Stock Purchase Agreement
among
Key Rocky Mountain, Inc.,
Xxxxxx Brothers, Inc. Employees= Stock Ownership
Retirement Plan and Trust
Xxxxx X. Xxxxxx Trust
Xxxxxxx X. Xxxxxx Trust
Xxxxxxx X. Xxxxxx Trust
Xxxx X. Xxxxxx
Xxxxx X. Xxxxxx
and
Xxxxxx Xxxxxx
Dated as of February 6, 1998
TABLE OF CONTENTS
Page
ARTICLE 1 PURCHASE AND SALE
1.1 Purchase and Sale of the Company Shares...............................1
1.1.1 Purchase and Sale............................................1
1.1.2 Payment of Purchase Price....................................1
1.1.3 Purchase Price Holdback......................................2
1.1.4 Interest.....................................................2
1.1.5 Distribution of Purchase Price Holdback......................2
1.2 Cash Adjustment Payment...............................................2
1.3 Closing...............................................................3
1.4 Resignations..........................................................3
1.5 Closing Deliveries....................................................3
1.6 Termination of ESOP...................................................4
ARTICLE 2 REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Shareholders....................5
2.1.1 Organization and Standing....................................5
2.1.2 Agreements Authorized and its Effect on Other Obligations....5
2.1.3 Capitalization...............................................6
2.1.4 Ownership of the Company Shares..............................6
2.1.5 No Subsidiaries..............................................6
2.1.6 Financial Statements.........................................6
2.1.7 Liabilities..................................................6
2.1.8 Additional Company Information...............................7
2.1.9 No Defaults..................................................9
2.1.10 Absence of Certain Changes and Events........................9
2.1.11 Taxes........................................................9
2.1.12 Intellectual Property........................................10
2.1.13 Title to and Condition of Assets.............................10
2.1.14 Contracts....................................................10
2.1.15 Licenses and Permits.........................................11
2.1.16 Litigation...................................................11
2.1.17 Environmental Compliance.....................................11
2.1.18 Compliance with Other Laws...................................12
2.1.19 ERISA Plans or Labor Issues.................................13
2.1.20 Investigations; Litigation...................................14
2.1.21 Absence of Certain Business Practices........................14
2.1.22 No Untrue Statements.........................................14
2.1.23 Consents and Approvals.......................................14
2.1.24 Finder's Fee.................................................14
2.2 Representations and Warranties of Buyer..............................15
2.2.1 Organization and Good Standing................................15
2.2.2 Agreement Authorized and its Effect on Other Obligations......15
2.2.3 Consents and Approvals........................................15
2.2.4 Investigations; Litigation....................................15
ARTICLE 3 ADDITIONAL AGREEMENTS
3.1 Further Assurances...................................................16
3.2 Public Announcements.................................................16
3.3 338(h)(10) Election..................................................16
3.4 Environmental Assessments and Cleanup................................16
3.5 Tax Indemnification..................................................16
ARTICLE 4 INDEMNIFICATION
4.1 Indemnification by the Sellers.......................................17
4.2 Indemnification by Buyer.............................................17
4.3. Indemnification Procedure............................................17
4.3 Limitation on Damages................................................18
4.4 Exclusive Remedy.....................................................18
ARTICLE 5 MISCELLANEOUS
5.1 Survival of Representations, Warranties and Covenants................18
5.2 Entirety.............................................................18
5.3 Counterparts.........................................................18
5.4 Notices and Waivers..................................................19
5.5 Table of Contents and Captions.......................................19
5.6 Successors and Assigns...............................................19
5.7 Severability.........................................................19
5.8 Applicable Law.......................................................19
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered into as of
February 6, 1998, among (i) Key Rocky Mountain, Inc., a Delaware corporation
("Buyer") and (ii) Xxxxxx Brothers, Inc. Employees= Stock Ownership Retirement
Plan and Trust (the "ESOP"), Xxxxx X. Xxxxxx Trust, Xxxxxxx X. Xxxxxx Trust,
Xxxxxxx X. Xxxxxx Trust, Xxxx X. Xxxxxx, Xxxxx X. Xxxxxx and Xxxxxx Xxxxxx
(collectively, the "Shareholders").
W I T N E S S E T H:
WHEREAS, Buyer is a corporation duly organized and validly existing under the
laws of the State of Delaware, with its principal executive offices at Xxx Xxxxx
Xxxxxx, 00xx Xxxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000;
WHEREAS, Xxxxxx Brothers, Inc. (the "Company") is a corporation duly organized
and validly existing under the laws of the State of Wyoming, with its principal
executive offices at 0000 Xxxx Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx 00000;
WHEREAS, the Shareholders own 6,166 shares (the "Company Shares") of common
stock, par value $10.00 per share, of the Company (the "Common Stock"), which
constitutes all of the issued and outstanding shares of capital stock of the
Company; and
WHEREAS, the Shareholders desire to sell to Buyer, and Buyer desires to purchase
from the Shareholders, all of the Company Shares.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1 Purchase and Sale of the Company Shares.
1.1.1 Purchase and Sale. Subject to the terms and conditions of this Agreement,
on the date hereof, the Shareholders agree to sell and convey to Buyer, free and
clear of all Encumbrances (as defined in Section 2.1.8.1 hereof), and Buyer
agrees to purchase and accept from the Shareholders, all of the Company Shares.
In consideration of the sale of the Company Shares, Buyer shall pay to the
Shareholders a purchase price of $10,600,000 (the "Purchase Price") in cash, and
the Cash Adjustment Payment (as defined in Section 1.2 hereof), if any, in
accordance with Section 1.2 hereof.
1.1.2 Payment of Purchase Price. The Purchase Price payable to the Shareholders
on the date hereof shall be in the amounts set forth on Schedule 1.1.2. Such
amounts are net of (i) $530,000 payable to the Xxxxxxx Group as described in
Schedule 2.1.24, and (ii) the Cash Adjustment Payment payable to the
Shareholders pursuant to Section 1.2.
1.1.3 Purchase Price Holdback. A purchase price holdback of $1,000,000 (the
"Purchase Price Holdback") will be deducted from the Cash Adjustment Payment
payable to the Shareholders pursuant to Section 1.2. The Purchase Price Holdback
shall be held in escrow pursuant to the escrow agreement dated the date hereof
(the "Escrow Agreement") in the form of Exhibit A hereto and will be applied to
pay Environmental Assessments and Cleanup Costs (as defined in Section 3.4), Tax
Adjustments (as defined in Section 3.5), and to cover indemnification
obligations under Article IV of this Agreement.
