Asset Purchase Agreement
among
Yale E. Key, Inc.,
Xxxxxxx Transport, Inc.
and
Xxx Nations
March 26, 1998
Asset Purchase Agreement
This Asset Purchase Agreement (this "Agreement") is entered into as of March 26,
1998 among Yale E. Key, Inc., a Texas corporation (the "Buyer"), Xxxxxxx
Transport, Inc., a Texas corporation (the "Seller") and Xxx Nations (the
"Shareholder").
RECITATIONS
The Seller desires to sell substantially all of its assets, and Buyer desires to
acquire such assets.
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements, and subject to the terms
and conditions herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
Purchase and Sale of Assets
1.1 Purchase and Sale of the Assets. Subject to the terms and conditions set
forth in this Agreement, the Seller hereby agrees to sell, convey, transfer,
assign and deliver to Buyer effective as of 12:01 A.M. Texas time on the date of
execution hereof (the "Closing Date"), all of the assets of the Seller existing
on the Closing Date other than the Excluded Assets (defined below), whether
real, personal, tangible or intangible, including, without limitation, the
following assets owned by the Seller relating to or used or useful in the
operation of the business as conducted by the Seller on and before the date
hereof (the "Business") (all such assets being sold hereunder are referred to
collectively herein as the "Assets"):
(a) all tangible personal property owned by Seller (such as machinery,
equipment, leasehold improvements, furniture and fixtures, and vehicles),
including, without limitation, that which is more fully described on
Schedule 1.1(a) hereto (collectively, the "Tangible Personal Property");
(b) all of the inventory owned by Seller, including without limitation, that
which is more fully described on Schedule 1.1(b) hereto (collectively, the
"Inventory");
(c) all of the Seller's intangible assets (the "Intangibles"), including
without limitation, (i) all of the Seller's rights to any patents, patent
applications, trademarks and service marks (including registrations and
applications therefor), trade names, and copyrights and written know-how,
trade secrets, licenses and sublicenses and all other similar proprietary
data and the goodwill associated therewith (collectively, the "Intellectual
Property") used or held in connection with the Business, (ii) the Seller's
telephone numbers, and (iii) the sales and promotional literature, computer
software, customer and supplier lists and all other records of the Seller
relating to the Assets or the Business, excluding the corporate minute
books, accounting records, files, tax returns and other financial data on
whatever media, relating to the Seller or the Shareholder or the Excluded
Assets (the "Retained Records");
(d) all leases, subleases, contracts, contract rights, and agreements relating
to the Assets or the operation of the Business, including, without
limitation those listed on Schedule 1.1(d) hereto (collectively, the
"Contracts");
(e) all of the permits, authorizations, certificates, approvals, registrations,
variances, waivers, exemptions, rights-of-way, franchises, ordinances,
orders, licenses and other rights of every kind and character
(collectively, the "Permits") relating principally to all or any of the
Assets or to the operation of the Business, including, but not limited to,
those that are more fully described on Schedule 1.1(e) hereto;
(f) the goodwill and going concern value of the Business; and
(h) all other or additional privileges, rights, interests, properties and
assets of the Seller of every kind and description and wherever located
that are used in the Business or intended for use in the Business in
connection with, or that are necessary for the continued conduct of, the
Business (other than the Excluded Assets).
1.2 Excluded Assets. The Assets shall not include the following (collectively,
the "Excluded Assets"): (i) all real property and buildings owned by Seller
(including, specifically, the land and building located on Xxxxxxx 000,
Xxxxxxxxx, Xxxxx, (xx) all of the Seller's accounts receivable and all other
rights of the Seller to payment for services rendered by the Seller before
Closing, it being understood that all of Seller's customers shall be billed on
the Closing Date for services or materials provided through that date and that
Buyer will forward any payment on such accounts received by it to Seller within
five (5) business day of receipt; (iii) all cash accounts of the Seller and all
xxxxx cash of the Seller kept on hand for use in the Business; (iv) all other
receivables and prepaid expenses, including all right, title and interest of the
Seller in and to any prepaid expenses, bonds, deposits and other current assets
relating to any of the Assets or the Business; (v) the Retained Records; and
(vi) the cash consideration paid or payable by Buyer to Seller pursuant to
Section 1.3 hereof.
