1
EXHIBIT 10.13
PURCHASE AGREEMENT
BY AND AMONG
AGRI-EMPRESA, INC.,
AND
W-H ENERGY HOLDINGS, INC.,
AS BUYER,
W-H ENERGY SERVICES, INC.,
A TEXAS CORPORATION
AND
THE SELLERS LISTED HEREIN,
AS SELLERS
DATED AS OF MAY 10, 2001
RELATING TO THE ACQUISITION OF
COIL TUBING SERVICES, L.L.C.
2
TABLE OF CONTENTS
1. PURCHASE AND SALE OF THE MEMBERSHIP INTERESTS.....................................1
2. CLOSING...........................................................................1
3. REPRESENTATIONS AND WARRANTIES OF SELLERS.........................................2
(a) Authority................................................................2
(b) No Conflicts; Consents...................................................3
(c) The Membership Interests.................................................3
(d) Organization and Standing; Books and Records.............................3
(e) Capitalization of the Company............................................4
(f) Equity Interests.........................................................4
(g) Financial Statements; Equipment Payments.................................4
(h) Taxes....................................................................5
(i) Assets Other than Real Property Interests................................6
(j) Title to Real Property...................................................7
(k) Intellectual Property....................................................7
(l) Contracts................................................................9
(m) Litigation..............................................................11
(n) Benefit Plans...........................................................11
(o) Absence of Changes or Events............................................14
(p) Compliance with Applicable Laws.........................................15
(q) Employee and Labor Matters..............................................16
(r) Customer Accounts Receivable............................................16
(s) Licenses; Permits.......................................................16
(t) Transactions with Affiliates............................................16
(u) Effect of Transaction...................................................17
(v) Private Offering of Membership Interests................................17
(w) Private Offering of Shares..............................................17
(x) Environmental Matters...................................................18
(y) Transaction Information.................................................19
4. COVENANTS OF SELLERS.............................................................20
(a) Access..................................................................20
(b) Ordinary Conduct........................................................20
(c) Confidentiality.........................................................22
(d) Assignment of Confidentiality Agreements................................22
(e) Resignations............................................................22
(f) Exclusive Dealing.......................................................22
(g) Notice..................................................................23
(h) Non-Competition.........................................................23
(i) Certain Licenses and Permits............................................24
(j) Election Under Section 754..............................................24
(k) Disclosure Schedules, Updated Disclosures; Breaches.....................24
(l) Maximum Debt; Working Capital...........................................25
i
3
(m) Termination of Service Agreements.......................................25
(n) Corrective Actions......................................................25
5. REPRESENTATIONS AND WARRANTIES OF BUYER AND W-H..................................25
(a) Authority...............................................................25
(b) No Conflicts; Consents..................................................26
(c) Capital Stock of the W-H................................................26
(d) SEC Documents...........................................................27
(e) Securities Act..........................................................27
(f) Actions and Proceedings, etc............................................27
6. COVENANTS OF BUYER AND W-H.......................................................27
(a) Confidentiality.........................................................27
(b) Notice..................................................................28
(c) Prepayment of Debt......................................................28
(d) Disclosure Schedules, Updated Disclosures; Breaches.....................28
7. MUTUAL COVENANTS.................................................................28
(a) Cooperation.............................................................28
(b) Confidentiality of the Existence of the Agreement.......................29
(c) Publicity...............................................................29
(d) Commercial Efforts......................................................29
(e) Records.................................................................29
(f) Purchase Price..........................................................30
(g) Legend..................................................................30
(h) Transfer Restrictions...................................................30
8. CONDITIONS TO CLOSING............................................................31
(a) Buyer's and W-H's Obligation............................................31
(b) Seller's Obligation.....................................................33
(c) Frustration of Closing Conditions.......................................34
9. FURTHER ASSURANCES...............................................................34
10. INDEMNIFICATION..................................................................34
(a) In General..............................................................34
(b) No Exhaustion of Remedies; Exclusive Remedy.............................35
(c) Indemnification by Buyer................................................35
(d) Exclusive Remedy........................................................35
(e) Procedures Relating to Indemnification..................................35
(f) Other Claims............................................................36
(g) Satisfaction of Claims from Escrow Shares...............................37
(h) Liability Limitations; Survival of Representations and Warranties.......38
(i) Tax Treatment of Indemnification Payments...............................38
11. TAX MATTERS......................................................................38
(a) Taxable Period Ending on or Before Closing Date.........................38
ii
4
(b) Taxable Period Beginning on or Before Closing Date and
Ending After Closing Date...............................................39
(c) Franchise Tax...........................................................39
(d) Other State and Local Taxes.............................................39
(e) Consistent Preparation of Tax Returns...................................39
(f) Cooperation.............................................................39
(g) Certificate of Non-Foreign Status.......................................40
(h) Interest................................................................40
12. ASSIGNMENT.......................................................................40
13. NO THIRD-PARTY BENEFICIARIES.....................................................40
14. TERMINATION......................................................................40
15. EXPENSES.........................................................................41
16. ATTORNEY FEES....................................................................41
17. AMENDMENTS.......................................................................41
18. NOTICES..........................................................................42
19. INTERPRETATION; EXHIBITS AND SCHEDULES; CERTAIN DEFINITIONS......................42
20. COUNTERPARTS.....................................................................43
21. ENTIRE AGREEMENT.................................................................43
22. FEES.............................................................................43
23. SEVERABILITY.....................................................................43
24. GOVERNING LAW....................................................................43
Schedule I Equipment Debt Payments
Schedule II Purchase Price Allocation
Exhibit A Form of Note
Exhibit B Form of Escrow Agreement
Exhibit C Form of Certificate of Accredited Investor Status
Exhibit D Form of Stock Power
Exhibit E Form of Certificate of Non-Foreign Status
Exhibit F Form of Lease Agreement
Exhibit G Matters to be Covered in Opinion of Buyer's Counsel
Company Disclosure Schedule
Buyer Disclosure Schedule
iii
5
INDEX OF DEFINED TERMS
TERM SECTION
---- -------
Accredited Seller.......................................................3(w)
Affected Persons........................................................4(f)
Affiliate...............................................................4(c)
Agreement...........................................................Preamble
Agri-Empresa........................................................Preamble
Applicable Laws.........................................................3(p)
Average Stock Price........................................................1
Balance Sheet...........................................................3(g)
Benefit Program or Agreement......................................3(n)(i)(B)
Buyer...............................................................Preamble
Buyer Disclosure Schedule...............................................5(b)
Buyer Indemnified Parties..............................................10(a)
Buyer Indemnified Party................................................10(a)
Capital Stock...........................................................3(f)
Cash Consideration.........................................................1
CBI.....................................................................4(n)
Certificates............................................................2(a)
Claim..................................................................10(a)
Closing.................................................................2(a)
Closing Date............................................................2(a)
Code.................................................................3(h)(i)
Company.............................................................Recitals
Company Disclosure Schedule................................................3
Company Properties......................................................3(j)
Company Property........................................................3(j)
Competing Transaction...................................................4(f)
Competitive Activities...............................................4(h)(i)
Confidential Information................................................4(c)
Contracts...............................................................3(l)
Control.................................................................4(c)
Corrective Actions......................................................4(n)
Environmental Laws................................................3(x)(i)(A)
Environmental Reports...............................................3(x)(ii)
Equipment Payments.........................................................1
ERISA.............................................................3(n)(i)(A)
Escrow Agent............................................................2(a)
Escrow Agreement........................................................2(a)
Escrow Shares...........................................................2(a)
Excepted Claims........................................................10(h)
Exchange Act............................................................3(b)
Financial Statements....................................................3(g)
GAAP....................................................................3(g)
iv
6
TERM SECTION
---- -------
Governmental Authority...............................................3(h)(i)
Governmental Entity................................................8(a)(iii)
Hazardous Materials...............................................3(x)(i)(B)
Immediate Family........................................................4(c)
including...........................................................19(b)(i)
Indemnified Party......................................................10(e)
Intellectual Property...................................................3(k)
knowledge...........................................................19(b)ii)
Leased Property.........................................................3(j)
Liens...................................................................3(b)
Market Value.......................................................10(g)(ii)
Material Adverse Effect.................................................3(b)
Membership Interests................................................Recitals
Non-Compete Parishes.................................................4(h)(i)
Note.......................................................................1
Notes......................................................................1
Note Consideration.........................................................1
Organizational Documents................................................3(b)
Owned Property..........................................................3(j)
Permits...........................................................3(x)(i)(C)
Permitted Liens.........................................................3(i)
person............................................................19(b)(iii)
Plan..............................................................3(n)(i)(A)
Pre-Closing Tax........................................................11(b)
Proceeding.............................................................11(f)
Purchase Price.............................................................1
Recently Acquired Assets...................................................1
Records.................................................................7(e)
Related Parties......................................................7(b)(i)
Release...........................................................3(x)(i)(D)
SEC.....................................................................5(d)
SEC Documents...........................................................5(d)
Securities Act..........................................................3(v)
Seller..............................................................Preamble
Seller's Representative...............................................18(ii)
Sellers.............................................................Preamble
Shares.....................................................................1
Site...............................................................8(a)(xii)
Stock Consideration........................................................1
Tax..................................................................3(h)(i)
Tax Items...........................................................3(h)(ii)
Tax Return...........................................................3(h)(i)
Taxes...................................................................3(h)
Third Party Claim......................................................10(e)
Transfer................................................................7(h)
Wastewater Discharge Claims.............................................4(h)
v
7
TERM SECTION
---- -------
W-H.................................................................Preamble
W-H Common Stock........................................................5(c)
W-H Holdings........................................................Preamble
vi
8
PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement") dated as of May 10, 2001, is
by and among the Sellers listed on the signature pages hereto (collectively, the
"Sellers" and, individually, a "Seller"), Agri-Empresa, Inc., a Texas
corporation ("Agri-Empresa"), W-H Energy Holdings, Inc., a Delaware corporation
("W-H Holdings" and Agri-Empresa, collectively the "Buyer") and W-H Energy
Services, Inc., a Texas corporation ("W-H").
WHEREAS, Buyer desires to purchase from Sellers, and Sellers desire to
sell to Buyer, 100% of the membership interests (the "Membership Interests") in
Coil Tubing Services, L.L.C., a Louisiana limited liability company (the
"Company").
Accordingly, Sellers and Buyer hereby agree as follows:
1. PURCHASE AND SALE OF THE MEMBERSHIP INTERESTS. On the terms and
subject to the conditions of this Agreement, Sellers shall sell, transfer and
deliver or cause to be sold, transferred and delivered to Buyer, and Buyer shall
purchase from Sellers, the Membership Interests for an aggregate purchase price
equal to the sum of (i) $39,500,000 (the "Purchase Price"), $26,250,000 of which
shall be payable in cash (the "Cash Consideration"), $4,500,000 of which shall
be payable through the issuance to Accredited Sellers (as hereinafter defined)
by W-H of its 9% Convertible Subordinated Notes due December 31, 2003
(individually, a "Note" and collectively, the "Notes") in the form attached
hereto as Exhibit A (the "Note Consideration") and $8,750,000 of which shall be
payable in 372,340 shares of common stock, par value $0.0001 per share (the
"Shares"), of W-H (the "Stock Consideration"), (unless the average of the
closing price for the W-H Common Stock on The Nasdaq National Market over the 20
trading days immediately preceding the second business day before the Closing
Date (as hereinafter defined) (the "Average Stock Price") is less than $23.50
per share, in which case, the number of Shares to be delivered in respect of the
Stock Consideration will be the number of shares of W-H Common Stock obtained by
dividing (I) the Average Stock Price into (II) the Stock Consideration) and (ii)
the payments (the "Equipment Payments") made to purchase the coil tubing
equipment and accessory assets and other assets described on Schedule I hereto
(the "Recently Acquired Assets") placed in service during 2001, which payments
are set forth on Schedule I hereto, payable in cash at Closing in the respective
amounts and to the Sellers listed on Schedule I hereto. The "Conversion Rate" to
be included in each Note shall be the number obtained by dividing one by the
greater of (i) $30.00 or (ii) the closing price for the W-H Common Stock on The
Nasdaq National Market on the last trading day immediately preceding the Closing
Date.
2. CLOSING.
(a) The closing (the "Closing") of the purchase and sale of
the Membership Interests shall be held at the offices of Xxxxxx & Xxxxxx L.L.P.,
Houston, Texas, at 10:00 a.m. on May 22, 2001, or, if the conditions to the
Closing set forth in Section 8 shall not have been satisfied by such date, as
soon as practicable after such conditions shall have been satisfied. The date on
which the Closing shall occur is hereinafter referred to as the "Closing Date."
At the Closing, (i) Buyer shall (A) cause to be delivered to each Seller a check
in an amount equal to each such Seller's portion of the Cash Consideration as
set forth next to each such Seller's name on
1
9
Schedule II attached hereto, (B) cause to be delivered to each Accredited Seller
a Note in a principal amount equal to each such Accredited Seller's portion of
the Note Consideration as set forth next to each such Accredited Seller's name
on Schedule II attached hereto, (C) cause to be delivered to, and directly
deposited with Xxxxx Fargo Bank Texas, N.A., or another national bank reasonably
acceptable to the Accredited Sellers and Buyer (the "Escrow Agent"), in escrow
for the account and future potential benefit of the Accredited Sellers, a stock
certificate, for 168,085 shares out of the Stock Consideration (unless the
Average Stock Price is less than $23.50 per share, in which case the number of
shares shall be computed by dividing $3,950,000 by the Average Stock Price) (the
"Escrow Shares") which certificate shall be registered in the name of the
Sellers' Representative (as hereinafter defined) for the benefit of the
Accredited Sellers, (D) cause to be delivered to each Accredited Seller a
certificate for the number of shares set forth next to the name of each such
Seller on Schedule II (unless the Average Stock Price is less than $23.50 per
share, in which case the number of Shares shall be computed by dividing
$4,800,000 by the Average Stock Price and multiplying the result by the
percentage set forth next to each such Seller's name on Schedule II hereto) and
(E) cause to be delivered to each Seller a check in an amount equal to such
Seller's share of the Equipment Payments as set forth next to each such Seller's
name on Schedule I hereto (ii) each Seller shall deliver or cause to be
delivered to Buyer certificates (the "Certificates") representing, in the
aggregate, a total of 100% of the Membership Interests, duly endorsed in blank
or accompanied by stock powers in proper form for transfer, with appropriate
transfer stamps, if any, affixed. In the event any Certificate shall have been
lost, stolen or destroyed, the holder thereof shall deliver to Buyer at the
Closing an affidavit of that fact and such indemnity or other security as Buyer
may reasonably request against any claim that may be made against Buyer or the
Company with respect to the Certificate alleged to have been lost, stolen or
destroyed. The term Escrow Shares shall include the Escrow Shares delivered to
the Escrow Agent and all subsequent stock dividends or distributions of other
shares received in respect of such Escrow Shares while deposited with the Escrow
Agent. The Escrow Shares shall be held by the Escrow Agent pursuant to the terms
and conditions of an Escrow Agreement substantially in the form attached hereto
as Exhibit B (the "Escrow Agreement") between Buyer, Company and the Accredited
Sellers.