1.1.4 Interest. Immediately before any portion of the Purchase Price Holdback is
distributed from the escrow account, maintained pursuant to the Escrow Agreement
the Buyer will pay into such escrow account an amount of cash, if any, necessary
to give the Shareholders receiving such distribution an annualized return on the
amount distributed equal to the greater of (i) 8% or (ii) the Federal Funds
interest rate on the day before of the distribution plus 2-9/16%, computed from
the date hereof through the date of the distribution.
1.1.5 Distribution of Purchase Price Holdback. The Purchase Price Holdback will
be distributed to the Shareholders as follows:
1.1.5.1 Initial Distribution. At the time of the distribution of the assets of
the ESOP contemplated by Section 1.6.2 of this Agreement, the participants in
the ESOP who beneficially owned an interest in the ESOP entitling them to
receive ten or fewer shares of Common Stock as of the Closing Date shall receive
a distribution from the Escrow Funds (as defined in the Escrow Agreement) an
amount equal to the unpaid portion of the Purchase Price forming a part of the
Purchase Price Holdback allocable to such participants, including accrued
interest through the date of the distribution as contemplated by Section 1.1.4.
The Purchase Price Holdback will thereupon be reduced by the amount of such
distribution.
1.1.5.2 Final Distribution. On the third anniversary of the date hereof, the
Shareholders will receive from the Escrow Account any portion of the Purchase
Price Holdback remaining after deduction of Environmental Assessment and Cleanup
Costs, Tax Adjustments and all amounts necessary to cover indemnification
obligations under Article IV of this Agreement, plus accrued interest through
such date based on their percentage interests in the Company as reflected on
Schedule 1.1.2.
1.2 Cash Adjustment Payment. Within 60 days after the date hereof, Buyer shall
cause to be prepared and delivered to the Shareholders a consolidated balance
sheet of the Company as of the date hereof (the "Final Balance Sheet") which
balance sheet will be prepared in accordance with generally accepted accounting
principles, consistently applied in all respects. Buyer and the Shareholders
shall jointly review the Final Balance Sheet, and endeavor in good faith to
resolve all disagreements regarding the entries thereon and reach a final
determination thereof within 90 days from the date hereof. If the parties cannot
agree on the entries to be placed on the Final Balance Sheet, the dispute will
be resolved by an independent accounting firm mutually agreed to by the
Shareholders and Buyer (such agreement not to be unreasonably withheld or
delayed) whose resolution shall be binding on and enforceable against the
parties hereto. Within 10 days of reaching such final determination, the
following adjusting payments (which shall include interest at the rate of 8% per
annum accruing from the date hereof through the payment date) shall be made:
1.2.1 If the Final Net Current Value of the Company (defined below) exceeds
$0.00, Buyer shall pay to the Shareholders the amount of such difference (the
"Cash Adjustment Payment"), or
1.2.2 If the Final Net Current Value of the Company (defined below) is less than
$0.00, Shareholders shall pay to Buyer the amount of such difference.
1.2.3 In addition, any capital expenditures made by Company since October 31,
1997, made with Buyer's prior approval, will be added to the Final Net Current
Value of the Company as set out in paragraph 1.2.1 or 1.2.2 above. Buyer hereby
acknowledges approval of the capital expenditures listed on Schedule 1.2.3.
The term "Final Net Current Value of the Company" means the dollar value of the
amount by which the "Total Current Assets" as recorded on the Final Balance
Sheet exceeds the "Total Liabilities" as recorded on the Final Balance Sheet.
1.3 Closing. Consummation of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of the Company, 0000 Xxxx Xxxx,
Xxxxxxxxx, Xxxxxxx 00000, contemporaneously with the execution of this Agreement
by all of the parties hereto (the "Closing Date") unless another time, place or
date is agreed to by the Shareholders and the Buyer.
1.4 Resignations. At the Closing, each of the officers and directors of the
Company will resign.
1.5 Closing Deliveries. At the Closing, (a) the Shareholders shall deliver to
Buyer duly and validly issued certificates representing all of the Company
Shares owned beneficially or of record by them, 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
Company Shares to Buyer; (b) Xxxxx X. Xxxxxx will deliver Buyer (i)
an employment agreement dated the date hereof in the form of Exhibit B (the
"Employment Agreement") and (ii) an agreement not to compete dated the date
hereof in the form of Exhibit C (the "Non-Compete Agreement"); (c) the
Shareholders and Buyer shall have delivered to one another all other documents,
instruments and agreements as required under this Agreement; (d) Buyer shall
deliver to the Shareholders the cash purchase price payable at Closing as
provided in Section 1.1 by checks payable to the order of each of the
Shareholders; and (e) the Buyer and Shareholders will deliver to one another the
opinions of counsel as described below:
1.5.1 Opinion of Buyer's Counsel. The Buyer shall deliver a favorable opinion,
addressed to the Shareholders and dated as of the Closing Date, from Xxxxxx &
Xxxxxx, L.L.P., counsel for the Buyer, in form and substance satisfactory to the
Shareholders, to the effect that (i) the Buyer has been duly incorporated and is
validly existing as a corporation in good standing under the laws of Delaware;
(ii) all corporate proceedings required to be taken by or on the part of the
Buyer to authorize the execution of this Agreement and the Escrow Agreement and
the implementation of the transactions contemplated hereby and thereby have been
taken; and (iii) this Agreement and Escrow Agreement have been duly executed and
delivered by, and are the legal, valid and binding obligations of the Buyer and
are enforceable against Buyer in accordance with their terms, except as
enforceability may be limited by (a) equitable principles of general
applicability or (b) bankruptcy, insolvency, reorganization, fraudulent
conveyance or similar laws affecting the rights of creditors generally. In
rendering such opinion, such counsel may rely upon (i) certificates of public
officials and of officers of the Buyer as to matters of fact and (ii) the
opinion or opinions of other counsel, which opinions shall be reasonably
satisfactory to the Shareholders, as to matters other than federal or Texas law.
