PURCHASE AND SALE AGREEMENT
BY AND AMONG
XXXXXX OPERATING PARTNERSHIP L.P.,
AS BUYER,
NECHES INDUSTRIAL PARK, INC.,
AS SELLER,
AND
XXXXXXX X. XXXXXXXX
AND
FURTIVUS, INC.,
AS SHAREHOLDERS
June 1, 2004
TABLE OF CONTENTS
Page
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TABLE OF CONTENTS................................................................................................ i
ARTICLE I PURCHASE AND SALE OF ASSETS............................................................................ 1
1.1 Purchase and Sale of Assets.......................................................................... 1
1.2 Retained Assets...................................................................................... 3
1.3 Post-Closing Liabilities............................................................................. 3
1.4 Pre-Closing Liabilities.............................................................................. 4
1.5 Nonassignable Licenses, Contracts and Leases......................................................... 5
1.6 Purchase Price....................................................................................... 5
1.7 Purchase Price Allocation............................................................................ 6
1.8 Taxes; Apportionments; Post-Closing Adjustments...................................................... 7
1.9 Time and Place of Closing............................................................................ 7
1.10 Execution and Delivery of Documents of Title......................................................... 8
1.11 Closing Deliveries................................................................................... 8
ARTICLE II REPRESENTATIONS OF THE SELLER AND THE SHAREHOLDERS.................................................... 10
2.1 Organization......................................................................................... 10
2.2 Execution and Delivery............................................................................... 11
2.3 Authority............................................................................................ 11
2.4 No Conflicts......................................................................................... 12
2.5 Governmental Approvals and Filings................................................................... 12
2.6 Books and Records.................................................................................... 12
2.7 Financial Statements................................................................................. 13
2.8 Absence of Changes................................................................................... 13
2.9 No Undisclosed Liabilities........................................................................... 14
2.10 Taxes................................................................................................ 14
2.11 Legal Proceedings.................................................................................... 15
2.12 Compliance With Laws and Orders...................................................................... 15
2.13 Benefit Plans/ERISA.................................................................................. 15
2.14 Real Property........................................................................................ 16
2.15 Tangible Personal Property; Purchased Assets......................................................... 18
2.16 Intellectual Property Rights......................................................................... 18
2.17 Contracts............................................................................................ 19
2.18 Licenses............................................................................................. 20
2.19 Insurance............................................................................................ 20
2.20 Affiliate Transactions............................................................................... 21
2.21 Employees; Labor Relations........................................................................... 21
2.22 Environmental Matters................................................................................ 22
2.23 Substantial Customers................................................................................ 23
2.24 No Powers of Attorney................................................................................ 23
2.25 Solvency............................................................................................. 23
2.26 Government Contracts................................................................................. 23
2.27 Disclosure........................................................................................... 24
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE BUYER.......................................................... 24
3.1 Organization......................................................................................... 24
3.2 Execution and Delivery............................................................................... 24
3.3 Authority............................................................................................ 24
3.4 No Conflicts......................................................................................... 24
3.5 Governmental Approvals and Filings................................................................... 25
ARTICLE IV COVENANTS............................................................................................. 25
4.1 Confidentiality...................................................................................... 25
4.2 Cooperation by the Parties........................................................................... 25
4.3 Seller's Employees................................................................................... 26
4.4 Railroad Track Lease................................................................................. 27
ARTICLE V INDEMNIFICATION........................................................................................ 27
5.1 Indemnification by the Seller and the Shareholders................................................... 27
5.2 Indemnification by the Buyer......................................................................... 28
5.3 Procedures for Indemnification....................................................................... 28
5.4 Survival............................................................................................. 30
5.5 Limitations on Indemnification....................................................................... 30
5.6 Inconsistent Provisions.............................................................................. 31
5.7 Right to Indemnification Not Affected by Knowledge................................................... 31
5.8 Express Negligence................................................................................... 31
ARTICLE VI MISCELLANEOUS......................................................................................... 31
6.1 Expenses............................................................................................. 31
6.2 Notices.............................................................................................. 31
6.3 Amendments........................................................................................... 32
6.4 Waiver............................................................................................... 32
6.5 Headings............................................................................................. 33
6.6 Nonassignability..................................................................................... 33
6.7 Parties in Interest.................................................................................. 33
6.8 Counterparts......................................................................................... 33
6.9 Governing Law; Consent to Jurisdiction............................................................... 33
6.10 Severability......................................................................................... 33
6.11 Entire Agreement..................................................................................... 34
6.12 English Language..................................................................................... 34
6.13 Brokers.............................................................................................. 34
ARTICLE VII DEFINITIONS.......................................................................................... 34
7.1 Definitions.......................................................................................... 34
7.2 Other Terms.......................................................................................... 39
7.3 Other Definitional Provisions........................................................................ 39
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Exhibits
Exhibit A - XXX Tank Repair Escrow Agreement
Exhibit B - Port Xxxxxx Tank Escrow Agreement
Exhibit C - Xxxx Xxxx Escrow Agreement
Exhibit D - Letter of Credit
Exhibit E - Xxxx of Sale
Exhibit F - Special Warranty Deed
Exhibit G - Form of Estoppel Letter
Exhibit H - Noncompetition Agreement
Disclosure Schedule
Section 1.1(a) Tangible Property
Section 1.1(b) Owned Real Property
Section 1.1(c) Leased Real Property
Section 1.1(d) Assigned Contracts
Section 1.1(h) Assigned Licenses
Section 1.2(b) Retained Contracts
Section 1.2(c) Retained Assets
Schedule 1.6(iv) Certain Prepaid Rents and Deposits
Section 1.7 Purchase Price Allocation
Section 1.11(a)(vii) Estoppel Letters
Section 2.3 Authority
Section 2.4 No Conflicts
Section 2.5 Governmental Approvals
Section 2.7 Financial Statements
Section 2.8 Absence of Changes
Section 2.9 Undisclosed Liabilities
Section 2.11 Legal Proceedings
Section 2.13 Benefit Plans/ERISA
Section 2.14 Real Property
Section 2.15 Tangible Personal Property
Section 2.16 Intellectual Property Rights
Section 2.17 Contracts
Section 2.18 Licenses
Section 2.19 Insurance
Section 2.20 Affiliate Transactions
Section 2.21 Employees; Labor Relations
Section 2.22 Environmental
Section 2.23 Substantial Customers
Section 4.3 Seller's Employees
Section 7.1 Seller's Persons with Knowledge
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PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (the "Agreement"), dated as of June 1,
2004, is entered into by and among Xxxxxx Operating Partnership L.P., a Delaware
limited partnership (the "Buyer"), Neches Industrial Park, Inc., a Texas
corporation (the "Seller"), and each of Xxxxxxx X. Xxxxxxxx and Furtivus, Inc.,
the shareholders of the Seller (each a "Shareholder" and, collectively, the
"Shareholders").
RECITALS
WHEREAS, the Buyer and the Seller have determined that it is in their
respective best interests for the Seller to sell to the Buyer and for the Buyer
to buy from the Seller all or substantially all of the assets comprising the
Seller on the terms and conditions contained in this Agreement (the
"Acquisition");
WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants and agreements in connection with the Acquisition;
NOW THEREFORE, in consideration of the mutual representations, warranties,
covenants and agreements set forth herein, the Seller, the Shareholders and the
Buyer agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 Purchase and Sale of Assets. Upon the terms and subject to the
conditions contained in this Agreement, the Seller hereby sells, assigns,
transfers and conveys to the Buyer, and the Buyer hereby purchases,
acquires and accepts from the Seller, all of the assets of the Seller,
including, without limitation, those listed below, free and clear of all
Liens except Permitted Liens, other than the Retained Assets (hereinafter
defined) (collectively the "Purchased Assets"):
(a) all tangible assets, personal property, fixtures and equipment listed
in Section 1.1(a) of the Disclosure Schedule (the "Tangible Property")
(excluding, however, any assets listed in Section 1.2(c) of the Disclosure
Schedule);
(b) good and marketable fee simple title in and to all tracts or parcels
of land listed and described in Section 1.1(b) of the Disclosure Schedule,
together with (i) all of the interest of the Seller in any land in the
beds of any public streets or public roads in front of or adjoining
indicated portions of such land; (ii) any easements, licenses or
rights-of-way appurtenant to such land and all water, wastewater, sewer,
sanitary sewer and other utility rights related to such land; (iii) any
reversionary rights attributable thereto; (iv) all claims or demands
whatsoever of the Seller either in law or in equity in or to such land
except to the extent provided otherwise in this Agreement or in any
document executed herewith; (v) all buildings, improvements, fixtures,
storage tanks, pipelines (along with all physical facilities used in
connection with the ownership or operation of such pipelines, including
all valves, meters, measurement stations and equipment), electrical
facilities, storage and shipping facilities and other fixed assets and
personalty owned by
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the Seller annexed, affixed or attached to such land; and (vi) all of the
Seller's rights and interests in all personal property and physical
facilities used in connection with the ownership or operation of the
electrical facilities used in the operation of the Purchased Assets or the
Business including, without limitation, all transformers, power lines,
meters, rectifiers, busbars, housings, circuit breakers and all other
fixtures and equipment of every type and description used in connection
therewith (collectively, the "Owned Real Property");
(c) all of the Seller's rights and interest in all leases of real property
listed and described in Section 1.1(c) of the Disclosure Schedule (the
"Assigned Leases"). The real property subject to the Assigned Leases shall
be referred to as the "Leased Real Property", and together with the Owned
Real Property shall be referred to as the "Real Property";
(d) all of the Seller's rights and interest in and to all Contracts listed
in Section 1.1(d) of the Disclosure Schedule (the "Assigned Contracts");
(e) any and all of the Seller's Books and Records (the "Assigned Books and
Records"), excluding any Books and Records of the Seller that relate
exclusively to (i) organizational or governance proceedings of the Seller,
(ii) the Retained Assets or (iii) the Pre-Closing Liabilities;
(f) all of the Seller's goodwill;
(g) all of the Seller's rights and interest in and to the Intellectual
Property of the Seller;
(h) all Licenses listed in Section 1.1(h) of the Disclosure Schedule
(hereinafter defined) used in the operation of the Purchased Assets or the
Business, to the extent such Licenses are transferable to the Buyer (the
"Assigned Licenses");
(i) all of the Seller's rights and interest in insurance proceeds that may
be payable under the insurance policies of the Seller ("Insurance
Proceeds");
(j) all (i) accounts, instruments and general intangibles (as such terms
are defined in the Uniform Commercial Code of Texas) and (ii) liens and
security interests in favor of the Seller, whether xxxxxx or inchoate,
under any law, rule or regulation or under any of the Assigned Contracts
arising from the ownership, operation or sale of any of the Purchased
Assets;
(k) all of the Seller's rights and interest pertaining to any
counterclaims, set-offs, third party indemnities or defenses the Seller
may have with respect to the Post-Closing Liabilities or the Purchased
Assets; and
(l) all raw materials, work in progress and finished goods inventories of
the Seller.
To the extent that any Purchased Assets are intended to be transferred to
the Buyer pursuant to the language of this Section 1.1 but are not listed, the
language of this Section 1.1
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shall be controlling and such Purchased Assets nonetheless shall be transferred
to the Buyer for all purposes.
1.2 Retained Assets. The Seller will retain ownership of the
following (collectively, the "Retained Assets"):
(a) the Seller's Books and Records other than those set forth in Section
1.1(e) above;
(b) subject to Section 1.5, each Contract, Lease or License set forth in
Section 1.2(b) of the Disclosure Schedule or that requires the consent to
assignment by a Person other than the Seller or its Affiliates and which
consents are not obtained on or before the Closing Date;
(c) the items set forth in Section 1.2(c) of the Disclosure Schedule;
(d) the Seller's rights under this Agreement and the Related Agreements;
(e) all cash and cash equivalents of the Seller as of the Closing (other
than cash Insurance Proceeds);
(f) all outstanding customer accounts receivable as of the Closing;
(g) any refunds of insurance deposits; and
(h) the right to receive a pro-rata portion based on the Closing Date of
any "minimum guaranteed volume payment", if any, paid by CNR, L.P.
pursuant to that certain Lease of Facilities and Agreement for Anhydrous
Amonia Storage and Handling, dated November 6, 1995, between Neches
Industrial Park, Inc. and CNR, L.P., as subsequently amended, with respect
to the second calendar quarter of 2004, and the Buyer shall promptly remit
such amount, if any, to the Seller upon the Buyer's actual receipt
thereof.
1.3 Post-Closing Liabilities. Subject to the terms and conditions of
this Agreement, at Closing, the Buyer will assume and agree to pay,
perform and discharge when due from and after the Closing Date:
(a) such of the Liabilities that initially occur and are attributable
solely to the period after Closing (and that do not relate to arise out of
any breach of any representation of the Seller and Shareholders hereunder)
in respect of the Assigned Contracts, Assigned Leases or Assigned Licenses
transferred and assigned to Buyer hereunder in conformity with the
provisions of such Assigned Contracts, Assigned Leases or Assigned
Licenses (collectively, the "Assumed Obligations"); and
(b) the Liabilities that pertain to the ownership, operation or conduct of
the Business or the Purchased Assets by the Buyer arising from any acts,
omissions, events, conditions or circumstances that initially occur and
are solely attributable to the period after the Closing (the "Post-Closing
Liabilities").
