ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of the 4th day of December, 1998, by and between AGGREKO INC., a
Louisiana corporation ("Purchaser") and TOWER TECH, INC., an Oklahoma
corporation ("Seller").
WITNESSETH:
WHEREAS, Seller is currently engaged in the business of, among other
things, leasing and renting industrial modular cooling towers (the "Business");
WHEREAS, in consideration of certain payments to be made to Seller by
Purchaser and the assumption of certain liabilities by Purchaser, Seller desires
to sell to Purchaser and Purchaser desires to purchase from Seller, upon the
terms and subject to the conditions hereinafter set forth, the Business as an
ongoing concern, together with substantially all of the properties and assets,
tangible or intangible, of Seller used in connection with the Business (except
for the Retained Assets, as defined in Section 1.02 hereof); and
WHEREAS, Seller will derive certain substantial benefits from the
transactions contemplated by this Agreement and in connection therewith is
willing to (i) deliver to Purchaser certain agreements not to compete with
Purchaser and the Business for a reasonable period of time in a specific
geographic area, and (ii) make certain representations, warranties, covenants
and agreements set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants hereinafter contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Purchaser and Seller, on the basis of, and in reliance upon, the respective
representations, warranties, covenants, obligations, indemnities and agreements
set forth in this Agreement, and upon the terms and subject to the conditions
contained herein, hereby agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.01 Assets to be Purchased. Subject to the terms and conditions
hereinafter set forth, and except for the Retained Assets, Seller hereby agrees
to sell, assign, transfer, convey and deliver, or cause to be sold, assigned,
transferred, conveyed and delivered, to Purchaser, and Purchaser agrees to
purchase, accept and acquire from Seller, on the Closing Date (as defined in
Section 3.01 hereof), on a going concern basis, all of the assets, properties,
rights and interests of every kind and description, personal or mixed, tangible
or intangible, used by Seller in connection with the Business (all of which
assets, properties, rights and interests are hereinafter collectively referred
to as the "Acquired Assets"), including, without limitation, the following:
(a) Tangible Personal Property. All of Seller's modular
cooling tower rental fleet, equipment inventories, including pumps,
electrical distribution panels, heat exchangers, pipings, fittings and
other inventoried items (collectively, the "Rental Equipment"), shop
equipment, tools, operating supplies, and other tangible personal
property used in connection with the Business, including, without
limitation, those assets listed on Schedule 1.01(a) to this Agreement.
(b) Books, Records and Written Materials. All books of
account, records, files, invoices, customer lists, supplier lists,
promotional and advertising materials, plans, designs and other
drawings, catalogs, brochures, manuals and handbooks and other similar
data reduced to writing or other storage media and used by Seller in
connection with the Business or any Acquired Asset (collectively, the
"Documentary Information").
(c) Third Party Warranties. All rights and benefits of Seller
under any and all manufacturer's, merchant's, repairmen's and other
third-party warranties, guaranties and service or replacement programs
relating to the Business or any Acquired Asset, including, without
limitation, those assets listed on Schedule 1.01(c) to this Agreement
(collectively, the "Warranties").
(d) Personal Property Leases. All of Seller's right, title and
interest in and to those personal property leases (collectively, the
"Personal Property Leases") listed on Schedule 1.01(d) to this
Agreement (collectively, the "Leased Personal Property").
(e) Acquired Contracts. All rights and benefits of Seller in,
to or under those written agreements, contracts, sales commitments,
purchase orders, customer commitments, security agreements or
instruments and undertakings entered into in the ordinary course of the
Business which have been (i) entered into on or before the date hereof
and are listed on Schedule 1.01(e) to this Agreement or (ii) are
entered into after the date hereof, are related exclusively to the
Business and satisfy the requirements of Section 6.02(c) hereof
(collectively, the "Acquired Contracts").
(f) Permits and Approvals. All of the licenses, permits,
approvals, variances, rights, waivers or consents (collectively, the
"Permits") issued to Seller by any federal, state, county, parish,
local or foreign governmental entity or municipality or subdivision
thereof or any authority, arbitrator, department, commission, board,
bureau, body, agency, court or instrumentality thereof (collectively,
"Governmental Authorities") and used by Seller exclusively in
connection with the operations of the Business, including, without
limitation, the Permits listed on Schedule 1.01(f) to this Agreement.
(g) Goodwill. The goodwill associated with the Business.
1.02 Retained Assets. Notwithstanding anything contained in Section
1.01 hereof to the contrary, Seller shall, and hereby does, expressly retain all
of Seller's right, title and interest in and to the following assets,
properties, rights and interests, including, without limitation, certain assets
related to the Business which are expressly described herein (all of which
assets, properties, rights and interests are hereinafter collectively referred
to as the "Retained Assets"):
(a) cash, cash equivalents, certificates of deposit and other
investments in marketable securities of third-party issuers;
(b) all receivable for goods and/or services rendered by
Seller with respect to the Business prior to the Closing Date;
(c) assets, properties and rights related exclusively to
affiliates, divisions or operations of Seller other than the Business;
(d) all intellectual property of any and all kinds owned or
licensed by or to Seller (it being understood that Purchaser shall have
the right to use certain intellectual property of Seller as and to the
extent provided in the License Agreement referred to in Section 3.07);
and
(e) any and all rights to the name "Tower Tech" and any
derivation thereof; provided, however, that, without payment of
additional consideration, Purchaser shall be permitted a transition
period from the Closing Date until March 31, 1999 or such later date
mutually agreed to in writing as shall be required to utilize and phase
out all items or printed materials bearing the "Tower Tech" name
included in the Acquired Assets.
1.03 Assignability and Consents. To the extent that the assignment of
any Acquired Contract, Warranties, Permits, Documentary Information, Leased
Personal Property or other Acquired Asset to be assigned to Purchaser as
provided herein shall require the consent or waiver of any third party or any
Governmental Authority (each a "Required Consent"), Seller shall use its best
efforts to obtain the consent or waiver of each such third party or Governmental
Authority to such assignment, in each case in form and substance satisfactory to
Purchaser, on or prior to the Closing Date. Schedule 1.03 to this Agreement sets
forth a list of all of the Required Consents.
1.04 Assumed Liabilities and Obligations. On the Closing Date,
Purchaser shall assume and agree to pay, perform and discharge as and when due
only the following obligations and liabilities of Seller:
(a) All executory obligations with respect to the Business
accruing exclusively, and based upon events occurring, after the
Closing Date under (i) the Personal Property Leases, and (ii) the
Acquired Contracts.
All of the foregoing to be assumed by Purchaser hereunder are
collectively referred to herein as the "Assumed Liabilities".
1.05 Retained Liabilities and Obligations. Notwithstanding any other
provision of this Agreement or doctrine of law, Seller shall retain, and
Purchaser shall not assume or be liable with respect to, any liability or
obligation of Seller ("Retained Liabilities"), except those expressly described
in, and only to the extent specifically assumed by Purchaser pursuant to,
Section 1.04 hereof.
ARTICLE II
PURCHASE PRICE
2.01 Payment. As full payment for the Acquired Assets, the
Noncompetition Agreement (as defined in Section 3.06 hereof), the License
Agreement (as defined in Section 3.07 hereof) and the Supply Agreement (as
defined in Section 3.08 hereof), at the Closing Purchaser shall (a) assume the
Assumed Liabilities, and (b) shall pay and/or deliver to Seller:
(i) the sum of Twelve Million One Hundred Fifty Thousand
Dollars ($12,150,000.00), by wire transfer of immediately available funds to
such accounts as shall be designated in writing by Seller at least three (3)
business days prior to the Closing Date (the "Cash Portion"); and
(ii) the Purchaser's promissory note in the principal amount
of One Million Three Hundred Fifty Thousand Dollars ($1,350,000.00) and
substantially in the form attached hereto as Exhibit A (the "Note").
2.02 Allocation of Purchase Price. The Purchase Price and the Assumed
Liabilities represent the amount agreed upon by the parties to be the value of
the Acquired Assets, the Noncompetition Agreement, the License Agreement and the
Supply Agreement, it being further agreed that the Purchase Price and the
Assumed Liabilities shall be allocated among the Acquired Assets, the
Noncompetition Agreement, the License Agreement and the Supply Agreement in
accordance with the allocation set forth on Schedule 2.02. Purchaser and Seller
shall report the purchase and sale of the Acquired Assets, the Noncompetition
Agreement, the License Agreement and the Supply Agreement in their respective
federal, state, local or foreign tax returns in accordance with the allocation
set forth on such Schedule 2.02.