1.5.2 Opinion of Shareholders' Counsel. The Shareholders shall deliver a
favorable opinion, addressed to the Buyer and dated the Closing Date, from
Xxxxxx & Xxxx, Newcastle, Wyoming, counsel to the Shareholders, in form and
substance satisfactory to Buyer, to the effect that (i) the Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of Wyoming and is qualified to transact business in
every jurisdiction in which the nature of the Company's contacts require such
qualification, (ii) all outstanding shares of the Company Common Stock have been
validly issued and are fully paid and nonassessable and are free of preemptive
rights, other than the preemptive rights set forth in Article VIII, Section 3,
of the Company's Bylaws, which preemptive rights have been waived by the Company
in accordance with the procedures set forth in the Company's Bylaws; (iii) all
of the Company Shares are owned beneficially and of record by the Shareholders
free of any Encumbrances; (iv) the Company owns all of its assets free and clear
of any Encumbrances other than those Encumbrances listed on the Balance Sheet or
the Schedules hereto, and (v) this Agreement and the Escrow Agreement, the
Employment Agreements and the Non-Competition Agreements have been duly executed
and delivered by, and this Agreement, the Employment Agreements, the Escrow
Agreement and the Noncompetition Agreements are the legal, valid and binding
obligations of the Shareholders that are parties thereto and are enforceable
against the Shareholders that are parties thereto in accordance with their
terms, except as the enforceability of this Agreement, the Escrow Agreement, the
Employment Agreements and the Noncompetition Agreements may be limited by (a)
equitable principles of general applicability or (b) bankruptcy, insolvency,
reorganization, fraudulent conveyance or similar laws affecting the rights of
creditors generally. In rendering such opinion, such counsel may rely upon (i)
certificates of public officials and of officers of the Company or the
Shareholders as to matters of fact and (ii) on the opinion or opinions of other
counsel, which opinions shall be reasonably satisfactory to Buyer, as to matters
other than federal or Wyoming law.
1.6 Termination of ESOP.
1.6.1 Termination. The Company, by action of its Board of Directors, agrees to
take such action as is necessary or appropriate to terminate the ESOP as of a
date before the Closing date. After the effective date of termination of the
ESOP, the ESOP shall be "frozen" pending distribution of its assets to
participants and their beneficiaries. No persons who are not participants or
beneficiaries as of the termination date shall be eligible to participate in the
ESOP or receive benefits thereunder, and no distributions shall be made by the
ESOP except normal distributions in the ordinary course of business pursuant to
the terms and provisions of the ESOP document.
1.6.2 IRS Determination Letters. Within 120 days after the Closing Date, Buyer
agrees to file a submission to formally request a determination letter from the
Internal Revenue Service (the "IRS") to the effect that the ESOP is a qualified
plan under Section 401(a) of the Internal Revenue Code of 1986, as amended (the
"Code") upon its termination and that the trust used to fund the ESOP (the
"Trust") is tax exempt under Section 501(a) of the Code. As soon as
administratively practicable following receipt of a favorable IRS determination
letter, the administrator of the Trust shall effect distributions of all
remaining assets from the Trust and, thereafter, it shall be liquidated. The
individual trustees of the Trust as of the Closing Date agree to serve in such
capacity until such time as the Trust has been liquidated and its assets
completely distributed unless the Buyer, in its discretion, elects to appoint
any successor trustee. The Shareholders hereby agree that the Buyer does not
assume any liability or obligation with respect to the ESOP or Trust that
results from, relates to, or arises out of any act or omission by the Company,
the trustees or any other person or entity occurring on or before the Closing
Date.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Shareholders. Each of the
Shareholders, jointly and severally, represents and warrants to Buyer as
follows:
2.1.1 Organization and Standing. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Wyoming,
has full requisite corporate power and authority to carry on its business as it
is currently conducted, and to own and operate the properties currently owned
and operated by it, and is duly qualified or licensed to do business and is in
good standing as a foreign corporation authorized to do business in all
jurisdictions in which the character of the properties owned or the nature of
the business conducted by it would make such qualification or licensing
necessary.
2.1.2 Agreements Authorized and its Effect on Other Obligations. Each of the
Shareholders has the legal capacity and requisite power and authority to enter
into, and perform its obligations under this Agreement and the Employment
Agreements and the Non-Competition Agreements to which they are a party. This
Agreement, the Employment Agreements and the Non-Competition Agreements are
valid and binding obligations of each of the Shareholders that are a party
thereto, enforceable against each of the Shareholders that are a party thereto
in accordance with their terms. The execution, delivery and performance of this
Agreement, the Employment Agreements and the Non-Competition Agreements by each
of the Shareholders that are a party thereto will not conflict with or result in
a violation or breach of any term or provision of, nor constitute a default
under (i) the Articles of Incorporation or Bylaws of the Company or (ii) any
obligation, indenture, mortgage, deed of trust, lease, contract or other
agreement to which the Company or any of the Shareholders is a party or by which
the Company or any of the Shareholders or their respective properties are bound.
2.1.3 Capitalization. The authorized capitalization of the Company consists of
100,000 shares of Common Stock, of which, as of the date hereof, 6,166 shares
are issued and outstanding and held beneficially and of record by the
Shareholders. On the date hereof, the Company does not have any outstanding
options, warrants, calls or commitments of any character relating to any of its
authorized but unissued shares of capital stock. All issued and outstanding
shares of Common Stock are validly issued, fully paid and non-assessable and are
not subject to preemptive rights (other than those preemptive rights set forth
in Article VIII, Section 3, of the Company's Bylaws, which preemptive rights
have been waived by the Company). None of the outstanding shares of Common Stock
is subject to any voting trusts, voting agreement or other agreement or
understanding with respect to the voting thereof, nor is any proxy in existence
with respect thereto.
2.1.4 Ownership of the Company Shares. The Shareholders hold good and valid
title to the Company Shares set forth opposite their names on Schedule 1.1.2,
free and clear of all Encumbrances. The Shareholders possess full authority and
legal right to sell, transfer and assign the Company Shares to Buyer, free and
clear of all Encumbrances. Upon transfer to Buyer by the Shareholders of the
Company Shares, Buyer will own the Company Shares free and clear of all
Encumbrances. There are no claims pending or, to the knowledge of any of the
Shareholders, threatened, against the Company or any of the Shareholders that
concern or affect title to the Company Shares, or that seek to compel the
issuance of capital stock or other securities of the Company.
2.1.5 No Subsidiaries. Except as set forth on Schedule 2.1.5, there is no
corporation, partnership, joint venture, business trust or other legal entity in
which the Company, either directly or indirectly through one or more
intermediaries, owns or holds beneficial or record ownership of the outstanding
voting securities.