1.3 Consideration for Assets. As consideration for the sale of the Assets to
Buyer and for the other covenants and agreements of the Seller and the
Shareholder contained herein, Buyer agrees to pay on the Closing Date, the sum
of $2,700,000 by wire transfer of immediately available funds to an account
designated by the Seller or by delivery of immediately available funds. In
addition, within thirty (30) days following the Closing, Buyer will pay Seller
an additional amount equal to (a) the amounts paid by Seller for equipment
purchases made by Seller after March 5, 1998, and before the date hereof which
expand the capabilities of the Business and which have been approved by Buyer,
plus (b) such amounts, if any, actually paid by Seller after March 5, 1998 and
before the date hereof as registration or license fees on vehicles owned and
operated by Seller and which apply to the period from and after April 1, 1998.
1.4 Liabilities. Effective on the Closing Date, Buyer shall assume those, and
only those, liabilities and obligations of the Seller to perform the Contracts
described on Schedule 1.1(d) hereto to the extent such Contracts have not been
performed and are not in default on the date hereof (the "Assumed Liabilities").
On and after the date hereof, the Seller shall be responsible for any and all
liabilities and obligations of the Seller other than the Assumed Liabilities,
including, without limitation, (a) any obligations arising from the Seller's
employment of those employees of the Seller listed on Schedule 3.2 hereto; (b)
any liabilities arising from or relating to Seller's failure to be duly
qualified or licensed to do business and in good standing as a foreign
corporation authorized to do business in all jurisdictions in which the
character of the properties owned or the nature of the business conducted by
Seller would make such qualification or licensing necessary; (c) any failure to
pay any taxes owed by Seller which are applicable to the period ending with the
date hereof (including, specifically, all taxes applicable to any of the
Assets); (d) any liabilities resulting from or related to Seller's violation of
Environmental Laws (as hereinafter defined); and (e) any liabilities arising out
of any matters listed on Schedule 2.1.10 hereto (collectively, the "Retained
Liabilities").
1.5 Closing. The closing of the purchase and sale provided for hereunder (the
"Closing") shall take place on the date of execution hereof (the "Closing
Date"), at the offices of Seller.
1.6 Closing Deliveries. At the Closing, in addition to the conveyances of the
Assets to the Buyer in exchange for the Purchase Price: (i) the Seller and the
Shareholder shall each enter into an agreement not to compete (the
"Noncompetition Agreements") in the form of Exhibit A hereto, and (iii) Buyer
and Seller will deliver to one another the opinions of counsel described below:
1.6.1 Opinion of Buyer's Counsel. The Seller shall have received a favorable
opinion, dated as of the Closing Date, from Xxxxx, Xxxxxxxx & Xxxxx, P.C.,
counsel for Buyer, in form and substance satisfactory to the Seller, to the
effect that (i) Buyer has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Texas; (ii) all
corporate proceedings required to be taken by or on the part of the Buyer to
authorize the execution of this Agreement, the Noncompetition Agreements and the
implementation of the transactions contemplated hereby and thereby, have been
taken; and (iii) this Agreement has been duly executed and delivered by, and is
the legal, valid and binding obligations of Buyer and is enforceable against
Buyer in accordance with its terms, except as enforceability may be limited by
(a) equitable principals of general applicability of (b) bankruptcy, insolvency,
reorganization, fraudulent conveyance or similar laws affecting the rights of
creditors generally. In rendering such opinion, such counsel may rely upon (x)
certificates of public officials and of officers or Buyer as to the matters of
fact and (y) the opinion or opinions of other counsel, which opinions shall be
reasonably satisfactory to the Seller, as to matters other than federal or Texas
law.