ARTICLE III
CLOSING
3.01 Date, Time and Place of Closing. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Seller located at two miles xxxx xx Xxxxxxx 00, Xxxxxxxxx, Xxxxxxxx 00000 at
12:00 a.m., local time, on December 4, 1998, or as promptly as practicable
thereafter as soon as the conditions set forth in Article VIII are satisfied, or
at such other date, time or place fixed by mutual written consent of Purchaser
and Seller, but in no event later than December 18 , 1998. All proceedings to
take place at the Closing shall take place simultaneously, and no delivery shall
be considered to have been made until all such proceedings have been completed
(the time and date of such Closing is referred to herein as the "Closing Date").
3.02 Conveyance of Assets. At the Closing, Seller shall deliver or
cause to be delivered to Purchaser for the purpose of transferring the Acquired
Assets to Purchaser such documents, bills of sale, certificates of title,
endorsements, assignments and instruments necessary, advisable or desirable to
vest in Purchaser good and marketable title to all of the Acquired Assets being
transferred by Seller to Purchaser hereunder (such documents and instruments
hereinafter collectively referred to as the "Transfer Documents"), such Acquired
Assets shall be free and clear of any and all liens, prior assignments, security
interests, charges, pledges, claims or encumbrances whatsoever (collectively,
"Liens"), except Liens relating to the Assumed Liabilities.
3.03 Assumption Instrument. At the Closing, Purchaser shall, at the
request of Seller, execute and deliver to Seller the assumption agreement with
respect to the Assumed Liabilities, in substantially the form attached hereto as
Exhibit B (the "Assumption Instrument").
3.04 Payment of Purchase Price. At the Closing, Purchaser shall pay to
Seller the Purchase Price by delivering to Seller the Cash Portion as
contemplated by Section 2.01(b)(i) and the Note.
3.05 Taxes, Charges and Fees.
(a) Sales, Use and Transfer Taxes. At the Closing, Purchaser
shall pay all transfer taxes, documentary stamp taxes, recording
charges and other taxes imposed by any Governmental Authority in
connection with the sale and, transfer of the Acquired Assets.
Notwithstanding the foregoing sentence, Seller shall remain solely
responsible for any and all taxes imposed by any Governmental Authority
in connection with the use or rental of the Acquired Assets on or prior
to the Closing Date. In addition, Seller shall have the sole
responsibility of representing its position in any future audit by any
Governmental Authority with respect to any tax periods during which the
Seller owned the Acquired Assets or operated the Business.
(b) Payment of Personal Property Taxes. Personal property
taxes associated with the Acquired Assets that are imposed on a
periodic basis and are payable for a tax period ending on or before
December 31, 1998 shall be paid by Seller and Seller shall have the
sole responsibility of such taxes (and any payments due on account of
such taxes).In addition, Seller acknowledges and agrees that Seller
shall remain solely responsible for all other Taxes (as defined in
Section 4.15) and any payments due on account of such Taxes arising on
or prior to the Closing Date. Purchaser shall have the sole
responsibility for the payment of personal property taxes associated
with the Acquired Assets (and any payments due on account of such
taxes) which are payable for a tax period beginning on or after January
1, 1999.
3.06 Noncompetition Agreement. At the Closing, Seller, Xxxxxx X. Xxxxxx
and Purchaser shall enter into a Noncompetition Agreement (herein so called) in
substantially the form attached hereto as Exhibit C.
3.07 License Agreement. At the Closing, Seller and Purchaser shall
enter into a License Agreement (herein so called) in substantially the form
attached hereto as Exhibit D.
3.08 Supply Agreement. At the Closing, Seller and Purchaser shall enter
into a Supply Agreement (herein so called) in substantially the form attached
hereto as Exhibit E.
3.09 Other Documents. All other documents, certificates, consents,
approvals and notations, confirmations and papers required by Article VIII
hereof as conditions to Closing, and all appropriate receipts, shall be
delivered to Seller and to Purchaser, as the case may be, at the Closing.
3.10 Covenants and Further Assurance. Seller shall, at any time and
from time to time after the Closing Date, upon request of Purchaser and without
further cost or expense to Purchaser, execute and deliver such instruments of
conveyance and assignment and shall take such action as Purchaser may reasonably
request to more effectively transfer to and vest in Purchaser, and to put
Purchaser in possession of, any and all of the Acquired Assets, free and clear
of any and all Liens, or otherwise carry out the transactions contemplated by
this Agreement. Purchaser shall, at the time and from time to time after the
Closing Date, upon request of Seller and without further cost or expense to
Seller, execute and deliver such instruments of assumption and shall take such
other action as Seller may reasonably request to more effectively evidence or
effect the assumption by Purchaser of the Assumed Liabilities or otherwise carry
out the transactions contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
In order to induce the Purchaser to enter into this Agreement and to
consummate the transactions contemplated hereby, Seller hereby represents and
warrants as of the date hereof as follows:
4.01 Organization and Good Standing; Power and Authority. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Oklahoma. Seller has full corporate power and authority to
execute and deliver this Agreement and to perform Seller's obligations hereunder
and to consummate the transactions contemplated hereby, to operate the Business
as it is now being conducted and to own or lease the Acquired Assets. Seller is
qualified to do business and is in good standing in each jurisdiction in which
the failure to so qualify would have a material adverse effect upon the
Business, the Acquired Assets or Seller.
4.02 Corporate Authorization. The execution, delivery and performance
of this Agreement and all other agreements and instruments executed and
delivered by Seller in connection herewith and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Seller. This
Agreement has been, and the other agreements and instruments to be executed and
delivered by Seller in connection herewith will be, on or prior to the Closing
Date, duly executed and delivered by Seller, and constitute, or upon execution
and delivery will constitute, the valid, legal and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms.
4.03 Conflicts: Defaults. The execution and delivery of this Agreement
and the other agreements and instruments executed or to be executed in
connection herewith by Seller do not, and the performance by Seller of its
obligations hereunder and thereunder and the consummation by Seller of the
transactions contemplated hereby or thereby, will not (i) violate, conflict
with, or constitute a breach or default under any of the terms of Seller's
Articles of Incorporation or Bylaws, or except for the Required Consents, any
Permit, patent, trademark, copyright or other intellectual property right of
Seller, Warranties, Documentary Information, Acquired Contract or Personal
Property Lease or any other obligation under or with respect to the Acquired
Assets, (ii) result in the creation or imposition of any Liens in favor of any
third party upon any of the Acquired Assets or the Business, (iii) violate or
require any authorization, approval, consent or other action by, or
registration, declaration or filing with or notice to, any Governmental
Authority pursuant to any law, statute, judgment, decree, injunction, order,
writ, rule or regulation of any Governmental Authority affecting the Business or
the Acquired Assets; or (iv) except as set forth on Schedule 4.03, conflict with
or result in a breach of, create an event of default (or event that, with the
giving of notice or lapse of time or both, would constitute an event of default)
under, or give any third party the right to terminate, cancel or accelerate any
obligation under, any contract, agreement, note, bond, guarantee, deed of trust,
loan agreement, mortgage, license, lease, indenture, instrument, order,
arbitration award, judgment or decree to which Seller is a party or by which
Seller or any of its assets or properties are bound or affected, including,
without limitation, the Acquired Assets. There is no pending or, to the best
knowledge of Seller , threatened action, suit, claim, proceeding, inquiry or
investigation before or by any Governmental Authority, involving or to restrain
or prevent the consummation of the transactions contemplated by this Agreement
or that might reasonably be expected to affect the right of Purchaser to acquire
or own the Acquired Assets or the right of Purchaser to operate the Business in
substantially the manner in which it currently is operated.
4.04 Absence of Undisclosed Information. The Business and the Acquired
Assets are not subject to (i) any liabilities or obligations of any nature,
fixed or contingent, or any facts that might give rise to any such liabilities
or obligations, which would materially adversely affect the business, business
prospects, assets, financial condition or results of operations of the Business,
or (ii) to the best knowledge of Seller, any liabilities or adverse claims
against or relating to the Acquired Assets or the Business.
