EXHIBIT 2.1
PURCHASE AGREEMENT
AMONG
AQUATICA, INC.,
a Louisiana Corporation,
CAL DIVE INTERNATIONAL, INC.,
a Minnesota Corporation
AND
XXXXXXXX X. XXXXXXX III,
an Individual and Shareholder of Aquatica, Inc.
Dated as of January 27, 1998
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "AGREEMENT"), dated as of January 27, 1998,
is among AQUATICA, INC., a Louisiana corporation (the "COMPANY"), CAL DIVE
INTERNATIONAL, INC , a Minnesota corporation (the "PURCHASER"), and XXXXXXXX X.
XXXXXXX III, an individual and a shareholder of the Company ("XXXXXXX"). Except
as otherwise defined herein, capitalized terms used in this Agreement are
defined in Section 9.
This Agreement is being executed in connection with the acquisition of
forty-five percent (45%) of the issued and outstanding capital stock (after
giving effect to the transactions contemplated by this Agreement) of the Company
by the Purchaser. This acquisition will be accomplished through the issuance and
sale by the Company of 4,500,000 shares of Common Stock, no par value, of the
Company (the "COMPANY SHARES") for an aggregate purchase price of Five Million
and No/100 Dollars ($5,000,000.00).
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
1. AUTHORIZATION AND CLOSING.
1A. PURCHASE AND SALE OF COMMON STOCK. At the Closing, subject to the
terms and conditions of this Agreement, the Company shall sell the Company
Shares as follows:
(i) The Company shall sell to the Purchaser, and the Purchaser
shall purchase from the Company, the Company Shares for an
aggregate purchase price of Five Million Dollars ($5,000,000);
and
(ii) At the Closing, the Company shall deliver to the Purchaser
stock certificates evidencing the Company Shares with all
applicable stock transfer Taxes paid and stamps affixed, duly
registered in the Purchaser's name free and clear of all
Liens, upon payment by the Purchaser.
Purchaser shall have no obligation to complete the Closing or the
transactions contemplated hereby unless there shall have been transferred and
conveyed to Purchaser good, valid and indefeasible title to all of the Company
Shares free and clear of all Liens.
1B. THE CLOSING. The closing of the purchase and sale of the Company
Shares pursuant to Section 1A (the "CLOSING") shall take place at the offices of
Purchaser, at 10:00 a.m. on the date of this Agreement, or at such other place
or on such other date as may be mutually agreeable to the Company and the
Purchaser. The date on which the Closing is held is referred to in this
Agreement as the "CLOSING DATE."
2. CONDITIONS TO THE PURCHASER'S OBLIGATION AT THE CLOSING. The
obligations of the Purchaser to consummate the transactions contemplated by this
Agreement are subject to the
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fulfillment, on or prior to the Closing Date, of each of the following
conditions (any or all of which may be waived by the Purchaser in whole or in
part to the extent permitted by applicable Law):
2A. REPRESENTATIONS AND WARRANTIES. All representations and warranties of
the Company to the Purchaser contained herein shall be true and correct at and
as of the Closing Date with the same effect as though those representations and
warranties had been made again at and as of that time.
2B. COMPLIANCE. The Company and Xxxxxxx shall have performed and complied
in all material respects with all obligations and covenants required by this
Agreement and the Seller Documents to be performed or complied with by any one
or more of them on or prior to the Closing Date.
2C. MATERIAL ADVERSE CHANGE. Since December 1, 1997, there shall not have
been or occurred (i) any change, destruction or loss, whether or not covered by
insurance, which would result in the loss of a material part of the properties
or assets of the Company, (ii) any Legal Proceedings instituted or threatened
against the Company, Xxxxxxx or the Purchaser seeking to restrain or prohibit or
to obtain substantial damages with respect to the consummation of the
transactions contemplated hereby, or which might, in the reasonable opinion of
the Purchaser, result in a Material Adverse Change, (iii) any Order by a
Governmental Body of competent jurisdiction restraining, enjoining or otherwise
prohibiting the consummation of the transactions contemplated hereby, or (iv)
any other event or occurrence which could reasonably be expected to result in a
Material Adverse Change.
2D. THIRD PARTY CONSENTS. The Company shall have obtained the consents and
waivers, in a form reasonably satisfactory to the Purchaser, with respect to the
transactions contemplated by this Agreement and the other Seller Documents set
forth on SCHEDULE 5C; PROVIDED, HOWEVER, that neither the Company, Xxxxxxx nor
the Purchaser shall be obligated to pay any consideration therefor to any third
party from whom consent or approval is requested (other than the payment of
filing fees, recording fees and other similar administrative fees).
2E. REGISTRATION RIGHTS AGREEMENT UNDERTAKING. The Company and Xxxxxxx
shall have entered into a Registration Rights Agreement Undertaking, (the
"REGISTRATION RIGHTS AGREEMENT UNDERTAKING"), which requires the Purchaser to
grant the Shareholders the registration rights provided therein upon conversion
of the Shareholders' shares in the Company to shares of Purchaser in accordance
with the terms of the Shareholders' Agreement.
2F. SHAREHOLDERS' AGREEMENT. The Company, the Purchaser and Xxxxxxx shall
have entered into a certain "Aquatica, Inc. Shareholders' Agreement", (the
"SHAREHOLDERS' AGREEMENT"), and the Shareholders' Agreement shall be in full
force and effect as of the Closing.
2G. CORPORATE GOVERNANCE DOCUMENTS. The Purchaser shall have received
copies of the Company's Articles of Incorporation, By-laws, and documents shall
be executed at Closing for the Company to qualify to do business in the State of
Texas and for the Articles of Incorporation of the Company to be amended in the
State of Louisiana, and other agreements, instruments and indentures relating to
the corporate governance of the Company.
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2H. EMPLOYMENT AGREEMENTS. The Company and each of the Executives, Xxxxxxx
and Xxxx Xxxxxxxxx, shall have entered into employment and non-competition
agreements (the "Employment Agreements").
2I. LEGAL OPINIONS. The Purchaser shall have received from the Company's
Special Counsel, a legal opinion which shall be addressed to the Purchaser,
dated the Closing Date and in form and substance reasonably satisfactory to the
Purchaser.
2J. CLOSING DOCUMENTS. The Company shall have delivered to the
Purchaser each of the following documents:
(i) certified copies of the resolutions duly adopted by the
Company's shareholders and board of directors authorizing the
execution, delivery and performance of this Agreement and each of
the Seller Documents and the other agreements contemplated hereby,
the issuance and sale of the Company Shares and the consummation of
all other transactions contemplated by this Agreement and the other
Seller Documents;
(ii) certified copies of the Company's Articles of Incorporation and
By-laws, each as in effect at the Closing;
(iii) a "Key Man" Life Insurance Policy in the amount of $1,900,000
naming Xxxxxxx as the insured party and Whitney National Bank and
the Company as the beneficiary; and,
(iv) such other documents, instruments and certificates relating to
the transactions contemplated by this Agreement or any of the other
Seller Documents as the Purchaser or its counsel may reasonably
request or are otherwise required by this Agreement.
2K. PROCEEDINGS. All corporate and other proceedings taken or required to
be taken in connection with the transactions contemplated hereby to be
consummated at or prior to the Closing and all documents, instruments and
certificates incident thereto shall be satisfactory in form and substance to the
Purchaser and its counsel.
3. CONDITIONS TO THE COMPANY'S AND XXXXXXX'X OBLIGATION AT THE CLOSING.
The obligations of the Company and Xxxxxxx to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior to or on
the Closing Date, of each of the following conditions (any or all of which may
be waived by the Company, in whole or in part to the extent permitted by
applicable Law):
3A. REPRESENTATIONS AND WARRANTIES. All representations and warranties of
the Purchaser contained herein shall be true and correct in all material
respects at and as of the Closing Date with the same effect as though those
representations and warranties had been made again at and as of that date.
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3B. COMPLIANCE. The Purchaser shall have performed and complied in all
material respects with all obligations and covenants required by this Agreement
to be performed or complied with by the Purchaser on or prior to the Closing
Date.
3C. THIRD PARTY CONSENTS. The Purchaser shall have obtained the consents
and waivers, in a form reasonably satisfactory to the Company, with respect to
the transactions contemplated by this Agreement set forth in SCHEDULE 5C;
provided, however that the Purchaser shall not be obligated to pay any
consideration therefor to any third party from whom consent or approval is
requested (other than the payment of filing fees, recording fees and other
similar administrative fees).
3D. REGISTRATION RIGHTS AGREEMENT UNDERTAKING. The Purchaser shall have
entered into the Registration Rights Agreement Undertaking which is to be
executed upon conversion of Xxxxxxx'x shares in the Company to shares of
Purchaser in accordance with the terms of the Shareholders' Agreement.
3E. LOAN COMMITMENT AGREEMENT. The Purchaser shall have executed the
Subdebt Lending Commitment Letter as of the Closing.
3F. SHAREHOLDERS' AGREEMENT. The Purchaser shall have entered into the
Shareholders' Agreement, and the Shareholders' Agreement shall be in full force
and effect as of the Closing.
3G. LEGAL OPINIONS. The Company and Xxxxxxx shall have received from the
Purchaser's General Counsel, a legal opinion which shall be addressed to the
Company and Xxxxxxx, dated the Closing Date and in form and substance reasonably
satisfactory to the Company.
3H. CLOSING DOCUMENTS. The Purchaser shall have delivered to the
Company and Xxxxxxx each of the following documents:
(i) certified copies of the resolutions duly adopted by the
Purchaser's board of directors authorizing the execution,
delivery and performance of this Agreement and each of the
Seller Documents and the other agreements contemplated hereby
and the consummation of all other transactions contemplated by
this Agreement; and
(ii) such other documents, instruments and certificates
contemplated by this Agreement as the Company or its counsel
may reasonably request.
3I. PROCEEDINGS. All corporate and other proceedings taken or required to
be taken in connection with the transactions contemplated hereby to be
consummated at or prior to the Closing and all documents, instruments and
certificates incident thereto shall be satisfactory in form and substance to the
Company, Xxxxxxx and their counsel.
4. COVENANTS
4A. FINANCIAL STATEMENTS AND OTHER INFORMATION. Until the Shareholders
have converted their shares in the Company into shares of the Purchaser in
accordance with the terms of the
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Shareholders' Agreement, the Company shall deliver to the Purchaser (so long as
the Purchaser and/or its Affiliates Beneficially Owns at least 25% of the
outstanding shares (subject to adjustment for any stock splits, stock dividends,
recapitalization or similar events)) of Common Stock of the Company:
FINANCIAL STATEMENTS. Cause to be prepared and furnished to Payee the
following (financial statements covering any period after October 1, 1997
kept in accordance with GAAP applied on a consistent basis, unless the
Company's certified public accountants concur in any change therein and
such change is disclosed to the Company and is consistent with GAAP):
(a) as soon as possible, but not later than forty-five (45) days
after the close of each fiscal year of Company, unqualified audited
financial statements of the Company and its subsidiaries as of the end of
such year, on a consolidated basis, certified by a firm of independent
certified public accountants of recognized national standing or otherwise
acceptable to Purchaser (except for a qualification for a change in
accounting principles with which the independent public accountant
concurs);
(b) as soon as possible, but not later than thirty (30) days after
the end of each month hereafter, unaudited interim financial statements of
the Company and its subsidiaries as of the end of such month and of the
portion of the Company's fiscal year then elapsed, on a consolidating
basis certified by the principal financial officer of the Company as
prepared in accordance with GAAP and fairly presenting the consolidated
financial position, results of operations and cash flows of the Company
and its subsidiaries for such month and period subject only to changes
from audit and year-end adjustments and except that such statements should
contain notes covering at least cash flow, profit/loss, balance sheet,
accounts receivable aging, operating statistics comparison to budget and a
narrative written analysis of that month.
