same up to such date and Purchaser being charged and credited for
all of same on and after such date. If the actual amounts to be prorated
are not known as of the Closing Date, the prorations shall be made on
the basis of the best evidence then available, and thereafter, when
actual figures are received, a cash settlement will be made between
Seller and Purchaser. The provisions of this Section 9(c) shall survive
the Closing.
d. Seller shall pay all costs and liabilities relating to the
Property that arise out of or are attributable to the period prior to
the Closing Date, and shall indemnify and hold harmless Purchaser from
such costs and liabilities and from all reasonable attorneys' fees
expended by Purchaser in connection therewith. Seller shall have the
right to receive all proceeds relating to the Property that are properly
allocable to the period before the Closing Date, and Purchaser shall
have the right to receive all proceeds relating to the Property that are
properly allocable to the period from and after the Closing Date.
Purchaser shall pay all costs and liabilities relating to the Property
that arise out of or are attributable to the period from and after the
Closing Date, except such costs and liabilities that arise out of or
result from a breach by Seller of its representations and warranties set
forth in Section 8 hereof, and Purchaser shall indemnify and hold
harmless Seller from such costs and liabilities and from all reasonable
attorneys' fees expended by Seller in connection therewith. This Section
9(d) shall survive the Closing.
e. Upon completion of the Closing, Seller shall deliver to
Purchaser possession of the Property free and clear of all tenancies of
every kind and parties in possession, with all parts of the Property
(including without limitation the Improvements) in the same condition as
on the date hereof, normal wear only excepted.
Section 10. Commissions. Seller shall defend, indemnify, and hold
harmless Purchaser, and Purchaser shall defend, indemnify, and hold harmless
Seller, from and against all claims by third parties for brokerage, commission,
finders, or other fees relative to this Agreement or the sale of the Property,
and all court costs, attorneys' fees, and other costs or expenses arising
therefrom, and alleged to be due by authorization of the indemnifying party.
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Section 11. Destruction, Damage or Taking Before Closing. If, before
Closing, all or any part of the Land or Improvements are destroyed or damaged,
or become subject to condemnation or eminent domain proceedings, then Seller
shall promptly notify Purchaser thereof. Purchaser shall have the right to
elect to proceed with the Closing (subject to the other provisions of this
Agreement) by delivering notice thereof to Seller within five (5) business days
of receipt of Seller's notice respecting the damage, destruction, or taking,
but Purchaser shall be entitled to all insurance proceeds or condemnation
awards payable as a result of such damage or taking and, to the extent the same
may be necessary or appropriate, Seller shall assign to Purchaser at Closing
Seller's rights to such proceeds or awards. If, within five (5) business days
of receipt of Seller's notice respecting the damage, destruction, or taking,
Purchaser notifies Seller of its intent to terminate this Agreement, or if
Purchaser gives no notice within such period, then Purchaser shall be deemed to
have terminated this Agreement pursuant to Section 12(b) hereof.
Section 12. Termination and Remedies.
a. If Purchaser fails to consummate the purchase of the
Property pursuant to this Agreement for any reason other than
termination hereof pursuant to a right granted to Purchaser in Sections
6, 7, 8, 11 and 13 hereof, then Seller, shall have the right to
terminate this Agreement by notifying Purchaser thereof, in which event
Title Company shall deliver the Xxxxxxx Money to Seller, and Seller
shall have all rights and remedies available under applicable law.
b. If Purchaser terminates this Agreement pursuant to Section
6, 7, 8, 11 or 13 hereof, then Title Company shall return the Xxxxxxx
Money to Purchaser, whereupon neither party hereto shall have any
further rights or obligations hereunder.
c. If Seller fails to consummate the sale of the Property
pursuant to this Agreement for any reason other than termination hereof
pursuant to Section 13, Purchaser's failure to perform its obligations
hereunder or termination hereof by Purchaser in accordance with Section
12(b), then Purchaser shall have all rights and remedies available under
applicable law, and Title Company shall return the Xxxxxxx Money to
Purchaser.
Section 13. Conditions to Closing. This Agreement is expressly
conditioned upon the consummation of a Stock Purchase Agreement dated April 24,
1997 between the stockholders of Exell, Inc., a Texas corporation and Purchaser
(the "EXELL AGREEMENT"). In the event the Exell Agreement is not consummated
for any reason, Seller shall have no further obligation to sell and Purchaser
shall have no further obligation to purchase the Property and this Agreement
shall be automatically terminated and of no further force and effect.
Section 14. Notices. All notices provided or permitted to be given
under this Agreement must be in writing and may be served by depositing same in
the United States mail, addressed to the party to be notified, postage prepaid
and registered or certified with return receipt requested; by delivering the
same in person to such party; transmitted by Federal Express or a similar
generally recognized overnight carrier generally providing proof of delivery;
by prepaid telegram or telex; or
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by facsimile copy transmission. Notice given in accordance herewith shall be
effective upon receipt at the address of the addressee. For purposes of notice,
the addresses of the parties shall be as follows:
If to Seller, to: Babel, Xxxxxx & Xxxxxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
(000) 000-0000
FAX: (000) 000-0000
If to Purchaser, to: ITEQ, Inc.
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxxxx X. XxXxxx
(000) 000-0000
FAX: (000) 000-0000
Either party hereto may change its address for notice by giving three (3) days
prior written notice thereof to the other party.
Section 15. Assigns; Beneficiaries. This Agreement shall inure to the
benefit of and be binding on the parties hereto and their respective heirs,
legal representatives and successors; provided, this Agreement is not
assignable by either party, except Purchaser may assign this Agreement to any
of its subsidiaries or affiliates. This Agreement is for the sole benefit of
Seller and Purchaser, and no third party is intended to be a beneficiary of
this Agreement.
Section 16. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Texas.
Section 17. Entire Agreement. This Agreement is the entire agreement
between Seller and Purchaser concerning the sale of the Property, and no
modification hereof or subsequent agreement relative to the subject matter
hereof shall be binding on either party unless reduced to writing and signed by
the party to be bound. Exhibits A through C, inclusive, attached hereto, are
incorporated herein by this reference for all purposes.
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IN WITNESS WHEREOF, Purchaser and Seller have executed this Agreement as
of the date first set forth above.
SELLER:
BABEL, XXXXXX & XXXXXXXXX PARTNERSHIP
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
PURCHASER:
ITEQ, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Schedule of Exhibits
A - Description of Land
B - List of Property Agreements
C - Form of Special Warranty Deed
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JOINDER BY TITLE COMPANY
The undersigned, XXXXXXX TITLE COMPANY, referred to in this Agreement as
the "TITLE COMPANY," hereby acknowledges that it received this Agreement
executed by Seller and Purchaser on the ____ day of _____________, 1997, and
accepts the obligations of the Title Company as set forth herein. The
undersigned further acknowledges that it received the Xxxxxxx Money on the ___
day of _______________, 1997. The Title Company hereby agrees to hold the
Xxxxxxx Money as directed in this Agreement, and to distribute the Xxxxxxx
Money in accordance with the terms and provisions of this Agreement.
XXXXXXX TITLE COMPANY
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Address: 0000 Xxxxx Xxxxxx Xxxx.
Xxxxxxxx, Xxxxx 00000
(000) 000-0000
Fax (000) 000-0000