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Nothing herein prevents Buyer from contesting in good faith any of the
Assumed Obligations and/or the Post-Closing Liabilities. The Seller agrees to
satisfy and discharge all Liabilities that are not assumed by Buyer pursuant to
the terms of this Agreement, whether known as of the date hereof or thereafter
determined. Seller represents that all payments due and all obligations to be
performed as of the Closing Date in respect of the Assigned Contracts, Assigned
Leases, Assigned Licenses and the other Purchased Assets have been timely made
and performed.
1.4 Pre-Closing Liabilities. It is expressly understood and agreed
that the Buyer shall not be obligated to pay, perform or discharge, and
the Seller shall retain, the Pre-Closing Liabilities of the Seller,
including, without limitation, Liabilities listed below, but excluding,
however, the Post-Closing Liabilities and the Assumed Obligations;
provided, however, that Seller shall have no liability to Xxxx Nitrogen
International Sarl ("Xxxx") with respect to the $2,500,000 placed in
escrow pursuant to the Xxxx Xxxx Escrow Agreement (as defined below):
(a) Liabilities relating to indebtedness for borrowed money or bonds
(including, without limitation, industrial revenue bonds, that in any
respect relate to the Business or the Purchased Assets) whether or not
such Liabilities are reflected on the Financial Statements and all other
Liabilities of Seller not disclosed on the Financial Statements;
(b) Liabilities resulting from, constituting or relating to a breach of
any of the representations, warranties, covenants or agreements of the
Seller or the Shareholder under this Agreement or any of the Related
Agreements;
(c) Liabilities for any federal, state, local, foreign or other Taxes (i)
incurred or relating to periods on or prior to the Closing or (ii) arising
in connection with the consummation of the transactions contemplated by
this Agreement or any of the Related Agreements;
(d) notwithstanding Section 2.22, Liabilities for all environmental,
ecological, natural resource, health, safety, products liability or other
Claims, conditions or obligations pertaining to the Seller, the Business
or the Purchased Assets that relate to time periods, circumstances or
events occurring prior to the Closing, including, without limitation, any
and all Losses (i) resulting from or arising out of any Environmental
Action that relates to any violations of Environmental Laws or
Environmental Permits on or prior to the Closing or (ii) incurred as a
result of the presence of any Hazardous Materials at, in, on, under or
around any of the Purchased Assets or other facilities of the Seller on or
prior to the Closing, or the disposal of any Hazardous Materials generated
in connection with the Business or the Purchased Assets prior to the
Closing (including, without limitation, any investigation, monitoring,
containment, remediation, cleanup or removal thereof after the Closing);
(e) Liabilities for warranty claims, quality-related claims or other
similar claims arising out of or relating to events or circumstances on or
prior to the Closing;
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(f) Liabilities based on any actual or alleged tortious or illegal conduct
by or on behalf of the Seller, its Affiliates, shareholders, officers,
directors, independent contractors or agents;
(g) Liabilities incurred by the Seller in connection with the negotiation,
execution or performance of this Agreement or any of the Related
Agreements, including, without limitation, all legal, accounting,
brokers', finders' and other professional fees and expenses;
(h) Liabilities incurred by the Seller after the Closing;
(i) Liabilities with respect to any of the Seller's employees (and
employees of its Affiliates), including, without limitation, wages,
salaries, federal withholding and social security taxes, worker's
compensation, unemployment compensation, employee benefit plans,
termination costs, accrued vacation and Liabilities under the Plans, all
in any way relating to (i) events occurring on or prior to the Closing,
(ii) the employment of employees by the Seller or its Affiliates
regardless of when any Claim relating to any such Liabilities may arise
and (iii) employees who are not Transferred Employees;
(j) Liabilities, including any Liability pursuant to any Claim, litigation
or proceeding (other than those for which either the Seller or the
Shareholders are being indemnified by the Buyer hereunder), that pertain
to (i) contractual or other obligations of the Seller or (ii) the
ownership, operation or conduct of the Business or Purchased Assets, in
each case arising from any acts, omissions, events, conditions or
circumstances occurring on or before or relating to or attributable to the
period on or before the Closing; and
(k) Liabilities relating to the Real Property and/or any agreements,
easements, rights of way or other restrictions encumbering the Real
Property arising out of or relating or attributable to events or
circumstances on or prior to the Closing.
1.5 Nonassignable Licenses, Contracts and Leases. If any Licenses,
Contracts or Leases are not by their respective terms assignable, the
Seller and the Shareholders agree to use their reasonable best efforts to
obtain, or cause to be obtained, prior to the Closing Date, any written
consents necessary to convey to the Buyer the benefit thereof. The Buyer
shall cooperate with the Seller and the Shareholders, in such manner as
may be reasonably requested, in connection therewith, including, without
limitation, discussions and negotiations with all Persons with the
authority to grant or withhold consent. To the extent that any such
consents cannot be obtained, the Seller, the Shareholders and the Buyer
will use their reasonable best efforts (but in no event shall the Buyer be
required to pay any amounts in connection therewith) to take such actions
as may be possible without violation or breach of any such nonassignable
Assigned Licenses, Assigned Contracts or Assigned Leases to effectively
grant the Buyer the economic benefits of such Assigned Licenses, Assigned
Contracts and Assigned Leases.
1.6 Purchase Price. At the Closing, the Buyer shall pay to the
Seller $25,500,000 (the "Purchase Price"), minus the amounts set forth in
clauses (i), (ii), (iii) and (iv) below, which Purchase Price shall be
remitted by the Buyer to the Seller in cash
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payable by wire transfer of immediately available funds. The Purchase
Price shall be reduced as set forth below.
(i) $300,000 of the Purchase Price, representing an amount to repair
the tanks constructed by XXX Tank, Inc., shall be placed in escrow
pursuant to the terms of an escrow agreement (the "XXX Tank Repair Escrow
Agreement") attached hereto as Exhibit A. The XXX Tank Repair Escrow
Agreement shall provide (A) that the funds shall be released to Buyer upon
agreement between Buyer and Seller as to a plan of action to repair the
tanks constructed by XXX Tank, Inc., (B) in the event that the cost of
such repairs is less than $300,000, the difference between the amount in
the escrow account under the XXX Tank Repair Escrow Agreement and the
repair costs shall be paid to Seller, and (C) in the event that the cost
of such repairs is greater than $300,000, the difference between the
repair costs and the amount in the escrow account under the XXX Tank
Repair Escrow Agreement shall be paid to Buyer by Seller.
(ii) $140,000 of the Purchase Price shall be placed in escrow
pursuant to the terms of an escrow agreement (the "Port Xxxxxx Tank Escrow
Agreement") attached hereto as Exhibit B. The Port Xxxxxx Tank Escrow
Agreement shall provide that (A) the funds shall be released to the Seller
upon the termination of the lien held by XXX Tank, Inc, and (B) if such
lien is not terminated by the third anniversary of the date hereof, and
there are no proceedings in process contesting the lien held by XXX Tank,
Inc., the funds shall be released to the Buyer.
(iii) $2,500,000 of the Purchase Price shall be placed in escrow
pursuant to the terms of an escrow agreement (the "Xxxx Xxxx Escrow
Agreement") attached hereto as Exhibit C. The Xxxx Xxxx Escrow Agreement
shall provide that (A) the amount in escrow shall be reduced by the
payment to Seller from the escrowed funds of $104,166.67 on the last day
of each month beginning November 30, 2005 until no funds are left in
escrow, (B) in the event that Xxxx forecloses on the funds placed in
escrow as a result of a Event of Default by Buyer under that certain Lease
of Facilities and Agreement for Anhydrous Ammonia Storage & Handling dated
November 14, 2000, between Seller and Xxxx (successor-in-interest to Duke
Energy Merchants, LLC), amended by First Amendment to Lease of Facilities
and Agreement for Anhydrous Ammonia Storage & Handling dated February 27,
2004 (the "Xxxx Lease"), Buyer shall pay to Seller an amount equal to the
total funds then remaining in escrow, (C) in the event that Xxxx
forecloses on the funds placed in escrow as a result of a force xxxxxx
event as set forth in Article XV of the Lease, Buyer shall have no further
obligation to Seller, and (D) Buyer shall provide Seller with a letter of
credit (the "Letter of Credit") in substantially the form attached hereto
as Exhibit D.
(iv) The amounts set forth on Schedule 1.6(iv), representing certain
rent deposits and prepaid rents as described on Schedule 1.6(iv), shall be
withheld from the Purchase Price.
1.7 Purchase Price Allocation. The Buyer and the Seller agree to
allocate the Purchase Price (together with any assumed liabilities) for
the Purchased Assets as set forth on Section 1.7 of the Disclosure
Schedule (the "Asset Allocation"). The Asset
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Allocation shall be revised after all adjustments, if any, have been made
in accordance with Section 1.8(b). The Asset Allocation shall be completed
in the manner required by Section 1060 of the Code. The Buyer and the
Seller further agree to comply with all filing, notice and reporting
requirements described in Section 1060 of the Code and the Treasury
Regulations promulgated thereunder, including the timely preparation and
filing of Form 8594 based on the Asset Allocation. The Buyer and the
Seller hereby agree that they will report the federal, state, foreign and
other Tax consequences of the transactions contemplated by this Agreement
in a manner consistent with the Asset Allocation.
1.8 Taxes; Apportionments; Post-Closing Adjustments.
(a) All sales, use, transfer, filing, recordation, registration and
similar Taxes and fees arising from or associated with the transactions
contemplated by this Agreement, whether levied on the Buyer or the Seller
or their respective Affiliates, shall be paid by the Seller, and the
Seller shall file all necessary documentation with respect to, and make
all payments of, such Taxes and fees on a timely basis.
(b) At the Closing, the following items, to the extent they relate to the
Purchased Assets and except as otherwise provided for in this Agreement,
shall be apportioned as of 11:59 p.m. on the day preceding the Closing
Date: property taxes, rents, prepayments from customers, prepayments to
suppliers and other prepayments and expenses under any of the Assigned
Contracts, Assigned Leases or Assigned Licenses; and such other items as
are customarily apportioned in connection with the sale of similar
property, all such items prior to such time being for the account of the
Seller and all such items after such time being for the account of the
Buyer. At the Closing, the Purchase Price shall be reduced by the amount
owing by Seller under this Section 1.8(b) and the amounts set forth in
Section 1.6(iv). If any such items cannot accurately be apportioned at the
Closing or prior thereto, or if it is later determined that such
apportionment at Closing was not accurate, such items shall be apportioned
or reapportioned, as the case may be, as soon as practicable after the
Closing Date or the date on which the apportionment error is discovered,
as applicable, but in no event more than one hundred twenty (120) days
after the Closing Date. Any amounts received by, or other consideration
given to, the Buyer (or its Affiliates) after the Closing with respect to
either any Retained Assets or the conduct of the Business prior to the
Closing shall be held by the Buyer in trust for the Seller until promptly
paid to the Seller. Likewise, any amounts received by, or other
consideration given to, the Seller (or its Affiliates, including the
Shareholders) after the Closing with respect to either any Purchased
Assets or the conduct of the Business after the Closing shall be held by
the Seller in trust for the Buyer until promptly paid to the Buyer.
1.9 Time and Place of Closing. The closing of the transactions
described in this Article I (the "Closing") shall take place at the
offices of Xxxxx Xxxxx L.L.P., 0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx
00000 at 10:00 a.m. on June 1, 2004, or at such other place or time as the
parties hereto may agree. The date upon which the Closing actually occurs
is hereinafter referred to as the "Closing Date."
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1.10 Execution and Delivery of Documents of Title. At the Closing,
the Seller and the Buyer shall execute and deliver a Xxxx of Sale, in the
form attached hereto as Exhibit E, (the "Xxxx of Sale"), and a Special
Warranty Deed, in the form attached hereto as Exhibit F (the "Deed"). In
addition, the Seller will execute and deliver to the Buyer such deeds,
conveyances, certificates of title, assignments, assurances and other
instruments and documents as the Buyer and/or the Title Company (as
hereinafter defined) may reasonably request in order to effect the sale,
conveyance and transfer of the Purchased Assets from the Seller to the
Buyer. Such instruments and documents shall be sufficient to convey to the
Buyer good and marketable title in all of the Purchased Assets, free and
clear of any Liens other than Permitted Liens. The Seller will, from time
to time after the Closing Date, take such additional actions and execute
and deliver such further documents as the Buyer may reasonably request in
order more effectively to sell, transfer and convey the Purchased Assets
to the Buyer and to place the Buyer in position to operate and control all
of the Purchased Assets.
