EXHIBIT 2.1
PLAN OF REORGANIZATION AND AGREEMENT OF MERGER
BY AND AMONG
MAVERICK TUBE CORPORATION
SC ACQUISITION, X.X.
XXXXXX CORPORATION
AND
CERTAIN SHAREHOLDERS OF XXXXXX CORPORATION
February 19, 2003
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS; INTERPRETATION......................................4
1.01 Definitions......................................................4
1.02 Interpretation...................................................9
1.03 Headings.........................................................9
ARTICLE 2 THE MERGER.......................................................9
2.01 The Merger.......................................................9
2.02 Effective Time..................................................10
2.03 Effects of the Merger...........................................10
2.04 Certificate of Limited Partnership and
Limited Partnership Agreement...................................10
2.05 General Partner and Limited Partner.............................10
2.06 Conversion of Securities........................................10
2.07 RESERVED........................................................11
2.08 Exchange of Certificate; Delivery of Aggregate
Merger Consideration............................................11
2.09 No Further Transfer of Shares...................................12
2.10 Closing.........................................................12
2.11 Closing Deliveries..............................................12
2.12 Contingent Merger Consideration Payments........................13
2.13 Registration Statement..........................................14
2.14 Obligations of Acquiror and the Selling Shareholders............17
2.15 Registration on Transfer of Shares of Acquiror
Common Stock....................................................18
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF EACH HOLDER...................19
3.01 Organization, Execution and Delivery; Valid and
Binding Agreements..............................................19
3.02 Authority; No Breach............................................19
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF Xxxxx AND FLP.................19
4.01 Due Organization................................................19
4.02 Authorization; Validity.........................................20
4.03 Capital Stock of Target.........................................20
4.04 Interest in Other Entities......................................21
4.05 No Conflicts....................................................21
4.06 Financial Statements; Books of Account..........................21
4.07 Accounts Receivable and Accounts Payable........................21
4.08 No Undisclosed Liabilities................... ..................22
4.09 Existing Conditions........................... ................22
4.10 Assets..........................................................23
4.11 Real Property...................................................23
4.12 Intellectual Property and Products..............................24
4.13 Deposit Accounts; Powers of Attorney............ ...............25
4.14 Contracts and Commitments.......................................25
4.15 Customers and Suppliers.........................................26
4.16 Conditions Affecting Target.....................................27
4.17 Insurance........................................ ..............27
4.18 Compliance with Law.............................................27
4.19 No Litigation...................................................28
4.20 Permits.........................................................28
4.21 Tax Matters.....................................................28
4.22 Employee Matters and Benefit Plans..............................29
4.23 Labor and Employment Matters....................................30
4.24 Environmental Matters...........................................30
4.25 No Third Party Options..........................................31
4.26 Transactions with Affiliates....................................31
4.27 Warranty Claims.......................... ....................31
4.28 No Brokers or Finders...........................................31
4.29 Transaction Expenses............................................31
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING PARTIES.........31
5.01 Due Organization................................................31
5.02 Authorization; Validity.........................................31
5.03 No Conflicts................................ ...................32
5.04 Public Filings..................................................32
5.05 No Brokers or Finders...........................................33
5.06 Acquiror Common Stock...........................................33
5.07 No Undisclosed Liabilities......................................33
5.08 Certain Tax Matters.............................................33
5.09 No Litigation or Court Order.................. .................33
ARTICLE 6 COVENANTS AND AGREEMENTS........................................34
6.01 Cooperation.................................. ..................34
6.02 Access to Books and Records.....................................34
6.03 Publicity.......................................................34
6.04 Reorganization Status...........................................34
6.05 Tax Return Preparation..........................................34
6.06 Tax Covenants...................................................35
ARTICLE 7 CONDITIONS TO THE MERGER........................................35
7.01 Conditions to Obligations of Each Party to
Effect the Merger...............................................35
7.02 Additional Conditions to Obligations of the Target
and the Holders.................................................36
7.03 Additional Conditions to the Obligations of Acquiror
and Acquisition Sub.............................................36
ARTICLE 7A TERMINATION.....................................................37
7A.01 Termination Event...............................................37
7A.02 Effect of Termination...........................................37
ARTICLE 8 INDEMNIFICATION.................................................38
8.01 Indemnification by the Holders..................................38
8.02 Indemnification by Xxxxx and FLP................................38
8.03 Indemnification by the Acquiring Parties........................39
8.04 Limitations.....................................................39
8.05 Survival........................................................40
8.06 Holders Indemnification Procedures..............................40
8.07 Exceptions to Limitations.......................................42
8.08 Effect of Investigation or Knowledge............................42
8.09 Payment of Indemnification Obligations..........................42
8.10 Set Off.........................................................42
8.11 Exclusive Remedy................................................43
ARTICLE 9 GENERAL.........................................................43
9.01 Assignment and Binding Effect...................................43
9.02 Entire Agreement; Amendment; Waiver.............................43
9.03 Counterparts....................................................43
9.04 Expenses........................................................43
9.05 Notices.........................................................44
9.06 Delaware Law to Govern Venue; Waiver of Jury Trial..............44
9.07 Severability....................................................45
9.08 No Benefit to Others............................................45
9.09 Further Representations.........................................45
9.10 Holders' Representative.........................................45
9.11 Disclosure Schedule.............................................45
9.12 Conflict Waiver.................................................46
9.13 Specific Performance; Attorneys' Fees...........................46
List of Exhibits
Exhibit Description
A Form of Note
B-1 Form of Certificate of Merger
B-2 Form of Statement Regarding Delayed Effective Condition
C Allocation of Aggregate Preferred Stock Merger Consideration
D Form of Employment Agreement
E Form of Xxxxx Noncompetition Agreement
F Form of Opinion of Xxxxx Xxxxxxx & Xxxx LLP
G Form of Opinion of Gallop, Xxxxxxx & Xxxxxx, X.X.
H-1 Form of Letter of Transmittal (Common Stock)
H-2 Form of Letter of Transmittal (Preferred Stock)
I Form of Subordination Agreement
J Form of Security Agreement
K Form of Deed of Trust
PLAN OF REORGANIZATION AND AGREEMENT OF MERGER
THIS PLAN OF REORGANIZATION AND AGREEMENT OF MERGER (this "Agreement") is made
and entered into as of the 19th day of February, 2003, by and among MAVERICK
TUBE CORPORATION, a Delaware corporation ("Acquiror"), SC ACQUISITION, L.P., a
Texas limited partnership, the general partner and limited partner of which are
limited liability companies of which Acquiror is the sole member ("Acquisition
Sub", and, together with Acquiror, the "Acquiring Parties"), XXXXXX CORPORATION,
a Texas corporation ("Target"), and XXXXXX X. XXXXX ("Xxxxx") and XXXXX FAMILY
INVESTMENT PARTNERSHIP, LTD. ("FLP") (Xxxxx and FLP are the "Holders", and the
Holders together with the Acquiring Parties and Target, are the "Parties").
Background
The respective Boards of Directors of Target and Acquiror and the general
partner of Acquisition Sub have approved a merger (the "Merger") of Target with
and into Acquisition Sub in accordance with the Texas Revised Limited
Partnership Act ("TRLPA") and the Texas Business Corporation Act (the "TBCA"),
on the terms and conditions set forth herein. The Merger provides for the
payment of the consideration specified in Section 2.06 to the Holders and the
other shareholders of Target. The Parties intend for the Merger to qualify as a
reorganization for purposes of Section 368 of the Code and adopt this Agreement
as a plan of reorganization.
Agreement
NOW, THEREFORE, in consideration of the premises and of the representations,
warranties, covenants and agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:
ARTICLE 1
DEFINITIONS; INTERPRETATION
1.01 Definitions. For convenience, certain terms used in more than one
section of this Agreement are listed in alphabetical order and defined or
referred to below (such terms as well as any other terms defined elsewhere in
this Agreement shall be equally applicable to both singular and plural forms of
the terms defined).
"368 Reorganization" is defined in Section 5.08.
"Accountants" is defined in Section 2.12(c).
"Acquiring Parties" is defined above in the preamble.
"Acquiror" is defined above in the preamble.
"Acquiror Affiliated Group" means Acquiror and each of its Subsidiaries.
"Acquiror Common Stock" means the common stock, par value $0.01 per share, of
Acquiror.
"Acquiror Indemnified Parties" is defined in Section 8.01.
"Acquisition Sub" is defined above in the preamble.
"Affiliate" means, with respect to a particular Person, any Person controlling,
controlled by or under common control with that Person. The term "control" and
phrases of similar importance, as used in this definition, means the possession,
directly or indirectly, of the power to direct or cause the direction or
management of the policies of a Person, whether through ownership of voting
securities, by Contract or otherwise.
"Aggregate Common Stock Merger Consideration" means $1,759,933, payable in
immediately available funds.
"Aggregate Merger Consideration" means (i) the Aggregate Common Stock Merger
Consideration and (ii) the Aggregate Preferred Stock Merger Consideration.
"Aggregate Preferred Stock Merger Consideration" means (i) the Note, (ii) the
Aggregate Stock Consideration and (iii) $2,240,067 in cash.
"Aggregate Stock Consideration" means 733,676 shares of Acquiror Common Stock.
"Agreement" means this Agreement, the Exhibits and Schedules hereto and the
Disclosure Schedule.
"Applicable Rate" is defined in Section 8.06(a).
"Assets" means, with respect to a Person, all of the assets of every kind and
description, real and personal, tangible and intangible, that are owned,
possessed or licensed by such Person.
"Audited Financial Statements" is defined in Section 4.06.
"Benefit Plans" is defined in Section 4.22.
"Business" means the entire business, operations and facilities of Target.
"Business Day" means any day other than a Saturday or Sunday, or a day on which
the banking institutions of the State of Missouri are authorized or obligated by
law or executive order to close.
"CERCLA" means the Comprehensive Environmental Response Compensation and
Liability Act, 42 USC 9601 et seq. as in effect as of the Closing Date.
"Certificates" is defined in Section 2.06(e).
"Certificate of Merger" is defined in Section 2.02.
"Charter Documents" means a Person's certificate or articles of incorporation,
certificate defining the rights and preferences of securities, articles of
organization, bylaws, general or limited partnership agreement, certificate of
limited partnership, joint venture agreement or similar document governing the
entity.
"Claim Notice" is defined in Section 8.06(a).
"Closing" is defined in Section 2.10.
"Closing Date" is defined in Section 2.10.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
"Contingent Merger Consideration Period" is defined in Section 2.12(a).
"Contingent Merger Consideration Revenue" is defined in Section 2.12(b).
"Contract" means any written or oral contract, agreement, lease, license,
commitment or arrangement (excluding purchase orders) that is binding on any
Person or its Assets under any applicable Law.
"Copyrights" means all copyrights, whether registered or unregistered, in both
published and unpublished works and all registrations and applications for
registration for copyrights in any jurisdiction throughout the world, and any
renewals, modifications and extensions thereof.
"Court Order" means any judgment, decree, injunction, order or ruling of any
Governmental Body that is binding on any Person or its Assets under applicable
Law.
"Credit Agreement" is defined in Section 7.03(f).
"Deed of Trust" means the Second Lien Deed of Trust and Security Agreement from
Acquisition Sub to Xxxxx in the form of Exhibit K attached hereto.
"Default" means (a) a breach, default or violation, (b) the occurrence of an
event that with or without the passage of time or the giving of notice, or both,
would constitute a breach, default or violation or cause an Encumbrance to arise
or (c) with respect to any Contract, the occurrence of an event that with or
without the passage of time or the giving of notice, or both, would give rise to
a right of termination, renegotiation or acceleration or a right to receive
damages or a payment of penalties.
"Disclosure Schedule" means the disclosure schedule of Holders containing
information pursuant to Article 4 and other provisions hereof that has been
identified as such and provided to Acquiror.
"Dissenting Shares" is defined in Section 2.06(g).
"Effective Merger Certificate" is defined in Section 2.02.
"Effective Time" is defined in Section 2.02.
"Employee Shareholder" means H.E. Xxxxxxxxx, X.X. Xxxxxx, X.X. Xxxxx, X.X. Xxxxx
and D.P. Trail.
"Employment Agreement" is defined in Section 2.11(a)(vii).
"Encumbrances" means any lien, mortgage, security interest, pledge, restriction
on transferability, defect of title or other claim, charge or encumbrance of any
nature whatsoever on any property or property interest.
"Environmental Law" shall mean any applicable environmental or health and
safety-related law, regulation, rule, or ordinance at the federal, state or
local level in effect and applicable to the business as of the date hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations promulgated thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"FLP" is defined above in the preamble.
"Final Tax Return" is defined in Section 6.05(b).
"GAAP" means generally accepted US accounting principles consistently applied.
"Governmental Body" means any (a) nation, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any nature,
or any political subdivision thereof, (b) federal, state, local, municipal,
foreign or other government or (c) governmental or quasi-governmental authority
of any nature (including any governmental division, department, agency,
commission, instrumentality, official, organization, body or other entity and
any court, arbitrator or other tribunal).
"Governmental Permits" means any regulatory or administrative permits, licenses,
registrations, certificates of occupancy, approvals and other regulatory and
administrative authorizations of any Governmental Body.
"Hazardous Material" shall mean any hazardous waste or hazardous substance as
defined in or pursuant to RCRA or CERCLA, each as in effect as of the date
hereof.
"Holder" is defined above in the preamble.
"Holder Indemnified Parties" is defined in Section 8.03.
"Holders' Representative" is defined in Section 9.10.
"Identified Real Property" is defined in Section 4.11(b).
"Indemnified Party" is defined in Section 8.06(a).
"Indemnifying Party" is defined in Section 8.06(a).
"Intellectual Property" is defined in Section 4.12.
"Interim Balance Sheet" is defined in Section 4.06.
"Interim Balance Sheet Date" is defined in Section 4.06.
"Interim Financial Statements" is defined in Section 4.06.
"IRS" is defined in Section 4.21.
"JPMorgan" means JPMorgan Chase Bank, as administrative agent for the lenders,
and CIT Business Credit Canada Inc., as Canadian administrative agent for the
lenders.
"Knowledge," with respect to the Holders, means the actual knowledge of Xxxxxx
X. Xxxxx, after having inquired whether any Employee Shareholder or Xxxx Xxxxxxx
has actual knowledge of the fact or matter in question and, with respect to
Acquiror, means the actual knowledge of Xxxxx Xxxxxxxxx and Xxxxxx X. Xxxxx.
"Law" means any constitution, statute, law, code, ordinance, regulation, order
or rule of any Governmental Body, other than Environmental Laws, but including
those covering energy, health and safety, transportation, bribery, record
keeping, zoning, antidiscrimination, antitrust, wage and hour, and price and
wage control matters, as well as any applicable principle of common law.
"Letter of Transmittal" means: (i) for the holders of Target Common Stock, a
Letter of Transmittal delivered to Acquiror in substantially the same form as
Exhibit H-1 hereto and (ii) for the holders of Target Preferred Stock, a Letter
of Transmittal delivered to Acquiror in substantially the same form as Exhibit
H-2 hereto.
