March 20, 2005 Definitive Acquisition Purchase Agreement Jerry Swinford Coil Tubing Technology Holding, Inc. 19515 Weid Road Suite C Spring, Texas 77388 Jim Dial Grifco International, Inc. Scott, Louisiana 70583
Exhibit
10.1
March
20,
2005
Definitive
Acquisition Purchase Agreement
Xxxxx
Xxxxxxxx
Coil
Tubing Technology Holding, Inc.
00000
Xxxx Xxxx
Xxxxx
X
Xxxxxx,
Xxxxx 00000
Xxx
Xxxx
Grifco
International, Inc.
000
Xxxxxx Xxxxx
Xxxxx,
Xxxxxxxxx 00000
This
Definitive Acquisition Stock Purchase Agreement dated March 20, 2005 (the
“Agreement”), is between Grifco International, Inc., a Nevada corporation
(“GFCI”) and the Shareholders of Coil Tubing Technology Holding, Inc., a Texas
corporation (“CTTI”) identified on Exhibit A to this Agreement (the
“Shareholders”).
Whereas,
the Board of Directors of Grifco has approved the purchase of all of the shares
of capital stock of Coil Tubing Technology Holding, Inc., held by the
Shareholders, and Shareholders agree to sell said shares upon the terms and
subject to the conditions set forth in this Agreement.
The
parties hereby agree that Grifco shall acquire 100% of the outstanding common
shares of Coil Tubing Technology Holding, Inc.,
ACCORDINGLY,
the parties agree as follows:
ARTICLE
I. THE PURCHASE
1.1 The
Purchase.
On the
Closing Date (as defined in Section 8.1), Grifco agrees to purchase from
Shareholders and Shareholders agree to transfer, sell and assign to Grifco
all
of the issued and outstanding capital stock of CTTI. Consisting of 51,000 Shares
of common stock, par value $0.01 per share (the “Common Stock”), in the
respective share amounts set forth opposite their names in Exhibit A (the
“Shares”), all for the purchase price set forth in Section 1.2.
1.2 Purchase
Price.
The
purchase price (the “Purchase Price”) to be paid by Grifco to Shareholders for
the Shares shall be $510,000.00 Dollars and adjusted as provided in Section
1.3.
1.3 Adjustments
to Purchase Price.
1
(a) Adjustment
Amount.
[To the
shareholders] An initial payment of $50,000.00 US Dollars at the signing of
the
definitive acquisition purchase agreement and restricted shares of Grifco
equivalent to $260,000.00 Dollars. Strike price for the restricted share
issuance shall be determined at the close of stock market on the closing date.
(b) Second
Payment.
Restricted shares of Grifco equivalent to $200,000.00. These restricted shares
will be issued to HyCoTec Investments, B.V, in full satisfaction of the
outstanding obligation to it in the approximate amount of $800,000.00.
Strike price for the restricted share issuance shall be determined at the close
of stock market on the closing date.
1.4.
Closing
Obligations.
At the
Closing;
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(i)
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Certificates
representing all the Shares of Coil Tubing Technology Holding, Inc.,
duly
endorsed (or accompanied by duly executed stock powers), with signatures
guaranteed by a commercial bank or by a member firm of the New York
Stock
Exchange, for transfer to Grifco;
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(ii)
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Releases
in the form of Exhibit 1.4(a) (ii) executed by each Shareholder
(collectively, “Shareholders’
Releases”);
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(iii)
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Employment
agreement in the form of Exhibit 1.4(a)(iii), executed by Xxxxx Xxxxxxxx
(collectively, “Employment
Agreement”);
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(iv)
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Non-competition
agreements in the form of Exhibit 1.4(a)(iv), executed by each Shareholder
(collectively, the “Non-competition Agreements”);
and
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(v)
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A
certificate executed by the Shareholders representing and warranting
to
Grifco that Shareholders’ representations and warranties in this Agreement
were accurate in all respects as of the date of this Agreement and
are
accurate in all respects as of the Closing Date as if made on the
Closing
Date (giving full effect to any supplements to the Disclosure Letter
that
were delivered by Shareholders to Grifco prior to the Closing Date
in
accordance with Section 4.10); and
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(b) GRIFCO
will deliver to Shareholders:
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(i)
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Certificates
representing the Shares of Grifco duly endorsed (or accompanied by
duly
executed stock powers) with signatures guaranteed by a commercial
bank or
by a member from the New York Stock Exchange for transfer to each
Shareholder as set forth opposite their names on Exhibit
A;
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2
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(ii)
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A
certificate executed by Grifco to the effect that, except as otherwise
stated in such certificate, each of Grifco representations and warranties
in this Agreement is accurate in all respects as of the date of this
Agreement and is accurate in all respects as of the Closing Date
as if
made on the Closing Date;
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(iii) The
Employment Agreements executed by Grifco; and
(iv) Cashier’s
check or similarly immediately available funds in the amount of
$50,000.00.
ARTICLE
II. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
Except
as
otherwise previously disclosed to Grifco in writing, each of the Shareholders
of
Coil Tubing Technology Holding, Inc., represents and warrants to Grifco as
follows:
2.1 Corporate
Organization. Coil
Tubing Technology Holding, Inc., is a corporation duly formed, validly existing
and in good standing under the laws of the State of Texas. Grifco has received
complete and correct copies of Coil Tubing Technology Holding, Inc.’s
Certificate of Incorporation and Bylaws and all agreements between and among
the
Shareholders or the Shareholders and Coil Tubing Technology Holding, Inc.,
each
as amended to date. Such Certificate of Incorporation, Bylaws and agreements
are
in full force and effect. Coil Tubing Technology Holding, Inc., is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each state or other jurisdiction in which either the ownership
or
use of the properties owned or used by it, or the nature of the activities
conducted by it, requires such qualification.
2.2 Capitalization.
As of
the date of this Agreement, the authorized capital stock of CTTI consists of
1,000,000 shares of Common Stock with a par value $0.01 per share, of which
51,000 shares are issued and outstanding. CTTI has no preferred stock
authorized, issued or outstanding.
All the issued and outstanding shares of capital stock of Coil Tubing Technology
Holding, Inc., are validly issued, fully paid and nonassessable. Coil Tubing
Technology Holding, Inc., has no commitment for the issuance or sale of shares
of its capital stock or subscriptions, options, convertible securities,
warrants, preemptive rights, or other such rights. The Shares are not subject
to
any stock redemption, buy/sell, right of first refusal or other such agreements
or understandings, whether written or oral.
2.3 Capacity.
Each
Shareholder has the requisite capacity to enter into this Agreement and to
carry
out the transactions contemplated hereby. The consummation of the transactions
contemplated by this Agreement does not require any corporate proceedings to
authorize the same pursuant to applicable law, agreement or otherwise. This
Agreement has been validly executed and delivered by each Shareholder and is
a
legal, valid and binding agreement of each of them.