1.11 Closing Deliveries.
(a) At the Closing, the Seller shall execute and deliver, or cause to be
executed and delivered, to the Buyer:
(i) duly executed copies of all consents and approvals required for
the consummation of the transactions contemplated by this Agreement and
the Related Agreements and to permit the Buyer to acquire all of the
Purchased Assets without violating any Contract, Lease or License of the
Seller or any Laws, including, without limitation, Environmental Laws,
Environmental Permits and any other requirement of any Governmental or
Regulatory Authority. Additionally, any financing statement terminations
shall have been filed as necessary to remove any Liens applicable to the
Real Property;
(ii) (A) a commitment for title policies issued by Beaumont Title
Company on First American Title Insurance Company (the "Title Company")
with respect to the Real Property, insuring title of the Real Property
(and specifically insuring as an insured parcel any easements benefiting
the Real Property) to be in the Buyer as of the Closing Date, subject only
to those exceptions approved by the Buyer in writing and (B) legible (to
the extent reasonably possible) copies of the title exception documents
referenced in the commitments with respect thereto. At the Closing the
Sellers shall provide to the Buyer an Owner's Policy of Title Insurance
(the "Owner's Policy"), in Texas standard form (Form T-1), together with a
mortgagee's policy (the "Mortgagee Policy") in favor of the Royal Bank of
Canada, as administrative agent with such endorsements as are reasonably
requested (the Owner's Policy and the Mortgagee's Policy being referred to
herein collectively as, the "Title Policies"), issued by the Title Company
insuring the Real Property (and specifically insuring as an insured parcel
any easements benefiting the Real Property), subject only to those
exceptions approved by the Buyer in writing, in the aggregate amount of
$25,500,000. Seller shall be responsible for the payment of all costs and
expenses associated the Owner's Policy. Buyer shall be responsible for the
payment of the cost of the Mortgagee Policy. The Seller shall pay for the
cost of the policy premiums and any endorsements required by the Buyer.
The Seller shall deliver to the
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Buyer and the Title Company any further affidavits, agreements, current
survey(s) and assurances necessary to issue the Title Policies;
(iii) a current survey of the Real Property made on the ground by a
registered professional land surveyor in a form reasonably acceptable to
the Buyer;
(iv) all consents, approvals and/or waivers necessary to assign or
transfer to the Buyer any and all assignable or transferable Licenses,
Environmental Permits or other permissions of Governmental or Regulatory
Authorities;
(v) certification of the Seller's non-foreign status as set forth in
Treasury Regulation Section 1.1445-2(b);
(vi) the documents contemplated by Section 1.10 of this Agreement;
(vii) estoppel letters in the form attached hereto as Exhibit G from
each of the tenants listed on Schedule 1.11(a)(vii);
(viii) a written instrument in form and substance acceptable to
Buyer pursuant to which Xxxxxxx Xxxxx Business Financial Services, Inc.
terminates and releases all liens and security interests granted to it by
Seller and authorizes the filing of all UCC-3 termination statements which
may be necessary or appropriate to evidence such termination and release
without any further action on the part of Xxxxxxx Xxxxx Business Financial
Services, Inc;
(ix) a written instrument in form and substance acceptable to Buyer
pursuant to which Xxxx Nitrogen International Sarl terminates and releases
that certain Deed of Trust dated November 14, 2000, recorded under County
Clerk's File No. 2000043048 (Official Records of Real Property, Jefferson
County, Texas) and authorizes the filing of all UCC-3 termination
statements which may be necessary or appropriate to evidence such
termination and release without any further action on the part of Xxxx
Nitrogen International Sarl;
(x) the XXX Tank Repair Escrow Agreement, the Port Xxxxxx Tank
Escrow Agreement and the Xxxx Xxxx Escrow Agreement;
(xi) resolutions of the board of directors and the shareholders of
the Seller authorizing the transactions described herein and in the
Related Agreements;
(xii) a certificate executed by Seller to the effect that, except as
otherwise stated in the certificate, each of Seller's representations and
warranties contained herein is true, complete and accurate in all respects
as of the Closing Date as if made on the Closing Date and that Seller has
complied with all of its covenants to be performed hereunder prior to
Closing; and
(xiii) such further instruments and documents, normal and customary
for transactions such as those contemplated by this Agreement, as may be
reasonably
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required for the Buyer to consummate the transactions contemplated hereby,
including, without limitation, certificates issued by the appropriate
Governmental or Regulatory Authorities in the Seller's jurisdiction of
incorporation, certifying the valid existence and good standing of the
appropriate Seller.
(b) At the Closing, Xxxxxxx X. Xxxxxxxx shall execute and deliver, or
cause to be executed and delivered, to the Buyer, the Noncompetition
Agreement, in the form attached hereto as Exhibit H (the "Noncompetition
Agreement");
(c) At the Closing, the Buyer shall execute and deliver, or cause to be
executed and delivered:
(i) the Purchase Price to the Seller;
(ii) the Noncompetition Agreement to Xxxxxxx X. Xxxxxxxx;
(iii) resolutions of the general partner of the Buyer authorizing
the transactions described herein and in the Related Agreements;
(iv) a certificate executed by Buyer to the effect that, except as
otherwise stated in the certificate, each of Buyer's representations and
warranties contained herein is true, complete and accurate in all respects
as of the Closing Date as if made on the Closing Date and that Buyer has
complied with all of its covenants to be performed hereunder prior to
Closing; and
(v) such further instruments and documents, normal and customary for
transactions such as those contemplated by this Agreement, as may be
reasonably required for the Seller or the Shareholders to consummate the
transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS OF THE SELLER AND THE SHAREHOLDERS
In order to induce the Buyer to enter into this Agreement, the Seller and
the Shareholders, jointly and severally, hereby make the representations and
warranties set forth below. The Seller has delivered to the Buyer the Disclosure
Schedule on the date hereof. The disclosures in the Disclosure Schedule must
relate only to the representations and warranties in the section of this
Agreement to which they expressly relate and not to any other representation or
warranty in this Agreement. Except as expressly set forth in those sections of
the Disclosure Schedule corresponding to the sections below:
2.1 Organization.
(a) The Seller is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation. The Seller has
full power, authority and capacity to execute and deliver this Agreement
and the Related Agreements to which it is a party and to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby.
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(b) Each Shareholder that is a natural person has the legal capacity to
execute and deliver this Agreement and the Related Agreements to which he,
she or it is a party and to perform his, her or its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby.
(c) Each Shareholder that is not a natural person is a corporation duly
organized, validly existing and in good standing under the laws of its
state of incorporation. Each such Shareholder has full power, authority
and capacity to execute and deliver this Agreement and the Related
Agreements to which it is a party and to perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby.
2.2 Execution and Delivery. The execution, delivery and performance
of this Agreement and the Related Agreements by the Seller and the
Shareholders and the consummation of the transactions contemplated hereby
and thereby have been duly authorized and approved by the Board of
Directors of the Seller and, to the extent applicable, the Shareholders,
and no other corporate (or other action with respect to any Shareholder
who is a natural person) action on the part of the Seller or any
Shareholder is necessary to authorize the execution, delivery and
performance of this Agreement and the Related Agreements by the Seller and
the Shareholders and the consummation of the transactions contemplated
hereby and thereby. This Agreement has been duly and validly executed and
delivered by the Seller and the Shareholders and constitutes, and upon the
execution and delivery by the Seller of the Related Agreements, the
Related Agreements will constitute, the legal, valid and binding
obligations of the Seller and the Shareholders, as the case may be,
enforceable against each of them in accordance with their terms, assuming
valid execution and delivery of this Agreement and the Related Agreements
by the Buyer, and except as enforceability may be limited by bankruptcy,
insolvency, reorganizations, moratorium or other Laws affecting creditors'
rights generally.
2.3 Authority.
(a) The Seller has full corporate power and authority to conduct the
operations of the Business and the Purchased Assets as and to the extent
now conducted and to own, use and lease the Purchased Assets. The Seller
is duly qualified, licensed or admitted to do business and is in good
standing in those jurisdictions specified in Section 2.3 of the Disclosure
Schedule, which are the only jurisdictions in which the ownership, use or
leasing of its assets and properties or the conduct or nature of its
business, makes such qualification, licensing or admission necessary. The
name of each director and officer of the Seller on the date hereof, and
the position with the Seller held by each, are listed in Section 2.3 of
the Disclosure Schedule. The Seller has, prior to the execution of this
Agreement, delivered to the Buyer true and complete copies of its articles
or certificate of incorporation and bylaws as in effect on the date
hereof.
(b) Except as set forth in Section 2.3 of the Disclosure Schedule, the
Seller does not presently own, of record or beneficially, or control,
directly or indirectly, any capital stock, securities convertible into or
exchangeable for capital stock or any other equity interest in any Person
that has an interest, either beneficially or of record, in any of the
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Purchased Assets (individually, a "Subsidiary"). Herein, unless expressly
stated or the context requires otherwise, each representation and warranty
made with respect to the Seller or the stock of the Seller shall be deemed
made equally but separately for each Subsidiary.
(c) The Shareholders hold, beneficially and of record, all of the
outstanding capital stock (of all classes) of the Seller.
2.4 No Conflicts. The execution and delivery by the Seller and the
Shareholders of this Agreement and the Related Agreements, the performance
of their respective obligations under this Agreement and such Related
Agreements and the consummation of the transactions contemplated hereby
and thereby do not and will not:
(a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the applicable articles of organization or
bylaws of Seller or any Shareholder that is not a natural person;
(b) subject to obtaining the consents, approvals and actions, making the
filings and giving the notices disclosed in Section 2.4 of the Disclosure
Schedule, conflict with or result in a violation or breach of any term or
provision of any License, Law or Order applicable to the Seller, any
Shareholder or any of the Purchased Assets; or
(c) except as disclosed in Section 2.4 of the Disclosure Schedule, (i)
conflict with or result in a violation or breach of, (ii) constitute (with
or without notice or lapse of time or both) a default under, (iii) require
the Seller or the Shareholders to obtain any consent, approval or action
of, make any filing with or give any notice to any Person as a result or
under the terms of, (iv) result in or give to any Person any right of
termination, cancellation, acceleration or modification in or with respect
to, (v) result in or give to any Person any additional rights or
entitlement to increased, additional accelerated or guaranteed payments
under, or (vi) result in the creation or imposition of any Lien upon the
Seller or any of the Purchased Assets under any Assigned Contract,
Assigned Lease or Assigned License.
2.5 Governmental Approvals and Filings. Except as set forth in
Section 2.5 of the Disclosure Schedule, no consent, approval or action of,
filing with or notice to any Governmental or Regulatory Authority on the
part of the Seller or the Shareholders is required in connection with the
execution, delivery and performance of this Agreement or any of the
Related Agreements or the consummation of the transactions contemplated
hereby or thereby.
2.6 Books and Records. The Assigned Books and Records of the Seller
as provided to the Buyer prior to the execution of this Agreement are true
and complete, and the summaries of any minute books and other similar
records of the Seller provided to the Buyer contain a true and complete
record, in all material respects, of all action taken at all meetings, and
by written consent, of the board of directors and committees of the board
of directors and the Shareholders of the Seller. The Seller does not have
any of the Assigned Books and Records recorded, stored, maintained,
operated or otherwise wholly
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or partly dependent upon or held by any means (including any electronic,
mechanical or photographic process, whether computerized or not) that
(including all means of access thereto and therefrom) are not under the
exclusive ownership and direct control of the Seller or an Affiliate. All
of the Seller's Books and Records have been maintained in accordance with
sound business practices.
2.7 Financial Statements.
(a) Attached hereto as Section 2.7 of the Disclosure Schedule are true and
complete copies of the following financial statements: (i) a reviewed but
unaudited balance sheet as of, and reviewed but unaudited statements of
income, cash flow and stockholders' equity for the year ended, September
30, 2003, and (ii) an unaudited balance sheet as of, and unaudited
statements of income, cash flow and stockholders' equity for the four (4)
months ended, April 30, 2004 (the "Financial Statements"), which are
attached hereto as Section 2.7 of the Disclosure Schedule.
(b) The Financial Statements (i) are true, accurate, correct and complete
and in accordance with the books and records of the Seller and (ii) fairly
present in all material respects the financial condition and results of
operations of the Seller as of the respective dates thereof and for the
respective periods covered thereby, subject in the case of the unaudited
Financial Statements to normal year end adjustments.