1.6.2 Opinion of Seller's Counsel. The Buyer shall have received a favorable
opinion, dated as of the Closing Date, from Xxxxx Xxxxxxx, Esq., counsel to
Seller and the Shareholder, in form and substance satisfactory to Buyer, to the
effect that (i) Seller has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Texas; (ii) all
proceedings required to be taken by or on the part of the Seller and the
Shareholder to authorize the execution of this Agreement, the Noncompetition
Agreements and the Employment Agreement and the implementation of the
transactions contemplated hereby and thereby have been taken; (iii) the Seller
owns all of the Assets free and clear of any Encumbrances other than those
Encumbrances specifically listed and described on the Schedules to this
Agreement; and (iv) this Agreement, the Noncompetition Agreements and the
Employment Agreement have been duly executed and delivered by, and are the
legal, valid and binding obligations of the Seller and the Shareholder and are
enforceable against the Seller and the Shareholder in accordance with their
respective terms, in each case, except as the enforceability may be limited by
(a) equitable principles of general applicability or (b) bankruptcy, insolvency,
reorganization, fraudulent conveyance or similar laws affecting the rights of
creditors generally. In rendering such opinion, such counsel may rely upon (x)
certificates of public officials and of officers of the Seller as to the matters
of fact and (y) on the opinion or opinions of other counsel, which opinions
shall be reasonably satisfactory to Buyer, as to matters other than federal or
Texas law.
ARTICLE II
Representations and Warranties
2.1 Representations and Warranties of Seller and Shareholder. The Seller and the
Shareholder jointly and severally represent and warrant to Buyer as follows:
2.1.1 Organization and Good Standing. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas, has
full requisite corporate power and authority to carry on its businesses as it is
currently conducted, and to own and operate the properties currently owned and
operated by it and does not do business in any state other than the State of
Texas. Shareholder owns all of the issued and outstanding capital stock of
Seller and has the right to vote the same.
2.1.2 Agreement Authorized and Effect on Other Obligations. The execution and
delivery of this Agreement and all instruments to be executed by Seller
hereunder have been authorized by all necessary corporate, shareholder and other
action on the part of the Seller and the Shareholder, and this Agreement and all
instruments to be executed by the Seller and the Shareholder hereunder are the
valid and binding obligations of the Seller and Shareholder enforceable (subject
to normal equitable principals) against each of such parties in accordance with
their terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, debtor relief or similar laws affecting the rights of creditors
generally. The Seller and the Shareholder represent and warrant that the
execution, delivery and performance of this Agreement and all instruments to be
executed by the Seller hereunder and the consummation of the transactions
contemplated hereby and thereby, will not conflict with or result in a violation
or breach of any term or provision of, nor constitute a default under (i) the
Articles of Incorporation or Bylaws (or other organizational documents) of the
Seller, (ii) any obligation, indenture, mortgage, deed of trust, lease, contract
or other agreement to which the Seller or the Shareholder is a party or by which
the Seller or the Shareholder or their respective properties are bound; or (iii)
to the best of their knowledge, any provision of any law, rule, regulation,
order, permits, certificate, writ, judgment, injunction, decree, determination,
award or other decision of any court, arbitrator or other governmental authority
to which the Seller or the Shareholder or any of their respective properties are
subject.
2.1.3 Contracts. Schedule 1.1(d) hereto sets forth a complete list of all
contracts, including leases under which the Seller is lessor or lessee, which
relate to the Assets and are to be performed in whole or in part after the date
hereof. In addition, (a) all of the Contracts are in full force and effect, and
constitute valid and binding obligations of the Seller, (b) the Seller is not,
and no other party to any of the Contracts is, in default thereunder, and no
event has occurred which (with or without notice, lapse of time, or the
happening of any other event) would constitute a default thereunder, (c) no
Contract has been entered into on terms which could reasonably be expected to
have an adverse effect on the use of the Assets by Buyer, (d) neither the Seller
nor the Shareholder has received any information which would cause either of
such parties to conclude that any customer of the Seller will (or is likely to)
cease doing business with Buyer (or its successors) as a result of the
consummation of the transactions contemplated hereby.
2.1.4 Title to Assets. The Seller has good, indefeasible and marketable title to
all of the Assets, free and clear of any Encumbrances (defined below). The
Seller and the Shareholder represent and warrant that all of the Assets are (a)
in a state of good repair, ordinary wear and tear excepted, (b) are free from
any known defects except as may be repaired by routine maintenance and such
minor defects as do not substantially interfere with the continued use thereof
in the conduct of normal operations and (c) conform to all applicable laws
governing their use. The Seller and Shareholder represent that no notice of any
violation of any law, statute, ordinance, or regulation relating to any of the
Assets has been received by the Seller or the Shareholder, except such as have
been fully complied with. The term "Encumbrances" means all liens, security
interests, pledges, mortgages, deeds of trust, claims, rights of first refusal,
options, charges, restrictions or conditions to transfer or assignment,
liabilities, obligations, taxes, privileges, equities, easements, rights of way,
limitations, reservations, restrictions and other encumbrances of any kind or
nature.