(b) At Closing the Cash Consideration and Stock Consideration
shall be adjusted to account for payment of the Stock Consideration only in
whole shares of W-H common stock rounded downward and the appropriate upward
adjustment of the Cash Consideration to reflect the fractional shares that
otherwise would have been payable.
3. REPRESENTATIONS AND WARRANTIES OF SELLERS. Except as set forth on
any of the schedules to this Agreement (the "Company Disclosure Schedule") (the
Company Disclosure Schedule shall be arranged in paragraphs corresponding to the
numbered and lettered paragraphs contained in this Section 3, and the
disclosures in any paragraph of the Company Disclosure Schedule shall qualify
only (i) the corresponding paragraph of this Section 3 and (ii) other paragraphs
of this Section 3 to the extent it is clear from a specific cross reference that
such disclosure is applicable to such other paragraph), the Company and Sellers
hereby jointly and severally represent and warrant to Buyer as follows:
(a) AUTHORITY. Sellers have all requisite capacity and
authority to enter into this Agreement, to perform their obligations hereunder
and to consummate the transactions contemplated hereby. All acts and other
proceedings required to be taken by Sellers to authorize
2
10
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby have been duly and properly taken. This
Agreement has been duly executed and delivered by Sellers and constitutes a
legal, valid and binding obligation of Sellers, enforceable against Sellers in
accordance with its terms.
(b) NO CONFLICTS; CONSENTS. The execution and delivery of this
Agreement by Sellers do not, and the consummation of the transactions
contemplated hereby and compliance with the terms hereof will not, conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation under, or result in the creation of any lien,
claim, encumbrance, security interest, option, charge or restriction of any kind
("Liens") upon, any of the properties or assets of the Company under, any
provision of (i) the Organizational Documents (as hereinafter defined) of the
Company, (ii) except as set forth in Schedule 3(b), any note, bond, mortgage,
indenture, deed of trust, license, lease, contract, commitment, agreement or
arrangement to which any Seller or the Company is a party or by which any of
their respective properties or assets are bound or (iii) any judgment, order or
decree, or statute, law, ordinance, rule or regulation applicable to any Seller
or the Company or their respective properties or assets, other than, in the case
of clauses (ii) and (iii) above, any such items that, individually or in the
aggregate, would not have a material adverse effect on the business, condition
(financial or otherwise), prospects or results of operations of the Company or
on the ability of any Seller to consummate the transactions contemplated hereby
(a "Material Adverse Effect"). No consent, approval, license, permit, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity or any other person is required to be obtained or made by or with respect
to any Seller or the Company or their respective Affiliates in connection with
the execution, delivery and performance of this Agreement or the consummation of
the transactions contemplated hereby, other than compliance with and filings
under Section 13(a) or 15(d), as the case may be, of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). The term "Organizational Documents"
means (i) with respect to a corporation, the Articles of Incorporation and
Bylaws of the corporation, or any comparable governing instruments, together
with any other governing instruments of such corporation, each as amended, and
(ii) with respect to a limited liability company, the Articles of Organization
and the operating agreement of the limited liability company, or any comparable
governing instruments, each as amended.
(c) THE MEMBERSHIP INTERESTS. Sellers have good and valid
title to the Membership Interests, free and clear of any Liens. Upon delivery to
Buyer at the Closing of the Certificates, duly endorsed by Sellers for transfer
to Buyer, and upon Sellers' receipt of the Purchase Price, good and valid title
to the Membership Interests will pass to Buyer, free and clear of any Liens,
other than those arising from acts of Buyer or its Affiliates. The Membership
Interests are not subject to any voting trust agreement or other agreement,
arrangement or understanding, including any such agreement, arrangement or
understanding restricting or otherwise relating to the voting, dividend rights
or disposition of the Membership Interests.
(d) ORGANIZATION AND STANDING; BOOKS AND RECORDS. The Company
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Louisiana. The Company has full power
and authority and possesses all governmental franchises, licenses, permits,
authorizations and approvals necessary to enable it to own, lease or otherwise
hold its properties and assets and to carry on its business as presently
3
11
conducted. The Company is duly qualified and in good standing to do business in
Louisiana and in each other jurisdiction in which the conduct or nature of its
business or the ownership, leasing or holding of its properties makes such
qualification necessary, except such jurisdictions where the failure to be so
qualified or in good standing, individually or in the aggregate, would not have
a Material Adverse Effect.
Sellers have prior to the execution of this Agreement made available to
Buyer true and complete copies of the Organizational Documents, each as amended
to date, of the Company. All corporate records of the Company (which have been
made available for inspection by Buyer prior to the date hereof) are true and
complete.
(e) CAPITALIZATION OF THE COMPANY. The authorized Capital
Stock (as hereinafter defined) of the Company immediately prior to the Closing,
after giving effect to the transactions contemplated hereby, will consist of the
Certificates representing the Membership Interests. The Membership Interests
have the rights, privileges and preferences stated in the Organizational
Documents. Sellers are the record and beneficial owners of the Membership
Interests represented by the Certificates. Except for the Membership Interests,
there is no other Capital Stock of the Company authorized or outstanding. The
Membership Interests have not been issued in violation of, and none of the
Membership Interests are subject to, any purchase option, call, right of first
refusal, preemptive, subscription or similar rights under any provision of (i)
applicable law, (ii) the Organizational Documents, or (iii) any contract,
agreement or instrument to which the Company is subject, bound or a party or
otherwise. There are no outstanding warrants, options, rights, "phantom" rights,
agreements, convertible or exchangeable securities or other commitments (other
than this Agreement) pursuant to which Sellers or the Company is or may become
obligated to issue or cause the Company to issue, sell, purchase, return or
redeem or cause the Company to redeem any of the Membership Interests,
Certificates or any other Capital Stock of the Company. Except as set forth in
Schedule 3(e), there are no Membership Interests, Certificates or other Capital
Stock of the Company reserved for issuance for any purpose. Except as set forth
in Schedule 3(e), there are no outstanding bonds, debentures, notes or other
indebtedness having the right to vote on any matters on which members of the
Company may vote.
(f) EQUITY INTERESTS. The Company does not directly or
indirectly own any Capital Stock of any corporation, partnership or other person
and the Company is not a member of or participant in any partnership, joint
venture or similar person. The term "Capital Stock" means (i) with respect to
any entity that is a corporation, any and all shares, interests, participations,
rights or other equivalents (however designated) of equity or ownership
interests in such corporation (ii) with respect to any other entity, any and all
partnership, limited partnership, limited liability company or other equity or
ownership interests of such entity however denominated and (iii) any right or
security convertible into or exercisable or exchangeable for any of the
foregoing.
(g) FINANCIAL STATEMENTS; EQUIPMENT PAYMENTS. (i) Schedule
3(g) contains (A) the unaudited balance sheet of the Company as of March 31,
2001 (the "Balance Sheet") and the unaudited statement of income of the Company
for the three-month period ended March 31, 2001, and (B) the unaudited balance
sheet of the Company as of December 31, 2000, and the unaudited statement of
income of the Company for the fiscal year ended December 31, 2000
4
12
(collectively, the "Financial Statements"). The Financial Statements have been
prepared using accounting principles consistently applied (except as set forth
in Schedule 3(g)) and on a basis that fairly presents (subject to normal,
recurring year-end audit adjustments) the financial condition and results of
operations of the Company as of the respective dates thereof and for the
respective periods indicated. There are no liabilities not disclosed in the
Financial Statements that are required to be disclosed under generally accepted
accounting principles ("GAAP").
(ii) The amounts set forth in the column entitled "Total Cost" on
Schedule I hereto represent the total cost of acquiring the Recently Acquired
Assets. The Company has made or caused to be made to the persons entitled
thereto in respect of the purchase of the Recently Acquired Assets the payments
in the column entitled "Amount Paid" on Schedule I hereto. Upon making the
payments in the column entitled "Amount Due" on Schedule I hereto, the Company
will own, free and clear of all Liens, the Recently Acquired Assets.
(h) TAXES
(i) For purposes of this Agreement, (A) "Tax" or
"Taxes" shall mean all taxes, charges, fees, levies or other
assessments, however denominated, including any interest,
penalties or other additions to tax that may become payable in
respect thereof, imposed by any Governmental Authority, which
taxes include, without limitation, all income or profits taxes
(including federal income taxes and state income taxes), real
property gains taxes, payroll and employee withholding taxes,
unemployment insurance taxes, social security taxes, sales and
use taxes, ad valorem taxes, excise taxes, franchise taxes,
gross receipts taxes, business license taxes, occupation
taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, workers' compensation,
PBGC premiums and other Governmental charges, and other
obligations of the same or of a similar nature to any of the
foregoing, which the Company is required to pay, withhold or
collect; (B) "Tax Return" shall mean all reports, information
statements and returns required to be filed in connection
with, any Taxes, including information returns or reports with
respect to backup withholding and other payments to any
Person; (C) "Governmental Authority" means any governmental or
quasi-governmental body of the United States or any other
country, including any state, province, county, city or other
political subdivision thereof, or any agency, court,
instrumentality or statutory or regulatory body of any of the
foregoing; and (D) "Code" shall mean the Internal Revenue Code
of 1986, as amended.
(ii) Except as set forth in Schedule 3(h), (A) all
Tax Returns which were required to be filed by or with respect
to the Company have been duly and timely filed with the
appropriate Governmental authority, (B) all items of income,
gain, loss, deduction and credit or other items ("Tax Items")
required to be included in each such Tax Return have been so
included and all such Tax Items and any other information
provided in each such Tax Return are true, correct and
complete, (C) all Taxes owed by the Company which are or have
become due have been timely paid in full, (D) no penalty,
interest or other charge is or will become due with respect to
the late filing of any such Tax Return or late payment of any
such Tax, (E) all Tax withholding and deposit requirements
imposed on
5
13
or with respect to the Company have been satisfied in full in
all respects, and (F) there are no mortgages, pledges, liens,
encumbrances, charges or other security interests on any of
the assets of the Company that arose in connection with any
failure (or alleged failure) to pay any Tax.
(iii) There is no claim against the Company for any
Taxes, and no assessment, deficiency or adjustment has been
asserted, proposed, or threatened with respect to any Tax
Return of or with respect to the Company, other than those
disclosed (and to which are attached true and complete copies
of all audit or similar reports) in Schedule 3(h).
(iv) No claim has ever been made by an authority in a
jurisdiction where the Company does not file Tax Returns that
it is or may be subject to taxation in that jurisdiction.
(v) Except as set forth in Schedule 3(h), there is
not in force any extension of time with respect to the due
date for the filing of any Tax Return of or with respect to
the Company or any waiver or agreement for any extension of
time for the assessment or payment of any Tax of or with
respect to the Company.
(vi) The total amounts set up as liabilities for
Taxes in the Balance Sheet are sufficient to cover the payment
of all Taxes, whether or not assessed or disputed, which are,
or are hereafter found to be, or to have been, due by or with
respect to the Company up to and through the periods ending on
the dates thereof.
(vii) There are no Tax allocation, Tax sharing or Tax
indemnification agreements affecting the Company.
(viii) The Company currently qualifies, and has
qualified since the date of its formation, to be treated as a
partnership for federal income tax purposes and neither the
Company nor any of the Sellers has taken a position
inconsistent with such treatment.
(ix) All amounts required to be withheld and paid to
any Governmental Authority for income, social security,
unemployment insurance, sales, exercise, use and other Taxes
have been collected or withheld and accrued or paid to the
proper Governmental Authority. The Company has made all
deposits required by law to be made with respect to employees'
withholding and other employment Taxes.
(i) ASSETS OTHER THAN REAL PROPERTY INTERESTS. The Company has
good and valid title to all material assets reflected on the Balance Sheet or
thereafter acquired, including the assets set forth on Schedule I hereto, except
those sold or otherwise disposed of since the date of the Balance Sheet in the
ordinary course of business consistent with past practice and not in violation
of this Agreement, in each case free and clear of all Liens except (i) such as
are set forth in Schedule 3(i), (ii) mechanics', carriers', workmen's,
repairmen's or other like Liens arising or incurred in the ordinary course of
business, and Liens for Taxes which are not due and payable or which may
thereafter be paid without penalty and (iii) imperfections of title which,
6
14
individually or in the aggregate, would not have a Material Adverse Effect (the
Liens described in clauses (ii) and (iii) above are hereinafter referred to
collectively as "Permitted Liens").
All the material tangible personal property of the Company has been
maintained in accordance with the past practice of the Company and generally
accepted industry practice and is in good operating condition and repair,
ordinary wear and tear excepted, in each case except such as would not have a
Material Adverse Effect.
This Section 3(i) does not relate to real property or interests in real
property, such items being the subject of Section 3(j).
(j) TITLE TO REAL PROPERTY. The Company owns no real property.
Schedule 3(j) sets forth a complete list of all real property and interests in
real property leased by the Company (individually, a "Leased Property"). The
Company has good and valid title to the leasehold estates in all Leased Property
(a Leased Property being sometimes referred to herein, individually, as a
"Company Property" and, collectively, as "Company Properties"), in each case
free and clear of all Liens, except (A) such as are set forth in Schedule 3(j),
(B) leases, subleases and similar agreements set forth in Schedule 3(l), (C)
Permitted Liens, (D) easements, covenants, rights-of-way and other similar
restrictions of record and (E) (I) zoning, building and other similar
restrictions, (II) mortgages, liens, security interests, encumbrances,
easements, covenants, rights-of-way and other similar restrictions that have
been placed by any developer, landlord or other third party on property over
which the Company has easement rights or on any Leased Property and
subordination or similar agreements relating thereto, and (III) unrecorded
easements, covenants, rights-of-way and other similar restrictions, none of
which items set forth in clauses (I), (II) and (III), individually or in the
aggregate, would have a Material Adverse Effect.
(k) INTELLECTUAL PROPERTY
(i) Schedule 3(k) sets forth a true and complete list
of all (both foreign and domestic) patents, trademarks
(registered or unregistered), service marks (registered or
unregistered), trade names, and copyrights, and all
applications and registrations therefor, as well as any trade
secrets or confidential or proprietary information, inventions
(whether patentable or not), and any other intellectual
property, (all of the foregoing referred to hereinafter
collectively as "Intellectual Property"), owned, used, filed
by or licensed to the Company. Schedule 3(k) sets forth a list
of all jurisdictions in which any of such Intellectual
Property is the subject of a patent, registration,
certificate, or other such governmental acknowledgment or
grant or application therefor, together with all identifying
numbers or other designations related to such patents,
registrations, certificates or applications.
(ii) Unless (and only to the extent) expressly stated
otherwise in Schedule 3(k),
(A) the Company owns (free and clear of any
Liens, joint interests or licenses) the Intellectual
Property;
7
15
(B) the Company has the right to make, have
made, use, sell, offer for sale, execute, reproduce,
display, perform, modify, enhance, enforce, transfer,
distribute, prepare derivative works of, and
sublicense, without payment or provision of
consideration in any form to any other person, all
Intellectual Property listed in Schedule 3(k);
(C) the consummation of the transactions
contemplated hereby will not conflict with, alter,
forfeit, terminate or impair any such rights; and
(D) the Company has not previously granted
to third parties any rights of any kind relating to
the Intellectual Property listed in Schedule 3(k).