2.1.6 Financial Statements. The Company has delivered to Buyer copies of the
Company's audited balance sheet as of October 31, 1997, a copy of which is
attached hereto as Schedule 2.1.6 (the "10/31 Balance Sheet"), and related
statements of income, with appended notes which are an integral part of such
statements, (collectively, the "Financial Statements"), as at and for the 12
months ended as of October 31, 1997 (the "Balance Sheet Date"). The Financial
Statements are complete in all material respects, present fairly the financial
condition of the Company as of the dates and for the periods indicated and have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis. The accounts receivable reflected in the 10/31
Balance Sheet, or which have been thereafter acquired by the Company, have been
collected or are collectible at the aggregate recorded amounts thereof less
applicable reserves, which reserves are adequate.
2.1.7 Liabilities. Except as disclosed on Schedule 2.1.7. hereto, the Company
does not have any liabilities or obligations, either accrued, absolute or
contingent, nor do any of the Shareholders have any knowledge of any potential
liabilities or obligations of the Company, other than those (i) reflected or
reserved against in the 10/31 Balance Sheet or (ii) incurred in the ordinary
course of business since the Balance Sheet Date that would not materially
adversely affect the value and conduct of the business of the Company.
2.1.8 Additional Company Information. Attached as Schedule 2.1.8 hereto are
true, complete and correct lists of the following items:
2.1.8.1 Real Estate. All real property and structures thereon owned, leased or
subject to a contract of purchase and sale, or lease commitment, by the Company,
with a description of the nature and amount of any Encumbrances thereon. The
term "Encumbrances" means all liens, security interests, pledges, mortgages,
deeds of trust, claims, rights of first refusal, options, charges, restrictions
or conditions to transfer or assignment, liabilities, obligations, privileges,
equities, easements, rights-of-way, limitations, reservations, restrictions and
other encumbrances of any kind or nature;
2.1.8.2 Machinery and Equipment. All rigs, carriers, rig equipment, machinery,
transportation equipment, tools, equipment, furnishings, and fixtures owned,
leased or subject to a contract of purchase and sale, or lease commitment, by
the Company with a description of the nature and amount of any Encumbrances
thereon;
2.1.8.3 Inventory. All Inventory items or groups of inventory items owned by the
Company, excluding raw materials and work in process, which raw materials and
work in process are valued on the 10/31 Balance Sheet, together with the amount
of any Encumbrances thereon;
2.1.8.4 Receivables. All accounts and notes receivable of the Company, together
with (i) aging schedules by invoice date and due date, (ii) the amounts provided
for as an allowance for bad debts, (iii) the identity and location of any asset
in which the Company holds a security interest to secure payment of the
underlying indebtedness, and (iv) a description of the nature and amount of any
Encumbrances on such accounts and notes receivable.
2.1.8.5 Payables. All notes payable of the Company, together with an appropriate
aging schedule;
2.1.8.6 Insurance. All insurance policies or bonds currently maintained by the
Company, including title insurance policies, with respect to the Company,
including those covering the Company's properties, rigs, machinery, equipment,
fixtures, employees and operations, as well as listing of any premiums,
deductibles or retroactive adjustments due or pending on such policies or any
predecessor policies;
2.1.8.7 Contracts. All contracts, including leases under which the Company is
lessor or lessee, which are to be performed in whole or in part after the date
hereof;
2.1.8.8 Employee Compensation Plans. All bonus, incentive compensation, deferred
compensation, profit-sharing, retirement, pension, employee stock ownership,
welfare, group insurance, death benefit, or other employee benefit or fringe
benefit plans, arrangements or trust agreements of the Company or any employee
benefit plan maintained by the Company, together with copies of the most recent
reports with respect to such plans, arrangements, or trust agreements filed with
any governmental agency and all IRS determination letters and other
correspondence from governmental entities that have been received with respect
to such plans, arrangements or agreements (collectively, "Employee Plans");
2.1.8.9 Salaries. The names and salary rates of all present employees of the
Company, and, to the extent existing on the date of this Agreement, all
arrangements with respect to any bonuses to be paid to them from and after the
date of this Agreement;
2.1.8.10 Bank Accounts. The name of each bank in which the Company has an
account, the account balances as of the Closing Date and the names of all
persons authorized to draw thereon;
2.1.8.11 Employee Agreements. Any collective bargaining agreements of the
Company with any labor union or other representative of employees, including
amendments, supplements, and written or oral understandings, and all employment
and consulting and severance agreements of the Company;
2.1.8.12 Intellectual Property. All patents, patent applications, trademarks and
service marks (including registrations and applications therefore), trade names,
copyrights and written know-how, trade secrets and all other similar proprietary
data and the goodwill associated therewith (collectively, the "Intellectual
Property") used by the Company;
2.1.8.13 Trade Names. All trade names, assumed and fictitious names used or held
by the Company, whether and where such names are registered and where used;
2.1.8.14 Licenses and Permits. All permits, authorizations, certificates,
approvals, registrations, variances, waivers, exemptions, rights-of-way,
franchises, ordinances, licenses and other rights of every kind and character
(collectively, the "Permits") of the Company under which it conducts its
business;
2.1.8.15 Promissory Notes. All long-term and short-term promissory notes,
installment contracts, loan agreements, credit-agreements, and any other
agreements of the Company relating thereto or with respect to collateral
securing the same;
2.1.8.16 Guaranties. All indebtedness, liabilities and commitments of others and
as to which the Company is a guarantor, endorser, co-maker, surety, or
accommodation maker, or is contingently liable therefor and all letters of
credit, whether stand-by or documentary, issued by any third party;
2.1.8.17 Reserves and Accruals. All accounting reserves and accruals maintained
in the 10/31 Balance Sheet; and
2.1.8.18 Environment. All environmental permits, approvals, certifications,
licenses, registrations, orders and decrees applicable to current operations
conducted by the Company and all environmental audits, assessments,
investigations and reviews conducted by the Company within the last five years
or otherwise in the Company's possession on any property owned, leased or used
by the Company.
2.1.9 No Defaults. The Company is not in default in any obligation or covenant
on its part to be performed under any obligation, lease, contract, order, plan
or other arrangement.