"Xxxxx" is defined above in the preamble.
"Xxxxx Noncompetition Agreement" is defined in Section 2.11(a)(viii).
"Liability" means any direct or indirect liability, indebtedness, obligation,
expense, claim, loss, damage, deficiency, guaranty or endorsement of or by any
Person, absolute or contingent, secured or unsecured, accrued or unaccrued,
xxxxxx or inchoate, due or to become due, liquidated or unliquidated, known or
unknown.
"Litigation" means any lawsuit, action, arbitration, administrative,
quasi-administrative or other proceeding, criminal prosecution, investigation or
inquiry of any Governmental Body.
"LLS" is defined in Section 9.12.
"Losses" is defined in Section 8.01(a).
"Material Adverse Effect" means a change, event or effect that is materially
adverse to the Business, operations, results of operations, Assets, properties
or financial condition of Target.
"Merger" is defined above in the Background section.
"Minimum Contingent Merger Consideration Revenue" is defined in Section 2.12(b).
"Note" means the Subordinated Promissory Note of Acquiror in the principal
amount of Five Million Dollars ($5,000,000) in the form of Exhibit A attached
hereto.
"Notice Period" is defined in Section 8.06(a).
"Ordinary course" or "ordinary course of business" means, with respect to an
action taken by any Person, an action that is consistent in nature, scope and
magnitude with the past practices of such Person and is taken in the ordinary
course of the normal, day-to-day operations of such Person.
"Parties" is defined above in the preamble.
"Patents" means all issued United States patents and pending patent applications
including all pending provisional patent applications, and divisional,
continuation, continuation-in part and file wrapper continuation applications,
together with any extensions, reexaminations and reissues of such patents, and
any issued patents or pending patent applications in any country or jurisdiction
throughout the world.
"Pension Plans" is defined in Section 4.22.
"Per Share Common Stock Merger Consideration" shall mean an amount equal to
$359.17.
"Permitted Liens" means (i) liens for Taxes, assessments or similar charges not
yet due and payable; (ii) liens not yet due and payable of mechanics,
materialmen, warehousemen, carriers, or other like liens securing obligations
incurred in the ordinary course of the Business; and (iii) easements, rights of
way, claims, objections, defects, reservations, consents, tenancies, licenses
and the like affecting any Identified Real Property, in each case of record or
visible upon a physical inspection of the real property.
"Person" means any natural person, business trust, corporation, partnership,
limited liability company, joint stock company, proprietorship, association,
trust, joint venture, unincorporated association or any other legal entity of
whatever nature.
"Public Documents" is defined in Section 5.04.
"RCRA" means The Resource Conservation and Recovery Act, 42 USC 6901 et seq. as
in effect as of the Closing Date.
"Real Property" is defined in Section 4.11(a).
"Registration Statement" is defined in Section 2.13.
"Release" shall have the meaning ascribed to it in CERCLA.
"Required Consents" means, notwithstanding anything on Section 4.05 of the
Disclosure Schedule, the written consent of Shell Offshore Inc. to the
assignment by operation of law pursuant to the Merger of the Tubing Frame
Agreement dated as of September 1, 1997 between Target and Shell Offshore Inc.
"SEC" is defined in Section 5.04.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"Security Agreement" means the Security Agreement between Acquisition Sub and
Xxxxx in the form of Exhibit J attached hereto.
"Selling Shareholders" is defined in Section 2.13(c).
"Subordination Agreement" means the Subordination agreement between Xxxxx and
JPMorgan in the form of Exhibit I attached hereto.
"Subsidiary" means with respect to any Person (the "Owner"), any corporation or
other Person of which securities or other interests having the power to elect a
majority of that corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred) are held by the Owner or one or more of its Subsidiaries.
"Surviving Entity" is defined in Section 2.01.
"Target" is defined above in the preamble.
"Target Capital Stock" means Target Common Stock and Target Preferred Stock.
"Target Common Stock" means the Common Stock, par value $0.01 per share, of
Target.
"Target Financial Statements" is defined in Section 4.06.
"Target Permits" is defined in Section 4.20.
"Target Preferred Stock" means the Preferred Stock, par value $0.01 per share,
of Target.
"Tax Returns" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Taxes" means any federal, state, local, or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental (including taxes under Code Section 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind whatsoever, including any interest, penalty, or
addition thereto.
"TBCA" is defined above in the Background Section.
"TRLPA" is defined above in the Background Section.
"Threat of Release" shall have the meaning ascribed to it in CERCLA.
"Trade Secrets" means all proprietary know-how, trade secrets, customer lists,
personnel information, sales and profit figures, distribution and sales methods,
supplier lists, technology rights and licenses, specifications and other
technical information, data, process technology, plans, drawings (including
engineering and auto-cad drawings), innovations, designs, ideas, proprietary
information and blue prints, or computer source code, owned, used or licensed by
Target.
"Trademarks" means trademarks, service marks, pending trademark and service xxxx
applications, trade names, logos, brand names, certification marks, trade dress,
including the goodwill of the business associated with all of the foregoing, and
all registrations and pending registrations for any of the foregoing in any
jurisdictions throughout the world, including any extension, modification or
renewal of any such registration or application thereto.
"Transaction Documents" means this Agreement, the Note, the Certificate of
Merger, the Articles of Merger, the Employment Agreement, the Xxxxx
Noncompetition Agreement and all other documents executed in connection with any
of the foregoing.
"Transactions" means the Merger and the other transactions contemplated by any
of the Transaction Documents.
"US" means the United States of America.
"Welfare Plans" is defined in Section 4.22.
"Yearly Contingent Merger Consideration Amount" is defined in Section 2.12(a).
1.02 Interpretation. Unless the context of this Agreement clearly requires
otherwise, (a) references to the plural include the singular, the singular the
plural, the part the whole, (b) references to any gender include all genders,
(c) "including" has the inclusive meaning frequently identified with the phrase
"but not limited to" and (d) references to "hereunder," "hereof" and "herein"
relate to this Agreement. Each accounting term used herein that is not
specifically defined herein shall have the meaning given to it under GAAP. Any
reference to a Party's being satisfied with any particular item or to a Party's
determination of a particular item presumes, unless specifically stated
otherwise, that such standard will not be achieved unless such Party shall be
satisfied or shall have made such determination in its reasonable discretion.
1.03 Headings. The Article and Section references and other headings
contained herein are for reference purposes only and shall not control or affect
the construction of this Agreement or the interpretation thereof in any respect.
Article, Section, subsection, paragraph, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
ARTICLE 2
THE MERGER
2.01 The Merger. Upon the terms and subject to the conditions hereof, and
in accordance with the relevant provisions of the TRLPA and the TBCA, Target
shall be merged with and into Acquisition Sub at the Effective Time. Acquisition
Sub shall be the surviving entity (the "Surviving Entity") and shall continue
its existence as a limited partnership under the laws of the State of Texas, and
the separate corporate existence of Target shall cease.
2.02 Effective Time. The Merger shall be consummated by filing with the
Texas Secretary of State (i) prior to the Closing Date, a certificate of merger
in the form attached hereto as Exhibit B-1 (the "Certificate of Merger"), and
(ii) on the Closing Date, a Statement Regarding Delayed Effective Condition in
the form attached hereto as Exhibit B-2, as is required by, and executed in
accordance with, the relevant provisions of the TRLPA and the TBCA. The Merger
shall become effective at such time as is specified in the Certificate of
Merger, or if not so specified upon the issuance of a certificate of merger by
the Texas Secretary of State (the "Effective Time")
2.03 Effects of the Merger. The Merger shall have the effects set forth in
the TRLPA and the TBCA.
2.04 Certificate of Limited Partnership and Limited Partnership Agreement.
The form of certificate of limited partnership attached to the Certificate of
Merger, as amended by the Certificate of Merger, shall be the certificate of
limited partnership of the Surviving Entity at the Effective Time and thereafter
until amended in accordance with applicable Law and the terms thereof. The
limited partnership agreement of Acquisition Sub shall be the limited
partnership agreement of the Surviving Entity at the Effective Time and
thereafter until amended in accordance with applicable Law and the terms
thereof.
2.05 General Partner and Limited Partner. The general partner of the
Acquisition Sub shall be the general partner of the Surviving Entity at the
Effective Time, and the limited partner of the Acquisition Sub shall be the
limited partner of the Surviving Entity at the Effective Time.
2.06 Conversion of Securities.
(a) Each share of Target Common Stock (other than any Dissenting
Shares) issued and outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of Acquiror, Target or
the holders of such shares of Target Common Stock, but subject to the
effectiveness of the Merger, be canceled and extinguished and automatically
converted into the right to receive the Per Share Common Stock Merger
Consideration as provided in this Agreement.
(b) All shares of Target Preferred Stock (other than any Dissenting
Shares) issued and outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of Acquiror, Target or
the holders of such Target Preferred Stock, but subject to the effectiveness of
the Merger, be canceled and extinguished and automatically converted into the
right to receive the Aggregate Preferred Stock Merger Consideration in
accordance with Section 2.08(b).
(c) Any shares of Target Capital Stock held in the treasury of
Target shall be canceled.
(d) In the event any certificates evidencing shares of Target Capital
Stock shall have been lost, stolen or destroyed, the Acquiror shall issue, in
exchange for such lost, stolen or destroyed certificates, that portion of the
Aggregate Merger Consideration as such lost, stolen or destroyed certificates
would entitle the registered holder of such Target Capital Stock to receive
under this Section 2.06, upon the making of an affidavit of that fact by such
registered holder; provided, however, that Acquiror may, in its sole and
absolute discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificates to provide an
indemnity (without the posting of any bond) against any claim that may be made
against Acquiror with respect to such certificates alleged to have been lost,
stolen or destroyed.
(e) Until surrendered in accordance with the provisions of Section
2.08, each share of Target Capital Stock (other than any Dissenting Shares)
outstanding immediately prior to the Effective Time and the certificates
representing such shares ("Certificates") shall, after the Effective Time,
represent for all purposes, only the right to receive that portion of the
Aggregate Merger Consideration such share of Target Capital Stock would entitle
the holder thereof to receive hereunder.
(f) No fractional shares of Acquiror Common Stock shall be issued in
the Merger. All fractional shares of Acquiror Common Stock that would otherwise
be a part of the Aggregate Preferred Stock Merger Consideration shall be
aggregated and if a fractional share of Acquiror Common Stock results from such
aggregation, the Aggregate Preferred Stock Merger Consideration shall include an
amount in cash equal to the value of Acquiror Common Stock at the closing
selling price on the first trading day immediately preceding the Closing.
(g) For the purposes of this Section 2.06, "Dissenting Shares" shall
mean any shares of Target Common Stock or Target Preferred Stock held by a
holder who has satisfied the requirements of Article 5.12 of the TBCA to
exercise his dissenter's rights with respect to such shares and who, as of the
Effective Time, has not ceased to be entitled to payment for his shares under
Section 5.12 of the TBCA and has not waived his right to demand payment under
TBCA:
Notwithstanding any provision of this Agreement to the
contrary, Dissenting Shares shall not be converted into or represent a
right to receive any portion of the Aggregate Merger Consideration
pursuant to this Section 2.06, but the holder thereof shall only be
entitled to such rights as are granted by the TBCA; and
Notwithstanding the provisions of subsection (i) above, if
any holder of Dissenting Shares shall cease to be entitled to payment
for his shares under Section 5.12 of the TBCA or shall waive his right
to demand payment under the TBCA then, as of the later of the
Effective Time and the occurrence of such event, such holder's shares
shall automatically be converted into and represent only the right to
receive the portion of the Aggregate Merger Consideration as provided
in this Section 2.06, without interest thereon, upon surrender of the
certificate representing such shares, subject to the conditions set
forth in this Agreement.
2.07 [RESERVED.]
2.08 Exchange of Certificate; Delivery of Aggregate Merger Consideration.
(a) At the Closing, each holder of Target Capital Stock shall deliver
his or its Certificate to the Acquiror or its designated agent together with a
properly executed Letter of Transmittal.
(b) At the Closing, subject to receipt of the Certificates and Letters
of Transmittal described in Section 2.08(a), Acquiror shall deliver to the
Holders' Representative, as agent for the holders of the Target Capital Stock,
the Aggregate Merger Consideration, with each holder of Target Capital Stock
having the right to receive that portion of the Aggregate Merger Consideration
set forth next to his or its name on Exhibit C attached hereto.
2.09 No Further Transfer of Shares. After the Effective Time, there shall
be no transfers of Target Capital Stock that were outstanding immediately prior
to the Effective Time. If, after the Effective Time, Certificates or any other
securities of Target are presented to the Surviving Corporation for transfer,
they shall be canceled and exchanged for that portion of the Aggregate Merger
Consideration as such Certificates would entitle the registered holder of such
Target Capital Stock to receive as provided in this Article 2. As of the
Effective Time, the stock ledger of Target shall be closed.
2.10 Closing . The consummation of the Transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Gallop, Xxxxxxx &
Xxxxxx, X.X., 000 X. Xxxxxx Xx., Xxxxx 0000, Xx. Xxxxx, XX 00000 on the later of
(i) February 21, 2003 or (ii) the date that is five (5) Business Days after all
of the conditions set forth in Article 7 have been met, or at such other place
and on such other date or by such other means as Acquiror and Target may
mutually agree. The date of the Closing is sometimes herein referred to as the
"Closing Date."
2.11 Closing Deliveries. At the Closing:
(a) Target and/or Holders (as applicable) shall deliver or cause
to be delivered to Acquiror the following:
(i) the Certificates and the Letters of Transmittal (as
contemplated by Section 2.08);
(ii) a certificate of the Secretary of Target, in form and
substance reasonably satisfactory to Acquiror and its counsel, regarding
Target's Charter Documents, good standing, board of directors and stockholder
resolutions relating to the Transactions and the incumbency of Target's
officers;
(iii) letters of resignation in the name of and executed by each
(A) member of Target's Board of Directors resigning his/her position as a
director of such company effective as of the Effective Time, and (B) officer of
Target resigning his/her position as an officer of such company effective as of
the Effective Time, in each case, except as otherwise agreed to by the Parties;
(iv) executed counterparts to each of the Transaction Documents
to which Target or any Holder is a party;
(v) bank account signature cards for each account of Target;
(vi) the Required Consents;
(vii) executed counterparts of an Employment Agreement, in the
form of Exhibit D, entered into as of the Closing Date by Target and Xxxxx (the
"Employment Agreement");
(viii) executed counterparts of a Noncompetition Agreement, in
the form of Exhibit E, entered into as of the Closing Date by Acquiror and Xxxxx
(the "Xxxxx Noncompetition Agreement");
(ix) the Subordination Agreement; and (x) the Security Agreement.