2.1.5 Licenses and Permits. Schedule 1.1(e) hereto sets forth a complete list of
all Permits necessary under law or otherwise for the operation, maintenance and
use of the Assets in the manner in which they are now being operated, maintained
and used; each of the Permits and the Seller's rights with respect thereto is
valid and subsisting, in full force and effect, and enforceable by the Seller;
the Seller is in compliance in all material respects with the terms of each of
the Permits; none of the Permits have been, or to the knowledge of the Seller or
the Shareholder, are threatened to be, revoked, canceled, suspended or modified.
2.1.6 Intellectual Property. There is no Intellectual Property that is either
material or necessary for the continued use of the Assets and, to the best of
Seller's knowledge, the conduct of the Business by Seller did not infringe,
misappropriate or conflict with the intellectual property rights of others.
Neither the Seller nor the Shareholder has received any notice of infringement,
misappropriation or conflict with the intellectual property rights of others.
2.1.7 Financial Statements. The Seller has delivered to Buyer a copy of Seller's
unaudited Statement of Income for the nine (9) month period ended December 31,
1997, copy of which is attached hereto as Schedule 2.1.7 (the "Seller's
Statement of Income"); the Seller's Statement of Income is true, correct and
complete in all material respects and presents fairly and fully the income and
expenses of the Seller as at the date and for the period indicated thereon, and
has been prepared in accordance with generally accepted accounting principles as
promulgated by the American Institute of Certified Public Accountants ("GAAP")
applied on a consistent basis, except as noted therein; and the Seller's
Statement of Income includes all adjustments which are necessary for a fair
presentation of the Seller's income and expenses for the periods indicated.
2.1.8 Absence of Certain Changes and Events. Since December 31, 1997, there has
not been:
(g) Financial Change. Any adverse change in the Assets, the Business or the
financial condition, operations, liabilities or prospects of the Seller;
(h) Property Damage. Any damage, destruction, or loss to any of the Assets or
the Business (whether or not covered by insurance);
(i) Waiver. Any waiver or release of a material right of or claim held by the
Seller;
(j) Change in Assets. Any acquisition, disposition, transfer, encumbrance,
mortgage, pledge or other encumbrance of any asset of the Seller other than
in the ordinary course of business;
(k) Labor Disputes. Any labor disputes between the Seller and its employees; or
(l) Other Changes. Any other event or condition known to the Seller or the
Shareholder that particularly pertains to and has or might have an adverse
effect on the Assets, the operations of the Business or the financial
condition or prospects of the Seller.
2.1.9 Necessary Consents. The Seller has obtained and delivered to Buyer all
consents to assignment or waivers thereof required to be obtained from any
governmental authority or from any other third party in order to validly
transfer the Assets hereunder.
2.1.10 Environmental Matters. Except as described on Schedule 2.1.10 hereto,
none of the current or past operations of the Business or any of the Assets are
being or have been conducted or used in such a manner as to constitute a
violation of any Environmental Law (defined below); neither the Seller nor the
Shareholder has received any notice (whether formal or informal, written or
oral) from any entity, governmental agency or individual regarding any existing,
pending or threatened investigation or inquiry related to violations of any
Environmental Law or regarding any claims for remedial obligations or
contribution for removal costs or damages under any Environmental Law; there are
no writs, injunction decrees, orders or judgments outstanding, or lawsuits,
claims, proceedings or investigations pending or, to the knowledge of the Seller
or the Shareholder, threatened relating to the ownership, use, maintenance or
operation of the Assets or the conduct of the Business, nor, to the knowledge of
the Seller or the Shareholder, is there any basis for any of the foregoing;
Buyer is not required to obtain any permits, licenses or similar authorizations
pursuant to any Environmental Law in effect as of the date hereof to operate and
use any of the Assets for their current or proposed purposes and uses; to the
knowledge of the Seller or the Shareholder, the Assets include all environmental
and pollution control equipment necessary for compliance with applicable
Environmental Law; no Hazardous Materials (defined below) have been or are
currently being used by the Seller in the operation of the Assets; no Hazardous
Materials are or have ever been situated on or under any of the Seller's
properties, whether owned or leased, or incorporated into any of the Assets; to
the knowledge of the Seller or the Shareholder, there are no, there have never
been any, underground storage tanks (as defined under Environmental Law) located
under any of the Seller's properties, whether owned or leased; and there are no
environmental conditions or circumstances, including the presence or release of
any Hazardous Materials, on any property presently or previously owned or leased
by the Seller, or on any property on which Hazardous Materials generated by the
Seller's operations or the use of the Assets were disposed of, which would
result in an adverse change in the Business or business prospects of the Seller.
