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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, made and entered into on 3rd day of
February, 1999, by and between Tiger Trucking LLC ("General Partner"), X. Xxxxx
Limited Partnership ("Company"), (hereinafter Partner and Company may be
referred to collectively as "Sellers") and Containment Solutions, Inc., a
Delaware corporation, (hereinafter referred to as "Purchaser");
WITNESSETH
WHEREAS, the parties hereto desire that the Purchaser will acquire all
of the assets of the Company in exchange for the consideration herein described
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties agree as follows:
Definitions
(a) Intellectual Property. Shall be defined as any and all (i) patents
(including, without limitation, design patents, industrial designs and utility
models, utility patents and plant patents) and patent applications (including
docketed patent disclosures awaiting filing, reissues, results of
reexaminations, divisions, continuations and extensions), patent disclosure
awaiting filing determination, inventions and improvements thereto; (ii)
trademarks, service marks, trade names, trade dress, logos, business and product
names, slogans and registrations and applications for registration thereof;
(iii) copyrights and registrations thereof and rights and unpublished works to
the extent such rights are not subsumed by copyright; (iv) inventions,
processes, designs, formulae, trade secrets, know-how, software, industrial
models, confidential and technical information, manufacturing, engineering and
technical drawings, product specifications and confidential business
information; and (v) intellectual property rights (including rights as a
licensee, if any) similar to any of the foregoing; in each case, that are
specific to the Subject Business.
(b) Inventory. Shall be defined as Inventories of raw materials, spare
parts (as detailed on the attached Schedule (c), to be prepared on the Closing
Date) and office and other supplies, and other items reflected as inventory in
the financial statements.
(c) Liens. Shall be defined as all mortgages, deeds of trust, liens,
security interests, pledges, conditional sales contracts, claims, rights of
first refusal, options, charges, liabilities, obligations, easements,
rights-of-way, limitations, reservations, restrictions and other encumbrances of
any kind.
(d) Permitted Encumbrances. Shall mean Liens for current taxes and
assessments not yet due and payable, including, without limitation, liens for
nondelinquent ad valorem taxes, nondelinquent statutory liens, inchoate liens,
deposits for xxxxxxx'x compensation, unemployment and surety bonds arising other
than by reason of any default on the part of the Sellers.
(e) Assets. Shall be defined as all the assets of the Company, as
specifically set forth on Schedule 1 (a) hereto.
1. Transfer of Assets; Purchase Price; and Related Matters
(a) Transfer of Assets. In reliance upon the representations and
warranties of Purchaser contained herein, and on the terms and subject to the
conditions of this Agreement, the Sellers, at the Closing referred to in Section
2 hereof, will sell, transfer, convey and deliver to Purchaser all of the Assets
shown on the balance sheet dated September 30, 1998, and as reflected on
attached Schedule 1(a) (collectively "Subject Business"). The Sellers shall
transfer such Assets free and clear of all Liens, except Permitted Encumbrances,
such Liens, if any, to be released by the Sellers at Closing (as hereinafter
defined).
(b) Purchase Price.
(i) In reliance on the representations and warranties of the
Sellers herein contained, and on the terms and subject to the conditions of this
Agreement, the Purchaser, in consideration for the transfer and delivery to it
of the Assets as herein provided, will pay $1,000,000.00.
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(ii) Allocation of Purchase Price. Purchaser shall prepare in
good faith and deliver to Sellers either at Closing, or if not at Closing,
within 15 days of Closing, an allocation of the consideration paid by Purchaser
for the Assets, which shall be prepared in accordance with the methodology
contained in Section 1060 of the Code. Each party hereto agrees to complete
jointly and to file separately Form 8594 with its Federal Income Tax Return
consistent with such allocation for the tax year in which the Closing Date
occurs, to file, or cause to be filed, all other Tax Returns in a manner
consistent with such allocation, and not take any actions inconsistent
therewith.
(c) Instruments of Conveyance and Transfer. At the Closing, the Sellers
shall deliver to the Purchaser or its designee such bills of sale, warranty
deeds, endorsements, assignments, title certificates to motor vehicles, and
other good and sufficient instruments of transfer, conveyance and assignment, in
form reasonably satisfactory to the Purchaser's and Sellers' counsel, as shall
be effective to vest in the Purchaser good title to the Assets, free and clear
of all Liens, other than Permitted Encumbrances.
(d) Contracts, Records. At the Closing, the Sellers will deliver to the
Purchaser all contracts, commitments, and rights of the Company which are part
of the Assets and listed on Exhibit 1(a), with assignment thereof, to assure the
Purchaser of the full benefit of such contracts, leases, commitments and rights.
All consents, except those from landlords of real property leases, shall be
obtained by Sellers post closing. At the Closing, the Sellers shall deliver to
the Purchaser all records and other data relating to the inventory and fixed
assets acquired. Simultaneously with such delivery, the Sellers shall take all
such steps as may be reasonably required to put the Purchaser in actual
possession and control of the Assets. Sellers shall retain a right of access to
and right to make copies of all such records, during normal business hours, upon
reasonable notice to Purchaser.
(e) Employee Matters. Sellers agree to terminate all employees prior to
Closing. Sellers agree that they shall be solely liable for and shall indemnify
and defend Purchaser from and against any employee obligations arising prior to
or directly related to events occurring prior to the Closing Date. Sellers
further agree to permit Purchaser to access employees prior to Closing, to
negotiate, at Purchaser's sole discretion, rehire.