(b) Acquiror shall deliver the following to the Holders'
Representative:
(i) the Aggregate Merger Consideration (as contemplated by
Section 2.08);
(ii) a certificate of the Secretary of Acquiror, in form and
substance reasonably satisfactory to the Holders and their counsel, regarding
Acquiror's Charter Documents, good standing, board of directors resolutions
relating to the Transactions and the incumbency of Acquiror's officers;
(iii) a certificate of the general partner of Acquisition Sub, in
form and substance reasonably satisfactory to the Holders and their counsel,
regarding Acquisition Sub's Charter Documents, good standing and the consent of
the general partner relating to the Transactions;
(iv) executed counterparts to each of the Transaction Documents
(including the Employment Agreement) to which Acquiror or Acquisition Sub is a
party;
(v) the Subordination Agreement executed by Acquiror and all of
Acquiror's Affiliates required to execute such agreement;
(vi) the Security Agreement; and
(vii) the Deed of Trust.
(c) Acquiror shall file with the Secretary of State of Texas a duly
executed Certificate of Merger, as required by the TBCA and the TRLPA, and the
Parties shall take all such other and further actions as may be required by law
to make the Merger effective upon the terms and subject to the conditions
hereof.
2.12 Contingent Merger Consideration Payments.
(a) Subject to the conditions set forth in Section 2.12(b) of this
Agreement, for each of the three (3) calendar years beginning with the calendar
year in which the Closing occurs (the "Contingent Merger Consideration Period"),
Acquiror will pay to Holders' Representative, as the representative of those
holders of Target Capital Stock immediately prior to the Effective Time, an
amount equal to Two Hundred Fifty Thousand Dollars ($250,000) (the "Yearly
Contingent Merger Consideration Amount").
(b) Payment of the Yearly Contingent Merger Consideration Amount for
any year shall be due only if Target and the Acquiror Affiliated Group have
achieved, in such calendar year, aggregate revenue (net of any sales returns,
allowances or discounts) of Target and Acquiror Affiliated Group from the sale
of continuous tubular products used in subsea umbilical and gas lift operations
("Contingent Merger Consideration Revenue") of not less than sixteen million
dollars ($16,000,000) ("Minimum Contingent Merger Consideration Revenue").
Contingent Merger Consideration Revenue shall not include non-continuous tubular
products sold by Target or the Acquiror Affiliated Group or sales of continuous
line pipe products or continuous downhole pipe products sold by Target or the
Acquiror Affiliated Group. Acquiror shall prepare a computation of Contingent
Merger Consideration Revenue based on the financial statements of Acquiror for
each year during the Contingent Merger Consideration Period and will deliver
such computation to the Holders' Representative not later than 90 days after the
end of such fiscal year together with a certification setting forth the name of
each member of the Acquiror Affiliated Group included in the computation of
Contingent Merger Consideration Revenue and that such members of the Acquiror
Affiliated Group are the only members of the Acquiror Affiliated Group required
to be included in the calculation of Contingent Merger Consideration Revenue. If
within 15 days following the delivery of such computation the Holders'
Representative has not given Acquiror written notice of objection to such
computation (such notice must contain a statement of the basis of such
objection), then the computation shall be deemed to be approved by Holders'
Representative. If the Holders' Representative gives written notice of objection
within the time frame set forth above, any issues in dispute will be resolved in
accordance with the provisions of Section 2.12(c). On the tenth business day
following the final determination of Contingent Merger Consideration Revenue, if
Minimum Contingent Merger Consideration Revenue has been achieved, Acquiror
shall deliver the Yearly Contingent Merger Consideration Amount to the Holders'
Representative by wire transfer pursuant to written instructions received by
Acquiror from the Holders' Representative.
(c) If the Holders' Representative objects to the calculation of
Contingent Merger Consideration Revenue pursuant to Section 2.12(b), then the
issues in dispute will be submitted to the St. Louis office of Deloitte & Touche
LLP (the "Accountants"), for resolution. If issues in dispute are submitted to
the Accountants for resolution, (i) each party will furnish to the Accountants
such work papers and other documents and information relating to the disputed
issues as the Accountants may request and are available to that party or its
independent public accountants and will be afforded the opportunity to present
to the Accountants any material relating to the determination and to discuss the
determination with the Accountants; and (ii) the determination by the
Accountants, as set forth in a notice delivered to both parties by the
Accountants, will be binding and conclusive on the parties; and (iii) the
Holders (collectively) and Acquiror will each bear 50% of the fees of the
Accountants for such determination.
2.13 Registration Statement.
(a) Within five (5) Business Days following the date of execution of
this Agreement, Acquiror will prepare and file with the SEC a registration
statement (the "Registration Statement") covering the total number of shares of
Acquiror Common Stock to be delivered pursuant to Section 2.08 of this Agreement
for an offering to be made on a continuous basis pursuant to Rule 415 (or
similar rule that may be adopted by the SEC) under the Securities Act in
accordance with the intended method of distribution of the "Selling
Shareholders" (defined below).
(b) Acquiror will use its reasonable best efforts to (1) have the
Registration Statement declared effective by the SEC as soon as reasonably
practicable following its filing with the SEC, and (2) keep such Registration
Statement continuously in effect until the earlier to occur of (i) the second
anniversary of the date of the Closing, extended as necessary in accordance with
the provisions below relating to the suspension of the use of the prospectus
contained in the Registration Statement, or (ii) the date on which all of the
shares of Acquiror Common Stock registered under the Registration Statement are
eligible to be sold by the current holders thereof pursuant to Rule 144 under
the Securities Act; provided, however, that, in the event that, at any time
after such Registration Statement is declared effective, Acquiror determines
that an event or circumstance occurs and is continuing that (Y) has not been
publicly disclosed and, if not disclosed in the Registration Statement, any
related prospectus or any document incorporated therein by reference as then
amended or supplemented would, in the judgment of the Acquiror, result in the
Registration Statement, any related prospectus or any such document containing
an untrue statement of a material fact or omitting to state a material fact
required to be stated therein, or necessary in order to make the statements
therein not misleading under the circumstances under which they were made, and
(Z) in the judgment of the Board of Directors of Acquiror, Acquiror has a bona
fide business purpose for not then disclosing the existence of such event or
circumstance, Acquiror may suspend the use by the Selling Shareholders of the
prospectus contained in the Registration Statement of the Selling Shareholders
(the "Prospectus"); provided, further, however, that the number of days that
Acquiror is required to maintain the effectiveness of the Registration Statement
pursuant to Section 2.13(b)(2)(i) above shall be extended by the number of days
that the use of the Prospectus is suspended. Notwithstanding the foregoing,
Acquiror may not suspend the use of the Prospectus for more than 45 consecutive
days and in no event for more than an aggregate of 45 days during any 12-month
period, unless the Board of Directors of Acquiror, in its good faith reasonable
discretion determines that a longer period of suspension is required, and for
only so long as such longer period is required, in order to prevent the
disclosure of material information which would have a material adverse effect on
Acquiror.
(c) Those shareholders of Target receiving shares of Acquiror Common
Stock in the merger who wish to sell any or all of such shares pursuant to the
Registration Statement ("Selling Shareholders") shall, upon receiving written
notice from the Acquiror of the suspension of the use of any Prospectus pursuant
to Section 2.13(b) above, not effect sales of any shares of Acquiror Common
Stock pursuant to such Prospectus for a period beginning on the date of receipt
of such notice and expiring on the date upon which such information is disclosed
to the public or ceases to be material, and in either case as evidenced by a
notice from Acquiror to such Selling Shareholder to that effect.
(d) Acquiror will use its best efforts to cause any Registration
Statement or amendment, including any prospectus and any supplements thereto,
and each report or other document incorporated by reference therein, when filed,
(i) to comply as to form with the requirements of the Securities Act or the
Exchange Act, as applicable, in all material respects, and (ii) to not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that Acquiror makes no representation or warranty in respect of any information
that any of the Selling Shareholders provide to Acquiror for the express purpose
of inclusion in any Registration Statement.
(e) As to any shares of Acquiror Common Stock to be registered
pursuant this Section 2.13, Acquiror covenants and agrees that:
(i) Prior to their filing with the SEC, Acquiror shall furnish to
Xxxxx, Xxxxxxx & Xxxx LLP, counsel for Target, for purposes of such counsel's
review thereof, copies of the Registration Statement and all amendments,
including any prospectus and any supplements thereto;
(ii) It shall immediately advise the Holders' Representative in
writing of the occurrence and time of occurrence of each of the following
events: (A) the issuance by the SEC of an order declaring a Registration
Statement effective, including any post-effective amendment thereto; (B) any
request by the SEC for an amendment of a Registration Statement as originally
filed or as amended or as effective or for any amendment or supplement to the
final prospectus or preliminary prospectus contained therein, or for any
additional information with respect to a Registration Statement or such
prospectus or any preliminary prospectus; (C) the occurrence of any event, of
which Acquiror had knowledge, during the period of the effectiveness of a
Registration Statement which requires that such final prospectus included in
such Registration Statement be amended or supplemented in order to make the
statements therein not misleading; (D) the refusal to qualify or the suspension
of the qualification of such shares of Acquiror Common Stock for offering or
sale in any jurisdiction, or for the institution of any proceedings for such
purpose; (E) the issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement or any order suspending or preventing
the use of such final prospectus or any such preliminary prospectus, or the
initiation of any proceedings for such purpose; or (F) the receipt by Acquiror
of any notification with respect to the suspension of the qualification of the
shares of Acquiror Common Stock for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose;
(iii) It shall timely file all reports required by the Exchange
Act and, subject to the proviso in Section 2.13(b) hereof, promptly amend or
supplement a Registration Statement at any time during the required period of
its effectiveness in order to make the statements therein not misleading, or as
otherwise may be required by the Securities Act and the rules and regulations
promulgated thereunder;
(iv) It shall make every reasonable effort to prevent the
issuance of any stop order or any suspension of the qualification (or exemption
from qualification) of any of the shares of Acquiror Common Stock for sale in
any jurisdiction described in Section 2.13(e)(v) below, and, if issued, to
obtain the withdrawal thereof at the earliest practicable moment;
(v) In the event the shares of Acquiror Common Stock are not
deemed a "covered security" pursuant to Section 18 of the Securities Act, it
will make every reasonable effort to qualify such shares of Acquiror Common
Stock for offering and sale under the securities or "blue sky" laws of any
states in which the Selling Shareholders require such qualification and will
continue such qualifications in effect for so long as the Registration Statement
is in effect for the distribution of the shares of Acquiror Common Stock;
provided, however, that Acquiror shall not be required in connected therewith to
qualify to do business as a foreign corporation in any such state;
(vi) All expenses of any Registration Statement, and all
amendments and supplements thereto, provided for in this Section 2.13
(including, without limitation, Acquiror's legal fees, accounting fees, printing
costs, "blue sky," SEC filing fees, underwriting discounts, commissions,
brokerage fees, and fees of legal counsel for the Selling Shareholders arising
from or related to the registration or sale of the shares of Acquiror Common
Stock), will be borne by Acquiror; provided that each Selling Shareholder shall
bear any discounts, commissions, fees, or other amounts payable to underwriters
or brokers in connection with its sale of such Selling Shareholder's shares of
Acquiror Common Stock;
(vii) Acquiror will furnish such number of copies of the
prospectus, including any amendments or supplements thereto, as the Selling
Shareholders reasonably request in order to facilitate their disposition of the
registered shares of Acquiror Common Stock; and
(viii) Within five (5) Business Days of the date of this
Agreement, Acquiror will file an application to list or include the shares of
Acquiror Common Stock to be delivered pursuant to Section 2.08 of this Agreement
on each securities exchange on which similar securities are then listed or
included, and Acquiror will thereafter use its reasonable best efforts to cause
such shares to be so listed or included as promptly as practicable.
2.14 Obligations of Acquiror and the Selling Shareholders.
(a) Acquiror will indemnify each Selling Shareholder, each of its
directors, officers, employees, partners and agents, and each person controlling
such Selling Shareholder within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act, with respect to any registration,
qualification or compliance effected pursuant to Section 2.13, against any and
all Losses (as such term is defined in Section 8.01(a)), including any Loss
incurred in settlement of any litigation, commenced or threatened, arising out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular or
other document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance or any preliminary prospectus, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading under the circumstances under which they were made, or any violation
by Acquiror of the Securities Act, the Exchange Act or state securities law
applicable to Acquiror in connection with any such registration, qualification
or compliance or any preliminary prospectus, and shall reimburse each Selling
Shareholder, each of its directors, officers, employees, partners and agents,
and each person controlling such Selling Shareholder within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act, for
reasonable legal and other expenses that such Selling Shareholder may incur in
connection with investigating, preparing or defending any claim by a third party
related thereto; provided, however, that the indemnity agreement contained in
this Section 2.14(a) shall not apply to amounts paid in settlement of any Loss
if such settlement is effected without the consent of Acquiror (which consent
shall not be unreasonably withheld) nor shall Acquiror be liable in any such
case for any Loss caused by any untrue statement or omission (or alleged untrue
statement or omission) made in reliance upon and in conformity with written
information furnished for or in connection with such registration by the Selling
Shareholder or its directors, officers, employees, partners, or agents.
(b) Holders will, jointly and severally, indemnify and reimburse
Acquiror, each of its directors, officers, employees, partners, and agents and
each person controlling Acquiror within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
indemnity from the Acquiror to each Selling Shareholder set forth in Section
2.14(a) as though in such Section 2.14(a) "Acquiror" means "Selling
Shareholders" and "Selling Shareholders" means "Acquiror," but only with respect
to any Loss arising out of written information relating to the Selling
Shareholders furnished to the Acquiror in writing by the Selling Shareholders or
their directors, officers, employees, partners or agents expressly for use in or
in connection with any registration, qualification or compliance effected
pursuant to Section 2.13 or any preliminary prospectus. Notwithstanding anything
to the contrary in this Section 2.14(b), the indemnity agreement contained in
this Section 2.14(b) shall not apply to amounts paid in settlement of any Loss
if such settlement is effected without the consent of the applicable Selling
Shareholder (which consent shall not be unreasonably withheld). In addition, in
no event shall the indemnity provided by Holders under this Section 2.14(b)
exceed the net proceeds from the offering received by the Selling Shareholders.
(c) If the indemnification provided for in this Section 2.14 is held
by a court of competent jurisdiction to be unavailable to any of the parties
entitled thereto under this Agreement with respect to any Loss, then the
indemnifying party, in lieu of indemnifying the party otherwise entitled to such
indemnification, shall contribute to the amount paid of such Loss or payable by
such parties in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnifying party on the one hand and the
party entitled to such indemnification on the other, but also the relative fault
of the indemnifying party on the one hand and of the party otherwise entitled to
such indemnification on the other in connection with the statements or omissions
or actions that resulted in Loss as well as any other relevant equitable
considerations; provided, however, that in any such case, no person or entity
liable for a fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) will be entitled to contribution from any person or
entity that was not liable for such fraudulent misrepresentation. The relative
fault of the indemnifying party and of the party otherwise entitled to
indemnification shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the indemnifying party
or by the party otherwise entitled to such indemnification and the relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission of or by the indemnifying party or the party
otherwise entitled to such indemnification.