The term "Environmental Law" means any and all laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, and other legally enforceable requirements
(including, without limitation, common law) of the United states, or any state,
regional, city, local, municipal or other governmental authority or
quasi-governmental authority, regulating, relating to, or imposing environmental
standards of conduct concerning protection of the environment or human health,
or employee health and safety as from time to time has been or is now in effect.
The term "Hazardous Materials" means (x) asbestos, polychlorinated biphenyls,
urea formaldehyde, lead based paint, radon gas, petroleum, oil, solid waste,
pollutants and contaminants, and (y) any chemicals, materials, wastes or
substances that are defined, regulated, determined or identified as toxic or
hazardous in any Environmental Law.
2.1.11 No ERISA Plans or Labor Issues. No employee benefit plan of the Seller,
whether or not subject to any provisions of the Employee Retirement Income
Security Act of 1974, as amended, will by its terms or applicable law, become
binding upon or an obligation of Buyer; (b) the Seller has not engaged in any
unfair labor practices which could reasonably be expected to result in an
adverse effect on the Assets; (c) the Seller does not have any dispute with any
of its existing or former employees, and (d) there are no labor disputes or, to
the knowledge of the Seller or the Shareholder, any disputes threatened by
current or former employees of the Seller.
2.1.12 Investigations; Litigation. Except as set forth on Schedule 2.1.10
hereto, no investigation or review by any governmental entity with respect to
the Seller or any of the transactions contemplated by this Agreement is pending
or threatened, nor has any governmental entity indicated to the Seller or the
Shareholder an intention to conduct the same; and there is no suit, action, or
legal, administrative, arbitration or other proceeding or governmental
investigation pending to which the Seller or the Shareholder is a party or, to
the knowledge of the Seller or the Shareholder, might become a party or which
would adversely affect the Assets or the Buyer's future conduct of the Business.
2.1.13 Absence of Certain Businesses Practices. Neither the Seller, the
Shareholder, nor any officer, employee or agent of the Seller, or any other
person acting on behalf of the Seller or the Shareholder, has, directly or
indirectly, within the past five years, given or agreed to give any gift or
similar benefit to any customer, supplier, government employee or other person
who is or may be in a position to help or hinder the profitable conduct of the
Business or the profitable use of the Assets (or to assist the Seller in
connection with any actual or proposed transaction) which if not given in the
past, might have had an adverse effect on the profitable conduct of the Business
or the profitable use of the Assets, or if not continued in the future, might
adversely affect the profitable conduct of the Business or the profitable use of
the Assets.
2.1.14 Solvency. The Seller is not presently insolvent, nor will the Seller be
rendered insolvent by the occurrence of the transactions contemplated by this
Agreement. The term "insolvent" with respect to the Seller, means that the sum
of the present fair and saleable value of the Seller's assets does not and will
not exceed its debts and other probable liabilities, and the term "debts"
includes any legal liability whether matured or unmatured, liquidated or
unliquidated, absolute fixed or contingent, disputed or undisputed or secured or
unsecured.
2.1.15. Finder's Fee. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by the Seller, the
Shareholder and their counsel directly with Buyer and its counsel, without the
intervention of any other person in such a manner as to give rise to any valid
claim against any of the parties hereto for a brokerage commission, finder's fee
or any similar payment.