(f) Further Assurances. The Sellers shall, from time to time after the
Closing at the Purchaser's request and without further consideration, execute
and deliver such instruments of transfer, conveyance and assignment in addition
to those delivered pursuant to Paragraph 1(c), and take such other action as the
Purchaser may reasonably require to more effectively transfer, convey and assign
to and vest in the Purchaser, and to put the Purchaser in actual possession and
control of, any of the Assets. To the extent that the assignment of any license,
contract, commitment, or right subject to the Xxxx of Sale and Assignment and
Assumption Agreement shall require the consent of the other party thereto, this
Agreement shall not constitute an agreement to assign the same if any attempted
assignment would constitute a breach thereof. If any lease, license, contract,
commitment, right or other assets or property which are part of the Assets
cannot be transferred effectively to the Purchaser without the consent of a
third party, the Sellers shall thereafter be obligated to use its best efforts
to assure the Purchaser of the benefits of such lease, license, contract,
commitment, right or other asset or property.
(g) Liabilities Not Assumed by Purchaser. Except as expressly provided
to the contrary in this Agreement, Purchaser shall not assume any of Company's
litigation, tax, product liability or any other obligations arising from
products or services manufactured, sold or performed prior to Closing or other
products or services invoiced by Company or any of Company's liabilities and
obligations of any and every kind whatsoever, whether disclosed, undisclosed,
direct, indirect, absolute, contingent, secured, unsecured, accrued or
otherwise, whether known or unknown.
(h) Purchase of all Assets. Purchaser and Sellers' intend that this
transaction qualifies as an occasional sale within the meaning of Section
151.304 of the Texas Tax Code, under the tax laws of any other state which is
applicable to this transaction as well as any similar laws.
2. The Closing. The closing of the transactions provided for in
Section 1 of this Agreement (herein called the "Closing") shall take place on
twenty-four hours prior notice on or before February 3, 1999, to be effective
at 11:59 p.m. Central Time. The date of the Closing is referred to in this
Agreement as the "Closing Date".
(a) Closing Deliveries.
1. At the Closing, Purchaser will deliver to Sellers:
(i) one copy of the resolutions adopted by the Board of Directors
of Purchaser authorizing the transactions contemplated hereby,
certified by the Secretary or Assistant Secretary of Purchaser;
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(ii) certificate to the effect of Section 8(a) executed by
appropriate authorized officers of Purchaser;
(iii) payment of the purchase price to Sellers' account; and (iv) the
opinion of counsel described at Section 8(d).
2. At the Closing, Sellers and Company will deliver to Purchaser:
(i) one copy of the resolutions adopted by the Sellers, authorizing
the transactions contemplated hereby, certified by the Sellers;
(ii) certificates to the effect of Sections 7(a) and 7(h) hereof
executed by General Partner and Company; and
(iii) The opinion of counsel required by Section 7(c).
3. At the Closing, Purchaser and Sellers will execute, deliver and
acknowledge, or cause to be executed, delivered and acknowledged, to the other
such certificates and other documents related to the consummation of the
transactions contemplated hereby, as may be reasonably requested by the other.
3. Representations and Warranties of the Sellers. The Sellers represent
and warrant to the Purchaser that:
(a) Organization and Existence. Company is Texas limited partnership
duly organized and validly existing and in good standing under the laws of the
State of Texas and has full power and authority to carry on its business as now
conducted. Complete and correct copies of the partnership agreement and
certificate of limited partnership of the Company as in effect on the date
hereof have been delivered to the Purchaser. The Company is qualified in Texas.
General Partner is a Texas limited liability company, duly organized and validly
existing and in good standing under the laws of the State of Texas and has full
power and authority to carry on its business as now conducted. Complete and
correct copies of the Articles and Regulations of the General Partner as in
effect on the date hereof have been delivered to the Purchaser. The General
Partner is qualified in Texas.
(b) Authority Relative to This Agreement. The transactions
contemplated by this Agreement have been duly authorized by the General Partner
of the Company, and no further action is necessary on the part of the Company to
make this Agreement valid and binding upon the Company in accordance with its
terms. The execution, delivery and performance of this Agreement by its Managing
Member of the Company will not result in a violation or breach of any term or
provision of, or constitute a default or accelerate the performance required
under the partnership agreement of the Company or the Articles and Regulations
of the General Partner, any indenture, mortgage, deed of trust or other contract
or agreement to which the Company or General Partner is a party or by which they
or any of their properties is bound, or violate any order, writ, injunction,
decree of any court, administrative agency or governmental body.
(c) Ownership of Assets. Company owns, has good and marketable title
to, and is in possession of all of the assets set forth on the September 30,
1998 balance sheet, free and clear of all liens, security interests and
encumbrances, except for Permitted Encumbrances.
(d) Validity and Enforceability. This Agreement and all related
documents have been duly executed and delivered by Sellers and constitute legal,
valid and binding obligations of Sellers enforceable in accordance with their
terms, except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, or the laws affecting the enforcement of creditors' rights
generally, and the application of general principles of equity. Specifically,
Xxxxx Xxxxx as Managing Member has authority to execute and deliver these
documents on behalf of Tiger Trucking LLC, which has authority to execute and
deliver these documents on behalf of Company.
(e) Financial Statements. The Company has delivered to Purchaser the
adjusted unaudited financial statements of the Company for the period ending
September 30, 1998, attached hereto as Exhibit 3(e). Except as otherwise
disclosed on Exhibit 3(e), the financial statements fairly represent the
financial position of the Company as of the date thereof and the results of
operations and changes in financial position for the periods then ended,
provided that such statements are subject to year-end adjustments in accordance
with GAAP, none of which are material.