4.05 Financial Statements. (a) Seller has heretofore delivered to
Purchaser true and correct copies of the Seller's audited balance sheet as at
November 30, 1997, and related statements of operations, retained earnings and
cash flows for the twelve month period ending November 30, 1997, together with
the notes relating thereto (collectively, the "Audited Financial Statements").
The Audited Financial Statements: (A) have been prepared in accordance with the
books and records of Seller; (B) have been prepared in accordance with generally
accepting accounting principles consistently applied with Seller's financial
statements for its business; (C) reflect and provide adequate reserves and
disclosures in respect of all liabilities of the Business, including without
limitation, all contingent liabilities, as of November 30, 1997 to the extent
required by generally accepted accounting principles consistently applied; and
(D) present fairly the financial condition of the Business at such date and the
results of operations and cash flows of the Business for the period then ended.
(b) Seller has heretofore delivered to Purchaser true and correct
copies of the Seller's unaudited balance sheet as at August 31, 1998, and
related statements of operations, retained earnings and cash flows for the nine
month period ending August 31, 1998, together with the notes relating thereto
(collectively, the "Unaudited Financial Statements"). The Unaudited Financial
Statements: (A) have been prepared in accordance with the books and records of
Seller; (B) have been prepared in accordance with generally accepting accounting
principles consistently applied with Seller's financial statements for its
business; (C) reflect and provide adequate reserves and disclosures in respect
of all liabilities of the Business, including without limitation, all contingent
liabilities, as of August 31, 1998 to the extent required by generally accepted
accounting principles consistently applied; and (D) present fairly the financial
condition of the Business at such date and the results of operations and cash
flows of the Business for the period then ended.
(c) Seller has heretofore delivered to Purchaser true and correct
copies of the Seller's unaudited balance sheet as at October 31, 1998, and
related statements of operations, retained earnings and cash flows for the
eleven month period ending October 31, 1998, together with the notes relating
thereto with respect to Seller's Rental Division (collectively, the "Rental
Division Financial Statements"). The Rental Division Financial Statements: (A)
have been prepared in accordance with the books and records of Seller; (B) have
been prepared in accordance with generally accepting accounting principles
consistently applied with Seller's financial statements for the Rental Division;
(C) reflect and provide adequate reserves and disclosures in respect of all
liabilities of the Rental Division, including without limitation, all contingent
liabilities, as of October 31, 1998 to the extent required by generally accepted
accounting principles consistently applied; and (D) present fairly the financial
condition of the Rental Division at such date and the results of operations and
cash flows of the Rental Division for the period then ended.
4.06 Adequacy of Acquired Assets. Seller has good and marketable title
to all of the Acquired Assets and the Acquired Assets are, or will be, upon
consummation of the transactions contemplated by this Agreement on the Closing
Date, free and clear of all Liens. The Acquired Assets include all assets and
properties of Seller of every kind and description, personal or mixed, tangible
or intangible, the use of which is reasonably necessary to enable Purchaser to
conduct the Business as it has been conducted by Seller prior to the date hereof
and all such property is in good operating condition and in a state of
reasonable maintenance and repair. There are no unpaid liabilities, claims or
obligations arising from the ownership, use or operation of the Acquired Assets
or the Business which could give rise to any mechanic's, materialman's or other
statutory lien against the Acquired Assets, or for which Purchaser could be held
responsible. All industrial modular cooling towers included in the Rental
Equipment are capable of performing at the capacity levels defined in this
Section 4.06. For the purposes of defining capacity, one (1) nominal ton equals
fifteen thousand (15,000) British Thermal Units (BTU) per hour. The modular
cooling tower rental fleet units are constructed in 6'x6' modules where each
module is rated with a capacity of one hundred (100) tons. For example, a Model
360 measures 12' x 30' and consists of 10-6'x6' modules, thus having a rated
capacity of one thousand (1000) tons. This rated capacity is only applicable to
operating conditions of 95(Degree) F Hot Water Temperature (HWT), 85(Degree)F
Cold Water Temperature (CWT), 76(Degree)F Wet Bulb (WB), and 3 gallons per
minute (gpm) per ton of water flow rate. The charts set forth on Schedule 4.06
shall be used to verify capacity where capacity multiples for altitude, wet bulb
and entering water temperatures vary from the above conditions.
4.07 Personal Property Leases. Schedule 1.01(d) to this Agreement sets
forth as of the date of this Agreement a list and brief description of each
lease or other agreement or right, whether written or oral (including in each
case the rental, the expiration date thereof and a brief description of the
property covered), under which Seller is lessee of, or holds or operates any
machinery, equipment, vehicle or other tangible personal property owned by a
third party and used in connection with the Business. All personal property
leases to which Seller is a party either as lessor or lessee with respect to the
Acquired Assets are valid and enforceable in accordance with their respective
terms, and there is not under any of such leases any material breach or default
on the part of Seller or, to the knowledge of Seller, on the part of any other
party thereto, or any condition or event that, with the giving of notice or
lapse of time or both, would constitute such a material breach or default on the
part of Seller or, to the knowledge of Seller, on the part of any other party
thereto.
4.08 Intellectual Property. (i) Schedule 4.08 to this Agreement sets
forth a true and accurate description of all intellectual property and all
registrations and applications for any of the foregoing owned or used by Seller
in connection with the conduct of the Business (the "Intellectual Property").
(ii) Seller is the owner of all right, title and interest in
and to the Intellectual Property free and clear of all Liens and
without obligation to make any royalty, license or other payment with
respect thereto, including, without limitation, any royalty, license or
other payment resulting from any infringement of any third party
rights.
(iii) There have not been any claims, actions or judicial or
other adversary proceedings involving Seller concerning any item of the
Intellectual Property; there is no basis for any such action or
proceeding; and to the best knowledge of Seller no such action or
proceeding is threatened.
4.09 Contracts and Commitments. Except as set forth in Schedule 4.09 to
this Agreement, Seller is not, with respect to the Business or the Acquired
Assets, a party to any written or oral:
(i) contract not made in the ordinary course of business,
other than this Agreement, under which the total outstanding obligation
is in excess of Ten Thousand Dollars ($10,000.00);
(ii) consulting agreement or contract for the employment of
any, employee or other person on a full-time, part-time or consulting
basis that is not terminable upon notice of thirty (30) days or less
without cost or other liability resulting solely from such termination;
(iii) agreement relating to the lease of any property, real or
personal, whether as lessor or lessee that involves future obligations
of more than Ten Thousand Dollars ($10,000.00);
(iv) contract for the purchase or sale of real property or
capital or fixed assets that involves future obligations of more than
Ten Thousand Dollars ($10,000.00); or
(v) contracts and other agreements containing covenants under
which the Business may not compete in any line of business or with any
person in any geographic area.
Except as set forth in Schedule 4.09 to this Agreement, Seller is not in breach
of or in default under any of the contracts, agreements or arrangements set
forth in Schedule 4.09 to this Agreement, and no event has occurred that, with
the giving of notice or lapse of time or both, would constitute such a breach or
default. True and complete copies of such contracts, agreements or instruments
have been delivered to Purchaser.
4.10 Inventory. Except as set forth in Schedule 4.10 to this Agreement,
Seller has good title to all inventory included in the Acquired Assets, free and
clear of all Liens. The inventory is adequate for the conduct of the Business
and contains no items of obsolete inventory, and inventory levels are not in
excess of the normal operating requirements of the Business in the ordinary
course of business consistent with past practices.
4.11 Customers and Suppliers. Except as set forth on Schedule 4.11,
Seller is not involved in any material controversy with any of the customers or
suppliers of the Business. Schedule 4.11 to this Agreement lists all customers
or suppliers which, during the twelve (12) months ended October 31, 1998,
accounted for five percent (5%) or more of the purchases or sales of the
materials, products, supplies, equipment or parts used in connection with the
Business or five percent (5%) or more of the revenues of the Business.
4.12 Compliance with Law. Seller is in compliance with all federal,
state, local or foreign laws, statutes, ordinances, regulations, orders and
other requirements of Governmental Authorities having jurisdiction over the
Acquired Assets or the conduct of the Business.