(iii) The Company and Sellers have taken all
necessary and appropriate steps to:
(A) insure that all requirements and all
fees, annuities, or other payments which are due as
of the consummation of this transaction for any
patent, registration, certificate, or other such
governmental acknowledgment or grant or application
therefor have been met or paid;
(B) safeguard and maintain the secrecy of
confidential and proprietary information of the
Company; and
(C) insure that the Company has acquired
ownership of all inventions, patents, copyrights, and
other Intellectual Property developed for Company by
its employees and contractors.
(iv) With respect to the Intellectual Property,
(A) no claims are pending or threatened as
of the date of this Agreement against Sellers or
Company by any person with respect to the ownership,
validity, enforceability, infringement, effectiveness
or use of any Intellectual Property;
(B) the Company and Sellers have not
received any communications alleging that the Company
has violated any rights relating to Intellectual
Property or the rights of any person;
(C) the Intellectual Property, and any use
thereof, does not infringe or otherwise violate, and
has not infringed or otherwise violated, the rights
of any other person (including but not limited to
Seller), and the Company and Sellers have no reason
to believe that the Intellectual Property infringes
the rights of other persons or involves the
misappropriation or improper use of the information
of other persons; and
8
16
(D) the Intellectual Property of Company and
its Subsidiaries includes, but is not hereby limited
to, all rights necessary for conducting the business
of Company.
(l) CONTRACTS. Except as set forth in Schedule 3(1), the
Company is not a party to or bound by any:
(i) employment agreement or employment contract that
has an aggregate future liability in excess of $50,000 and is
not terminable by the Company by notice of not more than 60
days for a cost of less than $50,000;
(ii) employee collective bargaining agreement or
other contract with any labor union;
(iii) covenant of the Company not to compete or other
covenant of the Company restricting the development,
manufacture, marketing or distribution of the products and
services of the Company that materially impairs the operation
of the business of the Company as presently conducted;
(iv) agreement, contract or other arrangement with
(A) any Seller or any Affiliate of a Seller or (B) any current
or former officer, director or employee of the Company, a
Seller or any Affiliate of a Seller (other than employment
agreements covered by clause (i) above);
(v) lease, sublease or similar agreement with any
person under which the Company is a lessor or sublessor of, or
makes available for use to any person, (A) any Company
Property or (B) any portion of any premises otherwise occupied
by the Company;
(vi) lease or similar agreement with any person under
which (A) the Company is lessee of, or holds or uses, any
machinery, equipment, vehicle or other tangible personal
property owned by any person or (B) the Company is a lessor or
sublessor of, or makes available for use by any person, any
tangible personal property owned or leased by the Company, in
any such case which has an aggregate future liability or
receivable, as the case may be, in excess of $50,000 and is
not terminable by the Company by notice of not more than 60
days for a cost of less than $50,000;
(vii) (A) continuing contract for the future purchase
of materials, supplies or equipment (other than purchase
contracts and orders for inventory in the ordinary course of
business consistent with past practice), (B) management,
service, consulting or other similar type of contract or (C)
advertising agreement or arrangement, in any such case which
has an aggregate future liability to any person in excess of
$50,000 and is not terminable by the Company by notice of not
more than 60 days for a cost of less than $50,000;
(viii) material license, option or other agreement
relating in whole or in part to the Intellectual Property set
forth in Schedule 3(k) (including any license
9
17
or other agreement under which the Company is licensee or
licensor of any such Intellectual Property);
(ix) agreement, contract or other instrument under
which the Company has borrowed any money from, or issued any
note, bond, debenture or other evidence of indebtedness to,
any person or any other note, bond, debenture or other
evidence of indebtedness issued to any person (other than the
Company) in any such case which, individually, is in excess of
$50,000;
(x) agreement, contract or other instrument
(including so-called take-or-pay or keepwell agreements) under
which (A) any person has directly or indirectly guaranteed
indebtedness, liabilities or obligations of the Company or (B)
the Company has directly or indirectly guaranteed
indebtedness, liabilities or obligations of any person (in
each case other than endorsements for the purpose of
collection in the ordinary course of business), in any such
case which, individually, is in excess of $50,000;
(xi) agreement, contract or other instrument under
which the Company has, directly or indirectly, made any
advance, loan, extension of credit or capital contribution to,
or other investment in, any person, in any such case which,
individually, is in excess of $50,000;
(xii) mortgage, pledge, security agreement, deed of
trust or other instrument granting a Lien upon any Company
Property;
(xiii) agreement or instrument providing for
indemnification of any person with respect to liabilities
relating to any current or former business of the Company or
any predecessor person; or
(xiv) other agreement, contract, lease, license,
commitment or instrument to which the Company is a party or by
or to which it or any of its assets or business is bound or
subject which has an aggregate future liability to any person
(other than the Company) in excess of $50,000 and is not
terminable by the Company by notice of not more than 60 days
for a cost of less than $50,000.
Except as set forth in Schedule 3(1), (I) all agreements, contracts,
leases, licenses, commitments or instruments of the Company listed in the
Schedules hereto (collectively, the "Contracts") are valid, binding and in full
force and effect and are enforceable by the Company in accordance with its
terms, (II) Sellers and the Company have performed all obligations required to
be performed by them to date under the Contracts and they are not (with or
without the lapse of time or the giving of notice, or both) in breach or default
in any material respect thereunder, (III) to the knowledge of Sellers, no other
party to any of the Contracts is (with or without the lapse of time or the
giving of notice, or both) in breach or default in any respect thereunder and
(IV) true and correct copies of all the Contracts have been delivered to Buyer.
The Sellers acknowledge and agree that the obligations of the Sellers hereunder
to the Buyer and
10
18
W-H are not affected by the Mutual Release Agreement made and entered into on
May 7, 2001 by and between each of the Sellers and the Sellers' spouses.
(m) LITIGATION. Schedule 3(m) describes all pending lawsuits
or claims, with respect to which Sellers or the Company has been contacted in
writing by counsel for the plaintiff or claimant, against the Company or any of
its respective properties, assets, operations or businesses and, to the
knowledge of Sellers, no such lawsuits or claims are threatened. Except as set
forth in Schedule 3(m), the Company is not a party or subject to or in default
under any judgment, order, injunction or decree of any Governmental Entity or
arbitration tribunal applicable to it or any of its respective properties,
assets, operations or business. Except as set forth in Schedule 3(m), there is
no lawsuit or claim by the Company pending against any other person. Except as
set forth in Schedule 3(m), there is no pending or, to the knowledge of Sellers,
threatened investigation of or affecting the Company by any Governmental Entity.
(n) BENEFIT PLANS.
(i) Schedule 3(n) provides a description of each of
the following which is sponsored, maintained or contributed to
(or has been so sponsored, maintained, or contributed to
within six years prior to the Closing Date) by Sellers or the
Company for the benefit of or pursuant to which the Company
could have liability with respect to any of the present or
former directors, officers, employees, agents, consultants or
similar representatives of the Company:
(A) each "employee benefit plan," as such
term is defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended
("ERISA"), (including, but not limited to, employee
benefit plans, such as foreign plans, which are not
subject to the provisions of ERISA), ("Plan");
(B) each personnel policy, stock option
plan, collective bargaining agreement, bonus plan or
arrangement, incentive award plan or arrangement,
vacation policy, severance pay plan, policy, or
agreement, deferred compensation agreement or
arrangement, executive compensation or supplemental
income arrangement, consulting agreement, employment
agreement, and each other employee benefit plan,
agreement, arrangement, program, practice, or
understanding which is not described in Section
3(n)(i)(A) ("Benefit Program or Agreement").
(ii) True, correct, and complete copies of each of
the Plans, and related trusts, if applicable, including all
amendments thereto, have been furnished to Buyer. There has
also been furnished to Buyer, with respect to each Plan
required to file such report and description, the most recent
report on Form 5500 and the summary plan description, and with
respect to each Plan intended to be qualified under Section
401 of the Code, the most recent determination letter. True,
correct, and complete copies or descriptions of all Benefit
Programs and Agreements have also been furnished to Buyer.
11
19
(iii) Neither the Company, nor any corporation,
trade, business, or entity under common control with the
Company, within the meaning of Sections 414(b), 414(c) or
414(m) of the Code or Section 4001 of ERISA sponsors
maintains, contributes to, or has an obligation to contribute
to or has sponsored, maintained, contributed to or has had an
obligation to contribute to, at any time within six years
prior to the Closing Date (A) any employee benefit plan within
the meaning of Section 3(3) of ERISA that is or was subject to
Title IV of ERISA, Section 302 of ERISA, or Section 412 of the
Code or (B) any multiemployer plan within the meaning of
Section 3(37) of ERISA;
(iv) Except as otherwise set forth on Schedule
3(n)(iv):
(A) Sellers and the Company have
substantially performed all obligations, whether
arising by operation of law or by contract, required
to be performed by them in connection with the Plans
and the Benefit Programs and Agreements, and to the
knowledge of the Company and Sellers there have been
no defaults or violations by any other party to the
Plans or Benefit Programs and Agreements;
(B) All reports and disclosures relating to
the Plans required to be filed with or furnished to
governmental agencies, Plan participants or Plan
beneficiaries have been filed or furnished in
accordance with applicable law in a timely manner,
and each Plan and each Benefit Program or Agreement
is in substantial compliance with, and at all times
within the six year period prior to the Closing Date
has been maintained in substantial compliance with,
its governing documents and the applicable provisions
of ERISA and the Code;
(C) Each of the Plans intended to be
qualified under Section 401 of the Code, (1)
satisfies in form the requirements of such Section
except to the extent amendments are not required by
law to be made until a date after the Closing Date,
(2) has received a favorable determination letter
from the Internal Revenue Service regarding such
qualified status, (3) has not, since receipt of the
most recent favorable determination letter, been
amended, and (4) has not been operated in a way that
would adversely affect its qualified status;
(D) There are no actions, suits, or claims
pending (other than routine claims for benefits) or,
to the knowledge of Seller or the Company threatened
against, or with respect to, any of the Plans or
Benefit Programs and Agreements or their assets;
(E) All contributions required to be made to
the Plans pursuant to their terms and the provisions
of ERISA, the Code, or any other applicable Law have
been timely made;
12
20
(F) As to any Plan intended to be qualified
under Section 401 of the Code, there has been no
termination or partial termination of the Plan within
the meaning of Section 411(d)(3) of the Code;
(G) No act, omission or transaction has
occurred which would result in imposition on the
Company of (1) breach of fiduciary duty liability
damages under Section 409 of ERISA, (2) a civil
penalty assessed pursuant to subsections (c), (i) or
(l) of Section 502 of ERISA, or (3) a tax imposed
pursuant to Chapter 43 of Subtitle D of the Code;
(H) To the knowledge of Sellers and the
Company, there is no matter pending (other than
routine qualification determination filings) with
respect to any of the Plans before the Internal
Revenue Service, the Department of Labor, the PBGC,
or other Governmental Authority;
(I) Each trust funding a Plan, which trust
is intended to be exempt from federal income taxation
pursuant to Section 501(c)(9) of the Code, satisfies
the requirements of such section and has received a
favorable determination letter from the Internal
Revenue Service regarding such exempt status and has
not, since receipt of the most recent favorable
determination letter, been amended or operated in a
way which would adversely affect such exempt status;
(J) The execution and delivery of this
Agreement and the consummation of the transactions
contemplated hereby will not (1) require Sellers or
the Company to make a larger contribution to, or pay
greater benefits or provide other rights under, any
Plan or Benefit Program or Agreement than it
otherwise would, whether or not some other subsequent
action or event would be required to cause such
payment or provision to be triggered, or (2) create
or give rise to any additional vested rights or
service credits under any Plan or any Benefit Program
or Agreement.
(v) Except as otherwise set forth in Schedule
3(n)(v), none of Sellers or the Company is a party to any
agreement, nor has any of the foregoing parties established
any policy or practice, requiring any payment or any other
form of compensation or benefit to any person performing
services for the Company upon termination of such services
which would not be payable or provided in the absence of the
consummation of the transactions contemplated by this
Agreement.
(vi) In connection with the consummation of the
transactions contemplated by this Agreement, no payments of
money or other property, acceleration of benefits, or
provisions of other rights have or will be made hereunder,
under any agreement contemplated herein, or under the Plans
and the Benefit Programs and Agreements that would be
reasonably likely to result in imposition of the sanctions
imposed under Sections 280G and 4999 of the Code, whether or
not some other subsequent action or event would be required to
cause such payment, acceleration, or provision to be
triggered.
13
21
(vii) Each Plan may be unilaterally amended or
terminated in its entirety without liability except as to
benefits accrued thereunder prior to such amendment or
termination. No Plan or Benefit Program or Agreement provides
retiree medical or retiree life insurance benefits to any
individual and the Company is not contractually or otherwise
obligated (whether or not in writing) to provide any
individual with life insurance or medical benefits upon
retirement or termination of employment, other than as
required by the provisions of Sections 601 through 609 of
ERISA and Section 4980B of the Code. Each Plan that is a
"group health plan" has been operated in all material respects
in compliance with the provisions of Part 6 of Title 1,
Subtitle B of ERISA.
(viii) Schedule 3(n)(viii) sets forth by number and
employment classification the approximate numbers of employees
employed by the Company as of the date of this Agreement, and,
except as set forth therein, none of said employees are
subject to union or collective bargaining agreements with the
Company. No collective bargaining agreement is being
negotiated by the Company.
(ix) Except as set forth in Schedule 3(n)(ix), the
Company is not a party to nor is it bound by any severance
agreement, program, or policy. True and correct copies of all
employment agreements with officers of the Company, and all
vacation, overtime, and other compensation policies of the
Company relating to its employees have been made available to
Buyer.
(x) Neither Sellers nor the Company has announced,
proposed, or agreed to any changes to any Plan or any Benefit
Program or Agreement that would cause an increase in benefits
(or the creation of new benefits) under any such Plan or any
such Benefit Program or Agreement or that would cause a
material increase in the cost of maintaining such Plan or such
Benefit Program or Agreement.
(o) ABSENCE OF CHANGES OR EVENTS. Except as set forth in
Schedule 3(o), since the date of the Balance Sheet:
(i) there has not been any material adverse change in
the business, condition (financial or otherwise), prospects or
results of operations of the Company;
(ii) Sellers have caused the business of the Company
to be conducted in the ordinary course and in substantially
the same manner as previously conducted and have made all
reasonable efforts consistent with past practices to preserve
the Company's relationships with customers, suppliers and
others with whom the Company deals;
(iii) there has not been any declaration, setting
aside or payment of any distribution or dividend with respect
to any of the Membership Interests or other Capital Stock of
the Company, or any repurchase, redemption or other
acquisition
14
22
by the Company of any of the Membership Interests or other
Capital Stock of the Company;
(iv) there has not been any amendment to the
Organizational Documents of the Company;
(v) there has not been any incurrence, assumption or
guarantee by the Company of any indebtedness for borrowed
money;
(vi) there has not been any creation or other
incurrence by the Company of any Lien on any asset;
(vii) there has not been any loan, advance or capital
contributions to or investment in any person made by the
Company;
(viii) there has not been any transaction or
commitment made, or any contract or agreement entered into, by
the Company relating to their respective assets or business
(including the acquisition or disposition of any assets) other
than in the ordinary course of business, or any relinquishment
by the Company of any contract or other right material to the
Company;
(ix) there has not been any change in any method of
accounting or accounting practice by the Company;
(x) there has not been any (A) employment, deferred
compensation, severance, retirement or other similar agreement
entered into with any director, officer or employee of the
Company (or any amendment to any such existing agreement), (B)
grant of any severance or termination pay to any director,
officer or employee of the Company, or (C) change in
compensation or other benefits payable to any director,
officer or employee of the Company pursuant to any severance
or retirement plans or policies thereof;
(xi) there has not been any labor dispute, other than
routine individual grievances, or any activity or proceeding
by a labor union or representative thereof to organize any
employees of the Company, which employees were not subject to
a collective bargaining agreement at the Balance Sheet Date,
or any lockouts, strikes, slowdowns, work stoppages or threats
thereof by or with respect to any employees of the Company; or
(xii) there has not been any modification or
amendment to any agreement to which the Company is a party
other than in the ordinary course of business.