3
2.4 No
Violation or Encumbrance. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated by this
Agreement will (a)
violate
any provision of the Certificate of Incorporation or Bylaws of Coil Tubing
Technology Holding, Inc.; (b) violate or be in conflict with, or constitute
a
default under, or permit the termination of, or cause the acceleration of the
maturity of any debt or other obligation pursuant to, or require the consent
of
any other party to, or result in the creation or imposition of any lien upon
any
property or assets of Coil Tubing Technology Holding, Inc., under, any agreement
or commitment to which Coil Tubing Technology Holding, Inc., is a party or
by
which Coil Tubing Technology Holding, Inc., or any Shareholder is bound; or
(c)
violate any statute or law or any judgment, decree, order, regulation or rule
of
any court or governmental authority to which Coil Tubing Technology Holding,
Inc., its properties or any Shareholder is bound or affected, except where
any
one or more such violations, conflicts or defaults described in clause (b)
or
(c) above would not materially adversely effect the financial condition, results
of operations, business or properties of Coil Tubing Technology Holding, Inc.,
taken as a whole or prevent Grifco from exercising all the benefits incident
to
ownership of the Shares. Each of Shareholders will transfer the Shares held
by
him free and clear of any lien, mortgage, charge, security interest, pledge
or
other encumbrance or other adverse claim or interest of any nature.
2.5 Consents
and Approvals of Governmental Authorities.
No
consent, approval or authorization of, or declaration, filing or registration
with, any governmental or regulatory authority is required to be obtained or
made in connection with the transactions contemplated by this Agreement or
the
execution, delivery and performance of this Agreement.
2.6 Financial
Statements.
Grifco
has received the following financial statements: Dec. 31, 2004 (the “Financial
Statements”). The Financial Statements fairly present the financial condition of
Coil Tubing Technology Holding, Inc., as of Dec.31, 2004 (the “Balance Sheet
Date”) and the results of operations and changes in financial position for the
periods presented, and have been presented in accordance with generally accepted
accounting principles consistently applied throughout the period involved.
As of
the Balance Sheet Date, there were (and on the Closing Date there will be)
no
material liabilities, absolute, accrued, contingent or otherwise, of Coil Tubing
Technology Holding, Inc., that are not reflected or reserved against on the
Financial Statements (or, in the case of the Closing Date, not previously
disclosed in writing to Grifco).
2.7 No
Material Adverse Change.
No
material adverse change has occurred in Coil Tubing Technology Holding, Inc.’s
business, operations or financial condition since Balance Sheet Date and since
such date Coil Tubing Technology Holding, Inc. has conducted its business only
in the ordinary course.
2.8 Title
to and Condition of Properties.
On the
Closing Date, Coil Tubing Technology Holding, Inc. will have good and marketable
titles to its assets free and clear of any lien, mortgage, charge, security
interest, pledge or other encumbrance or other adverse claim or interest of
any
nature, other than (a) liens for taxes currently payable without interest or
penalty or not yet payable or, if previously disclosed in writing to the Grifco,
liens for taxes the validity of which Coil Tubing Technology Holding, Inc.
is
contesting in good faith; (b) liens of employees for current wages not yet
due;
(c) liens, mortgages, and security interests previously disclosed in writing
to
Grifco; and (d) liens and other imperfections of title that do not materially
interfere with the continued operation of Coil Tubing Technology Holding, Inc.’s
business. Coil Tubing
Technology Holding, Inc.’s tangible personal property is in good and serviceable
condition, normal wear and tear excepted, and Coil Tubing Technology Holding,
Inc. is carrying no excess or obsolete inventories or work-in-progress for
which
adequate reserves are not reflected on its Financial
Statements.
4
2.9 Permits,
Licenses and Material Agreements;
To the
best of its knowledge, Coil Tubing Technology Holding, Inc. presently holds
all
the permits, licenses, franchises and approvals of governmental authorities
and
agencies material to its current use, occupancy or operations, and it has not
failed or is not failing to comply in any material respect with any applicable
law or regulation where such failure would, individually or in the aggregate,
have a material adverse effect on the financial condition, business or
operations of Coil Tubing Technology Holding, Inc. All agreements, instruments,
leases, or commitments to which Coil Tubing Technology Holding, Inc. is a party
or is subject and which are material to its business and operation are valid,
binding and fully enforceable by Coil Tubing Technology Holding, Inc., and
Coil
Tubing Technology Holding, Inc. is not in default nor has any event or
circumstance occurred which, but for the expiration of any applicable grace
period or the giving of notice, or both, would constitute a default under any
such agreement, instrument, lease or commitment.
2.10 Litigation.
There is
no litigation, legal, administrative or arbitral proceeding, investigation
or
other action of any nature pending or, to Coil Tubing Technology Holding, Inc.’s
best knowledge, threatened against, affecting or related to Coil Tubing
Technology Holding, Inc. or the Shares.
2.11 Certain
Fees.
Neither
Coil Tubing Technology Holding, Inc. nor any of its officers, directors or
employees in their capacities as such, has incurred any claims for any brokerage
fees, commissions or finders’ fees in connection with the transactions
contemplated by this Agreement.
Other
Common Representations and Warranties
2.12. Condition
and Sufficiency of Assets.
The
buildings, plants, structures, and equipment of Coil Tubing Technology Holding,
Inc., are structurally sound, are in good operating condition and repair, and
are adequate for the uses to which they are being put, and none of such
buildings, plants, structures, or equipment is in need of maintenance or repairs
except for ordinary, routine maintenance and repairs that are not material
in
nature or cost. The building, plants, structures, and equipment of Coil Tubing
Technology Holding, Inc. are sufficient for the continued conduct of Coil Tubing
Technology Holding, Inc.’s business after the Closing in substantially the same
manner as conducted prior to the Closing.
2.13. Accounts
Receivable.
All
accounts receivable of Coil Tubing Technology Holding, Inc. that are reflected
on the Financial Statements or on the accounting records of Coil Tubing
Technology Holding, Inc. as of the Closing Date (collectively, the “Accounts
Receivable”) represent or will represent valid obligations arising from sales
actually made or services actually performed in the ordinary course of business.
Unless paid prior to the Closing Date, the Accounts Receivable are or will
be as
of the Closing Date current and collectible net of the respective
reserves shown on the latest Balance Sheet or on the accounting records of
Coil
Tubing Technology Holding, Inc., as of the Closing Date (which reserves are
adequate and calculated consistent with past practice and, in the case of the
reserve as of the Closing Date, will not represent a greater percentage of
the
Accounts Receivable as of the Closing Date than the reserve reflected in the
latest Balance Sheet represented of the Accounts Receivable reflected therein
and will not represent a material adverse change in the composition of such
Accounts Receivable in terms of aging). Subject to such reserves, each of the
Accounts Receivable either has been or will be collected in full, without any
set-off, within 90 days after the day on which it first becomes due and payable.
There is no contest, claim, or right of set-off, other than returns in the
ordinary course of business, under any Contract with any obligor of an Accounts
Receivable relating to the amount or validity of such Accounts Receivable.
Part
2.13 of the Disclosure Letter contains a complete and accurate list of all
Accounts Receivable as of the Balance Sheet Date, which list sets forth the
aging of such Accounts Receivable.
5
2.14
Inventory.
All
inventory of Coil Tubing Technology Holding, Inc., whether or not reflected
in
the latest Balance Sheet, consists of a quality and quantity usable and salable
in the ordinary course of business, except for obsolete items and items of
below-standard quality, all of which have been written off or written down
to
net realizable value in such Balance Sheet or on the accounting records of
Coil
Tubing Technology Holding, Inc., as of the Closing Date, as the case may be.