4.13 Compliance with Permits. Schedule 1.01(f) to this Agreement
contains a true, correct and complete list of all Permits issued to Seller
relating exclusively to the Business or any Acquired Asset currently used by it
in the operation of the Business. Such Permits constitute all franchises,
licenses, permits, certificates and other authorizations from any Governmental
Authorities that are necessary for the conduct of the Business. All such Permits
are in full force and effect, no violations are or have been recorded in respect
of any of the Permits (except those which have been remedied and no proceeding
is pending or, to the best knowledge of Seller, threatened to revoke, withdraw
or limit any such Permit and to the best knowledge of Seller, there is no fact,
error or admission relevant to any such Permit that would permit the revocation,
withdrawal or limitation or result in the threatened revocation, withdrawal or
limitation of any such Permit.
4.14 Litigation. There is no pending or, to the best knowledge of
Seller, threatened litigation, action, suit, proceeding, claim, investigation,
or administrative proceeding against or affecting Seller, by or before any
Governmental Authority, involving or relating to the Business or the Acquired
Assets.
4.15 Taxes. (i) Seller has, or by the Closing Date will have, (A)
timely filed all Tax (as defined in clause (v) of this Section 4.15) returns,
schedules and declarations (including any withholding and information returns)
required to be filed by any jurisdiction to which it is or has been subject, all
of which Tax returns, schedules and declarations are or will, when filed, be
true, complete, accurate and correct in all material respects, (B) paid in full
all Taxes due and payable (or claimed to be due and payable by any federal,
state, local or foreign Taxing authority), (C) paid or finally settled all Tax
deficiencies asserted or assessed against it, and (D) made timely payments to
the proper Governmental Authorities of the Taxes required to be deducted and
withheld from the wages paid to its employees.
(ii) Seller (A) is not delinquent in the payment of any Tax,
(B) has not been granted an extension of time to file any Tax return
prior to or on the Closing Date which has expired, or will expire, on
or before the Closing Date without such return having been filed, and
(C) has not granted to any other person or entity a power of attorney
or similar authorization with respect to the settlement of its
liability for Taxes.
(iii) No deficiencies for any Tax has been claimed, proposed
or assessed (whether or not finally or tentatively, orally or in
writing), no requests for waivers of the time to assess any deficiency
for any Taxes are pending, and there are no pending or threatened Tax
audits, investigations or claims for or relating to (A) the assessment
or collection of Taxes, or (B) a claim for refund made with respect to
Taxes previously paid. There are no matters under discussion or dispute
with any Governmental Authorities with respect to Taxes that may have
been raised, nor are there any issues Seller believes will be raised in
the future, by any Taxing authority with respect to Taxes accruing on
or prior to the Closing Date.
(iv) There are, and as of the Closing Date there will be, no
Liens for Taxes upon the Acquired Assets except for statutory Liens for
Taxes not yet due or delinquent. Purchaser will take title to the
Assets free and clear of any such Liens.
(v) As used in this Agreement, "Taxes" (and all derivations
thereof) means all federal, state, local and foreign sales, use,
property, payroll and other taxes imposed by any Governmental Authority
with respect to the ownership, operation, transfer, or use of the
Business or the Acquired Assets, or in any other way relating to the
Business or the Acquired Assets.
4.16 Employee Agreements. Schedule 4.16 contains a list of the names
and current aggregate annual cash compensation and identifies the other material
benefits of each employee of the Business and any employment contracts,
confidentiality agreements or non-compete agreements to which Seller is a party.
Except as set forth on Schedule 4.16 to this Agreement, no labor organization,
collective bargaining representative or group represents or claims to represent
any of the Business' present employees.
4.17 Place of Property. Seller represents that all of the items
comprising the Acquired Assets (other than those Rental Equipment items covered
by the leases listed on Schedule 4.17) are located either at the Seller's
facilities located in Chickasha, Oklahoma or in Oklahoma City, Oklahoma. In
addition, Seller represents that all of the items covered by the leases listed
on Schedule 4.17 are located where specified in such leases. Seller shall not
remove any of such property from such locations without the prior written
consent of the Purchaser, except as may be required in the ordinary course of
the Business.
4.18 Bulk Sales. The aggregate book value of the Rental Equipment, shop
equipment, tools, operating supplies, and other personal property included in
the Acquired Assets on the date hereof is, and on the Closing Date shall be,
less than twenty-five percent (25%) of the aggregate book value of the
equipment, shop equipment, tools, operating supplies and other personal property
owned by Seller on each such date. At least fifty-one percent (51%) of the
aggregate book value of the Rental Equipment, shop equipment, tools, operating
supplies and other personal property owned by the Seller and utilized in
connection with the Business is located in Oklahoma.
4.19 Brokers, Finders and Agents. Seller is not directly or indirectly
obligated to anyone as a broker, finder, agent or in any other similar capacity
in connection with this Agreement or the transactions contemplated hereby.
4.20 Other Information. The information provided and to be provided by
Seller to Purchaser in this Agreement or in the Schedules or in any other
writing pursuant hereto (including, without limitation, the representations and
warranties contained in this Article IV) does not and will not contain any
untrue statement of a material fact and does not and will not omit to state a
material fact required to be stated herein or therein or necessary to make the
statements contained herein or therein, in light of the circumstances in which
they are made, not false or misleading. Copies of all financial statements,
reports, documents and other materials heretofore or hereafter delivered or made
available to Purchaser pursuant hereto and thereto were or will be at the time
of their delivery to Purchaser true, complete and accurate copies of such
financial statements, reports, documents and other materials.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PURCHASER
In order to induce Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, the Purchaser hereby represents
and warrants as of the date hereof as follows:
5.01 Organization and Good Standing: Power and Authority. Purchaser is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Louisiana. Purchaser has full corporate power and authority
to execute and deliver this Agreement, and to perform Purchaser's obligations
hereunder and to consummate the transactions contemplated hereby. Purchaser is
qualified to do business and is in good standing in each jurisdiction in which
the failure to so qualify would have a material adverse affect upon Purchaser.
5.02 Corporate Authorization. The execution, delivery and performance
of this Agreement and all other agreements and instruments executed and
delivered by Purchaser in connection herewith and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Purchaser. This
Agreement has been, and the other agreements and instruments to be executed and
delivered by Purchaser in connection herewith will be, on or prior to the
Closing Date, duly executed and delivered by Purchaser, and constitute, or upon
execution and delivery will constitute, the valid, legal and binding obligations
of Purchaser, enforceable against Purchaser in accordance with their respective
terms.
5.03 Conflicts; Defaults. The execution and delivery of this Agreement
and the other agreements and instruments executed or to be executed in
connection herewith by Purchaser do not, and the performance by Purchaser of its
obligations hereunder and thereunder and the consummation by Purchaser of the
transactions contemplated hereby or thereby, will not (i) violate, conflict
with, or constitute a breach or default under any of the terms of Purchaser's
Articles of Incorporation or Bylaws; (ii) violate or require any authorization,
approval, consent or other action by, or registration, declaration or filing
with or notice to, any Governmental Authority pursuant to any law, statute,
judgment, decree, injunction, order, writ, rule or regulation of any
Governmental Authority; or (iii) conflict with or result in a breach of, create
an event of default (or event that, with the giving of notice or lapse of time
or both, would constitute an event of default) under, or give any third party
the right to terminate, cancel or accelerate any obligation under, any contract,
agreement, note, bond, guarantee, deed of trust, loan agreement, mortgage,
license, lease, indenture, instrument, order, arbitration award, judgment or
decree to which Purchaser is a party or by which Purchaser or any of its assets
or properties are bound or affected. There is no pending or, to the best
knowledge of Purchaser, threatened action, suit, claim, proceeding, inquiry or
investigation before or by any Governmental Authorities, involving or to
restrain or prevent the consummation of the transactions contemplated by this
Agreement or that might reasonably be expected to affect the right of Purchaser
to purchase the Acquired Assets.
5.04 Brokers. Finders and Agents. Purchaser is not directly or
indirectly obligated to anyone as a broker, finder, agent or in any other
similar capacity in connection with this Agreement or the transactions
contemplated hereby.
ARTICLE VI
COVENANTS OF SELLER
Seller hereby covenants to Purchaser that:
6.01 Access and Information. Seller shall afford to Purchaser and
Purchaser's accountants, counsel and other representatives full and reasonable
access from time to time during normal business hours throughout the period from
the date hereof until the Closing Date to Seller's properties, books, contracts,
commitments, personnel and records relating to the Business and the Acquired
Assets, and, during such period, Seller will (or will cause its representatives
to) furnish to Purchaser and Purchaser's accountants, counsel and other
representatives copies of such documents and all such other information
concerning the Acquired Assets, the Retained Assets, the Assumed Liabilities,
the Retained Liabilities and the business, properties and personnel of the
Business as Purchaser may reasonably request.