(c) The Company shall forward to Purchaser a certificate of the
aforesaid certified public accountants certifying to Purchaser that, based
upon their examination of the financial statements of the Company and its
subsidiaries performed in connection with their examination of said
financial statements, they are not aware of any event of default, or, if
they are aware of such event of default, specifying the nature thereof.
(d) Such other financial information as the Purchaser may reasonably
request, including, without limitation, certificates of the principal
financial officer of the Company concerning compliance with the covenants
of the Company under this Section 4.
4B. INSPECTION OF PROPERTY. Until the Company has completed its initial
Qualified Public Offering, the Company shall permit any representatives
designated by the Purchaser (so long as the Purchaser and/or its Affiliates
Beneficially Owns any Common Stock of the Company), upon reasonable notice and
during normal business hours and such other times as any the Purchaser may
reasonably request, to (i) visit and inspect any of the properties of the
Company and its Subsidiaries, (ii) examine the corporate and financial records
of the Company and its Subsidiaries and make copies thereof or extracts
therefrom and (iii) discuss the affairs, finances and accounts of the Company
and its Subsidiaries with the directors, officers, key employees and independent
accountants of the Company and its Subsidiaries.
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4C. AFFIRMATIVE COVENANTS. So long as the Purchaser Beneficially
Owns any Common Stock of the Company, the Company shall:
(i) Pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or
properties prior to the date on which any penalty is
attached thereto or the same shall otherwise become in
default; provided that the Company shall not be required to
pay any such tax, assessment, charge or levy which is being
contested in good faith and by proper proceedings and for
which such reserves or other provisions as may be required
by GAAP shall have been made and recorded.
(ii) Maintain a comparative system of accounts in accordance with
GAAP for any period after October 1, 1997, consistently
applied, and keep full and complete financial records and
books of account, in which complete entries shall be made in
accordance with GAAP for any period after October 1, 1997,
consistently applied, reflecting all financial transactions of
the Company.
(ii) Comply with the applicable requirements of all laws, rules,
regulations, treaties and orders of any governmental authority
(including, without limitation ERISA and Environmental Laws),
the violation of which might reasonably be expected to have a
Material Adverse Effect.
4D. COMPLIANCE WITH AGREEMENTS. The Company shall perform and observe all
of its material obligations to the Purchaser set forth in the (i) Company's
Articles of Incorporation and By-laws, (ii) Shareholders' Agreement and (iii)
the Employment Agreements.
4E. VESSELS. At all times on and after the Closing Date, the Company:
(a) so long as it owns U.S. documented vessels, shall be a
corporation qualified to document a vessel under 46 X.X.X 00000(x)(0); and
(b) shall not operate any of the Vessels or any other vessels owned by the
Company so as to cause the Company, or any of their respective assets to be
liable for any material penalties for breach of the Coastwise Laws.
4F. ACCESS TO INFORMATION; CONFIDENTIALITY Prior to the Closing Date, the
Purchaser shall be entitled, through its officers, employees and representatives
(including, without limitation, its legal advisors and accountants), to make
such investigation of the properties, businesses and operations of the Company
and such examination of the books, records and financial condition of Company as
the Purchaser reasonably requests and to make extracts and copies of such books
and records. Any such investigation and examination shall be conducted during
regular business hours and under reasonable circumstances, and the Company shall
cooperate fully therein. No investigation by the Purchaser prior to or after the
date of this Agreement shall discharge or any of the representations,
warranties, covenants or agreements of the Company or Xxxxxxx contained in this
Agreement or any of the Seller Documents.
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4G. CONDUCT OF THE BUSINESS PENDING THE CLOSING. Except as otherwise
expressly contemplated by this Agreement or with the prior WRITTEN consent of
the Purchaser (which shall not be unreasonably withheld, conditioned or
delayed), until the Closing Date the Company shall:
(i) conduct the business of the Company only in the ordinary course
of business consistent with past practice;
(ii) not declare, set aside, make or pay any dividend or other
distribution in respect of the capital stock of the Company or repurchase,
redeem or otherwise acquire any outstanding shares of the capital stock or other
securities of, or other profit participations or proprietary or equity interests
in, the Company; not transfer, issue, sell or dispose of any shares of capital
stock or profit participations or other proprietary or equity interests in, or
other securities of the Company or grant options, warrants, calls or other
rights to directly or indirectly purchase or otherwise acquire profit
participations or proprietary or equity interests in the Company or shares of
capital stock of the Company or other securities (except as to any of the
foregoing as set forth on SCHEDULE 5F);
(iii) not effect any recapitalization, reclassification, stock split
or like change in the capitalization of the Company;
(iv) not amend the Articles of Incorporation or By-laws of the
Company;
(v) use its commercially reasonable best efforts to (A) preserve its
present business operations, organization (including, without limitation,
management) and goodwill of the Company and (B) preserve its present
relationship with Persons having business dealings with the Company;
(vi) maintain insurance upon all of the properties and assets of the
Company in such amounts and of such kinds comparable to that in effect on the
date of this Agreement (with insurers of substantially the same or better
financial condition);
(vii) (A) maintain the books, accounts and records of the Company in
the ordinary course of business consistent with past practices, except that the
Company shall maintain a comparative system of accounts in accordance with GAAP
beginning October 1, 1997 and thereafter, (B) continue to collect accounts
receivable and pay accounts payable utilizing historical procedures and without
discounting or accelerating payment of such accounts, except that the Company
shall maintain a comparative system of accounts in accordance with GAAP
beginning October 1, 1997 and thereafter, and (C) comply with all contractual
and other obligations applicable to the operations of the Company;
(viii) not, other than in the ordinary course of business consistent
with past practice and without materially increasing the benefits or the costs
thereof (except as described on SCHEDULE 5F) (A) increase the compensation
payable or to become payable by the Company to any of its respective directors,
officers, employees, agents or representatives, (B) increase the coverage or
benefits available under any severance pay, termination pay, vacation pay,
company awards, salary continuation for disability, sick leave, deferred
compensation, bonus or other incentive compensation, insurance, pension or other
employee benefit plan, payment or arrangement made to, for, or with any
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of the directors, officers, employees, agents or representatives of the Company
or (C) enter into any employment, deferred compensation, severance, consulting,
non-competition or similar agreement (or amend any such agreement) to which the
Company is a party or involving a director, officer or employee of the Company
in his or her capacity as a director, officer or employee of the Company;
(ix) not introduce any material change with respect to the
operations of the Company;
(x) except as set forth on SCHEDULE 5F, not permit the Company to
enter into any transaction or to make or enter into any Contract which by reason
of its size, subject matter or otherwise is not in the ordinary course of
business ;
(xi) promptly notify the Purchaser of (A) any one or more or
Extraordinary Losses suffered by the Company, (B) any casualty losses or damages
suffered by the Company or any of its Subsidiaries with respect to property and
assets having an individual replacement cost of more than $100,000 or aggregate
replacement cost of more than $100,000 or which could cause a Material Adverse
Change, whether or not such losses or damages are covered by insurance, and (C)
(i) any material Legal Proceeding commenced by or against the Company or (ii)
any Legal Proceeding commenced or threatened against the Company or Xxxxxxx
relating to the transactions contemplated by this Agreement;
(xii) not permit the Company to make any loans to, or pay any fees
or expenses (except in the Ordinary Course of Business) to, or enter into or
modify any Contract with, Xxxxxxx;
(xiii) promptly and accurately record in the appropriate records and
books of account of the Company, as applicable, all material corporate action
taken on or after the date hereof by the shareholders or the boards of directors
(including committees thereof) of the Company and promptly following such
recordation deliver true, correct and complete copies thereof to Purchaser; or
(xiv) not agree to do anything prohibited by this Section 4G or
anything that would make any of the representations and warranties of the
Company or Xxxxxxx in this Agreement or the Seller Documents untrue or incorrect
in any material respect.
4H. FINANCIAL STATEMENTS. The Company (i) shall (if the request is
timely) deliver to Purchaser as promptly as practicable after Purchaser's
request therefor and, in any event at least 15 days prior to the applicable
filing deadline therefor under the Securities Act, the Securities Exchange Act
or the regulations promulgated thereunder, such financial statements, financial
statement schedules and other financial information relating to the Company and
any future business acquisitions by the Company which Purchaser may require in
order to prepare any registration statement, report, proxy statement or other
filing under any such securities law or regulation and shall direct its
independent public accountants to cooperate with Purchaser in connection
therewith and (ii) shall use its best efforts to obtain promptly for Purchaser,
upon Purchaser's request (and at Purchaser's sole cost), any consent, report,
opinion or letter of such accountants require to be filed by Purchaser under
such law or regulations.
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4I. OTHER ACTIONS. Each of the Company, Xxxxxxx and the Purchaser shall
use its commercially reasonable best efforts to (i) take all actions necessary
or appropriate to consummate the transactions contemplated by this Agreement and
(ii) cause the fulfillment at the earliest practicable date of all of the
conditions to their respective obligations to consummate the transactions
contemplated by this Agreement set forth in Sections 2 and 3.
4J. CONFIDENTIALITY AND EMPLOYMENT PRACTICES.
Until Conversion, as such term is defined in the Shareholders'
Agreement, the Company will use its commercially reasonable best efforts :
(1) not to hire any officer or significant employee of the Company who
has an employment, non-compete, confidentiality or other similar
agreement with a prior employer which would be violated by his or
any of their [employment] activities with the Company.
(2) supervise its agents, executives and other company representatives
not to use any trade secret or confidential information developed by
another company, including, but not limited to, customer lists,
computer programs, research data, marketing and business strategies,
production formulas, technical reports, drawings, blueprints or
other reproductions of confidential information in violation of
Louisiana law (LSA-R.S.51-1431) or any similar state or federal law.
(3) not to engage in any unfair trade practices involving fraud,
misrepresentation, deception, breach of fiduciary duty or any other
unethical conduct regarding its formation, conduction of business,
manner of hiring of employees and/or customer/business solicitation
or development and has not targeted any company in its employment or
customer development plans or activities either generally or for the
purpose of unfairly injuring their business in violation of
Louisiana law (LSA-R.S. 51-1405 et.sec.) or any other applicable
state or federal law.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a material inducement
to the Purchaser to enter into this Agreement and purchase the Company Shares
the Company hereby represents and warrants at the time of execution hereof that:
5A. ORGANIZATION AND CORPORATE POWER. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Louisiana. The Company is in the process of qualifying to do business under
the laws of the State of Texas. The Company has all requisite legal and
corporate power and authority and all Permits necessary to own, lease and
operate its properties, to carry on its businesses as now conducted, to execute
and deliver this Agreement and each other Seller Document, to consummate the
transactions contemplated hereby and thereby and to duly perform its obligations
hereunder and thereunder, including but not limited to all Permits necessary to
operate the vessels and diving bells used in the Company's business, except for
such Permits which, if not obtained, would not have a Material Adverse Effect.