All
inventories not written off have been priced at the lower of cost or [market]
on
a [first in, first out] basis. The quantities of each item of inventory (whether
raw materials, work-in-process, or finished goods) are not excessive, but are
reasonable in the present circumstances of Coil Tubing Technology Holding,
Inc.
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2.15.
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No
Undisclosed Liabilities;
Except as set forth in Part 2.15 of the Disclosure Letter, Coil Tubing
Technology Holding, Inc. has no liabilities or obligations of any
nature
(whether known or unknown and whether absolute, accrued, contingent,
or
otherwise) except for liabilities or obligations reflected or reserved
against in the Balance Sheet and current liabilities incurred in
the
ordinary course of business since the respective dates
thereof.
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Coil
Tubing Technology Holding, Inc., has the following Liabilities and
obligations which the Company will assume and pay:
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Liability
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Amount
(in dollars)
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COB/NOB
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Hammelmann
Corporation
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$84,266.85
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Internal
Revenue Service
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$21,251.42
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Internal
Revenue Service
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$3,048.40
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Hui
Min XxXxx
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$1,750.00
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NOB
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Xxxx
Xxxxx
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$818.80
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NOB
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Industrial
Science
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$15,130.00
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NOB
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Prescott
Machine
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$8,060.00
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NOB
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Office
Depot
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$1,238.86
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NOB
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Xxxx
Xxxxxxxxxxx
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$696.38
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NOB
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Xxxxx
School District
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$1,393.46
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NOB
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Total
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$137,653.57
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*
COB - Change on Balance Sheet
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||
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*NOB
- Not on Balance
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6
2.16.
Taxes.
Except
as
disclosed on Part 2.16 of the Disclosure Letter or as would not have a material
adverse effect on Coil Tubing Technology Holding, Inc.: (a) Coil Tubing
Technology Holding, Inc. has duly filed all federal, state, local and foreign
tax returns required to be filed by or with respect to it with the applicable
taxing authority, and no extensions with respect to such tax returns have (or
as
of the Closing Date will have) been requested or granted; (b) Coil Tubing
Technology Holding, Inc. has (and as of the Closing Date will have) paid all
taxes due, or claimed by any taxing authority to be due, from or with respect
to
it, except taxes that are being contested in good faith by appropriate legal
proceedings; (c) there has been no issue raised or adjustment proposed (and
none
is pending) by any taxing authority in connection with any of the tax returns
of
Coil Tubing Technology Holding, Inc. that has not been resolved or paid, and
no
such issues raised could reasonably be expected to result in a proposed tax
deficiency to Coil Tubing Technology Holding, Inc. for any other period not
so
examined; (d) all taxes that are required to be withheld or collected by Coil
Tubing Technology Holding, Inc. have been duly withheld or collected and to
the
extent required, have been paid or properly segregated or deposited as required
by applicable law; (e) Coil Tubing Technology Holding, Inc. has not waived
the
statute of limitations on the right of any taxing authority in connection with
its tax returns or otherwise made any special arrangements with any taxing
authority.
2.17. Absence
of Certain Changes and Events.
Except
as set forth in Part 2.17 of the Disclosure Letter, since the Balance Sheet
Date, Coil Tubing Technology Holding, Inc. has conducted their businesses only
in the ordinary course of business and there has not been any:
(a)
Change
in
Coil Tubing Technology Holding, Inc.’s authorized or issued capital stock; grant
of any stock option or right to purchase shares of capital stock of Coil Tubing
Technology Holding, Inc.; issuance of any security convertible into such capital
stock; grant of any registration rights; purchase, redemption, retirement,
or
other acquisition by Coil Tubing Technology Holding, Inc. of any shares of
any
such capital stock; or declaration or payment of any dividend or other
distribution or payment in respect of shares of capital stock;
(b)
Amendment to the organizational documents of Coil Tubing Technology Holding,
Inc.;
(c)
Payment
or increase by Coil Tubing Technology Holding, Inc. of any bonuses, salaries,
or
other compensation to any stockholder, director, officer, or (except in the
ordinary course of business) employee or entry into any employment, severance,
or similar contract with any director, officer, or employee;
(d)
Adoption
of, or increase in the payments to or benefits under, any profit sharing, bonus,
deferred compensation, savings, insurance, pension, retirement, or other
employee benefit plan for or with any employees of Coil Tubing Technology
Holding, Inc.;
7
(e)
Damage
to
or destruction or loss of any asset or property of Coil Tubing Technology
Holding, Inc., whether or not covered by insurance, materially and adversely
affecting the properties, assets, business, financial condition, or prospects
of
Coil Tubing Technology Holding, Inc., taken as a whole;
(f)
Entry
into, termination of, or receipt of notice of termination of (i) any license,
distributorship, dealer, sales representative, joint venture, credit, or similar
agreement, or (ii) any contract or transaction involving a total remaining
commitment by or to Coil Tubing Technology Holding, Inc., of at least
$10,000.00;
(g)
Sale
(other than sales of inventory in the ordinary course of business), lease,
or
other disposition of any asset or property of Coil Tubing Technology Holding,
Inc., or mortgage, pledge, or imposition of any lien or other encumbrance on
any
material asset or property of Coil Tubing Technology Holding, Inc.;
(h)
Cancellation
or waiver of any claims or rights with a value to Coil Tubing Technology
Holding, Inc. in excess of $10,000.00;
(i)
Material
change in the accounting methods used by Coil Tubing Technology Holding, Inc.;
or
(j)
Agreement,
whether oral or written, by Coil Tubing Technology Holding, Inc. to do any
of
the foregoing.
2.18
Contracts. Coil Tubing Technology Holding, Inc. has made available to Grifco
for
review complete and correct copies of all material contracts. Except as set
forth on Part 2.18 of the Disclosure Letter, each of the material contracts
may
be transferred to Grifco without the consent of any person. Each of the material
contracts is valid, binding and in full force and effect against Coil Tubing
Technology Holding, Inc., and to Coil Tubing Technology Holding, Inc.’s
knowledge, is valid, binding and in full force and effect against the other
party thereto. Except as set forth on Part 2.18 of the Disclosure Letter, Coil
Tubing Technology Holding, Inc. is not in default in any material respect,
and
no notice of alleged default has been received by Coil Tubing Technology
Holding, Inc., under any of the material contracts, and no other party thereto
is, to the knowledge of Coil Tubing Technology Holding, Inc., in default there
under in any material respect, and, to the knowledge of Coil Tubing Technology
Holding, Inc., there exists no condition or event which, with or without notice
or lapse of time or both, would (a) constitute a default under any of the
material contracts by Coil Tubing Technology Holding, Inc., or any other parties
thereto, or (b) otherwise give any other party to such a contract the right
to
charge penalties or reduce the rates that would otherwise be payable under
such
a contract.
2.19
Coil
Tubing Technology Holding, Inc.’s
Insurance.