(f) Absence of Certain Changes or Events. With respect to the Subject
Business, except as contemplated hereby and as listed on Exhibit 3(f) hereto,
and other than in the ordinary course of business, since September 30, 1998 the
Sellers have not:
(i) Sold, transferred, or otherwise disposed of, or agreed to
sell, transfer or otherwise dispose of any of the Assets in other than the
ordinary course of the Subject Business;
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(ii) Entered or agreed to enter into any agreement or arrangement
granting any preferential rights to purchase any of the Assets, or requiring the
consent of any party to the transfer and assignment of any of such assets,
property or rights;
(iii) Waived any rights of value with respect to the Assets;
(iv) Made or permitted any amendment or termination of any
contract, agreement or license to which they are a party or by which they or any
of the Assets is subject, other than changes to purchase orders made in the
ordinary course of business;
(v) To its knowledge, incurred or become subject to any material
claim or liability for any damages or alleged damages for any actual or alleged
negligence or other tort or breach of contract which might in any fashion
adversely affect the value of the Assets or the Subject Business;
(vi) Made any capital expenditure (or commitments therefor),
aggregating in excess of $25,000.00 and relating to the Assets or the Subject
Business; or
(vii) Entered into any other material transaction of which
Purchaser has not been formally notified in writing.
(g) Prepayments and Deposits. Except as disclosed on Exhibit 3(g),
there are no prepayments or deposits which have been received and are being held
by the Company and the Company has made no prepayment or deposit.
(h) Absence of Undisclosed Liabilities. None of the Assets are subject
to any liabilities or obligations (accrued, absolute, contingent or otherwise),
or will be subject to any such liability or obligation arising from the actions
of the Sellers on or before the Closing Date, whether or not such liability
would normally be shown or reflected on a balance sheet prepared in a manner
consistent with generally accepted accounting principles. Except as disclosed to
the Purchaser in an exhibit hereto, to Sellers' knowledge, after reasonable
investigation, there are no facts in existence on the date hereof which might
reasonably serve as the basis for any liabilities or obligations of the Company
and which would adversely affect the value of the Assets or the Subject
Business.
(i) Tax Matters. Except as disclosed on Exhibit 3(i), all federal,
state, county, local and other taxes, including, without limitation, income
taxes, franchise taxes, payroll taxes, customs fees and duties, sales taxes and
ad valorem taxes, due and payable by the Company on or before the date of this
Agreement have been timely paid, and all tax returns and reports required to be
filed by the Company have been timely filed with all such taxing authorities. No
assessments or deficiencies have been made against the Company, no disputes or
audits or notices of audits are pending, and no extensions of time are in effect
for the assessment of deficiencies.
(j) Patents, Etc. The Sellers have delivered to the Purchaser a true
and complete Exhibit (Exhibit 3(j)) setting forth all Intellectual Property
patents, inventions, trademarks, tradenames, brand names or copyrights owned or
used by or licensed to or by the Company (if any), and relating to the Assets or
the Subject Business, together with a summary description and full information
in respect of the filing, registration or issuance and the status thereof,
except for rights to intellectual property arising under common law. Except as
disclosed in Exhibit 3(j), to the Sellers' knowledge, after reasonable
investigation, the operations of the Subject Business do not infringe upon the
patent, trademark or other similar rights of any other person or entity. Except
as disclosed in Exhibit 3(j), the Company has asserted no claim that the
operations of any other entity infringe upon the Intellectual Property of the
Company.
(k) Insurance. Attached hereto as Exhibit 3(k) is an Exhibit setting
forth a list and brief description of all policies of insurance, held by the
Company applicable to any Assets or the Subject Business.
(l) Licenses, Permits, Etc. Attached hereto as Exhibit 3(l) is a list
and brief description of all licenses and permits held by the Company, copies of
which licenses and permits have been furnished to the Purchaser. Except as noted
on Exhibit 3(l), to Sellers' knowledge, after reasonable investigation, such
licenses and permits constitute all licenses and permits necessary to own the
Assets or conduct the Subject Business, and each is in full force and effect.
Except as set forth on Exhibit 3(l), there is no violation that would adversely
affect the value of the Assets or the Subject Business; and no proceeding is
pending or threatened seeking the revocation or limitation of any such license
or permit.
(m) Litigation. To Sellers' knowledge, after reasonable investigation,
there are no claims, actions, suits, proceedings or investigations pending, or
threatened against or affecting the Company or any of its properties, at law or
in equity or before or by any court or federal, state, municipal or other
governmental department, commission, board,
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agency or instrumentality. The Sellers are not subject to any court or
administrative order, injunction or similar decree, the enforcement of which
would adversely affect the value of the Assets or the Subject Business.
(n) Compliance with Laws. To Sellers' knowledge, after reasonable
investigation, the operations of the Subject Business, either historically or as
now conducted, and the ownership of the Assets do not violate any federal, state
or local law, ordinance, rule or regulation, (including, without limitation, any
laws or regulations relating to the environment or the handling, treatment or
disposal of wastes or products of the Subject Business) the violation of which
would adversely affect the value of the Assets or the Subject Business.
(o) Brokers. The Sellers are not a party to or in any way obligated
under any contract or other agreement, and there are no outstanding claims
against them, for the payment of any broker's or finder's fee in connection with
the origin, negotiation, execution or performance of this Agreement.
(p) No Default. Except as disclosed on Exhibit 3(p), to Sellers'
knowledge, after reasonable investigation, the Company is not in default in any
respect of any obligation to be performed by the Company under any material
contract, lease, agreement, commitment or undertaking which default would
adversely affect the value of the Assets or the Subject Business to which the
Company is a party or by which the Company or the Assets are bound, nor has
Company waived any material right under any such contract, lease, agreement,
commitment or undertaking.
(q) Product Liability. To Sellers' knowledge, after reasonable
investigation, there is no state of facts or the occurrence of any event forming
the basis of any present claim against the Company for product liability on
account of any express or implied warranty. Warranty work over the last three
years has not been material to the Subject Business.