Copies of the Company's Articles of Incorporation, By-laws or other
organizational documents have been
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delivered to the Purchaser and its counsel, which reflect all amendments made
thereto and are correct and complete. The Company does not own any subsidiaries.
5B. CAPITAL STOCK AND RELATED MATTERS
(i) The authorized capital stock of the Company consists solely of
(A) Twenty Million shares of Common Stock, no par value, of which Five
Million, Five Hundred Thousand shares of Common Stock are issued and
outstanding and, as of the Closing Date, Ten Million shares of Common
Stock shall be issued and outstanding and (B) Five Million shares of
Preferred Stock, no par value none of which are issued and outstanding.
The Company does not have outstanding any capital stock or securities
directly or indirectly convertible into or exchangeable for any shares of
its capital stock or any profit participation (other than a cash bonus
program based upon earnings as described in SCHEDULE 5N) or proprietary or
equity interests, nor shall it have outstanding any options, warrants or
other rights (except as expressly set forth on
SCHEDULE 6B) to acquire, subscribe for or purchase its capital stock or
any other profit participation (other than a cash bonus program based on
earnings described in SCHEDULE 5N) or proprietary or equity interest in
the Company or any stock or securities directly or indirectly convertible
into or exchangeable for its capital stock or any other profit
participation or proprietary or equity interest in the Company nor is the
Company committed to do any of the foregoing, except as expressly set
forth on SCHEDULE 5B. The Company is not subject to: (i) any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its capital stock, any stock or securities directly or
indirectly convertible into or exchangeable for its capital stock or any
other profit participation (other than a cash bonus program based on
earnings described in SCHEDULE 5N) or proprietary or equity interest in
the Company, or (ii) any options, warrants or other rights to directly or
indirectly acquire its capital stock or any other profit participation
(other than a cash bonus program based on earnings described in SCHEDULE
5N) or proprietary or equity interest in the Company except to the
Purchaser under this Agreement or as expressly set forth on SCHEDULE 5B.
All of the outstanding shares of the Company's capital stock (including,
without limitation, the Company Shares) are, and as of the Closing, shall
have been duly authorized, validly issued, fully paid and nonassessable.
Immediately upon completion of the Closing, Purchaser will own, and have
good, valid and indefeasible title to, the Company Shares free and clear
of all Liens.
(ii) There are no statutory or contractual shareholders preemptive
rights, rights of first offer, rights of refusal, co-sale rights or
similar rights with respect to any capital stock, securities or other
profit participations or proprietary or equity interests in the Company,
including, without limitation, the issuance of the Company Shares
hereunder, except as expressly set forth on SCHEDULE 5B. No capital stock
or other securities of the Company has been issued in violation of any
such right. To the best of the Company's knowledge, there are no
agreements with respect to the issuance, sale, redemption, transfer,
disposition or voting of capital stock of the Company or any other profit
participation (other than a cash bonus program based on earnings described
in SCHEDULE 5N) or proprietary or equity interest in the Company or with
respect to any other aspect of the Company's affairs, except as expressly
set forth on SCHEDULE 5B. The Company does not (i) Beneficially Own of
record any capital
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stock, security or other profit participation or proprietary or equity
interest of or in any other Person or (ii) have any other investment in
any other Person.
(iii) The Company does not (i) Beneficially Own of record any capital
stock, security or other profit participation or proprietary or equity
interest of or in any other Person or (ii) have any other investment in
any other Person.
5C. AUTHORIZATION; NO BREACH. The execution, delivery and performance of
this Agreement and the other Seller Documents to which the Company is a party
have been duly authorized by all necessary corporate, including shareholder,
action on the part of the Company. This Agreement and each other Seller Document
have been duly and validly executed and delivered by, and constitute a valid and
binding obligation of, the Company and each Executive which is a party thereto
enforceable against such Person in accordance with its respective terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, or other similar laws now or hereafter in effect relating to or
affecting creditor's rights generally (regardless of whether such enforceability
is considered in a proceeding at law or in equity). The execution and delivery
by the Company and each Executive of this Agreement and each other Seller
Document to which such Person is a party, the offering, sale and issuance by the
Company or any shareholder of the Company Shares, and the fulfillment of and
compliance with the respective terms of this Agreement and the other Seller
Documents to which such Person is a party by any such Person, do not and shall
not (a)(i) conflict with or result in a breach of the terms, conditions or
provisions of, (ii) constitute a default or any event which with the giving of
notice, passage of time or both would constitute a default under, (iii) give
rise to any right or right of termination, cancellation or acceleration or right
to increase in any material respect the obligations or otherwise modify in any
material respect the terms of, (iv) result in a violation of, or (v) require any
consent, approval, waiver, Order, Permit or exemption or other action by or
notice, declaration or filing to or with any Governmental Body pursuant to, the
Articles of Incorporation, By-laws or other organizational documents of the
Company or any Law, Contract, Permit or Order, to which the Company, Executive
or any of their respective assets is subject, except for waivers or consents set
forth on SCHEDULE 5C, or (b) result in the creation or imposition of any Lien
upon the capital stock, property or assets of the Company, Shareholders or
Executive .
5D. FINANCIAL STATEMENTS. Attached hereto on SCHEDULE 5D are the unaudited
consolidated balance sheets of the Company as of December 31, 1997 and the
related statements of income, shareholder's equity and cash flows for the two
month periods then ended (the "FINANCIAL STATEMENTS"). Each of the Financial
Statements (including in all cases the notes thereto, if any) is accurate and
complete in all material respects, is consistent with the books and records of
the Company (which, in turn, are accurate and complete in all material
respects), has been prepared in accordance with GAAP consistently applied, and
presents fairly the financial condition and results of operations of the Company
through the periods covered thereby.
5E. ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth on SCHEDULE
5E, to the best of the Company's knowledge the Company does not have any
obligation or liability (whether accrued, absolute, contingent, unliquidated or
otherwise, whether due or to become due and regardless of when asserted) arising
out of transactions entered into at or prior to the Closing, or any action or
inaction at or prior to the Closing, or any state of facts existing at or prior
to the Closing (regardless of when any such obligation or liability is asserted,
including Taxes, with respect to or based upon transactions
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or events occurring on or before the Closing, other than (i) liabilities set
forth on the unaudited consolidated balance sheet of the Company and its
Subsidiaries as of December 31, 1997 (including any notes thereto) (the "LATEST
BALANCE SHEET,"), (ii) liabilities and obligations which have arisen after the
date of the Latest Balance Sheet in the ordinary course of business, (iii) as
set forth in the footnotes to the Financial Statements, or (iv) liabilities and
obligations which would not, either individually or in the aggregate, have a
Material Adverse Effect.
5F. ABSENCE OF CERTAIN DEVELOPMENTS. Except as set forth on SCHEDULE 5F or
as expressly contemplated by this Agreement, since December 31, 1997 up to and
including the Closing Date:
(i) there has not occurred any Material Adverse Change nor has any
event occurred which could reasonably be expected to result in
any Material Adverse Change;
(ii) there has not been any damage, destruction or loss, whether or
not covered by insurance, with respect to the property and
assets of the Company at a replacement cost of more than
$20,000 for any single loss or $100,000 for all such losses;
(iii) there has not been any declaration, setting aside or payment
of any dividend or other distribution in respect of any shares
of capital stock of the Company or any repurchase, redemption
or other acquisition by the Company of any outstanding shares
of the capital stock or other securities of, or other profit
participation (other than a cash bonus program based on
earnings described in SCHEDULE 6N) or proprietary or equity
interest in, the Company;
(iv) there has not been any transfer, issue, sale or disposition
of any sales of capital stock, securities or profit
participations (other than a cash bonus program based on
earnings described in SCHEDULE 6N) or other proprietary or
equity interests in the Company or any grant of options,
warrants, calls or other rights to directly or indirectly
purchase or otherwise acquire profit participations (other
than a cash bonus program based on earnings described in
SCHEDULE 5M) or proprietary or equity interests in the
Company or shares of capital stock or securities of the
Company;
(v) the Company has not awarded or paid any bonuses to employees
of the Company except to the extent appearing on the Latest
Balance Sheet or has not entered into any employment, deferred
compensation, severance or similar agreement (nor amended any
such agreement) or agreed to increase the compensation payable
or to become payable by the Company to any directors,
officers, employees, agents or representatives of the Company
or agreed to increase the coverage or benefits available under
any severance pay, termination pay, vacation pay, company
awards, salary continuation for disability, sick leave,
deferred compensation, bonus or other incentive compensation,
insurance, pension, or other employee benefit plan, payment
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or arrangement made to, or with such directors, officers,
employees, agents or representatives;
(vi) there has not been any change by the Company in accounting
principles, methods or policies;
(vii) the Company has not introduced any material change with
respect to the operations of the Company which is not in the
Ordinary Course of Business;
(viii)the Company has not entered into any transaction or made or
entered into any Contract which by reason of its size, subject
matter or otherwise is not in the Ordinary Course of Business;
(ix) the Company has not suffered one or more Extraordinary Losses;
(x) the Company has not made any investments in or loans to, or
paid any material fees or expenses to, or entered into or
modified any Contract with any of the Shareholders' or any
other respective Affiliates and other than inter-company
arrangements between the Company and its subsidiaries; and,
(xi) the Company has not agreed or committed to do anything set
forth in this Section 5F.
5G. TAX MATTERS. The Company has filed in a timely manner all tax returns
which it is required to file other than those which, individually or in the
aggregate, would not have a Material Adverse Effect; and such returns are true
and correct in all material respects. The Company has it(or has made provision
for the payment thereof on the Latest Balance Sheet) and has withheld and paid
over all Taxes which it is obligated to withhold from amounts owing to any
employee, creditor or other Person. No unresolved deficiencies or additions to
Taxes have been proposed, asserted or assessed against the Company, and the
assessment of any additional Taxes for periods for which returns have been filed
is not expected to exceed the recorded liability therefor on the Latest Balance
Sheet. The Company has not incurred any liability for Taxes from the date of the
Latest Balance Sheet except for Taxes incurred in the ordinary course of
business consistent with past practice.
5H. LITIGATION. There are no Legal Proceedings pending or, to the best of
the Company's knowledge, threatened against or affecting the Company or the
business or assets of the Company, that if adversely determined, could
reasonably be expected to have a material adverse effect on the Company's
ability to perform its obligations under this Agreement or any of the Seller
Documents or any action taken or to be taken by the Company in connection with
the consummation of the transactions contemplated hereby or thereby. There is no
outstanding or, to the knowledge of the Company, threatened Order of any
Governmental Body against, involving or naming the Company or involving any of
its assets.
5I. REAL PROPERTY. (a) The Company does not own any real property.