Coil
Tubing Technology Holding, Inc. will obtain and maintain with sound and
reputable insurers, and, to the knowledge of Coil Tubing Technology Holding,
Inc., there will be in full force and effect, policies of insurance with respect
to its business against such casualties and contingencies of such types and
in
such amounts as Coil Tubing Technology Holding, Inc. considers customary and
reasonable. All premiums due and payable with respect to such policies will
be
timely paid. No written notice of cancellation of, or written indication of
any
intention not to renew, any such policy has been received by Coil Tubing
Technology Holding, Inc., or to the knowledge of Coil Tubing Technology Holding,
Inc. Set forth on Part 2.19 of the Disclosure Letter is a summary description
of
(a) the insurance policies that will be acquired and maintained by Coil Tubing
Technology Holding, Inc., and (b) any and all outstanding
insurance.
8
2.20.
Environmental
Matters.
Except
as set forth in Part 2.20 of the Disclosure Letter:
(a)
Coil
Tubing Technology Holding, Inc. is, and at all times has been, in full
compliance with, and has not been and is not in violation of or liable under,
any environmental law. Coil Tubing Technology Holding, Inc. has no basis to
expect, nor has it or any other person for whose conduct they are or may be
held
to be responsible received, any actual or threatened order, notice, or other
communication from (i) any governmental body or private citizen acting in the
public interest, or (ii) the current or prior owner or operator of any
facilities, of any actual or potential violation or failure to comply with
any
environmental law, or of any actual or threatened obligation to undertake or
bear the cost of any environmental, health, and safety liabilities with respect
to any of the facilities or any other properties or assets (whether real,
personal, or mixed) in which Coil Tubing Technology Holding, Inc. has had an
interest, or with respect to any property or facility at or to which hazardous
materials were generated, manufactured, refined, transferred, imported, used,
or
processed by Coil Tubing Technology Holding, Inc., or any other person for
whose
conduct they are or may be held responsible, or from which hazardous materials
have been transported, treated, stored, handled, transferred, disposed,
recycled, or received.
(b)
There
are no pending or, to the knowledge of Coil Tubing Technology Holding, Inc.,
threatened claims, encumbrances, or other restrictions of any nature, resulting
from any environmental, health, and safety liabilities or arising under or
pursuant to any environmental law, with respect to or affecting any of the
facilities or any other properties and assets (whether real, personal, or mixed)
in which Coil Tubing Technology Holding, Inc. has or had an
interest.
(c)
Coil
Tubing Technology Holding, Inc. has no basis to expect, nor has it or any other
person for whose conduct they are or may be held responsible, received, any
citation, directive, inquiry, notice, order, summons, warning, or other
communication that relates to hazardous activity, hazardous materials, or any
alleged, actual, or potential violation or failure to comply with any
environmental law, or of any alleged, actual, or potential obligation to
undertake or bear the cost of any environmental, health, and safety liabilities
with respect to any of the facilities or any other properties or assets (whether
real, personal, or mixed) in which Coil Tubing Technology Holding, Inc. had
an
interest, or with respect to any property or facility to which hazardous
materials generated, manufactured, refined, transferred, imported, used, or
processed by Coil Tubing Technology Holding, Inc., or any other person for
whose
conduct they are or may be held responsible, have been transported, treated,
stored, handled, transferred, disposed, recycled, or received.
(d)
Neither
Coil Tubing Technology Holding, Inc., nor any other person for whose conduct
it
is or may be held responsible, has any environmental, health, and safety
liabilities with respect to the facilities or with respect to any other
properties and assets (whether real, personal, or mixed) in which Coil Tubing
Technology Holding, Inc. (or any predecessor) has or had an interest, or at
any
property geologically or hydrologically adjoining the facilities or any such
other property or assets.
9
(e)
There
are
no hazardous materials present on or in the environment at the facilities or
at
any geologically or hydrologically adjoining property, including any hazardous
materials contained in barrels, above or underground storage tanks, landfills,
land deposits, dumps, equipment (whether moveable or fixed) or other containers,
either temporary or permanent, and deposited or located in land, water, sumps,
or any other part of the facilities or such adjoining property, or incorporated
into any structure therein or thereon. Neither Coil Tubing Technology Holding,
Inc., nor any other person for whose conduct it is or may be held responsible,
or [to the knowledge of Coil Tubing Technology Holding, Inc.] any other person,
has permitted or conducted, or is aware of, any hazardous activity conducted
with respect to the facilities or any other properties or assets (whether real,
personal, or mixed) in which Coil Tubing Technology Holding, Inc. has or had
an
interest.
(f)
There
has been no release or, to the knowledge of Coil Tubing Technology Holding,
Inc., threat of release, of any hazardous materials at or from the facilities
or
at any other locations where any hazardous materials were generated,
manufactured, refined, transferred, produced, imported, used, or processed
from
or by the facilities, or from or by any other properties and assets (whether
real, personal, or mixed) in which Coil Tubing Technology Holding, Inc. has
or
had an interest, or any geologically or hydrologically adjoining property,
whether by Coil Tubing Technology Holding, Inc. or any other
person.
(g)
Coil
Tubing Technology Holding, Inc. has delivered to Grifco true and complete copies
and results of any reports, studies, analyses, tests, or monitoring possessed
or
initiated by Coil Tubing Technology Holding, Inc., pertaining to hazardous
materials or hazardous activities in, on, or under the facilities, or concerning
compliance by Coil Tubing Technology Holding, Inc., or any other person for
whose conduct it is or may be held responsible, with environmental
laws.
2.21
Employees.
(a)
Set
forth on Part 2.21(a) of the Disclosure Letter is a list of the name, social
security number (or the equivalent), and dates of employment by Coil Tubing
Technology Holding, Inc., of each employee on the date hereof, together with
the
position held by such employee and the total amounts of salary, bonuses and
other compensation paid or payable by Coil Tubing Technology Holding, Inc.,
to
each such person for the current fiscal year and the immediately preceding
fiscal year. Coil Tubing Technology Holding, Inc., has maintained adequate
and
suitable records regarding each person employed by Coil Tubing Technology
Holding, Inc., and has made such records available to Grifco.
(b)
Except
as
set forth on Part 2.21(b) of the Disclosure Letter, Coil Tubing Technology
Holding, Inc., is not a party to any employment agreement with any employees,
and the employment of each employee may be terminated by Coil Tubing Technology
Holding, Inc., on not more than 14 days notice to such employee without
liability to Coil Tubing Technology Holding,
Inc., subject to the applicable law. The consummation of the transactions
contemplated by this Agreement will not result in the incurring of any severance
pay obligations to any employee. Except as set forth in Part 2.21(a) of the
Disclosure Letter, there are no outstanding claims asserted in writing against
Coil Tubing Technology Holding, Inc., by any person who is or was employed
by
Coil Tubing Technology Holding, Inc., or any dispute with any material number
of
class of the employees.
10
2.22 Employee
Benefits.
Set
forth on Part 2.22 of the Disclosure Letter is a list identifying each employee
benefit plan, policy, agreement or arrangement, including without limitation,
pension, stock option, share saving, deferred compensation, profit sharing,
incentive, bonus and severance pay plans and arrangements, whether legally
enforceable or not, which (a) is, has been or is proposed to be entered into,
administered, maintained or contributed to by Coil Tubing Technology Holding,
Inc., or (b) covers any employee or former employee (each, a “Benefit Plan”).