(r) Disclosure. The representations and warranties contained in the
Articles and the Exhibits hereto, do not and shall not, when taken as a whole,
contain any untrue statement of a material fact or omit any material fact
necessary to make the statements contained therein or herein not misleading in
view of the circumstances under which they were made. To the extent that
Purchaser (or its officers or agents) has actual knowledge of any discrepancy,
statement or statement of facts, the applicable representation or warranty known
to be untrue or misleading shall be unenforceable to the extent of the knowledge
of such discrepancy, statement or state of facts. In all other respects, the
representations and warranties of Sellers shall remain unaffected. Disclosures
made in any of the Exhibits or exhibits to this Agreement are hereby deemed to
be made for purposes of all other schedules or exhibits.
(s) Contracts. Exhibit 3(s) lists all substantial contracts of the
Company.
(t) Environmental. Except as disclosed on Exhibit 3(t), (i) Company's
use and disposal of hazardous substances on or in the Company's real property
(which includes leased real property), has at all times complied with all
applicable laws and regulations; (ii) No spills, discharges, releases, deposits
or emplacements of any hazardous substances have occurred on the Company's real
property during the period of its occupancy, and to Sellers' knowledge, after
reasonable investigation, prior to occupancy; (iii) No electrical transformers,
fluorescent light fixtures or other electrical equipment containing PCBs have
been installed in, affixed to or located on the Company's real property during
Sellers' occupancy thereof; (iv) To Sellers' knowledge, after reasonable
investigation, there are no storage tanks for gasoline or any other hazardous
substance located on the Company's real property, whether above ground,
underground or within a structure.
All exhibits delivered to the Purchaser by the Sellers pursuant to this Section
shall be delivered upon the execution of this Agreement and shall be signed for
identification by Sellers.
4. Representations and Warranties of the Purchaser. Purchaser represents
and warrants to the Sellers that:
(a) Organization and Existence. The Purchaser is a corporation duly
organized validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power to enter into and perform this
Agreement.
(b) Authority Relative to This Agreement. The transactions contemplated
by this Agreement have been duly authorized by the Board by Directors of
Purchaser, and no further corporate action is necessary on the part of the
Purchaser to make this Agreement valid and binding upon the Purchaser in
accordance with its terms. The execution, delivery and performance of this
Agreement by the Purchaser will not result in a violation or breach of any term
or provision of, or constitute a default or accelerate the performance required
under, any indenture, mortgage, deed of trust or other contract or agreement to
which the Purchaser is a party or by which it or any of its properties is bound,
or violate any order, writ, injunction or decree of any court, administrative
agency or governmental body.
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(c) Validity and Enforceability. This Agreement and all related
documents have been duly executed and delivered by Purchaser and constitute
legal, valid and binding obligations of Purchaser enforceable in accordance with
their terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, or other laws affecting the enforcement of
creditors' rights generally, and the application of general principles of
equity.
(d) Brokers. The Purchaser is not a party to or in any way obligated
under any contract or other agreement and there are no outstanding claims
against it for the payment of any broker's or finder's fee in connection with
the origin, negotiation, execution or performance of this Agreement.
(e) Consents. The consummation of the transactions contemplated herein
by the Purchaser shall not require the consent, approval or authorization of any
third party.
(f) Compliance with Laws. Except as disclosed in an exhibit hereto,
Purchaser's operations, either historically or as now conducted do not violate
any federal, state or local law, ordinance, rule or regulation, the violation of
which would adversely affect its ability to perform under this Agreement.
(g) No Default. Purchaser is not in default in any respect of any
obligation to be performed by the Purchaser under any contract, lease,
agreement, commitment or undertaking which default would adversely affect its
ability to perform under this Agreement.
(h) Absence of Certain Changes. Since September 30, 1998, there has
been no material change in the business, prospects or condition, financial or
otherwise, of the Purchaser except changes in the ordinary course of business
affecting the entire industry which in the aggregate have not been materially
adverse.
5. Covenants of Sellers. The Sellers covenant with the Purchaser that:
(a) Conduct of Business. From the date of this Agreement to the
Closing Date, the business of the Company will be operated only in the ordinary
course, and in particular, without the prior written consent of the Purchaser,
the Sellers will not:
(i) Cancel or permit any insurance to lapse or terminate,
unless renewed or replaced by like coverage;
(ii) Change the Company's Articles of Incorporation or Bylaws
or the composition of General Partner;
(iii) Be in default under any material contract, agreement,
commitment or undertaking of any kind or under any local, state or federal
permits, except as disclosed on Exhibit 5(a)(iii);
(iv) Knowingly violate or fail to comply with all laws
applicable to it or its properties or business;
(v) Commit any act or permit the occurrence of any event or
the existence of any condition of the type described in Paragraph 3(f) hereof;
or
(vi) Merge, consolidate or agree to merge or consolidate with
or into any other corporation.
(b) Access. From and after the date of this Agreement, Company and
Purchaser will provide to each other and their respective counsel, accountants,
engineers and other representatives, full and free access to the records of the
Subject Business during normal business hours upon prior reasonable notice,
without disruption of the Subject Business. Expenses of providing such access
shall be paid by the party requesting such access.
(c) Preservation of Business Organization. The Sellers will use their
best efforts to preserve the business organization of the Company and to
preserve for the Purchaser the Company's good relations with all customers and
others having business relations with the Company.
(d) Trade Secrets. From and after the Closing Date, Sellers will not
use or divulge to any competitor or unauthorized person any confidential
information, and it will use all reasonable and proper efforts to insure that
its agents do not use or divulge any confidential information, trade secrets,
processes, formulae or know-how relating to the Assets or the Subject Business.
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(e) Consents of Third Parties. The Sellers will use their best efforts
to obtain, on a post-closing basis, where required, the consents of all third
parties to the assignment and transfer of all contracts, licenses, registrations
and commitments affecting the Assets which require such consents.