SCHEDULE 5I contains a correct and complete schedule of the documents comprising
all leases, subleases, licenses, rights of way or other Contracts for the use or
occupancy of any real property ("REAL PROPERTY LEASES"). The Company is not a
party to any lease, sublease, license or other agreement for the use
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or occupancy of any real property other than the Real Property Leases. Except as
set forth on SCHEDULE 5I, the Company has not assigned, sublet, mortgaged or
otherwise encumbered in any respect whatsoever its leasehold estate under the
Real Property Leases. Except as set forth on SCHEDULE 5I, the Company does not
own or hold, or is not obligated under or a party to, any option, right of first
refusal or other contractual right to purchase, acquire, sell, assign or dispose
of any real estate or any portion thereof or interest therein.
(b) Each of the Real Property Leases is a valid and binding obligation
enforceable against the Company and, to the knowledge of the Company, against
each other party thereto in accordance with its terms, and there is no default
under any of the Real Property Leases by the Company, or, to the knowledge of
the Company, by any other party thereto and, to the knowledge of the Company, no
event has occurred that with the lapse of time or the giving of notice or both
would constitute a default thereunder, except for such defaults or events which
would not have a Material Adverse Effect. No previous or current party to the
Real Property Leases has given written notice of or made a claim against the
Company with respect to any breach or default thereunder which remains uncured
or otherwise in existence as of the date hereof. To the knowledge of the
Company, each of the Real Property Leases covers the entire estate it purports
to cover and entitles the Company to the use, occupancy and possession of the
real property for the purposes such property is now being used by the Company.
Complete and correct copies of the Real Property Leases, together with all
amendments, modifications, supplements or side letters affecting the obligations
of any party thereunder have been delivered to the Purchaser. To the knowledge
of the Company, the property which is subject to the Real Property Leases
complies with all applicable Laws, except for such failure to comply which would
not have a Material Adverse Effect. No notice of violation of any such Law has
been received by the Company and, to the knowledge of the Company, no such
notice has been issued by any Governmental Body with respect to such property.
5J. VESSELS. (a) The Company does not own or operate any vessels other
than those listed on SCHEDULE 5J (collectively, the "VESSELS"). Each of the
Vessels listed on SCHEDULE 5J is duly documented in the sole ownership of the
Company under the Law and flag of the jurisdiction indicated for such vessel on
SCHEDULE 5J, is in compliance with all applicable Laws of such jurisdiction and
of the United States of America, except for any such noncompliance as would not
have a Material Adverse Effect, and, at no time during the Company's ownership
of the Vessels, have any of the Vessels been sold, chartered or otherwise
transferred to any Person in violation of Law.
(b) The Company has good, valid and indefeasible title to each of
the Vessels, free and clear of any Liens, other than those Liens described on
SCHEDULE 5J.
(c) Each of the Vessels listed on SCHEDULE 5J maintains the class
indicated on SCHEDULE 5J with the classification society indicated on SCHEDULE
5J, free of recommendations that would have a Material Adverse Effect.
(d) Except as indicated on SCHEDULE 5J, each of the Vessels is in
adequate running order and repair, and, insofar as due diligence can make such
vessel so, tight, staunch, strong and well and sufficiently tackled, appareled,
furnished, equipped and in all material respects seaworthy and in adequate
operating condition to perform its functions as currently contemplated. Each of
the Vessels
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that is documented under U.S. flag has a clean certificate of inspection from
the United States Coast Guard free of reported or reportable exceptions or
notations of record.
(e) The Company have filed with each appropriate Governmental Body
all evidence of financial responsibility to the extent required under all
applicable Laws, including the Oil Pollution Act of 1990, 33 U.S.C." 2710 ET
SEQ., and the rules and regulations promulgated thereunder, except for such
failure to file as would not have a Material Adverse Effect.
(f) In respect of each Vessel documented under the law and flag of
the United States of America with a Certificate of Documentation issued with a
coastwise endorsement, the Company has provided to the Purchaser a true and
complete copy of the duly completed application for exchange of such Certificate
of Documentation with a new Certificate of Documentation issued with a registry
endorsement.
5K. TANGIBLE PERSONAL PROPERTY. (a) SCHEDULE 5K sets forth all leases of
personal property ("PERSONAL PROPERTY LEASES") involving annual payments in
excess of $10,000 relating to personal property, other than Vessels, used in the
business of the Company or to which the Company or any is a party or by which
the Company or any of its properties or assets is bound, the parties thereto,
the amount of annual payments in respect thereof and the termination date and
the conditions of renewal thereof. Complete and correct copies of the Personal
Property Leases, together with all amendments, modifications, supplements or
side letters affecting the obligations of any party thereunder, have been
delivered or otherwise made available to Purchaser.
5L. INTANGIBLE PROPERTY. (a) SCHEDULE 5L sets forth a complete and correct
list of each patent, trademark, trade name, service xxxx, brand xxxx, brand
name, Software and copyright owned or used in the business of the Company as
well as all registrations thereof and pending applications therefor, and each
material license or other material Contract relating thereto (collectively, the
"INTANGIBLE PROPERTY") and indicates, with respect to each item of Intangible
Property, the owner thereof and, if applicable, the name of the licensor and
licensee thereof and the basic terms of such license or other Contract relating
thereto. Except as set forth on SCHEDULE 5L, each of the foregoing is owned by
the Company or one of its Subsidiaries free and clear of any and all Liens and
is in good standing and no other Person has any claim of ownership with respect
thereto. The use of the foregoing by the Company does not conflict with,
infringe upon, violate or interfere with or constitute an appropriation of any
right, title, interest or goodwill, including, without limitation, any
intellectual property right, patent, trademark, trade name, service xxxx, brand
xxxx, brand name, computer program, database, industrial design, copyright or
any pending application therefor of any other Person, which, in any such case,
could have a Material Adverse Effect. There have been no Legal Proceedings
initiated or, to the knowledge of the Company, threatened with respect to
Intangible Property and the Company has not received any notice or otherwise
knows that any of the foregoing is invalid or conflicts with the asserted rights
of other Persons or have failed to be used or enforced in a manner that would
result in the abandonment, cancellation or unenforceability of the Intangible
Property that could have a Material Adverse Effect.
(b) The Company owns or licenses all Intangible Property, know-how,
formulae and other proprietary and trade rights necessary for the conduct of
their respective businesses as now conducted.
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5M. MATERIAL CONTRACTS. (a) Except as set forth on SCHEDULES 5B, 5I, 5J,
5K, 5L or as set forth on SCHEDULE 5M, neither the Company nor any of its
properties or assets is a party to or bound by any (i) Contract not made in the
ordinary course of business, the performance of which will extend over a period
greater than One Hundred Eighty (180) days; (ii) employment, consulting,
non-competition, severance, golden parachute or employee, officer, or director
indemnification Contract (including, without limitation, in each case any
material Contract to which the Company or any of its Subsidiaries is a party
involving employees of the Company), which is not terminable by the Company, as
the case may be, within sixty (60) days after written notice thereof and without
liability to the Company; (iii) distributorship, sales representative or sales
agency Contract, which is not terminable by the Company, as the case may be,
within sixty (60) days after written notice thereof and without liability to the
Company; (iv) Contract (including, without limitation, purchase orders issued by
customers or to suppliers of the Company which remain open as of the date of
this Agreement) involving the commitment or payment reasonably expected to be in
excess of $1,000,000 for the future purchase of services or equipment; (v)
Contract among stockholders or granting a right of first refusal or for a
partnership or a joint venture or for the acquisition, sale or lease of any
assets individually or in the aggregate in excess of $25,000, partnership
interests or capital stock of the Company or any other Person or involving a
sharing of profits which could, individually or in the aggregate, reasonably be
expected to be in excess of $25,000; (vi) loan agreement, credit agreement,
promissory note, guarantee, subordination agreement, letter of credit or any
other similar type of Contract involving liabilities, individually or in the
aggregate, in excess of $25,000; (vii) material Contract relating to the
exploration, development, exploitation, extraction or transportation of oil or
gas, (viii) Contract with any Governmental Body; or (ix) Contract for the
charter of any vessels. There has been delivered or otherwise made available to
Purchaser complete and correct copies of the Contracts listed on SCHEDULES 0X,
0X, 0X, 0X, 0X, xxxxxxxx with all amendments, modifications, supplements or side
letters affecting the obligations of any party thereunder.
(b) Each of the Contracts listed on SCHEDULE 5M is a valid and binding
obligation enforceable against the Company and, to the knowledge of the Company,
against each other party thereto in accordance with its terms, and there is no
default under any Contract listed or described on SCHEDULE 5M either by the
Company or, to the knowledge of the Company, by any other party thereto, and no
event has occurred that with the lapse of time or the giving of notice or both
would constitute a default thereunder, which could result in a Material Adverse
Effect. No party to any Contract set forth on SCHEDULE 5M has given notice of or
initiated a material Legal Proceeding with respect to any breach or default
thereunder.
5N. EMPLOYEE BENEFITS. (a) SCHEDULE 5N AND 5B sets forth a complete and
correct list of all "employee benefit plans", as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and any
other pension plans or employee benefit arrangements or payroll practices
(including, without limitation, severance pay, vacation pay, company awards,
salary continuation for disability, sick leave, deferred compensation, bonus or
other incentive compensation, stock purchase arrangements or policies)
maintained by the Company.
(b) All contributions and premiums required by law or by the terms of any
Employee Benefit Plan or any agreement relating thereto have been timely made or
provided for (without regard to any waivers granted with respect thereto).
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(c) Complete and correct copies of the following documents, with respect
to each of the Employee Benefit Plans (as applicable), have been delivered to
Purchaser, including the most recent summary plan descriptions.
(d) No Employee Benefit Plan will require the payment of severance
benefits, separation pay or any similar pay as a result of the consummation of
the transactions contemplated by this Agreement.
5O. LABOR. (a) The Company is not a party to any labor or collective
bargaining agreement and there are no labor or collective bargaining
agreements which pertain to employees of the Company.
(b) No employees of the Company are represented by any labor organization.
No labor organization or group of employees of the Company has made a pending
demand for recognition, and there are no representation proceedings or petitions
seeking a representation proceeding presently pending or, to the knowledge of
the Company, threatened to be brought or filed, with the National Labor
Relations Board or other labor relations tribunal. There is no organizing
activity involving the Company pending or, to the knowledge of the Company,
threatened by any labor organization or group of employees of the Company.
(c) There are no labor or employment related (i) strikes, work stoppages,
slowdowns, lockouts or arbitrations or (ii) material grievances or other
material labor disputes pending or, to the knowledge of the Company, threatened
against or involving the Company. There are no unfair labor practice charges or
grievances pending or, to the knowledge of the Company, threatened by or on
behalf of any employee or group of employees of the Company.
(d) There are no complaints, charges or claims against the Company pending
or, to the knowledge of the Company, threatened to be brought or filed with any
Governmental Body based on, arising out of, in connection with, or otherwise
relating to the employment by the Company of any individual, including any claim
for workers' compensation , which could reasonably be expected to result in a
Material Adverse Change. To the knowledge of the Company, the Company is in
compliance with all Laws and Orders relating to the employment of labor,
including all such Laws and Orders relating to wages, hours, collective
bargaining, discrimination, civil rights, workers' compensation, pay equity and
the collection and payment of withholding and/or Social Security Taxes and
similar Taxes, noncompliance with which could result in a Material Adverse
Charge.