6.02 Conduct of the Business Pending Closing. Prior to the xxxxxx
of the Closing or termination of this Agreement:
(a) Ordinary Course of Business. From the date hereof through
the Closing Date, Seller shall use all reasonable efforts to preserve
the business organization of the Business intact, to keep available to
the Business the services of all current officers and employees and to
preserve for Purchaser the goodwill of the suppliers, distributors,
customers, employees and others having business relations with the
Business.
(b) Operation of Business. From the date hereof through the
Closing Date, except as otherwise permitted by this Agreement or
consented to in writing by Purchaser, Seller shall continue the
operation of the Business in the ordinary course and consistent with
past practices, and maintain the assets, properties and rights of the
Business (including, without limitation, the Acquired Assets) in at
least as good order and condition as exists on the date hereof, subject
to ordinary wear and tear.
(c) Material Contracts. Seller shall not enter into any
contract, purchase order or other commitment directly or indirectly
affecting the Acquired Assets or the Business, except contracts and
commitments entered into the ordinary course of business consistent
with past practices that are terminable on no more than thirty (30)
days notice without penalty or obligation, and that do not call for
aggregate payments by, or have an estimated cost of performance to
Seller in excess of Five Thousand Dollars ($5,000.00) under any single
contract or series or in the aggregate of Fifteen Thousand Dollars
($15,000.00) without the prior written consent of Purchaser.
(d) Material Adverse Change. Seller shall give prompt written
notice (but not later than five (5) days after the occurrence thereof)
to Purchaser of any (i) material adverse change in the business,
business prospects, assets, financial condition or results of operation
of the Business; and (ii) change that would render any representation
or warranty made by Seller hereunder untrue or incomplete in any
material respect as of the date of such change.
(e) Compliance with Representations and Warranties. Without
limiting the foregoing, except as otherwise expressly provided in this
Agreement, Seller shall not take any action or permit to occur any
event, directly or indirectly within the control of Seller, that would
cause any representation or warranty contained herein to be inaccurate
or untrue on or before the Closing Date.
6.03 Exclusivity. From and after the date hereof to and including the
Closing Date, neither Seller nor any of its shareholders, officers, directors,
employees, or agents, shall, directly or indirectly, solicit, initiate or engage
in or continue (including without limitation, furnishing any information
concerning the Acquired Assets or the Business) discussions, inquiries or
proposals, or enter into any negotiations for the purpose or with the intention
of leading to any proposal, concerning the acquisition or purchase by any other
party of the Seller, the Business or any part thereof or any Acquired Asset
(except, in the later case, for the purchase of inventory in the ordinary course
of the Business).
ARTICLE VII
ADDITIONAL AGREEMENTS OF SELLER AND PURCHASER
7.01 Employee Matters.
(a) Employment. Seller agrees to cooperate with Purchaser and
give Purchaser access to employee information and assistance with
employee communications in connection with Purchaser's potential
employment of the current employees of the Business. Seller will also
cooperate and assist Purchaser in connection with any pre-employment
screening, interviewing, physicals or drug testing, with respect to
Seller's employees, that Purchaser desires to conduct, as well as
distribution of communication materials and enrollment forms for
Purchaser's employee benefit plans. However, Purchaser shall be under
no obligation to (i) hire any employees of the Business; (ii) maintain
any of Seller's employees which it does hire at the same position,
title, or level or responsibility that they had with Seller; (iii)
grant seniority or service credit to any such employee; or (iv) pay any
specified level of compensation or benefits to any such employee.
(b) Employment Liabilities. Purchaser does not assume, and
Seller hereby retains, any and all employment related costs,
obligations, and liabilities of the Business incurred on or prior to
Closing or which relate to events, occurrences, conditions, actions, or
inactions which took place or were in effect on or prior to Closing
(whether or not reported, filed, billed, or paid for on or prior to
Closing), including, without limitation, costs, obligations and
liabilities relating to severance rights of employees of the Business,
employment discrimination, unfair labor practices, wage and hour laws,
health and safety, workers compensation, wrongful discharge,
compensation, fringe benefits, insurance, employee benefit plans,
pensions, retiree medical, severance pay, vacations, torts, accidents,
disabilities, injuries, sickness, exposure to harmful conditions,
breach of oral or written employment contracts or collective bargaining
agreements, or breach of law, statute, judgment, decree, injunction,
order, writ, rule or regulation of any Governmental Authority. The
entire liability for continuing acts or conditions (such as exposure to
harmful conditions or continuing discrimination) shall be assumed by
Seller if any material portion of the act or condition occurred on or
prior to Closing.
(c) COBRA. Purchaser does not assume, and Seller agrees to be
solely responsible for, any and all liabilities relating to health care
continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA") which relate to, or
arise out of or in connection with, this transaction or the events
contemplated by this Agreement.
7.02 Product Warranties. Seller warrants that each item constituting
part of the Rental Equipment conforms to the statements appearing on containers,
labels and in Seller's technical literature. Seller agrees that Purchaser shall
be entitled to Seller's warranties as described on Schedule 7.02 with respect to
each item constituting part of the Rental Equipment.
7.03 Storage of Rental Equipment. Seller hereby grants Purchaser the
right to store some or all of the Rental Equipment on Seller's premises in
Oklahoma City, Oklahoma for a period of up to one (1) year after the Closing
Date, at a nominal cost to Purchaser , in accordance with the Land Lease
Agreement (herein so called) in substantially the form attached hereto as
Exhibit F, to be executed by Seller and Purchaser at Closing.
7.04 Office Lease. Seller hereby authorizes Purchaser to utilize
certain office space of Seller, in accordance with the Office Lease Agreement
(herein so called) in substantially the form attached hereto as Exhibit G, to be
executed by Seller and Purchaser at Closing.
ARTICLE VIII
CONDITIONS OF CLOSING
8.01 Obligation of Purchaser. The obligation of Purchaser to consummate
the purchase contemplated by the provisions of this Agreement shall be subject
to the fulfillment on or prior to the Closing Date of the following conditions
(any of which may be waived in writing, in whole or in part, by Purchaser):
(a) Representations and Warranties; Performance. The
representations and warranties of Seller set forth in this Agreement
shall be true, correct and complete as of the Closing Date (as though
such representations and warranties were made anew at and as of such
date) except with respect to the effect of transactions specifically
permitted by the provisions of this Agreement, and Seller shall have
duly performed in all material respects all agreements and covenants
herein required to be performed by Seller on or before the Closing
Date.
(b) Officer's Certificates. Seller shall have furnished
Purchaser with a certificate, executed on behalf of Seller by one of
its executive officers and dated the Closing Date, confirming the
matters expressed in Section 8.01(a) hereof.
(c) Certificate of Authorities. Seller shall have furnished to
Purchaser (i) certificates of the Secretary of State of Oklahoma, dated
as of a date nor more than five (5) business days prior to the Closing
Date, attesting to the organization and good standing of Seller, (ii) a
copy certified by the Secretary of State of Oklahoma, as of a date not
more, than five (5) business days prior to the Closing Date, of
Seller's Articles of Incorporation and all amendments thereto, (iii) a
copy certified by the Secretary of Seller, of the Bylaws of Seller, as
amended and in effect as of the Closing Date, and (iv) a copy,
certified by the Secretary of Seller, of resolutions duly adopted by
the Board of Directors of Seller duly authorizing the transactions
contemplated in this Agreement.
(d) Consents and Approvals. All material consents, approvals
and novations, on terms satisfactory to Purchaser, of third parties and
Governmental Authorities (including, without limitation, the Required
Consents) that shall be (i) required to consummate the transactions
contemplated hereby or (ii) reasonably necessary to permit Purchaser to
operate the Business, shall have been obtained.
(e) Transfer Documents. Purchaser shall have received
the Transfer Documents as contemplated in Section 3.02 hereof.
(f) Receipt of Opinion of Counsel. Purchaser shall have
received an opinion, dated as of the Closing Date, of counsel to
Seller, in substantially the form attached hereto as Exhibit H.