(f) Non Competition. SELLERS AGREE THAT DURING A THREE YEAR PERIOD
COMMENCING ON THE CLOSING DATE, THEY WILL NOT, DIRECTLY OR INDIRECTLY, FOR THEIR
OWN ACCOUNT OR FOR THE ACCOUNT OF OTHERS, WHETHER AS PRINCIPAL OR AGENT OR
THROUGH THE AGENCY OF ANY CORPORATION, PARTNERSHIP, ASSOCIATION OR OTHER
BUSINESS ENTITY, ENGAGE IN ANY ACTIVITY SIMILAR TO OR COMPETITIVE WITH THE
ACITIVITIES OF THE COMPANY AS PERFORMED BY THE COMPANY IN THE THREE YEAR PERIOD
ENDING ON THE CLOSING DATE IN THE DUCT SALES BUSINESS IN THE UNITED STATES. THE
FOREGOING AGREEMENT NOT TO COMPETE SHALL NOT BE HELD INVALID OR UNENFORCEABLE
BECAUSE OF THE SCOPE OF THE SAID TERRITORY OR THE ACTIONS RESTRICTED THEREBY, OR
THE PERIOD OF TIME WITHIN WHICH SUCH AGREEMENT IS OPERATIVE; BUT ANY JUDGMENT OF
A COURT OF COMPETENT JURISDICTION MAY DEFINE THE MAXIMUM TERRITORY AND ACTIONS
SUBJECT TO AND RESTRICTED BY THIS PARAGRAPH AND THE PERIOD OF TIME DURING WHICH
SUCH AGREEMENT IS ENFORCEABLE.
(g) Xxxx of Sale and Assignment and Assumption Agreement. At Closing,
a duly authorized member of the General Partner shall have executed and
delivered the Xxxx of Sale and Assignment and Assumption Agreement to Purchaser.
(h) Product Warranty and Liability. From and after Closing, if
Purchaser receives notice or a claim for repairs to products under warranty that
were manufactured and sold by Company, then Purchaser shall promptly notify
Sellers. Purchaser agrees to make repairs and Sellers will be charged for time
and material at Purchaser's cost.
(i) Confidentiality of Information Furnished by Purchaser. Sellers and
their representatives will treat all information related to these transactions
as confidential. Sellers agree not to use any of this information except in
connection with this Agreement. Sellers will use their best efforts to keep such
information confidential. If the transactions contemplated by this Agreement are
not consummated, Sellers will return to the Purchaser all information relating
to Purchaser (and all copies thereof) then in their possession.
(j) Return of Property. Sellers hereby agree that they will promptly
distribute to Purchaser all funds, mail and other items owned by Purchaser that
come into the possession of Sellers at any time after Closing.
(k) Employees. From the date hereof until the date three years from
the Closing Date, the Sellers and its subsidiaries and affiliates shall not
directly induce or encourage any current employee of the Subject Business to
terminate or otherwise interfere with his or her employment relationship with
Purchaser.
(l) Notification of Untrue Reps and Warranties. Sellers will promptly
give written notice to Purchaser upon becoming aware of the occurrence or
failure to occur, or the impending or threatened occurrence or failure to occur,
of any event that would cause or constitute, or would be likely to cause or
constitute, any of the Sellers' representations or warranties being or becoming
untrue.
6. Covenants of the Purchaser. The Purchaser covenants with the Sellers
that:
(a) Confidentiality of Information Furnished by Sellers. The Purchaser
and its representatives will treat all information furnished pursuant to
Paragraph 5(b) (including financial statements) as confidential; however, it is
understood that such information must be revealed to various employees and
agents of the Purchaser for analysis and evaluation. Purchaser agrees not to use
any of this information except in connection with this Agreement. The Purchaser
will use its best efforts to keep such information confidential. If the
transactions contemplated by this Agreement are not consummated, the Purchaser
will return to the Sellers all such information (and all copies hereof) then in
its possession.
(b) Product Warranty. (i) Purchaser shall assume warranty obligations
for products manufactured after the Closing date; (ii) Purchaser agrees to
perform, in accordance with applicable warranties, all warranty services to
repair or replace defective parts or products sold or manufactured by the
Company prior to the Closing Date, to the account of Sellers. The price to
Sellers shall be the cost of Purchaser's time and materials.
(c) Notification of Creditors. Purchaser will waive compliance with
any applicable bulk sales law.
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(d) Return of Property. Purchaser hereby agrees that it will promptly
distribute to Sellers all funds, mail and other items owned by Purchaser that
come into the possession of Purchaser at any time after Closing.
(e) Books and Records. Purchaser agrees to retain at the current
business premises the contracts and records assigned to Purchaser under this
Agreement for a period of one year.
(f) Notification of Untrue Reps and Warranties. Purchaser will
promptly give written notice to Sellers upon becoming aware of the occurrence or
failure to occur, or the impending or threatened occurrence or failure to occur,
of any event that would cause or constitute, or would be likely to cause or
constitute, any of the Purchaser's representations or warranties being or
becoming untrue.
7. Conditions to Obligations of the Purchaser. The obligations of the
Purchaser under this Agreement shall be subject to the satisfaction of the
following conditions:
(a) Representations and Warranties of Sellers True at Closing. The
Purchaser shall not have discovered any material error, misstatement or omission
in the representations and warranties made by the Sellers in Section 3 hereof;
the representations and warranties made by the Sellers shall be deemed to have
been made again at and as of the time of Closing and shall then be true in all
material respects, except to the extent that such representations and warranties
shall have been made as of a specified date; the Sellers shall have performed
and complied with all agreements and conditions required by this Agreement to be
performed or complied with by them at or prior to Closing; and Sellers shall
provide Purchaser with a certificate from General Partner and Company's
President or Secretary, dated as of Closing that the above conditions have been
fulfilled.