5P. COMPLIANCE WITH LAWS; PERMITS. (a) To the knowledge of the Company,
the Company is in compliance in all material respects with all Laws and Orders
promulgated by any Governmental Body (including, without limitation, the
Commissioner of Customs and the U.S. Coast Guard) applicable to the Company or
to the conduct of the business or operations of the Company or the use of any of
its properties (including any leased properties) and assets, noncompliance with
which could result in a Material Adverse Change. The Company has not received,
or knows of the issuance of, any notices of any violation or alleged violation
of any such Law or Order of any Governmental Body. There are no pending or, to
the knowledge of the Company, threatened investigations by any Governmental Body
with respect to such business or operations of the Company which, either
individually or in the aggregate, could result in a Material Adverse Change.
-17-
(b) SCHEDULE 5P lists all Permits of the Company issued or granted by any
Governmental Body, indicating, in each case, the expiration date thereof, which
are material to the business and operations of the Company. The Company has all
Permits that are required to be obtained by each of them to permit the
operations of their respective businesses in the manner in which such operations
are currently and heretofore conducted, except to the extent that the failure to
have any such Permit could not, either individually or in the aggregate, cause a
Material Adverse Change. The Company has complied with all conditions of such
Permits applicable to it, non-compliance with which could result in a Material
Adverse Effect. No default or violation, or event, that with the lapse of time
or giving of notice or both would become a default or violation, has occurred in
the due observance of any such Permit which could reasonably be expected to have
a Material Adverse Effect. To the knowledge of the Company, all such Permits are
in full force and effect without further consent or approval of any Person
except for such as would not have a Material Adverse Effect.
5Q. ENVIRONMENTAL MATTERS. Except as would not have a Material Adverse
Effect, to the Company's knowledge, (i) the operations of the Company are in
compliance with all Environmental Laws; (ii) the Company has all Environmental
Permits required for its operations; all such Environmental Permits are in full
force and effect and in good standing, there are no Legal Proceedings pending
or, to the knowledge of the Company, threatened with respect to any such
Environmental Permit; the Company is in compliance with such Environmental
Permits; (iii) the Company is not (x) subject to any outstanding written Order
or, except as set forth on SCHEDULE 5Q, Material Contract, including
Environmental Liens, with or in favor of any Governmental Body or Person
relating to Environmental Laws, Environmental Permits or Hazardous Materials or
(y) to the knowledge of the Company, subject to any federal, state or local
investigation concerning any Environmental Laws or Environmental Claims; (iv)
the Company is not subject to any Legal Proceeding alleging the violation of any
Environmental Law or Environmental Permit; (v) the Company has not received
(nor, to the knowledge of the Company, has there been issued) any written
communication that alleges that either the Company is not in compliance with any
Environmental Law or Environmental Permit; (vi) except as set forth on SCHEDULE
5Q, the Company has not caused or, to the best knowledge of the Company after
due inquiry, permitted any Hazardous Materials to remain or be disposed of,
either on or under real property owned or operated by the Company or on any real
property not permitted to accept, store or dispose of such Hazardous Materials;
(vii) to the knowledge of the Company, except as set forth on SCHEDULE 5Q, there
is not now on or in the Leased Property (A) any underground storage tanks or
surface tanks, dikes or impoundments; (B) any friable asbestos containing
materials or (C) any polychlorinated biphenyls.
5R. INSURANCE. SCHEDULE 5R sets forth a list of all policies of insurance
of any kind or nature covering the Company or any of its employees, properties
or assets, including, without limitation, policies of life, disability, fire,
theft, workers compensation, employee fidelity and other casualty and liability
insurance. Except as set forth on SCHEDULE 5R, all such policies are in full
force and effect. SCHEDULE 5R also sets forth, for each such policy, the type of
coverage, name of the insured (other than third parties), the insurer, the
expiration date of each policy, the amount of coverage per occurrence and in the
aggregate, and any deductible amount or other form of self-insured retention.
Such policies of insurance are valid, enforceable and in full force and effect
(and will continue to be valid, enforceable and in full force and effect
following the Closing) and, taken together, provide the Company, and its,
directors and officers with, in the reasonable judgment of the Company, adequate
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coverage for all risks normally insured against a Person carrying on the same
businesses as the Company. Except as set forth on SCHEDULE 5R , the Company has
not received any refusal of coverage or any notice that a defense will be
afforded with a reservation of rights or any notice of cancellation or any other
indication that any insurance policy is no longer in full force or effect or
will not be renewed or that the issuer of any policy is not willing or able to
perform its obligations thereunder. The Company has delivered or otherwise made
available to Purchaser complete and correct copies of each policy listed on
SCHEDULE 5R, together with all amendments, modifications, supplements or side
letters affecting the obligations of any party thereunder.
5S. RELATED PARTY TRANSACTIONS. Except as set forth on SCHEDULE 5S, none
of the Company's shareholders or any of their respective Affiliates owns any
direct or indirect interest of any kind in, or controls or is a director,
officer, employee or partner of, or consultant to, or lender to or borrower from
or has the right to participate in the profits of, any Person which is a
competitor, supplier, customer, landlord, tenant, creditor or debtor of the
Company excluding ownership of shares of publicly traded companies.
5T. ENTIRE BUSINESS. Except for the unavailability from time to time of
vessels or oil services machinery and equipment for charter or lease on the spot
market, the assets, properties and rights which will be owned, leased or
licensed by the Company as of the Closing Date will constitute all of the
tangible and intangible property used by and necessary to the Company in
connection with the conduct of their businesses as now conducted.
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5U. NO FINDER'S FEE. There are no claims for brokerage commissions,
finders' fees or similar compensation payable by the Company and/or its
Affiliates in connection with the transactions contemplated by this Agreement.
5V. DISCLOSURE. Neither this Agreement nor any of the exhibits, schedules,
attachments, documents, certificates supplied to the Purchaser by or on behalf
of the Company with respect to the transactions contemplated hereby nor any of
the Seller Documents contains any untrue statement of a material fact or omit a
material fact necessary to make each statement contained herein or therein not
misleading under the circumstances. There is no fact which the Company has not
disclosed to the Purchaser and of which any of its officers, directors or key
employees is aware and which has had or would reasonably be anticipated to have
a Material Adverse Effect.
6. REPRESENTATIONS AND WARRANTIES OF XXXXXXX. As a material inducement to
the Purchaser to enter into this Agreement and purchase the Company Shares,
Xxxxxxx hereby represents and warrants at the time of execution hereof that:
1. CONFIRM COMPANY REPRESENTATIONS. Xxxxxxx hereby confirms the
accuracy of and hereby also himself makes to the Purchaser the
representations and warranties made by the Company in Sections 5B
and 5C, and to the best of his knowledge, 5D, 5E, and 5F of this
Agreement.
B. CONFIDENTIALITY AND EMPLOYMENT PRACTICES. Xxxxxxx represents
that:
(1) Neither he nor, to the best of his knowledge, after inquiry, any
other officer or significant employee of the Company had an
employment, non-compete, confidentiality or other similar agreement
with a prior employer which was or would be violated by his or any
of their activities with the Company.
-19-
(2) To the best of his knowledge after inquiry, no agent, executive or
other company representative has obtained or used any trade secret
or confidential information developed by another company, including,
but not limited to, customer lists, computer programs, research
data, marketing and business strategies, production formulas,
technical reports, drawings, blueprints or other reproductions of
confidential information in violation of Louisiana law (LSA-R.S.
51-1431) or any other applicable state or federal law.
(3) Neither he, nor to the best of his knowledge after inquiry, the
Company nor, any other officer or significant employee of the
Company has or will engage in any unfair trade practices involving
fraud, misrepresentation, deception, breach of fiduciary duty or any
other unethical conduct regarding its formation, conduct of
business, manner or hiring of employees and/or customer/business
solicitation or development and has not targeted any company in its
employment or customer development plans or activities either
generally or for the purpose of unfairly injuring their business in
violation of Louisiana Law (LSA-R.S. 51-1405 et.sec.) or any other
applicable state or federal law.
(4) To the best of his knowledge after inquiry, the Company maintains
records which are sufficient, based on advice of outside counsel, to
evidence that the manner in which it hires employees is consistent
with this Section 6.B. To the best of his knowledge after inquiry,
Employees have most often been hired based on a general solicitation
(such as in newspaper advertisement) or by actively seeking
employment from the Company.
7. PURCHASER'S REPRESENTATIONS AND WARRANTIES. As a material inducement to
the Company and Xxxxxxx to enter into this Agreement and sell the Company
Shares, the Purchaser hereby represents and warrants at the time of execution
hereof that:
7A. ORGANIZATION AND CORPORATE POWER. The Purchaser is duly organized,
validly existing and in good standing under the laws of Minnesota and is duly
qualified or authorized to do business as a foreign corporation and is in good
standing in each of the jurisdictions where the Purchaser's ownership or lease
of property or conduct of business requires it to so qualify, except for those
jurisdictions where the failure to be so qualified or authorized would not have
a material adverse effect on the business, properties, results of operations,
prospects, operations, condition (financial or otherwise) of the Purchaser taken
as a whole. The Purchaser has all requisite corporate power and authority to
execute and deliver this Agreement and each other Seller Document to which it is
a party, to consummate the transactions contemplated hereby and thereby and to
duly perform its obligations hereunder and thereunder.
7B. AUTHORIZATION; NO BREACH. The execution, delivery and performance of
this Agreement and the other Seller Documents to which the Purchaser is a party
have been duly authorized by all necessary corporate action on the part of the
Purchaser. This Agreement and each other Seller Document to which the Purchaser
is a party has been duly and validly executed and delivered by, and constitutes
or, at the Closing, will constitute, a valid and binding obligation of, the
Purchaser enforceable against the Purchaser in accordance with its respective
terms except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditor's rights generally (regardless of
whether such enforceability is considered in a proceeding at law or in equity).
The execution and delivery by the Purchaser of this Agreement and each other
Seller Document to which the Purchaser is a party and the fulfillment of, and
the compliance with, the respective terms of this Agreement and the other Seller
Documents to which the Purchaser is a party by the Purchaser, do not and shall
not (i) conflict with, or result in a breach of, the terms, conditions or
provisions of, (ii) constitute a default under or any event which with the
giving of notice, passage of time or both would constitute a default under, or
(iii) result in a violation of, require any consent, approval, waiver, Order,
Permit or exemption or other action by or notice, declaration or filing to or
with any Governmental Body pursuant to, the corporate organizational documents
of the Purchaser, or any Law to which the Purchaser is subject, or any Contract,
Permit or Order to which the Purchaser is a named party and subject, except for
consents or approvals set forth on SCHEDULE 7B.
7C. RESTRICTED SECURITIES. The Restricted Securities purchased hereunder
or acquired pursuant hereto are being acquired by the Purchaser for its own
account with the present intention of holding such securities for purposes of
investment, and that it has no present intention of selling or distributing such
securities in any transaction that would be in violation of the federal
securities laws or any applicable state securities laws; provided that nothing
contained herein shall prevent the Purchaser and subsequent holders of
Restricted Securities from transferring such securities in compliance with
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applicable Law. The Purchaser understands that the Restricted Securities have
not been registered under the Securities Act or any state securities laws by
reason of their contemplated issuance hereunder in a transaction exempt from the
registration requirements of the Securities Act and applicable state securities
laws, and that the reliance of the Company and others upon these exemptions is
predicated in part upon this representation by the Purchaser. The Purchaser
further understands that the Restricted Securities may not be transferred or
resold without (i) registration thereof under the Securities Act and applicable
state securities laws, or (ii) the availability of an exemption from the
registration requirements of the Securities Act and applicable state securities
laws.