2.1.10 Absence of Certain Changes and Events. Except as disclosed on
Schedule 2.1.10 hereto and other than as a result of the transactions
contemplated by this Agreement, since the Balance Sheet Date, there has not
been:
2.1.10.1 Financial Change. Any adverse change in the financial condition,
backlog, operations, assets, liabilities or business of the Company;
2.1.10.2 Property Damage. Any material damage, destruction, or loss to the
business or properties of the Company (whether or not covered by insurance);
2.1.10.3 Dividends. Any declaration, setting aside, or payment of any dividend
or other distribution in respect of the Common Stock, or any direct or indirect
redemption, purchase or any other acquisition by the Company of any such stock;
2.1.10.4 Capitalization Change. Any change in the capital stock or in the number
of shares or classes of the Company's authorized or outstanding capital stock as
described in Section 2.1.3 hereof;
2.1.10.5 Labor Disputes. Any labor or employment dispute of whatever nature; or
2.1.10.6 Other Material Changes. Any other event or condition known to any of
the Shareholders particularly pertaining to and adversely affecting the
operations, assets or business of the Company.
2.1.11 Taxes. All federal, state and local income, value added, 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 the
Company for each period for which any such returns, reports, or estimates were
due (taking into account any extensions of time to file before the date hereof);
all such returns are true and correct; the Company has only done business in
Wyoming, Montana, Utah, Colorado, South Dakota and North Dakota; all taxes shown
by such returns to be payable and any other taxes due and payable have been paid
other than those being contested in good faith by the Company; and the tax
provision reflected in the 10/31 Balance Sheet is adequate, in accordance with
generally acceptable accounting principles, to cover liabilities of the Company
at the date thereof for all taxes, including, but not limited to, interest and
penalties, and additions to taxes of any character whatsoever applicable to the
Company or its assets or business. No waiver of any statute of limitations
executed by the Company with respect to any income or other tax is in effect for
any period. The income tax returns of the Company have not been examined by the
Internal Revenue Service or the taxing authorities of any other jurisdiction.
There are no tax liens on any assets of the Company except for taxes not yet
currently due. The Company is not a member of a consolidated group subject to
Treasury Regulation 1.1502-6 or any similar provision.
2.1.12 Intellectual Property. The Company owns or possesses licenses to use all
Intellectual Property that is either material to the business of the Company or
that is necessary for the rendering of any services rendered by the Company and
the use or sale of any equipment or products used or sold by the Company,
including all such Intellectual Property listed in Schedule 2.1.8 hereto (the
"Required Intellectual Property"). The Required Intellectual Property is owned
or licensed by the Company free and clear of any Encumbrance. The Company has
not granted to any other person any license to use any Required Intellectual
Property. The Company has not infringed, misappropriated, or conflicted with,
the Intellectual Property rights of others in connection with the use by the
Company of the Required Intellectual Property or otherwise in connection with
the Company's operation of its business, nor has the Company received any notice
of such infringement, misappropriation, or conflict with such Intellectual
Property rights of others.
2.1.13 Title to and Condition of Assets. Except as disclosed on Schedule 2.1.13
hereto, the Company has good, indefeasible and marketable title to all its
properties, interests in properties and assets, real and personal, reflected in
the 10/31 Balance Sheet or in Schedule 2.1.8 hereto, free and clear of any
Encumbrance of any nature whatsoever, except Encumbrances reflected in the 10/31
Balance Sheet or in Schedule 2.1.8 hereto. All leases pursuant to which the
Company leases (whether as lessee or lessor) any substantial amount of real or
personal property are in good standing, valid, and effective; and there is not,
under any such leases, any existing default or event of default, or event that
with notice or lapse of time, or both, would constitute a default by the Company
and in respect to which the Company has not taken adequate steps to prevent a
default from occurring. The buildings and premises of the Company that are used
in its business are in good operating condition and repair, subject only to
ordinary wear and tear. All rigs, rig equipment, machinery, transportation
equipment, tools and other major items of equipment of the Company are in good
operating condition and in a state of good maintenance and repair, ordinary wear
and tear excepted, and are free from any known defects except as may be repaired
by routine maintenance. All such assets conform to all applicable laws governing
their use. The Company has not violated any law, statute, ordinance, or
regulation relating to any such assets, nor has any notice of such violation
been received by the Company or any of the Shareholders, except such as have
been fully complied with.
2.1.14 Contracts. All contracts, leases, plans or other arrangements to which
the Company 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 the Company. The Company is not and, to the knowledge of any of
the Shareholders, no other party to any such 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. No contract has been entered into on terms that
could reasonably be expected to have an adverse effect on the Company. None of
the Shareholders have received any information that would cause the Company or
such Shareholders to conclude that any customer of the Company will (or is
likely to) cease doing business with the Company (or its successors) as a result
of the consummation of the transactions contemplated hereby.
2.1.15 Licenses and Permits. The Company possesses all Permits necessary under
law or otherwise for the Company to conduct its business as now being conducted
and to construct, own, operate, maintain and use its assets in the manner in
which they are now being constructed, operated, maintained and used, including
all such Permits listed in Schedule 2.1.8 hereto (collectively, the "Required
Permits"). Each of the Required Permits and the Company's rights with respect
thereto is valid and subsisting, in full force and effect, and enforceable by
the Company subject to administrative powers of regulatory agencies having
jurisdiction, and will continue in full force and effect after the Closing Date.
The Company is in compliance in all respects with the terms of each of the
Required Permits. None of the Required Permits have been, or to the knowledge
any of the Shareholders, is threatened to be, revoked, canceled, suspended or
modified.
2.1.16 Litigation. Except as set forth on Schedule 2.1.16, there is no suit,
action, or legal, administrative, arbitration, or other proceeding or
governmental investigation pending to which the Company is a party or, to the
knowledge of any of the Shareholders, might become a party which particularly
affects the Company or its assets, nor is any change in the zoning or building
ordinances directly affecting the real property or leasehold interests of the
Company pending or, to the knowledge of any of the Shareholders , threatened.
2.1.17 Environmental Compliance.
2.1.17.1 Environmental Conditions. There are no environmental conditions or
circumstances, including, without limitation, the presence or release of any
Substance of Environmental Concern, on any property presently or previously
owned, leased or operated by the Company, or on any property to which any
Substance of Environmental Concern or waste generated by the Company's
operations or use of its assets was disposed of, which would have a material
adverse effect on the business or business prospects of the Company. The term
"Substance of Environmental Concern" means (a) any gasoline, petroleum
(including crude oil or any fraction thereof), petroleum product,
polychlorinated biphenyls, ureaformaldehyde insulation, asbestos, pollutant,
contaminant, radiation and any other substance of any kind, whether or not any
such substance is defined as toxic or hazardous under any Environmental Law ( as
defined in Section 2.1.17.3 hereof), that is regulated pursuant to or could give
rise to liability under any Environmental Law;
2.1.17.2 Permits, etc. The Company has and, within the period of all applicable
statutes of limitations, has had in full force and effect all environmental
Permits required to conduct its operations, and is, and within the period of all
applicable statutes of limitations has been, operating in compliance thereunder.