2.8 Absence of Changes. Except for the execution and delivery of
this Agreement and the transactions to take place pursuant hereto on or
prior to the Closing Date, since March 31, 2003, and except as set forth
in Section 2.8 of the Disclosure Schedule there has not been any change,
event or development which, individually or together with other such
events, could reasonably be expected to have a Material Adverse Effect on
the Seller, the Business or the Purchased Assets. Without limiting the
foregoing, except as set forth in Section 2.8 of the Disclosure Schedule,
there has not occurred between the Financial Statement Date and the date
hereof:
(a) any declaration, setting aside or payment of any dividend or other
distribution involving any of the Purchased Assets in respect of the
capital stock of the Seller;
(b) any increase in the salary, wages or other compensation of any
officer, employee or consultant of the Seller whose annual salary is, or
after giving effect to such change would be, $50,000 or more; (ii) any
establishment or modification of (A) target, goals, pools or similar
provisions in respect of any fiscal year under any Plan,
employment-related contract or other employee compensation arrangement or
(B) salary ranges, guidelines or similar provisions in respect of any
Plan, employment-related Contract or other employee compensation
arrangement; or (iii) any adoption, entering into or becoming bound by any
Plan, employment-related Contract or collective bargaining agreement, or
amendment, modification or termination (partial or complete) of any Plan,
employment-related Contract or collective bargaining agreement, except to
the extent required by applicable Law;
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(c) any physical damage, destruction or other casualty loss (whether or
not covered by insurance) affecting any of the Purchased Assets in an
amount exceeding $25,000 individually or $50,000 in the aggregate;
(d) any write-off or write-down, or any determination to write off or
write down, any of the Purchased Assets in an amount exceeding $25,000
individually or $50,000 in the aggregate;
(e) any incurrence of a Lien (other than a Permitted Lien) on any
Purchased Asset;
(f) any (i) amendment of the articles or certificate of incorporation or
bylaws of the Seller, (ii) recapitalization, reorganization, liquidation
or dissolution of the Seller or (iii) merger or other business combination
involving the Seller;
(g) any entering into, or material amendment, modification, termination
(partial or complete) or granting of a waiver under or giving any consent
with respect to any Assigned Contract, Assigned Lease or any Assigned
License;
(h) any capital expenditures or commitments for additions to property,
plant or equipment of the Seller constituting capital assets in an amount
exceeding $25,000 individually or $50,000 in the aggregate;
(i) any commencement or termination by the Seller of any line of business;
(j) any transaction by the Seller with any officer, director or Affiliate
of the Seller;
(k) any other transaction involving or development affecting the Purchased
Assets outside the ordinary course of business consistent with past
practice; or
(l) any entering into a Contract or committing to do or engage in any of
the foregoing after the date hereof.
2.9 No Undisclosed Liabilities. Except as reflected or reserved
against in the balance sheets included in the Financial Statements or in
the notes thereto, there are no Liabilities against, relating to or
affecting the Seller or the Purchased Assets, other than: (a) immaterial
Liabilities incurred in the ordinary course of business consistent with
past practice; (b) Liabilities that, individually or in the aggregate, are
not material to the Business or condition of the Purchased Assets; or (c)
Liabilities otherwise expressly disclosed in Section 2.9 of the Disclosure
Schedule.
2.10 Taxes.
(a) All Tax Returns required to be filed by or on behalf of the Seller
have been duly filed on a timely basis and such Tax Returns are true,
complete and correct. All Taxes owed by the Seller or any Affiliate of the
Seller have been or will be timely paid in full (whether or not shown on
or reportable on such Tax Returns).
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(b) None of the Purchased Assets consists of an equity or other ownership
interest in any other Person. None of the Purchased Assets is subject to
any Lien arising in connection with any failure or alleged failure to pay
any Tax. None of the Purchased Assets is subject to a safe-harbor lease
(pursuant to section 168(f)(8) of the Internal Revenue Code of 1954 as in
effect after the Economic Recovery Tax Act of 1981 and before the Tax
Reform Act of 1986). None of the Purchased Assets is "tax-exempt use
property" (within the meaning of section 168(h) of the Code) or
"tax-exempt bond financed property" (within the meaning of section
168(g)(5)) of the Code.
(c) There have been no waivers or extensions of any statutes of
limitations with respect to Taxes or Tax Returns of the Seller. There are
no Actions or Proceedings pending, or to the Knowledge of the Seller or
any Shareholder, threatened, with respect to Taxes or Tax Returns of the
Seller.
2.11 Legal Proceedings. Except as disclosed in Section 2.11 of the
Disclosure Schedule (with paragraph references corresponding to those set
forth below):
(a) there are no Actions or Proceedings pending or, to the Knowledge of
the Seller or the Shareholders, threatened against, relating to or
affecting the Seller, the Business or the Purchased Assets;
(b) there are no Claims or facts, conditions or circumstances that could
reasonably be expected to give rise to any Action or Proceeding that would
be required to be disclosed pursuant to clause (a) above; and
(c) there are no Orders outstanding against the Seller that provide for
injunctive relief, or with respect to monetary damages, exceed $25,000.
2.12 Compliance With Laws and Orders. The Seller is not, and the
Seller has not, at any time within the last five (5) years, been, and has
not received any notice that it is or has at any time within the last five
(5) years been, in violation of or in default under any Law, Assigned
License or Order.
2.13 Benefit Plans/ERISA.
(a) Each pension, profit sharing, 401(k), disability, medical, dental,
severance pay, vacation pay, sick pay, stock purchase, stock option,
deferred compensation, incentive compensation, fringe benefit,
stay-with-bonus, change of control agreement or other employee benefit
plan, program or agreement, including, without limitation, any employee
benefit plan as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), that is maintained or
contributed to by the Seller or any organization that is a member of a
controlled group of organizations within the meaning of Code Sections
414(b), (c), (m) or (o) of which the Seller is a member (the "Controlled
Group") or under which the Seller or any member of the Controlled Group
has any liability or contingent liability, and which cover the employees
of the Seller, shall hereinafter be known as the "Plans."
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(b) There are no Liabilities, breaches, violations or defaults under any
Plans which would subject the Purchased Assets, the Seller, the Buyer or
any of their employee benefit plans to any Taxes, penalties or other
Liabilities.
(c) Except as disclosed in Section 2.13 of the Disclosure Schedule, none
of the Plans is or has been subject to Title IV of ERISA. Except as
disclosed in Section 2.13 of the Disclosure Schedule, neither the Seller
nor any entity required to be aggregated with the Seller for purposes of
Section 414 of the Code or Section 4001 of ERISA has ever maintained,
contributed to or had any Liability for any employee pension benefit plan
(as defined in Section 3(2) of ERISA) that is or has been subject to Title
IV of ERISA.
2.14 Real Property.
(a) Section 1.1(b) of the Disclosure Schedule lists and describes briefly
all Owned Real Property owned by the Seller. With respect to each such
parcel of Owned Real Property: (i) the Seller has good and marketable
title to the Owned Real Property, free and clear of any Lien except for
Permitted Liens; (ii) there are no pending or, to the Knowledge of the
Seller or the Shareholders, threatened, condemnation proceedings, lawsuits
or administrative actions relating to the Owned Real Property; (iii) the
legal description for Owned Real Property contained in the deed thereof
describes such Owned Real Property fully and adequately, the buildings and
improvements are located within the boundary lines of the described
parcels of land, are not in violation of applicable setback requirements,
zoning laws and ordinances (and none of the Owned Real Property or
buildings or improvements thereon are subject to "permitted non-conforming
use" or "permitted non-conforming structure" classification), and do not
encroach on any easement that may burden the land, and the land does not
serve any adjoining property for any purpose inconsistent with the use of
the land, except as is set forth on Section 2.14 of the Disclosure
Schedule, the property is not located within any flood plain or subject to
any similar type restriction for which any material Assigned Licenses have
not been obtained and access to the property is provided by paved public
right of way with adequate curb cuts available; (iv) all facilities have
received all approvals of Governmental or Regulatory Authorities
(including Licenses) required in connection with the ownership or
operation thereof and have been operated and maintained in accordance with
applicable Laws; (v) except as set forth in Section 2.14 of the Disclosure
Schedule, there are no Leases, subleases, Licenses, concessions,
easements, servitudes, rights-of-way, encumbrances or other Contracts
granting to any party or parties the right of use or occupancy of any
portion of the Owned Real Property; (vi) neither the Leases, subleases,
Licenses, concessions, easements, servitudes, rights-of-way, encumbrances
or Contracts set forth in Section 2.14 of the Disclosure Schedule nor the
enforcement of any rights thereunder by any party thereto have or may have
a material adverse impact on the Buyer's ability to continue to operate
the Owned Real Property as a terminal facility in the same manner as the
Seller has operated the same prior to the Closing Date and (vii) with
respect to the easements, licenses and rights-of-way comprising the Owned
Real Property, the Seller has good and indefeasible title to or interests
therein sufficient to enable the Buyer, as the Seller's successor in
interest, to use and operate the Purchased Assets in a reasonable and
customary manner, free and clear of Liens except Permitted Liens.
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(b) Section 1.1(c) of the Disclosure Schedule contains a true and correct
list of each parcel of Leased Real Property. The Seller has not assigned,
transferred, conveyed, mortgaged, deeded in trust or encumbered any
interest in such Leases. The Seller has adequate rights of ingress and
egress with respect to the Leased Real Property and all buildings,
structures, facilities, fixtures and other improvements thereon. None of
such Leased Real Property, buildings, structures, facilities, fixtures or
other improvements, or the current use thereof, contravenes or violates
any building or zoning Law, or any administrative, occupational safety and
health or other applicable Law, in each case, in any material respect
(whether or not permitted on the basis of prior nonconforming use, waiver
or variance).
(c) The Seller has a valid leasehold interest in and the right to quiet
enjoyment of the Leased Real Property for the full term of the lease
thereof. Each lease covering the Leased Real Property is a legal, valid
and binding agreement enforceable in accordance with its terms against the
Seller and, to the Knowledge of the Seller and the Shareholders, each
other Person that is a party thereto, and the Seller is not in, and
neither the Seller nor any Shareholder has received notice of any, default
(or any condition or event that, after notice or lapse of time or both,
would constitute a default) thereunder. Neither the Seller nor, to the
Knowledge of the Seller and the Shareholders, any other party to any
Assigned Lease, is in breach or default, and no event has occurred that,
with notice or lapse of time, could reasonably be expected to constitute
such a breach or default or permit termination, modification or
acceleration under such Assigned Lease. Neither the Seller nor any
Shareholder owes any brokerage commission with respect to any such Leased
Real Property.
(d) The Seller has delivered to the Buyer prior to the execution of this
Agreement true and complete copies of (i) all deeds, leases, mortgages,
deeds of trust, certificates of occupancy, title insurance policies, title
reports, surveys, easements, licenses, rights of way, restrictions and
similar documents, and all amendments thereof, with respect to the Owned
Real Property and (ii) all Leases (including any amendments and renewal
letters).
(e) Except as set forth in Section 2.14 of the Disclosure Schedule, there
are no tenants or other parties in possession of any Real Property
included in the Purchased Assets. No Person has any right to purchase, or
holds any right of first refusal to purchase, such properties.
(f) All public utilities, including, without limitation, water and
wastewater, have been extended to a boundary line of each tract of the
Real Property through adjoining public streets, or if they pass through
adjoining private land, do so in accordance with validly existing
easements permitting such use, and all installation and connection charges
necessary to use such public utilities have been paid in full. All
facilities located on the Real Property are supplied with utilities and
other services, including gas, electricity, water, telephone, sanitary
sewer and storm sewer as are necessary for their current use, all of which
services are in accordance with all applicable Laws and are provided via
public roads or via permanent, irrevocable, appurtenant easements
benefiting the Real Property. The improvements on the Real Property are in
good operating condition and in a state of good maintenance and repair,
ordinary wear and tear excepted, and are adequate
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and suitable for the purposes for which they are presently being used and
there are no condemnation or appropriation proceedings pending or, to the
Knowledge of the Seller or the Shareholders, threatened, against any such
Real Property or the improvements thereon.
2.15 Tangible Personal Property; Purchased Assets.
(a) The Purchased Assets are sufficient to conduct the Business as
conducted in the ordinary course consistent with past practices and there
are no other assets that are material to the conduct of the Business. The
Seller is in possession of and has good title to, or has valid leasehold
interests in or valid rights under Contract to use, all Tangible Property
included in the Purchased Assets, including all tangible personal property
reflected on the balance sheets included in the Financial Statements and
tangible personal property acquired since the Financial Statement Date,
other than property disposed of since such date in the ordinary course of
business consistent with past practice. All such tangible personal
property is free and clear of all Liens, other than Permitted Liens and
Liens disclosed in Section 2.15 of the Disclosure Schedule, its use
complies in all material respects with all applicable Laws and Orders and
is in good working condition, ordinary wear and tear excepted, and is
suitable for the purposes for which it is now being used in the Business.
(b) No equity interest in any Person is included in the Purchased Assets.