(b) Approval of Counsel. All actions, proceedings, instruments and
documents reasonably required to carry out the transactions contemplated by this
Agreement or incidental thereto and all other related matters shall have been
approved by counsel for the Purchaser, which approval shall not be unreasonably
withheld or delayed, and such counsel shall have been furnished with such
certified copies of actions and proceedings and other such instruments and
documents as such counsel shall have reasonably requested.
(c) Opinion of Counsel for the Sellers. The Purchaser shall have
received an opinion of counsel for the Sellers, dated the Closing Date, to the
effect that:
(i) The Company is a Texas limited partnership duly organized
and validly existing and in good standing under the laws of the State of Texas
and has all requisite power and authority to carry on its business as now
conducted; the General Partner is a Texas limited liability company duly
organized and validly existing and in good standing under the laws of the State
of Texas and has all requisite power and authority to carry on its business as
now conducted;
(ii) This Agreement has been duly authorized by all necessary
action on the part of the Sellers and has been duly executed and delivered by
Sellers and constitutes a valid and binding obligation of Sellers enforceable in
accordance with its terms (with the usual creditors' rights exceptions);
(iii) The instruments of assignment, transfer and conveyance
delivered by Sellers to Purchaser pursuant to this Agreement have been duly
authorized by all necessary action of the Sellers, executed and delivered by
Sellers;
(iv) The consummation of the transactions contemplated by this
Agreement will not result in a breach of or constitute a default under the
Articles of Incorporation of General Partner or the partnership agreement of the
Company; and
(v) Such counsel does not know of any litigation or other
proceeding or governmental investigation pending or threatened against the
Company or affecting the Assets, the Subject Business, the General Partner or
the transactions contemplated by this Agreement which, if adversely determined
would have a materially adverse effect on the value of the Assets or the Subject
Business.
Such opinion may contain such exceptions, qualifications and
explanations as shall be reasonably acceptable to Purchaser and its counsel.
(d) Changes in Business. Prior to the Closing, there shall have been
no changes in the business, properties or operations of the Sellers since the
date of this Agreement which would have a material adverse effect on the value
of the Assets or the Subject Business.
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(e) Absence of Restraint. No order to restrain, enjoin or otherwise
prevent the consummation of this Agreement or transactions in connection
herewith shall have been entered and, on the Closing Date, there shall not be
any pending or threatened litigation in any court, or any proceeding by or
before any governmental commission, board or agency, seeking to restrain or
prohibit consummation of the transactions contemplated hereby or in which
divestiture, rescission or significant damages are sought in connection with the
transactions contemplated hereby, and no investigation by any governmental
agency shall be pending or threatened which might result in any such litigation
or other proceeding.
(f) Approval. The General Partner of the Company shall have approved
the transactions contemplated by the Agreement and such approvals shall not have
been rescinded.
(g) Governmental Consents. Any and all necessary consents of and
filings with any governmental authority or agency relating to the consummation
of the transactions contemplated by this Agreement shall have been obtained or
accomplished, and no action, proceeding, inquiry or investigation by any private
or governmental agency shall have been brought or threatened which questions the
validity or legality of the transactions contemplated by this Agreement.
(h) Charter; Good Standing Incumbency. There shall have been delivered
to Purchaser (i) a certificate dated within thirty (30) days of Closing Date
from the Secretary of State of Texas with respect to the incorporation and good
standing of General Partner and the formation and good standing of Company, (ii)
copies of Articles, Bylaws and all amendments and the resolutions of the Board
of Directors of Company and of General Partner approving these transactions, and
(iii) a certificate dated Closing Date with respect to the incumbency and
signature of the General Partner of Company signing this Agreement and any
certificate, agreement or instrument delivered on behalf of Sellers in
connection with this Agreement.
8. Conditions to Obligations of the Sellers. The obligations of the
Sellers under this Agreement shall be subject to the satisfaction of the
following conditions:
(a) Representations and Warranties of Purchaser True at Closing. The
Sellers have not discovered any material error, misstatement or omission in the
representations and warranties made by Purchaser in Section 4 hereof; the
representations and warranties made by the Purchaser shall be deemed to have
been made again at and as of the time of Closing and shall then be true in all
material respects, except to the extent that such representations and warranties
shall have been made as of a specified date; and the Purchaser shall have
performed or complied with all agreements and conditions required by this
Agreement to be performed or complied with by it at or prior to Closing; and
Purchaser shall provide Sellers with a Certificate from Purchaser's Secretary or
President dated as of Closing that the above conditions have been fulfilled.
(b) Approval of Counsel. All actions, proceedings, instruments and
documents required to carry out the transactions contemplated by this Agreement
or incidental thereto and all other related legal matters shall have been
approved by counsel for the Sellers, and such counsel shall have been furnished
with such certified copies of actions and proceedings and other such instruments
and documents as such counsel shall have reasonably requested.
(c) Absence of Restraint. No order to restrain, enjoin or otherwise
prevent the consummation of this Agreement or transactions in connection
herewith shall have been entered and, on the Closing Date, there shall not be
any pending or threatened litigation in any court, or any proceeding by or
before any governmental commission, board or agency, with a view to seeking to
restrain or prohibit consummation of the transactions contemplated hereby or in
which divestiture, rescission or significant damages are sought in connection
with the transactions contemplated hereby, and no investigations by any
governmental agency shall be pending or threatened which might result in any
such litigation or other proceeding.
(d) Opinion of Purchaser's Counsel. Sellers shall have received an
opinion of counsel for the Purchaser, dated the Closing Date, to the effect
that:
(i) Containment Solutions, Inc. is a corporation duly
organized and validly existing and in good standing under the laws of the State
of Delaware and has all requisite power and authority to carry on its business
as now conducted.