2.1.17.3 Compliance. The Company's operations and use of its assets are, and
within the period of all applicable statutes of limitations, have been in
compliance with applicable Environmental Law. "Environmental Law" as used herein
means any and all laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, and other legally enforceable requirements (including, without
limitation, common law) of the United States, or any state, local, municipal or
other governmental authority, or quasi-governmental authority, regulating,
relating to, or imposing liability or standards of conduct concerning protection
of the environmental or of human health, or employee health and safety as from
time to time has been or is now in effect;
2.1.17.4 Environmental Claims. No notice has been received by the Company or any
of the Shareholders from any entity, governmental agency or individual regarding
any existing, pending or threatened investigation, inquiry, enforcement action,
litigation, or liability, including, without limitation any claim for remedial
obligations, response costs or contribution, relating to any Environmental Law;
2.1.17.5 Enforcement. The Company and, to the knowledge of any of the
Shareholders, no predecessor of the Company or other party acting on behalf of
the Company, has entered into or agreed to any consent, decree, order,
settlement or other agreement, nor is subject to any judgment, decree, order or
other agreement, in any judicial, administrative, arbitral, or other forum,
relating to compliance with or liability under any Environmental Law;
2.1.17.6 Liabilities. The Company has not assumed or retained, by contract or
operation of law, any liabilities of any kind, fixed or contingent, known or
unknown, under any Environmental Law.
2.1.17.7 Renewals. None of the Shareholders know of any reason the Company (or
its successors) would not be able to renew without material expense any of the
permits, licenses, or other authorizations required pursuant to Environmental
Law to conduct and use any of the Company's current or planned operations; and
2.1.17.8 Asbestos and PCBs. No material amounts of friable asbestos currently
exist on any property owned or operated by the Company, nor do polychlorinated
biphenyls exist in concentrations of 50 parts per million or more in electrical
equipment owned or being used by the Company in its operations or on its
properties.
2.1.18 Compliance with Other Laws. The Company is not in violation of or in
default with respect to, or in alleged violation of or alleged default with
respect to, the Occupational Safety and Health Act (29 U.S.C. ''651 et seq.) as
amended, or any other applicable law or any applicable rule, regulation, or any
writ or decree of any court or any governmental commission, board, bureau,
agency, or instrumentality, or delinquent with respect to any report required to
be filed with any governmental commission, board, bureau, agency or
instrumentality.
2.1.19 ERISA Plans or Labor Issues.
2.1.19.1 Compliance With Applicable Laws. Except as identified in
Schedule 2.1.8.8, the Company does not currently sponsor, maintain or contribute
to, and has not at any time sponsored, maintained or contributed to, any
Employee Plan (as defined in Section 2.1.8.8 hereof) or any employee benefit
plan that is subject to any of the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), in which any of its employees are or
were participants (whether on an active or frozen basis). Each Employee Plan set
forth in Schedule 2.1.8.8 fully complies currently, and has fully complied in
the past, in form and operation, with the applicable provisions of ERISA, the
IRS and other applicable laws, including, without limitation, all qualification
and reporting and disclosure requirements of the Code and ERISA. Each Employee
Plan that is an employee pension benefit plan (as described in Section 3(2) of
ERISA) (i) meets, and has met, in all respects, the requirements of a "qualified
plan" under Section 401(a) of the Code whose income is exempt from taxation
under Section 501(a) of the Code, (ii) has received a currently effective
favorable determination letter from the IRS and (iii) nothing has occurred since
the date of such determination letter that could adversely affect such
qualification. Also, with respect to each Employee Plan, the Company and any
other party in interest have not engaged in any prohibited transaction or any
violation of its fiduciary duties to such plan. All contributions required to be
made to each Employee Plan under the terms of such Employee Plan, ERISA or other
applicable law have been timely made and there are no delinquent contributions
as of the Closing Date. None of the Employee Plans (i) is a "multiemployer plan"
(as defined in Section 3(37) of ERISA), (ii) is a defined benefit pension plan
subject to Title IV of ERISA, (iii) is a "voluntary employees' beneficiary
association" within the meaning of Code Section 501(c)(9), (iv) provides for
medical or other insurance benefits to current or future retired employees or
former employees of the Company (other than as required for group health plan
continuation coverage under Code Section 4980B ("COBRA") or applicable state
law), or (v) obligates the Company to pay any benefits solely as a result of a
change in control of the Company. During the six years preceding the Closing
Date, (i) no under-funded pension plan subject to Section 412 of the Code has
been transferred out of the Company, (ii) the Company has not participated in or
contributed to, or had an obligation to contribute to, any multiemployer plan
and has no withdrawal liability with respect to any multiemployer plan, and
(iii) the Company has not maintained any pension plan subject to Title IV of
ERISA. There are no claims, lawsuits or regulatory actions that have been
asserted, instituted or threatened against any Employee Plan by any fiduciary or
participant of such plan, except routine claims for benefits thereunder, or by
any governmental entity. The Company has not engaged in any unfair labor
practices. None of the Shareholders is aware of any pending or threatened
dispute with any of its existing or former employees.
2.1.19.2 Valuation. The Company has received the valuation of an independent and
certified appraiser (which appraiser satisfies the Code requirements to appraise
non-publicly traded employer securities held in an employee stock ownership
plan), in a form reasonably satisfactory to it, indicating that as of the
Closing Date the Purchase Price for the Company Shares held by the ESOP is equal
to or greater than the fair market value of such shares, and the trustee of the
ESOP has determined that the transactions contemplated by this Agreement are
fair to the participants in the ESOP.
2.1.20 Investigations; Litigation. No investigation or review by any
governmental entity with respect to the Company or any of the transactions
contemplated by this Agreement is pending or, to the knowledge of any of the
Shareholders , threatened, nor has any governmental entity indicated to the
Company or any of the Shareholders an intention to conduct the same, and there
is no action, suit or proceeding pending or, to the knowledge of any of the
Shareholders , threatened against or affecting the Company at law or in equity,
or before any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, that either individually
or in the aggregate, does or is likely to result in any material adverse change
in the financial condition, properties or business of the Company.