2.16 Intellectual Property Rights. The Seller has interests in or
uses only the Intellectual Property disclosed in Section 2.16 of the
Disclosure Schedule, all of which it either has all right, title and
interest in or a valid and binding right under an Assigned Contract to
use. No other Intellectual Property is used or necessary in the conduct of
the Business or the use of the other Purchased Assets. Except as disclosed
in Section 2.16 of the Disclosure Schedule, (a) the Seller has the
exclusive right to use the Intellectual Property disclosed in Section 2.16
of the Disclosure Schedule, (b) all registrations with and applications to
Governmental or Regulatory Authorities in respect of such Intellectual
Property owned or used by the Seller are valid and in full force and
effect and are not subject to the payment of any Taxes or maintenance fees
or the taking of any other actions by the Seller to maintain their
validity or effectiveness, (c) there are no restrictions on the direct or
indirect transfer of any Assigned Contract, or any interest therein, held
by the Seller in respect of such Intellectual Property, (d) the Seller has
provided to the Buyer prior to the date hereof documentation with respect
to any invention, process, design, computer program or other know-how or
trade secret included in such Intellectual Property, (e) the Seller has
taken reasonable security measures to protect the secrecy, confidentiality
and value of its trade secrets, (f) the Seller has not received any notice
that it is, and it is not, in default (or with the giving of notice or
lapse of time or both, would be in default) under any Assigned Contract to
use such Intellectual Property and (g) to the Knowledge of the Seller and
the Shareholders, no such Intellectual Property is being infringed by any
other Person. The Seller is not infringing, nor has it received notice
that it is infringing, on any Intellectual Property of any other Person
and no Claim, whether written or oral, is pending or has been made to such
effect that has not been resolved.
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2.17 Contracts.
(a) Section 1.1(d) of the Disclosure Schedule (with paragraph references
corresponding to those set forth below) contains a true and complete list
of all Assigned Contracts (true and complete copies of which, together
with all amendments and supplements thereto and all waivers of any terms
thereof, have been delivered to the Buyer prior to the date hereof) of the
following types:
(i) (A) all Assigned Contracts (excluding Plans) providing for a
commitment of employment or consultation services for a specified or
unspecified term or otherwise relating to employment or the termination of
employment and (B) any written or unwritten representations, commitments,
promises, communications or courses of conduct (excluding Plans) and any
such Assigned Contracts referred to in clause (A) involving an obligation
of the Seller to make payments in any year, other than with respect to
salary or incentive compensation payments in the ordinary course of
business, to any employee exceeding $25,000;
(ii) all Assigned Contracts with any Person containing any provision
or covenant prohibiting or limiting the ability of the Seller to engage in
any business activity or compete with any Person or prohibiting or
limiting the ability of any Person to compete with the Seller;
(iii) all Contracts relating to Indebtedness of the Seller;
(iv) all Assigned Contracts with distributors, dealers,
manufacturer's representatives, sales agencies or franchisees;
(v) all Assigned Contracts of Seller relating to the future
disposition or acquisition of any assets relating to the Business or the
Purchased Assets, other than dispositions or acquisitions in the ordinary
course of business consistent with past practice that are not material in
nature or amount;
(vi) all Assigned Contracts between the Seller, on the one hand, and
any Affiliate on the other hand, that will survive the Closing;
(vii) all collective bargaining or similar labor Contracts of the
Seller;
(viii) all Assigned Contracts that contain provisions calling for
the sale or purchase of raw materials, products or services at prices that
vary from the market prices of such raw materials, products and services
generally prevailing in customary third party markets, or that include
"take or pay," "meet or release," "most favored nation" or similar pricing
and delivery arrangements;
(ix) all Assigned Contracts relating to preferential access to any
facility of the Seller; and
(x) all other Assigned Contracts (other than Plans and Assigned
Leases) that (A) involve the payment or potential payment, pursuant to the
terms of any such
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Contract, by or to the Seller of more than $50,000 annually and (B) cannot
be terminated within thirty (30) days after giving notice of termination
without resulting in any material cost or penalty to the Seller.
(b) Each Assigned Contract is in full force and effect and, assuming valid
execution and delivery of such Assigned Contract by the other parties
thereto, constitutes a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other Laws affecting creditors' rights generally; and except
as disclosed in Section 2.17 of the Disclosure Schedule, neither the
Seller nor, to the Knowledge of the Seller and the Shareholders, any other
party to such Assigned Contract is, or has received notice that it is, in
violation or breach of or default under any such Assigned Contract (or
with notice or lapse of time or both, would be in violation or breach of
or default under any such Assigned Contract) in such a way as to give rise
to a liability of Seller or the Business or as to give rise to a right of
cancellation by any party to such Assigned Contract.
2.18 Licenses. Section 1.1(h) of the Disclosure Schedule contains a
true and complete list of all Licenses and pending applications for
Licenses required or used in the operation of the Business, setting forth
the grantor, the grantee, the function and the expiration and renewal date
of each. Prior to the date hereof, the Seller has delivered to the Buyer
true and complete copies of all such Licenses. Except as disclosed in
Section 2.18 of the Disclosure Schedule:
(a) the Seller owns or validly holds all Assigned Licenses;
(b) each Assigned License is valid, binding and in full force and effect
and is transferable to the Buyer in accordance with this Agreement;
(c) the Seller is not and the Seller has not received any written notice
that it is, in default (or with the giving of notice or lapse of time or
both, would be in default) under any Assigned License; and
(d) there has been no indication that any Assigned License may be issued,
renewed, modified or revoked on terms or conditions or other than those
currently in effect.
2.19 Insurance. Section 2.19 of the Disclosure Schedule contains a
true and complete list (including the names of the insurers and the names
of the Persons to whom such policies have been issued) of all liability,
property and workers' compensation insurance policies currently in effect
that insure the operations or employees working at or for the Seller or
affect or relate to the ownership, use or operation of any of the
Purchased Assets and that (a) have been issued to the Seller or (b) have
been issued to any Person (other than the Seller) for the benefit of the
Seller. Each policy listed in Section 2.19 of the Disclosure Schedule is
valid and binding and in full force and effect. All premiums due under
such policies have been paid, and neither Seller nor any other Person to
whom such policy has been issued has received any written notice of
cancellation, non-renewal or termination in respect of any such policy or
is in default
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thereunder. Neither Seller nor any other Person to whom such policy has
been issued has received notice that any insurer under any policy referred
to in this Section 2.19 is denying liability with respect to an unresolved
claim thereunder or defending such claim under a reservation of rights
clause.
2.20 Affiliate Transactions.
(a) Except as set forth in Section 2.20 of the Disclosure Schedule, (i)
there are no intercompany Liabilities between the Seller, on the one hand,
and any Shareholder or other Affiliate of the Seller, on the other, that
shall survive the Closing, (ii) no Shareholder or other Affiliate of the
Seller provides or causes to be provided any assets, services or
facilities to the Seller, (iii) the Seller does not provide or cause to be
provided any assets, services or facilities to any Shareholder or other
Affiliate of the Seller and (iv) the Seller does not beneficially own,
directly or indirectly, any Investment Assets issued by any Shareholder or
other Affiliate of the Seller.
(b) Except as set forth on Section 2.20 of the Disclosure Schedule, each
of the Liabilities and transactions listed in Section 2.20 of the
Disclosure Schedule was incurred or engaged in on an arm's-length basis.
(c) All settlements of intercompany Liabilities between the Seller, on the
one hand, and any Shareholder or other Affiliate of the Seller on the
other, have been made, and all allocations of intercompany expenses have
been applied, on arms-length terms.
2.21 Employees; Labor Relations. (a) No employee of the Seller is
presently a member of a collective bargaining unit, and, to the Knowledge
of the Seller or the Shareholders, there are no threatened or contemplated
attempts to organize for collective bargaining purposes any of the
employees of the Seller, (b) no unfair labor practice complaint or sex,
age, race or other discrimination claim has been brought during the last
five (5) years against the Seller before the National Labor Relations
Board, the Equal Employment Opportunity Commission or any other
Governmental or Regulatory Authority and (c) there has been no work
stoppage, strike or, to the Knowledge of the Seller or the Shareholders,
other concerted action by such employees. The Seller has complied with all
applicable Laws relating to the employment of labor, including, without
limitation, those relating to wages, hours and collective bargaining.
Without limiting the foregoing, the Seller has not committed any
violations of the Age Discrimination in Employment Act of 1967, as
amended, Title VII of the Civil Rights Act of 1964, as amended, applicable
workers' compensation provisions, the Equal Pay Act, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974, the
Civil Rights Act of 1991, the Family and Medical Leave Act of 1993, the
Americans with Disabilities Act of 1990, the Occupational Safety and
Health Act, and the Worker Adjustment and Retraining Notification Act,
federal and/or state employment, anti-discrimination, retaliation, income,
unemployment or social security withholding laws. Except as disclosed in
Section 2.21 of the Disclosure Schedule, the Seller is not a party to any
employment contract that contains an obligation for severance payments
upon the termination of an employee.
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2.22 Environmental Matters.
(a) Except as disclosed in Section 2.22 of the Disclosure Schedule, the
ownership, use and operation by the Seller of the Purchased Assets and the
Business have been, are and will be on the Closing Date, in compliance
with all Environmental Laws, and no Environmental Action has been filed,
commenced or, to the Seller's or the Shareholders' Knowledge, threatened
against Seller or, to Seller's or the Shareholders' Knowledge, against any
of the past owners and operators of the Purchased Assets or the Business
for failure to so comply or for recovery of any Losses by any Person
relating to the Release of Hazardous Materials.
(b) The Seller has made timely applications for and received all
Environmental Permits required to own and operate the Business and the
Purchased Assets, such Environmental Permits are valid and in effect and
the Seller is in compliance with such Environmental Permits.
(c) The Seller has not disposed of, sent or arranged for the
transportation of Hazardous Materials at or to a site, or owned, leased,
used or operated a site, that (i) pursuant to CERCLA or any similar or
analogous state law, has been placed or is proposed to be placed (by the
United State Environmental Protection Agency (the "EPA") or similar state
authority) on the "National Priorities List" or any similar list, or (ii)
has been or is involved with any state voluntary cleanup program.
(d) The Seller has not been identified by EPA or similar state authority
as a potentially responsible party under CERCLA or any similar or
analogous state law with respect to any site.
(e) Except as disclosed in Section 2.22 of the Disclosure Schedule, no
Hazardous Material has been generated, transported or disposed of by or on
behalf of the Seller at any site for which Environmental Law requires (i)
notice to any Person, (ii) further investigation, or (iii) any form of
response action.
(f) Section 2.22 of the Disclosure Schedule lists all underground storage
tanks located at the Real Property. The Seller has secured all necessary
Environmental Permits for said tanks and there have been no Releases from
said tanks for which Environmental Law requires (i) notice to any Person,
(ii) further investigation or (iii) any form of response action.
(g) Except as set forth on Section 2.22 of the Disclosure Schedule, no
Release resulting from any action or inaction by Seller, or, to the
Knowledge of the Seller or the Shareholders, any other Release not
resulting from the action or inaction by Seller or threatened Release of
Hazardous Materials has occurred or is occurring at, on, upon, into or
from the Real Property.
(h) Except as set forth on Section 2.22 of the Disclosure Schedule, no
Release, or to the Knowledge of Seller or the Shareholders, threatened
Release of Hazardous Materials has occurred or is occurring at, on, upon,
from or in any real property in the vicinity of the Real Property, which
by way of migration or transport through the soil, groundwater or
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surface water have come, or could reasonably be expected to come, to be
located at, on, upon or under the Real Property, except as could not
reasonably be expected to have a Material Adverse Effect on the Seller,
the Business or the Purchased Assets.
(i) Except as set forth on Section 2.22 of the Disclosure Schedule, the
Seller has not agreed to or assumed any responsibility or liability
relating to environmental or health and safety matters under any lease,
purchase agreement, sale agreement, joint venture or any similar agreement
relating to the Purchased Assets or the Business.
(j) The Seller has identified and made available to the Buyer all
environmental investigations, studies, audits, tests and other analyses,
whether in draft or final form, conducted by or for or in the possession
of the Seller in relation to the Business or the Purchased Assets.
2.23 Substantial Customers.
(a) Section 2.23 of the Disclosure Schedule lists the ten (10) largest
customers of the Seller, on the basis of revenues for services provided in
2003 (actual revenues) and 2004 (projected revenues).
(b) No such customer has ceased or materially reduced its use of the
services of the Seller since the Financial Statement Date or, to the
Knowledge of the Seller or the Shareholders, has threatened to cease or
materially reduce such purchases, use, sales or provision of services
after the date hereof.
(c) Except for relationships with Affiliates, with respect to the
Purchased Assets, neither the Seller nor any director, officer or employee
of the Seller possesses, directly or indirectly, any financial interest in
any Person that is a supplier, customer, lessor, lessee or competitor of
the Seller.
2.24 No Powers of Attorney. The Seller does not have any powers of
attorney or comparable delegations of authority outstanding with respect
to any Purchased Asset.
2.25 Solvency. The Seller (i) is not entering into this Agreement
with the intent to hinder, delay or defraud creditors, (ii) is solvent,
(iii) will not become insolvent as a result of the transfers contemplated
by this Agreement, (iv) is capable of paying its debts as they mature, (v)
will remain capable of repaying its debts as they mature after effecting
such transfers and (vi) is receiving a reasonably equivalent value in
exchange for the Purchased Assets. The transfer of the Purchased Assets is
not wrongful or fraudulent with respect to the Seller's creditors and no
creditor shall be entitled to bring any claim under any Law against the
Seller or the Buyer with respect to such transfer, except related to the
Post-Closing Liabilities.