(ii) This Agreement has been duly authorized by all necessary
action on the part of Purchaser and has been executed and delivered by Purchaser
and constitutes a valid and binding obligation of Purchaser enforceable in
accordance with its terms.
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(iii) The consummation of these transactions will not result
in a breach of or constitute a default under the Articles of Incorporation or
Bylaws of Purchaser.
(e) Changes in Business. Prior to Closing, there shall have been no
changes in the business, properties or operation of Purchaser since the date of
this Agreement which would have a material affect on Purchaser's ability to
perform under this Agreement.
(f) Government Consents. Any and all necessary consents of and filings
with any governmental authority or agency relating to the consummation of the
transactions contemplated by this Agreement shall have been obtained or
accomplished, and no action, proceeding, inquiry or investigation by any private
or governmental agency shall have been brought or threatened which questions the
validity or legality of the transactions contemplated by this Agreement.
9. Nature and Survival of Representations and Warranties.
(a) Nature of Statements. All statements contained in any exhibit
hereto or in any certificate delivered by or on behalf of any of the Sellers or
the Purchaser pursuant to this Agreement shall be deemed representations and
warranties by any of the Sellers or the Purchaser, as the case may be.
(b) Survival of Representations and Warranties. Regardless of any
investigation at any time made by or on behalf of any party hereto or of any
information any party may have in respect thereof, but subject to the provisions
of Section 10 hereof, all covenants, agreements, representations and warranties
made hereunder or pursuant hereto or in connection with the transactions
contemplated hereby shall survive the Closing and remain effective for a period
of three years from the Closing Date; provided, however, that any bona fide
claim shall continue in effect until such time as such claim has been resolved
or settled and the covenants in Sections 10(a) and (c) shall survive in
accordance with their term.
10. Indemnification.
(a) General Indemnity by Sellers. Subject to the conditions
hereinafter set forth, for a three year period, the Sellers shall indemnify and
hold harmless the Purchaser against any loss, damage or expense (including
reasonable attorneys' fees) incurred by the Purchaser and caused by or arising
out of (i) any breach or default in the performance by Sellers of any covenant
or agreement of Sellers contained in this Agreement; (ii) any breach of a
warranty or representation made by Sellers pursuant to this Agreement, or in any
certificate required to be delivered pursuant to this Agreement, or any material
misstatement or omission in any Schedule attached or to be delivered pursuant to
this Agreement; (iii) any warranty claims for which Sellers are responsible
pursuant to Section 5(h) hereof; and (iv) all costs and liabilities associated
with the cleanup of any contaminated soil or materials spilled, disposed of or
buried by Company or located on the property operated by Company or on any
customer property where Company is deemed to be responsible as a result of its
operations, prior to Closing Date.
(b) Tax Indemnity by Sellers. Upon the terms and subject to the
conditions set forth in this Section 10(b), Sellers shall indemnify and hold
harmless the Purchaser and Company against and will reimburse Purchaser or
Company for:
(i) any and all tax deficiencies in respect of federal, state,
and local and foreign sales, use, income or franchise tax or taxes
based on or measured by income or assets, including any interest or
penalties thereon, and legal fees and expenses incurred by Company or
Purchaser with respect to December 31, 1998 and all prior taxable
years; and
(ii) any and all such taxes, penalties, interest and legal
fees and expenses in respect of the period from December 31, 1998, up
to and including the Closing Date.
This indemnity for taxes, penalty and interest and legal fees and
expenses shall be independent of and in addition to any other indemnity
provision of this Agreement and shall survive until the expiration of the
applicable statute of limitations for assessment for the taxes referred to
herein. The above tax indemnity provisions shall apply regardless of any
investigation at any time made by or on behalf of Purchaser or any information
Purchaser may have in respect thereof.
(c) Procedure for Making Claims. If and when the Purchaser desires to
claim indemnification by the Sellers pursuant to the provisions of this Section,
the Purchaser shall deliver to the Sellers within 20 days of its receipt of a
claim, a certificate signed by the President or any Vice President of the
Purchaser (the "Notice of Claim") (i) stating that the Purchaser has properly
accrued or anticipated that it may be required to accrue losses, damages or
expenses to which the Purchaser is entitled to indemnification pursuant to this
Section, and (ii) specifying the individual items of loss,
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damage or expense included in the amount so stated, the date each such item was
properly accrued, if any, and the nature of the misrepresentation, breach of
warranty or claim to which such item is related. In the event that Purchaser
fails to give notice within the 20-day period and Sellers are harmed due to the
delay, Purchaser shall waive its claim to the extent of harm caused Sellers by
the delay. If Sellers object to such claim or needs more information, it may
deliver written notice of objection (the "Notice of Objection") to the Purchaser
within ten (10) days after the Purchaser's delivery of the Notice of Claim to
Sellers. The Notice of Objection shall set forth the grounds upon which the
objection is based. If no Notice of Objection shall have been so delivered
within such ten (10) day period, the Sellers shall be deemed to have
acknowledged the correctness of the claim or claims specified in the Notice of
Claim for the full amount thereof, and shall thereupon pay to the Purchaser, on
demand, in cash, an amount equal to the amount of such claim or claims.