7D. NO FINDER'S FEE. There are no claims for brokerage commissions,
finders' fees or similar compensation payable by the Purchaser and/or its
Affiliates in connection with the transactions contemplated by this Agreement.
7E. PURCHASER INQUIRY. The Purchaser and its advisors have reviewed to
their satisfaction, business, management and financial information about the
Company and have had an opportunity to ask questions of, and receive answers
from, the Company concerning the business, management and financial affairs of
the Company which questions, if any, have been answered to their satisfaction,
including, without limitation, all material contracts and related material
described in SCHEDULE 5M, and have had an opportunity to obtain, and have
received, any additional information deemed necessary by them in order to form a
decision concerning the Purchaser's investment in the Company contemplated
herein; provided, however, that none of the foregoing shall limit, diminish or
constitute a waiver of any representation, warranty or covenant made under this
Agreement by the Company or any Shareholder or impair any rights which the
Purchaser may have with respect thereto under Section 11B hereof.
7F. QUALIFICATION AS AN ACCREDITED INVESTOR. The Purchaser is an
accredited investor within the meaning of Rule 501(a) of Regulation D
promulgated under the Securities Act.
8. PUBLIC DISCLOSURE. No party shall disclose that the Purchaser is
acquiring an interest in the Company or the price or terms thereof in any press
release or any public announcement or in any document or material filed with any
Governmental Body or to any other Person, without the prior written consent of
the Company and the Purchaser (which consent shall not be unreasonably withheld,
delayed, or conditioned) unless such disclosure is required by applicable Law or
Rules of the Nasdaq Stock Market or by order of a court of competent
jurisdiction in which case prior to making such disclosure, the disclosing party
shall use its reasonable efforts to give written notice to the other party
describing in reasonable detail the proposed content of such disclosure and
shall use its reasonable efforts to permit the Company to review and comment
upon the form and substance of such disclosure. With respect to the transactions
contemplated by this Agreement, the Purchaser and the Company will coordinate
all communications, if any, to third parties.
9. DEFINITIONS. (a) For the purposes of this Agreement, the following
terms have the meanings set forth below:
"ACADIANA" means Acadiana Divers and Salvage, Inc., a Louisiana
corporation.
"ACADIANA PURCHASE AGREEMENT" means that certain Agreement of Purchase and
Sale of Assets dated as of October 1, 1997 by and between Acadiana as the seller
and the Company as the buyer.
"AFFILIATE" means, with respect to any Person, (i) any Person that
directly or indirectly controls, is controlled by or is under, common control
with, such Person, or (ii) any director, senior officer or partner of such
Person or any Person specified in Clause (i) above, or (iii) any Immediate
Family Member of any Person specified in clause (i) or (ii) above.
"BENEFICIAL OWNER" shall have the meaning set forth in Rule 13d-3 of
the U.S. Securities and Exchange Commission and "BENEFICIALLY OWNS" shall
have a correlative meaning.
"COASTWISE LAWS" means 46 U.S.C.289-883 and the rules and regulations
promulgated thereunder.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONTRACT" means any contract, agreement, indenture, note, bond, loan,
instrument, lease, conditional sale contract, mortgage, license, franchise,
insurance policy, commitment or other arrangement or agreement.
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"EMPLOYEE STOCK AGREEMENTS" means the Employee Stock Agreements entered
into from time to time between the Company and certain employees which provide
that the Company shall have a repurchase-option on such employee's shares of
Common Stock if the employee ceases to be employed by the Company.
"ENVIRONMENTAL CLAIM" means any notice of violation, pending or to the
knowledge of the Company, threatened court or administrative action, claim,
Lien, abatement, order or agency direction (conditional or otherwise) by any
Governmental Body or asserted by any Person pertaining to Environmental Matters.
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"ENVIRONMENTAL LAW" means any Law, as existing as of the Closing Date,
concerning Releases into any part of the natural environment, or activities that
might result in damage to the natural environment, or any Law that is concerned
in whole or in part with the natural environment and with protecting or
improving the quality of the natural environment and includes, but is not
limited to, the Comprehensive Environmental Response, Compensation, and
Liability Act ("CERCLA") (42 U.S.C. " 9601 ET SEQ.), the Hazardous Materials
Transportation Act (49 U.S.C. " 1801 ET SEQ.), the Resource Conservation and
Recovery Act (42 U.S.C." 6901 ET SEQ.), the Clean Water Act (33 U.S.C. " 1251 ET
SEQ.), the Clean Air Act (33 U.S.C. " 7401 et SEQ.), the Toxic Substances
Control Act (15 U.S.C. " 2601 ET SEQ.), the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. " 136 ET seq.), the Oil Pollution Act (33 U.S.C."
2701-2719), and the Louisiana spill law (La. Rev. Stat. '30:2025) as such laws
have been amended or supplemented, and the regulations promulgated pursuant
thereto, and any and all analogous state or local statutes, and the regulations
promulgated pursuant thereto. "Environmental Laws" does not include the
Occupational Safety and Health Act or any other law related to worker safety or
workplace conditions which, for purposes of this Agreement, shall nevertheless
still constitute a Law.
"ENVIRONMENTAL MATTERS" means any matter arising out of or relating to the
production, storage, transportation, disposal or Release of any Hazardous
Material which could give rise to liability or require the expenditure of money
to address, and shall include, without limitation, the costs of investigating
and remediating any of the foregoing matters, any fines and penalties arising in
connection therewith, and any claim in respect thereof for damages for alleged
personal injury, property damage or damage to natural resources or injunctive
relief under common law or other Environmental Law.
"ENVIRONMENTAL PERMIT" means any Permit, approval, authorization, license
variance, registration, or permission required under any applicable
Environmental Laws and all supporting documents associated therewith.
"ERISA" means the Employee Retirement Income Security of 1974, as
amended.
"EMPLOYEE SHAREHOLDERS" means employees who are shareholders of the
Company.
"EXECUTIVES" means Xxxxxxxx X. Xxxxxxx III and Xxxx Xxxxxxxxx.
"EXTRAORDINARY LOSS" means any extraordinary loss (as defined in
Opinion No. 30 of the Accounting Principles Board of the American Institute
of Certified Public Accountants and any amendments thereto).
"FACILITIES" means real property now or heretofore owned, leased or
operated by the Company.
"GAAP" means generally accepted accounting principles as in effect in the
United States of America from time to time.
"GOVERNMENTAL BODY" means any government or governmental or regulatory
body thereof, or political subdivision thereof, whether federal, state, local or
foreign, or any agency, instrumentality or authority thereof, or any court or
arbitrator (public or private).
"HAZARDOUS MATERIALS" means any substance, material or waste which is
defined as a "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste" or "restricted hazardous waste," "subject waste,"
"contaminant," "toxic waste" or "toxic substance" under any provision of
Environmental Law, including but not limited to, petroleum, petroleum products,
asbestos and polychlorinated biphenyls.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations thereunder.
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"IMMEDIATE FAMILY MEMBER" means, with respect to any Person, a spouse,
parent, child or sibling (whether natural or adopted) of such Person and any
trust or other mechanism established for estate or tax planning purposes solely
for the benefit of any such Person's Immediate Family Members.
"LAW" means any federal, state, local, foreign or supranational statute,
treaty, code, ordinance, rule, regulation or other requirement.
"LEGAL PROCEEDING" means any judicial, civil, criminal, equitable,
administrative or arbitral actions, suits, charges, complaints, demands,
proceedings (public or private), claims or governmental proceedings.
"LIEN" means any lien, pledge, mortgage, deed of trust, security interest,
claim, lease, charge, option, right of first refusal, easement, servitude,
transfer restriction under any shareholder or similar agreement, encumbrance,
litigation or any other restriction or limitation whatsoever
"LOAN COMMITMENT AGREEMENT" means the Loan Commitment Agreement by and
between the Company and Purchaser dated as of the effective date of this
Agreement.
"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means any action,
event, circumstance, condition, change or effect which, individually or in the
aggregate, has resulted in, or could reasonably be expected to, result in a
material adverse change in and/or effect on the business, properties, results of
operations, prospects, operations, condition (financial or otherwise) of the
Company taken as a whole.
"OFFICER'S CERTIFICATE" means, with respect to the Company or Purchaser, a
certificate signed by a chairman, president or its chief financial officer of
such Person, stating, among other things, that (i) the officer signing such
certificate has made or has caused to be made such investigations as are
necessary in order to permit him to verify the accuracy of the information set
forth in such certificate and (ii) to the best of such officer's knowledge, such
certificate does not misstate any material fact and does not omit to state any
fact necessary to make the certificate not misleading.
"ORDER" means any order, injunction, judgment, decree, ruling, writ,
assessment or arbitration award.
"ORDINARY COURSE OF BUSINESS" shall mean either action consistent with
historical Company practice or consistent with oil service industry practice of
competitors or reasonably foreseeable trends therein.
"PERMITS" means any approvals, authorizations, consents, filings,
licenses, permits, registrations, qualifications or certificates, other than
Environmental Permits.
"PERSON" means an individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization, Governmental Body or any other
entity, agency or political subdivision thereof.
"QUALIFIED PUBLIC OFFERING" means an underwritten public offering of
Common Stock of the Company under the Securities Act pursuant to which the
Company receives proceeds, net of underwriting discounts and commissions, of at
least $20,000,000.
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, or migration of a Hazardous
Material into the indoor or outdoor environment, or into or out of any property
owned, operated or leased by the Company.
"REMEDIAL ACTION" means all actions, including, without limitation, any
capital expenditures, required by applicable Environmental Laws to (i) clean up,
remove or treat, Hazardous Material ; (ii) prevent the Release or threat of
Release, or minimize the further Release of any Hazardous Material ; (iii)
perform pre-remedial studies and investigations or post-remedial monitoring and
care; or (iv) bring any Facility into compliance with all Environmental Laws and
Environmental Permits.
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"RESTRICTED SECURITIES" means (i) the Company Shares issued hereunder, and
(ii) any securities issued with respect to the securities referred to in clause
(i) above, by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Restricted Securities, such securities
shall cease to be Restricted Securities when they have (a) been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, (b) become eligible for sale pursuant to
Rule 144 or Rule 144A (or any similar provision or provisions then in force)
under the Securities Act or (c) been otherwise transferred in compliance with
applicable securities laws and new certificates for them not bearing a
Securities Act restrictive legend set forth have been delivered by the Company.
Whenever any particular securities cease to be Restricted Securities, the holder
thereof shall be entitled to receive from the Company, without expense, new
securities of like tenor not bearing a Securities Act restrictive legend.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any similar federal law then in force.
"SELLER DOCUMENTS" means this Agreement and each other Contract, document
or certificate contemplated by this Agreement in connection with the
consummation of the transactions contemplated by this Agreement.
"SHAREHOLDERS" means Xxxxxxxx X. Xxxxxxx III and Cadence Capital Partners
I, L.L.C., a Louisiana limited liability company.