Each Benefit Plan has been maintained and contributed to in compliance with
the
requirements of applicable law. Coil Tubing Technology Holding, Inc. has paid
and discharged when due all obligations and liabilities arising under such
plans
and applicable law of a character which, if not paid or discharged, are likely
to result in the imposition of an encumbrance or the assertion of a liability
enforceable against Coil Tubing Technology Holding, Inc.
2.23
Labor
Relations.
(a)
Except
as disclosed on Part 2.23(a) of the Disclosure Letter, (i) there are no
collective bargaining agreements or other similar agreements, arrangements,
or
understandings, written or oral, with employees as a group to or by which Coil
Tubing Technology Holding, Inc. is a party or is bound; (ii) no employees are
represented by any labor organization, collective bargaining representative
or
group of employees; (iii) no labor organization, collective bargaining
representative or group of employees claims to represent a majority of the
employees; (iv) Coil Tubing Technology Holding, Inc., has not been involved
with
any representational campaign by any union or other organization or group
seeking to become the collective bargaining representative of any employees,
or
been subject to or, to the knowledge of Coil Tubing Technology Holding, Inc.
overtly threatened with any strike or other concerted labor activity or dispute;
and (v) Coil Tubing Technology Holding, Inc. is not obligated to bargain
collectively with respect to wages, hours and other terms and conditions of
employment with any recognized or certified labor organization, collective
bargaining representative or group of employees with respect to
employees.
(b)
To the
knowledge of Coil Tubing Technology Holding, Inc., it is in compliance with
all
applicable laws pertaining to employment and employment practices and wages,
hours, and other terms and conditions of employment in respect of all employees,
and Coil Tubing Technology Holding, Inc. is not engaged in any unfair labor
practices or unlawful employment practices with respect to employees. There
is
no pending or, to the knowledge of Coil Tubing Technology Holding, Inc., overtly
threatened action, claim, investigation, or inquiry by or before, and Coil
Tubing Technology Holding, Inc. is not subject to any judgment, order, writ,
injunction or decree of or inquiry from, any governmental entity in connection
with any current, former or prospective employees.
11
2.24
Intellectual
Property
Coil
Tubing Technology Holding, Inc. owns or has rights to use all intellectual
property necessary for the operation of its business as presently operated.
Coil
Tubing Technology Holding, Inc. is not infringing upon the intellectual property
of any third party and has not received any written notice or claim of any
infringement, violation, misuse or misappropriation in connection with the
operation of its business of any intellectual property owned or purported to
be
owned by any other person.
2.25.
Certain
Payments.
Since
February 17, 2004, neither Coil Tubing Technology Holding, Inc., nor any
director, officer, agent, or employee of Coil Tubing Technology Holding, Inc.,
or any other person associated with or acting for or on behalf of Coil Tubing
Technology Holding, Inc., has directly or indirectly (a) made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback, or other payment
to
any person, private or public, regardless of form, whether in money, property,
or services (i) to obtain favorable treatment in securing business, (ii) to
pay
for favorable treatment for business secured, (iii) to obtain special
concessions or for special concessions already obtained, for or in respect
of
Coil Tubing Technology Holding, Inc., or any affiliate of Coil Tubing Technology
Holding, Inc., or (iv) in violation of any legal requirement, (b) established
or
maintained any fund or asset that has not been recorded in the books and records
of Coil Tubing Technology Holding, Inc.
2.26.
Disclosure.
(a)
No
representation or warranty of Coil Tubing Technology Holding, Inc., in this
Agreement and no statement in the Disclosure Letter omits to state a material
fact necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading.
(b)
No
notice given under this Agreement will contain any untrue statement or omit
to
state a material fact necessary to make the statements therein or in this
Agreement, in light of the circumstances in which they were made, not
misleading.
(c)
There
is no fact known to Coil Tubing Technology Holding, Inc., (other than general
economic or industry conditions) and that materially adversely affects the
assets, business, prospects, financial condition, or results of operations
of
Coil Tubing Technology Holding, Inc., (on a consolidated basis) that has not
been set forth in this Agreement or the Disclosure Letter.
2.27.
Relationships
with
Affiliates.
No
shareholder of Coil Tubing Technology Holding, Inc., or any affiliate of Coil
Tubing Technology Holding, Inc., has, any interest in any property (whether
real, personal, or mixed and whether tangible or intangible), used in or
pertaining to Coil Tubing Technology Holding, Inc.,’s businesses. No Coil Tubing
Technology Holding, Inc., or any affiliate of Coil Tubing Technology Holding,
Inc., is, has owned (of record or as a beneficial owner) an equity interest
or
any other financial or profit interest in, a person or business entity that
has
(a) had business dealings or a material financial interest in any transaction
with Coil Tubing Technology Holding, Inc., other than business dealings or
transactions conducted in the ordinary course of business with Coil Tubing
Technology Holding, Inc., at substantially prevailing market prices and on
substantially prevailing market terms, or (b) engaged
in competition with Coil Tubing Technology Holding, Inc., with respect to any
line of the products or services (a “Competing Business”) in any market
presently served by Coil Tubing Technology Holding, Inc.,. Except as set forth
in Part 2.27 of the Disclosure Letter, no Coil Tubing Technology Holding, Inc.,
or any affiliate of Coil Tubing Technology Holding, Inc., is a party to any
contract with, or has any claim or right against, Coil Tubing Technology
Holding, Inc.,.
12
ARTICLE
III. REPRESENTATIONS AND WARRANTIES OF GRIFCO
Except
as
otherwise previously disclosed to [Coil Tubing Technology Holding, Inc.,] [The
Shareholders] in writing, GRIFCO represents and warrants to [Coil Tubing
Technology Holding, Inc.,] [The Shareholders] as follows:
3.1 Corporate
Organization. Grifco
is
a corporation duly formed, validly existing and in good standing under the
laws
of the State of Nevada.
3.2 Authorization.
Grifco
has the requisite corporate power and authority to enter into this Agreement
and
to carry out the transactions contemplated hereby. The Board of Directors of
GRIFCO and the shareholders of Grifco have duly authorized the execution and
delivery of this Agreement, the performance by Grifco of its obligations under
this Agreement and the consummation of the transactions contemplated by this
Agreement, and no further corporate proceedings by Grifco are necessary to
authorize this Agreement. This Agreement has been validly executed and delivered
by Grifco and is a legal, valid and binding agreement of
Grifco.
3.3 No
Violation.
Neither
the execution and delivery of this Agreement, the performance by Grifco of
its
obligations under this Agreement, nor the consummation of the transactions
contemplated by this Agreement will (a) violate any provision of the Certificate
of Incorporation or Bylaws of Grifco; (b) violate or be in conflict with, or
constitute a default under, or permit the termination of, or cause the
acceleration of the maturity of any debt or other obligation pursuant to, or
require the consent of any other party to, or result in the creation or
imposition of any lien upon any property or assets of Grifco under, any
agreement or commitment to which Grifco is a party or by which Grifco is bound;
or (c) violate any statute or law or any judgment, decree, order, regulation
or
rule of any court or governmental authority to which Grifco or its properties
is
bound, or affected, except where any one or more such violations, conflicts
or
defaults described in clause (b) or (c) above would not prevent consummation
of
the transactions contemplated by this Agreement.