If any third party shall assert any claim or bring any action against
the Purchaser which, if successful, might result in a right of indemnification
hereunder, the Sellers shall be given written notice thereof in accordance with
the provisions of this Section 10(c), except that the notice period for both
parties shall be 30 days instead of 20/10 days as above. Thereafter, the Sellers
shall have the right to defend such claim or action at its own expense, and
through counsel of its own choice (which counsel shall be reasonably
satisfactory to Purchaser). If Sellers fail or refuse to provide a defense to
any third party claim, the Purchaser shall have the right to undertake the
defense, compromise or settlement of such claims, through counsel of its own
choice, on behalf of and for the account and at the risk of Sellers and Sellers
shall be obligated to pay the costs, expenses, and attorneys' fees incurred by
Purchaser in connection with such third party claim. Purchaser agrees that it
will not compromise or settle any claim without the consent of Sellers, which
consent shall not be unreasonably withheld. In any event, Purchaser, and Sellers
shall fully cooperate with each other and their respective counsel in connection
with any such litigation, defense, settlement, or other attempted resolution.
(d) Sellers' Indemnification Limits. Sellers shall have no obligation
to indemnify Purchaser with respect to any claim described in Section 10(a) or
(b) if (i) Purchaser fails to give the notice of claim for general claims
described in Section 10(a) within three years; or (ii) Purchaser fails to give
the notice of claim for tax related claims described in Section 10(b) within the
applicable statute of limitations for assessment for the taxes described Section
10(b).
(e) General Indemnification by Purchaser. The Purchaser agrees to
indemnify and hold the Sellers harmless against and in respect of (i) any
damage, claim, liability, deficiency, loss, cost or expense (including
reasonable attorney's fees) sustained by the Sellers arising out of or resulting
from (a) any misrepresentation by the Purchaser contained in this Agreement (or
any collateral documents), in any schedules attached hereto or thereto or in a
certificate to be delivered at the Closing, or (b) the breach of or default
under any warranty or representation, or the nonfulfillment of or default under
any agreement or covenant, of the Purchaser contained in this Agreement (or
collateral documents), schedules or certificates hereto, (c) the failure, after
the Closing Date, of Purchaser to pay or otherwise discharge when due any
contractual or other obligation relating to the Company, (d) Taxes for which
Purchaser is responsible. The procedures set forth at Section 10(c) shall apply
to claims for indemnification made by Sellers.
11. Termination.
(a) Best Efforts to Satisfy Conditions. The Sellers agree to use all
reasonable and proper efforts to bring about the satisfaction of the conditions
specified in Section 7 hereof and the Purchaser agrees to use its best efforts
to bring about the satisfaction of the conditions specified in Section 8 hereof.
(b) Termination. This Agreement may be terminated by:
(i) The mutual consent of the Sellers and the Purchaser;
(ii) The Purchaser if a material default shall be made by the
Sellers in the observance of or in the due and timely performance by the Sellers
of any of the covenants of the Sellers herein contained, or if there has been a
material breach by Seller of any of the warranties and representations of the
Sellers herein contained, or if the conditions of this Agreement to be complied
with or performed by the Sellers at or before the Closing shall not have been
complied with or performed at the time required for such compliance or
performance and such noncompliance or nonperformance shall not have been waived
by the Purchaser; or
(iii) The Sellers if a material default shall be made by the
Purchaser in the observance of or in the due and timely performance by the
Purchaser of any of the covenants of the Purchaser herein contained, or if there
shall have been a material breach by the Purchaser of any of the warranties and
representations of the Purchaser herein contained, or if the conditions of this
Agreement to be complied with or performed by the Purchaser at or before the
Closing shall not have been complied with or performed at the time required for
such compliance or performance and such noncompliance or nonperformance shall
not have been waived by the Sellers.
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In the event of termination of this Agreement as provided above,
written notice thereof shall be given to the party within five (5) business
days. No termination pursuant to paragraphs (ii) and (iii) hereunder shall
relieve any party hereto from any liability in respect of such party's breach or
indemnification obligations hereunder.
12. Exhibits. If any exhibit recited to be attached hereto is not so
attached at the time of the execution hereof, the same may be prepared after
execution of this Agreement and, upon approval by notation of said exhibit by a
representative of the Sellers and a representative of the Purchaser, shall
become a part of this Agreement.
13. Miscellaneous.
(a) Expenses. Whether or not the transactions contemplated hereby
shall be consummated, each of the parties will pay all costs and expenses
(including Closing costs) of its performance of and compliance with this
Agreement.
(b) Notices. All notices, requests and other communications hereunder
shall be in writing and shall be deemed to have been given if personally
delivered or mailed, first class, registered or certified mail, postage prepaid:
If to Sellers: Xxxxx Xxxxx
000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
With a copy to: Xxx Xxxxx
00 Xxxxx 00xx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
If to Purchaser: Xxxxxx Xxxxxxx
Containment Solutions, Inc.
0000 Xxxxxxxxx Xxxxxxxx Xx.
Xxxxxx, XX 00000
With a copy to: Xxxxx X. Xxxxx, Esq.
Denali Incorporated
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, XX 00000
Or at such other address as shall be given in writing by any person
identified above to each of the other such persons.
(c) Assignment. This Agreement may not be assigned by any party hereto
without the prior written consent of the other parties.
(d) Successors Bound. Subject to the provisions of Paragraph 13(c),
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
(e) Section and Paragraph Headings. The section and paragraph headings
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
(f) Amendment. This Agreement may be amended only by an instrument in
writing executed by the parties hereto.
(g) Entire Agreement. This Agreement, the exhibits hereto, and the
documents specifically referred to herein constitute the entire agreement,
understanding, representations and warranties of the parties hereto.
(h) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which shall constitute one of
the same instrument.
(i) Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Texas.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties as of the date first above written.
AGREED TO BY SELLERS:
X. Xxxxx Limited Partnership
By: Tiger Trucking LLC
As: General Partner
/s/ XXXXX XXXXX
By: Xxxxx Xxxxx
Its: Managing member
AGREED TO BY PURCHASER:
CONTAINMENT SOLUTIONS, INC.
/s/ XXXXXX X. XXXXXXX
By: Xxxxxx X. Xxxxxxx
Title: President
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