2.15 Registration on Transfer of Shares of Acquiror Common Stock.
(a) All certificates for shares of Acquiror Common Stock delivered
under the terms of this Agreement shall bear the following legend:
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION, AN OPINION OF COUNSEL FOR OR SATISFACTORY TO (OR
OTHER EVIDENCE SATISFACTORY TO) MAVERICK TUBE CORPORATION THAT
REGISTRATION IS NOT REQUIRED (E.G., COMPLIANCE WITH THE
REQUIREMENTS OF RULE 144 PROMULGATED UNDER SUCH ACT), OR A
NO-ACTION LETTER FROM THE STAFF OF THE SECURITIES AND EXCHANGE
COMMISSION."
The legend required under this Section 2.15(a) shall remain in place until the
occurrence of the declaration by the SEC of the effectiveness of the
Registration Statement.
(b) An appropriate stop-transfer order shall be noted on the records
of Acquiror's transfer agent with respect to the shares of Acquiror Common Stock
issued pursuant to this Agreement, which stop-transfer order shall remain in
effect with respect to any shares of Acquiror Common Stock so long as such
shares are subject to the legending requirements set forth in this Section 2.15.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF EACH HOLDER
Each Holder, solely for itself (on a several, and not joint and several, basis),
represents and warrants to Acquiror as follows:
3.01 Organization, Execution and Delivery; Valid and Binding Agreements.
Such Holder, if not an individual, is validly existing and in good standing
under the laws of its state of organization. Such Holder:
(a) has duly executed and delivered this Agreement; and
(b) assuming that this Agreement is the legal, valid and binding
agreement of the Acquiring Parties, then this Agreement is also the legal,
valid, and binding obligation of such Holder, enforceable against such Holder in
accordance with its terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, moratorium or similar laws affecting the
rights of creditors generally and general principles of equity.
3.02 Authority; No Breach. Such Holder has the right, power, and authority
and full legal capacity to execute and deliver this Agreement and to perform its
obligations hereunder. If such Holder is not an individual, the execution,
delivery and performance of this Agreement has been duly authorized by all
necessary action and neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby, directly or indirectly
contravenes, conflicts with or results in a violation of any provision of such
Holder's Charter Documents.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF Xxxxx AND FLP
Xxxxx and FLP, jointly and severally, hereby represent and warrant to the
Acquiring Parties as follows:
4.01 Due Organization. Target is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own,
operate and lease its properties and to carry on its Business in the manner as
now conducted. Section 4.01 of the Disclosure Schedule sets forth (a) a list of
all jurisdictions throughout the world in which Target is authorized or
qualified to do business as a foreign corporation and (b) a list of all the
officers and directors of Target. Target is qualified to do business and is in
good standing in all jurisdictions where the failure to be in good standing
would have a Material Adverse Effect. Target has delivered to Acquiror true,
complete and correct copies of the Charter Documents of Target, as amended
through the date hereof. Target is not in violation of any its Charter
Documents. At the Closing, all of the books of account, minute books, stock
record books and other records of the Target will be in the possession of the
Target.
4.02 Authorization; Validity. Target has the corporate power, authority and
legal right to execute, deliver and perform this Agreement and any other
Transaction Document to which Target is a party. The execution, delivery and
performance of this Agreement by Target has been duly authorized by all
necessary corporate and shareholder action. Without limiting the generality of
the foregoing sentence, Target has disclosed to each of its shareholders all
information necessary and required to be disclosed to such shareholders under
Texas Law. This Agreement and any other Transaction Document to which Target is
a party has been duly executed and delivered by a duly authorized officer of
Target, and this Agreement and the other Transaction Documents to which Target
is a party constitute the legal, valid and binding obligations of Target,
enforceable against Target in accordance with their respective terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency, moratorium
or similar laws affecting the rights of creditors generally and general
principles of equity.
4.03 Capital Stock of Target.
(a) As of the date of this Agreement, Target has authorized (i) 94,000
shares of Common Stock, $0.01 par value, of which 4,900 shares are issued and
outstanding and (ii) 6,000 shares of Preferred Stock, $0.01 par value, of which
6,000 shares are issued and outstanding.
(b) A true and correct listing of the names and addresses of the
record and beneficial holders of Target Capital Stock and the number of shares
and classes of Target Capital Stock held by such holders is set forth in Section
4.03 of the Disclosure Schedule.
(c Except as set forth in Section 4.03 of the Disclosure Schedule,
there are no outstanding options, warrants, convertible securities, Contracts or
rights of any kind to purchase or otherwise acquire from Target any shares of
Target Capital Stock. Except as set forth in Section 4.03 of the Disclosure
Schedule, no shares of Target Capital Stock are reserved or authorized for
issuance.
(d) All outstanding shares of Target Capital Stock have been duly
authorized and validly issued, are fully paid and non-assessable and were issued
in compliance with all applicable Charter Documents of Target, all Contracts
binding upon Target and all applicable federal, state and foreign securities
laws, rules and regulations.
(e) Other than as set forth herein, Target currently has no
outstanding vote, plan or pending proposal involving any merger or consolidation
of Target with or into any other Person, any sale of Target Capital Stock or any
sale of assets of Target other than inventory and other assets sold in the
ordinary course of business.
(f) Except as set forth in Section 4.14 of the Disclosure Schedule,
there are no Contracts among any Persons which affect or relate to the voting or
giving of written consents with respect to any Target Capital Stock.
4.04 Interest in Other Entities. Target has no Subsidiaries and owns no
equity security of any Person and has no other ownership or other investment
interest, either of record, beneficially or equitably, in any Person, except for
bank, checking and money market accounts and other cash equivalent investments.
4.05 No Conflicts. Except for the items set forth in Section 4.05 of the
Disclosure Schedule, the execution, delivery and performance of this Agreement
by Target does not contravene or violate (a) any Law or Court Order to which
Target is subject or (b) the Charter Documents of Target, or any securities
issued by Target; nor does such execution, delivery or performance, conflict
with or result in a Default under any term, condition or provision of, or
require the consent of any other party to, any Contract, indenture, plan, or any
Governmental Permit to which Target is a party, by which Target may have rights
or by which any of the Assets of Target may be bound or affected, or give any
party with rights thereunder the right to consent to or receive notice of the
Transaction, terminate, modify, accelerate or otherwise change the existing
rights or obligations of Target thereunder.
4.06 Financial Statements; Books of Account. Target has delivered to
Acquiror (a) true, complete and correct copies of Target's audited balance
sheets as of September 30, 2002, 2001 and 2000 and audited statements of income,
changes in stockholders' equity and cash flows for the years then ended
(collectively, the "Audited Financial Statements"); and (b) true, complete and
correct copies of Target's unaudited balance sheet as of December 31, 2002 (the
"Interim Balance Sheet" and the date of the Interim Balance Sheet is the
"Interim Balance Sheet Date") and statement of income for the 3-month period
then ended (such income statement, together with the Interim Balance Sheet, the
"Interim Financial Statements" and, collectively with the Audited Financial
Statements, the "Target Financial Statements"). Target Financial Statements have
been prepared in accordance with GAAP, subject to, in the case of the Interim
Financial Statements, the omission of footnote information and normal year-end
adjustments. The Target Financial Statements present fairly in all material
respects the financial position of Target as of the dates thereof and the
results of its operations and cash flows (in the case of the Audited Financial
Statements) for the periods then ended, in each case in accordance with GAAP,
except for, in the case of Interim Financial Statements, the omission of
footnote information and normal year end adjustments. Except as set forth in
Section 4.06 of the Disclosure Schedule, the books of account of Target reflect
in all material respects its items of income and expense and assets and
liabilities required to be reflected therein in accordance with GAAP.
4.07 Accounts Receivable and Accounts Payable.
(a) All accounts receivable that are reflected on the Interim Balance
Sheet represent valid obligations arising from sales actually made or services
actually performed by Target in the ordinary course and are not subject to
defenses, set-offs or counterclaims, and such accounts receivable are
collectible net of the reserve shown on the Interim Balance Sheet (which reserve
is calculated consistent with past practice). Section 4.07(a) of the Disclosure
Schedule sets forth a true and correct aging as of the Interim Balance Sheet
Date of the accounts receivable shown on the Interim Balance Sheet.
(b) All accounts payable that are reflected on the Interim Balance
Sheet have been incurred or have arisen only in the ordinary course. There is no
dispute or claim with any account creditor of any such account payable that
could result in any such account payable being due in greater than its recorded
amount, nor is there any reason to believe that any of the foregoing will occur,
except as may be reserved in the Interim Balance Sheet. Section 4.07(b) of the
Disclosure Schedule sets forth a true and correct aging as of the Interim
Balance Sheet Date of the accounts payable set forth on the Interim Balance
Sheet.
4.08 No Undisclosed Liabilities. Except as set forth in Section 4.08 of the
Disclosure Schedule, Target has no Liabilities, except:
(a) Liabilities pursuant to the terms of a Transaction Document;
(b) those Liabilities set forth in the Target Financial Statements and
not heretofore paid or discharged;
(c) Liabilities arising in the ordinary course, and not by reason of
any Default, under any Contract specifically disclosed in the Disclosure
Schedule or not required to be so disclosed because of the term or amount
involved or otherwise; and
(d) Liabilities incurred in the ordinary course since the Interim
Balance Sheet Date that are of a type that would normally appear on a balance
sheet of Target as of the date hereof and which do not arise from breach of
contract, breach of warranty, tort or infringement.
4.09 Existing Conditions. Except as disclosed in Section 4.09 of the
Disclosure Schedule, since the Interim Balance Sheet Date, Target has not:
(a) declared, set aside or paid any dividend or made or agreed to make
any other distribution or payment in respect of its equity securities or
redeemed, purchased or otherwise acquired or agreed to redeem, purchase or
acquire any of its equity securities;
(b) discharged or satisfied any Encumbrance, or paid any Liabilities,
other than in the ordinary course, or failed to pay or discharge when due any
Liabilities;
(c) sold, assigned or transferred or agreed to sell, assign or
transfer any of its Assets except in the ordinary course;
(d) incurred, issued, assumed or guaranteed any indebtedness for money
borrowed or any other indebtedness of any type or subjected to or created any
Encumbrance with respect to any of its Assets, other than in the ordinary course
of business pursuant to its existing revolving credit facility;
(e) made or suffered any amendment or termination of any material
Contract, to which it is a party or by which it is or any of its Assets are
bound, or canceled, modified or waived any material debts or claims held by it,
other than in the ordinary course, or waived any right of material value, other
than in the ordinary course;
(f) suffered any material damage, destruction or loss, whether or not
covered by insurance, (i) adversely affecting the Business or (ii) of any item
carried on its books of account, or suffered any repeated, recurring or
prolonged shortage, cessation or interruption of inventory shipments, supplies
or utility services required to conduct its Business and operations;
(g) suffered any Material Adverse Effect;
(h) made any capital expenditures or capital additions or betterments,
except such as may be involved in the ordinary repair, maintenance and
replacement of its Assets;
(i) increased the salaries or other compensation of, or made any
advance (excluding advances for ordinary and necessary business expenses) or
loan to, any of its employees or Holders, or made any increase in, or any
addition to, other benefits to which any of its employees may be entitled;
(j) made any payment to any holder of Target Capital Stock with
respect to any indebtedness owed to any holder; or
(k) entered into transactions or agreements, other than in the
ordinary course.
4.10 Assets.
(a) Except as to Intellectual Property (representations for which are
set forth in Section 4.12), Target has good and indefeasible title to, valid
leasehold interests in or valid licenses to use, all of its Assets used or held
for use in connection with the Business, including all of the Assets reflected
on the Interim Balance Sheet and those acquired since the Interim Balance Sheet
Date (except in each case for Assets sold or otherwise disposed of since the
Interim Balance Sheet Date in the ordinary course), except as set forth on
Section 4.10 of the Disclosure Schedule, free and clear of all Encumbrances
other than Permitted Liens. The Assets of Target constitute all Assets material
to the operation of the Business as currently conducted by Target. The Assets
include, but are not limited to, the machinery, equipment, furniture,
furnishings and fixtures listed on Section 4.10 of the Disclosure Schedule, all
of which Assets Target has good and indefeasible title to.
(b) Except those items disclosed in Section 4.10 of the Disclosure
Schedule, all Contracts pursuant to which Target has obtained the right to use
any fixed assets are valid and effective in accordance with their respective
terms, and there is no Default under any of such Contracts.
(c) All facilities, vehicles, machinery, equipment and other items of
tangible personal property carried on the books of account of Target (i) are in
good operating condition and repair, subject to normal wear and maintenance,
(ii) are useable in the regular and ordinary course and (iii) except as would
not have a Material Adverse Effect, conform to all applicable Laws relating to
their construction, use, operation or maintenance.
4.11 Real Property.
(a) For purposes of this Agreement, "Real Property" means all
interests in land and buildings, structures and other improvements thereon.
(b) Section 4.11(b) of the Disclosure Schedule contains a complete and
accurate description of all Real Property owned by Target. Target leases no real
property. The Real Property listed in Section 4.11(b) of the Disclosure Schedule
(the "Identified Real Property") includes all interests in Real Property
necessary to conduct the Business as currently conducted.
(c) Except as set forth in Section 4.11(c) of the Disclosure Schedule:
(i) Target owns the Identified Real Property free and clear of
any Encumbrance except Permitted Liens.
(ii) All structural, mechanical and other physical systems
thereof that constitute part of the Identified Real Property are in good
operating condition and repair, subject to normal wear and maintenance.
(iii) Except as would not have a Material Adverse Effect,
Target's present use of the Identified Real Property complies with all
applicable Laws, Court Orders, Governmental Permits, or restrictions of any
Governmental Body having jurisdiction over any portion of the Identified Real
Property and Target has obtained all approvals of any Governmental Body
(including, certificates of use and occupancy, licenses and permits) required in
connection with the use of the Identified Real Property.
(iv) There are no parties other than Target in possession of any
of the Identified Real Property, and there are no leases, subleases, co-location
agreements, licenses, concessions or other Contracts granting to any party or
parties the right of use or occupancy of any portion of the Identified Real
Property.
(v) There are no service Contracts relating to the use or
operation of the Identified Real Property to which Target is a party.
(vi) All permits and authorizations in any manner related to the
Identified Real Property and all other Contracts pursuant to which Target has
obtained the right to use any Identified Real Property are valid and effective
in accordance with their respective terms, and there is no Default under any of
such permits, authorizations, or Contracts.