(g) Noncompetition Agreement. Purchaser shall have
received the Noncompetition Agreement executed by Seller and Xxxxxx X.
Xxxxxx.
(h) License Agreement. Purchaser shall have received the
License Agreement executed by Seller.
(i) Supply Agreement. Purchaser shall have received the Supply
Agreement executed by Seller.
(j) Land Lease Agreement. Purchaser shall have received the
Land Lease Agreement executed by Seller.
(k) Office Agreement. Purchaser shall have received the Office
Lease Agreement executed by Seller.
(l) Rental Equipment. The Rental Equipment shall consist of,
among other items, (i) a minimum of one hundred and sixty-seven (167)
cooling towers with an aggregate minimum rated capacity of one hundred
twenty-five thousand four hundred and fifty (125,450) tons, (ii)
fifty-seven (57) pumps, (iii) thirty-two (32) electrical distribution
panels, (iv) four (4) heat exchangers, (v) one (1) centrifugal
separator and (vi) one (1) fre-dox unit.
8.02 Obligation of Seller. The obligation of Seller to consummate the
sale contemplated by the provisions of this Agreement shall be subject to the
fulfillment on or prior to the Closing Date of the following conditions (any of
which may be waived in writing, in whole or in part, by Seller):
(a) Representations and Warranties; Performance. The
representations and warranties of Purchaser set forth in this Agreement
shall be true, correct and complete as of the Closing Date (as though
such representations and warranties were made anew at and as of such
date) except with respect to the effect of transactions specifically
permitted by the provisions of this Agreement, and Purchaser shall have
duly performed in all material respects all agreements and covenants
herein required to be performed by Purchaser on or before the Closing
Date.
(b) Officer's Certificates. Purchaser shall have furnished
Seller with a certificate, executed on behalf of Purchaser by one of
its executive officers and dated the Closing Date, confirming the
matters expressed in Section 8.02(a) hereof.
(c) Certificate of Authorities. Purchaser shall have furnished
to Seller (i) certificates of the Secretary of State of Louisiana,
dated as of a date nor more than five (5) business days prior to the
Closing Date, attesting to the organization and good standing of
Purchaser, (ii) a copy certified by the Secretary of State of
Louisiana, as of a date not more, than five (5) business days prior to
the Closing Date, of Purchaser's Articles of Incorporation and all
amendments thereto, (iii) a copy certified by the Secretary of
Purchaser, of the Bylaws of Purchaser, as amended and in effect as of
the Closing Date, and (iv) a copy, certified by the Secretary of
Purchaser, of resolutions duly adopted by the Board of Directors of
Purchaser duly authorizing the transactions contemplated in this
Agreement.
(d) Consents and Approvals. All material consents, approvals
and novations, on terms satisfactory to Seller, of third parties and
Governmental Authorities (including, without limitation, the Required
Consents) that shall be (i) required to consummate the transactions
contemplated hereby or (ii) reasonably necessary to permit Purchaser to
operate the Business, shall have been obtained.
(e) Assumption Instrument. Seller shall have received from
Purchaser the Assumption Instrument as contemplated by Section 3.03
hereof.
(f) License Agreement. Seller shall have received the License
Agreement executed by Purchaser.
(g) Supply Agreement. Seller shall have received the Supply
Agreement executed by Purchaser.
(h) Land Lease Agreement. Seller shall have received the Land
Lease Agreement executed by Purchaser.
(i) Office Lease Agreement. Seller shall have received the
Office Lease Agreement executed by Purchaser.
(j) Taxes, Charges, and Fees. Seller shall have received
verification from Purchaser, in form and substance satisfactory to
Seller, that Purchaser has paid, or caused to be paid, any taxes,
charges and fees required to be paid by Purchaser pursuant to Section
3.05(a).
ARTICLE IX
TERMINATION OF AGREEMENT
9.01 Termination of Agreement. This Agreement and the transactions
contemplated hereby may be terminated and abandoned at any time on or prior to
the Closing as follows:
(a) by the written consent of Purchaser and Seller;
(b) by Purchaser, (i) if there is or occurs an inaccuracy in
any material respect in the representations and warranties of Seller
set forth in this Agreement, which inaccuracy is not capable of being
cured by December 18, 1998, (ii) if there has been a breach in any
material respect of a covenant of Seller, or a failure in any material
respect on the part of Seller to comply with its obligations hereunder,
and such breach or failure is not capable of being cured by December
18, 1998, or (iii) if any of the conditions set forth in Section 8.01
hereof are not satisfied on or before December 18, 1998;
(c) by Seller, (i) if there is or occurs an inaccuracy in any
material respect in the representations and warranties of Purchaser set
forth in this Agreement, which inaccuracy is not capable of being cured
by December 18, 1998, (ii) if there has been a breach in any material
respect on the part of Purchaser to comply with its obligations
hereunder, and such breach or failure is not capable of being cured by
December 18, 1998, or (iii) if any of the conditions set forth in
Section 8.02 hereof are not satisfied on or before December 18, 1998;
or
(d) by Purchaser or Seller if the Closing Date shall not have
occurred before December 18, 1998, for any reason other than the
failure of the party seeking to terminate this Agreement to perform in
any material respect its obligations hereunder or the breach or
inaccuracy in any material respect of a representation or warranty made
by such party.
9.02 Obligations Upon Termination. Except for obligations provided in
Section 11.02 hereof, in the event that this Agreement is terminated pursuant to
the provisions of Section 9.01(a) or (d) hereof, Seller shall have no obligation
to Purchaser and Purchaser shall have no obligation to Seller. In the event that
Seller or Purchaser shall terminate this Agreement pursuant to Section 9.01(b)
or (c) hereof, respectively, the right of Purchaser or Seller, as the case may
be, to pursue any and all rights it may have at law or equity or hereunder shall
survive unimpaired.
ARTICLE X
INDEMNIFICATION
10.01 Indemnification by Purchaser. From and after the Closing Date,
Purchaser shall indemnify, defend and hold Seller harmless from and against and
reimburse Seller for any and all claims, losses, liabilities, damages, costs and
expenses (including, without limitation, reasonable attorneys' fees)
(collectively, "Liabilities") that may be incurred by, imposed upon or asserted
against Seller arising from: (i) any failure of Purchaser to assume, pay,
perform and discharge the Assumed Liabilities; (ii) any action, claim, judicial
or other proceeding asserted by any third party against Seller with respect to
any of the Assumed Liabilities; and (iii) any inaccuracy in or breach of any
representation, warranty, covenant, obligation or agreement of Purchaser
contained herein or in any document or instrument delivered pursuant hereto.
10.02 Indemnification by Seller . From and after the Closing Date,
Seller shall indemnify, defend and hold Purchaser harmless from and against and
reimburse Purchaser for any and all Liabilities that may be incurred by, imposed
upon or asserted against Purchaser arising from or relating to: (i) any failure
of Seller to assume, pay, perform and discharge the Retained Liabilities; (ii)
any action, claim, judicial or other proceeding asserted by any third party
against Purchaser with respect to any of the Retained Liabilities; (iii) any
inaccuracy in or breach of any representation, warranty, covenant, obligation or
agreement of Seller contained herein, or in any document or instrument delivered
pursuant hereto; (iv) the operation of the Business or the ownership, use or
sale of the Acquired Assets by Seller prior to the Closing Date (including,
without limitation, any contractual, tax, product, warranty, tort or other
Liability whatsoever); and (v) any failure of Seller to comply with any bulk
sales laws, bulk transfer laws or similar laws of any applicable jurisdiction in
connection with the transactions contemplated by this Agreement. Purchaser may
withhold from Seller any payment otherwise due to Seller pursuant to the Note in
accordance with the provisions of Section 10.05 hereof. Upon the final
determination of any claim for indemnification hereunder, Purchaser may offset
the full amount of such claim for indemnification against the amount due to
Seller pursuant to the Note in accordance with Section 10.05 hereof.
10.03 Notification of Claim. Each indemnified party under this Article
X will promptly, and within ten (10) days after notice to such indemnified party
of any claim as to which it asserts a claim for indemnification, notify the
indemnifying party of such claim and the amount thereof; provided, however, that
the failure to give such notification shall not relieve the indemnifying party
from any liability which it may have pursuant to the provisions of this Article
X as long as the failure to give such notice within such time is not prejudicial
to the indemnifying party. Notice to an indemnified party for the purpose of the
preceding sentence shall mean the filing of any legal action, receipt of any
claim in writing or similar form of actual notice.