(p) COMPLIANCE WITH APPLICABLE LAWS. To the knowledge of
Sellers, and except as set forth on Schedule 3(p), the Company is in compliance
with all applicable statutes, laws, ordinances, rules, orders and regulations of
any Governmental Entity ("Applicable Laws"), including those relating to
occupational health and safety. Except as set forth in Schedule 3(p), none of
Sellers or the Company has received any written communication during the past
two
15
23
years from a Governmental Entity that alleges that the Company or a Subsidiary
is not in compliance in any material respect with any Applicable Laws. This
Section 3(p) does not relate to matters with respect to Taxes, which are the
subject of Section 3(h), or to environmental matters, which are the subject of
Section 3(x).
(q) EMPLOYEE AND LABOR MATTERS. Except as set forth in
Schedule 3(q), (i) there is no, and during the past two years there has not been
any, labor strike, dispute, work stoppage or lockout pending, or, to the
knowledge of Sellers, threatened, against the Company; (ii) to the knowledge of
Sellers, no union organizational campaign is in progress with respect to the
employees of the Company and no question concerning representation exists
respecting such employees; (iii) the Company is not engaged in any unfair labor
practice; (iv) there is no unfair labor practice charge or complaint against the
Company pending, or, to the knowledge of Sellers, threatened, before the
National Labor Relations Board; (v) there are no pending, or, to the knowledge
of Sellers, threatened, union grievances against the Company as to which there
is a reasonable possibility of adverse determination and that, if so determined,
individually or in the aggregate, would have a Material Adverse Effect; (vi)
there are no pending, or, to the knowledge of Sellers, threatened, charges
against the Company or any current or former employee of the Company before the
Equal Employment Opportunity Commission or any state or local agency responsible
for the prevention of unlawful employment practices; and (vii) none of Sellers
or the Company has received written notice during the past two years of the
intent of any Governmental Entity responsible for the enforcement of labor or
employment laws to conduct an investigation of the Company and, to the knowledge
of Sellers, no such investigation is in progress.
(r) CUSTOMER ACCOUNTS RECEIVABLE. Except as set forth in
Schedule 3(r), all customer accounts receivable of the Company, whether
reflected on the Balance Sheet or subsequently created, have arisen from bona
fide transactions in the ordinary course of business and are collectible in the
normal course of the Company's business, subject to reserves recorded on the
Balance Sheet. The Company has good and marketable title to its accounts
receivable, free and clear of all Liens, except as set forth in Schedule 3(r).
(s) LICENSES; PERMITS. Schedule 3(s) sets forth a true and
complete list, as of the date of this Agreement, of all material licenses,
permits and authorizations issued or granted to the Company by Governmental
Entities which are necessary or desirable for the conduct of the business of the
Company. Except as set forth in Schedule 3(s), all such licenses, permits and
authorizations are validly held by the Company, the Company has complied with
all terms and conditions thereof and the same will not be subject to suspension,
modification, revocation or nonrenewal as a result of the execution and delivery
of this Agreement or the consummation of the transactions contemplated hereby,
except such as, individually or in the aggregate, would not have a Material
Adverse Effect. All such licenses, permits and authorizations which are held in
the name of any member, employee, officer, director, stockholder, agent or
otherwise on behalf of the Company shall be deemed included under this warranty.
(t) TRANSACTIONS WITH AFFILIATES. Except as set forth in
Schedule 3(t), none of the agreements, contracts or other arrangements set forth
in Schedule 3(l) between the Company, on the one hand, and a Seller or any of
their Affiliates, on the other hand, will continue in effect subsequent to the
Closing.
16
24
(u) EFFECT OF TRANSACTION. No Seller has any knowledge of
facts that lead it to reasonably believe that the Company's relationship with
its creditors, employees, clients, customers or other persons having a material
business relationship with the Company would change because of the purchase and
sale of the Membership Interests or the consummation of any other transaction
contemplated hereby.
(v) PRIVATE OFFERING OF MEMBERSHIP INTERESTS. Neither Sellers,
any of their Affiliates nor anyone acting on their behalf has issued, sold or
offered any security of the Company to any person under circumstances that would
cause the sale of the Membership Interests, as contemplated by this Agreement,
to be subject to the registration requirements of the Securities Act of 1933, as
amended (the "Securities Act").
(w) PRIVATE OFFERING OF SHARES. With respect to any Seller
who, pursuant to Section 2, will receive Stock Consideration and Note
Consideration (an "Accredited Seller"):
(i) Each such Seller understands that the offering
and sale of the Shares and the Notes have not been registered
by W-H and are intended to be exempt from registration under
the Securities Act pursuant to Section 4(2) thereof and
Regulation D thereunder.
(ii) Each such Seller is an "accredited investor" (as
defined in Regulation D under the Securities Act) and has
truthfully and accurately completed the Certificate attached
hereto as Exhibit C indicating the basis on which he is
representing his status as an "accredited investor".
(iii) Each such Seller (either alone or together with
its advisors) has sufficient knowledge and experience in
financial and business matters so as to be capable of
evaluating the merits and risks of its investment in the
Shares and the Notes and is capable of bearing the economic
risks of such investment.
(iv) Except as otherwise set forth herein, each such
Seller is acquiring the Shares and the Notes to be acquired
hereunder for his own account (or for accounts over which he
exercises investment authority), for investment and not with a
view to the public resale or distribution thereof in violation
of any securities law.
(v) Each such Seller understands that the Shares and
the Notes will be issued in a transaction exempt from the
registration or qualification requirements of the Securities
Act and applicable state securities laws, and that the Shares
and the Notes must be held indefinitely unless a subsequent
disposition thereof (A) is registered or qualified under the
Securities Act and such state securities laws as are
applicable or (B) is exempt from such registration or
qualification.
(vi) Each such Seller (A) has been furnished with or
has had full access to all of the information that it
considers necessary or appropriate to make an informed
investment decision with respect to the Shares and the Notes
and that it has requested from Buyer or W-H, as the case may
be, (B) has had an opportunity to discuss with management of
W-H the intended business and financial affairs of
17
25
W-H and to obtain information (to the extent W-H possessed
such information or could acquire it without unreasonable
effort or expense) necessary to verify any information
furnished to it or to which it had access, (C) can bear the
economic risk of (I) an investment in the Shares and the Notes
indefinitely and (II) a total loss in respect of such
investment, and (D) has such knowledge and experience in
business and financial matters so as to enable it to
understand and evaluate the risks of and form an investment
decision with respect to its investment in the Shares and the
Notes and to protect its own interest in connection with such
investment.
(x) ENVIRONMENTAL MATTERS.
(i) As used in this Agreement:
(A) "Environmental Laws" means any and all
applicable treaties, laws, regulations, enforceable
requirements, binding determinations, orders,
ordinances, decrees, judgments, injunctions, Permits,
notices or binding agreements issued, promulgated or
entered into by any Governmental Entity, relating to
health, safety or the environment, preservation or
reclamation of natural resources, or to the
management, Release (as hereinafter defined) or
threatened Release of Hazardous Materials, including,
without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. Section 9601
et seq., the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1977, 33 U.S.C.
Sections 1251 et seq., the Clean Air Act of 1970, as
amended, 42 U.S.C. Section 7401 et seq., the Toxic
Substances Control Act of 1976, 15 U.S.C. Section
2601 et seq., the Occupational Safety and Health Act
of 1970, as amended, 29 U.S.C. Sections 651
et seq., the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et
seq., the Safe Drinking Water Act of 1974, as
amended, 42 U.S.C. Section 300(f) et seq., the
Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801 et seq., and any similar or implementing
state or local law, and all amendments or regulations
promulgated thereunder.
(B) "Hazardous Materials" means: (1) any
chemical, material, waste, or substance at any time
defined or regulated by, or form the basis of,
liability under any Environmental Law including,
without limitation, any "hazardous waste," "solid
waste," "extremely hazardous waste," "hazardous
material," "hazardous substance," "toxic substance,"
"hazardous material," "contaminant," "pollutant" or
any other comparable term or expression intended to
define or classify substances by reason of properties
harmful to health, safety, or the indoor or outdoor
environment; (2) any oil or petroleum substance
(including, without limitation, crude oil, any
petroleum fraction or any petroleum derivative
substance); (3) any drilling fluids, produced waters,
and other wastes associated with the
18
26
exploration, development, or production of crude oil,
natural gas, or geothermal resources; (4) any
flammable substances or explosives; (5) any
radioactive materials, polychlorinated biphenyls,
asbestos-containing materials, radon, or urea
formaldehyde foam insulation; (6) pesticides; and (7)
any other chemical, material, substance, or noxious
odor, exposure to which is prohibited or regulated
under Environmental Laws.
(C) "Permits" means any permit, license,
variance, certificate, reportings, permission,
exemption, approval, or authorization required under
Environmental Laws.
(D) "Release" means any spill, emission,
leaking, pumping, injection, deposit, disposal,
discharge, dispersal, leaching, emanation or
migration of any Hazardous Materials in, into, onto,
or through the environment (including ambient air,
surface water, ground water, soils, land surface,
subsurface strata, building, workplace, or
structure).
(ii) Except as set forth in Schedule 3(x): (A) The
Company and its properties and operations are and, to Seller's
knowledge, have been in compliance with all applicable
Environmental Laws, and there are no Releases, threatened
Releases, conditions or events existing on any properties
owned, operated, or otherwise used by the Company or at any
offsite location that may have been impacted by present or
past operations of the Company; (B) the Company and its
properties and operations are not subject to any existing,
pending or, to Seller's knowledge, threatened claim, action,
suit, investigation, inquiry or proceeding under any
Environmental Law; (C) all Permits required to be obtained or
filed by or complied with by the Company under any
Environmental Law in connection with their respective
operations and properties, including without limitation those
relating to Hazardous Materials, have been duly obtained or
filed and are in full force and effect, and the Company is in
compliance with the terms and conditions of all such Permits
in all material respects; (D) there has been no exposure of
any person or property to any potentially harmful quantities
of Hazardous Materials in connection with the properties,
operations, or activities of the Company; and (E) Sellers and
the Company have truthfully and fully provided to Buyer all
reports relating to the environmental condition of the
properties and operations of the Company (which such reports
are collectively referred to as "Environmental Reports" and
are listed in Schedule 3(x)(E)) and any and all information in
their possession, including such information as is contained
in the files and records of the Company, relating to (i) any
alleged non-compliance with Environmental Laws or Permits,
(ii) the presence of any underground storage tanks on any
property owned, occupied, or operated by the Company, (iii)
any proposed change in Environmental Laws or Permits that
could have a Material Adverse Effect or (iv) any alleged
Release or threatened Release relating to the Company or its
properties and operations.
(y) TRANSACTION INFORMATION. None of the documents or
information, taken as a whole, delivered to Buyer in connection with the
transactions contemplated by this
19
27
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein not
misleading. There is no fact or circumstance known to Seller or the Company that
has not been disclosed to Buyer which, individually or in the aggregate, would
reasonably be expected to be material to Buyer's decision respecting the
acquisition of the Company.
4. COVENANTS OF SELLERS. Sellers jointly and severally covenant and
agree as follows (except with respect to Sections 4(c) and 4(h) as to which
Sellers covenant and agree severally but not jointly):
(a) ACCESS. Prior to the Closing, Sellers shall, and shall
cause the Company to, give Buyer and its representatives, employees, counsel and
accountants reasonable access, during normal business hours and upon reasonable
notice, to the personnel, properties, books and records of the Company;
provided, however, that such access does not unreasonably disrupt the normal
operations of Sellers or the Company.
(b) ORDINARY CONDUCT. Except as set forth in Schedule 4(b) or
otherwise expressly permitted by the terms of this Agreement, from the date
hereof to the Closing, Sellers shall cause the business of the Company to be
conducted in the ordinary course in substantially the same manner as presently
conducted and shall make all reasonable efforts consistent with past practices
to preserve their relationships with customers, suppliers and others with whom
the Company deals; provided that, except as set forth in clause (xiv) of this
Section, Sellers shall not be obligated to, directly or indirectly, provide any
funds to the Company. Sellers shall not, and shall not permit the Company to,
take any action that would, or that reasonably could be expected to, (i) result
in any of the conditions to the purchase and sale of the Membership Interests
set forth in Section 8(a) not being satisfied or (ii) result in any of the
representations or warranties of Sellers and the Company becoming untrue. In
addition, except as set forth in Schedule 4(b) or otherwise expressly permitted
by the terms of this Agreement, Sellers shall not permit the Company to do any
of the following without the prior written consent of Buyer:
(i) amend its Organizational Documents;
(ii) declare or pay any dividend or make any other
distribution to Sellers whether or not upon or in respect of
Membership Interests, other than distributions which do not
cause the Company to be in violation of clause (xiv) below;
(iii) redeem or otherwise acquire any Membership
Interest or Capital Stock or issue same or any option, warrant
or right relating thereto or any securities convertible into
or exchangeable therefor;
(iv) adopt or amend any collective bargaining
agreement, except as required by law;
(v) establish, adopt, or enter into any Plan or any
Benefit Program or Agreement or, except as required by
applicable law, amend or take any other actions, including but
not limited to, acceleration of vesting and waiver of
20
28
performance criteria, with respect to any Plan or any Benefit
Program or Agreement;
(vi) increase the compensation payable or to become
payable to any director, officer, or employee of the Company,
except for increases in salary or wages payable or to become
payable upon promotion to an office having greater operational
responsibilities or otherwise in the ordinary course of
business and consistent with past practice or as may be
required under existing agreements;
(vii) grant any severance or termination pay (other
than pursuant to the severance policies of the Company as in
effect on the date of this Agreement) to, or enter into any
employment or severance agreement with, any director, officer,
or employee of the Company, either individually or as part of
a class of similarly situated persons;
(viii) incur or assume any liabilities, obligations
or indebtedness for borrowed money or guarantee any such
liabilities, obligations or indebtedness, other than in the
ordinary course of business consistent with past practice;
provided that in no event shall the Company incur, assume or
guarantee any long-term indebtedness for borrowed money;
(ix) permit, allow or suffer any of its assets to
become subjected to any Lien;
(x) cancel any indebtedness (individually or in the
aggregate) or waive any claims or rights of substantial value;
(xi) except for dividends and distributions permitted
under clause (ii) above pay, loan or advance any amount to, or
sell, transfer or lease any of its assets to, or enter into
any agreement or arrangement with, Sellers or any of their
Affiliates;
(xii) make any change in any method of accounting or
accounting practice or policy other than those required by
GAAP;
(xiii) acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of, or by
any other manner, any business or any corporation,
partnership, association or other business organization or
division thereof or otherwise acquire any assets (other than
inventory) which are material, individually or in the
aggregate, to the Company;
(xiv) maintain the Company's working capital (current
assets less current liabilities, as determined in accordance
with GAAP) at a level not less than $750,000;
(xv) sell, lease or otherwise dispose of any assets
of the Company, except in the ordinary course of business
consistent with past practice;
21
29
(xvi) enter into any lease of real property, except
any renewals of existing leases in the ordinary course of
business; or
(xvii) agree, whether in writing or otherwise, to do
any of the foregoing.