"SHAREHOLDERS' AGREEMENT" means that certain Shareholders' Agreement of
even date herewith among the Company, certain Shareholders, and the Purchaser.
"SOFTWARE" means any computer software program (exclusive of off-the-shelf
computer software available in the open market and related applications
thereof), program specification chart, procedure, source code, object code,
input data, routine, database, report layout, format, record file layout,
diagram, functional specification, narrative description, flow chart or other
related material which is material to the operations of the Company.
"STOCK OPTION PLAN" means that certain 1997 Long Term Incentive Plan of
the Company.
"TAX RETURNS" means all returns, declarations, reports, estimates,
information returns and statements required to be filed in respect of any Taxes.
"TAXES" means all taxes, charges, fees, imposts, levies or other
assessments, including, without limitation, all net income, gross receipts,
capital, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license, withholding, payroll, employment, social
security, unemployment, excise, severance, stamp, occupation, property and
estimated taxes, customs duties, fees, assessments and charges of any kind
whatsoever, together with any interest and any penalties, fines, additions to
tax or additional amounts imposed by any taxing authority (domestic or foreign)
and shall include any transferee liability in respect of Taxes.
"TRANSFER" means any transfer, sale, assignment, distribution, exchange,
mortgage, pledge, hypothecation or other disposition.
(b) The following capitalized terms are defined in the following
Sections of this Agreement:
TERM SECTION
Agreement Preamble
Arbitration Notice 12J
Award 12J
Basket 12D
Cap 12D
Closing 1B
Closing Date 1B
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Company Preamble
Company Shares Preamble
Discovery 12J
Dispute 12J
Employee Benefit Plans 6N
ERISA 6N
ERISA Affiliate 6N
Expenses 12D
Financial Statements 6D
Independent Arbitrator 12J
Intangible Property 6L
Intangible Property Licenses 6L
Latest Balance Sheet 6E
Lease Property 6I
Losses 12D
Multi Employer Plans 6N
PBGC 6N
Personal Property Leases 6K
Purchaser Preamble
Purchaser Indemnified Parties 11D
Qualified Plans 6N
Real Property Leases 6I
Registration Rights Agreement 2H
Registration Statement 12D
Securities Act 12D
Seller Indemnified Parties 11D
Shareholder Preamble
Shareholders Preamble
Shareholders Agreement 2I
Vessels 6J
(c) As used in this Agreement, all references to "Dollars" or "$" are to
U.S. dollars. As used in this Agreement, unless the context otherwise requires:
(1) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP; (2) "or" is not exclusive; and (3) words in the singular
include the plural, and in the plural include the singular.
10. POST-CLOSING ACTIVITIES. After the Closing, the parties shall execute
and deliver such other and further instruments and perform such other and
further acts as may be reasonably necessary or desirable for the implementation
of this Agreement or the consummation of the transactions contemplated hereby.
11. MISCELLANEOUS.
11A. EXPENSES. The Company will pay all of its expenses, including
attorneys' fees and the fees of [Darnall, Sikes, and Xxxxxxxxx] incurred in
connection with the negotiation of this Agreement, the performance of its
obligations hereunder and the consummation of the transactions contemplated
hereby. In addition, the Company will pay up to Five Thousand ($5,000.00)
Dollars of Purchaser's expenses incurred in connection with the negotiation of
this Agreement. Except as otherwise provided in this paragraph, Purchaser will
pay all of its own expenses, including fees of Xxxxxxx & Company International
and Xxxxxxxx Worldwide, incurred in connection with the negotiation of this
Agreement, the performance of its obligations hereunder and the consummation of
the transactions contemplated hereby
11B. REMEDIES. The Purchaser shall have all rights and remedies set forth
in this Agreement (including, without limitation, Section 11D) and the Company's
Articles of Incorporation and all rights and remedies which such holders may
have under any Law or Contract. Any Person having any rights under any provision
of this Agreement shall be entitled to enforce such rights specifically (without
the requirement of posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.
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11C. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement (including
the exhibits hereto) represents the entire understanding and agreement between
the parties hereto with respect to the subject matter hereof and can be amended,
supplemented or changed, and any provision hereof can be waived, only by written
instrument making specific reference to this Agreement signed by the party
against whom enforcement of any such amendment, supplement, modification or
waiver is sought. No action taken pursuant to this Agreement, including without
limitation, any investigation by or on behalf of any party, shall be deemed to
constitute a waiver by the party taking such action of compliance with any
representation, warranty, covenant or agreement contained herein. The waiver by
any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such breach or as a
waiver of any other or subsequent breach. No failure on the part of any party to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
law.
11D. SURVIVAL OF REPRESENTATION AND WARRANTIES; INDEMNIFICATION. (a) The
representations and warranties of the Company and of the Purchaser contained in
this Agreement or any of the documents delivered at Closing shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and continue in full force and effect,
regardless of any investigation made by the Purchaser or on its behalf, for a
period of three (3) years after the Closing Date. The representations and
warranties of Xxxxxxx contained in this Agreement shall survive the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby and continue in full force and effect, regardless of any
investigation made by the Purchaser or on its behalf, for a period of one (1)
year after the Closing Date.
(b) The Company hereby agrees to indemnify and hold harmless the
Purchaser and its directors, officers, employees, Affiliates, agents,
successors and assigns (collectively, the "PURCHASER INDEMNIFIED Parties")
from and against:
(i) subject to paragraph (a) of this Section 11D, any and all
losses, liabilities, obligations, damages, deficiencies,
costs and expenses ("LOSSES") based upon, attributable to
or resulting from any inaccuracy in or breach of any
representation or warranty on the part of the Company under
this Agreement or in any of the documents delivered by the
Company at Closing pursuant to Section 2J;
(ii)any and all Losses based upon, attributable to or resulting
from (A) the breach of any covenant or agreement on the
part of the Company under this Agreement or (B) the
enforcement of this Agreement (including, without
limitation, this Section 11D); and
(iii) any and all notices, actions, suits, proceedings,
demands, assessments, judgments, costs, penalties and
expenses, including attorneys' and other professional's,
fees and disbursements (collectively, "EXPENSES") incident
to the foregoing;
PROVIDED, HOWEVER, that (x) the Company shall not have any liability for
indemnity hereunder until the aggregate amount of Losses and Expenses for
which the Purchaser Indemnified Parties would otherwise be entitled to
receive indemnification hereunder exceeds $50,000 (the "BASKET"), in which
event the Company shall be obligated to pay to the Purchaser Indemnified
Parties the full amount of such Losses and Expenses, inclusive of the
Basket, and (y) the Company shall not have any liability for indemnity
hereunder in an aggregate amount in excess of $5,000,000; provided
further, however, that notwithstanding clause (x) above, the Basket shall
not apply to restrict, reduce or limit any liability of the Company for
indemnity hereunder for any Losses and Expenses of the Purchaser
Indemnified Parties, based upon, attributable to or resulting from any
willful failures ("willful" to be defined as after having been given
reasonable notice and a 30 day period to cure such failure), to fully
discharge any covenant or agreement on the part of the Company under this
Agreement which by its terms are to be performed after the Closing Date;
and further provided that the Company shall not have any liability for
breaches of representations and warranties that result from breaches of
representations and warranties by Acadiana in connection with the Acadiana
Purchase Agreement.
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(c) Xxxxxxx hereby agrees to indemnify and hold harmless the
Purchaser Indemnified Parties from and against:
(i) subject to paragraph (a) of this Section 11D, any and all
Losses based upon, attributable to or resulting from any
inaccuracy in or breach of any representation or warranty
on the part of Xxxxxxx under this Agreement;
(ii)any and all Losses based upon, attributable to or resulting
from (A) the breach of any covenant or agreement on the
part of Xxxxxxx under this Agreement or (B) the enforcement
of this Agreement (including, without limitation, this
Section 11D); and
(iii)any and all Expenses incident to the foregoing;
PROVIDED, HOWEVER, that (x) Xxxxxxx shall not have any liability for
indemnity hereunder until the aggregate amount of Losses and Expenses for
which the Purchaser Indemnified Parties would otherwise be entitled to
receive indemnification hereunder exceeds the Basket, in which event
Xxxxxxx shall be obligated to pay to the Purchaser Indemnified Parties the
full amount of such Losses and Expenses, inclusive of the Basket, and (y)
Xxxxxxx shall not have any liability for indemnity hereunder in an
aggregate amount in excess of $100,000; and further provided that Xxxxxxx
shall not have any liability for breaches of representations and
warranties that result from breaches of representations and warranties by
Acadiana in connection with the Acadiana Purchase Agreement.
(d) The Purchaser hereby agrees to indemnify and hold harmless the Company
and its directors, officers, employees, agents, successors and assigns and
Xxxxxxx (collectively, the Seller Indemnified Parties") from and against:
(i) subject to paragraph (a) of this Section 11D, any and all
Losses based upon, attributable to or resulting from any
inaccuracy in or breach of any representation or warranty on
the part of the Purchaser under this Agreement or in any of the
documents delivered by the Purchaser at Closing pursuant to
Sections 3C or 3I;
(ii) any and all Losses based upon, attributable to or resulting
from (A) the breach of any covenant or agreement on the part of
the Purchaser under this Agreement or (B) the enforcement of
this Agreement (including, without limitation, this Section
11D); and
(iii) any and all "Expenses" incident to the foregoing.
PROVIDED, HOWEVER, that (x) the Purchaser shall not have any liability for
indemnity hereunder until the aggregate amount of Losses and Expenses for
which the Seller Indemnified Parties would otherwise be entitled to
receive indemnification hereunder exceeds the Basket, in which event the
Purchaser shall be obligated to pay to the Seller Indemnified Parties the
full amount of such Losses and Expenses inclusive of the Basket, and (y)
the Purchaser shall not have any liability for indemnity hereunder to the
Company or its directors, officers, employees, shareholders, Affiliates,
agents, successors and assigns in an aggregate amount in excess of
$500,000; and further provided that Xxxxxxx shall not have any liability
for breaches of representations and warranties that result from breaches
of representations and warranties by Acadiana in connection with the
Acadiana Purchase Agreement.
(e) Subject to the limits on Losses and Expenses contained in Section 11D
(b) , (c), and (d) above, the Company and the Purchaser agree that any
indemnification payment made hereunder will be treated by the parties on
their respective Tax Returns as an adjustment to the aggregate
consideration for the shares of Common Stock of the Company acquired by
the Purchaser. If, notwithstanding such treatment by the parties, any such
indemnification payment is determined to be taxable to the indemnified
party by any taxing authority, the indemnifying party shall also indemnify
the indemnified party for any Taxes and Related Costs payable by the
indemnified party by reason of the receipt of such indemnification
payment.