2.1.16 Taxes. All federal, state and local taxes assessed or assessable against
the Assets for periods prior to January 1, 1998 have been paid by Seller and the
Assets will be conveyed to Buyer free and clear of any such taxes or claims
therefor. All taxes assessed against the Assets for the period commencing
January 1, 1998 will be prorated through the Closing Date (based on 1997
assessed values) with Seller paying to Buyer at Closing an amount equal to the
portion of such taxes applicable to the period between January 1, 1998 and the
Closing Date.
2.2 Representations and Warranties of Buyer. Buyer represents and warrants to
the Seller and the Shareholder as follows:
2.2.1 Organization and Good Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas, has
full requisite corporate power and authority to carry on its businesses as it is
currently conducted, and to own and operate the properties currently owned and
operated by it.
2.2.2 Agreement Authorized and its Effect on Other Obligations. The consummation
of the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of Buyer, and this Agreement is a
valid and binding obligation of Buyer enforceable (subject to normal equitable
principles) in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, debtor relief or similar laws
affecting the rights of creditors generally. The execution, delivery and
performance of this Agreement by Buyer will not conflict with or result in a
violation or breach of any term or provision of, or constitute a default under
(a) the Articles of Incorporation or Bylaws of Buyer or (b) any obligation,
indenture, mortgage, deed of trust, lease, contract or other agreement to which
Buyer or any of its property is bound.
2.2.3 Consents and Approvals. No consent, approval or authorization of, or
filing of a registration with, any governmental or regulatory authority, or any
other person or entity is required to be made or obtained by Buyer in connection
with the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby.
2.2.4 Finder's Fee. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on by Buyer and its counsel
directly with the Seller and the Shareholder and their counsel, without the
intervention by any other person as the result of any act of Buyer in such a
manner as to give rise to any valid claim against any of the parties hereto for
any brokerage commission, finder's fee or any similar payments.
ARTICLE III
Additional Agreements
3.1 Noncompetition. Except as set forth below or as otherwise consented to or
approved in writing by Buyer, the Seller and the Shareholder each agree that for
a period of 60 months following the date hereof, such party will not, directly
or indirectly, acting alone or as a member of a partnership or a holder of, or
investor in as much as 5% of any security of any class of any corporation or
other business entity (a) engage in any business in competition with the
business or business conducted by the Seller on or before the date hereof or by
Buyer (or Buyer's affiliates) on or after the date hereof, or in any service
business the services of which were provided and marketed by the Seller on or
before the date hereof or by Buyer (or Buyer's affiliates) on or after the date
hereof in any state of the United States, or any foreign country in which the
Seller transacted business on or before the date hereof or in which Buyer (or
Buyer's affiliates) transact business on or after the date hereof; (b) request
any present customers or suppliers of the Seller or any customers of Buyer (or
Buyer's affiliates) to curtail or cancel their business with Buyer (or Buyer's
affiliates); (c) disclose to any person, firm or corporation any trade,
technical or technological secrets of Buyer (or Buyer's affiliates) or of the
Seller or any details of their organization or business affairs or (d) induce or
actively attempt to influence any employee of Buyer (or Buyer's affiliates) to
terminate his employment. The Seller and the Shareholder agree that if either
the length of time or geographical area as set forth in this Section 3.1 is
deemed too restrictive in any court proceeding, the court may reduce such
restrictions to those which it deems reasonable under the circumstances. The
obligations expressed in this Section 3.1 are in addition to any other
obligations that the Seller and the Shareholder may have under the laws of any
state requiring a corporation selling its assets (or a shareholder of such
corporation) to limit its activities so that the goodwill and business relations
being transferred with such assets will not be materially impaired. The Seller
and the Shareholder further agree and acknowledge that Buyer does not have any
adequate remedy at law for the breach or threatened breach by the Seller or the
Shareholder of the covenants contained in this Section 3.1, and agree that Buyer
may, in addition to the other remedies which may be available to it hereunder,
file a suit in equity to enjoin the Seller or the Shareholder from such breach
or threatened breach. If any provisions of this Section 3.1 are held to be
invalid or against public policy, the remaining provisions shall not be affected
thereby. The Seller and the Shareholder acknowledge that the covenants set forth
in this Section 3.1 are being executed and delivered by such party in
consideration of (i) the covenants of Buyer contained in this Agreement, (ii)
additional consideration in the amount of $300,000 payable by Buyer on the date
hereof by wire transfer of immediately available funds to the Seller and the
Shareholder, in those amounts and to those accounts specified in Schedule 3.1
hereto and (iii) for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged.