(c) CONFIDENTIALITY. Sellers shall keep confidential, and
cause their Affiliates to keep confidential, all information relating to the
Company and its business ("Confidential Information") and will at the Closing
deliver to Buyer all tangible embodiments (and all copies) of such information
which are in a Seller's possession. In the event that any Seller is requested or
required to disclose any such Confidential Information, such Seller shall
immediately notify Buyer so that Buyer may seek a protective order or take other
steps to prevent the disclosure of such information, and such Seller will not
disclose such information. The foregoing provisions do not apply to information
which is available to the public on the Closing Date, or thereafter becomes
available to the public other than as a result of a breach of this Section 4(c).
For purposes of this Agreement, "Affiliate" shall mean a person that directly,
or indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with the person specified. In addition, in the case
of a person who is a natural person, the term Affiliate shall also include such
person's Immediate Family members and any relative or spouse who has the same
home as the person specified. "Immediate Family" means a person's spouse,
parents, siblings, children, mothers and fathers-in-law, sons and
daughters-in-law and brothers and sisters-in-law. "Control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of management and policies of a person, whether through the ownership
of voting securities, by contract, or otherwise.
(d) ASSIGNMENT OF CONFIDENTIALITY AGREEMENTS. On the Closing
Date, Sellers shall assign to Buyer their rights under all confidentiality
agreements entered into by Sellers with any person in connection with the
proposed sale of the Company to the extent such rights relate to the Company.
Copies of such confidentiality agreements shall be provided to Buyer promptly
following the Closing Date.
(e) RESIGNATIONS. On the Closing Date, Sellers shall cause to
be delivered to Buyer duly signed resignations (from each of the members of
management of the Company), effective immediately after the Closing, of all
members of management of the Company and shall take such other action as is
necessary to accomplish the foregoing.
(f) EXCLUSIVE DEALING. From the date hereof to the Closing,
Sellers shall, and shall cause each of their Affiliates, the Company, its
Affiliates and all of the members, directors, officers, employees,
representatives and agents of Company and each of their respective Affiliates
(collectively, "Affected Persons") to, immediately cease any action that may be
ongoing with respect to a Competing Transaction (as defined below). Sellers
shall not, and shall cause the Affected Persons not to, initiate, solicit or
encourage (including by way of furnishing information or assistance), or take
any other action to facilitate, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to any Competing Transaction,
or enter into discussions or furnish any information or negotiate with any
person or otherwise cooperate in any way in furtherance of such inquiries or to
obtain a Competing Transaction, or agree to or endorse any Competing
Transaction, or authorize any of the Affected Persons to take any such action.
Sellers agree to immediately (i) notify Buyer in writing of any
22
30
inquiries or the making of any proposal that constitutes, or may reasonably be
expected to lead to any Competing Transaction and (ii) provide Buyer with copies
of any written correspondence or a detailed description of any unwritten
inquiries relating to same. "Competing Transaction" means any of the following
involving the Company or its Affiliates (other than the transactions
contemplated hereby): (A) any merger, consolidation, Capital Stock exchange,
Capital Stock sale, business combination, or other similar transaction; (B) any
sale, lease, exchange, mortgage, pledge, transfer or other disposition of the
assets of the Company or its Affiliates or issuance of membership interests or
Capital Stock of the Company or any Affiliate; (C) any tender offer or exchange
offer for outstanding membership interests or Capital Stock of the Company or
any Affiliate; or (D) any agreement or public announcement of a proposal, plan
or intention to do any of the foregoing.
(g) NOTICE. Each Seller shall promptly notify Buyer of, and
furnish Buyer any information it may reasonably request with respect to, the
occurrence to such Seller's knowledge of any event or condition or the existence
to such Seller's knowledge of any fact that would cause any of the conditions to
Buyer's obligation to consummate the purchase and sale of the Membership
Interests not to be fulfilled.
(h) NON-COMPETITION. For a period of two years from the
Closing, Sellers shall not directly or indirectly, whether individually or
together:
(i) engage, within any of the Non-Compete Parishes
(as hereinafter defined) and, in addition, any of the other
geographical areas of the country in which the Company or W-H
(including any subsidiaries of W-H) is doing business as of
the Closing Date, in activities or businesses which are
substantially in competition with the coil tubing business of
the Company as it is currently conducted or as it is proposed
to be conducted ("Competitive Activities"), including, (A)
selling goods or services of the type sold by the Company or
proposed to be sold by the Company, (B) soliciting any
customer or prospective customer of the Company to purchase
any goods or services sold by the Company, from anyone other
than the Company; or (C) assisting any person in any way to
do, or attempt to do, anything prohibited by (A) or (B) above;
and
(ii) perform any action, activity or course of
conduct consisting of the following: (A) soliciting,
recruiting or hiring any employees of the Company or persons
who have worked for the Company; (B) soliciting or encouraging
any employee of the Company to leave the employment of the
Company and (C) disclosing or furnishing to anyone any
confidential information relating to the Company or otherwise
using such confidential information for his own benefit or the
benefit of any other person (other than Buyer).
Notwithstanding anything to the contrary contained in this Section
4(h), Buyer hereby agrees that Seller may hold up to an aggregate of 5% of any
Capital Stock of a person registered pursuant to Section 13 or Section 15 of the
Exchange Act engaged, directly or indirectly, in Competitive Activities. The
term "Non-Compete Parishes" means the following Parishes in the State of
Louisiana: Cameron, Calcasieu, Lafayette, Xxxx Xxxxx, Vermilion, Iberia, St.
Xxxx, Terrebone, Jefferson, Plaquemines, St. Xxxxxxx, LaFourche, St. Xxxxxx and
St. Xxxxxx. Each
23
31
Seller acknowledges and agrees that the Non-Compete Parishes are the only places
in which the Company conducts its business and that the Company is or will be,
upon completion of this transaction, conducting business in these parishes.
Each Seller agrees that it would not be possible to measure in monetary
terms the damages which Buyer and W-H would incur if Seller breaches his
obligations under this Section. Therefore, if Buyer and W-H institutes any
action or proceedings to enforce its rights hereunder, each Seller agrees that
he will not assert, and he hereby does waive forever the claim or defense that
Buyer and W-H has an adequate remedy at law. Each Seller further agrees that
Buyer and W-H may seek injunctive relief or any other remedy available to Buyer
and W-H to enforce its rights under this Section. In the event of a Seller's
breach of this Section, such Seller further agrees to pay Buyer and W-H all
costs and expenses, including reasonable attorneys' fees, incurred by Buyer and
W-H in enforcing its rights hereunder.
(i) CERTAIN LICENSES AND PERMITS. Sellers covenant that all
licenses, permits and authorizations which are held in the name of any employee,
officer, director, member, agent or otherwise on behalf of the Company shall be
duly and validly transferred to the Company without consideration prior to the
Closing and that the warranties, representations, covenants and conditions
contained in this Agreement shall apply to the same as if held by the Company as
of the date hereof.
(j) ELECTION UNDER SECTION 754. Sellers covenant to cause the
Company to place in effect an election under Section 754 of the Internal Revenue
Code of 1986, as amended, (and any similar state election) to adjust the basis
of the Company's property for the last Company return required to be filed by
the Company through the date of Closing.
(k) DISCLOSURE SCHEDULES, UPDATED DISCLOSURES; BREACHES. Prior
to the execution and delivery hereof, Sellers shall deliver to Buyer the Company
Disclosure Schedule; provided, however, that Buyer's rights set forth in Section
8(a)(x) hereof shall continue until the Closing Date with respect to matters
disclosed pursuant to such Company Disclosure Schedule. The Company Disclosure
Schedule shall constitute an integral part of this Agreement and shall modify or
otherwise affect the respective representations, warranties, covenants or
agreements of the parties hereto contained herein to the extent that such
representations, warranties, covenants or agreements expressly refer to the
Company Disclosure Schedule. Any and all statements, representations, warranties
or disclosures set forth in the Company Disclosure Schedule shall be deemed to
have been made on and as of the date of this Agreement.
From and after the date of this Agreement until the Closing Date,
Sellers shall promptly notify Buyer by written update to the Company Disclosure
Schedule of (A) any representation or warranty made by it in connection with
this Agreement becoming untrue or inaccurate in any material respect, (B) the
occurrence, or non-occurrence, of any event the occurrence, or non-occurrence,
of which would be likely to cause any condition to the obligations of any party
and the other transactions contemplated by this Agreement not to be satisfied,
or (C) the failure of the Company to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it pursuant to this
Agreement which would be likely to result in any condition to the obligations of
any party not to be satisfied; provided, however, that the delivery of any
notice pursuant to this section shall not cure any breach of any representation
or warranty requiring
24
32
disclosure of such matter prior to the date of this Agreement or otherwise limit
or affect the rights and remedies available hereunder to the party receiving
such notice, except with respect to any breach which Buyer shall have waived in
writing on or prior to the Closing Date.
(l) MAXIMUM DEBT; WORKING CAPITAL. On the Closing Date,
Sellers shall cause (i) the debt (as determined in accordance with GAAP) (other
than debt incurred in 2001 to purchase coil tubing equipment and accessory
assets (collectively, "Equipment Debt") of the Company) to not exceed $4,500,000
and (ii) Equipment Debt of the Company to not exceed $3,000,000. Sellers shall
cause the working capital (current assets less current liabilities, as
determined in accordance with GAAP) of the Company on the Closing Date to not be
less than $750,000.
(m) TERMINATION OF SERVICE AGREEMENTS. Each Seller shall,
immediately prior to the Closing, terminate his respective Services Agreement
with the Company.
(n) CORRECTIVE ACTIONS. Sellers shall take or have taken on
their behalf and complete or cause to be completed the Corrective Actions (as
hereinafter defined) on, under or about the Site no later than 60 days after the
Closing Date. "Corrective Actions" means: (i) those activities relating to
environmental cleanup or protection and compliance with Environmental Laws that
are recommended by Xxxxxx & Xxxxxxx, Inc. ("CBI") in its Phase I and Phase II
Environmental Site Assessment dated May 4, 2001 or in any supplemental report
thereto, such activities to include, but not be limited to: (A) plugging and
abandonment of all groundwater monitoring xxxxx located on the Site; and (B)
excavation of surficial and subsurface soils on the Site identified by CBI as
containing concentrations of arsenic in excess of background levels, replacement
of these excavated soils with clean fill soils comparable in nature and
compaction to the insitu soils, and disposal of these excavated soils offsite
the Site; and (ii) either (A) installing and commencing the operation of a zero
discharge, closed loop wastewater recycling system on the Site with respect to
all wastewater generated on the Site or (B) obtaining a Louisiana Water
Discharge Permit and/or other required permits required for the lawful discharge
of Wastewater from the Site. Sellers agree that all Corrective Actions shall be
commenced promptly after the date hereof and performed to the reasonable
satisfaction of CBI, Buyer, and W-H and in compliance with all applicable
Environmental Laws, as well as in a manner that does not unreasonably interfere
with the Buyer's operations on the Site. Buyer will pay up to $50,000 in
reasonably incurred costs and expenses incurred in implementing the Corrective
Actions, and Sellers shall pay any amount in excess thereof.
5. REPRESENTATIONS AND WARRANTIES OF BUYER AND W-H. Agri-Empresa, W-H
Holdings and W-H hereby jointly and severally represent and warrant to Sellers
as follows:
(a) AUTHORITY. Agri-Empresa is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas. W-H
Holdings is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. W-H is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas. Each
of Agri-Empresa, W-H Holdings and W-H has all requisite corporate power and
authority to enter into this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. W-H has all requisite
corporate power and authority to issue the Notes and to perform its obligations
thereunder. All corporate acts and other
25
33
proceedings required to be taken by each of Agri-Empresa, W-H Holdings and W-H
to authorize the execution, delivery and performance of this Agreement, and, in
the case of W-H, the Notes, and the consummation of the transactions
contemplated hereby have been duly and properly taken. This Agreement has been
duly executed and delivered by each of Agri-Empresa, W-H Holdings and W-H and
constitutes a legal, valid and binding obligation of each of Agri-Empresa, W-H
Holdings and W-H enforceable against each of Agri-Empresa, W-H Holdings and W-H
in accordance with its terms. The Notes, when executed and delivered by W-H in
accordance herewith, will constitute the legal, valid and binding obligations of
W-H enforceable against W-H in accordance with their respective terms.
(b) NO CONFLICTS; CONSENTS. Except as set forth in Schedule
5(b) (the schedules hereto in which Buyer sets forth exceptions to its covenants
and representations and warranties being herein referred to as the "Buyer
Disclosure Schedule"), (i) the execution and delivery of this Agreement by W-H,
Agri-Empresa and W-H Holdings do not, and the execution and delivery of the
Notes by W-H in accordance herewith will not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof will not,
conflict with, or result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation under, or result in the creation
of any Lien upon any of the properties or assets of W-H, Agri-Empresa or W-H
Holdings, as applicable, under, any provision of (A) the Organizational
Documents of W-H, Agri-Empresa or W-H Holdings, as applicable, (B) any material
note, bond, mortgage, indenture, deed of trust, license, lease, contract,
commitment, agreement or arrangement to which W-H, Agri-Empresa or W-H Holdings,
as applicable, is a party or by which any of their respective properties or
assets are bound or (C) any judgment, order, or decree, or statute, law,
ordinance, rule or regulation applicable to W-H, Agri-Empresa or W-H Holdings or
their respective properties or assets, other than, in the case of clauses (B)
and (C) above, any such items that, individually or in the aggregate, would not
have a material adverse effect on the ability of W-H, Agri-Empresa or W-H
Holdings, as applicable, to consummate the transactions contemplated hereby; and
(ii) no consent, approval, license, permit, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required to
be obtained or made by or with respect to W-H, Agri-Empresa or W-H Holdings, as
applicable, in connection with the execution, delivery and performance of this
Agreement by W-H, Agri-Empresa and W-H Holdings or the Notes by W-H or the
consummation of the transactions contemplated hereby, other than (A) filings as
required by the Securities Act or (B) compliance with and filings under Section
13(a) or 15(d), as the case may be, of the Exchange Act.