3.4 Consents
and Approvals of Governmental Authorities. Except
for the filing of appropriate documents to effect the Merger as required by
the
laws of the State of Nevada, No consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority is required to be obtained or made by Grifco in connection with the
transactions contemplated by this Agreement or the execution, delivery and
performance of this Agreement by Grifco.
13
ARTICLE
IV. CONDUCT OF Coil
Tubing Technology Holding, Inc.,
BUSINESS PENDING THE CLOSING DATE
Pending
the Closing Date (as defined in Section 8.1), and except as otherwise consented
to or approved by Grifco in writing or as otherwise contemplated by this
Agreement:
4.1 Conduct
of Business.
Coil
Tubing Technology Holding, Inc., will operate its business diligently and in
good faith, consistent with past practice.
4.2 Acquisition
or Disposition of Assets.
Coil
Tubing Technology Holding, Inc., shall not acquire or dispose of any substantial
assets, other than in the ordinary course of business or in transactions where
the aggregate consideration does not exceed $10,000.00, or enter into any
contract, agreement, commitment or arrangement with respect to the
foregoing.
4.3 Employment
Agreements, Compensation and Benefits.
Coil
Tubing Technology Holding, Inc., shall not enter into any new employment
agreement, amend any existing employment agreement or grant any increases in
compensation or benefits payable to their officers or employees other than
increases in the ordinary course of business and consistent with past practice
payable to non-officer employees.
4.4 Amendments.
No
change or amendment shall be made to the Certificate of Incorporation or Bylaws
of Coil Tubing Technology Holding, Inc.,..
4.5 Capital
Changes.
Coil
Tubing Technology Holding, Inc., shall not issue or sell or issue any securities
convertible into, or options, warrants to purchase, rights to subscribe to
or
enter into any arrangement or contract with respect to the issuance of, any
shares of its capital stock or any of its other securities, or make any other
changes in its capital structure.
4.6 Dividends;
Redemptions.
Except
as contemplated by this Agreement, Coil Tubing Technology Holding, Inc., shall
not declare, pay or set aside for payment any dividend or other distribution
in
respect of its capital stock, nor shall Coil Tubing Technology Holding, Inc.,
directly or indirectly, redeem, purchase or otherwise acquire any of its capital
stock.
4.7 Capital
Expenditures.
Coil
Tubing Technology Holding, Inc., shall not make any capital expenditures or
appropriations or commitments with respect thereto, except capital expenditures,
appropriations or commitments not exceeding $10,000.00 in the aggregate as
Coil
Tubing Technology Holding, Inc., may, in its discretion, deem
appropriate.
4.8 Borrowing.
Coil
Tubing Technology Holding, Inc., shall not incur or assume any indebtedness
except for (a) long-term indebtedness (as defined below) under its currently
existing credit agreements (as the same may be amended), (b) short-term
indebtedness (as defined below) in the ordinary course of business, or (c)
indebtedness in an amount or amounts less than an aggregate of $10,000.00.
Except to the extent of any guarantees outstanding on the date of this
Agreement, Coil Tubing Technology Holding, Inc., shall not guarantee any
indebtedness. As used in this Section 4.8, “long-term indebtedness” means any
indebtedness for money
borrowed maturing more than one year after the date of the incurrence or
assumption thereof, and “short-term indebtedness” means any such indebtedness
for money borrowed maturing one year or less after the date of the incurrence
or
assumption thereof.
14
4.9 No
Agreements.
Coil
Tubing Technology Holding, Inc., shall not agree or otherwise commit to do
any
of the foregoing in this Article IV.
4.10 Notification.
Between
the date of this Agreement and the Closing Date, Coil Tubing Technology Holding,
Inc., and Shareholders will promptly notify Grifco in writing if Coil Tubing
Technology Holding, Inc., or Shareholders becomes aware of any fact or condition
that causes or constitutes a breach of any of representations and warranties
as
of the date of this Agreement, or if Coil Tubing Technology Holding, Inc.,
or
such Shareholder becomes aware of the occurrence after the date of this
Agreement of any fact or condition that would (except as expressly contemplated
by this Agreement) cause or constitute a breach of any such representation
or
warranty had such representation or warranty been made as of the time of
occurrence or discovery of such fact or condition. Should any such fact or
condition require any change in the Disclosure Letter if the Disclosure Letter
were dated the date of the occurrence or discovery of any such fact or
condition, Coil Tubing Technology Holding, Inc., or Shareholders will promptly
deliver to Grifco a supplement to the Disclosure Letter specifying such change.
During the same period, Coil Tubing Technology Holding, Inc., or Shareholders
will promptly notify Grifco of the occurrence of any breach of any covenant
in
this Article VI or of the occurrence of any event that may make the satisfaction
of the conditions in Article VII impossible or unlikely.
ARTICLE
V CERTAIN OBLIGATIONS OF THE PARTIES
Grifco
covenants and agrees with Coil Tubing Technology Holding, Inc., and Coil Tubing
Technology Holding, Inc., covenants and agrees with Grifco that between the
date
of this Agreement and the Closing Date:
5.1 Full
Access.
Coil
Tubing Technology Holding, Inc., shall, upon reasonable request, afford to
Grifco and its affiliates, and its counsel, accountants and other authorized
representatives full access during normal business hours to the plants,
properties, books and records of Coil Tubing Technology Holding, Inc., in order
that Grifco may have the opportunity to make such reasonable investigations
as
it shall desire to make of the affairs of Coil Tubing Technology Holding, Inc.,
and Coil Tubing Technology Holding, Inc., will cause its officers and employees
to furnish such additional financial and operating data and other information
as
Grifco shall from time to time reasonably request. Coil Tubing Technology
Holding, Inc., shall, upon reasonable request, provide Grifco or its counsel,
accountants and other authorized representatives with such information
concerning Coil Tubing Technology Holding, Inc., as may be reasonably necessary
for Grifco to ascertain the accuracy and completeness of the information
supplied by Coil Tubing Technology Holding, Inc.,.
5.2 Confidentiality.
Grifco,
Coil Tubing Technology Holding, Inc., and their affiliates will, and will use
their best efforts to cause their counsel, accountants and other authorized
representatives to, hold in strict confidence and not disclose to others,
without the prior
written consent of the parties to this Agreement, any information received
by
them in connection with the transactions contemplated by this
Agreement.
15
5.3 Waivers,
Consents and Approvals.
Coil
Tubing Technology Holding, Inc., will use its best efforts to obtain any
waivers, consents or approvals under the terms of any agreement or commitment
to
which Coil Tubing Technology Holding, Inc., is a party that are necessary for
the consummation of the transactions contemplated by this Agreement. In
obtaining such waivers, consents and approvals, Coil Tubing Technology Holding,
Inc., shall not, without consent of Grifco, agree to any amendment to any such
instrument.
5.4 Publicity.
Grifco
and Coil Tubing Technology Holding, Inc., agree to consult with each other
in
issuing any press release and with respect to the general content of other
public statements about the transactions contemplated by this Agreement, and
shall not issue any such press release prior to such consultation, except as
may
be required by law.