2.1.21 Absence of Certain Business Practices. Neither the Company nor any
officer, employee or agent of the Company, nor any other person acting on its
behalf, has directly or indirectly, within the past five years, given or agreed
to give any gift or similar benefit to any customer, supplier, government
employee or other person who is or may be in a position to help or hinder the
business of the Company (or to assist the Company in connection with any actual
or proposed transaction) that might subject the Company to any damage or penalty
in any civil, criminal or governmental litigation or proceeding.
2.1.22 No Untrue Statements. The Company has made available to Buyer true,
complete and correct copies of all contracts, documents concerning all
litigation and administrative proceedings, licenses, permits, insurance
policies, lists of suppliers and customers, and records relating principally to
the Company's assets and business, and such information covers all commitments
and liabilities of the Company relating to its business or its assets. This
Agreement and the agreements and instruments to be entered into in connection
herewith do not include any untrue statement of a material fact or omit to state
any material fact or omit to state any material fact necessary to make the
statements made herein and therein not misleading in any material respect.
2.1.23 Consents and Approvals. No consent, approval or authorization of, or
filing or registration with, any governmental or regulatory authority, or any
other person or entity other than the Shareholders, is required to be made or
obtained by the Company or any of Shareholders in connection with the execution,
delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby.
2.1.24 Finder's Fee. Other than as described in the contract between the
Shareholders and the Xxxxxxx Group, Houston, Texas, dated October 6, 1997, a
copy of which is attached hereto as Schedule 2.1.24, all negotiations relative
to this Agreement, the Employment Agreements and the Non-Competition Agreements,
and the transactions contemplated hereby and thereby, have been carried on by
the Shareholders and their counsel directly with Buyer and its counsel, without
the intervention of any other person in such manner as to give rise to any valid
claim against any of the parties hereto for a brokerage commission, finder's fee
or any similar payments.
2.2 Representations and Warranties of Buyer. Buyer represents and warrants to
each of the Shareholders as follows:
2.2.1 Organization and Good Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
has full requisite corporate power and authority to carry on its business as it
is currently conducted, and to own and operate the properties currently owned
and operated by it, and is duly qualified or licensed to do business and is in
good standing as a foreign corporation authorized to do business in all
jurisdictions in which the character of the properties owned or the nature of
the business conducted by it would make such qualification or licensing
necessary.
2.2.2 Agreement Authorized and its Effect on Other Obligations. The consummation
of the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of Buyer, and this Agreement is a
valid and binding obligation of Buyer enforceable in accordance with its terms.
The execution, delivery and performance of this Agreement by Buyer will not
conflict with or result in a violation of breach of any term or provision of, or
constitute a default under (a) the Certificate of Incorporation or Bylaws of
Buyer or (b) any obligation, indenture, mortgage, deed of trust, lease, contract
or other agreement to which Buyer or any of its property is bound.
2.2.3 Consents and Approvals. No consent, approval or authorization of, or
filing of a registration with, any governmental or regulatory authority, or any
other person or entity is required to be made or obtained by Buyer in connection
with the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby.
2.2.4 Investigations; Litigation. No investigation or review by any governmental
entity with respect to Buyer in connection with any of the transactions
contemplated by this Agreement is pending or, to the best of Buyer's knowledge,
threatened, nor has any governmental entity indicated to Buyer an intention to
conduct the same. There is no action, suit or proceeding pending or, to the
Buyer's knowledge, threatened against or affecting Buyer by any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, which either individually or in the aggregate, does or is
likely to result in any material adverse change in the financial condition,
properties or businesses of Buyer.
ARTICLE 3
ADDITIONAL AGREEMENTS
3.1 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.
3.2 Public Announcements. Except as mutually agreed, neither Buyer, the
Shareholders, the Individuals 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 thereby. The Shareholders hereby
consent to Buyer's issuance of a press release announcing the completion of the
transactions contemplated by this Agreement.
3.3 338(h)(10) Election. If the Buyer elects to file an election to treat the
acquisition of the Company Shares as an asset purchase under Section 338(h)(10)
of the Code, the Shareholders agree to execute and deliver to Buyer any
documents required to be executed by the Shareholders in connection with such
election, and Buyer will compensate and indemnify the Shareholders for any
increased tax liability resulting therefrom. In addition, Buyer will indemnify
and reimburse the Shareholders for any additional tax that may be deemed to be
paid by the Shareholders on income created by Buyer compensating the
Shareholders for taxes paid on a Section 338(h)(10) election increase in asset
values.
3.4 Environmental Assessments and Cleanup. As soon as practicable after the date
hereof, Buyer shall conduct such Phase I Environmental Assessments with respect
to the real property listed on Schedule 2.1.8.1 as it deems prudent. In
addition, the Buyer will conduct Phase II Environmental Assessments with respect
to any such real property where Phase II assessments are reasonably determined
by the Buyer to be appropriate. To the extent that such environmental
assessments indicate that liabilities exist for environmental cleanup on a
particular property, the Buyer will conduct appropriate restoration activities
required on any such property. All of the costs for conducting such
environmental assessments and environmental cleanup ("Environmental Assessment
and Cleanup Costs") shall be paid by the Buyer and the amount of the Purchase
Price Holdback payable to the Shareholders pursuant to Section 1.1.2 shall be
reduced by such amount.
3.5 Tax Indemnification. If at any time from the date hereof through the first
anniversary of the date hereof the Buyer determines that the Company owes any
franchise or other corporate tax in any state in which the Company has conducted
business but has not been qualified as a foreign corporation, then, the amount
of such tax (the "Tax Adjustment") shall be paid by the Buyer and the amount of
the Purchase Price Holdback payable to the Shareholders pursuant to
Section 1.1.2 shall be reduced by such amount.
ARTICLE 4
INDEMNIFICATION
4.1 Indemnification by the Sellers. In addition to any other remedies available
to Buyer under this Agreement, or at law or in equity, the Buyer, the Company,
their affiliates and their respective officers, directors, employees, agents and
stockholders (collectively, the "Buyer Indemnified Parties"), shall be
indemnified against and with respect to any and all claims, costs, damages,
losses, expenses, obligations, liabilities, recoveries, suits, causes of action
and deficiencies, including interest, penalties and reasonable fees and expenses
of attorneys, consultants and experts (collectively, the "Damages") that the
Buyer Indemnified Parties shall incur or suffer, which arise, result from or
relate to any breach by any of the Shareholders (or the failure of any of the
Shareholders to perform) their respective representations, warranties, covenants
or agreements in this Agreement or in any schedule, certificate, exhibit or
other instrument delivered to Buyer by any of the Shareholders under this
Agreement.