10.04 Defense of Claim. If any claim for indemnification by any
indemnified party arises out of a claim by a person other than such indemnified
party, the indemnifying party may, by written notice to the indemnified party,
undertake to conduct any proceedings or negotiations in connection therewith or
necessary to defend the indemnified party and take all other steps or
proceedings to settle or contest such claim, including, but not limited to, the
employment of counsel; provided, however, that the indemnifying party shall
reasonably consider the advice of the indemnified party as to the defense and
settlement of such claim and the indemnified party shall have the right to
participate, at its own expense, in such defense, but control of such litigation
and settlement shall remain with the indemnifying party. The indemnified party
shall provide all reasonable cooperation in connection with any such defense by
the indemnifying party. Counsel and auditor fees, filing fees and court fees of
all proceedings, contests or lawsuits with respect to any such claim shall be
borne by the indemnifying party. If any such claim is made hereunder and the
indemnifying party elects not to undertake the defense thereof by written notice
to the indemnified party, the indemnified party shall be entitled to
indemnification with respect thereto pursuant to the terms of this Article X. To
the extent that the indemnifying party undertakes the defense of such claim by
written notice to the indemnified party and diligently pursues such defense at
its expense, the indemnified party shall be entitled to indemnification
hereunder only to the extent that such defense is unsuccessful as determined by
a final judgment of a court of competent jurisdiction, or by written
acknowledgment of the parties. If any claim for indemnification by Purchaser
arises out of a claim by Purchaser, then Purchaser shall be entitled to
immediate indemnification hereunder pursuant to Section 10.05 hereof.
10.05 Offset. In the event that Purchaser shall exercise its right to
offset provided in Section 10.02 any such offset shall be collected by reducing
the amount owed by Purchaser to Seller in the following manner (i) first, to the
extent of the principal amount outstanding on the Note, then (ii) to the extent
of any accrued interest on the Note.
ARTICLE XI
MISCELLANEOUS
11.01 Survival of Representations and Warranties. All representations
and warranties contained in this Agreement, any Exhibit of Schedule hereto or
any certificate, agreement or document delivered in connection with the
transactions contemplated hereby shall survive the consummation of the
transactions contemplated by this Agreement and any investigation on the part of
the parties hereto and shall continue in full force and effect after the Closing
for a period of two (2) years from the Closing Date at which time they shall
expire and Seller shall no longer be liable with respect thereto, except as to
claims made in respect thereof in writing by Purchaser or any other indemnitee
on or before the expiration of such two-year period; provided, however, that the
representations and warranties contained in Sections 4.06, 4.12 and 4.15 shall
survive indefinitely. The covenants and agreements of the parties hereto set
forth in this Agreement shall not be affected by the expiration of any
representation or warranty pursuant to this Section 11.01 and shall survive
indefinitely.
11.02 Expenses. Regardless of whether the transactions contemplated by
this Agreement are consummated, each of the parties hereto shall pay the fees
and expenses of its own counsel, accountants or other experts, and all expenses
incurred by such party incident to the negotiation, preparation, execution,
consummation, and performance of this Agreement and the transactions
contemplated hereby.
11.03 Notices. All notices, requests and other communications under
this Agreement shall be in writing (including a writing delivered by facsimile
transmission) and shall be deemed to have been duly given if delivered
personally, or sent by either certified or registered mail, return receipt
requested, postage prepaid, by overnight courier guaranteeing next day delivery,
or by facsimile, addressed as follows:
(a) If to Seller :
Tower Tech, Inc.
00000 Xxxxx X-00 Service Road.
P.O. 1838
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Chief Executive Officer
Facsimile: (000) 000-0000
With a required copy to:
Holloway, Dobson, Hudson, Bachman,
Alden, Jennings & Xxxxxxxx, P.C.
One Leadership Square, Suite 900
211 X. Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Attn: B. Xxxxx Xxxxxx
Facsimile No.: (000) 000-0000
or at such other address or facsimile number as Seller may have advised
Purchaser in writing; and
(b) If to Purchaser:
Aggreko Inc.
0000 X. Xxxxxxx Xxxxx Xxxxx
Xxx Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx, Vice President Finance
Facsimile No.: (000) 000-0000
With a required copy to:
Xxxxx, Xxxxx & Xxxxx, L.L.P.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxx, III
Facsimile: (000) 000-0000
or at such other address or facsimile number as Purchaser may have advised
Seller in writing.
All such notices, requests and other communications shall be deemed to have been
received on the date of delivery thereof, if delivered by hand, on the third day
after the mailing thereof, if mailed, on the next day after the sending thereof,
if by overnight courier, and when receipt is acknowledged, if faxed.
11.04 Waivers and Amendments. No amendment or waiver of any provision
of this Agreement, nor consent to any departure therefrom, shall be effective
unless the same be in writing and signed by each party hereto, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No failure on the part of any party hereto to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies provided in this Agreement are cumulative and not exclusive
of any remedies provided by law.
11.05 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, legal
representatives, heirs and assigns. No party hereto shall assign any of its
rights hereunder or any interest herein without the prior written consent of the
other parties hereto.
11.06 Exhibits and Schedules. The Exhibits and Schedules attached
hereto or referred to herein are incorporated herein and made a part hereof for
all purposes. As used herein, the expression "this Agreement" means this
document and such Exhibits and Schedules.
11.07 Governing Law. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
ITS PRINCIPLES OF CONFLICT OF LAWS.
11.08 Arbitration. The parties shall use their respective best efforts
to settle amicably any disputes, differences or controversies arising between
the parties out of or in connection with or in respect of this Agreement.
However, if not so settled then the same shall be submitted to arbitration and
to the fullest extent permitted by law, be solely and finally settled by
arbitration, except as specifically provided otherwise in any agreement attached
as an Exhibit hereto. The arbitration proceeding shall be held in Dallas, Texas,
and shall be conducted in accordance with the commercial arbitration rules of
the American Arbitration Association and to the extent not inconsistent
therewith, the Texas General Arbitration Act, Title 10, Xxxxxx'x Xxx. Civ. Stat.
Judgement upon the award rendered by the arbitrators may be entered in any court
having jurisdiction, or application may be made to such court for a judicial
acceptance of the award and any order of enforcement as the case may be.
11.09 Number and Gender. Whenever herein the singular number is used,
the same shall include the plural where appropriate, and words of any gender
shall include each other gender where appropriate.
11.10 Captions. The captions, headings and arrangements used in this
Agreement are for convenience only and do not in any way affect, limit or
amplify the provisions hereof.
11.11 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable; this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision of its severance from this
Agreement.
11.12 Entirety. This Agreement contains the agreement and understanding
among the parties with respect to the matters addressed herein and supersedes
all prior representations, inducements, promises or agreements, oral or
otherwise, which are not embodied herein.
11.13 Publicity. Except as otherwise required by law, until the
existence of this Agreement is publicly disclosed, no party hereto shall issue
any press release or make any other public statement, in either case relating to
or connected with or arising out of this Agreement or the matters contained
herein, without obtaining the prior written approval of the other parties to the
contents and the manner of presentation and publication thereof, which approval
shall not be unreasonably withheld.
11.14 Attorneys' Fees. In the event that any action or proceeding,
including arbitration, is commenced by any party hereto for the purpose of
enforcing any provision of this Agreement, the party to such action, proceeding
or arbitration may receive as part of any award, judgment, decision or other
resolution of such action, proceeding or arbitration its costs and attorneys'
fees as determined by the person or body making such award, judgment, decision
or resolution. Should any claim hereunder be settled short of the commencement
of any such action or proceeding, including arbitration, the parties in such
settlement shall be entitled to include as part of the damages alleged to have
been incurred reasonable costs of attorneys or other professionals in
investigation or counseling on such claim.
11.15 Third Party Beneficiaries. Nothing contained herein, express or
implied, is intended to confer upon any person or entity other than the parties
hereto and their successors in interest and permitted assigns any rights or
remedies under or by reason of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
PURCHASER: AGGREKO INC.
By:ss/XXXXXX X. XXXXXX
------------------------------------
Printed Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
By ss/XXXXXX X. XXXXXXX, XX.