5.5 Negotiations.
Between
the date of this Agreement and the Closing Date (or earlier termination of
this
Agreement pursuant to Section 9.1) Coil Tubing Technology Holding, Inc., shall
not, and shall not permit any of its officers, employees, representatives or
agents, directly or indirectly, to encourage, solicit or initiate discussions
or
negotiations with, or provide any non-public information to or negotiate or
enter into any agreement with, any corporation, partnership, person or other
entity or group concerning any possible proposals regarding a merger or other
business combination involving Coil Tubing Technology Holding, Inc., or for
the
acquisition of a material equity interest in, or a material portion of the
assets of Coil Tubing Technology Holding, Inc., (an “Acquisition Proposal”),
other than the transactions contemplated by this Agreement. Coil Tubing
Technology Holding, Inc., shall promptly notify Grifco if any such discussions
or negotiations are sought to be initiated with, any such information is
requested from, or any Acquisition Proposal is received by Coil Tubing
Technology Holding, Inc.,
ARTICLE
VI. CONDITIONS TO THE OBLIGATIONS OF COIL TUBING TECHNOLOGY HOLDING,
INC.,
The
obligations of Coil Tubing Technology Holding, Inc., under this Agreement to
be
performed on or before the Closing Date shall be subject to the satisfaction
on
or before the Closing Date, of each of the following conditions:
6.1 Representations
and Warranties True.
The
representations and warranties of Grifco contained in this Agreement shall
be
true and correct in all material respects on the date of this Agreement and
at
and on the Closing Date as though such representations and warranties were
made
at and on such date, except for changes permitted or contemplated by this
Agreement.
6.2 Performance.
Grifco
shall have performed and complied in all material respects with all agreements,
obligations and conditions required by this Agreement to be performed or
complied with by it on or prior to the Closing Date.
6.3 No
Proceeding, Litigation or Injunction. No
suit,
action, or other proceeding seeking to restrain, prevent or change the
transactions contemplated by this Agreement or otherwise
questioning the validity or legality of such transactions shall have been
instituted and be pending, and, on the Closing Date, there shall be no effective
injunction, writ, preliminary restraining order or any order of any nature
issued by a court of competent jurisdiction or other governmental authority
directing that the transactions provided for in this Agreement or any of them
not be consummated as so provided or imposing by conditions on the consummation
of the transactions contemplated by this Agreement which Coil Tubing Technology
Holding, Inc., reasonably deems.
16
ARTICLE
VII CONDITIONS TO GRIFCO’S OBLIGATIONS
The
obligations of Grifco under this Agreement to be performed on or before the
Closing Date shall be subject to the satisfaction on or before the Closing
Date,
of each of the following conditions:
7.1 Representations
and Warranties True.
The
representations and warranties of Coil Tubing Technology Holding, Inc.,
contained in this Agreement shall be true and correct in all material respects
on the date of this Agreement and at and on the Closing Date as though such
representations and warranties were made at and on such date, except for changes
permitted or contemplated by this Agreement.
7.2 Performance.
Coil
Tubing Technology Holding, Inc., shall have performed and complied with all
agreements, obligations and conditions required by this Agreement to be
performed or complied with by it on or prior to the Closing Date.
7.3
Consents.
All
approvals, consents, authorizations, and waivers from governmental and other
regulatory agencies required to consummate the transactions contemplated by
this
Agreement shall have been obtained.
7.4
No
Injunction.
On the
Closing Date there shall be no effective injunction, writ, preliminary
restraining order, or any order of any nature issued by a court of competent
jurisdiction or other governmental agency directing that the transactions
provided for in this Agreement or any of them not be consummated as so
provided.
7.5 Shareholder
Approval. The
shareholders contemplated by this agreement shall have voted (whether in person
or by proxy) for approval and adoption of this Agreement.
ARTICLE
VIII. CLOSING
8.1 Closing.
The
Closing of the Definitive Acquisition Agreement (the “Closing”) shall take place
at the offices of Coil Tubing Technology Holding, Inc., International, at 6:00
p.m., local time, on March 24th, 2005 and that all conditions contained in
Articles VI and VII of this Agreement have been satisfied. If all such
conditions have not been satisfied by such date, the Closing shall take place
at
a later date agreed upon by the parties (the date of the Closing is in this
Agreement called the “Closing Date”).
17
ARTICLE
IX. TERMINATION AND ABANDONMENT
9.1 Methods
of Terminations. This
Agreement may be abandoned at any time before the Closing Date:
(a) By
mutual
consent of the respective Boards of Directors of Coil Tubing Technology Holding,
Inc., and Grifco;
(b) By
either
Grifco or Coil Tubing Technology Holding, Inc., if the Closing has not been
consummated on or prior to March 24th, 2005, if the failure to consummate the
transactions contemplated by this Agreement are not attributable to the failure
of the terminating party to fulfill its obligations under this
Agreement;
(c) By
either
Grifco or Coil Tubing Technology Holding, Inc., if at the Shareholders Meeting,
The Shareholders of Coil Tubing Technology Holding, Inc., fail to adopt and
approve this agreement.
(d)
By
Grifco
if since the date of this Agreement, there has been any change (or any
condition, event or development involving a prospective change) in the business,
properties, assets, liabilities, conditions (financial or otherwise), results
of
operations or prospects of Coil Tubing Technology Holding, Inc., that is or
may
be materially adverse to Grifco when taken as a whole;
(e) By
either
Grifco or Coil Tubing Technology Holding, Inc., if a court of competent
jurisdiction or governmental, regulatory or administrative agency or commission
shall have issued an order, decree or ruling or taken any other action (which
order, decree or ruling the parties hereto shall use their best efforts to
lift), in each case permanently restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement, and such other decree, ruling
or other action shall have become final and nonappealable; and
(f) By
Grifco
if the condition set forth in Section 7.5 is not satisfied on the date of the
Coil Tubing Technology Holding, Inc., Shareholder Meeting.
9.2 Procedure
upon Termination.
In the
event of termination and abandonment by either the Board of Directors of Grifco
or Coil Tubing Technology Holding, Inc., pursuant to Section 9.1(b), (c), (d),
(e), or (f) of this Agreement, written notice shall terminate this Agreement
and
the transactions contemplated by this Agreement shall be abandoned without
further action by Coil Tubing Technology Holding, Inc., or Grifco. If this
Agreement is terminated as provided in this Agreement:
(a) All
information received by any party with respect to the business of any other
party (other than information which is a matter of public knowledge or which
has
been or is published in any publication for public distribution or filed as
public information with any governmental authority) shall not at any time be
used for the advantage of, or disclosed to third parties by, such party for
any
reason, and each party agrees to return promptly, if so requested by he
other
party, every document furnished by the other party or any subsidiaries,
division, associate or affiliate of such other party, in connection with the
transactions contemplated by this Agreement and any copies of documents that
may
have been made and to cause their representatives and others to whom such
documents were furnished promptly to return such documents and any copies,
other
than documents filed with governmental authorities or otherwise publicly
available; and
18
(b) Neither
party shall have any liability nor further obligation to the other party, except
as stated in this Section 9.2 and in Section 10.3, which sections shall survive
any termination of this Agreement.