2.26 Government Contracts. The Seller does not:
(a) have any Contracts with any agency of the federal government of the
United States involving any information, technology or data that is
classified under Executive Order 12356 of April 2, 1982; or
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(b) have any products or services (including research and development)
with respect to which the Seller (i) is a supplier, direct or indirect, to
any of the military services of the United States or the Department of
Defense, other than the United States Coast Guard, except the supply to
individuals of such military in their individual capacity, or (ii) has
technology that has or could have military applications.
2.27 Disclosure. No representation or warranty by the Seller
contained in the Agreement or in any Related Agreements, nor any statement
or certificate furnished or to be furnished by the Seller to the Buyer or
its representatives in connection herewith or pursuant hereto, contains
any untrue statement of a material fact or omits to state any material
fact required to make the statements herein or therein contained not
misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
In order to induce the Seller and the Shareholders to enter into this
Agreement, the Buyer hereby makes the representations and warranties set forth
below. Except as set forth in those sections of the Disclosure Schedule
corresponding to the sections below:
3.1 Organization. The Buyer is a limited partnership duly organized,
validly existing and in good standing under the laws on the State of
Delaware. The Buyer has full limited partnership power, authority and
capacity to execute and deliver this Agreement and the Related Agreements
and to perform its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby.
3.2 Execution and Delivery. The execution, delivery and performance
of this Agreement and the Related Agreements by the Buyer and the
consummation of the transactions contemplated hereby and thereby, have
been duly authorized and approved by the general partner of the Buyer, and
no other action on the part of the Buyer is necessary to authorize the
execution, delivery and performance of this Agreement and the Related
Agreements by the Buyer and the consummation of the transactions
contemplated hereby and thereby. This Agreement has been duly and validly
executed and delivered by the Buyer and constitutes, and upon the
execution and delivery by the Buyer of the Related Agreements, the Related
Agreements will constitute, legal, valid and binding obligations of the
Buyer, as the case may be, enforceable against the Buyer in accordance
with their terms, assuming valid execution and delivery of this Agreement
and the Related Agreements by the other parties thereto, and except as
enforceability may be limited by bankruptcy, insolvency, reorganizations,
moratorium or other Laws affecting creditors' rights generally.
3.3 Authority. The Buyer has full limited partnership power and
authority to conduct its business as and to the extent now conducted and
to own, use and lease its Assets and Properties.
3.4 No Conflicts. The execution and delivery by the Buyer of this
Agreement and the Related Agreements, the performance of its obligations
under this Agreement and
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such Related Agreements and the consummation of the transactions
contemplated hereby and thereby do not and will not:
(a) conflict with or result in a violation or breach of any of the terms,
conditions or provisions of the organizational documents of the Buyer;
(b) conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to the Buyer or any of its
respective Assets or Properties; or
(c) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default
under, (iii) require the Buyer to obtain any consent, approval or action
of, make any filing with or give any notice to any Person as a result or
under the terms of, (iv) result in or give to any Person any right of
termination, cancellation, acceleration or modification in or with respect
to, (v) result in or give to any Person any additional rights or
entitlement to increased, additional, accelerated or guaranteed payments
under, or (vi) result in the creation or imposition of any Lien upon the
Buyer or any of its assets or properties under any Contract or License to
which the Buyer is a party or by which any of the Buyer's Assets or
Properties is bound.
3.5 Governmental Approvals and Filings. No consent, approval or
action of, filing with or notice to any Governmental or Regulatory
Authority on the part of the Buyer is required in connection with the
execution, delivery and performance of this Agreement or any of the
Related Agreements or the consummation of the transactions contemplated
hereby or thereby.
ARTICLE IV
COVENANTS
4.1 Confidentiality. Each of the parties hereto agrees that it
shall, and shall cause its subsidiaries and the officers, employees and
authorized representatives of each of them to, hold in strict confidence
all data and information obtained by them from the other parties hereto
(unless such information is required, in legal counsel's written opinion,
to be disclosed in legal or administrative proceedings) and shall not, and
shall ensure that such subsidiaries, directors, officers, employees and
authorized representatives do not, except as required by The Nasdaq
National Market, the Securities and Exchange Commission or by Law (in
legal counsel's written opinion), disclose such information to others
without the prior written consent of the party from which such data or
information was obtained.
4.2 Cooperation by the Parties.
(a) Access to Records. The parties acknowledge and agree that after the
Closing, the Seller or its successors may need access to information or
documents in the control or possession of the Buyer for the purpose of
preparing or filing Tax Returns. The Buyer shall reasonably cooperate in
connection with, and, during normal business hours, make available for
inspection and copying by, the Seller and its successors and their
respective representatives, upon prior written request and at their sole
cost and expense, such
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records and files of the Seller included in the Purchased Assets
reasonably necessary to facilitate the purposes of the preceding sentence;
provided, however, that the Buyer shall be entitled to require the Seller,
its successors and representatives to execute and deliver reasonable
confidentiality agreements in favor of the Buyer with respect to such
records and files and any other information delivered to such Persons
pursuant to this Section 4.2(a).
(b) Cooperation with Respect to Examinations and Controversies. The Buyer
and the Seller shall use all reasonable efforts to cooperate with each
other and their respective representatives, in a prompt and timely manner,
in conjunction with any inquiry, audit, examination, investigation,
dispute or litigation involving any Tax Return (collectively, the "Tax
Disputes") relating to the Business or Purchased Assets and relating to
any federal, state or local Taxes (i) filed or required to be filed by or
for the Seller for any taxable period beginning before the Closing Date,
or (ii) filed or required to be filed by or for the Buyer for any taxable
period ending after the Closing Date. Notwithstanding anything to the
contrary herein, the Seller shall retain control of any Tax Dispute to the
extent such Tax Dispute arises out of or is related to events or
circumstances prior to the Closing, and the Buyer shall retain control of
any Tax Dispute to the extent such Tax Dispute arises out of or is related
to events or circumstances after the Closing. Such cooperation shall
include, but not be limited to, making available to one another during
normal business hours, and within ten (10) days of any reasonable request
therefor, all books, records and information, and the assistance of all
officers and employees, reasonably required in connection with any Tax
inquiry, audit, examination, investigation, dispute, litigation or any
other matter. The parties hereto agree to conduct any investigation or
examination hereunder without causing any material interference or
disruption of the operations of the business of any other party hereto or
their Affiliates. The Seller will retain, until the expiration of the
applicable statutes of limitation (including any extensions thereof)
copies of all Tax Returns, supporting work schedules and other records
relating to Taxes for all taxable years or periods (or portions thereof)
ending on or prior to the Closing Date.
4.3 Seller's Employees. Attached as Section 4.3 of the Disclosure
Schedule is a list of all full-time, active employees of the Seller as of
the date hereof, including those on temporary leave for jury duty, family
and short-term medical leave, vacation or military duty (such list also
sets forth the status as such employees and their compensation as of the
date hereof). Section 4.3 of the Disclosure Schedule also contains a list
of such employees to whom an Affiliate of the Buyer ("Employer") will
offer employment following the Closing. Employees of the Seller who accept
offers of employment with the Employer and become employees of the
Employer at the time of Closing shall be referred to herein as
"Transferred Employees." Employees of the Seller not offered employment,
or who decline employment, and Transferred Employees who do not report for
work with the Employer shall remain the responsibility of the Seller.
Seller shall be responsible for any Liabilities arising from the
termination of the Transferred Employees' employment with the Seller. The
Seller shall pay in cash all vested and unused vacation or paid off-duty
(if applicable) to Transferred Employees at the time of Closing. Except as
expressly provided otherwise herein, the terms of the Transferred
Employees' employment shall be upon such terms and conditions as the
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Buyer and the Employer, in their sole discretion, shall determine. The
Seller shall retain all rights, responsibilities and Liabilities of any
sort with respect to the Plans.
4.4 Railroad Track Lease. Buyer and Seller hereby agree that Seller
will continue to be a party to, and continue Seller's performance under,
including the payment of any required rental amounts, that certain Track
Lease Agreement, dated as of July 1, 2001 among Union Pacific Railroad
Company ("UP"), Kansas City Southern Railway ("KCSR") and Seller (the
"Track Lease Agreement") until such time as consent to assign the Track
Lease Agreement is received from UP and KCSR and the Track Lease Agreement
is assigned by Seller to Buyer. Seller agrees that it will not impair
Buyer's use of the tracks covered by the Track Lease Agreement or Buyer's
access by rail to the Purchased Assets, as needed by Buyer to conduct its
operations. Buyer agrees that it will perform such maintenance required to
be performed by Seller under the Track Lease Agreement to the extent
reasonably requested by Seller. Buyer and Seller agree to use their
commercially reasonable efforts to cause the Track Lease Agreement to be
assigned to Buyer as soon as practicable after the Closing Date.
ARTICLE V
INDEMNIFICATION
5.1 Indemnification by the Seller and the Shareholders. Solely for
the purpose of indemnification under this Section 5.1, the representations
and warranties of the Seller and Shareholder in this Agreement shall be
deemed to have been made without regard to any materiality or Material
Adverse Effect qualifiers. The Seller and the Shareholders, jointly and
severally, hereby agree to indemnify and hold harmless the Buyer and its
Affiliates and its and their managers, directors, officers, members,
shareholders, employees and agents (the "Buyer Indemnitees") from and
after the Closing Date from and against, and shall reimburse the Buyer
Indemnitees for, any and all Losses, including without limitation any
Losses arising out of the strict liability of any Person, paid, imposed on
or incurred by the Buyer Indemnitees, directly or indirectly, resulting
from, caused by, arising out of, or in any way relating to and with
respect to any of, or any allegation by any third party of, the following:
(a) any breach of or inaccuracy in any representation or warranty on the
part of the Seller or the Shareholders under this Agreement (including the
Disclosure Schedule) or any Related Agreement furnished or to be furnished
to the Buyer by the Seller or the Shareholders;
(b) any non-fulfillment of any covenant or agreement on the part of the
Seller or the Shareholders under this Agreement or any Related Agreement;
and
(c) the Pre-Closing Liabilities.
It shall not be necessary for Losses to be suffered as a result of or in
connection with actions taken, made or threatened by any third party or
Governmental or Regulatory Authority for such Losses to be indemnifiable under
this Article V.
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5.2 Indemnification by the Buyer. Solely for the purpose of
indemnification under this Section 5.2, the representations and warranties
of the Buyer in this Agreement shall be deemed to have been made without
regard to any materiality or Material Adverse Effect qualifiers. The Buyer
hereby agrees to indemnify and hold harmless the Seller, the Shareholders
and their Affiliates (the "Seller Indemnitees") from and after the Closing
Date from and against, and shall reimburse the Seller Indemnitees for, any
and all Losses, including without limitation any Losses arising out of the
strict liability of any Person, paid, imposed on or incurred by the Seller
Indemnitees, directly or indirectly, resulting from, caused by, arising
out of, or in any way relating to and with respect to any of, or any
allegation by any third party of, the following:
(a) any breach of or inaccuracy in any representation or warranty on the
part of the Buyer under this Agreement (including the Disclosure Schedule)
or any Related Agreement furnished or to be furnished to the Seller or the
Shareholders by the Buyer;
(b) any non-fulfillment of any covenant or agreement on the part of the
Buyer under this Agreement or any Related Agreements; and
(c) the Post-Closing Liabilities.
5.3 Procedures for Indemnification.
(a) If there occurs an event that either party asserts is an indemnifiable
event pursuant to Section 5.1 or 5.2, the party seeking indemnification
(the "Indemnitee") shall promptly provide notice (the "Notice of Claim")
to the other party or parties obligated to provide indemnification (the
"Indemnifying Party"). Providing the Notice of Claim shall be a condition
precedent to any Liability of the Indemnifying Party hereunder, and the
failure to provide prompt notice as provided herein will relieve the
Indemnifying Party of its obligations hereunder but only if and to the
extent that such failure materially prejudices the Indemnifying Party
hereunder. In case any such action shall be brought against any Indemnitee
and it shall provide a Notice of Claim to the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to
participate therein and, to the extent that it shall wish, to assume the
defense thereof, with counsel reasonably satisfactory to such Indemnitee
and, after notice from the Indemnifying Party to such Indemnitee of such
election so to assume the defense thereof, the Indemnifying Party shall
not be liable to the Indemnitee hereunder for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by the
Indemnitee, in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that if the Indemnitee
reasonably believes that counsel for the Indemnifying Party cannot
represent both the Indemnitee and the Indemnifying Party because such
representation would be reasonably likely to result in a conflict of
interest, then the Indemnitee shall have the right to defend, at the sole
cost and expense of the Indemnifying Party, such action by all appropriate
proceedings. The Indemnitee agrees to reasonably cooperate with the
Indemnifying Party and its counsel in the defense against any such
asserted liability. In any event, the Indemnitee shall have the right to
participate at its own expense in the defense of such asserted liability.