3.2 Hiring Employees. Schedule 3.2 hereto is a complete and accurate listing of
all employees of the Seller who devote their full time in the operation of the
Assets and the conduct of the Business (the "Employees"). Effective as of the
date of Closing, all of the Employees shall be offered employment by Buyer,
subject to such Employees meeting Buyer's standard employment eligibility
requirements. Buyer shall have no liability or obligation with respect to any
employee benefits of any Employee except those benefits that accrue pursuant to
such Employees' employment with Buyer on or after the date hereof. The Seller
and the Shareholder shall cooperate with Buyer in connection with any offer of
employment from Buyer to the Employees and use its best efforts to cause the
acceptance of any and all such offers.
3.3 Allocation of Purchase Price. The parties hereto agree to allocate the
Purchase Price payable by Buyer for the Assets hereunder as set forth on
Schedule 3.3 hereto, and shall report this transaction for federal income tax
purposes in accordance with the allocation so agreed upon. The parties hereto
for themselves and for their respective successors and assigns covenant and
agree that they will file coordinating Form 8594's in accordance with Section
1060 of the Internal Revenue Code of 1986, as amended, with their respective
income tax returns for the taxable year that includes the date hereof.
3.4 Employment of Shareholder. The Shareholder agrees to be Buyer's employee for
a period of at least one year at a total compensation of $61,000 per year, with
the terms and conditions of such employment to be pursuant to an Employment
Agreement to be executed by the Shareholder and the Buyer at Closing.
ARTICLE IV
Indemnification
4.1 Indemnification by the Seller and the Shareholder. In addition to any other
remedies available to Buyer under this Agreement, or at law or in equity, the
Seller and the Shareholder shall, jointly and severally, indemnify, defend and
hold harmless Buyer and its officers, directors, employees, agents and
stockholders , against and with respect to any and all claims, costs, damages,
losses, expenses, obligations, liabilities, recoveries, suits, causes of action
and deficiencies, including interest, penalties and reasonable attorneys' fees
and expenses (collectively, the "Damages") that such indemnitee shall incur or
suffer, which arise, result from or relate to (a) any material breach of, or
failure by the Seller or the Shareholder to perform, their respective
representations, warranties, covenants or agreements in this Agreement or in any
schedule, certificate, exhibit or other instrument furnished or delivered to
Buyer by the Seller or the Shareholder under this Agreement; and (b) the
Retained Liabilities.
4.2 Indemnification by Buyer. In addition to any other remedies available to the
Seller or the Shareholder under this Agreement, or at law or in equity, Buyer
shall indemnify, defend and hold harmless the Seller and its officers,
directors, employees, agents and stockholders and the Shareholder against and
with respect to any and all Damages that such indemnitees shall incur or suffer,
which arise, result from or relate to (a) any material breach of, or failure by
Buyer to perform, any of its representations, warranties, covenants or
agreements in this Agreement or in any schedule, certificate, exhibit or other
instrument furnished or delivered to the Seller or the Shareholder by or on
behalf of Buyer under this Agreement and (b) the Assumed Liabilities.