(c) CAPITAL STOCK OF THE W-H. The authorized capital of W-H as
of the day prior hereto, is (i) 100,000,000 shares of Common Stock ("W-H Common
Stock") of which 22,548,196 shares are issued and outstanding, (ii) options to
purchase 2,424,368 shares of W-H Common Stock, which options are issued and
outstanding, and (iii) warrants to purchase 2,795,694 shares of W-H Common
Stock, which warrants are issued and outstanding. All the outstanding shares
have been duly authorized and validly issued and are fully paid and
nonassessable. None of the shares have been issued in violation of, and none of
the shares are subject to, any purchase option, call, right of first refusal,
preemptive, subscription or similar rights under any provision of applicable
law, the Organizational Documents or any material contract, agreement or
instrument to which W-H is subject, bound or a party. The Shares, when
26
34
issued and delivered to the Accredited Sellers pursuant hereto, will be duly
authorized, validly issued, fully paid and non-assessable.
(d) SEC DOCUMENTS. W-H has filed all required quarterly and
annual reports with the United States Securities and Exchange Commission (the
"SEC") since October 16, 2000 (the "SEC Documents"). As of their respective
dates, the SEC Documents complied as to form in all material respects with the
applicable requirements of the Securities Act or the Exchange Act, as the case
may be. The financial statements of W-H included in the SEC Documents comply as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of W-H and its consolidated
subsidiaries as of the dates thereof and the consolidated results of operations
and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
(e) SECURITIES ACT. The Membership Interests purchased by
Buyer pursuant to this Agreement are being acquired for investment only and not
with a view to any public distribution thereof, and Buyer shall not offer to
sell or otherwise dispose of the Membership Interests so acquired by it in
violation of any of the registration requirements of the Securities Act.
(f) ACTIONS AND PROCEEDINGS, ETC. There are no (i) outstanding
judgments, orders, injunctions or decrees of any Governmental Entity or
arbitration tribunal against W-H or Buyer, (ii) lawsuits, actions or proceedings
pending or, to the knowledge of W-H or Buyer, threatened against W-H or Buyer,
or (iii) investigations by any Governmental Entity which are, to the knowledge
of W-H or Buyer, pending or threatened against W-H or Buyer, and which, in the
case of each of clauses (i), (ii) and (iii), have or could have a material
adverse effect on the ability of W-H or Buyer to consummate the transactions
contemplated hereby.
6. COVENANTS OF BUYER AND W-H. Buyer and W-H, jointly and severally,
covenant and agree as follows:
(a) CONFIDENTIALITY. Subject to Section 7(d), until the
Closing Date, Buyer shall keep confidential, and cause its Affiliates to keep
confidential, all Confidential Information known to Buyer. In the event this
Agreement is terminated pursuant to Section 14 hereof, Buyer will deliver to
Seller or destroy all tangible embodiments (and all copies) of such Confidential
Information which are in a Buyer's possession and shall keep confidential, and
cause its Affiliates to keep confidential, all Confidential Information known to
Buyer. Subject to Section 7(d), in the event Buyer is requested or required to
disclose any Confidential Information, Buyer shall immediately notify Sellers so
that Sellers may seek a protective order or take other steps to prevent the
disclosure of information which is required to be kept confidential under the
above terms, and Buyer will not disclose such information.
The foregoing provisions do not apply to information which is available
to the public on the Closing Date, or thereafter becomes available to the public
other than as a result of a breach of this Section 6(a). The covenant set forth
in this Section 6(a) shall terminate upon the earlier to
27
35
occur of (i) closing of the transactions contemplated in this Agreement or (ii)
three years after the Closing Date.
(b) NOTICE. Buyer shall promptly notify Sellers of, and
furnish Sellers any information they may reasonably request with respect to, the
occurrence to Buyer's knowledge of any event or condition or the existence to
Buyer's knowledge of any fact that would cause any of the conditions to Sellers'
obligation to consummate the purchase and sale of the Membership Interests not
to be fulfilled.
(c) PREPAYMENT OF DEBT. Within 10 days of the Closing Date,
Buyer shall prepay the debt of the Company listed on Schedule 6(c) as to which
any Seller has delivered a payment guaranty and shall use its reasonable efforts
to cause any such guaranty (which are listed on Schedule 6(c)) to be released
and terminated. Sellers shall cooperate with Buyer in obtaining the prepayment
of such debt and in obtaining the release of such guaranties.
(d) DISCLOSURE SCHEDULES, UPDATED DISCLOSURES; BREACHES. Prior
to the execution and delivery hereof, Buyer shall deliver to Seller the Buyer
Disclosure Schedule. The Buyer Disclosure Schedule shall constitute an integral
part of this Agreement and shall modify or otherwise affect the respective
representations, warranties, covenants or agreements of the parties hereto
contained herein to the extent that such representations, warranties, covenants
or agreements expressly refer to the Buyer Disclosure Schedule. Any and all
statements, representations, warranties or disclosures set forth in the Buyer
Disclosure Schedule shall be deemed to have been made on and as of the date of
this Agreement.
From and after the date of this Agreement until the Closing Date, Buyer
shall promptly notify Sellers' Representative by written update to the Buyer
Disclosure Schedule of (A) any representation or warranty made by it in
connection with this Agreement becoming untrue or inaccurate in any material
respect, (B) the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which would be likely to cause any condition to the
obligations of any party and the other transactions contemplated by this
Agreement not to be satisfied, or (C) the failure of Buyer to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it pursuant to this Agreement which would be likely to result in any condition
to the obligations of any party not to be satisfied; provided, however, that the
delivery of any notice pursuant to this section shall not cure any breach of any
representation or warranty requiring disclosure of such matter prior to the date
of this Agreement or otherwise limit or affect the rights and remedies available
hereunder to the party receiving such notice, except with respect to any breach
which Sellers shall have waived in writing on or prior to the Closing Date.
7. MUTUAL COVENANTS. Each of Xxxxxxx, X-X and Buyer covenants and
agrees as follows:
(a) COOPERATION. Buyer, W-H and Sellers shall cooperate with
each other, and shall cause their Affiliates, officers, employees, agents,
auditors and representatives to cooperate with each other, for a period of 180
days after the Closing to ensure the orderly transition of the Company from
Sellers to Buyer and to minimize any disruption to the respective businesses of
Sellers, Buyer, W-H or the Company. After the Closing, upon reasonable written
28
36
notice, Buyer and Sellers shall furnish or cause to be furnished to each other
and their employees, counsel, auditors and representatives access, during normal
business hours, such information and assistance relating to the Company as is
reasonably necessary for financial reporting and accounting matters (including
the preparation of audited financial statements for the Company for fiscal years
1999 and 2000 which will be conducted by W-H's independent public accountants),
the preparation and filing of any tax returns, reports or forms or the defense
of any tax claim or assessment. Neither party shall be required by this Section
7(a) to take any action that would unreasonably interfere with the conduct of
its business or unreasonably disrupt its normal operations (or, in the case of
Buyer, the business or operations of the Company).
(b) CONFIDENTIALITY OF THE EXISTENCE OF THE AGREEMENT. The
existence of this Agreement and its contents and the transactions contemplated
hereby are intended to be confidential and shall not be disclosed by any Seller
or, subject to Section 7(c) hereof, Buyer or W-H without the prior written
consent of the other parties hereto, except as follows:
(i) a party may disclose the existence of this
Agreement and its contents to its agents, consultants,
representatives or advisers (collectively, "Related Parties")
if such disclosure is necessary in furtherance of the
transactions contemplated by this Agreement; provided that any
such Related Party to which such information is disclosed
shall agree to treat such information confidentially; and
(ii) a party may disclose this Agreement and its
contents if, but only to the extent, it is legally required to
be disclosed or is otherwise subject to legal, judicial,
regulatory or self-regulatory requests for information or
documents.
If a party makes a disclosure pursuant to paragraph (ii) it shall give
the other parties written notice as soon as practicable (which shall be prior
notice where possible) of any such disclosure, and the party making the
disclosure shall use commercially reasonable efforts to obtain assurance that
confidential treatment will be accorded the disclosed information.
(c) PUBLICITY. Sellers agree that, from the date hereof
through the Closing Date, no Seller will make a public release or announcement
concerning the transactions contemplated hereby without the prior consent of
Buyer. Sellers acknowledge and agree that W-H is a publicly owned Company and
may, if required by law or by the rules or regulations of any United States or
foreign securities exchange or otherwise make such public release or
announcement concerning the transactions contemplated hereby as may be, in W-H's
sole discretion, necessary or desirable. W-H will use commercially reasonable
efforts to provide to Sellers' Representative a reasonable time prior to the
release thereof copies of any such public release or announcements that are
written.
(d) COMMERCIAL EFFORTS. Subject to the terms and conditions of
this Agreement, each party shall use all commercially reasonable efforts to
cause the Closing to occur as promptly as practical following the date hereof.
(e) RECORDS. On the Closing Date, Sellers shall deliver or
cause to be delivered to Buyer all Contracts, material agreements, documents,
books, records and files
29
37
(collectively, "Records"), if any, in the possession of Sellers relating to the
business and operations of the Company to the extent not then in the possession
of the Company, subject to the following exceptions:
(i) Sellers may retain copies of Records prepared in
connection with the sale of the Membership Interests; and
(ii) Sellers may retain any Tax Returns, and Buyer
shall be provided with copies of such Tax Returns only to the
extent that they relate to the Company's separate Tax Returns
or separate Tax liability.
(f) PURCHASE PRICE. The value of the Stock Consideration for
determining the Purchase Price paid by the Buyer and received by the Seller for
Tax Purposes will be discounted by 10%. Neither Buyer nor Sellers (nor any of
their respective Affiliates) shall take any position on any Tax (as hereinafter
defined) return or with any Taxing authority that is inconsistent with the
allocation of the Purchase Price set forth herein.
(g) LEGEND. Each certificate representing the Shares and each
Note shall bear a legend substantially in the following form:
[THE SHARE[S] REPRESENTED BY THIS CERTIFICATE HAVE] [THIS NOTE
HAS] BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND [HAVE]
[HAS] NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER ANY APPLICABLE STATE
SECURITIES LAWS. [SUCH SHARES] [SUCH NOTE] MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED OR PLEDGED, UNTIL (I) A REGISTRATION
STATEMENT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
AND SUCH APPLICABLE STATE SECURITIES LAWS OR (II) THE COMPANY
RECEIVES AN OPINION OF COUNSEL THAT SUCH SECURITIES MAY BE
TRANSFERRED WITHOUT REGISTRATION.
W-H shall cause the foregoing legend to be removed from the
certificates representing any restricted securities (as defined under
Rule 144 under the Securities Act), at the request of the holder
thereof, at such time as they cease to be restricted securities.
(h) TRANSFER RESTRICTIONS. Sellers may not during the one year
period following the Closing, directly or indirectly, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant for the sale of, or
otherwise dispose of or transfer any of the Shares; (ii) enter into any swap or
any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the Shares,
whether any such swap or transaction is to be settled by delivery of the Shares
or other securities, in cash or otherwise; or (iii) publicly disclose the
intention to make any such offer, pledge, sale, contract, grant, or other
disposal or transfer as described in clauses (i) and (ii) above, except for (A)
a transfer of the Shares by will, intestate succession or bona fide gift to a
member of a Seller's family or a trust the beneficiaries
30
38
of which are exclusively a Seller's and/or members of a Seller's family or (B)
the conversion or exchange of the Shares as part of a transaction in which all
or substantially all of the holders of equity securities of the Company of the
same class as the Shares convert or exchange, or have the right or option to
convert or exchange, such equity securities for shares of stock, other
securities, property and/or cash; provided, however, that the restrictions on
transfer contained in this Section 7(h) shall continue after such conversion or
exchange as provided herein unless the Sellers shall have received in exchange
for or upon conversion of the Shares, securities of another person
(collectively, a "Transfer"). During the period beginning with the one year
anniversary of the Closing and ending with the two year anniversary of the
Closing, each Seller may, subject to applicable securities laws, Transfer up to
but not more than 50% of the Shares held by such Seller (the Escrow Shares will
be restricted and may not be sold until after the two year anniversary of the
Closing, even though released from the Escrow Agreement). After the two year
anniversary of the Closing, each Seller may, subject to applicable securities
laws, Transfer all of the Shares held by such Seller.
8. CONDITIONS TO CLOSING
(a) BUYER'S AND W-H'S OBLIGATION. The obligation of Buyer and
W-H to purchase and pay for the Membership Interests is subject to the
satisfaction (or waiver by Buyer and W-H) as of the Closing of the following
conditions:
(i) The representations and warranties of Sellers
made in this Agreement shall be true and correct in each case
as of the date hereof and as of the time of the Closing as
though made as of such time, except to the extent such
representations and warranties expressly relate to an earlier
date, in which case then as of such earlier date. Sellers
shall have performed or complied with all obligations and
covenants required by this Agreement to be performed or
complied with by Sellers by the time of the Closing. Sellers
shall have delivered to Buyer a certificate dated the Closing
Date and signed by each Seller confirming the foregoing.
(ii) Buyer shall have received an opinion dated the
Closing Date of Xxxxxx Xxxxx, counsel to Sellers, in form and
substance reasonably acceptable to Buyer.
(iii) No statute, rule, regulation, executive order,
decree, temporary restraining order, preliminary or permanent
injunction or other order enacted, entered, promulgated,
enforced or issued by any federal, state, local or foreign
government or any court of competent jurisdiction,
administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (a
"Governmental Entity"), or other legal restraint or
prohibition preventing the purchase and sale of the Membership
Interests shall be in effect.
(iv) There shall not be pending by any Governmental
Entity any suit, action or proceeding (A) challenging or
seeking to restrain or prohibit the purchase and sale of the
Membership Interests or any of the other transactions
contemplated by this Agreement or seeking to obtain from Buyer
or any of its
31
39
Affiliates in connection with the purchase and sale of the
Membership Interests any damages that are material in relation
to Buyer, the Company and their respective Affiliates taken as
a whole, (B) seeking to prohibit or limit the ownership or
operation by Buyer, the Company or any of their respective
Affiliates of any material portion of the business or assets
of Buyer, the Company or any of their respective Affiliates,
or to compel Buyer, the Company or any of their respective
Affiliates to dispose of or hold separate any material portion
of the business or assets of Buyer, the Company or any of
their respective Affiliates, in each case as a result of the
purchase and sale of the Membership Interests or any of the
other transactions contemplated by this Agreement, or (C)
seeking to impose limitations on the ability of Buyer to
acquire or hold, or exercise full rights of ownership of, the
Membership Interests, including the right to vote the
Membership Interests on all matters properly presented to the
members of the Company.
(v) All consents, waivers, approvals and
authorizations required to be obtained, including, without
limitation the amendment, in form and substance satisfactory
to W-H, of W-H's Credit Agreement dated as of October 16,
2000, and all filings or notices required to be made, prior to
consummation of the transactions contemplated hereby shall
have been obtained from and made with all required persons.
(vi) Each of the Sellers designated by Buyer shall
have entered into either an employment agreement or consulting
agreement (as specified by Buyer) with Buyer, the Company or
W-H in form and substance reasonably satisfactory to W-H, not
to exceed three years in duration.
(vii) Each Seller shall have agreed to the
termination of his respective Services Agreement with the
Company.
(viii) Each Seller shall have delivered to Buyer a
certificate of accredited investor status in the form of
Exhibit C.