No Indemnifying Party, in the defense of any such claim or litigation,
shall, except with the written consent
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of each Indemnitee, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the
release of the Indemnitee from all Liability in respect to such claim or
litigation or that does not solely require the payment of money damages by
the Indemnifying Person. The Indemnifying Party agrees to afford the
Indemnitee and its counsel the opportunity to be present at, and to
participate in, conferences with all Persons, including any Governmental
or Regulatory Authority, asserting any Claim against the Indemnitee or
conferences with representatives of or counsel for such Persons. In no
event shall the Indemnifying Party, without the written consent of the
Indemnitee, settle any Claim on terms that provide for (i) a criminal
sanction against the Indemnitee or (ii) injunctive relief affecting the
Indemnitee.
(b) Upon receipt of a Notice of Claim, the Indemnifying Party shall have
twenty (20) calendar days (or such shorter period as may be appropriate
under the circumstances) to contest its indemnification obligation with
respect to such claim, or the amount thereof, by written notice to the
Indemnitee (the "Contest Notice"); provided, however, that if, at the time
a Notice of Claim is submitted to the Indemnifying Party the amount of the
Loss in respect thereof has not yet been determined, such twenty (20) day
period in respect of, but only in respect of the amount of the Loss, shall
not commence until a further written notice (the "Notice of Liability")
has been sent or delivered by the Indemnitee to the Indemnifying Party
setting forth the amount of the Loss incurred by the Indemnitee that was
the subject of the earlier Notice of Claim. Such Contest Notice shall
specify the reasons or bases for the objection of the Indemnifying Party
to the claim, and if the objection relates to the amount of the Loss
asserted, the amount, if any, that the Indemnifying Party believes is due
the Indemnitee, and any undisputed amount shall be promptly paid over to
the Indemnitee. If no such Contest Notice is given within such twenty (20)
day period, the obligation of the Indemnifying Party to pay the Indemnitee
the amount of the Loss set forth in the Notice of Claim, or subsequent
Notice of Liability, shall be deemed established and accepted by the
Indemnifying Party.
(c) If the Indemnifying Party fails to assume the defense of such Claim
or, having assumed the defense and settlement of such Claim, fails
reasonably to contest such Claim in good faith, the Indemnitee, without
waiving its right to indemnification, may assume, at the cost of the
Indemnifying Party, the defense and settlement of such Claim; provided,
however, that (i) the Indemnifying Party shall be permitted to join in the
defense and settlement of such Claim and to employ counsel at its own
expense, (ii) the Indemnifying Party shall cooperate with the Indemnitee
in the defense and settlement of such Claim in any manner reasonably
requested by the Indemnitee and (iii) the Indemnitee shall not settle such
Claim without soliciting the views of the Indemnifying Party and giving
them due consideration.
(d) The Indemnifying Party shall make any payment required to be made
under this Article in cash and on demand. Any payments required to be paid
by an Indemnifying Party under this Article that are not paid within five
(5) business days of the date on which such obligation becomes final shall
thereafter be deemed delinquent, and the Indemnifying Party shall pay to
the Indemnitee, immediately upon demand, interest at the rate of ten
percent (10%) per annum, not to exceed the maximum nonusurious rate
allowed by applicable Law, from the date such payment becomes delinquent
to the date
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of payment of such delinquent sums, which interest shall be considered to
be Losses of the Indemnitee.
(e) Notwithstanding any of the foregoing, in the event of a Claim asserted
by Buyer against Seller for indemnifiable Losses as a result of a breach
of the representations and warranties set forth in Section 2.14, Buyer
shall seek recovery, to the extent permitted under the Title Policies,
from the Title Company; provided, however, that if Buyer has not recovered
the amounts asserted in such Claim from the Title Company within one
hundred eighty (180) days, Buyer shall be able to assert such Claim
against Seller in accordance with the provisions of this Article V.
5.4 Survival.
(a) The liability of the Seller and the Shareholders for their
indemnification obligations arising under this Agreement in respect of
inaccuracies of representations or warranties shall be limited to claims
for which a Buyer Indemnitee delivers written notice to the Seller or the
Shareholders on or before the fourth anniversary date of the Closing Date;
provided, however, that any indemnification obligation relating to (i)
Sections 2.10, 2.12 and 2.13 shall be limited to claims for which a Buyer
Indemnitee delivers written notice to the Seller or the Shareholders on or
before the 45th day after the expiration of the applicable statute of
limitations, (ii) title to the Purchased Assets shall not be limited as to
time, (iii) Pre-Closing Liabilities shall not be limited as to time, (iv)
Sections 2.1, 2.2, 2.3, 2.4 and 6.13 shall not be limited as to time; (v)
non-fulfillment of any covenant or agreement shall not be limited as to
time, and (vi) Section 2.22 shall be limited to claims for which a Buyer
Indemnitee delivers written notice to the Seller or the Shareholders on or
before the seventh anniversary date of the Closing Date or the expiration
of any applicable statute of limitations, whichever is longer.
(b) The liability of the Buyer for the Buyer's indemnification obligations
arising out of Section 5.2 shall be limited to claims for which a Seller
Indemnitee delivers written notice to the Buyer on or before the fourth
anniversary date of the Closing Date; provided, however, that any
indemnification obligation relating to (i) Post-Closing Liabilities, (ii)
Sections 3.1, 3.2, 3.3, 3.4 and 6.13 and (iii) non-fulfillment of any
covenant or agreement under this Agreement shall not be limited as to
time.
5.5 Limitations on Indemnification. No Indemnifying Party hereto
shall have any liability with respect to, or obligation to indemnify for,
Losses under Article V hereof unless the aggregate amount of Losses for
which such Indemnifying Party would, but for the provisions of this
Section 5.5, be liable exceeds, on an aggregate basis, $100,000, but in
such event the Indemnifying Party's obligations under Article V hereof
will be without regard to such threshold and the Indemnitee will be
entitled to receive the full amount of such Losses from the first dollar;
provided, however, that such threshold shall not apply to losses related
to title to the Purchased Assets, Pre-Closing Liabilities, Post-Closing
Liabilities, Taxes or any of the matters described in Sections 2.1, 2.2,
2.3, 2.4, 2.10, 3.1, 3.2, 3.3, 3.4, 5.1(b), 5.2(b) and 6.13 hereof.
Notwithstanding anything in this Agreement to the contrary, the maximum
indemnification liability of the Seller and the Shareholders, on the one
hand, and the Buyer on the other, shall not exceed the Purchase Price in
the
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aggregate, provided that such limitations shall not apply to matters
related to title to the Purchased Assets, Pre-Closing Liabilities,
Post-Closing Liabilities, Taxes or any of the matters described in
Sections 2.1, 2.2, 2.3, 2.4, 2.10, 3.1, 3.2, 3.3, 3.4, 5.1(b), 5.2(b) and
6.13 hereof.
5.6 Inconsistent Provisions. The provisions of this Article shall
govern and control over any inconsistent provisions of this Agreement.
5.7 Right to Indemnification Not Affected by Knowledge. The right to
indemnification in accordance with the provisions of this Article will not
be affected by any investigation conducted with respect to, or any
knowledge acquired (or capable of being acquired) at any time, whether
before or after the Closing Date, with respect to the accuracy or
inaccuracy of or compliance with, any representation, warranty, covenant
or obligation set forth in this Agreement or any Related Agreement.
5.8 Express Negligence. THE FOREGOING INDEMNITIES SET FORTH IN THIS
ARTICLE ARE INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE
WITH THE EXPRESS TERMS AND SCOPE THEREOF, NOTWITHSTANDING ANY EXPRESS
NEGLIGENCE RULE OR ANY SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE
LIMIT INDEMNITIES BECAUSE OF THE SIMPLE OR GROSS NEGLIGENCE (WHETHER SOLE,
CONCURRENT, ACTIVE OR PASSIVE) OR OTHER FAULT OR STRICT LIABILITY OF ANY
INDEMNIFIED PARTY, INCLUDING, WITHOUT LIMITATION, ARISING UNDER
ENVIRONMENTAL LAWS. THE PARTIES HERETO ACKNOWLEDGE THAT THE INDEMNITIES
SET FORTH HEREIN MAY RESULT IN THE INDEMNITY OF A PARTY FOR ITS SIMPLE OR
GROSS NEGLIGENCE (WHETHER SOLE, CONCURRENT, ACTIVE OR PASSIVE) OR OTHER
FAULT OR STRICT LIABILITY OF THE INDEMNIFIED PARTY.
ARTICLE VI
MISCELLANEOUS
6.1 Expenses. Whether or not the transactions contemplated hereby
are consummated, all costs and expenses (including, without limitation,
the fees and expenses of investment bankers, attorneys and accountants)
incurred in connection with this Agreement and the Related Agreement and
the transactions contemplated hereby and thereby shall be borne by the
Buyer, in the case of costs and expenses incurred by the Buyer, and by the
Seller and the Shareholders in the case of costs and expenses incurred by
the Seller and the Shareholders.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly
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given, if given) by hand delivery, telecopy or mailed by registered or
certified mail, postage prepaid, return receipt requested, as follows:
(a) If to the Buyer to:
Xxxxxx Operating Partnership L.P.
0000 Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxx Xxxxx L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: X. Xxxx Lemon
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(b) If to the Seller or the Shareholders to:
Xxxxxxx X. Xxxxxxxx
000 Xxxxx XX Xxxxxxx Xxx. Xxxxx 0
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxx, III
0000 Xxxxxxxxxx 00 Xxxxx
Xxxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Notice given by personal delivery, courier service or mail shall be effective
upon actual receipt. Notice given by telecopier shall be confirmed by
appropriate answer back and shall be effective upon actual receipt if received
during the recipient's normal business hours, or at the beginning of the
recipient's next business day after receipt if not received during the
recipient's normal business hours. Any party may change any address to which
notice is to be given to it by giving notice as provided above of such change of
address.
6.3 Amendments. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be
bound thereby.
6.4 Waiver. The failure of a party to exercise any right or remedy
shall not be deemed or constitute a waiver of such right or remedy in the
future. No waiver of any of the provisions of this Agreement or the
Related Agreements shall be deemed or shall constitute a waiver of any
other provision hereof or thereof (regardless of whether
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similar), nor shall any such waiver constitute a continuing waiver unless
otherwise expressly provided.
6.5 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.6 Nonassignability. This Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of all
parties hereto; provided, however, that the parties specifically consent
to an assignment by the Buyer to an Affiliate of the Buyer.
6.7 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of the parties hereto and their successors and
permitted assigns, and nothing in this Agreement, expressed or implied, is
intended to confer upon any other Person any rights or remedies of any
nature under or by reason of this Agreement.
6.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original, and
shall become effective when one or more counterparts have been signed by
each of the parties hereto.
6.9 Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the
State of Texas, without regard to its conflicts of law rules. Each of the
parties hereto agrees that any Action or Proceeding brought to enforce the
rights or obligations of any party hereto under this Agreement may be
commenced and maintained in any court of competent jurisdiction located in
the Xxxxxx County, Texas, and that any Texas State court or federal court
sitting in the Xxxxxx County, Texas shall have exclusive jurisdiction over
any such Action or Proceeding brought by any of the parties hereto. Each
of the parties hereto further agrees that process may be served upon it by
certified mail, return receipt requested, addressed as more generally
provided in Section 6.2 hereof, and consents to the exercise of
jurisdiction over it and its properties with respect to any Action or
Proceeding arising out of or in connection with this Agreement or the
transactions contemplated hereby or the enforcement of any rights under
this Agreement.
6.10 Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated. It is
hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such which may be hereafter declared
invalid, void or unenforceable. In such case, the parties hereto shall
promptly meet and negotiate substitute provisions for those rendered or
declared illegal or unenforceable so as to preserve as nearly as possible
the contemplated economic effects of the transactions contemplated hereby.
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6.11 Entire Agreement. This Agreement and the exhibits and schedules
hereto and the Related Agreements constitute the entire agreement among
the parties hereto and supersede all prior agreements and understandings,
oral or written, among the parties hereto with respect to the subject
matter hereof and thereof. There are no warranties, representations or
other agreements between the parties in connection with the subject matter
hereof except as set forth specifically herein or contemplated hereby.
6.12 English Language. This Agreement, the Related Agreements and
all notices or other communications in connection herewith or therewith
shall only be in the English language.
6.13 Brokers. In addition to the obligations set forth in Article V
hereof, each party shall indemnify and hold the other parties harmless
from and against any agent or holder claiming by or through it for any fee
or other compensation due or allegedly due that broker or agent. The
obligations under this Section 6.13 shall not be subject to the
limitations on liability contained in Article V hereof.
ARTICLE VII
DEFINITIONS
7.1 Definitions. As used herein, the following terms have the
meanings set forth below:
"Actions or Proceedings" means any action, suit, proceeding, arbitration
or any investigation or audit by any Governmental or Regulatory Authority.