-----------------------------------
Printed Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Vice President Finance
SELLER: TOWER TECH, INC.
By:ss/XXXXXX X. XXXXXX
---------------------------------
Printed Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
EXHIBIT A
PROMISSORY NOTE
EXHIBIT B
ASSUMPTION AGREEMENT
EXHIBIT C
NONCOMPETITION AGREEMENT
EXHIBIT D
LICENSE AGREEMENT
EXHIBIT E
SUPPLY AGREEMENT
EXHIBIT F
LAND LEASE AGREEMENT
EXHIBIT G
OFFICE LEASE AGREEMENT
EXHIBIT H
LEGAL OPINION
SCHEDULE 1.01(a)
Tangible Personal Property
See Attached Description
SCHEDULE 1.01(c)
Third Party Warranties
See Attachments
SCHEDULE 1.01(d)
Personal Property Leases
None
SCHEDULE 1.01(e)
Acquired Contracts
See Attachments
SCHEDULE 1.01(f)
Permits and Approvals
None
SCHEDULE 1.03
Required Consents
None
SCHEDULE 2.02
Allocation of Purchase Price
See Attachment
SCHEDULE 4.03
Conflicts; Defaults - List of License Agreements
1. License Agreement dated as of September 1, 1995 by and between Tower
Tech, Inc. and Shriram Cooling Towers Ltd.
2. License Agreement dated as of December 29, 1995 by and between Tower
Tech, Inc. and Ilmed Impianti S.r.L., as amended by that certain
License Extension and Amendment Agreement dated as of October 31, 1998.
3. License Agreement dated as of [September 10, 1997] by and between Tower
Tech, Inc. and Industrial Water Cooling (PTY) LTD.
SCHEDULE 4.06
Rental Equipment Capacity
See Attachments
SCHEDULE 4.08
Intellectual Property
I. PATENTS
Patents Issued:
(1) United States. U.S. Patent No. 5,143,657 (9/1/92, FLUID DISTRIBUTOR):
U.S. Patent No. 5,152,458 (10/6/92, AUTOMATICALLY ADJUSTABLE FLUID DISTRIBUTOR);
U.S. Patent No. 5,227,095 (7/13/93, MODULAR COOLING TOWER); U.S. Patent No.
5,457,849 (1/30/96, PULTRUDED COOLING TOWER CONSTRUCTION); U.S. Patent No.
5,457,531 (1/30/96, DUAL LAYERED DRAINAGE COLLECTION SYSTEM).
(2) Europe. European Patent No. 518,579 B1 (French Patent No. 0518579,
German Patent No. 69204913.4, Great Britain Patent No. 0518579, and Italian
Patent No. 0518579), all filed/issued 9/20/95 and directed to and resulting from
European Patent Application No. 92305209.6 and corresponding to U.S. Patent No.
5,143,657 (9/1/92, FLUID DISTRIBUTOR), and U.S. Patent No. 5,152,458 (10/6/92,
AUTOMATICALLY ADJUSTABLE FLUID DISTRIBUTOR).
Patents Pending:
(1) Europe. European Patent Application No. 93900675.5, filed/issued 11/24/92
and designating the countries of Germany, Great Britain, France, and Italy,
corresponding to PCT Application No. US92/10202 (11/24/92, MODULAR COOLING
TOWER); European Patent Application No. 95904756.4, filed/issued 11/29/94 and
designating the countries of Germany, Great Britain, France, and Italy,
corresponding to PCT Application No. US94/13618 (11/29/94, DUAL LAYERED DRAINAGE
COLLECTION SYSTEM).
(2) Patent Cooperation Treaty. PCT Application No. US95/15650, filed/issued
11/30/95 and corresponding to U.S. Patent No. 5,545,356 (8/13/96, INDUSTRIAL
COOLING TOWER/TILT-UP CONCRETE CONSTRUCTION METHOD).
(3) Australia. Australian Patent Application No. 13314/95, filed/issued 11/29/94
and corresponding to PCT Application No. US94.13618 (11/29/94, DUAL LAYERED
DRAINAGE COLLECTION SYSTEM).
(4) Brazil. Brazilian Patent Application No. PI-9408229, filed/issued 11/29/94
and corresponding to PCT Application No. US94/13618 (11/29/94, DUAL LAYERED
DRAINAGE COLLECTION SYSTEM).
(5) China. Chinese Patent Application No. 94-194834.X, filed/issued 11/29/94 and
corresponding to PCT Application No. US94/13618 (11/29/94, DUAL LAYERED DRAINAGE
COLLECTION SYSTEM).
II. TRADEMARKS
III. TOWER TECH TRADE NAMES
Core-Trex
Water Collection System
Variable-Flow Rotary Spray Nozzle
FulFill 2000
Modular Fan Shroud
SmarTTower
SmarTTower
SCHEDULE 4.09
Contracts and Commitments
1. License Agreement dated as of September 1, 1995 by and between Tower
Tech, Inc. and Shriram Cooling Towers Ltd.
2. License Agreement dated as of December 29, 1995 by and between Tower
Tech, Inc. and Ilmed Impianti S.r.L., as amended by that certain
License Extension and Amendment Agreement dated as of October 31, 1998.
3. License Agreement dated as of [September 10, 1997] by and between Tower
Tech, Inc. and Industrial Water Cooling (PTY) LTD.
SCHEDULE 4.10
Inventory
None
SCHEDULE 4.11
Customers and Suppliers
See Attachments
SCHEDULE 4.16
Employee Agreements
SCHEDULE 4.17
Place of Property
See Attachments
SCHEDULE 7.02
Product Warranties
Seller warrants for a period of one (1) year from the Closing Date that
cooling tower workmanship and materials, excluding defects in pigmentation and
cosmetic deterioration of pultruded or injection-molded parts, shall be free of
defects with respect of any materials manufactured by, and any workmanship
performed by, Seller. Seller will replace or repair, at Seller's discretion, any
such defective workmanship or defective materials within thirty (30) days of a
valid warranty claim by Purchaser.
Seller's warranty is subject to the following conditions: (a) For any
warranty claim, Seller must receive from Purchaser within the warranty period
written notice describing the defect or defects. (b) Purchaser shall not have,
without Seller's written permission, attempted to correct the defect. (c)
Purchaser shall have operated and maintained the equipment in accordance with
Seller's published operating instructions. (d) The defect has been caused after
the Closing Date solely by such things as accident, erosion, corrosion, an
abnormally corrosive or abrasive use environment, normal wear and tear, or from
abuse or neglect. (e) All liability of Seller shall be limited, at Seller's sole
option, to the repair and replacement of defective parts and Seller shall have
no liability for consequential or other damages or for transportation charges
relating to repaired, replaced or defective parts. (f)This warranty is not
transferable. Seller makes no warranty for any materials and equipment
manufactured by parties other than Seller. Benefits to Seller, if any, with
respect to materials and equipment manufactured by other parties, including, but
not limited to, hardware, fans, drift eliminators fill media, float valves,
motors, basin heaters, electrical distribution and control panels, pumps, heat
exchangers, water filtration equipment, fan hubs, pipe and pipe fittings, but
furnished to Seller, are hereby assigned to Purchaser.
Seller's liability hereunder is expressly limited as follows: (a) The
warranties set forth above are Purchaser's exclusive remedies against Seller
with respect to the manufacture, operation or performance of the cooling towers
and are in lieu of any other warranties or guarantees, express or implied,
including the warranties of merchantability and fitness for a particular
purpose. (b) Seller shall not be liable to Purchaser for any consequential,
indirect or liquidated damages, including, but not limited to, loss of profits
or revenue, loss of use of equipment, costs of replacement cooling towers,
additional expenses incurred in the use of equipment or facilities, or claims of
customers of the Purchaser. The disclaimer shall apply to consequential damages
based upon any cause of action asserted against Seller, including claims arising
out of breach of warranty, expressed or implied, guarantee, product liability,
negligence, personal injury or any other clam pertaining to the performance or
non-performance of this contract by Seller. (c) Seller shall not be responsible
for handling or modification of the cooling tower by Purchaser. (d) Except as
otherwise set forth in this Agreement, no statement, remark , agreement,
representation, promise or understanding, oral or written, made by Seller or any
agent, representative or employee which is not contained herein will be
recognized or enforceable or binding upon Seller.