4.3 Indemnification Procedure. If any party hereto discovers or otherwise
becomes aware of an indemnification claim arising under Section 4.1 or 4.2 of
this Agreement, such indemnified party shall give written notice to the
indemnifying party, specifying such claim, and may thereafter exercise any
remedies available to such party under this Agreement; provided, however, that
the failure of an indemnified party to give notice as provided herein shall not
relieve the indemnifying party of any obligation hereunder to the extent the
indemnifying party is not materially prejudiced thereby. Further, promptly after
receipt by an indemnified party hereunder of written notice of the commencement
of any action or proceeding with respect to which a claim for indemnification
may be made pursuant to this Article IV, such indemnified party shall, if a
claim in respect thereof is to be made against any indemnifying party, give
written notice to the latter of the commencement of such action; provided,
however, that the failure of an indemnified party to give notice as provided
herein shall not relieve the indemnifying party of any obligation hereunder to
the extent the indemnifying party is not materially prejudiced thereby. In case
any such action is brought against an indemnified party, the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified, to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
such notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof unless the
indemnifying party has failed to assume the defense of such claim and to employ
counsel reasonably satisfactory to such indemnified person. An indemnifying
party who elects not to assume the defense of a claim shall not be liable for
the fees and expenses of more than one counsel in any single jurisdiction for
all parties indemnified by such indemnifying party with respect to such claim or
with respect to claims separate but similar or related in the same jurisdiction
arising out of the same general allegations. Notwithstanding any of the
foregoing to the contrary, the indemnified party will be entitled to select its
own counsel and assume the defense of any action brought against it if the
indemnifying party fails to select counsel reasonably satisfactory to the
indemnified party, the expenses of such defense to be paid by the indemnifying
party. No indemnifying party shall consent to entry of any judgment or enter
into any settlement with respect to a claim without the consent of the
indemnified party, which consent shall not be unreasonably withheld, or unless
such judgment or settlement includes as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability with respect to such claim. No indemnified party shall consent to
entry of any judgment or enter into any settlement of any such action, the
defense of which has been assumed by an indemnifying party, without the consent
of such indemnifying party, which consent shall not be unreasonably withheld or
delayed.
ARTICLE V
Miscellaneous
5.1 Survival of Representations, Warranties and Covenants. All representations
and warranties made by the parties hereto shall survive indefinitely without
limitation, notwithstanding any investigation made on the part of the parties
hereto. All statements contained in any certificate, schedule, exhibit or other
instrument delivered pursuant to this Agreement shall be deemed to have been
representations and warranties by the respective party or parties, as the case
may be, and shall also survive indefinitely without limitation, notwithstanding
any investigations made by any party hereto or on its behalf. All covenants and
agreements contained herein shall survive as provided herein.
5.2 Entirety. This Agreement embodies the entire agreement among the parties
with respect to the subject matter hereof, and all prior agreements between the
parties with respect thereto are hereby superseded in their entirety.
5.3 Counterparts. Any number of counterparts of this Agreement may be executed
and each such counterpart shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one instrument.
5.4 Notices and Waivers. Any notice or waiver to be given to any party hereto
shall be in writing and shall be delivered by courier, sent by facsimile
transmission or first class registered or certified mail, postage prepaid,
return receipt requested:
If to Buyer
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Addressed to: With a copy to:
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Yale E. Key, Inc. Xxxxx, Xxxxxxxx & Xxxxx, P.C.
Two Tower Center, 20th Floor 000 X. Xxxxxxxxxx, Xxxxx 000
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000 Xxxxxxx, Xxxxx 00000
Attn: General Counsel Attn: Xxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
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If to the Seller or the Shareholder
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Addressed to: With a copy to:
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Mr. Xxx Nations Xxxxx Xxxxxxx, Esq.
Xxxxxxx Transport, Inc. 000 Xxxxxx X
Xxxxx 0, Xxx 000 Xxxxxxxxx, Xxxxx 79336
Xxxxxxxxx, Xxxxx 00000 Facsimile: (000) 000-0000
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Any communication so addressed and mailed by first-class registered or certified
mail, postage prepaid, with return receipt requested, shall be deemed to be
received on the fifth (5th) businesses day after so mailed, and if delivered by
courier or facsimile to such address, upon delivery during normal businesses
hours on any businesses day.
5.5 Captions. The captions contained in this Agreement are solely for convenient
reference and shall not be deemed to affect the meaning or interpretation of any
article, section, or paragraph hereof.
5.6 Successors and Assigns. This Agreement shall be binding upon and shall inure
to the benefit of and be enforceable by the successors and assigns of the
parties hereto.
5.7 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
5.8 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the applicable laws of the State of Texas.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Shareholder has executed this Agreement and the other
parties hereto have caused this Agreement to be executed in their respective
corporate names by their respective duly authorized representatives, all as of
the day and year first above written.
BUYER:
YALE E. KEY, INC.
a Texas corporation
By:
C. Xxx Xxxxxxx, President
SELLER:
XXXXXXX TRANSPORT, INC.
a Texas corporation
By:
Xxx Nations, President
SHAREHOLDER:
__________________________________________
Xxx Nations