(ix) Sellers shall have delivered all of the unit
certificates representing 100% of the issued and outstanding
Membership Interests, duly endorsed in blank or accompanied by
stock powers duly endorsed in blank in proper form along with
completed letters of transmittal in the form of Exhibit D. (x)
Buyer's investigation of the books, records, properties and
other assets of the Company and its Subsidiaries shall (A)
have been concluded to the satisfaction of Buyer and (B) shall
not have established, in the judgment of Buyer, that any
representation, warranty, covenant or condition of the Company
has been, or reasonably can be foreseen to have been,
breached.
(xi) Each Seller shall have delivered to Buyer a
certificate of non-foreign status of Seller which meets the
requirements of Treasury Regulation Section 1.1445-2(b)(2) in
the form of Exhibit E.
32
40
(xii) Liberia Properties, L.L.C. shall have entered
into a lease agreement in the form of Exhibit F with respect
to the Company's principal facility which is described therein
(the "Site").
(xiii) Since December 31, 2000, there shall not have
occurred any event that has had or will have a Material
Adverse Effect (or any development that, insofar as reasonably
can be foreseen, is likely to result in any Material Adverse
Effect).
(xiv) The Sellers and the Escrow Agent shall have
executed and delivered the Escrow Agreement, and the Sellers
and Sellers' Representative shall have complied with their
obligations thereunder.
(xv) Sellers shall have delivered to Buyer at the
Closing such other executed documents, agreements or
instruments as shall be reasonably necessary to convey to
Buyer full right, title and interest in and to the Membership
Interests or as shall be reasonably necessary to effectuate
the transactions contemplated by this Agreement.
(b) SELLER'S OBLIGATION. The obligation of Sellers to sell and
deliver the Membership Interests to Buyer is subject to the satisfaction (or
waiver by Sellers) as of the Closing of the following conditions:
(i) The representations and warranties of Buyer and
W-H made in this Agreement shall be true and correct, as of
the date hereof and as of the time of the Closing as though
made as of such time, except to the extent such
representations and warranties expressly relate to an earlier
date, in which case then as of such earlier date. Buyer and
W-H shall have performed or complied with all obligations and
covenants required by this Agreement to be performed or
complied with by Buyer by the time of the Closing. Each of
Agri-Empresa, W-H Holdings and W-H shall have delivered to
Sellers a certificate dated the Closing Date and signed by an
authorized officer of Agri-Empresa, W-H Holdings and W-H, as
applicable, confirming the foregoing.
(ii) No statute, rule, regulation, executive order,
decree, temporary restraining order, preliminary or permanent
injunction or other order enacted, entered, promulgated,
enforced or issued by any Governmental Entity or other legal
restraint or prohibition preventing the purchase and sale of
the Membership Interests shall be in effect.
(iii) There shall not be pending by any Governmental
Entity any suit, action or proceeding challenging or seeking
to restrain or prohibit the purchase and sale of the
Membership Interests or any of the other transactions
contemplated by this Agreement or seeking to obtain from
Sellers in connection with the purchase and sale of the
Membership Interests any damages that are material to Sellers.
33
41
(iv) Since December 31, 2000 and except as disclosed
in any documents filed with the U.S. Securities and Exchange
Commission filed prior to the date hereof, there shall not
have occurred any events that individually or in the
aggregate, could reasonably be expected to have a material
adverse effect on the business, financial condition or results
of operations of W-H and its subsidiaries taken as a whole.
(v) Sellers shall have received the Cash
Consideration, and Accredited Sellers shall have received the
Notes and certificates representing the Stock Consideration
simultaneously with or prior to the Closing.
(vi) Sellers shall have received an opinion dated the
Closing Date of Xxxxxx & Xxxxxx L.L.P., counsel for W-H and
the Buyer as to the matters set forth on Exhibit G hereto,
which opinion may be subject to customary qualifications and
exceptions.
(vii) Buyer shall have delivered to Sellers at the
Closing such other executed documents, agreements and
instruments as shall be reasonably necessary to effectuate the
transactions contemplated by this Agreement.
(c) FRUSTRATION OF CLOSING CONDITIONS. Neither Buyer nor
Sellers may rely on the failure of any condition set forth in Section 8(a) or
8(b), respectively, to be satisfied if such failure was caused by such party's
failure to act in good faith or to use its commercially reasonable efforts to
cause the Closing to occur, as required by Section 7(e).
9. FURTHER ASSURANCES. From time to time, as and when requested by any
party hereto, the parties shall execute and deliver, or cause to be executed and
delivered, all such documents and instruments and shall take, or cause to be
taken, all such further or other actions, as such other party may reasonably
deem necessary or desirable to consummate the transactions contemplated by this
Agreement.
10. INDEMNIFICATION.
(a) IN GENERAL Subject to the terms and conditions of this
Section 10, Sellers agree, jointly and severally, to indemnify, defend and hold
harmless Buyer, W-H, their respective Affiliates (including the Company) and
each of their directors, officers, employees, consultants, agents, affiliates
and controlling persons (collectively, the "Buyer Indemnified Parties" or a
"Buyer Indemnified Party"), from and against all Claims asserted against,
resulting from, imposed upon or incurred by any Buyer Indemnified Party,
directly or indirectly, by reason of, arising out of, or resulting from (i) the
inaccuracy or breach of any representation or warranty of the Company or any of
the Sellers contained in or made pursuant to this Agreement, (ii) the breach of
any covenant or agreement of the Company or any of the Sellers contained in or
made pursuant to this Agreement or (iii) Wastewater Discharge Claims (as
hereinafter defined). As used in this Section 10, the term "Claim" shall include
(i) all debts, liabilities and obligations, (ii) all losses, damages, costs and
expenses (including, without limitation, interest (including prejudgment
interest in any litigated matter), penalties, court costs and reasonable
attorneys' fees and expenses), and (iii) all demands, claims, actions, costs of
investigation, causes of action,
34
42
proceedings, arbitrations, judgments, settlements and assessments, whether or
not ultimately determined to be valid.
(b) NO EXHAUSTION OF REMEDIES; EXCLUSIVE REMEDY. Sellers
acknowledge that their obligation under Section 10(a) of this Agreement is
independent of the obligations of the Company pursuant to this Agreement, and
that Sellers waive any right to require Buyer Indemnified Parties to (i) proceed
against the Company or (ii) pursue any other remedy whatsoever in the power of
Buyer Indemnified Parties.
(c) INDEMNIFICATION BY BUYER. Subject to the terms and
conditions of this Section 10, Buyer and W-H, jointly and severally, agree to
indemnify, defend and hold harmless Sellers from and against all Claims asserted
against, resulting from, imposed upon or incurred by Sellers, directly or
indirectly, by reason of, arising out of, or resulting from (a) the inaccuracy
or breach of any representation or warranty of Buyer or W-H contained in or made
pursuant to this Agreement or (b) the breach of any covenant or agreement of
Buyer or W-H contained in or made pursuant to this Agreement. W-H acknowledges
that its obligations under Section 10(c) of this Agreement are independent of
the obligations of Buyer pursuant to this Agreement and that W-H waives any
right to require Sellers to (i) proceed against Buyer or (ii) pursue any other
remedy whatsoever in the power of Sellers.
(d) EXCLUSIVE REMEDY. Should the Closing occur, the sole and
exclusive remedy of Buyer Indemnified Parties and Sellers with respect to any
and all Claims (other than Excepted Claims (as hereinafter defined)) shall be
pursuant to the indemnification provisions set forth in this Section 10.
(e) PROCEDURES RELATING TO INDEMNIFICATION. In order for a
party (the "Indemnified Party") to be entitled to any indemnification provided
for under this Agreement in respect of, arising out of or involving a Claim made
by any person against the Indemnified Party (a "Third Party Claim"), such
Indemnified Party must notify the indemnifying party in writing, and in
reasonable detail, of the Third Party Claim within 30 business days after
receipt by such Indemnified Party of written notice of the Third Party Claim;
provided, however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the indemnifying party
demonstrates that it has been actually materially prejudiced as a result of such
failure. Thereafter, the Indemnified Party shall deliver to the indemnifying
party, within ten business days after the Indemnified Party's receipt thereof,
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to the Third Party Claim.
If a Third Party Claim is made against an Indemnified Party, the
indemnifying party shall be entitled to participate in the defense thereof and,
if it so chooses and acknowledges its obligation to indemnify the Indemnified
Party therefor, to assume the defense thereof with counsel selected by the
indemnifying party and reasonably acceptable to the Indemnified Party. If the
indemnifying party assumes such defense, the Indemnified Party shall have the
right to participate in the defense thereof and to employ counsel at its own
expense, separate from the counsel employed by the indemnifying party. The
indemnifying party shall be liable for the fees and expenses of counsel employed
by the Indemnified Party for any period during which the indemnifying party has
failed to assume the defense thereof.
35
43
If the indemnifying party so elects to assume the defense of any Third
Party Claim, all of the indemnified parties shall reasonably cooperate with the
indemnifying party in the defense or prosecution thereof. Such cooperation shall
include the retention and (upon the indemnifying party's request) the provision
to the indemnifying party of records and information which are reasonably
relevant to such Third Party Claim, and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. Whether or not the indemnifying party shall have
assumed the defense of a Third Party Claim, the Indemnified Party shall not
admit any liability with respect to, or settle, compromise or discharge, such
Third Party Claim without the indemnifying party's prior written consent (which
consent shall not be unreasonably withheld). If the indemnifying party shall
have assumed the defense of a Third Party Claim, the Indemnified Party shall
agree to any settlement, compromise or discharge of a Third Party Claim which
the indemnifying party may recommend and which by its terms obligates the
indemnifying party to pay the full amount of the liability in connection with
such Third Party Claim, which releases the Indemnified Party completely in
connection with such Third Party Claim, which does not result in a finding or
admission of fault or culpability of the Indemnified Party and which would not
otherwise adversely affect the Indemnified Party.
Notwithstanding the foregoing, the indemnifying party shall not be
entitled to assume the defense of any Third Party Claim (and shall be liable for
the reasonable fees and expenses of counsel incurred by the Indemnified Party in
defending such Third Party Claim) if the Third Party Claim seeks an order,
injunction or other equitable relief or relief for other than money damages
against the Indemnified Party which the Indemnified Party reasonably determines,
after conferring with its outside counsel, cannot be separated from any related
claim for money damages. If such equitable relief or other relief portion of the
Third Party Claim can be so separated from that for money damages, the
indemnifying party shall be entitled to assume the defense of the portion
relating to money damages. The indemnification required by this Section shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or loss, liability,
Claim, damage or expense is incurred. All Claims under this Section 10 other
than Third Party Claims shall be governed by Section 10(f).
(f) OTHER CLAIMS. In the event any Indemnified Party should
have a Claim against any indemnifying party under this Section 10 that does not
involve a Third Party Claim being asserted against or sought to be collected
from such Indemnified Party, the Indemnified Party shall deliver notice of such
Claim with reasonable promptness to the indemnifying party. The failure by any
Indemnified Party so to notify the indemnifying party shall not relieve the
indemnifying party from any liability which it may have to such Indemnified
Party under this Section 10, except to the extent that the indemnifying party
demonstrates that it has been actually materially prejudiced by such failure. If
the indemnifying party does not notify the Indemnified Party within ten calendar
days following its receipt of such notice that the indemnifying party disputes
its liability to the Indemnified Party under this Section 10, such Claim
specified by the Indemnified Party in such notice shall be conclusively deemed a
liability of the indemnifying party under this Section 10 and the indemnifying
party shall pay the amount of such liability to the Indemnified Party on demand
or, in the case of any notice in which the amount of the claim (or any portion
thereof) is estimated, on such later date when the amount of such Claim (or such
portion thereof) becomes finally determined. If the indemnifying party has
timely disputed its
36
44
liability with respect to such Claim, as provided above, the indemnifying party
and the Indemnified Party shall proceed in good faith to negotiate a resolution
of such dispute and, if not resolved through negotiations, such dispute shall be
resolved by litigation in an appropriate court of competent jurisdiction.
(g) SATISFACTION OF CLAIMS FROM ESCROW SHARES.
(i) Except for any Excepted Claim, the
indemnification obligations of Sellers under this Section 10
(including with respect to any Third Party Claims) shall be
satisfied solely from payments of the Escrow Shares by
delivery to Buyer Indemnified Party entitled to
indemnification hereunder.
(ii) Pursuant to the provisions of the Escrow
Agreement, if Sellers are determined to owe a Claim amount
pursuant to the procedures set forth in Section 10(e) or
Section 10(f), then the amount due the Buyer Indemnified Party
hereunder shall be satisfied by the delivery to the Buyer
Indemnified Party pursuant to the Escrow Agreement of Escrow
Shares equal in value to the amount of the Claim to be
satisfied, and the Claim shall be deemed paid and satisfied
upon receipt by the Buyer Indemnified Party of certificates
representing such number of Escrow Shares duly endorsed for
transfer to the Buyer Indemnified Party. The per share value
of the Escrow Shares for purposes of this Section 10 and the
Escrow Agreement shall be the Market Value of the Escrow
Shares as of the date such Claim becomes payable pursuant
hereto. The "Market Value" of an Escrow Share as of any such
date shall be determined as follows: (i) in the event that the
W-H Common Stock is listed on a securities exchange or quoted
on the NASDAQ National Market System, the "Market Value" of an
Escrow Share shall be equal to the average of the closing
prices for the W-H Common Stock as quoted by such stock
exchange or as reported by the NASDAQ National Market System
for the ten trading days immediately preceding such date, (ii)
in the event that the W-H Common Stock is traded in the
over-the-counter markets, the "Market Value" of an Escrow
Share shall be equal to the average of the closing bid and
asked prices for a share of W-H Common Stock as reported in
such market for the ten trading days immediately preceding
such date, and (iii) if the W-H Common Stock is not traded on
any such exchange or markets as of such date, then the "Market
Value" of an Escrow Share shall be equal to the fair market
value of a share of W-H Common Stock as determined in good
faith by the Board of Directors of Buyer using a customary
valuation method; provided, however, if Sellers disagree with
such determination of value, then the "Market Value" of an
Escrow Share shall be as determined by an independent
third-party appraiser reasonably acceptable to Buyer and
Sellers and paid for equally by Buyer and all Sellers. The
Market Value of the Additional Corpus (as such term is defined
in the Escrow Agreement) shall be determined by mutual
agreement of Seller and Buyer.
(iii) Sellers' Representative shall have the power
and authority to make all decisions with regard to the
settlement of Claims brought pursuant to this Section 10 from
the Escrow Shares. If Sellers' Representative is unable to
carry
37
45
out his duties as Sellers' Representative, then the Seller who
held the next largest Membership Interest immediately prior to
the Closing Date, automatically shall be designated and
appointed as Sellers' Representative, and shall assume all of
the powers and duties of Sellers' Representative under this
Agreement and the Escrow Agreement. If any successor Sellers'
Representative becomes unable to carry out his duties as
Sellers' Representative, his replacement shall be the Seller
who held the next largest Membership Interest immediately
prior to the Closing Date.