4.12 Intellectual Property and Products.
(a) As used in this Agreement, "Intellectual Property" means all
Patents, Trademarks, inventions, Copyrights, internet domain names, Trade
Secrets and any and all other intellectual property used in, or necessary to
operate, the Business as now conducted. Target has good legal title to, or has a
valid and enforceable license to use, all of the Intellectual Property. Section
4.12 of the Disclosure Schedule sets forth a complete and correct list of all
(i) registered Patents, Trademarks and Copyrights owned by the Target and (ii)
licenses regarding the use of Intellectual Property to which Target is a party
(the "Licenses"), other than licenses with respect to "off-the-shelf" software,
each with a cost of less than $1,000. Except as set forth on Section 4.12 of the
Disclosure Schedule, (a) to the Knowledge of Holders, the conduct of the
business of Target as currently conducted, including, without limitation, all
Intellectual Property used by Target in the conduct of such business, does not
conflict with or infringe upon any proprietary right of any third party in any
material respect and (b) there is no claim pending or, to the Knowledge of
Holders, threatened that (i) alleges any such conflict with or infringement of
any third party's proprietary rights by Target or (ii) challenges Target's
ownership or use of any Intellectual Property. Except as set forth on Section
4.12 of the Disclosure Schedule, Target is not under any obligation to pay
royalties or other payments in connection with any Contract to use the
Intellectual Property and is not restricted from assigning its rights respecting
Intellectual Property.
(b) Except as disclosed in Section 4.12 of the Disclosure Schedule,
all of the issued Patents are currently in compliance with formal legal
requirements (including payment of filing, examination, and maintenance fees and
proofs of working or use), to the Knowledge of Holders are valid and
enforceable, and are not subject to any maintenance fees or taxes or actions
falling due within ninety days after the Closing Date. No Patent has been or is
now involved in any interference, reissue, reexamination, or opposition
proceeding. To the Knowledge of Holders there are no potentially interfering
patents or patent applications of any third party. To the Knowledge of Holders,
no Patent is infringed or has been challenged or threatened in any way.
(c) Each License is in full force and effect and is valid and
enforceable in accordance with its terms. Target, and, to the Knowledge of
Holders, each other party to such License are in compliance with the terms of
such License and are not in Default. There are no outstanding and, to the
Knowledge of Holders, no threatened disputes, disagreements or requests for
renegotiation with respect to any such License. The Target does not currently,
and has not since January 31, 1997 (date of Quality Tube license agreement),
made or sold any product used or intended to be used in any wellbore, downhole
oil and gas production, completion or workover activities.
(d) To the Knowledge of Holders none of the products manufactured and
sold, nor any process or know-how used, by the Company infringes or is alleged
to infringe any patent or other proprietary right of any other Person.
4.13 Deposit Accounts; Powers of Attorney. Section 4.13 of the Disclosure
Schedule sets forth a complete and accurate list of:
(a) the name of each financial institution in which Target has any
account or safe deposit box;
(b) the names in which the accounts or boxes are held;
(c) the type of account;
(d) the name of each Person authorized to draw thereon or have access
thereto; and
(e) the name of each Person holding a general or special power of
attorney from Target and a description of the terms of such power.
4.14 Contracts and Commitments. Except as listed and described in Section
4.14 of the Disclosure Schedule, Target is not a party to any:
(a) material Contract or commitment for services with any present or
former employee or consultant (other than Contracts where the sole remaining
obligations relate to non-disclosure, non-solicitation, non-compete or other
similar provisions binding upon the parties other than Target);
(b) Contract with any labor union or other representative of
employees;
(c) Contract for the future purchase of, or payment for, goods or
services by a third party (other than Contracts that are terminable upon not
more than 30 days prior written notice without payment or penalty);
(d) Contract for the sale or supply of products or performance of
services by Target;
(e) Contract not otherwise listed in Section 4.14 of the Disclosure
Schedule under which any Encumbrance on any Assets of Target exists;
(f) representative, sales agency, dealer or distributor Contract;
(g) lease under which Target is either lessor or lessee;
(h) note, debenture, bond, conditional sale agreement, equipment trust
agreement, letter of credit agreement, loan agreement or other Contract for the
borrowing or lending of money (including, loans to or from officers, directors,
securityholders or any member of their immediate families), agreement or
arrangement for a line of credit or guarantee, pledge or undertaking of the
indebtedness of any other Person;
(i) Contract for any charitable or political contribution;
(j) Contract for any capital expenditure;
(k) license, franchise, or distributorship Contract (other than
licenses of Intellectual Property listed on Section 4.12 of the Disclosure
Schedule); or
(l) material Contract not made in the ordinary course.
Except as may be disclosed in Section 4.14 of the Disclosure Schedule, each of
the Contracts listed in Section 4.14 of the Disclosure Schedule is valid and
enforceable in accordance with its terms. Except as disclosed in Section 4.05 of
the Disclosure Schedule, Target is in compliance with and is not in default
under any of the Contracts listed in Section 4.14 of the Disclosure Schedule. To
the Knowledge of Holders, each other party to the listed Contracts is in
compliance with the provisions thereof and not in Default.
4.15 Customers and Suppliers.
(a) Section 4.15(a) of the Disclosure Schedule sets forth a complete
and accurate list of (i) customers that have generated sales in an amount equal
to or exceeding $500,000 since April 29, 1997 (the "Significant Customers") and
(ii) the 10 suppliers who have supplied the largest amount by dollar volume of
products and services to Target from January 1, 2002 through December 31, 2002
(the "Significant Suppliers").
(b) Except as set forth in Section 4.15(b) of the Disclosure Schedule,
none of the Significant Customers has canceled or substantially reduced or is,
to the Knowledge of Holders, currently attempting or threatening or planning to
or is otherwise affected by circumstances that would cause such Person to cancel
or substantially reduce the purchase of tubing and other products from Target,
other than circumstances generally applicable to the industry in which such
Significant Customer operates or the economy in general in which such
Significant Customer conducts business. Except as set forth in Section 4.15(b)
of the Disclosure Schedule, the supply of products or services by such
Significant Suppliers is effected solely through the use of purchase orders and
Target has no Contract with any of the Significant Suppliers, and, to the
Knowledge of Holders, no Significant Supplier has given Target notice that it
intends to terminate or modify its relationship with Target.
(c) To the Knowledge of Holders, none of the intermediate processors
of Target's products have refused to use Target's products, negatively portrayed
Target's products to actively prevent the use of Target's products or actively
promoted the use of other products over the use of Target's products. To the
Knowledge of Holders, no Person who purchases products from the intermediate
processors referred to above has given notice or threatened that any action will
be taken to prevent the use of Target's products by such intermediate
processors.
4.16 Conditions Affecting Target. Except as set forth in Section 4.16 of
the Disclosure Schedule, to the Knowledge of Holders there are no conditions
existing with respect to Target's products, services, clients (other than
circumstances generally applicable to the industry in which Target or such
clients operate or the economy in general in which Target or such clients
conduct business), facilities or personnel which have had or would reasonably be
expected to have a Material Adverse Effect.
4.17 Insurance. Target has made available true and complete copies of all
policies of insurance maintained on behalf of Target. To the Knowledge of
Holders, Target has not failed to give any notice or present any claim under any
such policy in a timely fashion or in the manner or detail required by the
policy. Other than claims under Target's medical benefit plans, all existing
notices and claims are listed in Section 4.17 of the Disclosure Schedule. No
notice of cancellation or nonrenewal with respect to, or disallowance of any
claim under, any such policy has been received by Target. There are no
outstanding unpaid premiums or claims. No such policies are subject to any
retroactive premiums. To the Knowledge of Holders, there is no state of facts or
the occurrence of any event which reasonably might form the basis of any claim
against Target. To the Knowledge of Holders, there is no condition existing with
respect to Target (other than conditions generally applicable to the insurance
industry or economy in general or the industry in which Target operates), or
which might materially increase the insurance premiums payable under any such
policy. There are no outstanding bonds and other security arrangements issued or
entered into in connection with the Business.
4.18 Compliance with Law. Target is not in violation of or Default under
any Law to which it or its Assets or operations or Business is subject and has
not failed to obtain or to adhere to the requirements of any Governmental Permit
necessary to the ownership of the Assets or to the conduct of the Business, in
any case which would have a Material Adverse Effect. Neither Target, nor any
officer, employee or agent of, nor any consultant to, Target or any Holder has
unlawfully offered, paid or agreed to pay, directly or indirectly, any money or
anything of value to, or for the benefit of, any individual who is or was a
candidate for public office (other than lawful campaign contributions), or an
official or employee of any Governmental Body or an officer or employee of any
client, customer or supplier of Target. In addition, Target has not made,
offered or agreed to offer anything of value to any governmental official,
political party or candidate for government office, nor has it otherwise taken
or failed to take any action that has caused or may cause Target to be in
violation of any Law including the Foreign Corrupt Practices Act of 1977, as
amended, or any Law of similar effect. Target has not engaged in any
transaction, maintained any bank account or used any corporate funds except for
transactions, bank accounts and funds which have been and are reflected in their
normally maintained books and records.
4.19 No Litigation. Except as set forth in Section 4.19 of the Disclosure
Schedule, there is no Litigation or other proceeding of or before any
Governmental Body pending or, to the Knowledge of Holders, threatened (i)
against Target, any of its Assets or the Business or any of its directors,
officers or employees with respect to their activities as such directors,
officers or employees, or (ii) relating to the Transactions. Target is not a
party to or subject to the provisions of any Court Order.
4.20 Permits. Except as set forth in Section 4.20 of the Disclosure
Schedule, Target owns or holds all material Governmental Permits (including
motor vehicle titles and current registrations and fuel permits) necessary for
the operation of the Business (collectively, "Target Permits") as it is
currently conducted, except as would not have a Material Adverse Effect. Set
forth in Section 4.20 of the Disclosure Schedule is a complete and accurate list
of all such Target Permits. Target has not received any written notice that any
Governmental Body intends to modify, cancel, terminate or fail to renew any
Target Permit. Except as set forth in Section 4.20 of the Disclosure Schedule,
no present or former officer or employee of Target or any Affiliate thereof, or
any other Person, owns or has any proprietary, financial or other interest
(direct or indirect) in any Target Permits. Target has conducted and is
conducting the Business in compliance with the requirements, standards, criteria
and conditions set forth in Target Permits and is not in violation of any of the
foregoing, except as would not have a Material Adverse Effect. Except as set
forth in Section 4.05 or 4.20 of the Disclosure Schedule, the Transactions will
not result in a Default or adversely affect the rights and benefits afforded to
Target by any Target Permit.
4.21 Tax Matters. Except as disclosed in Section 4.21 of the Disclosure
Schedule, (a) all Tax Returns with respect to all Taxes required to be filed by
Target with respect to all periods ending prior to the Closing have been filed
on or before the due date thereof (including any extensions of time granted to
file such Tax Returns), and all such Tax Returns were correct and complete in
all material respects; (b) all Taxes due and owing by Target (whether or not
shown on any Tax Return) have been paid; (c) no claim has ever been made by a
taxing authority or Governmental Body in a jurisdiction where Target does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction;
(d) there are no Encumbrances other than Permitted Liens on any of the Assets of
any of Target that arose in connection with any failure (or alleged failure) to
pay any Tax; (e) Target has not received any notice of assessment or proposed
assessment from the Internal Revenue Service (the "IRS") or any other
Governmental Body in connection with any Tax Returns and there are no pending
Tax examinations of or Tax claims asserted against Target or any of its Assets
or properties; (f) there is no examination by the IRS or any other Governmental
Body affecting Target presently pending or, to the Knowledge of Holders,
contemplated and Target has not waived any statute of limitations in respect of
Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency; (g) all payroll, sales, employment, and any other Taxes which Target
is required by any applicable Law to withhold or collect with respect to all
periods ending prior to the Closing have been withheld or collected and have
been paid over to the proper Governmental Body or are properly held by Target,
as applicable, for such payment; (h) Target has not filed a consent under
Section 341(f) of the Code concerning collapsible corporations; (i) any
withholding obligation imposed on Target by Section 4999(c)(1) of the Code that
arose prior to or on the Effective Time has been satisfied; (j) Target has
disclosed on its federal income Tax Returns all positions taken therein that
could give rise to a substantial understatement of federal income Tax within the
meaning of Section 6662 of the Code; (k) Target is not a party to any Tax
allocation, Tax sharing, Tax indemnification or similar Contract; (l) since its
incorporation or organization, Target (i) has not been a member of an affiliated
group filing a consolidated federal income Tax Return or (ii) has any Liability
for the Taxes of any Person under Treas. Reg. Section 1.1502-6 (or similar
provisions of state, local or foreign Law), as a transferee or successor, by
Contract, or otherwise; (m) the unpaid Taxes of Target for the period ending
December 31, 2002 do not exceed the reserve for Taxes (not including any reserve
for deferred Taxes established to reflect timing differences between book and
Tax income), which reserve is included in the "Accrued Expenses" amount set
forth on the face of the Interim Balance Sheet; (n) no Taxes have been incurred
in the period beginning December 31, 2002 and ending immediately prior to the
Closing other than in the ordinary course of business; and (o) Target will not
be required to include any item of income in or exclude any item of deduction
from, taxable income for any taxable period (or portion thereof) ending after
the Closing Date as a result of any (A) change in method of accounting for a
taxable period ending on or prior to the Closing Date under Section 481(c) of
the Code (or any corresponding or similar provision of applicable Tax Law); (B)
"closing agreement" as described in Section 7121 of the Code (or any
corresponding or similar provision of applicable Tax Law) executed on or prior
to the Closing Date; (C) installment sale or open transaction disposition made
on or prior to the Closing Date; or (D) prepaid amount received on or prior to
the Closing Date.
4.22 Employee Matters and Benefit Plans. Except as listed on Schedule 4.22
of the Disclosure Schedule, Target does not (i) maintain or contribute to any
nonqualified deferred compensation or retirement plans, (ii) maintain or
contribute to any qualified defined contribution retirement plans, (iii)
maintain or contribute to any qualified defined benefit pension plans (the plans
described in (ii) and (iii) are collectively referred to as the "Pension
Plans"), (iv) maintain or contribute to any welfare benefit plans (the "Welfare
Plans"), and (v) contribute to any multiemployer plans (as defined in ERISA).
The Pension Plans and the Welfare Plans are collectively referred to as the
"Benefit Plans." The Benefit Plans comply in form and in operation in all
material respects with the requirements of the Code and ERISA. With respect to
the Benefit Plans, (i) all required contributions have been made or properly
accrued, to the extent required by GAAP, (ii) there are no actions, suits, or
claims pending, other than routine claims for benefits, and (iii) there have
been no "prohibited transactions" (as that term is defined in Section 406 of
ERISA or Section 4975 of the Code).