4.2 Indemnification by Buyer. In addition to any other remedies available to the
Shareholders under this Agreement, or at law or in equity, Buyer shall
indemnify, defend and hold harmless each of the Shareholders against and with
respect to any and all Damages that such indemnitees 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 this
Agreement or in any schedule, certificate, exhibit or other instrument furnished
or delivered to either of the Individuals by or on behalf of Buyer under this
Agreement.
4.3. Indemnification Procedure. If any party hereto discovers or otherwise
becomes aware of an indemnification claim arising under Sections 4.1 or 4.2 of
this Agreement, such indemnified party shall give written notice to the
indemnifying party, specifying such claim, and may thereafter exercise any
remedies available to such party under this Agreement; provided, however, that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of any obligations hereunder, to the extent the
indemnifying party is not materially prejudiced thereby. Further, promptly after
receipt by an indemnified party hereunder of written notice of the commencement
of any action or proceeding with respect to which a claim for indemnification
may be made pursuant to Sections 4.1 or 4.2 hereof, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party, give written notice to the latter of the commencement of such action;
provided, however, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of any obligations
hereunder, to the extent the indemnifying party is not materially prejudiced
thereby. In case any such action is 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, and after such notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof unless the indemnifying party has failed to assume the defense
of such claim and to employ counsel reasonably satisfactory to such indemnified
person. An indemnifying party who elects not to assume the defense of a 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, 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, or unless such judgment or settlement includes as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability with respect to such claim. 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 or delayed.
4.3 Limitation on Damages. Notwithstanding anything in this Agreement to the
contrary, the Buyer Indemnified Parties shall be indemnified for Damages only to
the extent of the Purchase Price Holdback after deducting all Environmental
Assessment and Cleanup Costs pursuant to Section 3.4. The aggregate amount of
any Damages owed by the Buyer to the Shareholders shall not exceed $1,000,000 in
the aggregate.
4.4 Exclusive Remedy. From and after the date hereof, the payment of (i)
Environmental Assessments and Cleanup Costs pursuant to Section 3.4 and (ii) the
costs of indemnification under Sections 4.1 and 4.2, as limited by the
provisions of Section 4.4, shall be the exclusive remedies for monetary damages
that may be asserted under this Agreement or in connection with the transactions
contemplated herein. Notwithstanding any provision of the contrary contained
herein, each of the parties to this Agreement hereby waives any right to recover
special, punitive or exemplary damages for any claim asserted against the other.
Noting in this Section 4.5 shall limit the availability of equitable remedies,
such as specific performance, to enforce the provisions of this Agreement.
ARTICLE 5
MISCELLANEOUS
5.1 Survival of Representations, Warranties and Covenants. All representations,
warranties, covenants and agreements made by the parties hereto shall survive
until the first anniversary of the date hereof, notwithstanding any
investigation made by or on behalf of any of the parties hereto. All statements
contained in any certificate, schedule, exhibit or other instrument delivered
pursuant to this Agreement shall be deemed to have been representations and
warranties by the respective party or parties, as the case may be, and shall
also survive indefinitely despite any investigation made by any party hereto or
on its behalf.
5.2 Entirety. This Agreement embodies the entire agreement among the parties
with respect to the subject matter hereof, and all prior agreements between the
parties with respect thereto are hereby superseded in their entirety.
5.3 Counterparts. Any number of counterparts of this Agreement may be executed
and each such counterpart shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one instrument.
5.4 Notices and Waivers. Any notice or waiver to be given to any party hereto
shall be in writing and shall be delivered by courier, sent by facsimile
transmission or first class registered or certified mail, postage prepaid,
return receipt requested:
If to Buyer:
Addressed to:.............. With a copy to:
Key Rocky Mountain, Inc.... Xxxxxx & Xxxxxx, L.L.P.
Two Tower Center, 20th Floor 700 Louisiana, 00xx Xxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000 Xxxxxxx, Xxxxx 00000-0000
Attn: General Counsel..... Attn: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000.. Facsimile: (000) 000-0000
If to any Shareholder:
Addressed to:.............. With a copy to:
c/o Xxxxx X. Xxxxxx........ Xxxxxx Xxxxxx
Xxxxxx Brothers, Inc. ..... Xxxxxx & Xxxx
2895 West Main............. 00 Xxxx Xxxx
X.X. Xxx 000 .............. Newcastle, Wyoming 82701
Newcastle, Wyoming 82701... Facsimile: (000) 000-0000
Facsimile: (000) 000-0000..
Any communication so addressed and mailed by first-class registered or certified
mail, postage prepaid, with return receipt requested, shall be deemed to be
received on the third business day after so mailed, and if delivered by courier
or facsimile to such address, upon delivery during normal business hours on any
business day.
5.5 Table of Contents and Captions. The table of contents and captions contained
in this Agreement are solely for convenient reference and shall not be deemed to
affect the meaning or interpretation of any article, section, or paragraph
hereof.
5.6 Successors and Assigns. This Agreement shall be binding upon and shall inure
to the benefit of and be enforceable by the successors and assigns of the
parties hereto.
5.7 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
5.8 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the applicable laws of the State of Wyoming.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Shareholders (and for purposes of Section 1.6.2, the
Trustee of the ESOP) have executed this Agreement, and the Buyer has caused this
Agreement to be signed in its corporate name by its duly authorized
representative, all as of the day and year first above written.
BUYER:
KEY ROCKY MOUNTAIN, INC.
By:
Xxxxxxx Xxxxxxx, President
SHAREHOLDERS:
XXXXXX BROTHERS, INC. EMPLOYEES= STOCK OWNERSHIP RETIREMENT
PLAN AND TRUST
By:
Xxxxxxx Xxxxxxx, Trustee
XXXXX X. XXXXXX TRUST
By:
Xxxxx X. Xxxxxx, Trustee
XXXXXXX X. XXXXXX TRUST
By:
Xxxxxxx X. Xxxxxx, Trustee
XXXXXXX X. XXXXXX TRUST**
By:
Xxxxxxx X. Xxxxxx, Trustee
Xxxx X. Xxxxxx
*
Xxxxx X. Xxxxxx
*
Xxxxxx Xxxxxx
*
By:*
Xxxxx X. Xxxxxx, Attorney-in-Fact
By:**
Xxxxxxx X. Xxxxxx, Attorney-in-Fact
ESOP TRUSTEE:
(Solely for purposes of Section 1.6.2)
Xxxxxxx Xxxxxxx