(f) In the event that any Legal Proceedings shall be instituted or
asserted by any Person in respect of which payment may be sought under
this Section 11D, the indemnified party shall reasonably and promptly
cause
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written notice of the assertion of any Legal Proceeding of which it has
knowledge which is covered by the indemnities under this Section 11D to be
forwarded to the indemnifying party; provided, however, that the failure
of the indemnified party to give such reasonable and prompt notice shall
not release, waive or otherwise offset the indemnifying party's
obligations hereunder with respect thereto except to the extent that the
indemnifying party can demonstrate actual loss and prejudice as a result
of such failure. The indemnifying party shall have the right, at its sole
option and expense, to be represented by counsel of its choice, which must
be reasonably satisfactory to the indemnified party which consent shall
not be unreasonably withheld, conditioned or delayed, and to defend
against, negotiate, settle or otherwise deal with any Legal Proceeding
which relates to any Losses or Expenses indemnified against hereunder;
PROVIDED, however, that (i) prior to assuming control of such defense, the
indemnifying party shall verify in writing to the indemnified party that
the indemnifying party will be fully responsible (with no reservation of
any rights) for all Liabilities and obligations relating to such claim for
indemnification and that it will provide full indemnification with respect
thereto and (ii) no settlement shall be made without the prior written
consent of the indemnified party, which consent shall not be unreasonably
withheld, conditioned or delayed. If the indemnifying party elects to
defend against, negotiate, settle or otherwise deal with any Legal
Proceeding which relates to any Losses indemnified against hereunder, it
shall within Thirty (30) days (or sooner, if the nature of the Legal
Proceeding so requires) notify the indemnified party of its intent to do
so. If the indemnifying party elects not to defend against, negotiate,
settle or otherwise deal with any Legal Proceeding which relates to any
Losses and Expenses indemnified against hereunder, fails to notify the
indemnified party of its election as herein provided or contests its
obligation to indemnify the indemnified party for such Losses and Expenses
under this Agreement, the indemnified party may defend against, negotiate,
settle or otherwise deal with such Legal Proceeding. If the indemnified
party defends any Legal Proceeding, then the indemnifying party shall
reimburse the indemnified party for the reasonable Expenses of defending
such Legal Proceeding upon submission of periodic bills. The indemnified
party may not settle any Legal Proceeding without the prior written
consent of the indemnifying party, which consent shall not be unreasonably
withheld, conditioned or delayed. If the indemnifying party shall assume
the defense of any Legal Proceeding, the indemnified party may
participate, at its own expense, in the defense of such Legal Proceeding;
PROVIDED, HOWEVER, such indemnified party shall be entitled to participate
in any such defense with separate counsel at the expense of the
Indemnifying Party if (i) so requested by the indemnifying party to
participate or (ii) in the reasonable opinion of counsel to the
indemnified party, a conflict or potential conflict exists between the
indemnified party and the indemnifying party that would make such separate
representation advisable. The parties hereto agree to cooperate fully with
each other in connection with the defense, negotiation or settlement of
any such Legal Proceeding.
After any final judgment or award shall have been rendered by a court,
arbitration board or administrative agency of competent jurisdiction and the
expiration of the time in which to appeal therefrom, or a settlement shall have
been consummated, or the indemnified party and the indemnifying party shall have
arrived at a mutually binding agreement with respect to a Legal Proceeding
hereunder, the indemnified party shall forward to the indemnifying party notice
of any sums due and owing by the indemnifying party pursuant to this Agreement
with respect to such matter and the indemnifying party shall be required to pay
all of the sums so due and owing to the indemnified party by wire transfer of
immediately available funds within five business days after the date of such
notice.
11E. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not
11F. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
11G. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more than
one party, and all such counterparts taken together shall constitute one and the
same Agreement.
11H. TABLE OF CONTENTS AND SECTION HEADINGS; INTERPRETATION. The table of
contents and section headings of this Agreement are inserted for convenience
only, do not constitute a part of this Agreement and are to be given no effect
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in the construction or interpretation of this Agreement. The use of the word
"including" in this Agreement shall be by way of example rather than by
limitation.
11I. GOVERNING LAW; SUBMISSION TO JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) Except as expressly provided in Section 11J, the internal law, and
not the conflict of laws principles, of the State of Texas shall govern this
Agreement as well as the construction, validity and interpretation of this
Agreement and the exhibits and schedules hereto.
(b) Solely to the extent permitted by Section 11J hereof, each of
the parties hereto hereby irrevocably submit for itself or himself and its or
his property to the non-exclusive jurisdiction of any federal or state court
located within the State of Louisiana over any Dispute (as hereinafter defined)
and each party hereby irrevocably agrees that all claims in respect of such
Dispute or any action, suit or proceeding related thereto, solely to the extent
expressly permitted by Section 11J hereof, may be heard and determined in such
courts. The parties hereby irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying
of venue of any Dispute brought in such court or any defense of inconvenient
forum for the maintenance of such Dispute, provided that relief sought in any
action, suit or proceeding relating thereto is of the nature expressly permitted
by Section 11J hereof to be sought in such court. Each of the parties hereto
agrees that an Award or a judgment in any such Dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(c) Each of the parties hereto hereby consents to process being
served by any party to this Agreement in any suit, action or proceeding of the
nature expressly permitted by Section 11J hereof by the delivery or mailing of a
copy thereof; in accordance with the provisions of Section 11K.
(d) Nothing in this Section 11I shall affect the rights of the
parties to commence any action, suit or proceeding of the nature expressly
permitted by Section 11J hereof in any other forum or to serve process in any
such action, suit or proceeding in any other manner permitted by law.
11J. ARBITRATION. (a) Any claim, dispute or other disagreement
(each, a "DISPUTE") between a Purchaser Indemnified Party, on the one hand, and
the Company or Xxxxxxx, on the other hand, arising out of or relating to this
Agreement or any of the transactions contemplated hereby shall be finally
settled by arbitration in accordance with the terms of this Section 11J;
provided that any party shall in any event have the right to seek and obtain
equitable relief during the pendency of such Dispute pursuant to Section 11J(b)
hereof. In the event of any Dispute, any party may serve written notice of such
Dispute on any other party and each party to such Dispute shall undertake in
good faith to resolve such Dispute. If the parties cannot agree to resolve such
Dispute within 30 days after such written notice, any party to such Dispute may,
by further written notice (the "ARBITRATION NOTICE") to the other party,
commence an arbitration proceeding by bringing the Dispute to an arbitration
panel selected as provided below. The Arbitration Notice shall be filed
simultaneously with the American Arbitrator Association, Lafayette, LA office,
and shall contain a description of the amount in controversy, the nature of the
Dispute and the paragraph(s) of this Agreement to which such Dispute relates.
Disputes shall be decided by an arbitration panel comprised of three arbitrators
(each of whom shall be a practicing lawyer knowledgeable and experienced in
matters of corporate, mergers and acquisitions and securities law), one
arbitrator to be selected by the Purchaser Indemnified Party, a second
arbitrator to be selected by the Company, and the third arbitrator (the
"INDEPENDENT ARBITRATOR"), who will be the Chairman of the arbitration panel, to
be appointed by the first two arbitrators. In the event the first two
arbitrators fail to agree on the appointment of the Independent Arbitrator
within 15 days, the Independent Arbitrator shall be appointed by the American
Arbitrator Association in Lafayette, LA. In the event that any arbitrator shall
resign, be unable or otherwise fail to perform his or her duties, each party
shall immediately notify the other parties of such resignation, inability or
failure, and a replacement shall immediately be selected by the party who
selected such arbitrator in the first instance, or, if the arbitrator to be
replaced is the Independent Arbitrator, then the parties shall attempt in good
faith to appoint a mutually agreeable replacement Independent Arbitrator. If the
parties fail to agree on such replacement within 15 days, either party may
request that the American Arbitrator Association appoint such replacement
Independent Arbitrator. The arbitration panel shall conduct the arbitration in
accordance with the Rules of Arbitration of the American Arbitrator Association
then in effect, except to the extent such rules are inconsistent with the
provisions of this Section 11J. The agreement to arbitrate contained in this
Section 11J shall be specifically enforceable under the prevailing arbitration
law, and shall survive termination of this Agreement. Judgment upon the Award
rendered by the arbitration panel may be entered in accordance with applicable
law in any court having jurisdiction therefor. Each party shall bear its own
costs and expenses for arbitration, subject to reimbursement as determined by
the arbitration panel in the Award. Arbitration shall, unless the parties
otherwise agree in writing, take place in Lafayette, Louisiana.
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(b) Nothing contained in this Section 11J shall preclude, or be
deemed, construed or interpreted to preclude, any party from seeking interim
equitable relief from a court of competent jurisdiction against the other party,
where circumstances so require, except that no party shall be entitled to seek a
stay of any arbitration proceeding brought hereunder. The parties agree that,
upon the application of any of the parties, and whether or not an arbitration
proceeding has yet been initiated pursuant to this Section 11J, all courts
having jurisdiction are hereby authorized to (i) issue and enforce in any lawful
manner such temporary restraining orders, preliminary injunctions and other
interim measures of relief as may be necessary to prevent harm to a party's
interests or as otherwise may be appropriate pending the conclusion of
arbitration proceedings pursuant to this Section 11J, and/or (ii) enter into and
enforce in any lawful manner such judgments for permanent equitable relief as
may be necessary to prevent harm to a party's interests or as otherwise may be
appropriate following the issuance of the Award.
11K. NOTICES. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
to the recipient, sent to the recipient by reputable express courier service
(charges prepaid) or mailed to the recipient by certified or registered mail,
return receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to the Purchaser and to the Company at the
addresses indicated below:
If to the Purchaser:
Cal Dive International, Inc.
000 Xxxxx Xxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
If to the Company or Xxxxxxx:
Aquatica, Inc.
0000 Xxxx Xx.
Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx III
Facsimile No:
or to such other address or to the attention of such other Person as the
recipient party has specified by prior written notice to the sending party.
11L. FURTHER ASSURANCES. The Company, Xxxxxxx and the Purchaser each agree
to execute and deliver such other documents or agreements as may be reasonably
necessary or desirable for the implementation of this Agreement and the
consummation of the transactions contemplated hereby.
11M. INTERPRETATION. The parties acknowledge and agree that: (i) each
party and its counsel reviewed and negotiated the terms and provisions of this
Agreement and have contributed to its revision; (ii) the rule of construction to
the effect that any ambiguities are resolved against the drafting party shall
not be employed in the interpretation of this Agreement; and (iii) the terms and
provisions of this Agreement shall be construed fairly as to all parties hereto,
regardless of which party was generally responsible for the preparation of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first written above.
COMPANY:
AQUATICA, INC.
a Louisiana corporation
By:_____________________
Xxxxxxxx X. Xxxxxxx III, President
SELLER:
By:_____________________
Xxxxxxxx X. Xxxxxxx III, Individually
PURCHASER:
CAL DIVE INTERNATIONAL, INC.
a Minnesota corporation
By:______________________
Name:____________________
Title:_____________________
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LIST OF SCHEDULES
Schedule 5B - Capital Stock and Options
Schedule 5C - Consents and Waivers
Schedule 5D - Financial Statements
Schedule 5E - Absence of Undisclosed Liabilities
Schedule 5F - Absence of Certain Developments
Schedule 5G - Tax Matters
Schedule 5I - Real Property
Schedule 5J - Vessels
Schedule 5K - Tangible Personal Property
Schedule 5L - Intangible Property
Schedule 5M - Material Contracts
Schedule 5N - Employee Benefits
Schedule 5P - Compliance with Laws; Permits
Schedule 5Q - Environmental Matters
Schedule 5R - Insurance
Schedule 5S - Customers and Suppliers
Schedule 7B - Purchaser Consents and Approvals
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