4.23 Labor and Employment Matters. Except as set forth in Section 4.23 of
the Disclosure Schedule:
(a) Target is and has been in compliance in all material respects with
all applicable Laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, including, any such laws
respecting minimum wage and overtime payments, employment discrimination,
workers' compensation, family and medical leave, the Immigration Reform and
Control Act, and occupational safety and health requirements, and has not and is
not engaged in any unfair labor practice;
(b) there is not now, nor within the past three years has there been,
any actions, suits, claims, labor disputes or grievances pending, or, to the
Knowledge of Holders, threatened or reasonably anticipated relating to any
labor, safety or discrimination matters involving any employee of Target,
including charges of unfair labor practices or discrimination complaints, which,
if adversely determined, would, individually or in the aggregate, result in any
Liability to Target;
(c) the employees of Target are not and have never been represented by
any labor union, and no collective bargaining agreement is binding and in force
against Target or currently being negotiated by Target;
(d) all Persons classified by Target as independent contractors
satisfy and have satisfied the requirements of any applicable Law to be so
classified, and Target has fully and accurately reported such independent
contractors' compensation on IRS Forms 1099 when required to do so;
(e) Target has provided Acquiror with the names and titles of and
current annual base salary or hourly rates for the seven (7) most highly
compensated Employees of Target, together with a statement of the full amount
and nature of any other remuneration, whether in cash or kind, paid to each such
Person during the past or current fiscal year;
(f) Target has no Liability for any payment to any trust or other fund
governed by or maintained by or on behalf of any Governmental Body, with respect
to unemployment compensation benefits, social security or other benefits or
obligations for its employees (other than routine payments to be made in the
normal course of business and consistent with past practice). There are no
pending, threatened or reasonably anticipated claims or actions against Target
under any worker's compensation policy or long-term disability policy.
4.24 Environmental Matters. Except as set forth on Schedule 4.24 of the
Disclosure Schedule, to the Knowledge of Holders: (a) there has been no Release,
Threat of Release, spill, leak, discharge or emission of any Hazardous Material
to the air, surface water, groundwater or soil of the Real Property requiring
corrective action under, or that is a violation of, any applicable Environmental
Law; (b) Target is in compliance with applicable Environmental Law, except where
such non-compliance would not reasonably be expected to have a Material Adverse
Effect; (c) there is not currently in effect, and there has not been, any
written complaint, Court Order, directive, claim, citation, notice, information
request or investigation by any Governmental Body or any other Person, with
respect to any Release, Threat of Release, spill, leak, discharge or emission of
any Hazardous Material to the air, surface water, groundwater or soil of the
Real Property that is a violation or alleged violation of any applicable
Environmental Law; and (d) Target has in full force and effect all material
environmental permits, licenses and other authorizations required to conduct its
operations and is operating in material compliance thereunder.
4.25 No Third Party Options. There are no Contracts, options, or rights
with, to or in any third Person to purchase or otherwise acquire any of Target's
Assets or rights or any interest therein, except for those Contracts entered
into in the ordinary course for the sale of Target's products and services.
4.26 Transactions with Affiliates. Neither Xxxxx nor FLP nor, to the
Knowledge of Holders, any director of Target owns directly or indirectly, an
interest in any Person that is a party to any material Contract with Target or
conducts the same business as, or a similar business to, the Business.
4.27 Warranty Claims. There are no warranty claims pending or, to the
Knowledge of Holders, threatened against Target. No material warranty claims
have been asserted against Target since its inception.
4.28 No Brokers or Finders. Except as set forth on Section 4.28 of the
Disclosure Schedule, Target will have no Liability to any Person for any
commission or finder's or similar fee in connection with the Transactions.
4.29 Transaction Expenses. Target has not incurred fees or expenses with
respect to the Transactions since December 31, 2002, except those to be
reimbursed by the Holders at closing pursuant to Section 9.04.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING PARTIES
The Acquiring Parties, jointly and severally, hereby represent and warrant to
the Holders as follows:
5.01 Due Organization. The Acquiror is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to own, operate and lease
its Assets and to carry on its business in the places and in the manner as now
conducted, and Acquisition Sub is a limited partnership duly organized, validly
existing and in good standing under the laws of the State of Texas and has all
requisite limited partnership power and authority to own, operate and lease its
Assets and to carry on its business in the places and in the manner now
conducted. Each Acquiring Party is authorized, qualified or licensed in all
jurisdictions where such authorization, qualification or license is required,
except where the failure to be so authorized, qualified or licensed would not
have a material adverse effect on or materially restrict the business,
operations, results of operations, Assets, or financial condition of such
Acquiring Party.
5.02 Authorization; Validity. Each Acquiring Party has the corporate or
limited partnership power (as applicable), authority and legal right to execute,
deliver and perform this Agreement and any other Transaction Document to which
it is a party. The execution, delivery and performance of this Agreement and any
other Transaction Document to which it is a party by each Acquiring Party has
been duly authorized by all necessary corporate action (no stockholder action
being required) or limited partnership action, as applicable. This Agreement and
such Transaction Documents have been duly executed and delivered on behalf of
each Acquiring Party by a duly authorized officer or other Person, and
constitute the legal, valid and binding obligations of the Acquiring Parties
enforceable against them in accordance with their respective terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency, moratorium
or similar laws affecting the rights of creditors generally and general
principles of equity.
5.03 No Conflicts. Except as set forth on Schedule 5.03 of the Disclosure
Schedule, the execution, delivery and performance of this Agreement and any
other Transaction Document to which any Acquiring Party is a party will not
contravene or violate (a) any Law or Court Order to which such Acquiring Party
is subject or (b) the Charter Documents of such Acquiring Party or any
securities issued by such Acquiring Party; nor will such execution, delivery or
performance result in a Default under any term, condition or provision of, or
require the consent of any other party to, any Contract, or any Governmental
Permit to which such Acquiring Party is a party, by which such Acquiring Party
may have rights or by which any of the assets of such Acquiring Party may be
bound or affected, or give any party with rights thereunder the right to
terminate, modify, accelerate or otherwise change the existing rights or
obligations of such Acquiring Party thereunder. Except for filings required
under the Securities Act and under state blue sky laws, as contemplated under
Section 2.13, no authorization, approval, or consent, and to the Acquiror's
Knowledge, no registration or filing with any Governmental Body is required in
connection with the execution, delivery and performance of this Agreement by
Acquiring Parties or the consummation of the Transactions.
5.04 Public Filings. Acquiror has filed with the Securities and Exchange
Commission ("SEC") all reports required to be filed pursuant to Sections 13(a),
14 and 15(d) of the Exchange Act, to be filed by Acquiror since December 31,
2000 (collectively, and in each case including all amendments thereto, the
"Public Documents"). To the Knowledge of Acquiror, as of their respective dates,
except to the extent revised or superseded by a subsequent filing with the SEC
prior to the date hereof, the Public Documents complied in all material respects
with the requirements of the Exchange Act, and none of the Public Documents
(including any and all financial statements included therein) as of such dates
and as of the date hereof contained or contains any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. To the Knowledge of
Acquiror, the consolidated financial statements of Acquiror included in the
Public Documents, including any amendments thereto, comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, and such financial
statements present fairly, in all material respects the consolidated financial
position of Acquiror and its subsidiaries at the dates thereof and the results
of their operations and cash flows for the periods then ended in accordance with
GAAP.
5.05 No Brokers or Finders. Acquiror will have no liability to any Person
for any commission or finder's or similar fee in connection with the
Transactions.
5.06 Acquiror Common Stock. Upon issuance in accordance with this
Agreement, the shares of Acquiror Common Stock delivered to the Holders will be
duly authorized, validly issued, fully paid and non-assessable, and the issuance
thereof is not subject to any preemptive or other similar right.
5.07 No Undisclosed Liabilities. Except as set forth in the Public
Documents, there are no debts, liabilities or obligations (whether accrued,
absolute, contingent or otherwise) that would have, individually or in the
aggregate, a material adverse effect on the business, operations, results of
operations, assets, properties or financial condition of Acquiror.
5.08 Certain Tax Matters.
(a) Acquisition Sub has at all times since its formation, through its
election, been classified as an association taxable as a corporation for federal
tax purposes pursuant to Treasury Regulations Section 301.7701-3.
(b) All the membership interests of each of the partners of
Acquisition Sub are owned by Acquiror. Each of the partners of Acquisition Sub
has at all times since its formation been disregarded for federal tax purposes
as provided in Treasury Regulations Section 301.7701-3.
(c) Prior to the Merger, Acquiror has been in control of Acquisition
Sub within the meaning of Section 368(c) of the Code.
(d) Acquiror has no plan or present intention to liquidate the
Surviving Entity, to merge the Surviving Entity with and into another
corporation or other entity, to sell or otherwise dispose of the ownership
interests of the Surviving Entity, or to cause the Surviving Entity to sell or
otherwise dispose of any of the assets of Target acquired in the Merger, except
for dispositions made in the ordinary course of business or transfers described
in Section 3 68(a)(2)(C) of the Code and Treasury Regulation Sections 1.368-2(f)
and 1.368-2(k).
(e) Neither Acquiror nor Acquisition Sub is under the jurisdiction of
a court in a Title 11 or similar case within the meaning of Section 368(a)(3)(A)
of the Code.
(f) Neither Acquiror nor Acquisition Sub is an investment company as
defined in Sections 368(a)(2)(F)(iii) and (iv) of the Code.
5.09 No Litigation or Court Order. To the knowledge of the Acquiring
Parties, there is no pending or threatened Litigation or other proceeding of or
before any Governmental Body, or Court Order, relating to the Transactions.
ARTICLE 6
COVENANTS AND AGREEMENTS
6.01 Cooperation. Target, the Holders and Acquiror shall each deliver or
cause to be delivered to the other on the Closing Date, and at such other times
and places as shall be reasonably agreed to, such instruments as the other may
reasonably request for the purpose of carrying out this Agreement. In connection
with the review or audit of the financial statements of Target by Acquiror's
accountants, if required, the chief executive or chief financial officer of
Target shall execute any documentation reasonably required by Acquiror's
accountants.
6.02 Access to Books and Records. From and after the Closing, Acquiror
shall provide the Holders and their agents with reasonable access (for the
purpose of examining and copying), during normal business hours, to the books
and records of (i) Target with respect to periods or occurrences prior to the
Closing Date in connection with any matter whether or not relating to or arising
out of the Transaction Documents or the Transactions, and (ii) Target and those
members of the Acquiror Affiliated Group that were included in the calculation
of Contingent Merger Consideration Revenue, provided Holders and their agents
have signed a confidentiality agreement and agreed to use such information only
in connection with the determination of Contingent Merger Consideration Revenue
for any year. Acquiror shall not for a period of seven years following the
Closing Date, destroy, alter, or otherwise dispose of (or permit any such
destruction, alteration or disposal of) any of the books and records of Target
for periods prior to the Closing Date without first offering to surrender to the
Holders such books and records or any portion thereof which Acquiror may intend
to destroy, alter, or dispose of.
6.03 Publicity. No press release or public announcement related to this
Agreement or the Transactions contemplated herein shall be issued or made
without the joint approval of Acquiror and the Holders' Representative, unless
required by law (in the reasonable opinion of counsel) in which case Acquiror
and Holders' Representative shall have the right to review such press release or
announcement prior to publication.
6.04 Reorganization Status. None of the Parties shall take any actions or
fail to take an action after the completion of the Merger that could cause the
Merger to cease to qualify as a 368 Reorganization. Each Party agrees to report
the Transaction as a tax-free reorganization for all relevant Tax purposes.
6.05 Tax Return Preparation.
(a) Acquiror shall not file any amended Tax Returns for Target for Tax
Returns filed prior to the date hereof that could reasonably be expected to
result in an indemnification claim by Acquiror under this Agreement without the
prior written consent of the Holders' Representative, which will not be withheld
if Acquiror delivers an opinion of counsel reasonably acceptable to the Holders'
Representative that such amended return is required under applicable Law, or if
such amended Tax Return is to be filed as a result of a final determination (as
defined in Section 1313 of the Code) of the issues raised in the original Tax
Return.
(b) Acquiror shall prepare all Tax Returns for Target (including
related information returns, such as IRS Form W-2 and other employee forms) for
periods that end on or before or include the Closing Date (each a "Final Tax
Return") in a manner consistent with the past Tax Returns filed by the Target
(unless Acquiror determines in good faith there is no reasonable basis to
continue such reporting). No election shall be made under Reg. Section
1.1502-76(b)(2)(ii)(D) to ratably allocate items of income and expense between
the Final Tax Return for the period January 1, 2003 through the Effective Time
and the period beginning the day after the Effective Time and ending on December
31, 2003 unless the Holders' Representative consents in writing to such
election, and such consent shall not be withheld if the election could not
reasonably result in an indemnification of an Acquiror Indemnified Party under
this Agreement. Any items of income or expense that arise on the date of Closing
as a result of the Merger or as a result of including Target in the Acquiror
consolidated tax return shall be deemed to arise on the next business day, as
provided in Reg. Section 1.1502-76(b), and will not be deemed to occur prior to
the Closing.
(c) The filing of any Final Tax Return shall be subject to the prior
review of the Holders' Representative. No later than 45 days prior to the filing
due date (including extensions) of a Final Tax Return, Acquiror shall provide
Holders' Representative with a copy of the draft Final Tax Return. If Holder's
Representative shall have delivered to Acquiror within twenty business days of
Holders' Representative's receipt of such draft Final Tax Return written notice
of its disagreement with such draft Final Tax Return, specifying with reasonable
particularity all items of disagreement with such draft, Acquiror and Holders'
Representative shall resolve any such items of disagreement prior to the filing
of such Final Tax Return.
6.06.....Tax Covenants. Following the Merger, the historic business of
Target will be continued by, or a significant portion of Target's historic
business assets will be used in a business of: (i) the Acquiring Parties; (ii) a
corporation within Acquiror's qualified group (within the meaning of Treasury
Regulation Section 1.368-1(d)(4)(ii)); or (iii) a partnership described in
Treasury Regulation Section 1.368-1(d)(4)(iii). For a period of not less than
two years following the Effective Time, neither the Surviving Entity nor any
partner of the Surviving Entity will issue additional ownership interests in
their respective entities that would result in Acquiror losing control of
Acquisition Sub within the meaning of Section 368(c) of the Code.
ARTICLE 7
CONDITIONS TO THE MERGER
7.01 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger or restricting the conduct or operations of the
business of the Surviving Entity shall be in effect, nor shall any proceeding
brought by any Governmental Body, seeking any of the foregoing be pending; nor
shall there be any action taken, or any statute, rule, regulation or order
enacted, entered, enforced or deemed applicable to the Merger, which makes the
consummation of the Merger unlawful. (b) Subordination Agreement. JPMorgan shall
have executed and delivered to Xxxxx and Acquiror the Subordination Agreement.
7.02 Additional Conditions to Obligations of the Target and the Holders.
The obligations of the Target and the Holders to consummate and effect this
Agreement and the Transactions shall be subject to the satisfaction at or prior
to the Effective Time of each of the following conditions, any of which may be
waived, in writing, exclusively by the Target and the Holders:
(a) Representations and Warranties. The representations and warranties
of Acquiror and Acquisition Sub contained in this Agreement (i) shall have been
true and correct in all material respects as of the date of this Agreement and
(ii) shall be true and correct in all material respects on and as of the Closing
Date with the same force and effect as if made on and as of the Closing Date.