"Affiliate" means any Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by or is under common control
with the Person specified.
"Assets and Properties" of any Person means all assets and properties of
every kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), including the goodwill related thereto,
operated, owned or leased by such Person, including, without limitation, cash,
cash equivalents, Investment Assets, accounts and notes receivable, chattel
paper, documents, instruments, general intangibles, real estate, equipment,
inventory, goods and Intellectual Property.
"Assigned Books and Records" has the meaning set forth in Section 1.1(e).
"Assigned Contracts" has the meaning set forth in Section 1.1(d).
"Assigned Leases" has the meaning set forth in Section 1.1 (c).
"Assigned Licenses" has the meaning set forth in Section 1.1(h).
"Xxxx of Sale" has the meaning set forth in Section 1.10.
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"Books and Records" means all documents instruments, papers, books and
records, books of account, files and data (including customer and supplier
lists), catalogs, brochures, sales literature, promotional material,
certificates and other documents used in or associated with the conduct of the
Business or the ownership of the Purchased Assets, including, without
limitation, financial statements, Tax Records (including Tax Returns), ledgers,
minute books, copies of Contracts, Licenses and Permits, operating data and
environmental studies and plans.
"Business" means the Purchased Assets and the business and goodwill of the
Seller as a going concern.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.).
"Claim" means any action, suit, proceeding, hearing, investigation,
litigation, charge, complaint, claim, Environmental Action or demand.
"Closing" has the meaning set forth in Section 1.9.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contract" means any agreement, lease, evidence of Indebtedness, mortgage,
indenture, security agreement or other contract or agreement (whether written or
oral).
"Disclosure Schedule" means the schedules attached hereto and incorporated
herein by reference of the Seller, the Shareholders and the Buyer as appropriate
in the context and as referenced throughout this Agreement.
"Employer" has the meaning set forth in Section 4.3.
"Environmental Action" means any administrative, regulatory or judicial
action, suit, demand, Claim, notice of non-compliance or violation,
investigation, request for information, proceeding, consent order or consent
agreement by any Person relating in any way to any Environmental Law or any
Environmental Permit.
"Environmental Laws" means any applicable federal, state or local law,
statute, rule, regulation, ordinance or judicial or administrative decision or
interpretation in effect on the date of this Agreement relating to the
environment, human health or safety, pollution or other environmental
degradation or Hazardous Materials.
"Environmental Permit" means any permit, approval, identification number,
certificate, registration, license or other authorization required under any
Environmental Law.
"Financial Statement Date" means April 30, 2004.
"Financial Statements" has the meaning set forth in Section 2.7(a).
"GAAP" means generally accepted accounting principles consistently applied
(as such term is used in the American Institute of Certified Public Accountants
Professional Standards).
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"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
"Hazardous Materials" means (a) petroleum or petroleum products,
fractions, derivatives or additives, natural or synthetic gas, asbestos, urea
formaldehyde foam insulation, polychlorinated biphenyls and radon gas, (b) any
substances defined as or included in the definition of "hazardous wastes,"
"hazardous materials," "hazardous substances," "extremely hazardous substances,"
"restricted hazardous wastes," "special wastes," "toxic substances," toxic
chemicals or "toxic pollutants," "contaminants" or "pollutants" or words of
similar import under any Environmental Law, (c) radioactive materials,
substances and waste, and radiation, and (d) any other substance exposure to
which is regulated under any Environmental Law or could give rise to Liability
under common law.
"Indebtedness" of any Person means any obligations of such Person (a) for
borrowed money, (b) evidenced by notes, bonds, indentures or similar
instruments, (c) for the deferred purchase price of goods and services (other
than trade payables incurred in the ordinary course of business), (d) under
capital leases and (e) in the nature of guarantees of the obligations described
in clauses (a) through (d) above of any other Person.
"Intellectual Property" means all patents, copyright registrations,
trademark and service xxxx registrations, applications for any of the foregoing,
and whether or not registered, all designs, copyrights, trademarks, service
marks, trade names, secret formulae, trade secrets, secret processes, computer
programs and confidential information, including all rights to any such property
that is owned by and licensed from others and any goodwill associated with any
of the above.
"Investment Assets" means all debentures, notes and other evidence of
Indebtedness, stocks, securities (including rights to purchase and securities
convertible into or exchangeable for other securities), interests in joint
ventures and general and limited partnership, mortgage loans and other
investment or portfolio assets owned of record or beneficially by the Seller and
issued by any Person other than the Seller (other than trade receivables
generated in the ordinary course of business).
"Knowledge of the Seller and the Shareholders," "the Seller's or the
Shareholders' Knowledge," "Known to the Seller or the Shareholders," or other
like words mean the knowledge of the individuals set forth in Section 7.1 of the
Disclosure Schedule after due inquiry.
"Xxxx" has the meaning set forth in Section 1.6.
"Xxxx Xxxx Escrow Agreement" has the meaning set forth in Section 1.6.
"Laws" means all laws, statutes, rules, regulations, ordinances and other
pronouncements in effect on the date of this Agreement having the effect of law
of the United States, any foreign country or any domestic or foreign state,
county, city or other political subdivision or of any Governmental or Regulatory
Authority and "Laws" includes, without limitation, all Environmental Laws.
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"Liabilities" means all Indebtedness, Claims, legal proceedings,
obligations, duties, warranties or liabilities, including, without limitation,
STRICT LIABILITY, of any nature (including any undisclosed, unfixed, unknown,
unliquidated, unsecured, unmatured, unaccrued, unasserted, contingent,
conditional, inchoate, implied, vicarious, joint, several or secondary
liabilities), regardless of whether any such Indebtedness, Claims, legal
proceedings, obligations, duties, warranties or liabilities would be required to
be disclosed on a balance sheet prepared in accordance with GAAP or is known as
of the Closing.
"Licenses" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations, franchises, Environmental Permits and
similar consents granted or issued by any Person and are associated with or
necessary to operate the Purchased Assets or are used in connection with the
Business.
"Liens" means any mortgage, pledge, assessment, security interest, lease,
lien, adverse claims, levy, charge, option, right of first refusal, charges,
debentures, indentures, deeds of trust, easements, rights-of-way, restrictions,
encroachments, licenses, Leases, Permits, security agreements or other
encumbrance of any kind and other restrictions or limitations on the use or
ownership of real or personal property or irregularities in title thereto or any
conditional sale Contract, title retention Contract or other Contract to give
any of the foregoing.
"Loss" or "Losses" means any loss, damage, injury, harm, detriment,
Liability, diminution in value, exposure, claim, demand, proceeding, settlement,
judgment, aware, punitive damage award, fine, penalty, fee, charge, cost or
expense (including, without limitation, reasonable costs of attempting to avoid
or in opposing the imposition thereof, interest, penalties, costs of preparation
and investigation, and the reasonable fees, disbursements and expenses of
attorneys, accountants and other professional advisors), as well as with,
respect to compliance with the requirements of environmental law, expenses of
remediation and any other remedial, removal, response, abatement, cleanup,
investigative, monitoring, or record keeping costs and expenses.
"Material Adverse Effect" means with respect any Person, material adverse
changes in the business, assets, financial condition, results or prospects of
operations of such Person.
"Option" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (a) purchase or otherwise receive or be issued any shares of
capital stock of such Person or any security of any kind convertible into or
exchangeable or exercisable for any shares of capital stock of such Person or
(b) receive or exercise any benefits or rights similar to any rights enjoyed by
or accruing to the holder of shares of capital stock of such Person, including
any rights to participate in the equity or income of such Person or to
participate in or direct the election of any directors or officers of such
Person or the manner in which any shares of capital stock of such Person are
voted.
"Order" means any writ, judgment, decree, injunction or similar order of
any Governmental or Regulatory Authority (in each such case whether preliminary
or final).
"Permitted Lien" means (a) any Lien for Taxes incurred in the ordinary
course of business not yet due and for which adequate reserves have been
established on the Financial
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Statements, (b) liens in favor of landlords, carriers, warehousemen, mechanics,
workmen and materialmen and statutory construction or similar liens arising by
operation of law or incurred in the ordinary course of business for sums not yet
due or that are being contested in good faith as to which adequate reserves
exist (to the extent such reserves are required by GAAP), (c) water rights or
claims or title to water, whether or not shown by the public records, (d) any
Lien created by the Buyers, (e) Liens in respect of pledges or deposits under
workers' compensation laws or similar legislation, unemployment insurance or
other types of social security or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return of money bonds and similar obligations, (f)
rights reserved to or vested in any Governmental or Regulatory Authority to
control or regulate any real property or interests therein in any manner, and
all Laws of any Governmental or Regulatory Authority, and (g) matters of title
respecting the Real Property shown on the Title Policies.
"Person" means any natural person, corporation, limited liability company,
general partnership, limited partnership proprietorship, other business
organization, trust, union, association of Governmental or Regulatory Authority.
"Plans" has the meaning set forth in Section 2.13(a).
"Port Xxxxxx Tank Escrow Agreement" has the meaning set forth in Section
1.6.
"Pre-Closing Liabilities" means all Liabilities of the Seller, whether or
not disclosed to the Buyer, that, directly or indirectly, relate to, result from
or arise out of, facts, conduct, conditions or circumstances in existence on or
before the Closing Date, including, without limitation, all Liabilities listed
in Section 1.4 of this Agreement.
"Real Property" has the meaning set forth in Section 1.1(c).
"Related Agreements" means the XXX Tank Repair Escrow Agreement, the Port
Xxxxxx Tank Escrow Agreement, the Xxxx Xxxx Escrow Agreement, the Letter of
Credit, the Xxxx of Sale, the Deed, the Noncompetion Agreement and any other
agreement, certificate or similar document executed pursuant to this Agreement.
"Release" means the presence, release, issuance, disposal, discharge,
dispersal, leaching or migration into the indoor or outdoor environment or into
or out of any property, including the movement of Hazardous Materials through
the air, soil, surface water, ground water or property other than as
specifically authorized by (and then only to the extent in compliance with) all
Environmental Laws and Environmental Permits.
"Taxes" means any and all taxes, fees, levies, duties, tariffs, import and
other charges imposed by any taxing authority, together with any related
interest, penalties or other additions to tax, or additional amounts imposed by
any taxing authority, and without limiting the generality of the foregoing,
shall include net income taxes, alternative or add-on minimum taxes, gross
income taxes, gross receipts taxes, sales taxes, use taxes, ad valorem taxes,
value added taxes, franchise taxes, profits taxes, license taxes, transfer
taxes, recording taxes, escheat taxes, withholding taxes, payroll taxes,
employment taxes, excise taxes, severance taxes, stamp taxes, occupation taxes,
premium taxes, property taxes, windfall profit taxes, environmental taxes,
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custom duty taxes or other governmental fees or other like assessments or
charges of any kind whatsoever.
"Tax Returns" means all reports, estimates, declarations of estimated tax,
information statements and returns relating to, or required to be filed in
connection with, any Taxes, including information returns or reports with
respect to backup withholding and other payments to third parties.
"Title Company" has the meaning set forth in Section 1.11(a)(ii).
"Title Policies" has the meaning set forth in Section 1.11(a)(ii).
7.2 Other Terms. Other terms may be defined elsewhere in the text of
this Agreement and shall have the meaning indicated throughout this
Agreement.
7.3 Other Definitional Provisions.
(a) The words "hereof," "herein" and "hereunder," and words of similar
import, when used in this Agreement, shall refer to this Agreement as a
whole and not any particular provision of this Agreement.
(b) The terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa.
(c) The terms defined in the neuter or masculine gender shall include the
feminine, neuter and masculine genders, unless the context clearly
indicates otherwise.
(d) For purposes of this Agreement, "ordinary course of business" shall
include, without limitation, spot service agreements and negotiating
contract renewals consistent with past practices.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK - SIGNATURE PAGE FOLLOWS]
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This Agreement has been duly executed and delivered by the parties on the
date first above written.
BUYER:
XXXXXX OPERATING PARTNERSHIP L.P.
By: Xxxxxx Operating GP LLC, its general partner
By: Xxxxxx Midstream Partners L.P., its sole member
By: Xxxxxx Midstream GP LLC, its general partner
By: /s/ XXXXX X. XXXXXX
--------------------------------------------------
Name: XXXXX X. XXXXXX
------------------------------------------------
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
-----------------------------------------------
SELLER:
NECHES INDUSTRIAL PARK, INC.
By: /s/ XXXXXXX X. XXXXXXXX
--------------------------------------------------
Name: XXXXXXX X. XXXXXXXX
------------------------------------------------
Title: PRESIDENT AND SECRETARY
-----------------------------------------------
SHAREHOLDERS:
FURTIVUS, INC.
By: /s/ XXXXXXX X. XXXXXXXX
--------------------------------------------------
Name: XXXXXXX X. XXXXXXXX
------------------------------------------------
Title: PRESIDENT
-----------------------------------------------
XXXXXXX X. XXXXXXXX
/s/ XXXXXXX X. XXXXXXXX
------------------------------------------------------
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