ARTICLE
X. MISCELLANEOUS PROVISIONS
10.1 Amendment
and Modification. Subject
to applicable law, this Agreement may be amended, modified or supplemented
by
written agreement of the Board of Directors of Grifco or its officers authorized
by the Board of Directors and the Shareholders at any time prior to the Closing
Date with respect to any of the terms contained in this Agreement.
10.2 Extension;
Waiver. At
any
time prior to the Closing Date, the parties may by board action (a) extend
the
time for the performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations and warranties
contained in this Agreement, or (c) waive compliance with any of the agreements
or conditions contained in this Agreement. Any such waiver or failure to insist
upon strict compliance not operates as a waiver of, estoppels with respect
to,
any subsequent or other failure. Any agreement on the part of any party to
any
such extension or waiver shall be valid only if set forth in an instrument
in
writing signed on behalf of such party-
10.3 Fees
and Expenses.
Each of
the parties will pay its own expenses incurred in connection with the
preparation, negotiation, execution, delivery and consummation of this Agreement
and the transactions contemplated by this Agreement.
10.4 Survival
of Representations and Warranties, Etc.
The
representations, warranties and covenants contained in this Agreement (except
to
the extent any such agreement is limited by its terms) shall remain operative
and in full force and effect and shall survive consummation of the transactions
contemplated hereby at the Closing, including, without limitation, the delivery
of the Shares to Grifco.
10.5 Notices.
All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given
if delivered by hand, mailed by certified or registered mail with postage
prepaid or by overnight mail (next day guaranteed delivery), or if sent by
cable, telegram, telex, telecopy or electronic mail as follows:
|
(a)
|
If
to Grifco, to:
|
Xxx
Xxxx
|
|
0000
Xxxxxx Xxxxxx
|
||
|
Xxxxxx,
XX 00000
|
19
Or
to
such other person or address as Grifco shall furnish to [Coil Tubing Technology
Holding, Inc.] [The Shareholders] in writing.
|
(c)
|
If
to Coil Tubing Technology Holding, Inc., or the Shareholders,
to:
|
|
|
|
Xxxxx
Xxxxxxxx
|
|
|
|
00000
Xxxx Xxxx Xxxxx X
|
|
|
|
Xxxxxx
XX 00000
|
|
Or
to
such other person or address as [Coil Tubing Technology Holding, Inc.,] [The
Shareholders] shall furnish Grifco in writing.
10.6 Assignment.
This
Agreement and all of the provisions of this Agreement shall be binding upon
and
inure to the benefit of the parties and their respective successors and
permitted assigns, but neither this Agreement nor any of the rights, interests
or obligations shall be assigned by either of the parties without the prior
written consent of the other party; provided, however, that this Section 10.6
is
not intended to limit or restrict the class of persons entitled to the benefits
of Section 10.7 of this Agreement or to limit or restrict any such person’s
standing or capacity to enforce the provisions of Section 10.7.
10.7 Agreement
to Indemnify.
(a) Coil
Tubing Technology Holding, Inc., and Each Shareholder, jointly and severally,
with respect to each Shareholder, respectively, agrees to indemnify, defend
and
hold Grifco and its affiliates (the “Indemnified Parties) harmless from and
against any and all claims sustained after Closing by Grifco or any of its
affiliates based upon, arising out of or otherwise in respect of (i) the
inaccuracy of any representation or warranty, or the breach of any covenant
or
agreement, of such Coil Tubing Technology Holding, Inc., Shareholder contained
in this Agreement or in any certificate, agreement, document or instrument
delivered pursuant to this Agreement, or (ii) the operation of the business
or
the ownership, management or use of the assets prior to the Closing unless
and
to the extent that such claim shall have arisen solely from any action of Grifco
or any of its affiliates prior to the Closing; provided, however, that Coil
Tubing Technology Holding, Inc., Shareholders shall have no liability pursuant
to this Section for the first $10,000 of aggregate claims incurred by Grifco
or
its affiliates (the "Grifco Basket") and Coil Tubing Technology Holding, Inc.,
Shareholders shall be responsible only for such amounts of such claims as exceed
the Grifco Basket.
The
Indemnified Parties may retain counsel satisfactory to them, and the Coil Tubing
Technology Holding, Inc., Shareholders shall pay all fees and expenses of such
counsel for the Indemnified Parties, promptly as statements therefore are
received, and (b) the Coil Tubing Technology Holding, Inc., Shareholders will
use its best efforts to assist in the vigorous defense of any such matter;
provided, that the Coil Tubing Technology Holding, Inc., Shareholders shall
not
be liable for any settlement effected without its written consent, which
consent, however, shall
not
be unreasonably withheld. Any Indemnified Party wishing to claim indemnification
under this Section 10.7, upon learning of any such claim, action, suit,
proceeding or investigation, shall notify the Coil Tubing Technology Holding,
Inc., Shareholders and shall deliver to the Coil Tubing Technology Holding,
Inc., Shareholders an undertaking to repay any amounts advanced when and if
a
court of competent jurisdiction shall ultimately determine, after exhausting
of
all avenues of appeal, that it was not entitled to indemnity under this
Agreement or by law. The Indemnified Parties as a unit may retain only one
law
firm to represent them with respect to any such matter unless there is, under
applicable standards of professional conduct, a conflict of any significant
issue between the positions of any two or more Indemnified Parties. This Section
10.7 shall survive the Closing and is intended to benefit each of the
Indemnified Parties, each of whom shall be entitled to enforce this Section
10.7
against the Coil Tubing Technology Holding, Inc., Shareholders for a period
of
six years.
20
(b)
The
indemnification obligations under this Section shall be limited to
indemnification for actual damages suffered and shall not include incidental,
consequential, special or indirect damages; provided, however, that any such
incidental, consequential, special or indirect damages recovered by a third
party against a party entitled to indemnity under this Agreement shall be
included in the damages recoverable pursuant to the indemnities
herein.
10.8 Governing
Law.
This
Agreement and the legal relations among the parties shall be governed by and
construed in accordance with the laws of the State of Nevada.
10.9 Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same agreement.
10.10 Headings.
The
headings in this Agreement are inserted for convenience only and shall not
constitute a part of this Agreement.
10.11 Entire
Agreement.
This
Agreement, including the schedules, lists and other documents referred to in
this Agreement which form a part of this Agreement, embody the entire agreement
and understanding of the parties in respect of the subject matter contained
in
this Agreement. There are no restrictions, promises, warranties, covenants
or
undertakings, other than those set forth or referred to in this Agreement.
This
Agreement supersedes all prior agreements and understandings between the parties
with respect to each subject matter.
21
IN
WITNESS WHEREOF, the parties have signed this Agreement on the ________________
day of March, 2005.
/s/
Xxxxx Xxxxxxxx
Coil
Tubing Technology Holding, Inc.,
Xxxxx
Xxxxxxxx
/s/
Xxxxx Xxxxxxxx
Xxxxx
Xxxxxxxx, Individually
/s/
Xxxxx Xxxx
Grifco
International, Inc.
Xxxxx
Xxxx
President
/s/
Xxxxx Xxxx
Xxxxx
Xxxx, Individually
22
Exhibit
A
Shareholders
Coil Tubing Technology Holdings, Inc.
|
1.
Xxxxx Xxxxxxxx
|
51,000
common shares with a par value of
$0.01
|
23