Each of Acquiror and Acquisition Sub shall have delivered a signed certificate
executed by its chief financial officer and general partner, respectively, with
respect to the foregoing to the Target and the Holders' Representative.
(b) Agreements and Covenants. Acquiror and Acquisition Sub shall have
performed and complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with by them at
or prior to the Effective Time, and each of Acquiror and Acquisition Sub shall
have delivered a signed certificate executed by its chief financial officer and
general partner, respectively, to such effect to the Target and the Holder's
Representative.
(c) Legal Opinion. The Target and the Holders shall have received a
legal opinion from Gallop, Xxxxxxx & Xxxxxx, X.X., legal counsel to Acquiror and
Acquisition Sub, substantially in the form of Exhibit G attached hereto.
(d) Litigation. There shall be no action, suit, claim or proceeding of
any nature pending, or overtly threatened, against Acquiror, Acquisition Sub or
the Target, their respective properties or any of their officers or directors or
partners arising out of, or in any way connected with, the Merger or the other
Transactions.
(e) The SEC shall have issued an order declaring the Registration
Statement effective.
7.03 Additional Conditions to the Obligations of Acquiror and Acquisition
Sub. The obligations of Acquiror and Acquisition Sub to consummate and effect
this Agreement and the Transactions shall be subject to the satisfaction at or
prior to the Effective Time of each of the following conditions, any of which
may be waived, in writing, exclusively by Acquiror:
(a) Representations and Warranties. The representations and warranties
of Holders contained in this Agreement (i) shall have been true and correct in
all material respects as of the date of this Agreement and (ii) shall be true
and correct in all material respects on and as of the Closing Date with the same
force and effect as if made on and as of the Closing Date. Acquiror shall have
received a signed certificate of Holders with respect to the foregoing.
(b) Agreements and Covenants. Target and Holders shall have performed
and complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by them at or prior to the
Effective Time, and Acquiror shall have received a signed certificate of Holders
to such effect.
(c) Third Party Consents. All Required Consents shall have been
obtained.
(d) Legal Opinion. Acquiror shall have received a legal opinion from
Xxxxx Liddell & Xxxx LLP, legal counsel to the Target, substantially in the form
of Exhibit F.
(e) Litigation. There shall be no action, suit, claim or proceeding of
any nature pending, or overtly threatened, against Acquiror, Acquisition Sub or
the Target, their respective properties or any of their officers or directors or
partners arising out of or in any way connected with the Merger or the other
Transactions.
(f) Senior Lender Approval. Acquiror shall have received approval of
the Transactions from XX Xxxxxx Chase Bank as administrative agent for the
lenders who are a party to that Amended and Restated Credit Agreement dated
December 31, 2002 (the "Credit Agreement") and all of the consents required
under the Credit Agreement.
(g) Dissenter's Rights. No holder of Target Capital Stock shall have
exercised his or its Dissenter's Rights with respect to such Target Capital
Stock.
(h) Other Requirements. Acquiror shall have received:
(i) evidence reasonably satisfactory to the Acquiror that the
Buy-Sell Agreement among the Target and certain shareholders of the Target has
been terminated;
(ii) a true, complete and correct copy of Target's unaudited
balance sheet as of the close of business on January 31, 2003;
(iii) a true and correct aging as of January 31, 2003 of the
accounts receivable shown on the balance sheet delivered pursuant to Section
7.03(g)(ii) above;
(iv) a true and correct aging as of January 31, 2003 of the
accounts payable shown on the balance sheet delivered pursuant to Section
7.03(g)(ii) above; and
(v) payoff letters and discharge documents, reasonably acceptable
to Acquiror, from Bank One, NA, which payoff letters and discharge documents
shall (A) reflect the amounts required in order to pay in full all obligations
of the Target to Bank One, N.A. as of the Closing Date, and (B) provide that,
upon payment in full of the amounts indicated, all claims, encumbrances,
security interests and other charges of such Person in and to the properties and
Assets of the Target shall be terminated and of no further force and effect, and
that such Person shall forthwith execute and deliver to Acquiror any and all
terminations and releases (including, without limitation, UCC-3 termination
statements) necessary to evidence the foregoing.
ARTICLE 7A
TERMINATION
7A.01 Termination Event This Agreement may, by notice given prior to or at
the Closing, be terminated (a) by mutual written consent of Target and Acquiror
or (b) by either Target or Acquiror if the Closing has not occurred (other than
for the failure of any party seeking to terminate this Agreement to comply fully
with its obligations under this Agreement, including, in the case of Target, the
failure of Holders to comply fully with their obligations under this Agreement)
on or before the later of (i) Xxxxx 00, 0000, (xx) if all conditions set forth
in Article 7 other than the condition set forth in Section 7.02(e) have been
fulfilled or waived by the applicable party, the date that is the earlier of (1)
one business day after the SEC shall have issued an order declaring the
Registration Statement effective or (2) April 30, 2003, or (iii) such later date
as the parties may agree upon. 7A.02 Effect of Termination If this Agreement is
terminated pursuant to Section 7A.01, all further obligations of the parties
under this Agreement will terminate, except that the obligations in Section 9.04
shall survive; provided, however, that if this Agreement is terminated by a
party because of the breach of the Agreement by another party or because one or
more of the conditions to the terminating party's obligations under this
Agreement is not satisfied as a result of another party's failure to comply with
its obligations under this Agreement, the terminating party's right to pursue
all legal remedies will survive such termination unimpaired. ARTICLE 8
INDEMNIFICATION
8.01 Indemnification by the Holders. Each Holder, severally and not
jointly, shall indemnify, defend, protect and hold harmless the Acquiror and its
Affiliates (including the Surviving Corporation) and each of their officers,
directors, members, managers and employees (collectively, the "Acquiror
Indemnified Parties") from, against and in respect of:
(a) all Liabilities, losses, claims, damages, fines, penalties,
assessments, adjustments, settlement payments, deficiencies, diminution in
value, costs and expenses (including reasonable attorneys' fees and expenses of
investigation, but excluding special, incidental, consequential or punitive
damages) (collectively, "Losses") suffered, sustained, incurred or paid by any
Acquiror Indemnified Party in connection with, resulting from or arising out of,
directly or indirectly any breach of any representation or warranty of such
Holders set forth in Article 3 of this Agreement or any covenant or obligation
of such Holder set forth in this Agreement or in any certificate or other
writing delivered by such Holder in connection herewith; and
(b) any and all actions, suits, claims, proceedings, investigations,
allegations, demands, assessments, audits, fines, judgments, costs and other
expenses (including reasonable attorneys' fees and expenses) incident to any of
the foregoing or to the enforcement of this Section 8.01.
8.02 Indemnification by Xxxxx and FLP. Xxxxx and FLP, jointly and
severally, shall indemnify, defend, protect and hold harmless the Acquiror
Indemnified Parties from, against and in respect of:
(a) All Losses suffered, sustained, incurred or paid by any Acquiror
Indemnified Party in connection with, resulting from or arising out of, directly
or indirectly, any breach of any representation or warranty of Xxxxx and FLP set
forth in Article 4 of this Agreement or any covenant or obligation of Target, or
of Holders specifically made jointly and severally, set forth in this Agreement
or any certificate or other writing delivered by Target in connection herewith;
(b) any and all actions, suits, claims, proceedings, investigations,
allegations, demands, assessments, audits, fines, judgments, costs and other
expenses (including reasonable attorneys' fees and expenses) incident to any of
the foregoing or to the enforcement of this Section 8.02; and
(c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with the Target (or any Person
acting on the Target's behalf) or by any Person for professional or other fees
incurred by Target in connection with the transactions contemplated by this
Agreement.
8.03 Indemnification by the Acquiring Parties. The Acquiring Parties,
jointly and severally, shall indemnify, defend, protect and hold harmless each
Holder and his or its officers, directors, partners, trustees, managers,
employees, heirs, administrators, and personal representatives (collectively,
the "Holder Indemnified Parties") from, against and in respect of:
(a) All Losses suffered, sustained, incurred or paid by any Holder
Indemnified Party in connection with, resulting from or arising out of, directly
or indirectly, any breach of any representation or warranty of the Acquiring
Parties set forth in Article 5 of this Agreement or any covenant or obligation
of either Acquiring Party set forth in this Agreement or any certificate or
other writing delivered by either Acquiring Party in connection herewith;
(b) any and all actions, suits, claims, proceedings, investigations,
allegations, demands, assessments, audits, fines, judgments, costs and other
expenses (including reasonable attorneys' fees and expenses) incident to any of
the foregoing or to the enforcement of this Section 8.03; and
(c) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with either Acquiring Party (or any
Person acting on behalf of either Acquiring Party) or by any Person for
professional or other fees incurred by either Acquiring Party in connection with
the transactions contemplated by this Agreement; provided, however, this shall
not include claims based upon agreements or understandings alleged to have been
made by Target prior to the consummation of the Merger for broker's, finder's,
professional or other fees.
8.04 Limitations.
(a) No Holder will have any liability with respect to the matters
described in Section 8.01 or 8.02(a) or (b) except to the extent that the total
of all Liabilities with respect to such matters exceeds $100,000, provided that
this limitation shall not apply to any breach of covenant to be performed after
Closing or to any breach of the representations and warranties set forth in
Section 4.02 or Section 4.03(b) and further provided that this limitation shall
not apply to any breach of Section 4.12(c) solely as such section applies to the
License Agreement dated January 31, 1997 between Quality Tubing, Inc. and
Southwestern Pipe, Inc. as assigned by Southwestern Pipe, Inc. to XxxXxx
Corporation. In no event will any Holder have any liability with respect to the
matters described in Section 8.01 for any amounts in excess of the Aggregate
Merger Consideration received by such Holder as set forth on Exhibit C. With
respect to the matters described in Section 8.02 the following limitations will
apply: (i) with respect to liability for a breach of the representations and
warranties set forth in Section 4.02 or Section 4.03(b), the Holders' maximum
aggregate liability shall be equal to the Aggregate Merger Consideration, and
(ii) with respect to all other matters described in Section 8.02(a) or (b), the
Holders' maximum aggregate liability shall be $10,000,000. Notwithstanding
anything in this Agreement to the contrary, Xxxxx or FLP shall, in no event,
have any liability under this Article 8 or otherwise with respect to
environmental-related matters, including any liability that may arise under
Environmental Laws, and including but not limited to any breach or alleged
breach of the representations and warranties set forth in Sections 4.08, 4.09,
4.11, 4.18, 4.20 or 4.24 (but solely as such Sections apply to
environmental-related matters) (collectively, the "Environmental Liability"), in
excess of $1,500,000 ("Environmental Cap") provided that, after Holders'
obligations for Environmental Liability have reached $1,000,000 then Holders
shall be liable for only 50% of any remaining Environmental Liability up to the
remaining Environmental Cap.
(b) Notwithstanding any provision of this Agreement, the Charter
Documents of Target, or any agreement between Target and any Holder to the
contrary, in no event shall the Surviving Corporation be obligated to reimburse,
contribute, indemnify or hold harmless any Holder in respect of any of the
liabilities or obligations of the Holders under this Article 8. No Holder shall
have the right to exercise or assert any right of contribution, right of
indemnity or other right or remedy against the Surviving Corporation for
recovery in respect of such Holder's indemnification obligation under this
Article 8.
(c) No Indemnifying Party shall have any obligation to indemnify an
Indemnified Party for special, incidental, consequential or punitive damages.
(d) The amount of any Losses otherwise payable to an Indemnified Party
shall be reduced by the amount of net insurance proceeds actually received by
such Indemnified Party (giving effect to deductibles or self insured or
co-insurance payments made) as compensation for the damage or Losses caused by
the act, or omission, fact or circumstance giving rise to the Losses.
8.05 Survival. The representations and warranties of the Parties given or
made in this Agreement or in any certificate or other writing furnished in
connection herewith shall survive until the second anniversary of the Closing
Date and shall thereafter terminate and be of no further force or effect, except
that (a) solely to the extent the representations and warranties relate to
environmental-related matters, including but not limited to Sections 4.08, 4.09,
4.11, 4.18, 4.20 and 4.24 (as such Sections apply to environmental-related
matters), such representations and warranties shall survive the Closing until
one year after the Closing Date, (b) the representations and warranties set
forth in Section 4.02 and 4.03(b) shall survive the Closing until the fourth
anniversary of the Closing Date, and (c) any representation or warranty as to
which a claim shall have been asserted during the survival period shall continue
in effect with respect to such claim until such claim shall have been finally
resolved or settled.
8.06 Holders Indemnification Procedures. All claims or demands for
indemnification under this Article 8 shall be asserted and resolved as follows:
(a) In the event that any claim or demand for which an indemnifying
party ("Indemnifying Party") would be liable to an indemnified party
("Indemnified Party") hereunder is asserted against an Indemnified Party by a
third party, the Indemnified Party shall within 30 days notify the Indemnifying
Party of such claim or demand (the "Claim Notice"), specifying the nature of
such claim or demand and the amount or the estimated amount thereof to the
extent then feasible (which estimate shall not be conclusive of the final amount
of such claim or demand); provided, however, that any delay or failure to notify
the Indemnifying Party within such time period shall relieve the Indemnifying
Party of its obligations hereunder only to the extent it is prejudiced by reason
of such delay or failure. The Indemnifying Party shall have 30 days from the
receipt of the Claim Notice (the "Notice Period") to notify the Indemnified
Party (i) whether or not the Indemnifying Party disputes the relevant
Indemnifying Party's liability to the Indemnified Party hereunder with respect
to such claim or demand and (ii) if the Indemnifying Party does not dispute such
Liability, whether or not the Indemnifying Party desires, at the sole cost and
expense of such Indemnifying Party, to defend against such claim or demand,
provided that the Indemnified Party is hereby authorized (but not obligated)
prior to and during the Notice Period to file any motion, answer or other
pleading and to take such action which the Indemnified Party shall reasonably
deem necessary or appropriate to protect the Indemnified Party's interests. In
the event that the Indemnifying Party notifies the Indemnified Party within the
Notice Period that, based on the facts then known to it, the Indemnifying Party
does not dispute such Indemnifying Party's obligation to indemnify hereunder and
desires to defend the Indemnified Party against such claim or demand, the
Indemnifying Party shall have the right to defend (with counsel reasonably
satisfactory to the Indemnified Party) by appropriate proceedings; provided
that, unless the Indemnified Party otherwise agrees in writing, the Indemnifying
Party may not settle any matter (in whole or in part) unless such settlement
includes a complete and unconditional release of the Indemnified Party. If the
Indemnified Party desires to participate in, but not control, any such defense
or settlement the Indemnified Party may do so at its sole cost and expense. If
the Indemnifying Party elects not to defend the Indemnified Party against such
claim or demand, whether by not giving the Indemnified Party timely notice as
provided above or otherwise, then the Indemnified Party, without waiving any
rights against such Indemnifying Party, may settle or defend against any such
claim in the Indemnified Party's sole discretion and, if it is ultimately
determined that the Indemnifying Party is responsible therefor under this
Article 8, then the Indemnified Party shall be entitled to recover from the
relevant Indemnifying Party the amount of any settlement or judgment and all
indemnifiable costs and expenses of the Indemnified Party with respect thereto,
including interest from the date such costs and expenses were incurred at the
fluctuating rate per annum equal to two percentage points in excess of the prime
rate published from time to time in the of The Wall Street Journal (the
"Applicable Rate") subject to the limitations set forth in this Article 8.