(h) LIABILITY LIMITATIONS; SURVIVAL OF REPRESENTATIONS AND
WARRANTIES. All representations, warranties, covenants and agreements in this
Agreement or made pursuant hereto shall survive the Closing, and any
investigation thereof, until the end of the eighteenth month following the
Closing Date and neither Sellers nor Buyer shall have any liability under this
Section 10 unless notice of a Claim or alleged or potential Claim is provided
within such period, except that (i) the representations and warranties contained
in Sections 3(a) - 3(e) and the representations and warranties of W-H in Section
5(a) - 5(c) hereof shall survive indefinitely and (ii) Wastewater Discharge
Claims shall survive until the fifth annual anniversary of the Closing Date.
Except for Claims arising from (i) fraud, willful breach of any covenant or
breaches of the representations and warranties contained in Sections 3(a) - 3(e)
hereof or (ii) the Company not having a valid and effective Louisiana Water
Discharge Permit or other required permit for the lawful discharge of wastewater
from the Site ("Wastewater Discharge Claims") (collectively, "Excepted Claims"),
the Buyer Indemnified Parties shall not be entitled to indemnification for
Claims from the Escrow Shares except to the extent the aggregate amount for all
claims exceeds $100,000. Once such threshold is satisfied, Sellers, subject to
the other limitations in this Section 10, shall be liable for all Claims of the
Buyer Indemnified Parties in excess thereof. All Claims by the Buyer Indemnified
Parties pursuant to this Agreement, other than Excepted Claims, shall be limited
to the Escrow Shares. Sellers shall not be entitled to indemnification for
Claims against Buyer except to the extent the aggregate amount for all claims
exceeds $100,000. Once such threshold is satisfied, Buyer, subject to the other
limitations in this Section 10, shall be liable for all claims of Sellers in
excess thereof.
(i) TAX TREATMENT OF INDEMNIFICATION PAYMENTS. To the extent
permitted by applicable law, the parties agree that any indemnification payments
(and/or payments or adjustments) made with respect to this Agreement shall be
treated for all Tax purposes as an adjustment to the purchase price.
11. TAX MATTERS.
(a) TAXABLE PERIOD ENDING ON OR BEFORE CLOSING DATE. With
respect to any Tax Return covering a taxable period ending on or before the
Closing Date that is required to be filed after the Closing Date with respect to
the Company, Sellers: (i) shall cause such Tax Return to be prepared; (ii) shall
cause to be included in such Tax Return all Tax Items required to be included
therein; (iii) shall be responsible for the timely payment of all Taxes due with
respect to the periods covered by such Tax Returns; and (iv) shall be
responsible for the payment of all costs and expenses incurred in the
preparation and filing of such Tax Returns. Not later than 10 business days
prior to the due date of each such Tax Return, Sellers shall deliver a copy of
such Tax Return to Buyer. Sellers shall permit Buyer to review and comment on
each such Tax
38
46
Return prior to filing and shall make such revisions to such Tax Return as are
reasonably requested by Buyer. Not later than five days prior to the due date of
such Tax Return, Sellers shall deliver such Tax Return to Buyer together with a
payment for the amount of Taxes shown due on such Tax Return. Upon receipt
thereof Buyer shall cause the Company to file the Tax Return and timely pay the
Taxes shown due on such Tax Return.
(b) TAXABLE PERIOD BEGINNING ON OR BEFORE CLOSING DATE AND
ENDING AFTER CLOSING DATE. With respect to any Tax Return covering a taxable
period beginning on or before the Closing Date and ending after the Closing Date
that is required to be filed after the Closing Date with respect to the Company,
Buyer shall cause such Tax Return to be prepared, and shall cause to be included
in such Tax Return all Tax Items required to be included therein. Buyer shall
determine (by an interim closing of the books as of the Closing Date except for
ad valorem Taxes which shall be prorated on a daily basis) the Tax which would
have been due with respect to the period covered by such Tax Return if such
taxable period ended on and included the Closing Date (the "Pre-Closing Tax").
Not later than 30 days prior to the due date of each such Tax Return, Buyer
shall deliver to Sellers a statement (including supporting documentation) of the
excess, if any, of the Pre-Closing Tax over the amount set up as a liability for
such Tax in the Balance Sheet. Not later than five days prior to the due date of
such Tax Return, Sellers shall pay to Buyer the amount of such excess. Upon
receipt thereof Buyer shall cause the Company to file the Tax Return and timely
pay the Taxes shown due on such Tax Return.
(c) FRANCHISE TAX. Notwithstanding anything to the contrary
herein, any franchise Tax paid or payable with respect to the Company shall be
allocated to the taxable period during which the income, operations, assets or
capital comprising the base of such Tax is measured, regardless of whether the
right to do business for another taxable period is obtained by the payment of
such franchise Tax.
(d) OTHER STATE AND LOCAL TAXES. Sellers shall be responsible
for the payment of all state and local transfer, sales, use, stamp, registration
or other similar Taxes resulting from the transactions contemplated by this
Agreement.
(e) CONSISTENT PREPARATION OF TAX RETURNS. Any Tax Return to
be prepared pursuant to the provisions of this Section 11 shall be prepared in a
manner consistent with practices followed in prior years with respect to similar
Tax Returns, except as otherwise required by law or fact.
(f) COOPERATION. Buyer and Sellers shall cooperate fully, and
shall cause their Affiliates, including the Company, to cooperate fully, as and
to the extent reasonably requested by the other party, in connection with the
filing of Tax Returns pursuant to this Section and any audit, litigation or
other proceeding (each a "Proceeding") with respect to Taxes. Such cooperation
shall include the retention and (upon the other party's request) the provision
of records and information which are reasonably relevant to any such Proceeding
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.
Sellers will deliver to Buyer all books and records with respect to Tax matters
pertinent to the Company relating to any taxable period beginning before the
Closing Date. Sellers further agree, upon request, to use their best efforts to
obtain any certificate or other document from any Governmental Authority or any
other Person
39
47
as may be necessary to mitigate, reduce or eliminate any Tax that could be
imposed on Buyer or the Company. Buyer and Sellers further agree, upon request,
to provide the other party with all information regarding the Company that
either party may be required to report to any taxing authority.
(g) CERTIFICATE OF NON-FOREIGN STATUS Buyer shall withhold
from the Cash Consideration an amount equal to ten percent (10%) of the Purchase
Price to be paid to each Seller unless such Seller provides to Buyer on or
before the Closing Date a certificate of non-foreign status of such Seller which
meets the requirements of Treasury Regulation Section 1.1445-2(b)(2) (a form of
such certificate is attached hereto as Exhibit E). However, notwithstanding the
previous sentence, Buyer will withhold from the Cash Consideration an amount
equal to ten percent (10%) of the Purchase Price to be paid to such a Seller if
Buyer has actual notice that the certification relied on to avoid such
withholding is false, or if Buyer receives notice that such certification is
false pursuant to Treasury Regulation Section 1.1445-4.
(h) INTEREST. Any payment required under this Section 11 and
not made when due shall bear interest at the rate per annum determined, from
time to time, under the provisions of Section 6621(a)(2) or 6621(c) as
applicable of the Code for each day until paid.
12. ASSIGNMENT. This Agreement and the rights and obligations hereunder
shall not be assignable or transferable by Buyer or Sellers (including by
operation of law in connection with a merger, or sale of substantially all the
assets, of Buyer or Sellers) without the prior written consent of the other
party hereto; provided, however, that Buyer may assign its right to purchase the
Shares hereunder to an Affiliate of Buyer without the prior written consent of
Sellers; provided further, however, that no assignment shall limit or affect the
assignor's obligations hereunder. Any attempted assignment in violation of this
Section 12 shall be void.
13. NO THIRD-PARTY BENEFICIARIES. Except as provided in Section 10,
this Agreement is for the sole benefit of the parties hereto and their permitted
assigns and nothing herein expressed or implied shall give or be construed to
give to any person, other than the parties hereto and such assigns, any legal or
equitable rights hereunder.
14. TERMINATION.
(a) Anything contained herein to the contrary notwithstanding, this
Agreement may be terminated and the transactions contemplated hereby abandoned
at any time prior to the Closing Date:
(i) by mutual written consent of Sellers and Buyer;
(ii) by Sellers if any of the conditions set forth in
Section 8(b) shall have become incapable of fulfillment, and
shall not have been waived by Sellers;
(iii) by Buyer if any of the conditions set forth in
Section 8(a) shall have become incapable of fulfillment, and
shall not have been waived by Buyer; or
40
48
(iv) by either party hereto, if the Closing does not
occur on or prior to the date that is 60 days from the date
hereof;
provided, however, that the party seeking termination pursuant to clause (ii),
(iii) or (iv) is not in breach of any of its representations, warranties,
covenants or agreements contained in this Agreement.
(b) In the event of termination by Sellers or Buyer pursuant to this
Section 14, written notice thereof shall forthwith be given to the other party
and the transactions contemplated by this Agreement shall be terminated, without
further action by either party. If the transactions contemplated by this
Agreement are terminated as provided herein:
(i) Buyer shall return all documents and other
material received from Parent, Sellers, the Company or any
Subsidiary relating to the transactions contemplated hereby,
whether so obtained before or after the execution hereof, to
Sellers; and
(ii) all confidential information received by Buyer
with respect to the business of the Company and the
Subsidiaries shall be treated in accordance with the
Confidentiality Agreement, which shall remain in full force
and effect notwithstanding the termination of this Agreement.
(c) If this Agreement is terminated and the transactions contemplated
hereby are abandoned as described in this Section 14, this Agreement shall
become void and of no further force or effect, except for the provisions of (i)
Section 6(a) relating to the obligation of Buyer to keep confidential certain
information and data obtained by it, (ii) Section 15 relating to certain
expenses, (iii) Section 16 relating to attorney fees and expenses, (iv) Section
7(c) relating to publicity, (v) Section 22 relating to finder's fees and
broker's fees and (vi) this Section 14. Nothing in this Section 14 shall be
deemed to release either party from any liability for any breach by such party
of the terms and provisions of this Agreement or to impair the right of either
party to compel specific performance by the other party of its obligations under
this Agreement.
15. EXPENSES. Whether or not the transactions contemplated hereby are
consummated, and except as otherwise specifically provided in this Agreement,
all costs and closing expenses incurred in connection with this Agreement and
the transactions contemplated hereby shall be paid by the party incurring such
costs or expenses. Subject to Sections 4(b)(xiv) and 4(l), the Company may pay
the costs and expenses of Sellers in connection with the negotiation and closing
of the transactions contemplated by this Agreement.
16. ATTORNEY FEES. A party in breach of this Agreement shall, on
demand, indemnify and hold harmless the other party for and against all
reasonable out-of-pocket expenses, including legal fees, incurred by such other
party by reason of the enforcement and protection of its rights under this
Agreement. The payment of such expenses is in addition to any other relief to
which such other party may be entitled.
17. AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement shall be effective unless it shall be in writing and signed by both
parties hereto.
41
49
18. NOTICES. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be sent, postage prepaid, by
registered, certified or express mail, return receipt requested or by reputable
national overnight courier service guaranteeing next business day delivery and
shall be deemed given if mailed, three days after mailing, and in the case of
overnight courier service one business day after mailing), as follows:
(i) if to Buyer:
W-H Energy Services, Inc.
00000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
2300 First City Tower
0000 Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: T. Xxxx Xxxxx, Esq.; and
(ii) if to Sellers, to Sellers' Representative (the
"Sellers' Representative") as follows:
Xxxxx Xxxxxx
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxx 00000
with a copy to:
Xxxxxx Xxxxx
X.X. Xxxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxx
Each Seller hereby appoints the Sellers' Representative as his agent to receive
notices hereunder and to take all other actions as may be required of the
Sellers' Representative hereunder or under the Escrow Agreement.
19. INTERPRETATION; EXHIBITS AND SCHEDULES; CERTAIN DEFINITIONS. (a)
The headings contained in this Agreement, in any Exhibit or Schedule hereto and
in the table of contents to this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement. Any
matter set forth in any provision, subprovision, section or subsection of the
Disclosure Schedule hereto shall be deemed set forth
42
50
for all purposes of the Disclosure Schedule to the extent relevant. All Exhibits
and Schedules annexed hereto or referred to herein are hereby incorporated in
and made a part of this Agreement as if set forth in full herein. Any
capitalized terms used in any Schedule or Exhibit but not otherwise defined
therein, shall have the meaning as defined in this Agreement.
(b) For all purposes hereof:
(i) "including" means including, without limitation;
(ii) "knowledge" means with respect to any specific
matter and Sellers, the Company, any Subsidiary or Buyer, the
knowledge after due inquiry of the executive officers and
other officers having primary responsibility for such matters,
of Sellers, the Company, any Subsidiary or Buyer, as the case
may be; provided, however, that with respect to Sellers,
knowledge shall include knowledge of the Company and any
Subsidiary; and
(iii) "person" means any individual, firm,
corporation, partnership, limited liability company, trust,
joint venture, Governmental Entity or other entity.
20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by
each of the parties and delivered to the other party.
21. ENTIRE AGREEMENT. This Agreement and the Confidentiality Agreement
contain the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings relating to such subject matter. Neither party shall be liable or
bound to any other party in any manner by any representations, warranties or
covenants relating to such subject matter except as specifically set forth
herein or in the Confidentiality Agreement.
22. FEES. Each party hereto hereby represents and warrants that no
brokers or finders have acted for such party in connection with this Agreement
or the transactions contemplated hereby.
23. SEVERABILITY. If any provision of this Agreement (or any portion
thereof) or the application of any such provision (or any portion thereof) to
any person or circumstance shall be held invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof (or the remaining
portion thereof) or the application of such provision to any other persons or
circumstances.
24. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Texas applicable to agreements
made and to be performed entirely within such State, without regard to the
conflicts of law principles of such State.
43
51
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
AGRI-EMPRESA, INC.
By: /s/ XXXXXXX X. XXXXX, XX.
-------------------------------------
Xxxxxxx X. Xxxxx, Xx.
Chairman
W-H ENERGY HOLDINGS, INC.
By: /s/ XXXXXXX X. XXXXX, XX.
-------------------------------------
Xxxxxxx X. Xxxxx, Xx.
President and Chief Executive Officer
W-H ENERGY SERVICES, INC.
By: /s/ XXXXXXX X. XXXXX, XX.
-------------------------------------
Xxxxxxx X. Xxxxx, Xx.
President and Chief Executive Officer
/s/ XXXX X. XXXXXX
-----------------------------------------
Xxxx X. Xxxxxx
/s/ XXXXXX X. LINK
-----------------------------------------
Xxxxxx X. Link
/s/ XXXXXX X. XXXXXXXXX, XX.
-----------------------------------------
Xxxxxx X. Xxxxxxxxx, Xx.
/s/ XXXXX X. XXXXXX
-----------------------------------------
Xxxxx X. Xxxxxx
/s/ XXXXX X. XXXXX
-----------------------------------------
Xxxxx X. Xxxxx
/s/ XXXXX X. XXXXXX
-----------------------------------------
Xxxxx X. Xxxxxx
/s/ XXXX X. XXXXXX
-----------------------------------------
Xxxx X. Xxxxxx
/s/ XXXXXX XXXXXXXX
-----------------------------------------
Xxxxxx Xxxxxxxx
/s/ XXXXX XXXXXXX XXXXXXX XX
-----------------------------------------
Xxxxx Xxxxxxx Xxxxxxx XX
SIGNATURE PAGE TO PURCHASE AGREEMENT