(b) Notwithstanding the foregoing, if an Indemnified Party determines
in good faith that there is a reasonable probability that any such claim or
demand may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the Indemnified Party may, by notice to the Indemnifying Party,
assume the exclusive right to defend, compromise or settle such claim or demand,
provided the cost of defending such claim shall be the sole responsibility of
the Indemnified Party. In such event, Indemnifying Party will not be bound by
any determination of a proceeding so defended or any compromise or settlement
effected without its consent (which may not be unreasonably withheld).
(c) In the event the Indemnified Party should have a claim against any
Indemnifying Party hereunder which does not involve a claim or demand being
asserted against or sought to be collected by a third party, the Indemnified
Party shall with reasonable promptness, and in any event prior to the
termination pursuant to Section 8.05 of any representation and warranty on which
any such claim is based, send a Claim Notice with respect to such claim to the
Indemnifying Party. In the case of any claim against a Holder, a copy of such
Claim Notice shall also be sent to the Holders' Representative. If the
Indemnifying Party does not notify the Indemnified Party within the Notice
Period that the Indemnifying Party disputes such claim, the amount of such claim
shall be conclusively deemed a Liability of the Indemnifying Party hereunder.
(d) Nothing herein shall be deemed to prevent the Indemnified Party
from making a claim hereunder for potential or contingent claims or demands
provided the Claim Notice sets forth the specific basis for any such potential
or contingent claim or demand to the extent then feasible and the Indemnified
Party has reasonable good faith belief that such a claim will be made. At such
time when the Indemnified Party shall have a good faith belief that any such
potential or contingent claim or demand will not be made, the Indemnified Party
shall withdraw its Claim Notice and claim, and all such Claim Notices and claims
for potential or contingent claims or demands shall be deemed withdrawn on the
second anniversary of the Closing Date. The Indemnified Party's failure to give
reasonably prompt notice to the Indemnifying Parties of any actual, threatened
or possible claim or demand which may give rise to a right of indemnification
hereunder shall not relieve the Indemnifying Parties of any Liability which the
Indemnifying Parties may have to the Indemnified Party except to the extent the
failure to give such notice prejudiced the Indemnifying Party.
8.07 Exceptions to Limitations. Nothing herein shall be deemed to limit or
restrict in any manner any rights or remedies that any Party has, or might have,
at law, in equity or otherwise, against any other Party, based on intentional
misrepresentation, or other fraud.
8.08 Effect of Investigation or Knowledge. Any claim by an Indemnified
Party for indemnification shall not be adversely affected by any investigation
by or opportunity to investigate afforded to Acquiring Parties. Each Party shall
be deemed to be relying on the representations and warranties of the other Party
set forth herein regardless of any investigation or audit conducted before or
after the Closing Date or the decision of any Party to consummate the
Transactions contemplated hereby.
8.09 Payment of Indemnification Obligations. In the event that any
Indemnifying Party is required to make any payment under this Article 8, such
amount shall be paid promptly to the Indemnified Party. If there should be a
dispute as to such amount, the portion, if any, of the obligation as shall not
be subject to dispute shall be paid promptly. The difference, if any, between
the amount of the obligation ultimately determined as properly payable under
this Article 8 and the portion, if any, theretofore paid shall bear interest at
the Applicable Rate for the period from the date the amount was demanded by the
Indemnified Party until payment in full, payable on demand.
8.10 Set Off. Acquiror may set off any and all amounts which the Acquiror
in good faith claims to be entitled to from a Holder under Article 8 against
amounts otherwise payable by Acquiror to such Holder under this Agreement or the
Note, if not timely paid by such Holder; provided, that in the event it is
determined that Acquiror offset amounts in excess of the Losses to which it is
entitled under this Section 8, Acquiror shall repay the amount of such excess
offsets to Holders' Representative along with interest at the rate per annum
equal to the prime rate of JPMorgan Chase on the date the offset occurs which
interest shall accrue from the date of offset of such excess amounts to the date
repaid by the Acquiror provided, that such interest shall be due only if and to
the extent the amounts against which such set off occurs are not already bearing
interest. Neither the exercise of nor the failure to exercise such right of set
off will constitute an election of remedies or limit Acquiror in any manner in
the enforcement of any other remedies that may be available to it.
8.11 Exclusive Remedy. The rights and remedies of the Parties under this
Article 8 are the sole and exclusive rights and remedies of such Parties with
respect to any matters arising out of this Agreement or the Transactions other
than with respect to claims for intentional misrepresentation or other fraud and
other than with respect to claims under the Note or the Credit Documents (as
defined in the Note) and the Employment Agreement or Xxxxx Noncompetition
Agreement. FOR ITSELF AND ON BEHALF OF ITS AFFILIATES, EACH PARTY HEREBY WAIVES,
RELEASES AND DISCHARGES ALL RIGHTS TO, AND COVENANTS NOT TO XXX FOR, AND NO
PARTY SHALL HAVE ANY OBLIGATION FOR, ANY DAMAGES, WHETHER UNDER ANY STATUTE
(INCLUDING WITHOUT LIMITATION ANY ENVIRONMENTAL LAWS), IN CONTRACT OR IN TORT,
AT LAW OR IN EQUITY, OTHER THAN THOSE EXPRESSLY PROVIDED FOR IN THIS ARTICLE 8.
ARTICLE 9
GENERAL
9.01 Assignment and Binding Effect. No Party may assign either this
Agreement or any of its rights, interests, or obligations hereunder without the
prior written approval of the other Parties; provided that the Acquiring Parties
may collaterally assign its rights under this Agreement and all Transaction
Documents to JPMorgan Chase Bank as administrative agent under the Amended and
Restated Credit Agreement between, among others, Acquiror and JPMorgan Chase
Bank, for the benefit of the lenders named therein. Subject to the preceding
sentence, all of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the heirs,
administrators, personal representatives, successors and permitted assigns of
the Parties.
9.02 Entire Agreement; Amendment; Waiver. This Agreement and the other
Transaction Documents sets forth the entire understanding of the Parties with
respect to the Transactions. Each of the Schedules and Exhibits to this
Agreement is incorporated herein by this reference and expressly made a part
hereof. Any and all previous agreements and understandings between or among the
Parties regarding the subject matter hereof, whether written or oral, are
superseded by this Agreement. This Agreement shall not be amended or modified
except by a written instrument duly executed by each of the Parties. Any
extension or waiver by any Party of any provision hereto shall be valid only if
set forth in an instrument in writing signed on behalf of such Party.
9.03 Counterparts. This Agreement may be executed in any number of
counterparts and any Party may execute any such counterpart, each of which when
executed and delivered (which deliveries may be made by facsimile) shall be
deemed to be an original, and all of which counterparts taken together shall
constitute but one and the same instrument.
9.04 Expenses. All fees, expenses and disbursements incidental to the
preparation of this Agreement, the carrying out of the provisions of this
Agreement and the consummation of the Transactions contemplated hereby shall be
paid by the Person incurring such amounts, except that Holders shall cause
Target not to incur any expenses in connection with this Transaction and shall
reimburse all expenses of Target in connection with this Transaction at Closing.
9.05 Notices. Any notice, request, claim, demand, waiver, consent, approval
or other communication which is required or permitted hereunder shall be in
writing and shall be deemed received on the day delivered personally or sent by
telefax (with confirmation of receipt), on the third Business Day after posted
by registered or certified mail, postage prepaid, or on the next Business Day
after sent by recognized overnight courier service, as follows:
If to Acquiror:
Maverick Tube Corporation
00000 Xxxxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
(Facsimile: 636-733-1671)
with a copy (which shall not constitute notice) to:
Gallop, Xxxxxxx & Xxxxxx, X.X.
000 X. Xxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
(Facsimile: 314-615-6000)
If to a Holder or the Holders' Representative:
To the appropriate address set forth on the signature
page hereto
with a copy (which shall not constitute notice) to:
Xxxxx Liddell & Xxxx LLP
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
(Facsimile: 713-223-3717)
or to such other address as the Person to whom notice is to be given may have
specified in a notice duly given to the sender as provided herein. Such notice,
request, claim, demand, waiver, consent, approval or other communication shall
be deemed to have been given as of the date so delivered, telefaxed, mailed or
dispatched and, if given by any other means, shall be deemed given only when
actually received by the addressees.
9.06 Delaware Law to Govern Venue; Waiver of Jury Trial. This Agreement
shall be governed by and construed, interpreted and enforced in accordance with
the laws of the State of Delaware, without giving effect to any of the conflicts
of laws provisions thereof that would require the application of the substantive
laws of any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF.
9.07 Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance is held invalid or unenforceable in any
jurisdiction, the remainder hereof, and the application of such provision to
such Person or circumstance in any other jurisdiction or to other Persons or
circumstances in any jurisdiction, shall not be affected thereby, and to this
end the provisions of this Agreement shall be severable.
9.08 No Benefit to Others. The representations, warranties, covenants and
agreements contained in this Agreement are for the sole benefit of the Parties
and their respective heirs, administrators, personal representatives, successors
and assigns, and they shall not be construed as conferring any rights on any
other Persons.
9.09 Further Representations. Each Party hereby acknowledges and represents
that it, he or she (a) has been represented by its, his or her own legal counsel
in connection with the Transactions, with the opportunity to seek advice as to
its, his or her legal rights from such counsel, (b) is being independently
advised as to the Tax consequences of the Transactions, (c) that the terms and
language of this Agreement were the result of negotiations among the Parties
and, as a result, there shall be no presumption that any ambiguities in this
Agreement shall be resolved against any particular Party and (d) any controversy
over construction of this Agreement shall be decided without regard to events of
authorship or negotiation.
9.10 Holders' Representative. Xxxxx has been appointed to act as exclusive
agent and attorney-in-fact to act on behalf of the holders of Target Capital
Stock with respect to any and all matters, claims, controversies, or disputes
arising out of the terms of this Agreement (the "Holders' Representative"). In
the event of the death, disability or resignation of such Person, a successor
may be appointed by the Holders. The Holders' Representative shall have the
power to take any and all actions which the Holders' Representative believes are
necessary or appropriate or in the best interests of the Holders, as fully as if
each such Holder was acting on its, his or her own behalf with respect to all
claims for indemnification under this Agreement and to take any action or no
action in connection therewith as the Holders' Representative may deem
appropriate as effectively as the Holders could act themselves, including the
settlement or compromise of any dispute or controversy. In no event shall the
Holders' Representative be required to expend his own funds to defend any claim
for indemnification hereunder, and he may require, as a condition of undertaking
such defense, contribution by the Holders of funds necessary to pay the cost of
any such defense. The authority granted hereunder is deemed to be coupled with
an interest. The death or incapacity of any Holder shall not terminate the
authority and agency of the Holders' Representative. Acquiror shall have the
right to rely on any actions taken or omitted to be taken by the Holders'
Representative as being the act or omission of the Holders, without the need for
any inquiry, and any such actions or omissions shall be binding upon each of the
Holders. The Holders' Representative shall incur no liability, loss, damage or
expense as a result of any action taken in good faith hereunder, including any
legal fees and expenses.
9.11 Disclosure Schedule. The Disclosure Schedule shall be arranged in
numbered sections corresponding to the Sections and subsections of this
Agreement to which they relate. Nothing in the Disclosure Schedule shall be
deemed to disclose an exception to a representation or warranty made herein
unless such exception is identified specifically in the applicable section of
the Disclosure Schedule, except where the context of such disclosure makes it
reasonably apparent that such disclosure is also being disclosed for purposes
relating to the representation or warranty referenced on another section of the
Disclosure Schedule.
9.12 Conflict Waiver. Each of Target and Acquiror (i) acknowledges that
Xxxxx Xxxxxxx & Xxxx LLP ("LLS") had, prior to the Effective Time, represented
Target as its general legal counsel, (ii) hereby waives any conflict or
potential conflict arising out of its representation of the Holders (as a group
or any such Holders individually) with respect to or in connection with the
transactions contemplated by the Agreement, and (iii) consents to the retention
of LLS by the Holders as legal counsel in connection with any and all matters
referred to herein or in connection with any disputes arising out to terms
hereof or the matters referred to herein.
9.13 Specific Performance; Attorneys' Fees. The Parties hereby acknowledge
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. Each of the Parties shall be entitled to seek an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof, in any court having jurisdiction.
In any action at law or suit in equity to enforce this Agreement or the rights
of any of the Parties hereunder (including any claim for indemnification under
Article 8), the prevailing Party in such action or suit shall be entitled to
receive a reasonable sum for its attorneys' fees and all other reasonable costs
and expenses incurred in such action or suit, if in such action or suit the
principal claim or defense of the non-prevailing Party is held to be without
merit because it was not reasonably supported by Laws or material and relevant
facts.
[Execution Page Following]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and
year first above written.
MAVERICK TUBE CORPORATION
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
SC ACQUISITION, L.P.
By: Precision GP, LLC,
Its general partner
By: Maverick Tube Corporation,
Its sole member
By: /s/ Xxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: President
XXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Xxxxxx X. Xxxxx, President
XXXXXX X. XXXXX
/s/ Xxxxxx X. Xxxxx
-----------------------------------------
Signature
XXXXX FAMILY INVESTMENT PARTNERSHIP, LTD.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing General Partner
LIST OF
DISCLOSURE SCHEDULES
Section 4.01 Due Organization
Section 4.03 Capital Stock of Target
Section 4.05 No Conflicts
Section 4.06 Financial Statements; Books of Account
Section 4.07(a) Accounts Receivable
Section 4.07(b) Accounts Payable
Section 4.08 No Undisclosed Liabilities
Section 4.09 Existing Conditions
Section 4.10 Assets
Section 4.11(b) Real Property
Section 4.11(c) Real Property
Section 4.12 Intellectual Property and Products
Section 4.13 Deposit Accounts; Powers of Attorney
Section 4.14 Contracts and Commitments
Section 4.15(a) Customers and Suppliers
Section 4.15(b) Customers and Suppliers
Section 4.16 Conditions Affecting Target
Section 4.17 Insurance
Section 4.19 No Litigation
Section 4.20 Permits
Section 4.21 Tax Matters
Section 4.22 Employee Matters and Benefit Plans
Section 4.23 Labor and Employment Matters
Section 4.24 Environmental Matters
Section 4.28 No Brokers or Finders
Section 5.03 No Conflicts
